Wednesday, May 25, 2016

Cameron's dodgy dossier

Fed-up with all of the contradictory forecasts and statements about the referendum on Britain's continued membership of the European Union?  You probably should look away.

I would like to see another forecast - I know, that suggests either some kind of a weird fantasy obsession or that maybe I am just sad but let me explain.

The UK Treasury have been burning the midnight oil and going into 'spreadsheet frenzy' to produce forecast after forecast that shows how much the UK economy would suffer if the UK electorate had the nerve/courage to vote for Brexit.  So I am not alone in wanting forecasts!  Maybe not even sad.

The latest forecasts suggests a 12% decline in the value of Sterling, an increase in unemployment of up to 820,000, house price declines of 10-18% and a deep recession as a result of the shock to the economy, from a Brexit.

Now, these Treasury economists are supposed to be smart and I suppose that the reason that they are getting the same 'results' as other forecasting bodies is because they are all using the same economic model.   So rather than being independent verification, as is being touted, we instead have a reiteration of the same result because the 'domesday' data input and the model used is largely the same.  The surprise would be if they came out with a different result.

I would like to see a forecast that looks at the impact of a Brexit, not on the UK economy but rather on the economy of the remaining EU countries.

The doomsayers include in their forecasts projections that immediately a Brexit vote is achieved the four horsemen of the apocalypse will descend.  We will have Pestilence, Famine, Death and of course War.  Additionally, overnight or close to it, the strongest growing economy in the EU will dive into recession.

But...

What about the effect on Germany?  Or on France or the Netherlands?

In 2015, the Germans exported US $100 billion of their excellent cars and other goods and services to the UK.  They then imported just US $46.5 billion from the UK and so enjoyed a surplus of US$ 53.5 billion.

In the same year, France exported US$41.5 billion and imported $27 billion, so having a US$ 14.5 billion trade surplus.  The position for the Netherlands was exports to the UK of US$50.7 billion and imports of $34.2 billion, so a trade surplus of $34.2 billion.  I am not sure if that Netherlands import figure includes items that are 'imported' as part of a trans-shipment process through the Rotterdam super-port but you get the drift.

Now - still with me?- If the Sterling exchange rate did fall by 12% (why not 10% or 15%?) then this would make UK exports cheaper and if proper WTO duty rates, of around 4%,  were used, rather than the extremely high rates used in the Treasury model, then the falling exchange rate would completely eliminate the effect of any duties and would still provide an export boost.

Problem is though, that this 12% fall is one-sided.  It supposes that the other global economies would be okay and stable and only the UK would suffer from a Brexit.  Consider though the effect of the UK retaliating against Germany, France and the Netherlands, if they and the rest of the EU imposed  onerous customs duties on the UK.  If the UK did exactly the same and applied the same rates of customs duties, the economies of these countries would undoubtedly suffer and this would ripple on and impact the Euro exchange rate.   So maybe that 12% decline in Sterling's value is incorrect.

Let's suppose that the USA also followed the EU lead and imposed similar level duties.  Then the US economy and the US $ exchange rate would also suffer as they have a small trade surplus with the UK. Albeit not too much but the impact would not be benign.

We all know D'Israeli's saying about 'lies, damn lies and statistics' however, what we are being presented with are one-sided forecasts that simply serve the UK government's position.  In none of these 'forecasts' do we hear the impact of Britain's reduced contribution to the EU.  This is variously estimated at £55 million per day! Again, this would positively impact Britain and negatively impact the EU.  Those particular coins, unsurprisingly have two sides.  Nor is any of the positive effect of reducing the mountains of 'red tape' that strangle UK and EU business, shown.

Also consider that a fall in house prices would be a boon for all those young people trying to get on the housing ladder.  Yes it would negatively impact those people who speculate in the housing market - foreign flight capital, members of Parliament, etc., but overall, the effect would be positive.

In the past, UK Prime Minister, David Cameron spoke of presenting the case around the referendum to the British people and letting them decide.  Instead of doing this, he and his Chancellor, George Osborne are becoming ever more outrageous in the claims and use of data.  Indeed, they are starting to make Tony Blair's 'dodgy dossier' look like a respectable, sober and credible document!


George Osborne, speaking when he established the Office of Budget Responsibility, said that the need for this organisation, independent of the the government, was because in the past, HM Treasury forecasts were found to be biased and dubious because of the political interference.  So when we see the drivel now emanating from Osborne's Treasury we know that we need to filter any forecasts through the prism of number manipulation so as to achieve a pre-determined outcome.  In other words, don't trust or set any store by what they say - they say what their master - George Osborne - wants them to say.

To close, another forecast.

David Cameron has said today, that the cost of Brexit could add £230 to the cost of a holiday in Europe, for a family of 4.  Of this is a 'could' rather than a 'would' and of course this figure is 'supported' by the usual dodgy statistics and calculations from the widely discredited forecasts publishers.  However, let's say that this time, the number is right, does £57.50 a head sound a high price to pay for the restoration of Britain's long-held democratic traditions?  Britain has paid a far, far higher price to defend its democracy, in the past.  A price in blood and lives, not in £ sterling.

Jean-Claude Juncker, the unelected 'President' of the European Commission, who hails from Luxembourg, has threatened the UK by saying that 'deserters' can expect no assistance from the EU.   Well Mr Juncker, I suggest that you hit the history books.  Go back to the history of the second World War.  In 1940, after the fall of EU members France, Belgium and Netherlands, at the hands of the Nazi hordes, Britain, aided by its colonies and Commonwealth allies, stood alone against the Nazis.  Britain didn't desert Europe's people in 1940 and we won't desert them now or in the future.  Brexit will provide a liberating example for those Europeans now trapped within an anti-democratic EU.  Brexit will allow those countries that suffered under post-war Soviet domination, to experience true freedom and democracy, when the inevitable collapse of the EU occurs.

£57.50 a head for freedom - bargain of the century - where do I send my money?

Vote Brexit, shake off the yoke of anti-democracy which is weighing us down and restore Britain's freedom




Wednesday, May 11, 2016

The Referendum contradiction

What do you make of all the scare-mongering, AKA Project Fear,  that is coming out of the Remain camp, relating to the European Referendum?

I ask because there seems to be something of a contradiction in the whole thing.

On the one hand, we have David Cameron and his government fulfilling a manifesto commitment and organising a referendum on the UK's continued membership of the EU, following a 'renegotiation' of the terms of membership with other EU members.

On the other hand, David Cameron and his acolytes in the Cabinet and the Remain camp, including some members of the security services and some members of the military, are telling us that if the UK does indeed Brexit, then we will experience:


  • Economic dislocation and a contraction in the UK economy
  • Immediately depreciating value for the Pound Sterling.  
  • The shock effect could lead to serious conflict in Europe - war and such - indeed some have mentioned Brexit being a potential cause for World War 3 starting.  
  • The UK would also become immediately more vulnerable to a terrorist attack as the European partners, with which we currently share intelligence, would cut-off cooperation. 


The economic consequences have been batted back and forth and the outcome depends upon the individual's overall view on Brexit.  However, surely a depreciation in Sterling would be expected to make the UK's exports cheaper and so would be a boost for the UK economy.

In terms of the intelligence sharing.  The most effective and important partnership that the UK participates in, is the Five Eyes programme.  This intelligence sharing agreement is between, Australia, Canada, New Zealand , USA and the UK.  You will note the lack of any other EU member.  You will understand that this mutually beneficial cooperation programme will continue whatever the outcome of the EU referendum.  Indeed, you will have heard from Cameron and Co. how the UK's GCHQ intelligence centre is one of, or maybe is the foremost of such centres, in the world.  Indeed, possibly equal to or only just surpassed by the USA's capabilities. A former head of the CIA essentially discounted other European intelligence service capabilities and posited that the EU sometimes get in the way of intelligence gathering and sharing.

In terms of war and peace in Europe (including in the EU countries),  it is NATO that has ensured the peace, for the last 67 years.  Certainly not the EU.  I have posted  on this earlier blog regarding the EU's contribution to the situation in Ukraine.  If this is what EU membership saving us from war is about, then the UK is better-off out rather than running the risk of getting pulled into a European conflict because of the  EU's naive and dangerous meddling.

But back to the contradiction.

If we, for just a single moment, accept the clap-trap that is spewing forth from Cameron and the Remainians, then why on earth is Cameron holding this referendum?  If the risks are so great - don't know about you but WW3 and Armageddon are up there for me - why hasn't the vote been canceled? Indeed, why were none of these arguments put forward by Cameron and Co., before legislation on the EU referendum was put before Parliament?  Or at the very least during those debates on this?.

Call me cynical but I suspect that these 'fears and risks' don't actually exist.  They are just being dreamt-up now.  There will no doubt be more in the days and weeks to come.  I ask you to apply the contradiction test to them.  If Brexit is so dangerous, why are we having the vote?

I suppose we should at least be grateful that the Remainiacs haven't (yet) invoked biblical plagues being inflicted on the UK.  Fire, pestilence, bugs, boils, etc.  There's still time though.

As before, the solution is - Vote Brexit!





Tuesday, May 10, 2016

EU and Elephants

Don't worry, this isn't about circuses or zoos.  Though, before I move on, and given just as something that 'tickled' me. I came across a lovely Polish saying, on Twitter.  Not my circus, not my monkeys - so not my problem.

Anyway, back to the European Union and Elephants.  Or rather, the Brexit vote and Immigration.

There. I said it.  I used the immigration word.  Naughty me!

Immigration though is a key, maybe the key factor affecting Britain's relationship with the EU.   Ronald Reagan is famously quoted as saying 'a nation that cannot control its borders is not a nation'. Within the European Union, that is the position in which the UK finds itself.

I have posted on this blog before about all of the fallacious and specious economic arguments put forward by those that want Britain to remain in the EU.  Simply put, they are wrong, they are based on unfounded fears that the EU will, as a result of a vote to Brexit, punish its largest single export market. Isn't going to happen, so let's move on.  

We can also discount the somewhat deranged comments from David Cameron, who seeks to suggest that a vote for Brexit could lead to World War 3.  Suppose for just a second that this was true.  Why then would he risk such a situation by holding a referendum that might produce a Brexit vote?   Oh I know he only offered the vote to scupper UKIP but still, if he actually believes what he said, then it is madness to continue with a vote.  Truth is, just as Cameron said earlier, as recently as February 2016, the UK can survive outside of the EU.

So let's look at immigration.

The numbers of people that are immigrating to the UK, from within the EU seem to be incredibly difficult to obtain.  Then when they are published they don't add up - more on that in a moment.  

According to the most recent numbers of immigrants, in the year to September 2015, the numbers were

55,000 from the EU 2 - Bulgaria and Romania, up from just 5,000 in 2007.

69,000 from the EU 8 - Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia. This is up from 53,000 in 2004.

130,000 from the rest of the EU countries , up from 53,000 in 1991.

These total to 257,000 when rounding is taken account of.

One issue with these numbers, is that the number of new National Insurance (Social Security) numbers that were issued in the same period was 630,000.  The UK government has so far failed to explain who received the 'missing' National Insurance numbers.

We need to consider, why these people are coming to the UK.  I doubt it is the weather.

The strong suspicion is that people are coming to the UK because of the strength of the UK economy and the economic benefits that are available.  Add to this the disparity in the UK minimum wage and that prevailing in the 'sending' countries as well as 'in work benefits' and we have a cocktail mix that guarantees the attractiveness of the UK as an immigration destination and, most importantly, one that will continue.  

But I am getting ahead of myself.

Based on recent data, from 2015, the minimum monthly wage in the UK is Euro €1,378.

In countries that are suffering IMF/EU and World Bank restrictions, countries like Greece, Spain and Portugal, the rates are €684, €757 and €589 respectively.

In Bulgaria and Romania the rates are €194 and €235 respectively.

In the so called EU 8, Czech Republic €335,, Estonia €390, Hungary €345, Latvia €360, Lithuania ¢325, Poland €410, Slovakia €380 and Slovenia €791

The minimum wage in the UK acts as a magnet for economic migrants from EU countries.  For some of these people, they can come to the UK, take-up a low-paid job and be far, far better-off than they would be in their home country.

Then add to this 'in work benefits'.  These are things like Working Tax Credits.  This is an invention of the fiscally incontinent former Chancellor, Gordon Brown.  These effectively subsidise companies by providing workers with taxpayer-funded handouts which supplement the low wage they are receiving.   For those migrants from low minimum wage countries, this just makes the UK look like a better and better choice.   Add in child benefit - another taxpayer-funded handout and a migrant would be crazy to go anywhere else.

Note I am clear, in my mind and media comment supports this, that migrants do not typically come to the UK to be 'benefits scroungers' who will 'sponge' off of the welfare state.  Rather they come to the UK to work.  Many of them end-up doing the work that work-shy, benefit dependent simply won't do.
David Cameron's much vaunted 'victory' at the EU summit, on the UK having the ability to apply some kind of 'emergency brake' on benefits to EU immigrants is essentially worthless.  These people do not come here for the benefits, they come here for jobs.

The problem for the UK though is more about available resources.

The NHS is straining under its current load.  In reality, it cannot cope, today.  On any reasonable metric, the NHS is failing.  It isn't even a question of money - the NHS gets flooded with taxpayer money.  The problem is human and infrastructure resources.  Not enough doctors, nurses and hospitals. The requirement for these resources cannot keep up with ever increasing demand.  The existing population is living longer and that is a challenge so you can imagine what kind of a burden an extra 257,000 people  places on the system.

The problems facing the NHS are replicated in schooling and housing.  It has been estimated that more than 50% of all new homes that are being built (and there's nowhere near enough of them, for 'locals') will be needed for immigrants.  It has been estimated that a new house would need to be built, every 6 minutes, just to keep pace with the housing of EU migrants.  That's 240 a day, every day.
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Classroom sizes in certain areas are approaching 3rd World levels.  Oh and not all of the children , or their parents, speak English, which places a further burden on an already over-loaded system.

So immigration on this scale is simply not sustainable.  London is said to have an immigrant population of greater than 50% and there are parts elsewhere in the UK, where the indigenous population are feeling swamped.

Oh, and on top of the 257,000 people from the EU, there was a further 273,000 immigrants from outside the EU.

And then, just around the corner is Turkey.  Germany, suffering under Merkel's madness has agreed to 'energise' the ascension of Turkey, with its 79 million population, into the EU.  Consider that Turkey has a monthly minimum wage of €425.  How many of them might want to upscale their earning capacity and move to the UK?  Turkey being a predominantly Muslim nation then layers religious and cultural differences on top of the immigration problem.

The only realistic solution for the UK is for the country to take control of its borders and to restrict the number of people that can come to the UK.  In reality this would mean very dramatically reduce the number coming in.  It would mean ending working tax credits for immigrants and child benefit, unless the child accompanied the immigrant - many currently don't but stay in their home country.

Saying the above, it is therefore crystal clear that the UK must vote leave - Brexit - on June 23rd.  Not doing so, will simply lead to further and ever increasing deterioration in public services as well as a sense of alienation and non-belonging for the native population.

So, consider, then do your duty and vote Brexit.