The legacy of Magna Carta

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We’ve just been celebrating the 800th anniversary of the signing of Magna Carta, which many regard as the founding document of the UK’s (largely unwritten) Constitution. And the key achievement of Magna Carta was to put an end to the absolute rule of the Monarch, and to assert for the first time that every man, be he peasant, gentleman, baron or King, was equally subject to the rule of law – and to ensure that redress should be available to those disadvantaged by the failure of others to obey the law.

In these days of Constitutional Monarchy, the government has taken over many of the previous rôles of Monarchy. But the rules continue to apply. Like the King, the government is also subject to the rule of law. The elected government has the democratic right to make the law, but it does not have the right to break it.

Classical liberal economics stresses the vital importance of the rule of law, of property rights and enforceable contracts, as the basis of a free society and a workable economy. Consider most of the world’s trouble spots, and the lack of these basic elements of civilisation is at the root of their problems. If you enter into an agreement, or a contract, or a treaty, you should observe it. And it will normally include some kind of mechanism to provide redress in the event of non-compliance. Indeed a contract or treaty without such provisions is of little value.

So I am rather astonished at the large number of e-mails I am getting regarding TTIP (The Transatlantic Trade and Investment Partnership, or EU/US Trade Agreement), with particular and quite aggressive concerns raised about ISDS (the Investor/State Dispute Settlement system). They are horrified that ISDS will “allow corporates to sue democratic governments”, as though this were a new thing. But already companies that feel they have been disadvantaged by a failure of a government to behave properly can and do sue governments on the basis of existing law. In Britain, the wind industry is currently threatening to sue the government over subsidy cuts. BAA threatened to sue the government over the third Heathrow runway, and now protesters are threatening to sue as well.

In Germany, the nuclear industry is planning to sue the German government (rightly, in my view) for very large sums of money for Angela Merkel’s peremptory decision to close the German nuclear plants. There is nothing “democratic” about allowing governments to break the law, or to renege on contractual or treaty provisions. Indeed, that’s the route to tyranny and despotism.

ISDS is variously described as “an assault on democracy” and “riding rough-shod over the will of the people”. In fact it is simply a dispute resolution procedure in the event of non-compliance. Correspondents write about ISDS as if it were some demonic device newly created by rapacious American corporations to damage trading partners. In fact ISDS provisions are already a commonplace of international treaties – a treaty is worth little without a compliance mechanism. But according to the Chartered Institute of Arbitrators, the existing network of 1400 European Bilateral Treaties (BITs) – all of which include ISDS — already provide good protection to many European investors. These include 8 existing BITs between EU Member States and the US. The UK itself has negotiated 94 Bilateral Investment Treaties, the majority of which include ISDS provisions.

In other words, ISDS provisions are already widely used, and have a good track record. Only two cases have ever been brought against the British government under ISDS, and neither succeeded. Rather than “riding rough-shod over the democratic will of the people”, ISDS simply ensures that governments are called to account, and required to live up to contracts and treaties that they have voluntarily and democratically entered into.

Imagine that you wanted to invest in another country with which the UK had an investment treaty. Imagine it was Russia, say. And suppose the Russian government decided to nationalise your investment. Wouldn’t you hope that there would be a compliance mechanism to ensure that you got appropriate compensation? And wouldn’t you be happier if any legal action took place in some kind of international tribunal rather than in a Russian Court? Do you see anything anti-democratic in that?

I think that there are real issues of concern with TTIP. We in UKIP believe that Britain should be free to negotiate its own bilateral deal with America – indeed I believe that had it not been for the EU’s straitjacket, we should have had a UK/US trade deal decades ago. Then there is the issue of public services and especially the NHS. As TTIP develops (and that could take months or years), we in UKIP will be watching at every stage to ensure that there’s no threat to the NHS. But to be fair, that’s the position that just about every politician – and the European Commission – takes. There are questions about the tribunal mechanism for ISDS resolution, and we would insist that the proceedings of any such tribunal should be open and transparent. A rather more worrying concern would be any tendency for the EU and the USA together to seek to establish some kind of joint global hegemony over regulation. Similarly, any tendency to use TTIP to increase regulation – perhaps by introducing conditions from both sides – is to be resisted. But if they approach regulatory convergence in terms of mutual recognition rather than aggregating two sets of rules, so much the better.

There has been a strident and aggressive populist campaign against TTIP, which (like the rather similar campaign against shale-gas) has engaged in shameless scare-mongering and black propaganda. That campaign is leftist, protectionist, anti-trade, anti-American, anti-capitalist – and also anti-growth, anti-jobs and anti-prosperity. It is an hysterical response to a Treaty for which a final text has not yet been written.

My conclusion is that there are risks with TTIP, as there would be with any major new treaty. But we are aware of the risks, and will watch carefully to see that they are dealt with. And provided they are, a good TTIP agreement will offer huge benefits on both sides of the Atlantic.

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11 Responses to The legacy of Magna Carta

  1. Brin Jenkins says:

    I must differ Roger, some large international organisations have greater fiscal muscle than small governments. We are aware how crooked some of these companies are, and must to not let them have any greater influence over National Sovereignty. I understand one may not sue the Crown, so it should be with the State also but with the proviso that treason will always be pursued with full vigor against all who commit it, or just allow it to occur.

    • You are setting the government above the law — and repealing Magna Carta.

      • Brin Jenkins says:

        That was not my intention Roger. Treason is Treason and covers all from the farm worker to the Queen. No Government is to be bound by any previous action of an outgoing regime. The slate has to be clear and many things done by Tony Blair will have a permanent effect, he has boasted of this on immigration and should stand trial.

  2. Philip Rock says:

    Thank you Roger.

    I now know that I did not understand this subject – much to my shame – for I was deeply suspicious of it, namely because it seemed to be a child of the EU only. This of course is the propaganda that I swallowed!

    I follow and agree fully with your reasoning.

    Philip Rock

  3. Ex-expat Colin says:

    Mr Farage right on them today:

  4. charles wardrop says:

    Yes, Mr Farage, that’s the problem, and naetheless, the SNParty want ppoor Scotland to join the EU, instead of sticking with our fellow Brits, who should also leave the EU, which is not synonymous with “Europe.”

  5. Anne says:

    People my age Roger, did not go through a full scale WAR only to allow FOREIGNERS governing us, -and paying them to do so-(no wonder we are WELL OVER £trillion in debt) or such as the present Government that may allow FOREIGNERS (EU) to speak on behalf of ALL in this Country to the mighty USA on ALL MATTERS OF TRADE-FOREVER. Not just “FOOD-trade” but ALL MATTERS OF TRADE. There is absolutely no point in having ANYONE in either Houses of Parliament if they cannot speak for themselves to such as the USA. You are surely aware that other Countries in this World are also part of other similar types of TTIP’s?

    We fought a very bloody War to prevent such as this-and it will be forever-surely you realise that? Yes Roger, and people my age in the heavy bombing of this Country-not where I live presently-for we were bombed out and never went back, but surely you realise that there will be no point in having anyone in either Houses of Parliament and soon there would be no point in having anyone “speaking” for us in the EU either-surely you realise one will follow the other?

    You draw our attention to Magna Carta, yet I remember this too Roger, ““ “We shall not flag or fail. We shall go on to the end. We shall fight in France, we shall fight on the seas and oceans, we shall fight with growing confidence and growing strength in the air. We shall defend our island, whatever the cost may be. We shall fight on the beaches, we shall fight on the landing-grounds, we shall fight in the fields and in the streets, we shall fight in the hills. We shall never surrender!” —House of Commons, 4 June 1940, following the evacuation of British and French armies from Dunkirk as the German tide swept through France. You see I listened to that on our “wireless” and at that time.

    And now each and every one of us are paying our government through our Taxes to give our Country away-this through the treacherous proposed EU Transatlantic Trade and Investment Partnership (TTIP) where the EU would speak for ALL the Country’s in it to the USA-FOREVER. Yet not just about FOOD TRADE, which many may think at first, but TRADE in ALL matters. Everything and anything you can think of-for all time. It is no wonder there are so many EU Restricted Documents, the one I am looking at now, is one dated on St Patrick’s Day 17 March 2014. “TTIP threatens to take away democracy’s means for social and environmental management of the internal market,” Green MEP Sven Giegold warned, defending the decision to publish the document.
    Is this Government or ANY British Government prepared TO PAY to allow foreigners the right to “SPEAK” for all in this Country on matters of all kinds of TRADE to the EU and FOREVER? Perhaps the time is coming when there will be no need of ANYONE IN EITHER HOUSES OF PARLIAMENT, and we know for sure our own Constitution FORBIDS us encouraging foreigners Governing us-that was what that last WAR was all about. “…all usurped and foreign power and authority…may forever be clearly extinguished, and never used or obeyed in this realm. …no foreign prince, person, prelate, state, or potentate…shall at any time after the last day of this session of Parliament, use, enjoy or exercise any manner of power, jurisdiction, superiority, authority, preeminence or privilege…within this realm, but that henceforth the same shall be clearly abolished out of this realm, for ever.”

  6. Mark Hodgson says:

    The problem, as I understand it, and which you don’t mention, is that the proposed right of businesses to sue the Government under TTIP is not via the Courts but via a separate mechanism outwith our existing legal system, and set up especially for them. Foreign businesses will be able to use the new system, but of course UK citizens will not.

    Even though I think you normally speak with a lot of common sense, and I regularly (but not invariably) agree with what you say, I’m not with you on this subject at all. Your references to Magna Carta are misplaced. If TTIP goes through, there is a real danger that foreign businesses will be put above the law that UK citizens are subject to, and will have access to dispute resolution mechanisms denied to UK citizens, and not peopled by UK judges.

    Foreign businesses can already sue the UK Government via the UK courts (and sometimes through foreign courts) if they have a claim known to UK law (or to be precise, known to English & Welsh/Northern Irish/Scottish law as appropriate. There is no good reason to give them new rights over and above those available to the rest of us who pay our taxes here (many of these companies don’t pay UK tax).

  7. dave Roderick says:

    I agree with most of what you say roger but this treaty is a stich up by corporations for corporations by the time you are able to read the small print it will be to late as it will have already been signed sealed and delivered why do you think there is so much secrecy

  8. Anne says:

    If TTIP goes through, there is absolutely no point in having ANYONE in either Houses of Parliament. In fact the people would have the right to with-hold their taxes-for their Constitution forbids them allowing foreigners Governing them: “…all usurped and foreign power and authority…may forever be clearly extinguished, and never used or obeyed in this realm. …no foreign prince, person, prelate, state, or potentate…shall at any time after the last day of this session of Parliament, use, enjoy or exercise any manner of power, jurisdiction, superiority, authority, preeminence or privilege…within this realm, but that henceforth the same shall be clearly abolished out of this realm, for ever.”

    We have fought two World WARS to prevent FOREIGNERS GOVERNING US-THE LAST WAR, I REMEMBER VERY WELL FOR WE WERE INDEED BOMBED OUT.

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