Financial Times

Exiting the EU impact assessments warn of the true cost of Brexit

Labour Party

The FT reports today that Brexit will hit five sectors hardest in the EU, while in the UK smaller companies and specific regions will be “disproportionately affected.”

The research, published by Oliver Wyman and Clifford Chance law firm, found that the hardest hit sectors following Brexit will be financial services, automotive, agriculture, food and drink, chemicals and plastics which are heavily dependent on EU trade.

This corroborates the release of the document by the chair of the House of Commons Exiting the EU Committee, Hillary Benn, which also published its economic impact of Brexit last week.

Even taking into consideration the admission by the reports authors that economic modelling in this way is difficult and contains uncertainties it is of concern that the Government and others continue to dismiss and/or refute the “best case scenarios” put forward.

The Committee’s report predicts that between -1% and -12.5% will be wiped off the growth of the UK economy in the long term, under the government’s current plans for a wide-ranging free trade agreement. Even leaving the EU but remaining in the single market results in growth between 1.1% to -10% over the course of 15 years.

Meanwhile the assessment published by the firms Oliver Wyman and Clifford Chance found that potential non-tariff barriers would have a much more significant effect on companies than tariffs.

Reporting in the FT, the research calculated that if a future customs arrangement was in place, equivalent to the current customs union then the impact of Brexit would be reduced to £14bn for the EU and £17bn for the UK.

While it must be accepted on both sides that these are estimates only, it would be foolish to claim that Brexit will have no economic impact at all, and the potential that the impact will be significant  is, obviously, a real threat to the UK economy.

EU negotiations facing further fragility

Labour Party

The Financial Times reports that the already fragile EU negotiations are in further jeopardy. Concerns have been raised after the European Union announced it was to publish the legal text of December’s Brexit divorce agreement which will stipulate unambiguously how it sees its future relationship with Northern Ireland i.e. how it would align with the Union’s single Market.

I’m sure we all recall the furore between Theresa May and the DUP’s Arlene Foster who four days before the meeting on the 8 December rejected language which was to be used in the Brexit Divorce meeting which would essentially see Northern Ireland remain under the EU’s regulatory orbit- and it was this which was wholly unacceptable to the DUP.

Admittedly May was in a rock and a hard place politically – to avert the walkout of the DUP (an alliance Theresa May rely on to ensure she has a parliamentary majority) some wording was hastily drawn up and vaguely agreed. However, it was as the FT article reminds us, somewhat of a fudge – the wording was deemed so ambiguous as to not have any real meaning and it is unlikely to be coherent enough to be replicated into a final legal document concerning the UK’s withdrawal.

The publication of the official legal text in the next few weeks could seriously hamper the situation domestically. But May will not be able to advance on the next stage of negotiations concerning the transitional period either unless the UK Government is prepared to fully accept that which was agreed on the 8 December – as we know this was a pre-condition to moving to the second stage.

The problem with the legal document which is set to be published imminently is that it will contain much of the detail, something that the UK Government has so far avoided where possible! This is such a delicate and fragile situation that it risks jeopardising many areas politically and May really must tread very carefully.

You can read the excellent full and detailed article here.

The reality of Brexit

Labour Party

Today I am reproducing two comments which appeared in the Guardian and Financial Times. They are both so good, I thought Honeyball Buzz readers should have the opportunity to read them.

In the Financial Times, Philip Stephens says: “Britain is having a nervous breakdown and only the British cannot see it. These are truly extraordinary times. Britain is upending the economic and foreign policies that have set its national course for half a century. Nothing in modern peacetime matches the upheaval.

“The impact on the nation’s prosperity, security and role in international affairs will be felt for a generation and beyond. And yet the prime minister dare not set out her preferred course for a post-Brexit settlement lest she be toppled by her own Tory MPs. Brexit is an act of protectionism promulgated by English nationalists who inexplicably style themselves free-marketeers: every study produced in Whitehall suggests departure from the single market will leave Britain poorer and less able to promote its interests overseas. With each step back from the melee, the picture becomes all the more incredible.

“Most MPs in the House of Commons consider Brexit an act of folly. They will vote against their judgment because the referendum, with its narrow majority for leave, has been invested with an absurd, almost mystical status. Let no one dare question “the will of the people.” Link to full article here.

Meanwhile in the Observer, Nick Cohen argues the hard right Tory Brexiteers flaming the civil service will blame anybody but themselves for Brexit’s failure: ““We can have our cake and eat it” is no longer the slogan of that asinine opportunist Boris Johnson, but of the post-Brexit establishment. Both Conservatives and Labour pretend there is no hard choice between taking back control and economic hardship.

“May says we can have it all because that’s “what the British people voted for” … In Russia, Hungary, Poland, the US and Venezuela, we have seen elected autocrats sweeping aside, or attempting to sweep aside, constraints on their power. They have the people’s mandate.

“Anyone who stands in their way is therefore an enemy of democracy itself. Just because it hasn’t happened here does not mean the British can console themselves with the happy thought that it can’t happen here – the more so when it already is.” Link to Nick’s full article can be found here.

Repugnant misogynistic behaviour is not a justification for raising charitable donations

Labour Party

A glitzy, glamorous bash where the champagne flowed, and canapes were consumed in abundance. Yet there was a darker, seedier side where, reportedly, flashing, touching and groping of the female hostesses took place.

‘Serving’ the attendees at the male only ‘President’s Gala’ were women who had been hired on the basis they were young pretty and thin. The undercover reporters from the Financial Times who exposed the seedy event reported how women were groped, harassed and received other unwanted attention.

It has been described as revealing the seedy underbelly of corporate life. Indeed, two attendees of the bash are reported to have said “it’s no different to what goes on at a rugby dinner”. As if that makes it OK?

One of the women who ‘worked’ the event three or four years ago said it was the worst job she had ever done in her life.

The event was an opportunity for those men, testosterone filled, successful in industry and completely pathetic to objectify women and in some cases, harass them.

And what of those who organised the rules. They are equally as repugnant, if not more so. Their rules are reported as follows: The women had to: “wear short skirts and black knickers, given alcohol and not allowed to hide in the toilets that were monitored by security guards. The only warning the women had was that some of the guests would be ‘annoying’ and that, to earn their £150 fee plus a cab home, they were obliged to sign a non-disclosure agreement.”

The misogynistic event had been held every year since 1985 so all those on the guest list knew what to expect. Indeed a few years ago a report in the Independent on Sunday said of the event there were “men tucking into the women”. So, the criticism of all those who chose to ‘innocently’ attend is entirely legitimate.

And let’s not forget the charities in this, they have innocently been caught up in the episode and some, Such as Great Ormond Street, have returned the money which was raised at the Dorchester Hotel dinner. They can’t possibly accept money from events which are completely at odds with their with ethical procedures. Fundraising must be in line with charity values and justifiable and this clearly doesn’t fall into those categories.

It’s disgraceful that the money raised and received in good faith by the charities was for hugely important, sometimes life saving machinery; beds, cancer research treatment toys for children, therapy rooms among many other things.

Here is just one example: Clatterbridge cancer charity – sending the money back
Received: £15,000 towards the building of a new specialist cancer hospital in Liverpool.
Comment: “We can confirm that we received a donation of £15,000 from the Presidents Club charitable trust last year. Following reports of completely unacceptable behaviour at their event we will be returning that donation.”

There are legislative issues in this too which have been little raised. In 2013 the then Coalition Government removed third party protection from workers, those which should protect the very women who ‘worked’ this event. They are now left without the ability to challenge such unacceptable, repugnant behaviour.

The balance between Westminster and Brussels is broadly correct

Labour Party

Downing Street will, according to the Financial Times, release official reports on Thursday concluding that the balance of powers between Westminster and Brussels in key policy areas is broadly correct.

The assiduously hidden balance of competencies exercise has therefore blown up in David Cameron’s face. Designed to keep the Eurosceptics quiet, the review of the EU’s competences, which the Foreign Secretary launched in July 2012, tells a very different story from what the sceptics and possibly the Prime Minister himself wanted to hear.

An audit of what the EU does and how it affects the UK, the review’s official blurb states, “It is important that Britain has a clear sense of how our national interests interact with the EU’s roles, particularly at a time of great change for the EU.” It goes on to say that government departments will consult Parliament and its committees, business, the devolved administrations, and civil society to look in depth at how the EU’s competences (the power to act in particular areas conferred on it by the EU Treaties) work in practice. Moreover, our European partners and the EU institutions will also contribute evidence to the review, and it will examine issues that are of interest across the EU, seeking to improve understanding and engagement.

No-one can say that the review wasn’t thorough. Parliament and its committees, the devolved administrations, business and civil society plus Britain’s European partners add up to a very wide range of opinion. And they conclude that Britain’s relationship with the European Union is just about right. In fact, these studies include a strong endorsement of the commercial advantages of Britain’s EU membership.

Tellingly, Number 10 has ordered low-key release for these reports. There is only one reason for such behaviour, namely that Downing Street fears that the findings of the balance of competencies exercise do not support the case for a radical renegotiation of EU powers. In other words, David Cameron’s gamble that this review would calm the Eurosceptics has utterly failed.

There is something very unseemly about a Prime Minister who will undertake official studies and use taxpayers’ money for Party advantage. It’s not the kind of conduct we expect from our government, and it’s even worse when the instigator wants to conceal the findings of the review he initiated because it came up with the wrong result.

Thankfully for democracy in Great Britain, the Financial Times reported on the studies, allowing people to know what has been going on. Congratulations to that excellent newspaper. What would we do without the FT?

 

Cameron is again putting party before country

Labour Party

There is a wise adage in politics that leaders, representatives and their parties should listen and respond to the questions the people, their electorate, are asking rather than matters which endlessly fascinate professional politicos but leave virtually everybody else (99.999 per cent of the population) cold.

Enter the torrid and seemingly endless Tory debate on Europe. Begun in earnest under Margaret Thatcher in the 1980s, the Conservatives remain in utter disarray over whether or not Britain should remain in the European Union. As Janan Ganesh  of the Financial Times succintly put it, the Tory Party is suffering from “a single-issue neuralgia that knows no equivalent in any major party in the west”.

And nobody except professional politicians actually cares. Opinion polls consistently show that whether or not Britain remains a member of the European Union is not central to people’s lives. According to YouGov they are far more concerned about jobs and prices, schools and hospitals. Although it pains me as an MEP to say it, EU membership is little more than peripheral in terms of voters’ priorities.

All of which leads to the inevitable conclusion that those Tories who fight in such a relentless and unremitting way to get Britain out of the European Union are not answering any question asked by those who voted for them. Instead they are reinforcing their own strange view of the world whereby the EU is seen as the source of almost all that is wrong with Britain and we would all be massively better off without johnny foreigner telling us what to do.

This could be understood and forgiven if it were just a few misguided backbenchers banging the drum. While this may have been the case prior to William Hague’s disastrous four years as Conservative leader from 1997 to 2001, the Tory tide most definitely turned during the first years of the 1997 Labour Government. Local Conservative Associations selected ever more anti-EU candidates while those already in Parliament gained ground. The only comparable episode in recent British politics was the Labour Party during the 1980s when Labour lurched to the left espousing causes such a unilateral nuclear disarmament which the majority of the British people did not want.

Yet the Tories in 2013 are very different position on EU membership. While Labour was in opposition in 1983 when the party wrote “the longest suicide note in history”, the Conservatives are in government, albeit in a coalition, the other part of which, incidentally, does not share their EU phobia. It’s one thing not to listen to the people when the only damage will be that the opposition party does not get elected. It’s quite another not to listen when in government and the party can make a difference to people’s lives.

David Cameron’s unseemly haste to publish the EU Referendum Bill surely indicates that he, the Prime Minister, is not listening to the people. Instead he is putting what he perceives as his Party’s interest first, both internal – pacifying his rabid Eurosceptic backbenchers and external – doing something about UKIP. Cameron is running scared yet in incapable of showing leadership. He appears more like a headless chicken in a mire-filled farmyard than the world statesman he wanted to present during his visit to the United States and meeting with President Obama.

Tragically for David Cameron his strategy of appeasement – appease UKIP and they will not take any more Tory votes and appease the anti-EU backbenchers so that they will pipe down – is patently not working. He is our Prime Minister and as such he would do well to learn basic lessons. Appeasement does not work. Cameron should listen to the people rather than try and maintain an impossible position on something a large majority of the population does not rate as a priority.

Repatriation of powers really is smoke and mirrors

Labour Party

France and Germany have refused to participate in Prime Minister David Cameron’s much-vaunted examination of whether some EU powers should be returned to member states.

Reported in the Financial Times on 2 April, this extremely significant development has unfortunately received little attention in the British media. Since the story broke before the Thatcher demise, there was no excuse for ignoring such important news.

David Cameron’s flagship policy is now in tatters, as predicted many times on this blog. I first mentioned the impossibility of repatriation of powers as long ago as March 2010, before Cameron achieved the highest office. It was blindingly obvious to those of us engaged in European politics that there would never be the agreement required from the 26 other EU member states for repatriation to happen.

According to the FT, Paris and Berlin consulted with one another before concluding that the exercise known as the “balance of competences” was about serving Britain’s domestic political interests and not an EU issue as such. The two countries took this view even though the British government sent letters to each of the 26 other EU countries explaining the approach would be even-handed.

Cameron, of course, wants to use the results of the balance of competences review to renegotiate the terms of Britain’s membership of the European Union. Now that France and Germany have refused to participate in Cameron’s little scheme, renegotiation looks less and less likely. The Franco-German axis seems to be at one on this. The previous position where Hollande was against what he called “cherry picking” , (ie the UK keeping what it wanted such as the single market while opting out of European social legislation) while Merkel seemed to be more sympathetic to the UK position has obviously hardened into that of opposition to Cameron’s impossible policy.

Indeed, the FT was quite clear that most EU governments have indicated extreme reluctance to re-open the EU treaties. It is, moreover, unclear whether Cameron has enough political sympathy among his EU partners to engineer a one-off deal for Britain.

So it’s all ending in tears for Cameron and his side-kick William Hague. Fortunately for Mr Cameron and the Con-Dem government the end of one of the major promises in the Conservative manifesto for the 2010 general election has gone virtually unnoticed. Shame on all those who seek to cover up Tory incompetence and their lack of understanding on EU and international matters.

Cameron and Hague are being dishonest on Europe

Labour Party

The excellent David Aaronovitch of the Times now joins the FT’s Janan Ganesh in the ranks of national political commentators who are getting to grips with the European Union.

Aaronovitch’s colourful metaphor in yesterday’s Times summed up current Government’s position and showed just how flawed their line on the EU really is.

David had a childhood friend called Denny with whom he played toy soldier games re-enacting the Napoleonic Wars. Denny, the French commander, was, according to Aaronovitch, “dashing, ingenious and fatally elaborate. His plans were complex and daring, involving clever feints and diversions. But to come to fruition they relied on the other players behaving in ways that they simply didn’t. So usually he lost.”

The brutal fact of the matter is that the while Cameron-Hague “route map” may appeal to Eurosceptics, and maybe even those who are lukewarm on the subject, these are not the people Messrs C&H will have to convince.

In order to achieve the holy grail of treaty renegotiation and repatriation of powers from Brussels to London, the British Government will have to convince all 26 other EU member states that this is in their interest, the interest of the EU as a whole. Aside from some justice and home affairs matters where the UK can opt out, the idea that powers will come back to Britain is utter pie in the sky.

I would ask all of you reading this to seriously ask yourself why would the 26 other EU member states agree to the UK taking back powers? EU treaties are exhaustively negotiated and eventually agreed by all the countries. In most instances change can therefore only happen if all member states, or at the very least a substantial majority, agree.

The feral Tory Eurosceptics claim to love the EU single market. In order for trade to be fair across the single market with no country having an unfair advantage or disadvantage, the market is regulated and laws put in place to secure the same treatment for employees across the EU. Membership of the single market therefore confers responsibilities as well as rights.

It is these rights the Tories want to repatriate, to destroy in other words. Employment and social legislation would go as would the equalities agenda. This Conservative-led Government wants the UK to enjoy the privileges of the EU single market without its responsibilities.

I ask you again, why would the other 26 member states confer this special status on the UK? Why would 26 countries who accept the responsibilities as well as the rights of the single market allow one country, who, to be honest they don’t really like, to opt out of the difficult stuff?

The rest of the EU is simply not going to behave as Cameron and Hague want them to. David Aaronovitch’s analysis is far more realistic: In his piece yesterday he puts forward this scenario:

“In the run up to the European elections the Conservatives will announce their commitment to a referendum on Europe based on their negotiations about powers. A year later they’ll go to the country on a manifesto based on negotiating the new balance and promising a referendum based on the results. [Assuming they win the 2015 election which I don’t think they will] they’ll then negotiate – their hand supposedly strengthened by having won an election on those terms – and a referendum will finally be held in 2017 or 2018. In their imaginations the referendum will endorse the newly negotiated position and Britain and possibly a few other countries will take their places, um, somewhere in an imagined optimal adjacent European space, where you get all the advantages of European association and few of the downsides.”

Dream on Messrs Cameron and Hague. I assure you your dishonesty will be found out.

 

David Cameron’s attempt to have it all ways on the EU is doomed to fail

Labour Party

As David Cameron makes yet more noise about Britain’s membership of the EU, you may wonder why he chose to use the word “consent”, a somewhat woolly concept, rather than going all guns blazing for a referendum.

One answer is that Cameron is increasingly finding himself between a rock and a hard place. As the FT’s Janan Ganesh puts it: “By hinting at a repatriation of powers, he (Cameron) raises eurosceptic hopes that are almost impossible to meet. Few diplomats expect to achieve more than cosmetic changes to the terms of British membership, and even those tweaks will take place largely in non-economic areas such as justice.”

One of the few British commentators to even begin to understand the EU, Ganesh is spot on with this analysis. Continuing in the same vein, he rightly says: “If such negotiations (on repatriating powers) ever transpire, the EU is likely to want to give Mr Cameron enough to have a fighting chance of winning a referendum to stay in the club. But the immemorial desire of most eurosceptics is nothing less than to belong to the single market while being excused much of the burden of European regulation. It is no more in the interests of the rest of the EU to grant this privilege now than it was in the past.”

An opt out on some justice and home affairs matters is all Cameron is ever going to get out of the EU, and even that is very uncertain. I, for one, have never understood why the majority of UK political commentators give house room to the concept of repatriation of powers from the EU to the UK. As the excellent Mr Ganesh has confirmed, except in a few specific, non-economic areas, it is impossibility.

Cameron is promising smoke and mirrors to appease the Tory right-wing and try and see off the threat to the Tories from UKIP. He is, however, deceiving the British people. This is, of course, dishonest. It’s also very stupid.

Janan Ganesh makes another strong point: “If the content of any new settlement will upset the right, the process of winning consent for it is also tricky. The Tory manifesto for the next election is increasingly likely to include a promise to hold a referendum on the new arrangements once they are secured. This should pacify eurosceptics for a while and prevent UKIP from encroaching too far into the Tory vote in 2015. But it will also ensure that the first couple of years of the next parliament will be dominated by Europe. The Conservatives could easily split as MPs decide that the deal struck by Mr Cameron is not worth campaigning for. Then, if the referendum is lost, it is hard to imagine the government surviving.”

Even supposing David Cameron is Prime Minister after 2015, and I most definitely do not believe that will be the case, it’s very difficult to see how his chosen policy on the European Union can be even modestly successful. The Tory eurosceptics are stridently demanding more than is even remotely realistic. Moreover, they scent blood and will not go away. Meanwhile David Cameron, one individual Prime Minister in a European Union of 27 member states, quite simply cannot give the sceptics what they want. To cap it all the British people are being promised a referendum on something which will probably never happen.

Some of the challenges faced by top women

Labour Party

The Financial Times earlier in the week produced a fascinating and informative “slideshow” of top women professors in financial education.

When asked; “What is the biggest challenge you have faced as a woman working in finance?” the female professors’ replies included the following:

  • Performing at the highest level as finance academic means that sacrifices in other areas of life must be made. Missing out on important birthdays, holidays and school events is not uncommon and I often feel guilty
  • The biggest challenge has been international mobility. I saw with my male colleagues that their spouses happily accompanied them, but my husband is not keen on quitting his job and starting from scratch abroad
  • My biggest challenge has not been in the field of finance itself but rather the difficulties in balancing work and family
  • You must prove quickly – and often with greater quality – that in addition to bringing your gender you bring knowledge and experience
  • The single biggest challenge I faced was establishing credibility with senior colleagues as a long term practitioner in the field
  • The biggest challenge as a women in finance is the small representation of women in general in the industry

These are telling comments and, I fear, representative of women at the top of their field in most careers.

In addition, the women in the FT feature speak for most of those in similar high-powered positions across Europe. Life for those who break through the glass ceiling is rarely easy and women face many challenges which are completely foreign to men.

Although women have by and large achieved acceptance at the higher levels of the public and private sectors, it is clear that this is by no means a given. Women still have to prove themselves more than their male counterparts, and also still do the majority of the caring for children and elderly dependants.

This is, I believe, changing, at least in northern Europe. Some countries, notably those in Scandinavia, are well ahead. However, we all need to work to improve the position of women, both at work and at home. In particular, the work-life balance needs special attention. This is the big challenge for those of us who legislate on these issues.