June 2016

June 23rd will be a seminal moment in Great Britain’s history.

June 2016

I had not meant to comment before the great vote, as there will be plenty to say afterwards – whichever way the vote goes there will be massive changes to the way we work and think that will result from the campaign. The real arguments are hugely complex but the debate has become a propaganda battle of Orwellian proportions. The Prime Minister and Chancellor, with all the machinery of government around them, along with the recipients of EU largesse and the many organisations that depend on the EU for their existence, have failed to create the certainty that the Remain vote will win.

It is extraordinary that the campaign for Brexit, mounted by a disparate group of people who think deeply about the economy and the philosophy behind the UK parliamentary system, the Mother of Parliaments, along with a number of fringe thinkers, have been able to make an impact against the massive weight of the government led establishment.

The tactics used by the Prime Minister and Remain of using propaganda and speculation as a weapon of argument have degraded the status of those ministers and the authority of the government machinery. Many outrageous forecasts, quite outside the scope of any possible economic argument, have been promulgated and supported, not surprisingly, by the large institutions that feel that the status quo might be affected if we left.

Britain’s historical position in Europe is one of endeavouring to maintain the balance between competing regimes, and has usually tried to ensure that no monolithic group of states can dominate. The original concept of Europe based on the European coal and steel communities was free trade between countries when typical tariffs were 15% and protectionism in the post-war period was a fear. Today world trade is governed by the GAT round and typical tariffs are from 2 to 3% and declining. Europe, which has failed to negotiate trade agreements with the USA, the North American Free Trade area, with China or, for that matter, the rest of Asia, is unlikely, in spite of the propaganda being put out, to agree trade agreements as the 28 members have disparate interests and, as we have seen, cannot agree on anything. Agreements on anything can only be achieved where the Commission and the European Court can over-ride the European parliament, and the individual national parliaments.

On the democratic front, the EU is run by a Commission that proposes the laws which Members of Parliament cannot do. It is a superannuated bureaucracy with no leadership, no accountability and is, indeed, unable to police its own massive budgets and expenditure, which every year fail their audit owing to the corruption that is rife in the system.

Britain contributes billions into the pot, of which considerable sums disappear without a trace. The numbers are difficult to determine but £10bn. to £15bn. is bandied around, enough to make a dent in the Chancellor’s deficit or increase expenditure on welfare, whatever Parliament decides, which is the important point. Britain also runs a massive trade deficit with Europe, i.e., we import some £24bn. worth of goods more than we sell. It would be bizarre if European countries decided to cut Britain off from one of their biggest markets. That is not to say the Commission would not try to be vindictive as their grand plans for reducing the sovereignty of the individual countries within Europe are thwarted.

If we leave, there will no doubt be some short-term disruption to stock markets and commodity markets as traders unwind positions generated through their predicted outcomes, but if we stay the slow death by bureaucratic strangulation and the undermining of our Parliamentary systems will gather pace.

The plans for the regionalisation of European countries will gather pace. UK is scheduled to be broken up into eleven regions, which will each report directly to the EU Government in Brussels. You can do your own research, the map is already drawn and published.

It is possible that a British exit may cause problems for Europe as people within Europe are already chafing at the EU straitjacket. What is certain is that if Britain voted to leave, there would be a chance that Government and governance in Europe might reform. If Britain stays, there will be no chance. The tribune like characters that run the Commission will laugh and know that they can ignore Britain which only has one vote in 28.

It is likely that Britain will vote to Remain on the 23rd June, as the weight of vested interests will be supported by the status quo and the natural desire not to rock the boat! The entrepreneurial and adventurous spirit of Britain which has been waning for many years, will take a further beating.

Damon de Laszlo 21st June 2016