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

Osborne Statement leaked

Below is the transcript of the Autumn Statement that Chancellor George Osborne is to deliver to the House of Commons on December 3, 2014.  Given its content, we can expect that there will be changes made to water down many of these but see what you think.

Mr Speaker, fellow members of the Conservative Party and members of Parliament from other parties.  Today, following this speech, I will place in the House of Commons Library a copy of this statement and supporting documentation.

The supporting documentation includes a statement from the independent Office of Budget Responsibility (OBR) which comments on my statement.  As the House will know, the OBR was established by this government to act as an independent reviewer of the economic situation within the United Kingdom and of the government's responses to that situation.  Essentially, to ensure that there is independent scrutiny of government budgetary plans so that we avoid the multiple counting of expenditure and unfunded promises, which could not subsequently be kept, that were so prevalent under the previous government.  Also to comment on taxation and policies that would drag Britain further into debt.  The House will recall that Britain's spiraling debt increases were occurring even before the 2008 global economic crisis.

Before I get too far into this statement, I must declare an interest.

It is customary, in such circumstances that the Rt. Hon. Leader of the Opposition, will respond to this statement.  I declare therefore that though I have made a financial contribution to the 'Save Ed' campaign, I do not expect to receive any favours in return for such largesse.  My donation was in excess of the 2p that the Leader of the Opposition recently allegedly gave to a beggar in Manchester, but I consider my £1 money well spent, if it keeps him and the other Ed sitting opposite and continuing to peddle their Micawberish lines about 'needing to borrow ever more because something will turn-up to sort it out'.

I have news for them.  Something did turn up to sort it out.  It is the Conservative Party.

Before I digress too much a final comment regarding the party opposite.  A friend recently reminded me of the line from the film, Love Story and turned it around to make it relevant to Labour and their economic incompetence.  Labour means never having to say sorry, is how it goes!

So Honourable Members, when you read the statement and hear the comments from those opposite, remember that, Labour means never having to say sorry for how they left this country in 2010.  Labour means never having to say sorry for the deficit that they left the country, for the debt mountain that would grow bigger because of the financial black holes and unfunded spending that they left behind.  In fact the only time that Labour have said sorry, is when they left a note at the Treasury saying ' Sorry, there's no money left!'

Before I get to the statement, just a word about our Coalition partners, the Liberal Democrats.   Some members of that party have indicated that they do not support this statement and will vote against any measures arising from it.  My Right Honourable friend the Prime Minister has suggested that any such dissenting members, who hold ministerial office should consider their position and that is what they are now doing.

Thank you for your patience and now to the statement.

The UK economy is well on the way to recovery.  Indeed it is leading the way, in terms of all economic indicators, among the G7.  As with any patient that has had a serious illness, a relapse is possible, though given that the fundamental underlying economic health issues have been identified and the remedies are known, we can expect a full recovery, over time, so long as we stick to the medicine that has brought us back from the brink.

Sticking with this medical theme, the UK economy was obese and suffering as a consequence.  In 2010, the Body Mass Index, or BMI was very unhealthy.  We were funding a financial/calorific intake that was far in excess of our needs and of what was good for us.  We were getting fatter on other people's money.

For the health of the patient, that had to stop!

Over the last 4 1/2 years, we have initiated policies which have begun the slimming down process.  Our economic BMI is still too high but now when we get on the scales we can see improvement and as a nation we know we cannot treat this like some kind of yo-yo diet where we now  backslide and start getting into debt again.  We need to stay the course.

Staying the course is  vital for any healthy diet.  However, a diet needn't be all doom and gloom, not all abstinence and restraint.  Sometime we also need the carrot of a little self-indulgence.

This statement looks to keeping Britain on that healthy diet.  We will slim down the State but will indulge our people along the way.

Firstly, the slimming regime.

In the Budget planned for April 2015, this government will propose removing the so called ring-fence from Education and Health spending.  At a time when all other sectors of the economy are learning that they need to slim down and lose weight, we cannot, as a nation have two vital services that are allowed to gorge while others are on reduced rations.  that is not the British way, that is not the Conservative way.

All government departments, will need to reduce year on year expenditure by 5% in the fiscal year 2015/2016 and a further 5% in each of the succeeding 4 years.

The NHS has been protected from the expenditure reductions that have been required at other government departments but it simply isn't fair that this continues.  I know that the party opposite will scream about the NHS not being safe in Tory hands and so on but the reality is that we are all in this together, we cannot slim-down the body and ignore any large part of that body, we must look at this as a whole.

My colleague the Minister for Health will be advising NHS Trusts on the planned spending budgets  for coming years in a short time.  This advice will include instructions that they should immediately undertake wholesale re-negotiations of all PFI contracts.  And, let us state here and now, we expect these PFI providers to fund the largest part of the reduction in NHS spending.  We will advise NHS Trusts that they will be allowed to go into receivership, bankruptcy, fold or call it what you will but we, the British taxpayer and the Conservative government, will not allow the people to be ripped-off by paying exorbitant fees to private finance organisations.

To be clear on this.  We know that most of these overly generous PFI contracts were signed under previous Labour governments and were considered a 'neat trick' to keep the public finances looking good.  This though isn't about political point scoring.  This party wants to see a healthy NHS not one that is having its very life-blood sucked out by onerous PFI contracts.

To those financiers listening to this, my advice is clear.  Get in touch with your NHS Trust partners and renegotiate the terms of your agreements as a priority.  This issue of overly generous contracts is now on the table and we know we can expect the full support of the 'banker bashing' brigade on the opposite benches, so it isn't going away.

Details on departmental budgets will be placed in the House of Commons Library following their announcement by the respective Ministers but the foregoing outlines the overall direction of where we are heading.

Turning now to taxation.

It will come as no surprise that this party is committed to reducing the tax burden on ordinary people.  The party opposite will bleat about tax cuts for the privileged few and so on, and they may, in their comments,  be yet joined by others.  The reality though, and they absolutely know this, is that government spending isn't funded by the privileged few, by the top earners.  If these people were taxed at 100% it still wouldn't be enough to fund spending.  And that is before we contemplate the huge increases in public spending that will be required to fund the extravagant promises made by the party opposite!  Why they would want to throw away the gains we, as a country, have made in the last 4 1/2 years is simply criminal.  We haven't come through a period of austerity, just so that we can go out on a Labour Party inspired binge!

At the recent Conservative Party conference, we proposed certain measures would be enacted if we were entrusted with power, by the British people, after the May 2015 General Election.  We now believe that we can accelerate some of these proposals.

The April 2015 Budget statement will include proposals to raise the income tax threshold to £12,500 with effect from April 2015 and increase by £500 increments each succeeding fiscal year until it reaches £15,000.  This will lift millions of people out of paying tax, altogether.


The April 2015 Budget statement will include proposals to raise the income tax threshold for the 40% rate from the current level of £41,865 to £45,000 from April 2015 and then by £1,000 increments each succeeding fiscal year until it reaches £50,000.  This will cut the tax bill for millions of so called 'middle earners' .  These people have contributed to putting the UK economy on the road to recovery and it is only right that they should get to keep more of the money that they earn and to be able to spend it as they like, not so that its spending is dictated by some bureaucrat in Westminster or the local town hall.

The April 2015 Budget statement will include proposals to completely lift the burden of so called 'green taxes' from our people and our businesses.  These taxes have crept stealth-like into the fabric of our country and sap the economy.  They force Old-Age Pensioners to sit in unheated homes because they cannot afford to pay high gas or electricity bills which are high because of these taxes that were brought in by the last Labour governments.  These killing taxes must go.

Linked to this, effective midnight, the fuel duty will be reduced by 10p a litre.  I have listened to representatives of the transport industry and of those from rural communities and know that this is the right change to make, to aid our people.

Honourable friends colleagues and Members, these are the headline changes that this Government will be putting before the House.  The full statement, including the comments of the OBR and the current position of the economy will now be placed in the House of Commons Library.

I commend this statement to the House.