At public meeting in Fordingbridge last week a constituent asked me why the Vote Leave campaign had conceded the economic argument on the question of leaving the EU. I assured him that we most certainly had not. To get that impression I suspect he had just allowed himself to be overwhelmed by the vociferous chorus of academic economists, corporate bureaucrats, and politicians all warning of penury if we leave the EU.

It is difficult to stand up to this rather than accept the herd instinct and just follow along. It takes courage – or complete innocence – to point out that the Emperor is wearing no clothes. It is reassuring however, to recall that it was the very same people who warned of the desperate consequences we would face if we did not adopt the euro currency. They could not have been more wrong then, and they were wrong too when they said that we would face disaster if we left the exchange rate mechanism. They have form. They have made a habit of being wrong, and they are wrong now.

I believe that we will prosper outside the EU (the Prime Minister, not so long ago, said that we could thrive) but I don’t want to over sell the prospectus. Whether we are inside, or outside the EU, the single most important determinant of whether we prosper, is our ability to produce goods and services that other people are willing to buy at competitive prices. If we can do this we will be okay, economically at least, irrespective of whether we are in or out of the EU.

The reason I believe that we will be better off out than in, is because our ability to trade those competitive goods and services will be greater. Most of our trade has always been outside the EU but it is disadvantaged by the EU rules which encourage trade within the EU and make it more difficult to trade outside, by building a barrier around the EU in the form of a common external tariff.  Britain’s particular strength has always been in the export of services but within the EU, despite years of trying, we still do not have a single market in services. When the EU negotiates trade deals with other countries, trade in services is not its priority, in fact a third of its agreements exclude them.

As a general rule I am sceptical of the value of trade agreements. You don’t need a trade agreement to trade. We trade successfully with China, the USA and India and we don’t have trade agreements with any of them. Undoubtedly however, some agreements can give added advantages. The problem is that the EU is so monumentally bad at making them. Canada has been knocking at the door trying to make one for 7 years. India tried for so long, and eventually gave up. We would have much greater flexibility to negotiate on our own account and to our particular national interest if we set ourselves free to do so. As for the claim that, were we to leave, existing trade deals negotiated by the EU, would then exclude us, this is just nonsense and contrary to international law.

There really is no economic advantage to be had by staying in the EU. You can measure that fact by the £68 Billion trade deficit we had with the EU last year, and every year.

 

 

I haven’t said much about immigration in the EU debate. I haven’t needed to: last week’s statistics, the second highest on record, speak for themselves.  Constituents constantly express the view to me that the UK is already full, with housing and public services under considerable pressure.

The Government was successful at cutting quite dramatically the numbers of non EU immigrants during the lifetime of the last parliament, but nevertheless did not come anywhere near meeting its manifesto commitment to cut the total numbers to just tens of thousands. This cannot be achieved unless we have some control over EU migration, and we don’t have any at all. That is why the Prime Minister made such a big deal about seeking such control in his effort to re-negotiate our membership terms.

He came back virtually empty handed. What he got was not control of migrant numbers, but rather the possibility of some temporary reduction in their benefit entitlements described as an ‘emergency brake’.  The PM believes that the prospect of reduced benefit entitlement will, in turn, reduce the desire of EU migrants to move to the UK.  I just don’t believe it. They come here for jobs not for benefits. Europe is in a semi-permanent self-inflicted recession caused by its disastrous experiment with a single currency. Britain has been booming. The imperative to move to the UK to get a job is not going to diminish.

What is particularly insulting about the so called emergency brake, is that it is not under UK control. It will be operated by the EU Commission (and this was when they were attempting to persuade us to remain…just wait till they have us in the bag!)

 

Last week, when I opened a new high tech facility in Fordingbridge, I heard a familiar concern from thriving cutting-edge businesses: that the principal restraint on their growth is their inability to secure sufficient skilled workers.

Instead of importing those skilled workers, we need to get back into the habit of training them.

So, congratulations to Hampshire County Council’s apprentices who are successfully through to the finals of the Brathay Apprentice Challenge, a competition searching for the apprentice team of the year. Teams undertake a series of challenges to develop new skills by engaging with young people and businesses to promote the benefits of apprenticeships.

Hampshire’s team have been raising the profile of apprenticeships with presentations in schools, speaking to many young people and employers. The team also embarked on a community project with the aim to encourage young people into employment by showing them how volunteering can increase their employability.

As the team are now through to the National Finals there is one last push to promote apprenticeships as much as possible before they head up to Brathay HQ in Cumbria for 3 days battling it out to see who will be crowned apprentice team of the year 2016.

To see the teams progress and get involved: you can follow them on twitter: @HCCApprentices

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This weekend I confess to having delivered leaflets through hundreds of letter-boxes in the New Forest which contained an assertion that I would not personally have made in one of my own speeches.
In terms of magnitude however, it was as nothing compared to the hyperbole that we have heard from the Remain campaign about the risks of leaving the EU. Over the last few weeks I have used this column to debunk these ‘risks’ and to show that there is no economic argument for remaining (as, I believe, there was no economic case for joining in the first place).

What the doom-mongers have completely ignored however, are the very significant risks of remaining in the EU.  It is the only trading block in the world that is pursuing the political integration of the nation states of which it is composed. It is the only trading block in the world that has suffered a consistently shrinking share of world trade. It is the only trading block in the world that has attempted to create its own currency.
This, as we know, has been an absolute disaster and has left much of the EU stuck in persistent recession, whilst in Britain we have been enjoying the fastest economic growth of the world’s developed economies. This has, in turn, made our growing employment a magnet for EU job seekers, with consequent severe pressures on housing, schools and healthcare.

Hitching ourselves to this permanent EU recession mechanism is bad enough, but there is potentially an even greater danger: That the EU grasps the nettle and makes the necessary political changes that will enable the Euro to work properly as a single EU currency. This will mean centralising sufficient power in Brussels to control taxation and expenditure in the Euro member states.
Only ourselves and tiny Denmark will ultimately remain outside these arrangements. Do we really think that their design and implementation in the Euro currency block will take account of our very different interests outside of it?
Particularly, given that we have already surrendered any negotiating leverage that we would otherwise have had in this process.
In effect we are being asked to write a blank cheque. We are invited to remain within an organisation which is about to change dramatically, and in a way that we cannot predict, and over which we will have no control.

And for what?

Over the last week we have been told that it is our duty to the rest of Europe to remain within the EU in order to keep Europe strong and under our beneficial influence, and indeed that it has been our destiny to come to the rescue of Europe.
I confess to having some sympathy with the argument. I thought long and hard about this question before deciding to throw in my lot with Vote Leave. The prospect of de-stabilising Europe further at a time when there is already a currency crisis, a migration crisis, and the Russian bear menacing Ukraine, troubled me deeply.

From this international perspective there may have been a more opportune time to hold our referendum, but the time is now, and it may not come again for a generation, or indeed ever.
I accept that we have a responsibility and a duty to Europe as a European power. Our history and culture is deeply intertwined with the European mainland, and I would not wish it otherwise. I have concluded however, that our duty to Europe is best served by leaving the EU.

I believe that the EU is on a disastrous path of increased integration. It is attempting to create a country called Europe with all the trappings of a nation state: a government (the Commission); its own parliament; a supreme court (the ECJ); its own currency; a flag; and a national anthem (Beethoven’s Ode to Joy). Whilst support for the economic benefits of the EU are much more widely perceived on the continent than in the UK, this political process is being driven by the elites and has very little popular support.  Far from creating harmony amongst nations, it is actually generating the very opposite. One need only travel to Greece to feel the palpable and deeply distasteful anti- German sentiment. I have sympathy for both the Greeks and the Germans –it is, after all, the institutional processes of the EU that are driving them asunder.

When they have been given the democratic opportunity to do so, Europeans have voted to halt this process. In April 2005 the French voted in a referendum to reject the European Constitutional Treaty by 55% to 45%. A week later the Dutch rejected it by an even greater margin of 62% to 38%. Never the less, the constitution was ratified as the Treaty of Lisbon a without letting the French or Dutch have another chance. When will they understand that ‘No’ really means No?

The departure of the UK – one of the largest economies, largest financial contributors, a world power with a seat at the UN Security Council and the world’s 4^th largest defence budget – will be, I believe, such a profound shock to the process of European integration as to halt it in its tracks. The best thing we can do to rescue the Europe from its current disastrous course is to vote to leave the EU on 23 June!

 

Over the last few weeks I have used this column to question the economic case for ever having joined the EU in the first place, and to demolish the arguments made by the ‘fear-mongers’ who warn that we will suffer economically by leaving. In or out of the EU, our future prosperity depends upon how competitive we are at producing goods and services.

I have argued that, on the balance of probabilities, we are likely to me more competitive out than in. The world offers no nation a free ride however, and we will have to work to earn our keep. Out – at least, we can do so without one hand tied behind our back.
So, I don’t believe that in order to reclaim our self-determination as a free and independent nation we have to sacrifice any of our prosperity. I know many others however, fearful of the consequences for prosperity, who have therefore, and with a heavy heart, decided to opt to stay in the EU.
As John Adams, one of the founding fathers of the USA, observed: a man who is prepared to sacrifice his liberty for prosperity, deserves to have neither.

In the end the EU is a political institution determined on an ‘ever closer union’ between its member states. Democratically expressed opposition to its proposals have proved completely ineffective: the Irish, the Danes, and Dutch have all voted in referendums to reject the relentless process of integration, only for the proposals to be driven through anyway.
The Prime Minister has negotiated a declaration, to be inserted in any future treaty, that the UK is no longer to be bound by this principle of ever closer union. To secure this concession however, he had to sacrifice our trump card in any future negotiation by signing away our ability to impede further integration within the Eurozone. Without that possibility, we go into negotiations armed with very little that we can bargain with.

The record of our resistance to adverse changes is instructive: on the 74 occasions that we have pushed our opposition to the vote in the European Council, we have been on the losing side on every one of those 74 occasions.
Time and time again, we have been told that the latest concession of power from the UK to the EU represents the high water mark of integration, and that it will go no further. Only for the process to continue relentlessly. If we vote to stay in the EU, I have no doubt that it will give new democratic legitimacy to the project, with renewed and accelerated  impetus to integration. On the other hand, we have on 23^rd June the possibility not just to bring it to a halt, but to put it into reverse.

Take back control!

 

EU,  the wrong club  – 2nd May 2016

Last week economics has finally, if briefly,  broke cover in the referendum debate. We joined a club which promotes trade within the club, and disadvantages trade outside it. Given that the greater part of our trade is outside, for us it was just the wrong club. Additionally, the principal trade within the club is manufactures and food where we have never enjoyed a comparative advantage: Our strength has instead always been in services. Even at the height of our industrial world power we ran a balance of trade deficit, which we made up for with an export surplus of services (principally shipping in those days).  Un

Unfortunately, there is no ‘single market’ for services in this EU club. It is for this reason that the club exports so much more to us. It was in recognition of the fact that membership didn’t work for us that Mrs Thatcher negotiated a rebate. It’s time to recognise reality: Economically the club doesn’t suit us.

 

The UK has committed more to the Syrian emergency that to any other humanitarian crisis ever, and we are the world’s second largest donor. Spent in the region, our money goes much further and helps many more people than it can in Europe. Given the needs of millions, I do not believe that the solution can be resettlement for just thousands.
Never the less, in addition to existing asylum arrangements, the Government is committed to resettle 20,000 Syrian refugees in the UK. Of the 1000 refugees already re-settled under this new scheme in the run up to Christmas, half were children, and this proportion is likely to be maintained. With respect to unaccompanied children however, the advice of the United Nations agencies is that they are better off remaining in the region where they have a chance of being reunited with their extended families. In cases where the UN clearly believes this is not the case and that remaining within the region puts them in greater danger, we have said that we will welcome them.  We have not put a number on it, but I would anticipate something in the low hundreds.
The controversial argument continues with respect to what to do about unaccompanied children who have already made it to the European mainland.  There is an argument that, having reached the safety of Europe, we have to give priority to others remaining in the region who are more vulnerable. Clearly however, as we can plainly see on our TV screens, they are sometimes in conditions in some parts of Europe that we would never tolerate in the UK. Accordingly, we have allocated £10 million to alleviate those conditions.
Fundamentally, the problem is that, if we agree to resettle refugees who are already in Europe, we send a powerful signal to others to pay the traffickers and attempt an all too often fatal crossing. It was for this reason, to break the business model of the traffickers, that we decided to take refugees for resettlement direct from the region and not from Europe. The same applies to unaccompanied children: giving them priority will encourage more parents to send their children ahead, and alone.
The problem is heart-breaking, we have to address it, but in doing so we must ensure that we are not making it worse.

 

 

 

 

We are trading rather well with the USA – with better results than we are with the EU. Our trade with the USA is broadly in balance, whereas with the EU we run a significant trade deficit. The simple lesson of this is that you don’t need a trade agreement to trade successfully in the modern world. In fact, the EU is the USA’s largest trading partner and it doesn’t have a trade agreement. It has been trying to negotiate one for years, this proposal is called the Transatlantic Trade and Investment Partnership, and my constituents have emailed by the hundreds in opposition to it!

I believe that trade deals are desirable and can make things better, but the success of the world trading regime, which Britain has done so much to shape through the General Agreement on Trade and Tariffs –now the World Trade Organisation, has ensured that trade is so much easier across the globe even without individual agreements between trading partner nations. Notwithstanding the fact that the EU now officially negotiates for us at the World Trade Organisation, we continue to exert a great influence on it, sending our officials and ministers to shape to its deliberations.

President Obama’s intervention is just tactic in the overall strategy of ‘project fear’. His hypocrisy is breath-taking: the USA wouldn’t for a moment contemplate subjecting its laws to the scrutiny of an external court as we have to in the EU, nor would it dream of giving up control of its borders in the way that it is expecting us to continue to do. It suits the USA to have its principal ally firmly within the EU to continue to shape it. The USA is seeking to disengage from Europe and wants to leave it in safe hands. Its focus is increasingly in the Pacific with the rise and rise of China.  The President needn’t worry. We will continue to co-operate closely with European partners with whom we share an identity of interests, even when we leave the EU, and we will continue to demonstrate leadership through NATO.

Back to trading however, so, the President’s raspberry, is designed to terrify us with the prospect of having neither the USA nor the EU to trade with. It is rubbish: we will continue to trade with the USA as we do now.  As for the EU, given our trade deficit, it’s very much more in their interests to continue to trade amicably. “O, but like Switzerland, we’ll have to pay the EU and accept free movement of people across borders”. Well, Switzerland is a tiny country and I’m confident that we can drive a much better bargain. Incidentally, Switzerland has capped the numbers of EU migrants. It exports 400% more to the EU per capita than we do, and for this privilege it pays only 20% per capita of what we do. If that’s the deal, let’s have one too.

 

After weeks of onslaught against our international aid I think I have just about heard it all. One of the few accurate statements is that we are the world’s second largest donor. Yes we are, and in a world with such evident humanitarian need, I think that is a rank of which we should be proud.

They claim we overspent last year by 0.01% of our national income and that it should be paid back. I am not quite sure how we get it back from hungry children in South Sudan, but that can wait, because it is far too soon to tell. Final statistics are not yet available and all we currently have are estimates. Last year at this stage a similar overspend was estimated, and the year before a bigger one. In the end it was found that we spent exactly the right amount.

They claim that the expenditure is unscrutinised. It isn’t. It’s subject to thorough scrutiny by two parliamentary committees; the Independent Commission on Aid Impact, and the National Audit office. The public can scrutinise it for themselves using the Aid Tracker tool on our website. We are up at the top of the league for transparency.

They claim we rush money out of the door with reckless abandon as the year-end approaches. We don’t. The reality is that large scheduled payments including our contributions to the World Bank and other institutions fall due at that time of year.

They claim we lavish payments on private contractors. We don’t. We drive a hard bargain to get value for money in highly competitive processes, and we have won CIPS awards – the independent organisation for procurement professionals.

The say we are paying Palestinian terrorists: Absolutely untrue. That we built a new palace for the Palestinian Authority in Ramallah: Complete rubbish.

They say we built a shiny new HQ for the Centre for Global Development in the USA.  Actually, we paid for some important health research.

They say that we paid for BBC Somalia to broadcast messages encouraging migration. On the contrary, the message was about the perils of doing so.

I could go on, but you get the gist of it.

We spend 0.7% of our national income on international aid, which means that, as the 5^th richest country in the world, we have 99.3% of our income for ourselves. What really upsets some people that they believe that ‘charity begins at home’. Their fundamental error is thinking of it as charity. It isn’t. It is an investment. It is spent in our national interest in order that we can live in a safer, more stable, and more prosperous world. We spend it for  our benefit. The huge numbers of migrants fleeing poverty, violence, and injustice should bring home to anyone the truth that, unless we invest to deal with their problems at source, those problems are coming in our direction.

As for being one of the largest donors, the UK always takes the lead, it’s what we do. Others follow. Remember that when voting on 23rd June!