My EU Referendum Leaflet

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The economic consequences of immigration.

Do we really want to carry on like this?

Chart image

This graph shows how the average real standard of living in the UK has changed over the last 25 years (GDP ÷ population and inflation). The figures are discounted by 0.5%pa for average technological productivity growth. You can see a peak in 2004, which was when the immigration floodgates opened. Many people argue that immigration is good for our economy, but that just doesn’t show up in the figures. Judge by results. Of course the banking crisis in 2008 made the fall greater, but that has now largely washed through, and anyway the index is down to below 100 by 2008.  Yet we are still 22.5% worse off than in 2004 (excluding productivity growth).

The index is set at 100 for 1991. If I had included 1990 the starting point would have been higher than 2004! The benefits of the 1992 ERM exit devaluation do show up quite clearly though.

There are clearly four principle factors involved here: productivity, immigration, the trade deficit with the EU (which exports jobs) and the banking crisis. I have tried to isolate the effect of immigration and the EU trade deficit by removing productivity by the admittedly rather crude expedient of assuming a constant rate of 0.5% per annum. It would in fact have been likely to have been higher before 2004 when investment was buoyant, and lower thereafter. I have not however so far found a way of removing the effect of the banking crisis, so the graph still shows the two effects combined. I shall have a look at levels of perhaps consumer borrowing as an indicator of the latter and edit this post shortly accordingly.

Economic Consequesnces of Brexit

Herewith another letter to the editor of the Sunday Telegraph. He didn’t print the last one, so lets hope for better luck with this one!

Dear Sir,

Stephen Crabb’s piece last week in which he predicted economic Armageddon if we left the EU is typical of the genre. He uncritically and selectively quotes reports by alleged experts without reproducing or testing any underlying arguments. There is no such thing as an infallible expert, and these people may well be more interested in covering their backsides than in pursuing the truth.

One thing that is near certain is that we will gain a devaluation on Brexit, just like the exit from the ERM in 1992. That delivered about 10% additional competitiveness and laid the foundations for twelve years of strong economic growth, culminating in our economy becoming the fourth largest in the world. You also reported last week that we have already gained 4% since the referendum announcement, and that the CBI is reporting an upturn in exports (although how that squares with the government’s latest report that unemployment is rising I will leave to your readers’ imagination; a useful opportunity to correct the figures?).

A 10% or more gain on devaluation is greater than on average any amount of tariffs the EU could throw at us. In other words we cannot lose, which means we do not need any new deal with the EU and that therefore the EU cannot prevent us from controlling our borders. The only uncertainty lies between gaining a little and gaining a lot.

We desperately need such an economic boost. It will not come from anywhere else. The export and import-substitution led recovery will increase demand, which will stimulate investment, which will introduce new technology, which will improve productivity, which will create economic growth, which will increase living standards. As in the 1990s it is a domino growth effect in which the first tile is now Brexit.

The truth is we cannot afford not to leave the European Union. He who dares wins.

Yours faithfully.

PS. Although the editor has again failed to publish this letter, Charles Moore, a Telegraph columnist, makes the interesting point that the US has never had a free trade agreement with either the UK or the EU. Doesn’t seem to have held them back! So I repeat, we do not need any new agreement with the EU.

PPS. I also like the cartoon from London University which I have shared on my facebook page showing a minister of George III telling the Americans they will BE STRONGER IN THE EMPIRE!  Obama’s visit, clearly scripted by Downing Street (note use of the word ‘queue’), has not gone down well.


There is no EU Status Quo

Roger Helmer MEP


The Editorial in the Daily Telegraph April 7th concludes “The Remain Camp is relying not only on the fear of the unknown but also the comfort of the Status Quo”.  But we cannot repeat too often: in the EU, there is no Status Quo.  The EU is not a destination but a process.  To those who think of the EU as a comfortable safe haven, let’s ask some questions.

How many more Port Talbots?  Just yesterday I heard EU Commission Vice-President Sefcovic proudly promising “a tsunami of new legislation” aimed to reduce emissions by increasing the cost of CO2 emissions, and therefore the cost of energy.  The EU’s green policies have already caused plant closures across the EU in steel, aluminium, chemicals, fertilisers, petroleum refining, glass and ceramics, and other energy-intensive industries.  Jobs lost.  Investment moved overseas.  Perhaps it will be your job and your…

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Reply to Sir John Major in the Sunday Telgraph of 20th March 2016

Dear Sir,

It is Sir John Major who is suffering from fantasies over the EU, and I can see why. He wants to blank out that it was our exit from the ERM in 1992 that set up twelve years of strong economic growth; not EU membership as he claims. In fact since 2004 our living standards have fallen and never recovered.

Does he think we have any hope of resolving the housing crisis unless we can control our borders by leaving the EU? Does he imagine it will be possible to maintain a cohesive society by ending wage compression and reducing the pay gap without doing so? How are our SMEs going to provide the jobs we need without removing the tourniquet that EU regulations impose upon them? And how does he think we are going to protect ourselves once the EU has absorbed GCHQ, MI5 and MI6 into some new central incompetence? Indeed Brexit may well set up a new devaluation with all the consequent benefits we enjoyed after the exit from the ERM.

Sir John is disingenuous in comparing 45% of our exports that go to the EU with 7% of theirs coming here; apples and pears. It is irrelevant how much they export to the rest of the world; we are looking at the bilateral position here. And that shows a goods deficit of £89 bn last year; over 5% of GDP just with the EU alone! They are bleeding us dry; a veritable haemorrhage of jobs. Even in the worst, worst case scenario where they raise the maximum WTO tariffs against us and we do not retaliate, the percentage barriers are small compared to the likely benefit of devaluation. Britain will still be attractive to inwards investment, and the small increase in import prices is a small investment to make for the subsequent growth. Food prices in fact are likely to fall as we come out of the CAP and CFP. If we do raise import tariffs in retaliation they will provide much-needed additional fiscal revenues as well as promote import substitution.

There is no leap into the dark here. We know exactly what life will be like after we leave. On Brexit all our trading arrangements, security deals and laws will remain unaltered by default. They won’t change unless somebody changes them, and the EU cannot risk the consequences of trying. The only change is that we will save a net £12 bn or so from our membership fees, and that is after replacing all of the payments that Scotland and others receive. The point is that we do not need any new deal with the EU. We will not be dependent on the EU in any way. We can simply walk away if we do not like anything Brussels may propose.

Sir John is however right on one point; that we have a choice between Great Britain and Little Britain. He has just got it the wrong way round!

Yours faithfully,


And here’s a further reflection which I did not include in the letter. The devaluation from the ERM exit in 1992 was worth about 8 or 9%. As I write we already have a 4% devaluation consequent on the announcement of the referendum, so we should certainly get 8% or so after it, and if the maximum tariffs the EU can apply on average are 5%, we are bound to gain either way, even with a 10% maximum for motor vehicles and agricultural produce. But we could go further. Suppose we raised 10% tariffs against against motor vehicles ourselves. We may have to apply those globally, but we import very few vehicle from outside the EU. Most Japanese cars are made here anyway, so it would probably only affect the Koreans. Suppose we then said to both the Koreans and the continental manufacturers that we will not raise any tariffs on spare parts and components worth less than 10% of the value of the whole. They would then have a strong incentive to set up final assembly plants here, creating lots of new jobs in the UK as well as enabling them to continue tariff-free trade to us!

As for the rest we could be very selective (not forgetting steel, of course). We produce lots of good cheese in this country so that would be a good target, but not much wine which would not.

As regards steel, this is clearly a special case as a result of Chinese dumping. The global steel market will not ‘get back to normal’ until there have been significant reductions in capacity. Most commentators agree that a global economic recovery will not be sufficient. But whose capacity should be up for the chop? Why should it be ours? Even the Chinese themselves are now restricting imports, along with the Americans and many others, but we are not allowed to do so by EU rules.

Logic would suggest that the least efficient plants should go first. But that does not take account of ongoing investment and technological change. So I am bound to conclude that the ideal solution for the UK is to create a temporary closed market in steel – neither imports nor exports being allowed until the global market stabilises and UK capacity being set to supply UK demand. Whether the existing capacity is nationalised or nationally recapitalised, like the banks, it should be allowed to set prices within the market to enable it to be profitable overall. That market would of course have to be regulated, and the best basis for that would be a cap-and-collar profit regulation regime combined with quality inspections. By that I mean setting a range for profitability, perhaps 5% =/- 2.5%, so that if average profits went outside that range national prices would have to be adjusted according, other factors being equal. Such a regime would have to be applied on an industry wide basis of course so that new entrants with more efficient processes could still have an incentive to replace older suppliers who could not keep up.


Rupa Huq and the Ealing Gazette

Early in February the Ealing Gazette carried an article by Rupa Huq, MP for Ealing Central and Acton, supporting Britain’s continued membership of the European Union. My colleague and our GLA candidate, Alex Nieora, responded with a letter, which was edited down, and I with a fuller article, for which, predictably, space could not be found. So here is the full story, starting with Rupa Huq’s original article. I reproduce them without comment as each speaks for itself.

Rupa Huq’s Article.

“The word ‘crisis’ tends to be much over used in politics. Every year we have an NHS winter crisis and I have even raised the spectre of a curry crisis in the House of Commons before Christmas last year to George Osborne. But on the fate of our European membership it is no exaggeration to say that it would be nothing short of a crisis if we were to exit. To leave behind our biggest trading partner would put jobs and growth at serious risk.

Europe has also been a source of social reforming legislation, like maternity and paternity leave for new parents. EU competition agreements have brought down airline ticket prices. It is by working together with our European partners that we can catch criminals who do not operate within national borders through mechanisms such as the European arrest warrant. Our island is much stronger with the combined might of 28 nation states rather than the fanciful idea that we could ever go it alone.

Implications are wide-ranging – the universities’ science research budget that is working on cures to fatal diseases only functions due to European funding. David Cameron does not really want to leave but he is managed to have his tail wagged by a dangerous minority of extremists and Euro obsessives in the Conservative party. He is now boxed into a corner with his renegotiations, which are only being conducted to appease the Eurosceptic headbanger wing of his party – a rash promise made when he saw support ebbing away to UKIP. It is a sad day when government policy appears to be written by Nigel Farage.

In an age of globalisation we are part of numerous international alliances – NATO and the UN are others. It has been claimed that our historical ties to the Commonwealth act as an impediment to our playing a full part the EU. This is far from the case – it is not a mutually exclusive relationship. We can have the best of all worlds by participating in both Commonwealth on the one hand, with the Queen as figurehead and countries that once formed the empire, and on the other the European Union, which has so crucially kept the peace post World War Two in a continent previously ravaged by two world wars in a short space of time”

Alex then responded as follows:

“I write in response to Rupa Huq MP’s opinion piece in the Ealing Gazette last week. Contrary to what Dr. Huq’s asserts most of UK trade is not concluded with the EU. UK businesses now trade more with the rest of the world than with the EU, although the EU prevents the UK from signing trade agreements with other countries. This means that exports to the UK from developing world nations such as, for example, the Congo are forced to pay tariffs as they cross the EU Common Customs Border putting Congolese exporters at a competitive disadvantage. Moreover EU regulations act as a hindrance to the 80% of UK small and medium sized businesses that do not trade with the EU, while protecting corporate interests.

Dr. Huq mentions ‘European funding’ for science research without realising perhaps that the UK now pays the EU a staggering £12 billion more per year than the paltry 49p in the £ which it gets back from the EU. There is no ‘EU funding’ Dr. Huq – it is British taxpayers’ money.

Dr. Huq talks about EU ‘’competition agreements’’ but overlooks the impact that the 30,000 strong permanent corporate lobby in Brussels has on legislation that imposes restrictions and obstacles for would be competitors and smaller businesses. I doubt she has heard of gallium arsenide. It’s a compound semi-conductor used in microelectronics to make smart phones, integrated circuits, solar panels etc. Great you would think. Well French corporate interests have succeeded in getting the EU to ban gallium arsenide across the EU commencing from this year because it is a threat to their silicon based manufacturing interests. And the worst part is the UK’s MEPs who make up barely 8% of the European Parliament are powerless to do anything about this, or indeed anything else.

Perhaps Dr. Huq has heard of TTIP, the Transatlantic Trade and Investment Partnership deal between the EU and the US which threatens the NHS, by opening up public services to competition from the private sector and allowing corporates to sue governments who enact policies that negatively impact their profits. Both UKIP, Labour and other MEPs voted against these terms in the European Parliament but were outvoted no thanks to the small and ever decreasing British influence in the EU. While in the EU the UK can do absolutely nothing to prevent the implementation of TTIP, or indeed to renationalise the railways if it so wanted (due to the First Railways Directive) or a whole raft of other policy areas.

Dr. Huq disingenuously says the word ‘crisis’ is overused before writing ‘every year we have an NHS winter crisis’. Perhaps I might remind her that the NHS is indeed in crisis, and the last Labour government is largely to blame. The NHS is riddled with extortionate debt from decades of misguided PFI contacts. The NHS owes £80bn in PFI loan unitary charges. Next year alone trusts will make some £2bn in repayments. While PFI contracts were started by the Conservative government under John Major under the Labour government between 1997 and 2008 90% of all hospital construction funding was under PFI agreements.

Perhaps she is further aware but conveniently overlooks that each week politicians send £350 million to the EU net – that’s enough to build a new hospital every week. Dr. Huq mentions social reform legislation from the EU but omits to mention that most social reform and welfare state legislation was introduced by the UK Parliament a long time before the UK joined the EEC as it then was. As Tony Benn would have been the first to tell her the British government can just as easily pass social reform legislation as the EU but at a far less national debt accumulating cost.

The only crisis will happen if British voters listen – to use your own terms, Dr. Huq – to ‘dangerous extremist’ pro EU politicians”

And my contribution was

“Rupa Huq’s article last week claiming that Britain would be stronger in Europe is profoundly mistaken on so many fronts. Her case is purely negative and concentrates on what she perceives to be the risks of leaving, not mentioning a single one of the many far greater risks of staying in.

She starts by claiming that it is necessary for Britain to stay in the Single Market. Others have similarly accused UKIP for failing to give a clear picture of what it would be like outside. WRONG on both counts! We have always said that we would take up again our vacant seat at the World Trade Organisation (WTO) and trade with the EU on exactly the same basis that the US, China, Japan and many others do so successfully at present. That automatically would be the situation immediately after Brexit.

Quite separately there is the proposition that we could negotiate a new treaty with the EU effectively giving us zero-tariff access to the Single Market as at present. That of course remains to be seen, but don’t forget we trade at a huge deficit with the EU. So the betting is not only on the EU being the more desperate to continue with the current arrangements, but also that without a deal a bit of old-fashioned protectionism would in fact be to our advantage. Yes, trade volumes in both directions would be lower, but so would the trade deficit. And trade deficits export jobs. Any loss of jobs from a reduction in exports would be more than offset by job creation from import substitution. The import tariffs would help fund our public services and reduce our fiscal deficit, and the reduction in international trade volumes would save energy. Further the SM is highly unstable, like removing the bulkheads from an ocean-going oil tanker, thereby undermining economic growth. Thus four strong positive reasons for not re-joining the Single Market. Whilst we would not be the first to raise tariffs, we would of course respond in equal measure if tariffs were raised against us. So please, do not lose any sleep over this issue. We can handle it either way.

Dr. Huq then claims we would lose all the beneficial employment and other legislation we have derived from the EU. WRONG again! The day after Brexit the statute book would remain exactly the same as now. We can then decide for ourselves whether we keep those laws, change them or ditch them.

Next she claims our security would be at risk without solidarity within the EU. Still WRONG! There will be nothing to prevent us from co-operating fully with Europol or any other institution on the continent where we have a mutual interest in so doing. She claims that peace in Europe since WW2 has been kept by the EU, whereas most commentators attribute this success to NATO. Even today the EU has no significant military capability, though of course Brussels is itching to spend yet more money on what inevitably will be a fractious and ineffective force.

Then she claims we are safer with mechanisms like the European Arrest Warrant. This is a bit like saying we would be safer under a dictatorship. What about human rights? In this country a person is innocent until proven guilty. Not so on the continent where, under the Napoleonic Code, it is the other way around. She talks of the ‘combined might’ of the 28 states. Excuse me? What combined might? Not been very apparent during the refugee crisis, has it? And of course our influence as one of 28 countries is next to nothing, as David Cameron is currently demonstrating.

Next comes the assertion that our universities and other current recipients of EU funding would lose that funding. Also WRONG! Because we pay into the EU more than we get out we shall save not only the net deficit on funding, now some £12 billion a year, but also the value of all the funds we currently receive. We can, if we wish, guarantee that all current EU payments into the UK will continue £ for £ from those savings instead.

At least Dr. Huq has not repeated the hoary old canard that Britain would lose jobs if we left the EU. I assume simple logic has now informed her that once we control our borders, only possible outside the EU, the labour market will tighten because of the fall in the supply of workers. Leaving the EU will be good for both jobs and wages – an end to wage compression and a start to reducing the income spread and all the adverse effects of overcrowding such as the housing crisis.

Dr. Huq’s letter is full of emotive words such as ‘fanciful’, ‘headbanger’, ‘extremist’ and ‘obsessive’. She even claims that ‘it is a sad day when government policy appears to be written by Nigel Farage’! This is sure sign of a politician on the back foot. Let’s have fewer personal insults and more well-researched argument. I see UKIP as a libertarian centrist party committed to getting Britain out of the European Union. We always have been. We believe strongly in fairness and human rights as well as creating a freer society for those who want to be creative and enterprising. We call time on Labour’s deceitful propaganda.”

Reflections on Question Time, 17th December 2015

Now that the debate over leaving the European Union is well under way it is becoming more interesting to respond to the arguments being put forward by the Stay-In Brigade rather than go over yet again the well-worn reasons for leaving.

Last Thursday’s episode of Question Time gave a perfect opportunity to do this. It came from Slough and the panel comprised Piers Morgan, Hannah Bardell from the SNP, Jacob Rees-Mogg (Con), Emily Thornberry (Lab), and Mark Reckless. It was also encouraging to see how sympathetic the QT audience now are to the Leave point of view, and even David Dimbleby showed a much more open-minded position than perhaps has always been the case in the past.

The first point that arose was from Hannah Bardell who claimed that Brexit would mean that Scotland would lose all the funding she currently receives from the EU. This of course is complete rubbish as Westminster would be in a position to replace that funding £ for £, if not better, due to the saving of £11 billion or so that Brexit would generate. I have heard the same argument from a number of institutions, including Universities who ought to know better. To emphasis the point the Leave/UKIP campaign should perhaps guarantee that for the first two years after Brexit all funding currently received by UK institutions from the EU will be replaced £ for £. After that ongoing review could alter matters in either direction.

The next point came from Emily Thornberry who picked up on Sir John Major’s recent comments about Britain opting for ‘splendid isolation’ in international affairs which he thought would leave us powerless to promote or protect our essential interests. But have they not noticed how powerless we already are? What could be more debilitating than belonging to an organisation, the EU, that insists on sole representation of our interests internationally but then pays absolutely no attention to our point of view? The fact is we are already in splendid isolation, and Brexit will re-establish our ability to reach out and engage in the world around us. We will be able to do so through all sorts of alternative relationships as and when the need arises. Britain is one of the most talented nations on earth and will thrive once let free.

Another point that Labour and LibDem politicians often raise, though not on this occasion, is a fear than they may lose employment protection and other laws which have originated from the EU and are now on our statute book. Again this is scaremongering, because the day after Brexit those laws will still be there. By regaining our sovereignty we can chose, one by one, whether we wish to keep them or ditch them. It’s a red herring.

And then came the whole issue of trade. I have argued elsewhere why I think the Single Market is destabilising and counter-productive, and how leaving the EU without a new trade treaty could be just what the doctor ordered. The question came in the light of recent research by Lord Rose, who we are told is leading the Stay campaign, that Brexit would cost around £11bn in increased trade tariffs raised by the EU on our exports to them if we had to revert to trading under WTO rules.

Now I have no argument with that figure, as I have not been able to check it, so let’s accept it for the purpose of the argument. The point he has completely overlooked is that the same will apply to their exports to us. And because we import far more from the continent than we export to it, the result would be a net benefit! I accept that both imports and exports would be lower, and that there would be a period of adjustment during the transition as companies orientated towards exports would struggle and those aimed at the domestic market would expand, but it is ultimately the balance between them that matters.

I do normally advocate free trade, but such a position does assume we pursue policies which keep our trade in balance. We have not done that, and have ended up now with a deficit in excess of £5bn. A trade deficit exports jobs and undermines employment, so anything that reduces a trade deficit is a good thing, even if that means lower volumes. Employment within the UK can then be adjusted by stimulating or moderating consumer demand through fiscal and monetary policies, and of course the ability to control our borders will mean the focus transfers to a shortage of labour rather than remaining on a shortage of jobs.

This means that if the EU were to throw a tantrum after Brexit, always possible, and refuse to negotiate a new trade deal, despite that being in their own best interests, we can always just walk away at no loss to the UK. Whichever way it goes, we can handle it. So please, do not lose any sleep over trade.

Finally, and this is another point that did not in fact arise on this occasion, there is the whole question of why big business and leading UK institutions such as our universities are so uniformly in favour of staying in. The answer is that they can afford to spend a lot of time and money lobbying politicians both in Brussels and at Westminster. This gives them an advantage over smaller businesses that cannot afford to do this. So the question is, does the nation as a whole benefit from it? Almost certainly not, as most of our employment creation and economic growth comes from all of those small and medium-sized businesses put together. Restricting access to politicians would reduce corruption and create a more level playing field to the benefit of the nation as a whole. So let’s take the EU out of the equation once and for all.