Trade after Brexit: Better to sell where 90% of growth is or 90% of purchasing power is? Crisps anyone?

The last few days of February are proving to cause a bit of a meltdown in the fragile ranks of the brexiteers in my adopted homeland Great Britain.

First we had the spectacle of Theresa May having an away day with her entire Cabinet, 614 days after the Referendum and 335 days after invoking Art.50, to finally thrash out once and for all, what they actually jointly want out of Brexit; what kind of relationship they as the acting UK Government envisage the UK should have after the UK leaves on 29/03/2019.

Yes, that’s only 395 days away! Yes they should have sorted this out before triggering Art. 50!

True to the adversarial form of British Politics, at the same time the Labour Shadow Cabinet had their own Brexit huddle in boring Westminster and yesterday we saw a long awaited speech by Leader Jeremy Corbyn, finally putting a glimmer of clear blue water between the Government’s Brexit position and what the Labour opposition hopes to get out of it all.

What the Labour and Conservatives official position have in common is that both profess to want to respect and implement ‘The will of the People’ and leave the European Union. Notably for Labour this means drawing a red line somewhere short of the UK leaving the EU Customs Union.  Note that Labour is at pains to point out they do not want to remain in “The Customs Union”, but rather in “A Customs Union”.  The difference between “The” and “A” Customs Union for the moment is anyone’s guess. That, explains Mr. Corbyn, is a question for “negotiation”.

Listening dispassionately to Mr. Corbyn, 90% of his long awaited Brexit speech seemed to be a passionate pro-EU speech outlining all the advantages Great Britain derives from its membership. He mentioned the value to UK of membership of EU institutions like the  EU Medicines Agency(EMA), Chemicals Agency (ECHA) and Euratom. He mentioned workers’ rights and protections aspired to by Labour, but implemented by EU. He mentioned the Environment and Carbon Trading schemes. All areas where European nations are more effective and efficient collaborating rather than competing.

Today I am shamelessly exploiting the appearance of a crack that is appearing in the UK public’s perception of the Customs Union, with an amendmend on continued participation due to be voted on in Parliament this week. Theresa May’s Government’s majority is wafer thin on the subject. I read that only six Conservatives need to side with Jeremy Corbyn on continued membership of the Customs Union, to cause the UK Prime Minister a major head ache. The issue is of course intricately linked to the Northern Ireland border issue.

Meanwhile Theresa May seems to have thrashed out some sort of compromise between the ‘Soft’ and ‘Hard’ brexiteers, fighting each other tooth and nail in her Cabinet. This week the main adversaries will each take turns sharing their newfound shared insights with the British public.

Today was Liam Fox’s turn to take the limelight with a speech in which no doubt he will take aim at Labour’s sudden conversion to the benefits of retaining “a Customs Union” with the EU after Brexit. Indeed he called it “a betrayal of Brexit voters”. Never mind that in an earlier life he himself called it “the best way forward”.

With the customary leaks to the press of the contents of his speech, the main arguments Fox will put forward can be roughly summarised as follows:

  • Being part of “the” or “a” Customs Union will restrict the UK’s capability to strike its own Global Free Trade Deals by removing an incentive for future trade partners;
  • 90% of growth in the world economy will take place outside of the EU and Brexit Britain needs to be able to focus its trade on those economies rather than the slow growing EU Single Market.

Both points are pure Brexit bullshit of course. Like all propaganda, there is a grain of truth in them. Yes staying in the Customs Union means the UK would have to set the same tariffs as the EU. The UK could as an example not set a zero import tariff on Oranges from Morocco a fruit we don’t grow, but Spain in EU does. We could also get closer in trade to our cherished Anglosphere brethren in New Zealand by removing all restrictions on importing New Zealand lamb and Anchor butter.

I see Brexiteers nodding their head and smacking their lips in anticipation, but the truth is that upon joining the then Common Market the UK government has already negotiated generous tariff free EU export quotas for New Zealand lamb. Export quotas that New Zealand hasn’t fulfilled in years, because to them it’s more profitable to export to nearby China and other emerging markets. The oranges example also falls flat on closer inspection. It seems only during the height of the Spanish Orange harvest the EU puts some restrictions on Oranges from Africa. Most of the year Africa can export Oranges and clementines tariff free to its hearts content, so we are never without them!

Every time I ask a leaver for examples how the EU is denying poor African farmers a living by raising punitive tariffs, I find that the truth is that that country can already export to EU tariff free in huge quantities. Not just oranges, but same with processed coffee, which is another favourite myth peddled as a restrictive EU trade practice hurting developing countries.

Coming to the second bullet point for debunking, in another blog post I already pointed out that this fixation on where global ‘growth’ takes place is a very stupid myopian trade strategy. Leave zealots haven’t got a clue what it is that the UK economy actually produces for export and what these emerging economies are actually buying.

The truth is that the huge majority of the population in these markets haven’t got a penny to rub together to buy the things we in the UK produce en mass and  successfully export by the truck load on a daily basis to our EU neighbours. A key indicator for spotting this trade myopia is a country’s GDP Per Capita. This indicator of purchasing power is what you get when you divide a country’s fast growing GDP by their even faster growing population.

Who can afford the innovative jams and the luxury cars the UK manufactures so well (apart from Chinese millionaires, Russian oligarchs and a few tin pot dictators)?

The EU per capita GDP is $35,000 instead of the Commonwealth’s $3,500.  And that $3,500 average becomes a lot lower if we take the two richest Commonwealth nations Canada and Australia away from this figure. Go figure where the biggest market is for Jaguars, Bentleys, Rolls Royce?  But also for more down to earth UK Nissans, Tiptree Marmalade, Cadbury chocolate bars, McVitie’s Hobnobs. Not in some village in rural Africa!

The reality is that what developing countries are ‘bulk buying’ is building materials, plant and machinery. They need this to house their exploding population and to build and equip the factories and sweat shops where these people will slave away to produce our cheap T-shirts, jeans and flip-flops. No wonder that Germany, who produces a lot of manufacturing equipment, is doing so well selling into these fast growing economies, while we export but a value fraction to those same countries. The fact that a UK company like JCB does well in those developing economies therefor should not surprise us. It rather confirms the point I’m making rather than disputes it! Let me tell you kippers, brexit ain’t gonna fix our trade deficit with the World in a hurry!

Coming back to Foxy fox and his doomed Brexit trade speech, he has this morning been savaged on BBCRadio4 by one of his own top-aides who used to run his International Trade department.

“Sir Martin Donnelly, who was the permanent secretary at Liam Fox’s Department of International Trade until last year, told Radio 4’s Today programme that attempting to replace the UK’s current trading relationship with the EU with new free trade deals elsewhere was like “giving up a three-course meal now for the promise of a packet of crisps in the future.”

Leave EU three course meal for the promise of a packet of crisps in the future

Politicians like Liam Fox do not enable trade

I’d like to leave you with another point to ponder. I made this point before in this blog post.

“Politicians do not enable trade to start flowing simply by signing a trade deal with a lot of pomp and ceremony. If there were deals to be signed in 1973, Heath did this to protect trade with Europe that already existed. Certainly more so than wishful thinking EU trade would take off overnight! When Queen Victoria opened the Grand Union Canal between London and Liverpool, it was safe to assume trade would start flowing on it the very next day. If today a UK Prime Minister signs a piece of paper purporting to be some new Free Trade Agreement (FTA) with another country, you can bet your sweet bottom dollar he is already way behind the times. Nothing much will happen the next day. He’s just mopping up glory after the prior hard graft of private sector entrepreneurs who negotiated the deals in the first place. The ones who saw a new market opportunity abroad and jumped on it.”

The case of our beloved (or disgraced) International Trade Secretary flying around the world to line up all these incredible trade deals for budding UK entrepreneurs to take advantage off, is a case in point of the delusion he likes to foist upon us all. Take the case of this press photo I stumbled across of Dr. Liam witnessing the signing of a new Maggie & Rose business venture during his trade visit to China in January this year. The actual deal was already signed in November and I know for a fact Maggie Bolger has been working flat out on this deal long before Fox stuck his oar in. But Flying her in at her Majesty’s expense for another photo opportunity (to put DR. Liam Fox in the picture), is that good use of our tax-payers’ money?

Posted in #brexit, Trade Deals | Tagged | Leave a comment

Brexit economic news you will not read in the Daily Express UK or Daily Mail!

EU Brexit headlines you will find in UK tabloids (Telegraph included)

Regular readers of this blog and followers on Twitter know that I am always very sceptical about tabloid headlines suggesting that Brexit Britain enjoys some sort of economic boom since the disastrous referendum vote in June 2016 to leave the European Union, the largest free trading block in the world and right on the UK’s doorstep, not the other end of the world!

A quick read of such articles quickly reveal that what they really mean is that the economy has not collapsed to the extent to what they sneeringly call ‘Project Fear’ predicted. If one cares to read beyond the inflated headlines even the Express usually admits somewhere towards the end of the article, that actually in the years leading up to the referendum the UK growth figures were much more impressive!

In Great Britain the government department charged with monitoring the UK economy is the ‘Office for National Statistics’, ONS for short.

In the western world economic prowess is usually expressed as a yearly growth percentage of ‘Gross Domestic Product’ (GDP).

GDP growth is also the main indicator of economic performance quoted by the UK’s Government. This is then briefed and picked up by newspapers and blogs and reported upwards to supra-national organisations for aggregation at regional level like EU, OECD, IMF etc.

In their quarterly reports ONS further breaks GDP down to sectors like ‘Services’, ‘Manufacturing’, ‘Mining’ and ‘Agriculture’ to name a few.

How well the UK is doing financially out of all this economic activity is generally reported just once a year when ONS publishes the UK’s national accounts in a publication referred to as ‘The Pink Book’. Here you can find if Britain PLC runs a trade deficit or surplus with its main trading partners at country level. For brexit watchers like myself they also neatly split all this in EU-trade and trade with the non-EU rest of the World (ROW for short).

Brexit joy at UK GDP boost thanks to Q3 manufacturing convulsion

Let us dissect one recent headline that Brexit Britain is experiencing some sort of post Brexit Manufacturing Boom. Note that more often than not the anti EU press will be quoting something called the ‘Purchasing Managers Index (PMI)’. Note you can usually discount this index for reasons explained here. It’s based on small surveys that are usually out of touch with reality.  This is then picked up by pro-brexit Twitter accounts (some of them Russian bots) as follows:

The Brexit vote in the UK didn’t happen all that long ago. A quick look at the five quarters that ONS reported on since June 2016 and picking out the ‘manufacturing’ part of each reported ‘Production’ quartal GDP figure leaves us with the following aggregate UK manufacturing growth since the referendum.

-1.0 % – 0.0% +0.3% – 0.4% + 1.0% = – 0.1%

This means UK manufacturing since Brexit down by one tenth of a percent Dohhh! Not Booming and not Massive! A small 3 months 1% surge after a 15 months 1.1% drop!

OK that’s the post Brexit manufacturing boom dismantled. Let us now turn our attention to the first full set of UK national accounts since the brexit vote. Remember the 2016 pink book had two quarters before the referendum in it. The 2017 edition is the first full year reported where we can really say that the brexit decision ( if not the real thing yet) was fully factored into the UK’s national accounts.

We need to remind ourselves that part of the Leave narrative peddled by the likes of Dan Hannan MEP and others is that the EU’s share of Global GDP is “in decline” and anyway the UK now trades more, and more profitably with the non-EU ROW. So it would be a bit of a tabloid headline shocker if they had the guts to report that:

Brexit Shock Horror:
UK goods exports to EU grew at a slightly faster rate than exports to non-EU!

“Although the value of UK exports of goods to non-EU countries exceeded goods exports to the EU (by £11.1 billion) in 2016, UK goods exports to the EU grew at a slightly faster rate than exports to non-EU countries – at 4.8% and 4.5% respectively in 2016.”

Now for our next brexit headline shocker……

Brexit Shock Horror:
Deficit with non-EU areas widened to the largest recorded in the series history!

“Meanwhile, the primary income balance deficit with non-EU areas widened to the largest recorded in the series history, which started in 1999 (1.6% of nominal GDP). This was driven primarily by a rise in investment income”paid by the UK, which rose to 5.6% of nominal GDP and a slight reduction in UK investment income earned.
abroad to 3.9% of nominal GDP.”

UK’s Primary income balance deficit with non-EU areas widened to the largest recorded in the series history

Do we really need to Brexit:
Primary income deficit with the EU narrowed to 0.9% of nominal GDP, the lowest in seven years!

“The primary income deficit with the EU narrowed to the lowest level in seven years (0.9% of nominal gross domestic product (GDP)). This was a result of income earned on UK investments in the EU increasing to 3% of nominal GDP, the highest in three years and income earned on EU investments in the UK remaining broadly stable.”

UK’sprimary income deficit with the EU narrowed to the lowest level in seven years!


More Brexit shockers:
UK’s goods deficit with non-EU countries widened in 2016 for the first time since 2011!

“UK’s goods deficit with non-EU countries widened in 2016 for the first time since 2011, as a result of a larger increase in imports in relation to exports – 7.7% increase in imports compared with 4.5% increase in exports. The UK’s goods balance deficit with non-EU countries widened by £7.3 billion to £38.9 billion in 2016. This might suggest that the extent of overseas demand for UK products may have been limited by prevailing global economic conditions”

I might add that poor Dr. Liam Fox may have his job cut out for him replacing growing EU exports with equivalent ROW exports after brexit.

I sincerely hope that I haven’t shattered accidentally visiting Leave voters’ high hopes for a rapid brexit trade bonanza with the non-EU rest of the world with ONS reported reality.

You can draw comfort that Donald Tusk, President of the EU Council of Ministers repeatedly assured UK negotiators and press that Article 50 can be revoked.

Posted in #brexit, EURO, Europe, Eurozone | Tagged , , , , | 1 Comment

Remain means Remain, but Brexit doesn’t mean Brexit by a long shot!

What a dire depressive week it’s been in British politics. Before delving into the ‘Great Repeal’ bill going through Parliament and having a dig at Boris Johnson regurgitating the same old £350 M. to the NHS lie, let me explain with a random brexit tweet scraped from Twitter to illustrate what I mean with my headline that there is not one Brexit people voted for. For what is currently on the EU-UK negotiating table, there’s even less support than all the flavours of Brexit put together.



Brexit does not mean brexit apparently

One thing is sure, us remainers  are united we do not want to lose our EU citizen’s rights

I think it’s pretty fair to say that the 48% of voters pretty much agree on one thing and that is Remain means remaining in the EU. Not Hard remain, not soft remain. None of this one foot in and one foot out or ‘have your cake and eat it nonsense.  Sure there are real Europhiles who’d join the Eurozone given half a chance and there are remain voters who only voted remain because there is not a single viable alternative.

We all more or less agree brexit will end in tears and that we have more of a chance achieving our common goals by remaining influential EU members who try to steer the EU apparatus from within. We are also united in that we enjoy the additional rights EU citizenship confers on us and we do not want to lose those rights. Our own Freedom of Movement (FOM) is right up there, although unlimited for others raises some eyebrows.

The mixed basket case of serious Leave EU voters and outright nationalist and racist Brexit nutters

Then in contrast we have the leave camp, who managed to scrape together 52% of the voters that could be bothered to get out of bed that morning and partake in one of the most important democratic decisions in three generations. Note that they together represent 26% of the UK population. That’s far short of representing “the will of the people“!

Leave Alliance

First we have the ‘Leave alliance’ who tend to gravitate around the monographs of it’s major thought leader Dr. Richard North and a well thought out plan called Flexcit. You can say about the man what you like. His blog posts are terribly verbose. He tends to ramble on a bit. But he speaks with conviction of vision and all his blog posts are well researched with references like you would expect in respected economic journals. His loyal band of followers are no dummies either. They make short shrift with uneducated racist or nationalistic claptrap from kippers. They just about tolerate differing views of remoaners like me if you keep the discussion civil and back your alternative look at facts up with similar thorough research.

But leaving the leave alliance in search of other brexit camps you pretty quickly end up in some lalaland of imperial nostalgia or outright nationalism or even rampant racism.

I am not even going to discuss UKIP and Farage as a serious political party here. To me they are a spent force since the EU referendum and their leaders either has-beens, fantasists or nobodies. At Westminster, UKIP has no Members of Parliament (MPs).
Bereft of a political Home Nigel Farage these days loiters in hotel lobbies of Trump Hotels hoping that the big conman himself takes pity on him and asks the waiter to lay an extra plate on the table for useful fool Nigel. Always good for a few laughs after a pint or two, Farage is.

Free trade alliance

So my second group of leavers I will dub the “Free trade alliance”.  Here also we seem to have a single person, Professor Patrick Minford from the university of Cardiff, who acts as some sort of mouthpiece for the group. Because there are so precious few academics in the leave camp, Minford can be  relied upon to provide what the BBC thinks is ‘balanced reporting’ when it comes to the economics of  Brexit. He is rolled out tirelessly. like once Farage was.

So when almost the entire body of academic economic researchers predicts that we’ll all be much worse off after Brexit, Minford is allowed to trot out his discredited economic model in which there is ‘a possibility’ of a 135 billion economic upturn to Brexit sometime in a distant future. The same muddled thinking has the BBC interviewing Lord Lawson in prime time television as some sort of climate change specialist after showing us the real spectacle of the world’s receding polar glaciers and increasing tropical hurricanes fuelled by warming oceans. It’s not balance, it’s BBC mischief making!

This Brexit-supporting economist is on record admitting leaving the EU in combination with his favourited  ‘Free trade’ with the rest of the world would “mostly eliminate [UK] manufacturing”.  That’s alright he says, because things will be cheaper for UK consumers in the shops, while our kids should study for jobs “mainly” with industries such as design and marketing. What unlimited free trade would do to our UK farming community is unimaginable.

The Commonwealth rebirth Alliance

This third group consists mainly of aging disillusioned pensioners who have problems understanding what globalisation means and how to best protect the UK and their pensions. They just about get the fact that China’s steel dumping practices are a threat to British workers in Factories long ago sold to Indian steel mogul Tata (like the ones in Port Talbot). They wrongly blame the EU for its and other UK industries demise, because they know that within the single market the UK governments cannot in any way subsidise or favour local producers over European competitors. But that works both ways and on the continent favours UK with a level playing field. What these same people fail to realise is that the EU Commission can and has stood up for European Industries in the face of global unfair competition. That it was in fact their own UK delegation to the EU Council of Ministers that time and time objected to the EU standing up to their new found Chinese friends and vital UK inward investors. I have blogged about that here in more detail. The same delusions exist when it comes to the EU’s Agricultural and Fisheries policies. Brexit voting Brits just don’t realise who is screwing them, so EU is the easy scapegoat.

The third group of of Brexit voters can best be identified by their enormous sense of entitlement. This is expressed in tweets like “We didn’t win two wars for nothing, only to be ruled by Germany’s despotic EU creation” and “Britain was once ruling an Empire, on which the sun never set”.  My quick come-back “That’s because God didn’t trust the Brits in the dark” does not go down well with these people. Even when I back my assertion up with the woes of Chinese Opium Wars and Bengal Famine inflicted by the UK on India for profit. So if you want to hear the same assertion from a less biased source, why not click on this link and read what your ‘bestests of friends’ and ‘Special Relationship’ United States of America has to say about these British ‘delusions of Empire‘?

So here we have it. I could go on to identify other groups on the basis of pure racism or blatant UK nationalism.  They are out in force on twitter, but in numbers their ranks probably remain relatively low in number. That doesn’t mean that they weren’t much emboldened by the other three groups, who for the first time gave their appalling behaviour legitimacy. And with UKIP of course for the first time giving racists a political home and vote. Their existence in the brexit camp mainly serves to embarrass the other three groups by the company they must keep to safeguard their slender 2% majority.

Three Brexit groups whose vote cancel each other out

My Conclusion is that when it comes to a democratic mandate these three groups mainly cancel each other out. The leave alliance hate simple kippers and ridicules both the free traders, the WTO traders and those nostalgic imperialists that think they can just crash out of the European Economic Area without a trade deal.  The ‘Global Britain’ nostalgic Tories and the odd demented Labour die hard MP dreaming of Empire could never contemplate being on the receiving end of a fax-democracy, with which they dismiss the sensible Leave Alliance ideas. They still think Britain is a world power in it’s own right, not empowered by its leading role in EU, but somehow held back to revive those UK glory days of old.

Hence, since this EU referendum was only ‘advisory’ it is only right and proper that we lay the whole Brexit conundrum back in the hands of the UK’s parliamentary representatives.

There is no mandate for Theresa May’s Government to align itself with one particular flavour of #brexit and the associated emergency Henry VIII power graw they say they need to implement this particular flavour.

It’s either that or a new Referendum on the negotiated end results, now the British electorate is in a better position to separate the EU truth and Brexit realities from the fantasies of Free Traders, Nostalgic Imperialists and outright racist Nazi sympathisers.

Now let’s all unite in making fun of Boris.

Posted in #brexit, Europe | 2 Comments

Honey, I shrunk the economy!


I was shocked how on my favourite news app this morning the BBC could give a report by the discredited group ‘Economists for Brexit’ the following misleading headline.

‘Hard’ Brexit offers ‘£135bn annual boost’ to economy

Of course what is offered is just an opinion based on research which has been extensively debunked by peers :

 “Minford uses a 1970s style trade model in which all firms in an industry everywhere in the world produce the same goods and competition is perfect. There is no product differentiation – a German-made car is identical to a Chinese-made car. Importantly, trade does not follow the gravity equation – everyone simply buys from the lowest cost producer.

As a consequence, after Brexit, the UK does not care about the tariff barriers exporters face in accessing the EU Single Market as they can sell as much as they like anywhere in the world. The fact that France is closer than Fiji essentially makes no difference in the Minford world: there is just one fictional world market into which all goods can be effortlessly sold.

If this sounds crazy, that’s because it is crazy. In reality, the UK will still continue to trade extensively with the EU as our closest geographical neighbours. It’s just that the higher trade barriers mean that we will do less of it.”

What makes academics like Minford stick so hard to their free trade dogmas and their over simplistic trade models?  Some say just follow the money, but I fear it’s just personal vanity.  There are precious few economists that have anything positive to say about #brexit. The inverse follows that if you can lay claim to some academic qualifications and a few TV interviews the vote leave brigade kiss the ground people like Patrick Minford and Ruth Lea walk on and the BBC is delighted to be able to fulfill that part of their mission statement, that says they’re supposed to be balanced in their reporting, by giving people like that airtime. But that doesn’t justify the page header! You might as well print lies like that on a big fat bus! Too many people just get the headline, which just confirms their prejudices.

My personal take on this is not very scientific. Just look at the guy’s face. He’s absolutely terrified he’s going to get the blame when it all starts going tits up with Brexit.

Let’s not forget that UK GDP growth, which held up remarkably well the first two quarters after the referendum is now vying for the lowest place in Europe while neighbouring Netherlands, within the much maligned protectionist EU, grew at about six times the UK rate over the same period.  These are hard facts as measured by the the economists paid by our government to keep track of what really happens and not the wishful thinking of one or two ukip economists basing their projection on dodgy economic models from the seventies.

“All models simplify. But when the simplifications imply that the EU has created no new trade, despite the abundance of evidence to the contrary (e.g. Magee, 2008; HM Treasury, 2016), it is the theory that must go back to the drawing board, not the data”


Posted in #brexit, EU, EURO, Uncategorized | 1 Comment

Eurozone recovery is the real bombshell surprise economic story of 2017! 

We all know that Britain’s foreign owned tabloids have a lot to answer for when creating an atmosphere of fear and hate against the EU and foreign immigrants. We also know the same papers love to downplay any good economic news emanating from the Eurozone, while at the same time creating an illusion the economic prowess of the UK is unrivalled, certainly compared to other G7 economies. But an Express article by Brexit bimbo @katiemansfield_on July 5th really takes the biscuit with the following headline:

“Britain’s economy to outperform France, Germany and Eurozone, says bombshell report”

Having just read that ONS for the second time had to downgrade UK GDP Growth recorded for the first quarter of 2017 from 0.3% to 0.2% growth, naturally I was surprised. On that basis the annual growth rate for Brexit Britain would amount to just 0.8%, hardly something to write home about.

On the other hand is was widely reported, that the Eurozone Economy seems to be powering ahead. On a similar annual basis, CNN Money reported that the eurozone grew by 1.7%  or more than twice as fast than the UK!

I am quite used to rags like the Express not actually providing HTML links to the reports their shoddy reporters claim to have read. Certainly the providers of the report ‘Oxford Economics’ make no mention of the report on their web site. On the contrary, all I could find is older bad brexit news stories! So contacted their service help desk and they kindly provided me with copies and a link where the Daily Express quoted report can be downloaded from. See that wasn’t so hard to do was it Katie? Now some actual quotes rather than Katies fanciful imagination:

The impact of Brexit on Trade

“Since Brexit the UK economy has slowed, with a sharp weakening in the first quarter of 2017. The preliminary estimate of UK GDP growth of just 0.3% was significantly below the 0.7% achieved at the end of  2016 [ML: and was since then further revised downwards to 0.2% by ONS]”

Here it should be noted that the report quoted by the Express makes an assumption that the UK would leave the EU in early 2019 and that this is followed by a three year transitional arrangement followed by a comprehensive Free Trade Agreement (FTA) with the EU.  Those who follow the brexit news know that this ‘soft brexit’ scenario is far from certain as we speak. Over the alternative ‘hard brexit’ scenario that most Express readers lust after the report says:

“This would be a economically damaging outcome and would mean our forecasts are far too optimistic……….The increase in trading costs that would result would lead to a degree of Trade destruction.”

“On balance our baseline forecast shows slower growth in both exports and imports as a result of Brexit with the slower exports causing, and the slower imports caused by, slower GDP growth than would otherwise have occurred.”

UK economic performance over the next decade (after Brexit)

Are you still with me dear reader? So far we have seen optimistic assumptions and pessimistic outcomes predicted for Brexit. Now we come to the bit that poor old Katie tries to sell you as “bombshell good brexit news”. IF ( and it’s a big if) David Davis MP manages to negotiate that elusive Free Trade Deal with Europe and the much more sensible Chancellor Philip Hammond and the CBI get their three year transitional brexit period, than maybe, maybe the following report prediction might come true….

“We forecast an average increase in UK GVA of 1.9% a year in the period 2018–27. This means that the UK will grow more slowly over the next decade than in the period leading up to the financial crisis, but will continue to outperform many of its peers, including those in the Eurozone”

I’ll let that sink in: The UK will grow more slowly out of the EU! and if (and it’s a big if based on unsafe assumptions) the UK grows 1.9% a year after brexit it might outperform the dreaded Eurozone.  Only we’ve just seen that the Eurozone is already growing at 1.7% and we’re still in the doldrums with just 0.8% growth.

Conclusion:  More unsubstantiated Express UK bullshit…. Shame on you Katie Mansfield! Like me more discerning readers of the Oxford Economics report clearly must come to the conclusion you haven’t actually read the report you write about?

Eurozone recovery is the real bombshell surprise economic story of 2017! 

Read more about this in the FT here



Posted in #brexit, EU, EURO, Eurozone | Tagged , | 1 Comment

The implications of Macron’s presidency for Brexit

One of the nice things about following the #brexit hashtag on Twitter is that you get pointed to all sorts of interesting pro and anti EU blogs, that you might otherwise not come across. The LSE blog I read today is titled ““Macron’s Presidency will not have a huge impact on Brexit per se, but [will] on the future of the EU”

Alexandre Holroyd knows what he is talking about as he is the En Marche! candidate representing the French living in Northern Europe. One sentence seems to have got kinda lost in translation. He says:

“Macron has developed a measure in his program called a ‘democratic convention’ that will be launched by the end of 2017 in all the Member States. The objective is to grasp what the citizens expect from the EU taking into account the coherence in different countries. It is similar to the way En Marche! program was developed by crowdsourcing in information from hundreds of local committees across the country and followed by experts working with the results to translate them into concrete policy proposals”

If I translate ‘measure’ into the Dutch meaning of ‘maatregel’ the sentence becomes clearer. It seems to be some sort of EU policy proposal to run a vast public enquiry to find out what people really want from the EU, especially when it comes to addressing the heartfelt democratic deficit that many leave voters seem to experience and complain about.

From personal experience living in France I have come across En Marche! researchers at my local Market at ‘Les Herolles’ and even though I pointed out I didn’t have a vote [yet], they courteously heard me out on all my bug bears and grievances with French bureaucracy as an EU immigrant. It was all noted in their little black book. This to me was a total new experience and made me want to vote for Macron and join his mouvement.

Typical En Marche activist gathering citizens opinions in a French Market Town ( borrowed from @ELanderne )

Anyway at the bottom of the blog post there was a comment section. In todays IdentitySpace post I want to share my comments and hope that I get one or two reactions from my growing list of subscribers.

The rest of this post is a straight copy and paste from the blog as commented by me. Why not hone your own comments= skills here here and then cut and paste the result into Alexandre’s blog in return? Who knows Macron will get to read them and act on them.

Now there’s a thought 😉


I would like to add as comments my personal view what the EU should do for it’s citizens.

Note I am Dutch from birth, a UK-expat of 30 years and have made full use of my EU freedom of movement by working in several EU countries.

In my world view there is nothing intrinsically wrong with a bit of EU protectionism if it protects our rights as EU citizens, consumers or workers. Some argue EU market entry rules are to the detriment of developing countries. Especially Africa is often mentioned with huge crocodile tears when discussing the benefits of #brexit, #frexit or #nexit .
I have a deep mistrust of the real motivation driving those save Africa arguments. The same people often lament the fact that EU rules stop protectionism at a National level. It is well documented that the British representatives in the EU council of Ministers were the ones determined to block any EU  measures against Chinese steel dumping practices. After all they were Britain’s new friends financing a new nuclear reactor at Sizewell.

It’s just the fact that we in the EU practice this kind of sensible protectionism at a EU level, rather than a national level, that these Nationalist can’t get their head around. It doesn’t fit in their “them vs. us” narrative.

The very same people that shout we should give poor African Farmers a chance trading freely with them are the people that shout loudest we must do more to buy ‘British’ or ‘French’ etc. in other contexts. The main reason for a common agricultural policy is and always has been to give us food security at an EU level. If we have seasonal shortages in our common market we should use our common EU purchasing power in a responsible way. Not to buy up food stuff in Africa while locals go hungry (by pricing them out of local markets). The principle of the recent EU-Africa partnership deals seems to me exactly the right way to make our purchasing power a force for change for good on that continent. But of course it has to be monitored by ethical committees so it does not end up like modern slavery.

Free Movement of people
To illustrate my thinking here I would like to recall to you all a program shown recently on UK TV called “brexit wife swap” In it a fervent British white nationalist man takes his pro-EU partner for the week into an ethnic diverse community in East London. The camera zooms in on stall holders of Indian, Pakistani and Bangladeshi origin and then on the white man complaining he feels like a stranger in his ‘own’ country.

Wait a minute, is my reaction, aren’t these all immigrants from UKIP’s favourite ‘Commonwealth’? What on earth does that have to do with EU free movement or brexit? Yes, continues the man’s feeble argument, they all get here via Europe’s borderless Schengen agreement. It’s complete bullshit of course, but that’s how British uneducated minds work. They see brown faces in Calais camps and Farage posters. Next they see brown faces on a london market. Hence they must be the same people. It’s racism pure and simple. The government does not own up to the fact that most of these people fly in by passenger jet from the Asian sub-continent. Some Doctors, some nurses, some for family reunions, all perfectly legal. Nothing to do with EU or Calais refugees.

Later in the program the same ukip voting types are heard complaining that polish plumbers work hard for ten years only to save for a mortgage on a property back home. It seems the money they earned should all be spent in the UK. Don’t us British ex-pats buying our ‘place in the sun’ do exactly the same thing? You can’t complain about UK housing shortages in the same breath as condemning East Europeans returning home!

In conclusion the EU and member states have failed educating their people on the difference between EU protectionism (largely benign) and globalism (experienced as a threat).

The EU is always the easy scapegoat for weak national politicians and dubious tabloids playing on the fear of people.

What better way to present a new unpopular Westminster austerity initiative as something that is handed down by faceless bureaucrats in Brussels?

The only way to counteract this is by increasing the democratic mandate of the EU parliament and by holding our national representatives to the EU council of ministers more to account what they conspire in Brussels. This could be done by asking them to justify this in National Assemblies like Parliament in a special EU question time session once a week.  Now that would make for an interesting EU directive!

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Conservative Peer Edmund Limerick Brexit Resignation speech. Chapeau!

I’d like to share with you a resignation speech from a Tory Peer, who is ‘crossing the floor’ to the Liberal Democrats, shared with his permission. His speech makes so much sense. I dare any of the leave brigade to counter his arguments.

His name…. Edmund Limerick.

Dear David,

Please take this email as notice of my resignation from the ACP [Association of Conservative Peers] and the Conservative Party. I was recently advised that the three qualities required for a prospective Tory peer were experience, hard work and loyalty. A year ago loyalty meant commitment to remaining in the EU. Now it apparently means commitment to leaving the EU Customs Union. I cannot be loyal to this unmandated and suicidal policy. I remain convinced that a hard Brexit is the greatest mistake this country can ever make, and one which will haunt us for generations to come.

We have spent over 40 years building a common market with our EU partners and although the work is far from complete, it has resulted in remarkable economic and political success for the UK and Europe as whole, acting as a magnet first for southern nations such as Spain, Portugal and Greece to transition from dictatorship to democracy, then for the newly liberated countries of eastern Europe to join the club, all of them with strong British encouragement.

The large EU country which has benefited most of all is arguably the UK. Our free trade traditions, English language, natural borders and retention of our own currency have given us all the benefits and few of the costs of membership. Notably we have largely escaped the effects from mass immigration from North Africa which are so afflicting southern Europe at present. It makes our present obsession with immigration look petty and selfish, against a backdrop of real misery and crisis in the Middle East and Africa and along its EU borders.

Economically we have benefited from becoming the international gateway for foreign investment into Europe. Margaret Thatcher made huge efforts to attract the likes of Honda and Nissan to the UK, turning us over 30 years from the sick man of Europe into one of its leading car exporters.

Bankers may not be popular, but the City of London has created great wealth for the south east, and it also contributes at least 11% of the country’s tax income and enables the UK to run a current account deficit and public services it would not otherwise be able to afford.

I acknowledge the result of last year’s referendum but I fundamentally disagree that a 52% protest vote, a vote denied to EU nationals living in the UK, gives the government a mandate to do anything more than to negotiate exit terms with the EU and then report back to Parliament and the country as a whole for a further vote once it becomes clear what Brexit really means.

What will it mean? It is delusional to think that the EU under its reinvigorated Macron-Merkel Franco-German leadership will do anything other than defend the EU’s own interests, foremost of which is a demonstration that leaving the EU is a costly and disastrous mistake. Juncker was right: the EU will act to ensure that the UK is punished. And they’ll gladly pick up our financial services industry and our other exporting industries rendered uneconomic by the risk of future tariffs.

There is simply no way that any possible deal with the EU will be better than the one we have just torn up. The results of hard Brexit or no deal (the most probable outcome considering it took the EU and Canada 8 years to agree a marriage, let alone a divorce and then a new relationship) once the Article 50 two years have expired will include inflation, a rise in the cost of living, collapse of foreign investment, significant job losses not only in the City but across the country, a loss of international influence, and quite likely the secession of Scotland (if the English can ’have their country back’ why should they not too?) and Northern Ireland, which will not be happy about the reimposition of customs and immigration controls along its border with the Republic, which will have better living standards to boot.

The United Kingdom will no longer be united. Great Britain will no longer be great. Little Englanders will have got what they wanted: little england. I predict considerable public anger, especially amongst the young who voted overwhelmingly to remain and whose futures are being so casually squandered.

And what will this new England be like? Our negotiating power will be feeble. A free trade agreement with China which still has political prisoners and slave labour will flood us with cheap imports and do nothing for protection of UK jobs and standards. A free trade agreement with a protectionist USA will flood us with subsidised food products that would also not meet current UK or EU standards. We shall likely see 30 mile queues towards the Channel Ports as the French reimpose customs inspections in Calais. Apart from fishermen (the only Brexiteers whose views I respect) no-one will be better off.

If you have bothered to read this far I thank you humbly for your patience and urge you to use your position within a party that looks set to gain a substantial Commons majority to back the voice of common sense and reason, no matter what the pressure from the Whips. Unless there is a crisis resulting in a new general election it seems that the focus of debate will move to within the Tory party.

As for me I am joining the Lib Dems in the hope that a grand coalition of the sensible, moderate, non Europhobic and non suicidal public might be created out of the hitherto silent ranks of sensible Tories and sensible Labour supporters who are neither hard Brexiteers nor Corbynistas.

We may yet see the creation of a new centre party. For now the Brexit tail is wagging the Tory dog, and I am bowing out.

Sincerely, Edmund Limerick

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