Brexit: An opportunity that could be wrecked by politicians

So the UK votes to leave and the PM decides to leave, but not now.  The Chancellor of the Exchequer hides, and beyond the Bank of England printing a few billion, nothing else happens.

The EU has already decided to play tough and has its own position, which is essentially "fuck off, the walls are going up, deal with it".  Although Germany is being much more nuanced.

The Conservative Party has to find a new leader, and from that a new Cabinet and a policy on negotiations.  Labour meanwhile is going the same way.  It is likely a new Conservative leader/PM will call a General Election on a manifesto of leading the UK into a new open, free-trading world with a new free trading relationship with the EU.   Leaving the EU requires the UK to initiate it formally, which the EU is begging for, but the Government would rather delay because it changes its bargaining position.

Yet that could be problematic, not least because a key plank of those fighting to leave the EU is to end free movement of people with the EU, and all countries in the EU Single Market (including non-EU Norway and Iceland) all have signed up to free movement, and even non Single Market Switzerland has, although it does have extensive restrictions on new residents having access to any government provided services.

Meanwhile, leftwing nationalists have jumped on an opportunity.  Sinn Fein wants a referendum on Irish unification, but the Northern Ireland First Minister has said no.  Scottish First Minister Nicola Sturgeon is flailing about wanting a second referendum on independence, but wont discuss:

1. The EU only lets non-members join, not current members split into joining and non-joining;

2. Joining the EU means joining the Euro;

3. 90% of Scottish trade is with the UK, Scotland in the EU would mean any EU trade barriers with the UK also apply to Scottish trade with the rest of the UK.

Spain, showing it really hasn't turned as far from Francoism as it would have liked, is demanding co-sovereignty over Gibraltar.

Meanwhile, the young leftwing social justice warrior types (Generation SnowFlake some have called them, for their "safe spaces", being "triggered" by hurt feelings and constantly protesting about what is offended) feel "betrayed" about the old "ruining their futures".  However, the truth is that the majority of the young didn't care enough to vote as revealed by Sky News below.

% who got through our final #EUref poll turnout filter by age group:

18-24: 36%
25-34: 58%
35-44: 72%
45-54: 75%
55-64: 81%
65+: 83%

— Sky Data (@SkyData) June 25, 2016

Whinging about democracy when it doesn't go your way, whilst embracing it otherwise, is beyond the pale, as are some of the hate filled attacks on older votes coming from those whose own identity politics is supposed to decry hate speech.  The truth being that the so-called liberal leftwing anti-hate, anti-violence activists are full of hate and quite happily embrace violence to get their "own way".  It's emotion laden petulance, of the kind you would have only seen from the fringes of the far-right and conspiracy theorists had the vote gone to Remain. 

So what should happen now? (notwithstanding who the PM and Government is)

1. The Government should announce the key planks of a new relationship with the EU around trade, investment, movement of people and co-operation, that it seeks to adopt.  It should clarify to the entire country that it is not going to be a UK of isolationism, but one of openness.

2. The Government should make it clear to all EU passport holders in the UK that no-one will be deported, except under existing arrangements for threats to national security or criminals.  No EU residents need fear this, nor will their property be affected or businesses, and if anyone threatens them they should go to the Police.

3. The PM should make it clear that there will be no referendum on Scottish independence this side of Brexit, but that the Government will consult with the Scottish government and parliament on the deal it seeks with the EU.  It is precipitous to talk about Scottish independence until Scotland sees the new deal negotiated with the EU.

4. The PM should make it clear that there will be no referendum on Northern Ireland joining Ireland unless the preconditions of the Good Friday Agreement are met, but that equally it cannot happen until the new deal with the EU is negotiated AND negotiations are concluded with the Republic of Ireland.

5. The PM should go to Dublin and discuss the future relationship and reassure that no border controls will be reinstated.

6. The PM should go to Germany and talk, extensively, about how to make this work, and then go to all other EU Member State capitals, and the EFTA Member States too. 

7.  The Government should go to the WTO to discussing reviving membership.

8. The PM should visit USA, China, Japan and other trading partners and say that it wants to have open, freer trading relationships and the UK will be open for business and people.

9. Finally, the PM should make it clear that there wont be a second referendum on membership and that those who want to claim it is unfair, that this is democracy and the task now is to bring the country together and work for a new relationship with the EU and the world that demonstrably proves the claims of the Remain activists wrong.

Oh and ignore Nicola Sturgeon.  The Scottish Parliament can't "veto" the British Government any more than Lambeth Borough Council can stop the UK having nuclear weapons.

EU truths and untruths

With the UK now voting as to whether it remains in the EU or stirs up what has been described as "the biggest change in European politics since the fall of the Berlin Wall" (although the war in Yugoslavia and the first genocide since the Nazis ought to come close), I thought I'd run through some of the claims of both sides that are intellectually dishonest.

Remain

3 million jobs are linked to trade with the EU: Well yes, but then nobody is saying trade with the EU will end and nobody campaigning to leave wants inferior trading conditions.  The European Free Trade Association provides free trade with the EU, with Switzerland, Norway and Iceland all members.  The idea that leaving the EU means 3 millions jobs are at risk is a gross exaggeration.   However, if the EU is bloody minded and puts up tariff barriers equivalent to what it does for the rest of the world. it is a 4% average tariff on UK trade to the EU, which is negative for jobs, but hardly a huge risk. 

If the UK leaves the EU, you might need a visa to visit the EU: Nonsense.  You don't need a visa to visit the EU from the US, Canada, Australia, NZ or any of the EFTA member states.  What would change is having the right to live there.  Given those wanting to leave mostly want to end the free movement of people, that could be a concern for some. 

Leaving the EU will create a recession: No it wont.  The worst estimates are a small reduction in economic growth, but the long run estimates are a 6% long term slowing of growth if the UK gets the most inferior trading conditions likely with the EU (and assuming the UK has no free trade agreements with any other countries, like the US, Japan and China).  It also assumes the UK does not cut any EU regulation out at all.  In short, the Treasury estimates used by the Government of a recession are based on leaving the EU, and not taking advantage of the new freedom to trade and freedom to relieve the economy of EU Directives that impose costs on growth.

The EU means food, petrol, flights, energy and mobile phone charges are lower: Unmitigated rubbish, quite the opposite.  The EU Common Agricultural Policy inflates the price of food in the EU by 17% over market prices.  The EU legally requires all Member States to tax petrol by at least around 32p/l (but the UK government taxes it at 80% more than that).  The Single Aviation Market goes beyond the EU, with many non-EU countries as participants.  Norwegian Airlines has grown rapidly in the past couple of years, expanding long haul flights between the UK and US.  Norway is not in the EU. The EU inflates energy prices, by requiring minimum levels of taxation on gas and electricity bills, and imposing renewable energy obligations on member states.  Yes mobile roaming in the EU is lower than it would have been had the EU not enforced it, but it's clear EU protectionism and "normalisation" of regulations imposes costs on consumers. 

The £10 billion paid into the EU is "returned' many times over: No it's not.  What is returned is free trade, which should never be at the cost of paying for farming subsidies or infrastructure investment in other countries.  Leaving the EU doesn't mean an end to trading with the EU. 

The EU has 50 trade agreements we lose access to:  Many of which are with micro-states/territories, like San Marino, Andorra, Liechtenstein, Faroe Islands, Guernsey.  The only significant economies with deals are Mexico, South Africa and South Korea.  The UK could readily negotiate during the transition deals easily as good or better, as the main forces for protectionism in trade are the likes of France.

Staying in means reform:  That's highly unlikely.  David Cameron couldn't even get all the reforms he asked for with a threat of Brexit (which clearly the EU saw through as being unlikely), why would it happen after a vote to Remain?  The UK holds 9% of the MEP seats in the European Parliament, and although it is a significant contributor, reform is sclerotic.  The EU hasn't significantly cut back any of its activities and always finds new ones.  It is a political project of integration, and shows little sign of ever caring what is thought of it.

David Cameron's deal means unemployed EU migrants can be deported:  No, they can't. EU citizens can't be deported from Member States unless they are a threat to national security or criminals.  

Leave

Leaving the EU will fix the immigration "problem":  Assuming the problem is too many immigrant, and the failure of the Government to cut annual immigration to less than 100,000 people, leaving the EU will enable the UK to ration EU immigration like it does for non-EU.  However, non- EU immigration is already over 150,000 per annum.  Nobody is saying Brexit means deporting immigrants (thankfully).  Most concerns over immigration are perceptions about access to taxpayer provided services, and more often than not reflect the bankruptcy of the world's biggest health bureaucracy, which is treated as a religion never to be reformed (NHS), the bizarre legal obligation of all local authorities to ensure anyone who lives in the UK has housing (including rooms in hotels paid for by taxpayers), the open access to compulsory education and the sclerotic way the UK restrains supply of housing and roads.   Leaving the EU wont solve any of that, but then those wanting to stay in the EU are also devoid of responses to what are more fundamental problems.  

Turkey is joining soon: No it's not.  Notwithstanding David Cameron's hypocrisy over the issue, it is difficult to see Cyprus accepting Turkey until there is settlement over northern Cyprus, or Greece accepting Turkey until Turkey secures its southern borders with Syria and Iraq.  However, Serbia, Montenegro, FYR Macedonia and Albania will all likely be members within 10 years.

Money saved will be spent on the NHS:  Well the half that is a rebate and is current subsidies wont change, although there is a chance to make some serious saving there.  The rest?  Well it can go on many things, but there is a case for simply cutting the deficit by £10 billion a year.  After all, despite George Osborne's platitudes, the UK government is still overspending.  What happens with the money is up to the government.  The Leave campaign is not the government.  Yes leaving the EU wont save £350 million a week, more like half that, but the rebate is not set in a treaty, and the spending 

UK will be drawn into the Euro and ever closer union: The UK has a treaty opt-out of the Euro and has to agree to treaties for ever closer union, but it wont mean it doesn't face the costs of ever closer union.  That will depend on future negotiations.

The UK can get trade access as good as the Single Market without free movement of people:  This is unlikely, simply because it would mean the Single Market is undermined and would be a massive backtracking of the principles of the EU.  Signing up to EFTA or the EEA will mean some compromise on this.

Road pricing in Auckland

A simple guide:

1.  The proposal now on the cards is not "road tolls", tolls are when individual roads are subject to an additional fee on top of existing motoring taxes.  

2. The Auckland Mayor's "motorway tolls" proposal has been comprehensively rejected, as it has been before for sound reasons.  Quite simply, the motorways are not Auckland Council's to charge and just charging them diverts traffic onto the local road network which has traditionally been neglected in Auckland.

3. The proposal put forward by the government is to replace fuel tax with what is essentially an updated version of road user charges (which already is provided now by three private companies collected RUC), that varies by vehicle type, location and time of day.  It should be absolutely clear, as are vaguely similar proposals in Oregon and California, that fuel tax must go if roads are to be charged directly. 

4. The Auckland Transport Alignment Project (ATAP) has made it abundantly clear that the current "build lots of rail based public transport" trend beloved of new-urbanist planning enthusiasts (and the Green Party) will have next to no impact on traffic congestion. It's hardly surprising, because the reason traffic congestion exists is because the provision of roads and the pricing of roads is not done under market conditions, but is subject to a political/administrative process that results in demand exceeding supply.  Nowhere in the new world (NZ/Australia/US/Canada) have any cities noticeably eased traffic congestion by building new bespoke passenger rail networks.  Which is why, when questioned, the enthusiasts for highly subsidised (by taxes from road users) urban rail don't talk about addressing the problems of urban transport, but sell how "wonderful" it is for people to have a choice that they pay a fraction of the cost for.

5. There is no need for road pricing to be accompanied by highly subsidised alternatives.  Full market based road pricing has four major effects:

-  Prices go up at peak times, encouraging users to make different choices, such as drive at a different time, use a different (less congested) route if available, use another mode (increasing revenue for that mode), or not take a trip at all (consolidating trips);

- Prices go down at off peak times, encouraging greater use and facilitating more trips at those times;

- Congestion is greatly reduced, providing capacity for more public transport on existing roads at peaks, and making such public transport commercially viable.

- Higher revenues at peak times on busy roads sends a signal to invest in more road capacity when revenue from additional users will pay for the cost of the new capital investment

The primary economic argument for subsidising peak time public transport in cities has always been that roads in cities at peak times are underpriced (and historically the technology did not exist to adequately address this).  Once roads are priced efficiently, the case for subsidising urban public transport is weak indeed.  Notice that intercity bus and airline services are not subsidised, neither are road freight services (in or between cities).  Why should urban public transport be special when roads are subject to market forces?

6.  Market based road pricing inevitably should mean the management of roads is taken away from politicians and bureaucracies and towards a more commercial model.  State highways could be shifted into a state-owned-enterprise that could be privatised by giving away shares to all registered vehicle owners.  Local authority roads could be transferred into similar enterprises, but with shares held by local property owners (as ratepayers currently pay for half of all local road costs).

The price of roads should then be set by these organisations.  They would be owned by those with the greatest interest in their networks being run efficiently and meeting their needs.  

7. The ATAP road pricing proposal can only work nationwide.  It isn't just for Auckland, it's a change in how roads are priced everywhere.

Auckland Council wont like this, because it knows that the only way to address congestion is through road pricing, but it doesn't want to lose control of its large rail vanity projects (now including trams - which are buses on dedicated rights of way for 3-5x the price to taxpayers).  It wants control of the revenue to spend on its politically/central planner driven projects, but it shouldn't get it.

Bearing in mind the government wont do what I say, this is what it could do:

- Move all of the state highways into a new SOE, empower that SOE to charge users but only if it gives them an equivalent refund in fuel tax or RUC

- Tell Auckland Council that if it shifts its roads into a new Council Controlled Organisation, it can be fully funded from fuel tax and RUC (and any road pricing that replaces them), but on condition it gives all Auckland ratepayers an equivalent permanent cut in rates and that it has no political direction at all on its activities.


More background on Auckland road pricing debate in recent years:
Auckland motorway tolls re-emerge as revenue raising option
Auckland transport funding report promotes urban road pricing and tolls
Auckland congestion charging, not happening yet

NZ Herald wrong about EU referendum

The NZ Herald has decided that it thinks the UK should stay in the EU, but its editorial on the issue is  woeful, it misses the point and is dotted with errors.  There is nothing in the editorial about the key problems with EU membership, around how EU laws are developed undemocratically (introduced by the European Council, MEPs can't introduce legislation), how the EU is inordinately wasteful including on policies that harm New Zealand's economy (including the Common Agricultural Policy) and harm developing countries.  Nothing about the protectionism of the EU slowing the ability of the UK to trade freely with growing economies in Asia and Latin America.  

New Zealand has full control over its trade policy, its domestic regulations and immigration policy, but the UK does not have the same at all.

It's not true that no country has ever left the EU, Greenland did.  Now that's not anything remotely on the scale of the UK.  Of course, neither did the NZ Herald point out that Switzerland, Norway and Iceland all have thrived outside the EU.  The EU is not Europe as much as it likes to think that it is.  

It's true that Brexit could encourage a break up of the EU, but is that necessarily a bad thing? An unwieldy arrogant technocratic organisation that failed miserably to deal with the refugee crisis, was paralysed by the breakup of Yugoslavia, unable to agree on acting until the US intervened to stop Serbia deporting Kosovan Albanians.  The spectre that European countries will wage war on each other when they have functioning liberal democracies with extensive trade and travel with each other. 

Yet the Herald editorial paints the picture that Brexit somehow increases the chance of Russia invading the EU? Why?  NATO provides the security guarantee for its members, it isn't weakened by the UK leaving the EU - at all.  Why would it matter?

The claim that Scotland will leave the UK after a Brexit vote is also rather fatuous.  Polls on Scottish independence still say 55% would vote to stay in the UK, and there is little reason why the UK Government would hold another referendum on Scottish independence.  It's highly presumptive to think Brexit means Scottish independence.

Finally, yes it is immigration that is motivating many voters to want to leave the EU, but not immigration from outside the EU, it is concern that free movement will overcrowd the country, keep down wages and overwhelm government provided services. 

However, for me, it is because the EU is a sclerotic unaccountable project that keeps the UK in chains, it also subsidises unfair competition to New Zealand producers in world markets and restricts sales of many NZ products into the EU.

The case to leave the EU is about openness, tolerance, kindness and freedom

The shocking murder of Labour MP Jo Cox may well prove decisive in the referendum on EU membership.   Tommy Mair appears to have repeatedly shot and stabbed the MP and for all we now know, when asked for his name he shouted out “Death to Traitors, Freedom for Britain", but Mr Mair doesn't believe in freedom.

It appears he is a fascist, and so of course, the new narrative has been that “politics are too angry” and that the anti-EU campaign has “fuelled” this murder.  Of course, those claiming the hate tend to be on the left/Remain side, like legendary leftwing polemicist Polly Toynbee, who once claimed Conservative welfare cuts were like The Final Solution for the disabled.  You can’t do much more in hate than accuse your opponents of being Nazis can you?  Of course Labour is led by a man who used to go to the funerals of IRA terrorists and invite their leaders for meetings, all the time it was waging war against the UK public and UK government (and had killed several MPs).  Corbyn’s statements against hate and violence are as duplicitous as they are disgusting.  The late Jo Cox had a range of views across the spectrum, including a belief that the world shouldn't let Assad barrel bomb and drop chemical weapons on civilians, which saw her be damned by the mediocre "Madame Mao" Labour front bencher Diane Abbott as a "warmongering Tory".  She faced a campaign for de-selection, which Labour has carefully airbrushed away, as her tragic murder becomes politicised.  She did support remaining in the EU, quite vehemently, so it has become easy to claim that the other side were opposed to her.

Yet, the narrative that links the murder to leaving the EU may well stick among undecided voters, especially as polls have been close throughout the campaign, and most recently have put Leave ahead by a few points.  

It’s grossly simplistic and opportunistic to claim, as Remain advocates are, that their side is about kindness, tolerance and openness, when the EU is neither open, nor particularly tolerant and kind with its trade policies, or indeed with diversity of opinion about itself.

The EU isn't open when it maintains a fortress around it trading with the world, especially on services and agriculture.  It has been a force for openness in trade within with enormous resistance from one of its founding members, France, which sees the EU as a tool for "solidarity" - code for spending ever more taxpayers' money on its dirigiste vanity led economic nationalism and absurd profligacy for 19th century farming enterprises.

The EU isn't tolerant when it ignores referenda in France, Ireland, the Netherlands on EU Treaties and simply demands their governments ignore them.  It isn't tolerant when it says that it wont allow "extremists" to be in government in Member States even if democratically elected.

The EU isn't kind when it continues to flood world markets with subsidised agricultural produce, undermining exports and domestic production in developing countries, and so impoverishing poor country producers, whilst funding subsidies for Prince Charles's farming empire.  

Do I think leaving the EU will mean the UK will embark on some free market libertarian revolution of less government?  No, not really.  However, within the EU the only certainty is that there will be growth in EU spending programmes, growth in regulation and ever less accountability for the new laws and spending from Brussels/Strasbourg (don’t forget the EU has two locations for its Parliament, because France wanted an impoverished area to get a boost, so monthly the entire Parliament relocates between cities, at a cost of over €330 million annually).

For all of the relatively mild rhetoric about immigration, the Leave campaign is led by politicians who have mostly been sceptical about government power and all are advancing an agenda of more free trade, more openness to the world and greater engagement with the world.  Leaving the EU is not the fascist/socialist vision of a self-sufficient island that waves a flag and shuts out the world (although those who hold those views want to the leave the EU because its own internal market is an anathema).

I don’t doubt a vote to leave the EU will be a shock, initially to financial markets, more fundamentally to the EU and to the UK Government.  However, the shock need not last for the UK, when there are many years to negotiate leaving the EU and a new trade relationship.  It wont give succour to Putin, nor will it mean a loss of influence for the world’s fifth largest economy.

The Spectator’s lead story this week is about how it is advocating for the UK to break free from the EU.  

Given that the EU has proved that it is structurally incapable of reform, we now have a choice. Do we cave in, because we’re too scared to leave? Or do we vote to retrieve our sovereignty, walk away from the whole racket and engage with the world on our own terms? A vote to leave would represent an extraordinary vote of confidence in the project of the United Kingdom and the principle of national self-determination. It would also show reform-minded Europeans that theirs is not a lost cause. And that we stand willing to help forge a Europe based on freedom, co–operation and respect for sovereignty.

It isn't a vote for UKIP politicians, for leaving the EU will put most of them out of a job.  Nigel Farage isn't even an MP, and the one UKIP MP, Douglas Cardwell, is very much a libertarian.

I urge all those in the UK eligible to vote, to Vote Leave.  It is time to break free, for a more open, a more tolerant and a kinder UK.