UKIP economics and Brexit

Hashtags #ukip and #brexit  I follow religiously on twitter because I am interested in economy and exasperated with the ‘they’ll still trade’ nonsense regurgitated day in day out by kippers and eurosceptic ‘nice but dim’ Tories in their Closed Ideology Echo Chamber with no-one there seriously challenging them. What is worse, lazy journalists like Andrew Marr often start a TV interview with pro -EU politicians by repeating and hence re-enforcing these EU and UK trade lies, because they are too lazy to check on their veracity.

So what are these #ukip economic mantras that do not stand up to any kind of scrutiny and defy common sense?

  • In the EU we are shackled to a moribund corpse in terminal decline
  • EU red tape is holding the UK back. 90% of UK businesess don’t need regulation
  • The percentage of global Gross Domestic Product (GDP) of the EU is shrinking
  • Look at all these developing countries showing 6-8% annual growth, we’re missing out not trading with them
  • After #brexit we will be free to trade with the world
  • We should have never deserted our friends in the Commonwealth
  • Our trade with the EU is massively distorted by the Rotterdam-Antwerp effect
  • If only we could make our own trade deals, sit at the top of the WTO table again
  • The EU will still trade with us after brexit because we buy more from them, than they from us, we are in a position of power.

EU a basket case in terminal decline?
Before working our way through the list of above fallacies let me remind the reader that, whatever its sins, with its 500 million consumers and $18-trillion GDP, the European Union is still the world’s single largest integrated economic area, and it’s right on the UK’s doorstep, not half way around the globe! Even if since the 2008 financial crisis, EU growth has hovered just above freezing point these last few years, 0.4% growth of a $18-trillion GDP is still an awfully big number! If economic genius @RedHotSquirrel, aka ukip’s Robert Kimbell quotes, as he likes to do ad nauseam, yet another random African country with five or six percent growth, so what? Basically it means, that if EU growth remained stagnant  over the same period period, it would take Africa 50 years growing at 5% just to catch up with the EU!

africa

We all know that growth usually happens in spurts, in economic cycles that come and go, taking the economy up and then down again. There are no indicators that the EU economies will actually seriously contract again in the near future. The latest Quantitative Easing measures announced by the ECB might even get the EU’s sluggish economies moving again? It seemed to have done the trick in the USA. In any case, 500 M. consumers in the EU will still eat, go on holidays and replace household goods. Buy things made in Britain! They are not ‘dead’ by any means of ukip’s imagination or wishful thinking!

A mathematical certainty: Global GDP cannot rise above 100%
Incorrigible Eurosceptic Daniel Hannan MEP likes to bang on about the fact that Europe’s percentage of global GDP is in long term decline. He loves to say:

“In the year we joined, western Europe accounted for 38 per cent of world GDP. Today it’s 24 per cent, and in 2020 it will be 15 per cent. Far from joining a prosperous market, we shackled ourselves to a corpse.”

Am I the only person to see the fallacy of this argument? Is this why both Hannan and Kimbell immediately blocked me on twitter, so I can’t prick through their vacuous arguments at will?  Of course it is either terribly misleading or incredibly stupid to make such outrageous propaganda claims. With the best will in the world, all its nations’ GDP percentages always will add up to the same 100%. For most of the last century Europe and North America together have laid claim to about half of the world’s resources and squandered together 50% of its wealth, as commonly expressed in terms of  global GDP. Then emerged, what we like to call the developing economies of the BRIC countries, Brazil, Russia, India and China, which are all at a similar stage of newly advanced economic development. Together they are now good for about 30% of global GDP. Do you think that an intelligent Oxford educated man like Hannan does not know, that it is a mathematical certainty, that as these countries take their share of global resources and output, the percentages representing the USA and EU must necessarily fall? Remember he is not some silly contestant in a TV show promising to give 110% to please, please stay in ‘Britain’s got talent’ or the X-factor. He is a devious #brexit demagogue of the worst kind, because unlike his ukip adulators, you sense he is kinda smart! He knows full well, that if you bandy about economic half truths like that, some of it will stick in the minds of UKIP and Tory Eurosceptic simpletons. The fact of the matter is: Europe can have growth in absolute terms, while declining in relative terms. That is not a bad sign my kipper friends, it’s a good sign of rebalancing global economies and continuing world progress and harmonisation. We in the West have had it our way far too long, while whole continents suffered in poverty to feed our greed. The next time a kipper tells you the EU’s economy is shrinking remind them only Finland and Greece still have that problem. The rest are growing fine,  just not as fast as some developing nations playing catch-up. Spain actually grew faster than the UK in 2015, but kippers prefer to point their little finger at Greece.

We abandoned our friends in the Commonwealth
The next thing your typical ukip brexit activist likes to tweet on and on about is how well the old British Commonwealth is doing, and how we should have never abandoned them in favour of the EU Common Market.  This is another favorite Hannan propaganda line.

Far-flung Commonwealth nations would make a far more natural trade bloc than the EU. It never made much sense to abandon a diverse market, which comprised agricultural, industrial and service economies, in favour of a union of similar Western European states.

That is absolute bollocks Daniel. That line may have made sense for the British Empire, when you could send in the gun boats and enforce such a colonial trade policy. Didn’t you study modern history in Oxford Daniel? Forgotten the image of Gandhi spinning his own yarn as a peaceful protest against UK manufactured goods? Your idea of trade is not how modern nations operate today. I owe you references, but I have been taught in economics that nearby nations of a similar wealth and stage of economic development benefit most from trade. Not trade that exploits their natural resources and dumps unwanted manufactured goods on ex-colonies. We are talking about a ‘mutual beneficial trade’ with the EU, because the consumers in EU countries like the additional choice that such trade offers. An example of consumer choice is a Frenchman ‘sick’ of all the Renaults, Citroens and Peugeots in his street and instead would like to make a statement driving a sporty UK Nissan, a cool Mini or even a ‘posh’ Range Rover. This is a win-win two way kind of trade, not the pillaging of the colonies you Hannan seem to be lusting after. But I am sure that kind of neo-colonial ‘Britannia rules the waves again’ talk goes down a lot better with your ukip followers. One kipper @leslieappleyard  was so desperate to prove your point, that he found a quote for shipping a container to Auckland New Zealand that was two hundred pounds cheaper than sending the same size to Athens. He made a big thing of it on twitter:

auckland

What Leslie and most would be world traders don’t realise is that if you are running a trade deficit with most of the world’s economies, that manifests itself in a lot of empty return containers making their way back to Europe, China, or wherever.  Of course shipping lines will do special deals to ensure some of those containers contain actual goods produced in the UK, rather than remain empty. Just like RyanAir offers you heavily discounted midweek flights to the continent, rather than flying empty planes back and forth. Common sense should tell you that the closer your market, the cheaper your transport costs. But when it comes to brexit, common sense is the first victim in a kipper’s mind. So Auckland must be closer than Athens, and because in Malawi they enjoyed 8% growth from nothing, with their per capita GDP of less than a thousand bucks per year, in some kipper’s eyes they are now candidates to sell all those unsold Sunderland Nissans to after brexit? Who are they fooling in their ukip bubble?

Our Chief has a Range Rover!

Our Chief has a Range Rover!

If you don’t believe me here is an Australian Wayne Cole making the point U.K. trade could face cold reception from former colonies.

“For all the shared history, Britain is a fading presence in its former colonies. Australia’s Prime Minister is an avowed republican. New Zealand is voting on whether to remake its flag without a Union Flag.”

Don’t clutch at the Rotterdam-Antwerp effect my kipper friends
Whenever you tell a kipper that roughly half of the UK’s trade is with its  EU neighbours, the scripted ukip answer is that EU trade figures are just another establishment lie. They’ll have picked up from the Daily-Express or Dan Hannan, that really our trade with the ‘English speaking nations’ of this world is much bigger than official ONS figures for  trade with Europe. (Note that conveniently, in the trade definitions they use, now the Commonwealth and the USA are clubbed together for effect. Even ex-colony Hong Kong and other city states that speak a few word of English are thrown in). The debating line will be that the true size of EU trade is overblown because of so many of UK exports are shipped through the nearby ports of Rotterdam and Antwerp, therefor are classed as EU exports, when in reality their end destination is elsewhere in the rest of the world. You’d think that the few kippers that can count, would find it a tad strange that even with Holland the UK cannot seem to manage a positive trade balance? I  refer of course to all those exports destined for the Commonwealth wrongly attributed to the Netherlands or Belgium and hence to the EU? The problem is that few kippers have properly read, let alone understood the Civitas report that the Express likes to misquote in its many anti-EU propaganda drives. Civitas themselves warn in their conclusions not to “overestimate the Rotterdam-Antwerp effect” and that ” the overall trade distortion of the Rotterdam-Antwerp effect is not great”. Pascal in his excellent “EU-debate” blog demolishes the trade distortion argument even further:

“I can even go further in my proof that it’s nothing to do with EU regulation.  The fact is that the same thing happens whoever we trade with. Therefore in the same way that UK-EU trade is inflated, so is UK-US trade. When we export oil to Canada and that oil stops at a US port before then going on to Canada, can you guess who we say we’ve traded with? Yep, the US.  This is particularly important as the US is our next biggest trading partner and so it is good to ensure the Eurosceptics don’t also use inflated figures when talking about how much we trade with other countries such as the US” .

Most countries of the EU have comparable wealth to the UK. Some actually a lot more! They generally make and buy the same sort of things the UK does. Often we make things together like Airbus, remember them? The great thing about our EU neighbours is, that like us, they appreciate choice in what and from whom they buy. EU industries’ value chains today are more and more interlinked. Much more so than with those in the rest of the world.  This is only possible because it is just a short stretch across the channel, with most EU export destinations in an easy one day’s drive reach for roll on roll off containers (the kind with trucks attached).

Data suggests that UK employment is very closely tied to EU partners via value-chains in a way that non-EU export jobs simply are not. This is no doubt in part driven by the simple fact that EU is so close, but it is also hard to believe that this is not driven by regulatory commonalities in the single market. These interwoven relationships along the value chain are in stark contrast to the kind of ‘ship and forget’ trade that appears more characteristic of non-EU trade”

The interwoven EU value chain rebuke can also be used to argue how many UK jobs are dependent on trade with the EU, although how many exactly is anyone’s guess.

Rather than worrying about signing a Free Trade Deal with the EU after a possible brexit Eurosceptics should do well to worry about the abysmal state of UK manufacturing.

Britain’s manufacturing base is one of the worst performing of the world’s developed countries, a recent shock report revealed. It is not just the handicap of exporting against an over valued pound. Brexit might bring that UK vanity project back to earth soon, in the sense that Sterling is already crashing at the thought of it. It’s more the fact that successive Tory governments don’t seem to have an industrial policy to raise UK’s poor productivity levels e.g. by stimulating innovation in manufacturing. For them it’s just about the City of London, where all their Public School chums work. Same with Farage.

Who can afford 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! Not in the tribe lands of Pakistan. The truth is trade with the Commonwealth was in long term decline long before Britain decided to join the Common Market. There is no marked dip in the graph around  UK’s join date in 1973, just a continuation of a decline that set in shortly after WWII as the following graph clearly shows.

commonwealth2

Out of the EU and into the world, an inconvenient reply
The next kipper argument goes that EU red tape is holding the UK back. Even if their own captain’s of industry actually say time and time that the amount of EU regulation is about right, and in any case a darned sight better than facing 28 sets of red tape and customs declarations as was the case before the Common Market created a customs union. The argument that just because a UK business doesn’t export to the EU it doesn’t need regulating is of course the biggest myth of them all. As if UK consumers don’t need protection. As if they’d put up with shoddy goods just because it has a label “Made in UK not for export to EU”. If anything UK consumers would run a mile from those products. I expanded on that subject in another blog post using Chinese Formula baby milk containing melamine as an example. No, EU standards will do nicely, even if only for consumption in the UK thank you very much Mr. Farage!china_exp

Germany and France face the same EU red tape as Britain yet outperform the UK when it comes to exports to China.

Lets take our place at the WTO top table again, but will we?
So what would happen after a brexit, that miraculously would set the UK free to ‘trade with the world again, according to ukip? First of all I would question the underlying assumption that the trade deals the EU makes for all of us are always skewed against the interests of the UK. We never see any proof when eurosceptics make those claims. Could the truth be far more inconvenient? Could it be that maybe, just maybe, Britain isn’t such a great trading nation in the first place? If I look at EU neighbour The Netherlands, this country earns almost 30% of its income from the export of goods and services. In 2012, the value of exports was 86.7% of the Netherlands’ GDP. The comparable figure for exports of goods and services (% of GDP) in the United Kingdom peaked at 32% in 2011, according to the World Bank. As a UK ex-pat living in France, you only have to try and get something delivered from back home, and you immediately run into a self defeating attitude, where British suppliers steadfastly refuse to deliver orders to the EU mainland, although no customs formalities are involved. The same for UK traders on eBay, they refuse to change their delivery default from ‘UK and Eire only’, as if it’s a chore to buy a few stamps for Europe along with 1st class stamps for UK customers? Yet these same small minded people will vote for UKIP and dream of Britain trading with the world after brexit? They think if they’d only take up their old membership of the World Trade Organisation(WTO) they would straight away sit right next to the EU at the top Table? Or is it more likely they would they sit in the main hall next to Norway, Iceland and Lichtenstein clutching a copy of flexcit  Mr North? Remember these EEA countries follow EU rules, pay for the privilege, don’t vote for any of it.

bridge

If only the UK could make its own trade deals, sit at the top of the WTO table again?

They’d trade if brexit ( or maybe we’ll be the next Greece?)
My final scorn is reserved for @RuthLeaEcon.  Although not sure if she is a kipper or just Eurosceptic, she regularly tweets nonsense under the #brexit hashtag, while as a trained economist, she should know better.  One of her favourite clichés goes as follows: “They’d trade if #Brexit.”  Her reasoning, along with many kippers, seems to be that running a long term structural trade deficit with another country or trade block like the EU somehow makes that country beholden to you. Remember buying from abroad is easy. Getting them to return the favour is the hard bit. The UK should maybe start by making quality goods they actually want abroad, rather than thinking signing a piece of paper will do the trick as kippers suggest.

deficit2

Well having studied a bit of economics myself, I find ‘They’d trade’ a bit hard to swallow. But kippers lap it up like my cat likes his morning milk. Common sense tells us that imports to a nation are like shopping to a family. Exports to a nation are like having an income to pay for the shopping bill. All families sometimes spend more than they make, but we also know that in the end it’s wise to balance our books and not go further and further into debt. At a macroeconomic level a trade deficit can in the short-term sometimes be offset by capital flows, but there is a big big caveat here long term, which every basic book on economics will tell you. And it’s not good news whatever Ruth and her kipper friends try to tell you.  I recently came across another blog from Henning Meyer who makes mince meat from the argument that the EU has so much more to lose. Using data from the MIT Observatory of Economic Complexity he points out “The EU doesn’t exist as one unit as it is a group of 27 countries. So the comparison is 1:27 and 27:1 – not 1:1

Some of those countries hardly sell anything to the UK but still will have a veto in any article 50  negotiations. Negotiations where UK is not at the table when they vote over any post brexit EU-UK trade deal.

“the rest of Europe sells us more stuff than we sell them and therefore they will give us a free trade deal as they don’t want to shoot themselves in the foot”. You can easily debunk this myth in 2-3 steps”

Henning’s arguments are well worth a read. I’ll just stick to my old economy text book:

deficit

A schoolbook text, why running a structural trade deficit for the UK economy is nothing for ukip to brag about, in the long run it will end in tears.

Conclusion
I hope I have debunked a few ukip economic half truths and fallacies. I know I will not get much of a reply here, because swiftly the kipper argument will change to the EU’s democratic deficit and hollow phrases like: “we never ware asked”, “we never got to vote on joining a political union” or “I don’t like it if 70% of our laws are made by nameless bureaucrats in Brussels”. They will throw quotes at you from Winston Churchill, which are totally doctored. Winston Churchill was a founding father of the EU and in his famous Zurich speech in 1946 very clearly said that sovereignty needs to be pooled sometimes, for greater effect. My ultimate answer to a kipper is that if you are that bothered where they make the rules on food labelling for a common market the UK joined after the first referendum in 1973, then maybe you have not got much of a life? Maybe you should get one? The principle of subsidiarity is now well ensconced in the Lisbon treaty and this political union will never happen. We need to take this with a pinch of salt. None of the EU member states want this ‘ever closer union’. None of them like red tape more than the UK. But the UK has to remain and be engaged in the EU decision making process to make sure talk of it doesn’t rear its head again. We now live in a globalised world and the challenges we face are better faced together in a United Europe. Not by scarping from the sidelines, while dreaming of an empire lost a long time ago.

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About lasancmt

Passionate about Identity Management Disgusted at #ukip and #brexit
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30 Responses to UKIP economics and Brexit

  1. Charles Efford says:

    The objective of the EU project is to form a single nationstate. This is clearly set out in Jean Monet’s book Memoirs. Monet believed that high-minded, wise, bureaucrats, like himself, should run governments. He believed that political democracy led to trade wars, which then developed into real wars. Jean Monet was a cognac salesman, which brought him into contact with powerful people in Europe and North America in the years after the First World War. He became an informal French diplomat and work for some time with the League of Nations. It was the failure of this institution to prevent the Second World War that confirmed him in the belief that France and Germany should come together as one nation. At that time, France had been invaded by Germany, three times in living memory and France had lost each time, because it lacked the coal and iron resources of Germany, which is why the start of the EU was an agreement on coal and steel. So at its inception, the EU was a construction concocted by a Frenchman to solve the problems of France.
    Clement Attlee’s Labour government did not take part in these negotiations, because Attlee believed that the British people would not tolerate the loss of sovereignty that joining the new community would involve and he was right. If the implications of joining the steel community, the EEC or EU had ever been honestly put before the British people, we would never have joined. The loss of sovereignty is simply too much and is the principal reason why I want to leave. The EU is not a club, it is a government and one to which I do not want to be subjected, which is why I deny and refuse European citizenship, which has no other purpose but to provide a citizenry for a nationstate. If the EU wants to deny that the objective is the formation of a nationstate, then it should abolish European citizenship. The right of abode, and free movement can be simply allowed. We can’t even keep illegal immigrants out, let alone legal ones. We can’t deport criminals from other EU countries, because to the EU, they already are in their country.
    “In the EU, we are shackled to a moribund corpse in terminal decline.” Romano Prodi said that the Euro is a political project, not an economic one. He was right. That is why it is an economic disaster, creating mass unemployment and economic stagnation in the Eurozone. The countries of the Medzone simply cannot live in the same currency union as Germany. To work, the Eurozone needs banking union, economic union and political union. All this would mean massive transfers of wealth from Germany to the Medzone countries, which German taxpayers will never tolerate. This situation is structural. The ECB is now trying quantitative easing, but whose bonds does it by? Greek bonds may not be worth much shortly. My solution would be for Germany, the Netherlands and Finland to leave, leaving France and the others with a devalued currency, with which they may be able to restore growth. On the other hand, if they follow the logic of the euro and undertake full political union, they would be moving away from the UK and creating a union, which we could never join. This would be a reverse de facto #brexit. A most satisfactory solution, in my view.
    “The percentage of global GDP of the EU is shrinking.” You are right to point out that the rapid growth of China and India and the Far East, over recent years, mostly accounts for this fact, but the situation in the Eurozone exaggerates this by locking the currency union into a low growth, unemployment, death spiral. There is a real risk of long-term stagnation, like Japan has experienced, because of the structural flaws of the euro.
    The fact remains that they EU does not have FTAs with the USA, India or China, and most of the Asian tigers. Such bilateral agreements are necessary, because the EU, along with the USA and Japan, has consistently blocked, multilateral free trade in agricultural products to protect the economic obscenity of the CAP. This was the principal cause of the failure of the Doha round of trade liberalisation talks, which was the best hope to increase the GDPs of poor third world agricultural economies. This was an immoral act for which the European Union is justly condemned. The CAP also has the effect of increasing food prices within the EU, because it requires tariffs and quotas on the agricultural products of efficient producers to maintain the prices that inefficient European farmers require. You only have to look at the price of lamb, which is obscene. New Zealand could supply lamb to the table in the EU, cheaper than it leaves the farm gate here, because New Zealand is the world’s most efficient grassland farm economy, but their exports are severely limited, to sustain the CAP. Food prices affect low income families the most, which just makes the CAP even more disgusting. The European Union should abolish the CAP and returned to multilateral world trade negotiations, which would benefit both the EU and the whole world. Britain is shamed by association with the behaviour of the European Union in international trade. I for one would like to disassociate the UK from this by leaving the European Union.
    “After brexit, we will be free to trade with the world.” This would seem self-evident. The EU does not have FTAs, with the other large world economies, because it finds it difficult to reconcile 28 different interests in trade negotiations. I recall negotiations breaking down over the issue of cheap shoes, when Peter Mandelson tried to negotiate an FTA with China, this was because of the objections of the Italian shoe industry. Families were prevented from buying the children, cheap shoes to look around in school, because Italy didn’t like it. Such things would have been covered by a multilateral free-trade agreements under the WTO, if the EU had not obstructed them to protect the CAP. The FTA with the USA has had problems with the EU’s irrational fear of GM foods, which is similar to the mediaeval fear of witchcraft. If the UK resumes its WTO’s seat, it could far more easily conclude FTAs with the major world economies, unrestricted by the EU’s irrational fears and interest groups.
    “We should never have deserted our friends in the Commonwealth.” An inspection of the Commonwealth war graves in your native country of Holland, would reveal the number of Australians, New Zealanders and Canadians, along with Indians and others who fought and died for European freedom, but their descendants are now denied the right of abode in the United Kingdom. Edward Heath betrayed, these people for the EU, which is something that I am profoundly ashamed of. You might note that these countries have FTAs, with most of the major economies in the world. The EU being the exception.
    The EU has never accepted that the logic that brings down trade barriers between the members equally applies to the whole world. The EU should be a mere stepping stone to world free trade. However, it is an obstacle to this objective, paradoxically denying the logic of its own formation. The result is that it practices a form of regional autarky promoting free trade internally and obstructing externally. This is madness. We would be free of this stupidity if we left.
    “The EU will still trade with us after brexit, because we buy more from them and they buy from us. We are in a position of power.” The statement about power is irrelevant. It is in no one’s interest to set up trade barriers. It is also against WTO rules, which would apply after brexit, even if the free trade agreement was not concluded, which all agree is in everyone’s best interest. So it would seem logical that we would continue to trade with the EU, after we leave. We do run a trade deficit with the EU, and also with the whole world, which is something we must address, but waiting for the EU to reconcile its conflicting interests and dismantled or non-tariff barriers it has erected will not do this. We are held back by the EE is indecisiveness.

    As for your claim that political union will never happen, because of the Lisbon Treaty, I don’t see how you can reach this conclusion, political and economic union is part of the logic of the creation of the euro. The European commission is still on course to create its state. This what the EU: flag, anthem, currency, parliament, president, citizenship, free movement, Europol, Eurojust, the European arrest warrant, foreign policy and high representative, control over trade and the intended defence force and force projection capability, are all about. This goes far beyond the requirements of a free trade area, which is all the vast majority of British people want. Imagine your children and grandchildren being conscripted to fight and die for the EU? This is what the full implications of citizenship and their ambitions to project power, mean. Our government has given the EU power, without limit, over all of us.
    Regardless of whether we get a referendum or not, the solutions to the structural problems of the euro will mean a managed brexit, as the Commission engineers the political union it has always desired, on the pretext of saving the euro.

    • lasancmt says:

      First of all thanks for a well argued and balanced comment Charles. Unsurprisingly I am going to disagree with a few of your analyses and conclusions. Doesn’t mean I am right you are wrong necessarilly. Remember the old saying “one man’s terrorist is another man’s freedom fighter”?
      I have not read Monnet’s pamflets, books, whatever. I have heard other people say the same things about them as you recall, so they are probably true. But am I offended, shocked? No I broadly agree with him and consider him a freedom fighter rather than a terrorist. I fear nationalism more than supra-nationalism. If the EU’s role one day can be taken up by the United Nations, I won’t shed a tear. I won’t go all dewy eyed complaining about loss of sovereignty, a grossly over rated thing in my opinion.

      Now when it comes to UKIP’s obsession with CAP and Free Trade Agreements, I am much more passionate about my right and your wrong. If there are differences between what you like to call ‘Club med’ economies and what you loosely describe as ‘Northern’ EU countries, than imagine the discrepancies between low wage economies of the BRIC countries and the EU. True, some Free Trade Agreements have increased wealth in terms of GDP, but they can also be the death warrant for certain sectors of native industry and jobs. Some strategic, some not so strategic. The first sector may need protection, the second can be given up more easily for the benefit of trade.

      Europe’s agricultural sector is a case in point. I have written about CAP at length in another blog post (https://identityspace.wordpress.com/2014/04/14/having-your-ukip-porky-pie-and-eat-it/), so I am not repeating it here. But just because ” New Zealand is the world’s most efficient grassland farm economy” that doesn’t mean it is a good idea to let thousands of UK and French farmers go bust, shipping lamb in from half way around the world, while our countryside is depopulated and ruined by neglect. Let them sell their lamb to China, it’s closer and they need them more!

      You seem to be very selective in what you remember of WWII history, learned nothing about vulnerability in supply lines in times of international conflicts, in other words food security! You cannot put a price tag on that!

      • Michael says:

        “Freedom fighter” and “terrorist” are not mutually exclusive. Some people fight for freedom and use terror as their weapon. Just saying.

  2. NLFG says:

    Reblogged this on Nathan Lowndes, Football Genius and commented:
    Long fascinating read detailing why UKIP’s arguments about Brexit are mostly a nonsense. Worth 10 minutes of your time!

  3. Pingback: #UKIP And The Importance Of A Strong Voice In Europe | Exposing UKIP

  4. Charles Efford says:

    Your statement about farmers going bust if the UK trades freely with NZ contrasts with the post war situation, when UK shops were full of: NZ lamb, butter and cheese, yet UK farmers still produced 84% of UK food. Producers move to where they have the best comparative advantage, as an economist would say. This shows that economics is not a series of zero sum equations. All can benefit by producing to their comparative advantage through free trade.
    It is illogical to accept that the removal of trade barriers within the EU improves prosperity for all, and also to claim that this is not the case with the whole world, which of course it is.
    The obstruction of free trade penalises the consumer in the country that impose such restrictions, by increasing prices and reducing supply. It benefits the selected group within that country, by giving them the right to impose a private tax on their fellow citizens through higher prices, frequently accompanied by reduced quality. This is why it is schizophrenic for the EU to practice free trade at home and restricted trade against the rest of the world. These two positions cannot be logically justified. It is the vested interests that benefit from restricted trade, who prevent the EU from agreeing multilateral free-trade agreement, with the whole world, through the WTO. They also frustrated FTAs, with other major economies for the same reason. The worst, and most obvious, of these are French farmers.
    When politicians protect an industry, because they say it is “strategic”. The strategy is to gain votes. They seek to benefit the small interest group concerned, hoping that the majority of citizens will not notice how their prosperity is being reduced. The world’s agricultural economies, most of them in the Third World, would have benefited from the success of the Doha round of trade negotiations. It is facetious to suggest that the EU did them a favour, and protected their strategic industries, by immorally frustrating their ambition to defend the obscene CAP.
    As for wartime food security, do you think that in the nuclear age a conqueror could occupy all of continental Europe and prevent us trading with them? Do not fight the next war with the tactics of the previous one, which is now 70 years in the past. The modern war would be over far too quickly for siege tactics to have any effect. Also remember that the allies defeated the U boats in the end. NATO and nuclear weapons make a major war in Europe unthinkable, a situation that will prevail as far as we can foresee.

    • Michael says:

      I agree with you on the necessity to remove trade barriers and their devastating effect on farmers in agricultural economies. But stating that “the modern war” would be over far too quickly sounds a bit overoptimistic to me. Recent examples of prolonged wars are the Iran-Iraq war, which lasted for 8 years, the Nagorno-Karabakh war which lasted for 6 years and actually involved a blockade (still ongoing), the war in Bosnia, which involved a blockade of Sarajevo, and so on.

      • lasancmt says:

        When I think about food security in the 21st century I am no longer thinking of Atlantic Convoys from North America feeding starving wartime Britons. I am imagining, as an example, the trade in beans. Let’s say Kenya has a near monopoly trading advantage growing them, as they indeed already do with great success. Now let’s imagine a terrorist group like Boko Haram just spreading the rumor that they laced some ‘haricots verts’ shipments destined for British Supermarkets with the ebola virus. Given the power of social media, no-one would touch them with a barge-pole within days and Sainsbury’s would be forced to empty their shelves of them pretty quickly!

        OK that’s just a humble bean we could live without, but multiply that with a few other staple crops and we’d soon have panic buying. Thing is, once a European farmer gives up his trade, you can’t get them out of retirement by snapping your fingers, when you have a sudden problem with your food supply lines. He’ll have sold his tractors to Africa. We’d have a real problem on our hands, if not food riots. Food security means controlling your supply lines. Supply lines become less secure the farther away your stuff is produced. Seems simple enough. Besides who’d look after our countryside?

      • Michael says:

        And considering we actually depend on four-five crops for 90% of our food supply, things can get real nasty real quick.

  5. Pingback: Who do you think you are kidding Mr Hannan? | IdentitySpace

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  7. If you block people on twitter who dare to argue against your point of view you are nothing but a coward with no real arguments & invalid any point of view you put forward.

    As somebody who has represented the UK in Brussels negotiating EU Directives on behalf of the UK you should wonder why I am anti EU.

    Perhaps before you involve yourself in political discussions it might be as well if you grew up &, a back bone. If you are too cowardly to debate politics with adults, I suggest you take your feeble rantings back to the nursery.

    No doubt you will also delete this post to keep a pathetic fascist one sided pro EU view on your blog.

    • lasancmt says:

      Ian, the only reason why you were blocked on twitter is because you are just plain and unnecessarily rude. I mean for someone who has a bio picture ‘giving it the finger’ no wonder nobody takes you serious. I bet that went down real well when you were “in Brussels negotiating EU Directives on behalf of the UK”. Did your boss fire you for being undiplomatic in the diplomatic service? Go figure!

      Anyway what was your point exactly? You call what you just wrote debating like an adult?

    • Michael says:

      Well, since your reply has not been deleted, perhaps there is an opportunity for you to participate in a debate after all? Now its up to you to show you can.

  8. Pingback: Lies, damned lies and #ukip Statistics | IdentitySpace

  9. Those who maintain that non-EU trade is growing apace are simply stating a truth – see ONS Oversees Trade Statistics. In the last quarter Total Exports= £26.4bn Exports to Non-EU £15.4bn Exports to EU £11bn. The EU trade position is one of a huge deficit between imports and exports:

    I don’t know if this tag will work:

    If it doesn’t you can see the graph at The Benefits of the EU to UK Trade and Industry.

    The EU is one economy, one law and one culture for the whole of Europe. Supporting it embodies the desire to crush all diversity. Bring back the EEC with vetoes for even the smallest members.

    • lasancmt says:

      First of all the EU never had a policy to trade within the EU in preference to trade with the Rest of the world (ROW).
      That is just a delusion propagated by eurosceptic nutters like you. In fact several eurozone member states export quite successfully to the developing BRIC nations. Unlike Britain outside the Eurozone, they actually make money out of this trade in the sense that they have a trade surplus rather than the structural trade deficit that Britain carries, not only with other EU countries, but pretty much in each market it dips its toes in to trade except for some unknown reason trade with the USA.

      What really gets me is that people like you somehow try to lay the blame for this UK ‘failure to trade profitably’ on the doorstep of the EU instead of looking for the reasons in your own back yard.

      I explained this in the main body of this blog. It’s time you British accepted that you are just crap at trading. You have this notion Britain is this great seafaring trading nation, because you can’t see half of the containers destined for China loaded in Felixstowe are in fact empty returns. You are blind to the fact many empty UK containers are moved to Germany for them to fill up. Germany actually produces stuff ( plant Machinery) that developing nations need and can’t get anywhere else.

      And what car are you driving Mr Sydenham, I bet it’s a German car, not one produced in the UK. You see if more people like you put their patriotic feelings into actions, like buy British if Britain has a perfectly acceptable quality car available, than that would do more to eradicate Britains trade deficit with EU than all this meaningless moaning about how unfair those pesky Europeans are not buying a Jaguar or Range Rover for every quality German car Nigel Farage’s banking friends feel they should be seen driving in.

      • The EU has never held a policy to trade in preference with the EU over the rest of the world? What is the purpose of the Common External Tariff then, if not to enforce imperial preference among European member states, in particular the founding juggernauts of France and Germany, who have always adopted a mercantile approach to managing their economies?

      • lasancmt says:

        Don’t be an arse. There’s plenty of produce we Just don’t grow in our moderate climate. So we trade for it. You’ll find there is no EU tariff on those products either. So we do have some industries we’d like to protect. Sugar from sugar beets. Well we grow plenty of them in Suffolk, Cambridgeshire, Norfolk. So don’t pretend we don’t benefit. You are a joke, sir! We also put tariffs on steel. We protect our steel industry against Chinese dumping practices. That also protects steelworkers in Port Talbot Wales. Guess who was protesting against that protection in ‘Bwussels’. Camoron and Osborne were. But who do twats like you accuse of making it impossible to protect UK steel mills? You guessed it. Blame EU. Well fuck you very much, as Lilly Allen sings in Europe. Although in UK they play the version where she sings “Thank you very much” That’s how you lot are being lied to every day, every year.

      • lasancmt says:

        Another thing. Your comment suggests that before the EU nation states didn’t levy tariffs on trade. Of course they did. Just with the advent of EU they disappeared at least for the internal market. For the external market presumably they maintained an average of the member states. That’s a different narrative than trying to tell UK simple folk the EU was responsible for them and hence is against free trade. It created the biggest free trade area in the world dumbo! It uses its negotiating clout and the promise to get rid of more and more tariffs to much greater use than individual nations could. This is the essence of what I said when I said the EU does not ban trade. You trade by the rules. That’s all

      • The silent assumption that you have made, and I assume the point you do not want to have highlighted in what you say, is that we do not dictate the terms of our trade policies at all. Since we joined in 1973, we have been subjected to increasing degrees of regulation and control, to such an extent that it would be nonsense that it does not have a determinative effect upon our trading position. In the first place, we can’t make agreements in our own right with 3rd parties. What bigger influence upon trade can there be than that? Furthermore, the internal trade is regulated in all manner of measures, such as specifications and the like, by rules which effectively regulate the nature and specification of the products that are produced. Regulations effecting every aspect of production, labouring, distribution and consumption are enforced upon the British economy. You may call them “standards” – you have no reason whatsoever to call them anything other than regulations, because they serve to control this activity at every point. You can level all the insults you like at me, but it’s ignorant of you to pretend that this is not the case. And it is no answer, of course, to say that these bind all member states equally, since that is not the issue. The issue is whether Britain is free to manufacture and trade independently in any true sense of the word. This is one the many issues you skip over in your piece. But you are also being dishonest when you say that our trade deficit is one we share with the world. Take our trade deficit in cars with Europe, in contrast to that with the rest of the world. Regarding your observations over trade deficits, are you suggesting it would become even greater if we leave Europe? Might I address you to a little matter known as the law of supply and demand? For you to suggest that our deficit would widen upon exit is to ignore practically every observation in the economic textbook. In fact, might I address you in local terms to the work of Dr. David Comerford from Stirling University, and the institution of terms known as “the border effect” alone would serve to diminish EU exports. Now I will gladly have it that UK imports to the EU may suffer (to which the extent will depend upon more precise measures of trade), but what Comerford’s research would suggest is that given the recent imbalance in trade, it is the EU exports to the UK who will suffer most.

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  12. Steve Peers says:

    Could I add a point that is overlooked in this debate? In the time since the UK has joined the EU many key Commonwealth countries have joined or developed trade agreements like NAFTA, ASEAN or TPP. So it’s not possible to recreate the Commonwealth preference rules in order to create a protected market for UK exports.

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  14. Pingback: Lets go trade with the Commonwealth? – Get the Brexit FACTS

  15. On the EU being the largest integrated economic area in the world, you are aware that it requires full British membership to be so? Retraction of the UK’s $2.6 trillion in GDP (2nd largest in the bloc) would put the EU behind the US by such an amount, and given stagnant growth “enjoyed” by the Eurozone and its occupants as you have just admitted would put it behind America as the 2nd largest economic body in the world. The point Kimbell is making with these statistics and figures is a pretty simple one – would it not be wiser to focus an economic and global trading policy on areas of the world which are actually rapidly expanding, as opposed to ones which are otherwise stagnant, as you have just forced yourself to admit? Of course we’re not pretending the GDP of Africa will somehow equal that of the size of Europe, and you’re being fatuous to pretend so, we’re simply saying that in terms of raw growth and potential for innovation, would it not be more beneficial to expand our outlook, as opposed to settling into the dictate of the European commission? The same Commission which has said that 90% of world demand will be generated outside of Europe? With that said, Europe is going to fall behind China’s total size come 2024 regardless of UK entry, and its PPP is already giving way. What exports and imports we do give and take from the EU have declined since it officially formed in the 1990s. Our exports to the EU have declined 10% since 1990, and continue to do so, with UK-EU trade growing at half the rate of the rest of the member states. Of course Europe will continue to grow, it is an economic union of industrially developed nations, but with the Eurozone seeing such dismal growth rates, and many of the leading European economies lagging behind the UK in terms of GDP growth, the Eurozone seeing 0.2% the last quarter, might it not be wise to shift our focus, as the direction of our trade is already doing?
    There are no indicators that the EU economies will face any serious contractions in the near future? I would advise taking a peek at the situation in Italy, where their banks are proving unable to quite manage carrying 1/3 of Europes duff credit. I can toss you a number of different sources that explain pretty plainly why this will instigate an economic crisis across the Eurozone, a project so toxic even the remain campaign and European spokespeople struggle to continue to pretend is a success. As for QE supposedly being a success in the US, which is seeing its slowest recovery to a recession since 1929, your basis for that claim is equally as baffling.
    On Hannan and Kimbell blocking you on twitter, I’ve received similar such treatment from deluded Europhiles such as “I am incorrigible” and their ilk, so if there is intellectual dishonesty there, it’s certainly present both sides. Notice you’re not mentioning that Hannan’s remarks aren’t from thin air, and are actually backed up by the IMF. But again, you’re missing, once more, the fundamental point people who say that the economic future is not invested solely in Europe – why is it so far flung and patently dishonest to suggest that where the most noticeable and largest growth is occurring, be it by their own terms or ours, that we should instead choose to make that a focus of our economic policy? I wouldn’t be so baffled by the EU’s behaviour if they noticed this obvious fact, as opposed to slapping 4-5 figure tariffs on all such potential competitors who dare challenge their protection racket. You are correct, we squandered such a share of our GDP, Europe through deciding to form an insular protection racket, and the US for deciding to reject its innate division of labour that had always given it such an advantage after it enjoyed rapid economic development during reconstruction, and began to embrace free trade. The use of the term ‘squandered’ suggests it need not have happened after all, which we agree on. But to suggest that decline and fall of growth status is some sort of ethereal power of which we have no control and the decisions national economies make will have ultimately no impact on this is, let’s face it, silly. Just shouting quite emotionally about Hannan’s point only shows to me that you’re missing it entirely.
    Spain have enjoyed fantastic economic growth recently, this is true, but if you’re trying to pretend it was the buouyant genius of the Grand Duchy of Belgium that led to such prosperity, you are being dishonest. They have a political situation where for the past two years they have not even had an active government. And shall we brush over what has delivered them the issue to begin with, the eurozone crash, which you’re effectively treating as a blip on the radar.
    This banging on about wanting deeper economic ties to the prospering Commonwealth nations of India, Australia and New Zealand being shafted as supposedly being a desire to want to launch the battleships back out to sea and ramsack all those former colonies is just another emotional tirade getting in the way of another interesting point you’re making. Does such trade only benefit nearby nations, and should it only continue to? Doesn’t that rather fly in the face of the principles of economic globalisation, and the development of the new global trading systems, where distance and borders are but issues of the past in the face of new and developing prosperity? If that’s so, why does the EU want to expand its reach of trade to nations like India, and Canada (who struggle in their negotiations, a testament to the efficiency of the European model). If that’s so, why is the general direction of UK trade moving away from Europe? Again, the talk of us supposedly seeking to “dump goods and exploit resources” is emotive and confusing.
    Interesting point on that remark made on how New Zealand is supposedly leaving the UK behind, particularly on that new, union-less flag: the country voted to maintain the Union jack on its flag. Their PM stepped down, and is replaced with an individual whose view of the monarchy I am unsure of. We do know of this though: Australia, Canada, China, the US, New Zealand and others have, post-Leave result, given open voice and eager talk of a bilateral trading agreement between our two countries. Similarly the Prime Minister of Iceland said he was looking forward to us joining their contingent of non-EU European member states. It seems to me the idea of abandonment of our soggy little island is less a statement of the facts, and more just something you’d rather have happen.
    I’ll not comment on your remarks on the Rotterdam-Antwerp effect, as I agree with you there, I’ve never taken the claim seriously, nor has it ever been of considerable importance to me. I’ll take the ONS’ word that its impossible to quantify. But your stance of, from that, asserting that any potential inflation is therefore a folly, is childish. Although in that section, some of the remarks made require comment. I completely agree with our duff manufacturing base, but am surprised that you don’t think the Common Market has had any impact on this, considering when we entered the common market, manufacturing took over some 80% of our GDP, and nowadays it languishes at 12%. Successive governments have abandoned productivity in the name of soothing bond markets, and I’ve always felt it was a massive mistake made by Cameron and Osbourne in our recovery. I’d recommend you look at some of the coverage Max Keiser has put into this, as it’s really interesting. I’m also given heart that Theresa May and her government are shifting the focus onto productivity, albeit at the expense of financial prudency (not that the Conservatives ever knew such a thing). But as our growth has, in particular in the recovery to the 2008 crash, been propelled by consumer spending and services, whilst our manufacturing has been in a continuous decline, this means that membership of the Common Market hasn’t added a NET job to the jobs market for the past five years! You can’t really say our membership of the common market has been an asset to jobs creation, and the expansion of our manufacturing base can you seriously say that it is such a crucial underpinning of our manufacturing expansion, when it seems to any onlooker have declined, certainly in our internal market.
    It’s a fatuous comparison to pretend that the relationship with the single market that is had by Britain, and France and Germany is exactly the same, because you know as well as I do that it isn’t. Germany is an intensely mercantile economy, where the exports matter, ran on what the yanks would term “corporate welfare”. Similarly French agriculture benefits overwhelmingly from the pan-continental subsidies the Union writes up. Most crucially, they are founder member, and eurozone countries. They do not share our economic policy, or our relationship with Europe. They also have the overwhelming majority say in the European council, with their US-based model effectively putting in place rotten-boroughs so a preferable economic policy can be implemented within the Union. Does it not occur that perhaps the reason Britain doesn’t function as well as the mercantile French and German economies in the single market might just be because they share a preferable relationship with it to us? The argument for EU standards and regulations has always seemed one that misses the point from my perspective, but to imply that somehow the UK parliament can’t or won’t if they are necessary, implement those standards on exports, especially since we were so fundamental to the trade union movement? Or do we require the intellectual powerhouses of the European Commission to mollycoddle it for us in their fabian fantasy? And as non-member states, trading with the common market, why is it so absurd that we could not establish such standards as equal bodies, if they are so brilliant and essential? A similar such principle applies to taking back the seat on the WTO, although that delves more into the political and democratic argument of Brexit, which we aren’t debating here. Going past that, much of your argument seems to just be directed at the broader fashion in which the UK directs its trade, which I agree, is ridiculous. I fail to see how membership of the EU, and a refusal to adopt an independent economic policy, is somehow helping that. I have yet to read the full Flexit piece, although I often enjoy reading North’s blogs, but it seems you’re trying to sneer to take attention off the fact that they seem to have a genuine case to put forward.
    With that said, to state that the impact of European regulations has been wholly beneficial to continental industry does leave me with one or two points of motion. I know the British steel industry hasn’t benefitted from carbon cutting regulations employed by Brussels. The pledge to cut carbon by at least 40%, has caused verifiable divestment and has damaged the industry across the continent, but particularly in the UK. Why else would the price of kilowatt per hour of electricity be 50% higher in the US than Britain? Before pointing to China, the EU has attempted 37 anti-dumping measures against China, all have failed.
    On Ruth Lea, I’m unsure of her position, but given that she’s been very vocally disparaging of the Eurozone project, I would presume she’s a eurosceptic. But I fail to understand why this basic logic of the UK being the EU’s largest export market (a narrow 1st, but 2nd to the US who will be moving towards a more mercantile, protectionist policy under Trump and the Republicans) means we do not have the potential to agree a favourable negotiating position. And if free trade is a mutually beneficial process, as the principles of the Single Market testify to, why should they decide that somehow blocking that off is a good idea, or will benefit everybody involved? Do you seriously think that Europe could just shrug the potential impact of it off? Trade with the EU might create 3 million UK jobs (although the director of the NIESR called the claim “pure Goebbels”), but if we go by those same studies, this also creates some 5 million across Europe. Why else would Germany’s trade minister have made comments to the effect of losing or impeding trade with Britain would be mutual destruction? Voicing the trade deficit is simply being used as reference to the one-way nature of our relationship with Europe (one we don’t share with the rest of the world). No one is bragging about it (although I have heard a great number of Europhiles somehow pretending this is a good thing), it’s a point of reference. Although our problems in that regard, as I have concurred, run much deeper than our relationship with the EU, membership is clearly no help. Unless you’re implying that free trade within the EU is not a mutually beneficial process, and disproportionately benefits some member states moreso than others, which is hardly a testification to the model.
    I have read Meyer’s piece, and would sooner put my criticism’s and comments of that to him. But these terms only seem to underline a thesis of the hated Daniel Hannan: that the EU is a protection racket.
    In my view, rather than supposedly debunking “half truths and fallacies” (i.e. taking single quotes and deciding to dedicate a whole post with no rebuttal), you seem to have just ducked most of the points they were making with an aggressive snarl, and haven’t put up much of a defence in your own way. On eurosceptics supposedly then shifting the debate to the social argument, I would simply point out that the economic policies adopted or inflicted upon a nation will have a tangibly social effect on a society. Up to a point, in the real world, you cannot divorce the two. Certainly not one that properly puts forward a strong case for remaining in Europe, as no one was able to do, which is why Remain lost, and Leave won. To imply that somehow ever closer union is never going to happen is deliberately ignorant in my view. Against this background, any mention of “subsidiary” is an exercise in double think of Orwellian proportions.

    • lasancmt says:

      You’ve hot a serious problem mate. Have you looked at the size of your rant? You should seriously think of writing your own blog. I am not going to spend time arguing the toss with you. I gave done you the curtesy of reading it all. I have answered most of your points in other blog posts on IdentitySpace, but you obviously haven’t read them all. My suggestion is. Keep comments short and to the point. Then people might think them worth of an answer. This is actually quite an old post in case you haven’t noticed?

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