“Project Fear” scales new heights
In what looks almost like an attempt at self-parody, the Prime Minister makes the most paranoid claim of the Remain Camp so far: Brexit could lead to war. No doubt he’s saving the Four Horsemen of the Apocalypse for the last week of the campaign. The Telegraph and the Times both lead on the story, which most papers carry. However the Metro already highlights the back-lash: “PM under fire over EU security”.
Cameron is invoking the standard Brussels propaganda line that “The EU has kept the peace in Europe”. Of course that’s nonsense. The major EU economies are now far too closely integrated to enable (say) Germany to go to war with France (and that degree of integration would have happened with global trade growth anyway, regardless of the EU), and in any case, democracies don’t go to war with each other. In fact it’s NATO, and the Transatlantic alliance, and mutually assured destruction, and 100,000 GIs in Germany that have kept the peace – and which, with the courage and dedication of people like Margaret Thatcher and Ronald Reagan (and Pope John Paul) led to the demise of the Soviet Union.
The truth is that current moves by the Brussels/Berlin Axis to create a European Army are a deliberate attempt to side-line NATO, and weaken Western defence capability, despite Russian sabre-rattling on the border.
Cameron warns against “turning our back on Europe”. But of course we don’t want to turn our back on our largest export market (or on anyone else). We just prefer to be good neighbours rather than bad tenants. He counsels against “isolationism”, and we agree. That is why we want to leave the EU’s inward-looking, self-referential and protectionist political structures, and to re-join the rest of the world, where the growth is.
Choreographed moves: Alongside the Prime Minister’s speech (billed as “Churchillian”, by the way) we find that think-tank Chatham House,and a group of WW2 veterans, have declared for Remain. Perhaps the veterans relish the idea of being part of a German-dominated EU Army.
Meantime Julian Lewis MP, who heads the Defence Select Committee, has accused the PM of deliberately orchestrating claims from military and security chiefs. Few will have difficulty believing that.
Project Fear Part Two
While Cameron warns of Armageddon, Osborne focuses on economic questions. He predicts that with Brexit, house prices will fall and mortgage rates rise. . Is he right? Such prophecies tend to be self-fulfilling, and again, Osborne seems happy to talk up the negatives. There may be a Brexit impact on the very inflated top-end property prices in London, but few will weep tears about that. It is difficult to see an impact on ordinary homes. Of course Brexit would tend to reduce immigration and therefore to moderate demand for housing (and encroachment on the Green Belt), but there is so much pent-up demand that we won’t see an effect on prices any time soon.
And interest rates? Yes, there will be a flurry of volatility in the markets around Brexit, but as market operators start to see the economic benefits of Brexit, we can expect a period of growth and stability, with increasing confidence in financial markets.
Gove says we’d leave the Single Market
Gove’s comments have been seized upon by the Remain Camp as though they’re an “admission”. In fact they’re just Common Sense. Leaving the EU and staying in the Single Market would leave us in the same sort of uncomfortable and ambiguous position as Norway – still subject to EU budget contributions and many EU rules, and probably to free movement of people as well. Voters might justifiably ask why we’d bothered with Brexit if it leaves so much of the status quo in place.
The paper quotes “EU lawmakers” as saying that Britain “could not expect special treatment”. In fact we would get special treatment, as an economic imperative, given that we’ll be the EU’s largest export market. But in any case we simply want to be treated like all those dozens of countries which have free trade deals with the EU.
Slipping briefly from its pro-Brussels line, the FT also quotes Roger Bootle of Capital Economics who says that “the benefits of the Single Market have been greatly oversold”, and points to countries like the USA, Russia and China which have great success exporting to the EU without any special trade terms.
It seems that the Conservatives are starting to believe their own propaganda on the Single Market, which some claim is “their greatest achievement in Europe”. What is the Single Market? It’s an old-fashioned 19th century style Customs Union (think Bismarck and Zollverein) overlaid by a stifling level of administration and regulation, and it simply performs less well, in economic terms, that a modern free trade area. The Remain Camp tries to suggest that in leaving the Single Market we will be prevented from trading with it – but that’s nonsense. Gove is right. We want out.
“EU has added £1800 to annual pay”
The pro-EU lobby group London First has issued a study (or perhaps “a wild guess”) that EU membership has added £1800 to average annual pay in the UK as a whole – and for good measure, £3000 in London. They are also claiming that EU membership has created £4.6 billion more trade than would have been the case otherwise.
Expect to hear George Osborne and the Remain Campaign repeating these figures ad nauseam. Yet how do they derive them? I recall that Peter Mandelson when Trade Commissioner estimated that EU membership was worth 1.8% of additional GDP, while his colleague Commissioner Gunther Verheugen estimated the costs of excessive EU regulation at around 5.5% of GDP. On those figures, EU membership is making us poorer.
Estimates of trade benefits are notoriously unreliable. First you have to estimate what trade would have been without EU membership – the “counterfactual” – and that estimate is no more than a guess, influenced by the case which the guesser wishes to make. But the EU is in long-term decline in terms of world GDP and world trade, so arguably we should have done better if we had been outside, more focused on the rest of the world, and less on Europe.
In any case, these guys have taken their guess of the benefits, but as usual have not considered the negatives. The EU’s failure to establish trade deals with the fast-growing economies of Asia. The massive regulatory costs. The vast damage that EU energy policy is doing across Europe (“Creating an industrial massacre” – ask the guys at Port Talbot). Driving energy intensive businesses off-shore, taking their jobs and their investment with them. This is the regular pattern of Remain arguments. Make wildly optimistic estimates of benefits, and simply ignore the negatives.
Bank lowers forecast over EU uncertainty
The Sunday Telegraph reports that the Bank of England is expected to slash its growth forecasts “because of uncertainty over the Brexit vote”. With the Remain campaign persistently talking down the UK economy and talking up the risks of Brexit, this comes as no surprise. The Bank may simply be responding to the government’s need for pro-Remain propaganda. Or they may have talked themselves into it. As Allister Heath wrote (and I Tweeted) recently, “Big firms are the worst scaremongers, and they probably believe their own propaganda”. Same applies to banks and other financial institutions.
On the same page, Jeremy Warner strikes a much more moderate tone. Admitting that concerns over Brexit are a factor, he adds “Yet Brexit is clearly not the only, nor even the main, factor at work here. There’s something deeper going on. The global recovery is running out of steam”. Really the Bank of England should not be talking down British prospects in the face of global risks.
The Greek €uro crisis
Yesterday I wrote about Juncker’s rose-tinted view of Greek prospects. Peter Spence in the Telegraph offers a much more considered view. “Greece faces another stormy summer….the government faces running out of cash…in July”. But here the stage management comes in. Spence adds “With the Brexit Referendum in the UK looming….EU officials will be keen to keep talk of another Greek crisis quiet”. This accounts for Juncker’s rose-tinted view.
Meantime 15,000 Greeks were assembling in the streets of Athens and Thessalonica yesterday to oppose further taxes and austerity. Petrol bombs were thrown at police, who responded with tear-gas . The irresistible force of aggrieved public opinion meets the immoveable mass of Brussels obduracy.
Migrants to pay more for the NHS
The Express reports that new proposals will be introduced in the Queen’s Speech requiring migrants to pay for healthcare.This looks like a deliberate attempt by the government to allay public concerns over immigration ahead of the Referendum. But we have already seen how difficult it is to get the NHS to act as gate-keeper for free medical services.
The Mail reports that an article by Jeremy Paxman mildly critical of the EU has been withdrawn from the Radio Times (good lord, does the Radio Times still exist?!) under pressure from the BBC, which fears it might jeopardise his neutrality. But the BBC does not seem to be concerned that it jeopardises its own neutrality with its relentless stream of pro-EU propaganda, or its funding from Brussels.