Catalonia

Spain’s Prime Minister Mariano Rajoy just achieved what many thought impossible having in just twenty four hours succeeded in putting Brexit on the back-burner on the ‘list of things to worry about,’ for the EU. His heavy handed and insensitive approach to yesterday’s referendum has put succession tension in the region on the world’s front pages and will have unquestionably strengthened local resolve and pushed many ‘no,’ voters across to the independence camp simply out of family and community loyalty.

Images of ordinary decent citizens being beaten up by para military police are shocking. These weren’t the usual protesting unwashed anarchists we are used to seeing ripping up paving stones at G7 summits. They were mothers and fathers, aunts and uncles, brothers and sisters who were simply out and about with the intention of casting a vote. Rajoy has blown it and there will be consequences beyond Catalonia.

A positive vote with a convincing turnout was always a low probability event but Rajoy now has a simmering feud on his hands which will be a persistent and long lasting issue for future successive Spanish governments. And let’s not be naive here. The separatists managed to manoeuvre the national government into a no-win situation by refusing to engage and offering no optionality forcing the government down a path of action which would have negative repercussions across the worlds press. Of course, the federal police agencies weren’t forced into their heavy-handed actions. That simply amplified the impression that normal people are being denied their democratic rights. Moreover, the reported 42.3% turnout lacks legitimacy even if 90% of the votes were in favour of separatism. Legislation for the vote was only passed 4 weeks ago and opponents of independence simply refused to debate or engage in any meaningful way. The referendum was held in a manner that would not pass any independent audit with separatist movements issuing their own ballot papers and the local government suggesting that voters even download their ballot papers from a Catalonian government website.  

Prime Minister Rajoy’s credibility though is shot to pieces. Rajoy anyway relies on minority parties to help him with his legislative programme in parliament and some of those may be less well disposed to sit in his corner. The problem for the EU is that this comes at a time when many national governments in Europe, including Spain, have minority governments and with Merkel struggling to form a coalition there is a striking lack of leadership across the EU with the possible exception of France where of course Macron is flying into strong headwinds of his own with his reform programme.

I have consistently repeated two views regarding the EU and Brexit. First, that we are better off out because the whole monstrous construct is structurally flawed and will anyway, implode at some future point because of accelerating national divides, (watch the trend in popularism infect Eastern Europe, Belgium and Italy in the months ahead), and economic disparity between north and south. Second, that whilst an advocate of Brexit my long-held concern is that Westminster lacks the expertise, experience and wisdom, both politically and within the civil service to ensure a smooth and elegant exit. Funny how both are manifesting themselves simeoultaenously. 

Brenda from Bristol with Crumble from Compton

Brenda from Bristol has a few words to say on behalf of all of us

Tonight, fifty or more Labour Members of Parliament will be staring into the bottom of their glasses contemplating P45's thudding onto their door mats in fifty one days time with love and best wishes from the Great British Public, (although it is regrettable to see that someone of Alan Johnson's calibre is standing down). Many of them will see it as a merciful release from the hell that is public life under their inept comedy act of a leader, Jeremy Corbyn. With all leave cancelled for political journalists the rest of us will be subjected to a daily battering from the media, led by that ghastly Kuensberg woman on the BBC. Thankfully, British elections are relatively short and sharp affairs and with the better weather, I am sure we'll muddle through as usual.

Theresa May has made what is probably the right decision in the best interests of the country, standing as she does at an extraordinary confluence of political events. If she gets the result she is aiming for it will strengthen our negotiating stance with Europe and indeed, will probably be welcomed by most of Europe who are if anything more keen to get the ball rolling to end the uncertainty for themselves inside the union. For her personally, she has launched a thundering broadside at her critics which is a bit cruel given the disarray her opponents are in but politically, is very astute.

Enquiring minds might though, be wondering if there are any other reasons which might explain why she has pulled the trigger now?

Of course there are.

I have been thinking for some time that Tony Blair is up to something. It was always unlikely that his ego would allow him to stand idly by and allow the Corbyn faction to completely purge the Labour Party and its machinery of all Blairites and everything they stand for. I also think whatever his plans are, they probably involve the repatriation of the exiled David Milliband from New York. That being the case it makes sense for Theresa May to announce an election before New Labour, or Old New Labour or whatever they'll call themselves have chance to launch and gain party and electoral traction. Clearly, inevitable electoral evisceration on the 8th June will trigger a Labour split or reverse takeover by the moderates but that, in whatever form, if successful still leaves them staring down the barrel of a new five year Tory term rather than the three that was left on the clock until this morning.

Second, my personal view of stock markets is that there is a high probability of a significant market event in the August - November time frame. I expect weakness in April to continue but rather than the 'sell in May and go away and don't come back 'till St Ledger Day,' mantra, I think we'll have a pretty strong summer rally. That will be the concluding move in what is a very mature bull market. The fall out from this market event will be significant, marking as it will not just the conclusion of the rally from the 2009 low but the end of much longer market cycles. I'll cover this in more detail another time but suffice to say, better to be Prime Minister with four years still on the clock, rather than eighteen months, when a bad thing happens economically.

Third, the summer Mediterranean Migration season has kicked off with large inflatables carrying hundreds of migrants leaving Turkey and Libya every day. This season is predicted to be a big one. If Turkey continues down the route it has chosen then a breakdown in relations with the EU could see the collapse of the agreement between the EU and Turkey to manage the flow of migrants. Pictures on our television news will not harm the Conservative campaign and will no doubt influence the imminent French elections and those in Germany later this year.

I'll be keeping a keen eye open for entertainment from Jezza and LibDem fall guy Tim Fallon who would look over-promoted running a minor branch of McDonalds. In fact, if he had four pens in his top pocket and a bunch of keys hanging off his belt he would be that man. The best fun though will be found watching the leader of the Scottish Conservatives, Ruth Davidson. That woman is a feisty ball of fire and would make a great soldier...... except once she was.

Sturgeon Loses The Plot

Scotland has delivered a strong, unequivocal vote to remain. The vote here makes clear that the people of Scotland see their future as part of the European Union.’ Nicola Sturgeon - Scotland's First Minister; June 24, 2016

So spoke the Scottish First Minister the day after the referendum last June. Anyone puzzled as to why she yesterday announced her party’s intention to pursue IndyRef 2 should be under no illusion about what the Nats are about. They are hard coded to pursue independence at any moment of opportunity and to do so all the time. Logic, good sense and good governance come way behind their short, medium and long term pursuit of that single aim. In this context, soft or hard Brexit are simply an irrelevance. If it wasn’t this torch they would find something else. The ‘once in a generation,’ mantra during the last referendum was insincere. It was simply a tool to push undecided’s over the line.

Without question, many Scots are firmly in the independence camp and probably always will be. For some it is a rational conclusion that they have come to having weighed up their optionality. For many, it remains an emotional response in tune with how they see their position in relation to the rest of the UK and the rest of the world. Unfortunately few, especially those leading the SNP, can present an economically coherent case for independence which would underpin the political case. The SNP’s manifesto for independence in 2014 estimated oil revenues at £7.9bn. Following the fall in the oil price that number is some 90% or more lower. An independent Scotland simply could not absorb such a financial shock. The Scottish governments own figures show that they spend £127 for every £100 raised in tax, a ratio that is difficult to find anywhere else in the developed world. For every £100 pounds spent per person in England, £120 is spent in Scotland. The SNP will attempt to talk through, over or round the fact that Scotland’s deficit at 9.5% of GDP is the worst in the developed world. That number alone would keep the door to Europe firmly slammed shut even if resistance from some European countries such as Spain did not already exist. Had Scotland gained independence the country would now be staring down the barrel of slashing and burning state spending by 15% or raising taxes by 19% or a combination of the two. The quantum of those rises would be to raise the basic rate from 20% to 39% or VAT to 40%. Alternatively, an 82% cut in health spending would get them there. It is difficult to think of any country that has embarked on such a vicious austerity programme in peacetime. Regardless of oil revenues being high or low, it is a fact that Scotland has run a deficit every single year since devolution in 1999 and the deficit has deteriorated over recent years, and is now running even higher than during the aftermath of the 2008 Crash. Even in 2011-12, when the North Sea oil price peaked at $125 per barrel, Scotland's deficit was 5.7% of GDP.

So why go now? Bearing in mind that to Nat’s any opportunity is a good opportunity, the SNP are not actually in the commanding position they enjoyed three years ago. They have been in government now for 9 years and it is slowly dawning on Scottish voters that the SNP is not perhaps as capable at running a country as they are election campaigns. Despite the constant lecturing and grievance chasing it is apparent that while there is an open debate and willingness to explore new ways to improve public services efficiently in England, and which are meeting with some success especially in education for poorer children, few such improvements are evident in Scotland. Partly because the SNP are wary of upsetting some of their core constituencies, such as teachers, their solutions always veer toward more centralisation, more money, more government. The Scottish electorate are alert to this and the popularity of Sturgeon is consequently on the wane with the Scottish Conservative leader, Ruth Davidson, somewhat implausibly ahead of Sturgeon in the approval ratings.

Sturgeon’s move is simply irresponsible. She is putting her party’s historic political aims above the best interests of Scotland. The timing is theatrical. To demand a referendum as Brexit is being finalised will create an unnecessary distraction both to the UK and to Europe. I can guarantee the last thing the EU will want or need, if it still exists then in its current form which I very much doubt, is a small country with a banana republic sized deficit clinging to its coattails. The UK government will though acquiesce and offer a referendum but probably after Bexit, that is, after 2019. The SNP will stamp their feet and have sequential hissy fits about not being taken seriously or ‘insults to Scotland,’ but the only people who will take them seriously will be themselves. A growing number of Scots are fed up with their holier-than-thou ranting and simply want things done that matter to them and done properly. The English meanwhile are less and less animated about independence and that is more evident the further north in England you travel. As the English demographic has changed so have traditional ties to Unionism. Millennials for example, for the most part, see self-determination as an entirely fair and reasonable aspiration; ‘if you want it, have it.’ It would suit the SNP to have a much more robust response from the English but I think they will be disappointed. In fact, the quieter and more mature arguments that are presented the more likely they are to enrage them all the more which is kind of satisfying.

So, what should Sturgeon have done?

Seen through an SNP lens, I see Brexit quite simply as a lost opportunity to quietly build a firm economic platform for succession on a ten year timeline. Instead, all Mrs Sturgeon has succeeded in doing with her ill thought out announcement is to put a cap on Scottish property prices, to disincentivise long term inward investment and put a question mark over firms and central government looking at expansion in Scotland. In her stilettos, I would have done the following,

  • Seen Mrs May and offered quiet cooperation in return for,
    •  No change to the Barnett formula
    •  More shipbuilding orders
    • No further defence reductions in Scotland
    •  Inward investment incentives from Westminster for areas of special need
    •  HMG help and assistance overseas in capturing inward investment
    • (insert other items from economic shopping list as desired)
  •  Stepped down from the soapbox marked ‘grievance,’ and focused on internal matters pertinent to Scots; employment, housing, education, NHS Scotland etc. Adopt a stance of industrious humility and work tirelessly to organically improve the Scottish economy
  • · Stop obsessing about the single market (which, after all, was a creation of Mrs Thatcher through her former trade Secretary Frank Cockfield!). Scotland is in a single market. It is called the UK. Stop being emotional and start being pragmatic. Is it really sensible to leave the UK and then have your economic relationship with your biggest trading partner, (64%) negotiated by Brussels
  • Immediately sterling was devalued thrown open the doors to the country to visitors from across the world and aggressively pursued the tourist dollar / Euro / Yen. Pursue them with a generous international marketing budget and do so on a three year view
  • Dial back the incredibly short sighted pious remarks made about the US President and make friends. Usually, US Presidents go straight to Ireland and effect a sort of Plastic Paddy persona, playing to the gallery on their own East Coast and Chicago. A US President with a Scottish mother, who actually likes Scotland a lot, doesn’t come along very often. A successful visit to Scotland by Trump could unleash a tsunami of tourists from the Southern States and at least a reasonable shot at business investment.
  • Raid every educational establishment in the UK and US, business and the media for the best Scots, (or other), minds available and begin to establish the intellectual and economic case for inward investment and beyond that, independence. It simply does not exist at the moment.
  • Monitor Brexit and quietly learn from negotiating mistakes and inevitable errors of judgement.
  • Be humble and learn from success stories such as education in East London instead of dismissing everything south of the border as irrelevant.

In summary, Mrs Sturgeon and the SNP should cease and desist generally from the hectoring Calvanistic tone adopted in every interview or speech. Scots may be proud and they may be romantic but most are also gritty realists who can see through the flannel, (the SNP’s own independence newspaper’s circulation is down 30% in 12 months). They can also see that the SNP are not making any friends. Friends that economically at least, Scotland very badly needs. The big danger for Scotland is that the rest of the UK simply gets worn down by the SNP’s incessant moaning and just gives in. That would be tragic for Scotland and tragic for the UK. Having a next door neighbour throwing itself into economic Armageddon would not be good for any of us. Referendums are unpredictable but I’ll be hoping for 3/3 and will be relying on old fashioned Scots common sense when I place my bet today. Growth in Scotland has been put on ice with a breathtaking display of selfishness and arrogance which potentially sets Scotland on a road with a destination signposted ‘Catastrophe.’  It need not be so.

Europe; Coming Unglued

The financial media have, as usual, been watching a different movie.

The financial media have, as usual, been watching a different movie.

A friend recently said in reply to a comment, 'I think we're going to hell in a basket.' She is probably right but not for the reasons she thinks. My friend was referring to the consequences of Brexit. I am referring to the structural issues which are baked into the Eurozone and which are coming unwound at a pace which is very likely to accelerate throughout 2017. Standing close to an exploding bomb is never a good idea. The further away we are the better although it will take more than the English Channel and the political aspiration, if not commitment to leave, to save us from at least some of the backblast.

Political risk in Europe appears to be growing. The truth is, it never went away. It was simply subdued temporarily by successive ECB bailouts which have rescued (some) ailing banks but have done nothing to correct the systemic flaws in the Euro which have ruined southern European economies. Now, as political risk takes front and centre stage with Le Pen soaring in the polls the underlying economic risks which have been fermenting for years are at risk of ripping loose. The means of transmission are again, most likely to be the banks. You see, nothing has really changed.

We saw during the last period of Euro stress in 2011-12 that a sell off in bonds hit the balance sheets of European banks who tend to hold their own governments debt which increased their need for bailouts. In turn, that hits depositor and investor confidence which damage the banks even more creating a death spiral requiring direct central government intervention. As you may have guessed, the three countries with the banking sector most exposed to their own governments debt are Italy, Spain and Portugal.

With the ECB scaling back its bond purchases and the rising incidence of inflation yields have been rising. More importantly, spreads have been widening reflecting growing risk between member states.

Markets have so far placed a low delta on a Le Pen victory in France. Markets are being naïve. The French electoral system is designed to keep the door firmly shut against extremist parties but with the other candidates carrying baggage of their own her defeat is far from certain. Italy’s election meanwhile could result in a government under the influence of the Five Star Movement of the Northern League, both of which are committed to leaving the EU. Markets would not wait for an EU referendum result in these countries. Merely scheduling one will result in financial chaos. Meanwhile another Greek crisis similar to 2015 looks baked in when they run out of money in July.

Investors are hardened to serial crisis in these countries but are broadly complacent in their thinking that after a lot of fuss there will be another bailout and normal business will resume. Italy’s banks still hold 276bn in bad loans and the countries debt to GDP ratio stands at 134%. With 12% of the country’s bank assets being held in national debt there is a financial death spiral just waiting to be triggered. A small issue here is that Italy is the third biggest economy in the Euro block. That won’t be an easy fix.

Portugal meanwhile is back where it started with debt as high as it was in 2010. The 78bn Euro bailout there did not reverse economic trends. It did though, save the banks, for now.

The ever sensible and cautious Germans have been trying for years to neutralise this threat, first with a proposal to limit the amount of domestic sovereign debt that a bank could own. Germany failed. The second German proposal was adopted. That was to require that bank bond holders take a draw down, to zero if necessary, before government money could be used to bail out. Unfortunately, when Banca Monti Dei Paschi ran onto the rocks in December the rules were bent out of shape by using out of date stress tests and reimbursing debtholders saying they had been misled. That prevented a political fuss in Italy but has left the potential financial death spiral in place.

Other ideas, mostly based on the ‘bad bank,’ approach have circulated in recent years and include creating two classes of bonds, pooled together from the Eurozone countries, and divided into ‘safe,’ and lets call it ‘less safe.’ Loosely, that would be Germany plus one or two other countries and the rest. Unfortunately, the Germans are not big fans of either of these plans or any of their derivatives. The Germans in fact have been playing a quite crafty and streetwise game and who could blame them. German banks have pulled back their lending to non-German companies in the Eurozone over the past few years. Their appetite for shared risk is diminishing and the banks preference for keeping their money inside their national borders reflects this.

Germany itself has its own handcart of problems. Germany will of course work hard to keep the Eurozone together but it is not without its critics from both within and from outside. Germany is under constant criticism for having the largest trade surplus in the world, something that has not gone unnoticed by the Trump administration. It is ironic that Germany is the most powerful member of the very institutions that were imposed upon it in post war Europe. Indeed, the Euro was created years later in part to tie a reunified Germany to France and losing the Mark was the price paid for reunification. The trade off for Southern Europe in being unable to devalue was access to Northern European borrowing rates which allowed much needed structural reforms to be put firmly on the back burner.

Monetary union with fiscal union blocked potential wealth distributing mechanisms and acceptance of risk sharing required Southern Europe to gift their fiscal policies to Brussels. The Eurozone crisis and subsequent austerity measures have created fertile ground for growing resentment which has fanned the flames of populist movements which are gaining traction across the Eurozone. The refugee crisis and local political scandals have poured kerosene on an already politically volatile state. Growing recent civil unrest in France, (not much reported in the UK), and less violent demonstrations in Germany, reflect the heightened political volatility.

Political and economic structural tensions in Europe will continue to rise across the Continent in the coming months. They may well be contained and then abate. Protectionist rhetoric from Washington however complicates matters somewhat and are anathema to Germany’s export led economy. How the global economy, which has been designed and built around the free movement of people, goods and services reacts to fundamental changes driven by Washington remains an open question. Certainly, a much stronger dollar would be deflationary and wipe out the glimpses of inflation we are now seeing and that has a world of implications starting with Emerging markets and the $9tr of foreign dollar denominated loans which are ticking away.

With, for the moment, inflation at the gates and with bond yields rising in France and the periphery, the increased cost of debt repayments will do nothing to stabilise matters. Equities meanwhile have been skipping along without a care in the world. They may be about to stumble. For what it is worth, I firmly believe that the whole rotten construct is closer than most believe to coming completely unglued. Let’s hope that the financial boffins at the Bank of England are earning their money and are stress testing the banking and clearing system to destruction. It won’t be so very long before risk managers across the City are once again obsessed with counter party risk.

As a quiet postscript, those investment banks such as HSBC and Morgan Stanley who are making noises about moving some staff to Frankfurt and Paris, good luck. You are going to very much need it.

What Mr Cameron Should Say

We're all pretty uninspired with being constantly berated with warnings of gloom and despondency should we have the temerity to vote to leave the EU. It goes against the national character to just give up and meekly toe the line. David Cameron and the Remain camp have so far failed to articulate a positive path forward which will not only be good for the UK but also kick start the process of drawing the rest of the EU together which is anyway, decaying from within, something that few are keen to draw any attention to. 

How then, should David Cameron tackle this deficit in vision and positive thinking?

It is a basic truism in politics that what you see on the surface does not in any way reflect what lies beneath. When all the rhetoric is over and the votes counted, many in the remain camp will be keen to restore business as usual. That would be the world where we tolerate the meddlesome excesses of Brussels and where the government of the day can park troublesome ministers or ex ministers who have been turfed out by the electorate into enhanced pension positions in Brussels. David Cameron should rip up the status quo and make it clear that this referendum is a game changer. If we vote to stay, we'll be fielding our A team from here on in, not the wheezy boys with coughs and notes from their Mum on the bench.

 A civil service office in Madras, India during the British Raj

In another age 1,000 British civil servants ran the Indian Civil Service. That was on average of one civil servant for every 300,000 Indians, (although the total number had fallen to 688 by the time of partition). It is broadly acknowledged that they did a pretty good job. All of them however, were the very best candidates for the job on offer, having studied either at Oxbridge, the School of Oriental studies or Trinity College, Dublin. Similarly, British officers in the Indian Army had to pass out in the top half of their course at Sandhurst to have a chance of being selected for the Indian Army and when serving in India promotion was subject to passing examinations in Urdu.

1975 was a more positive campaign by 10 miles of good road

David Cameron should take inspiration from this experience and  make it clear that mediocrity will no longer be accepted, that we are going to engage with Europe by deploying our brightest and best minds at the political and administrative level and no individual can expect advancement to the highest reaches of their government career paths without serious time spent in Europe. He should emphasise that his administrations new mission to 'inform and influence,' policy and decision making in Brussels has the highest priority and the British government will henceforth take a long term view of its involvement at every level. The education system, honours system, diplomatic corp and government HR policies will be directed to reflect this new positive stance. "If we are going to do it, we are going to do it better than before and better than anyone else." Europeans will immediately adopt the look of stunned mullets, such will be the hanging air of disbelief but it would sway many voters currently sitting on the fence.

The Prime Minister won't do any of this of course. He is following the advice of his advisors to, 'scare the bejeesus out of them.' Personally, I think that tactic is past it's point of what usefulness it may have had and is now producing negative drag on the Remain campaign. I happen to hold that very positive mental attitude on the prospect of leaving but can see it can swing both ways for here is the thing, optimism and enthusiasm are infectious.

Luvvie Who?

Next up in joining the unseemly rush to join the list marked, "Next Honours List," we have 300  narcissistic and self obsessed luvvies, (I've never heard of 290 of them), signing a letter preaching what is good for the rest of us. Sorry to disappoint all these precious princesses but who exactly cares what they think?

Back of the Net

Mrs T puts the ball squarely in the back of the net in her Bruges speech made in 1988. The historic speech, spawning The Bruges Group, was delivered at Bruges in September 1988. Famously rejecting the centralised, unaccountable, federal Europe of Delors, Margaret Thatcher proposed instead a wider, decentralised, outward-looking democratic Europe of independent, freely- trading and cooperating nation states.

Calm Down At The Front

Each passing week sees the European referendum debate stepping up a gear and with it the rhetoric edging closer and closer still to the edge of the cliff signposted, 'barmy.' Last weeks offerings stretched credulity by offering both Hitler and Churchill in equal measure along with the not inconsiderable feat, from the Prime Minister, of including the dead of two world wars. Gordon Brown stepped forward to calm things down and instructed us in earnest Presbyterian tones that it would be un-British to leave the EU. Thank you Gordon. As it happens, one of the few quietly sensible reasons for Remain that I have yet heard is that the EU prevents some of the worst excesses of national governments, 'just think what Brown could have done to us had he been unleashed from the restrictions imposed by being part of the EU,' said my chum over a glass. 

Despite all the made up bilge that has poured out the polls remain remarkably consistent. They suggest that Remain have a lead of up to 10 points but are vulnerable to turnout numbers on the day and the 'fuck it,' factor. I don't use the phrase lightly. The backlash against the Establishment elites, which really started with the Arab Spring, has manifested itself across Europe and most prominently in the US with support for Donald Trump. National politicians and the media who get animated about Trump and sneer at his supporters are rather missing the point. Many if not most of his supporters are not Trump acolytes. They are simply fed up. Fed up working longer and harder for less. Fed up seeing their aspirations, ambitions and dreams being trampled on and fed up watching the relentless growth in the wealth gap between the super rich and the rest with no conceivable way of joining then party. The non stop lecturing from the inner circles of international finance, the Bank of England, (who mostly should at this point shut up), and supportive media like the Economist may just provoke a Trump like backlash from British voters that they least want. Such a backlash, and I do believe it is fermenting, would slice through that 10 point lead.

In fact, the Economist is becoming ever more shrill in it's warnings. Good thing the Economist rarely gets the big calls right then otherwise we'd all have Euro's in our pockets. No matter, it is to the Economist we look to find a letter from a reader in the United States who articulates rather well how the US election cycle has got to where it is. This is what Mr Mark Kraschel of Portland Oregon has to say,

You used so much ink trying to convince us that Donald Trump is not fit for office (“Time to fire him”, February 27th). Do you think the type of person who reads your erudite publication would ever consider voting for him? Not likely. The people who will vote for The Donald are the disaffected bitter-clingers whom the last candidate you passionately begged us to vote for—Barack Obama—disparaged in his campaign. Those same disaffected people haven’t been doing well over the past eight years, and in case you haven’t noticed, they are mad as hell.

Government isn’t working for us. There are few good jobs, we’ve been stuck with a joke of a health-care system, the few rights we still enjoy are under siege and the future looks dim for our children. We are powerless to foment a revolution while working two part-time jobs to make ends meet, so all we can do is register a protest against the Dickensian nightmare that the elites have created for us by voting. Apparently, nobody listened (Republican or Democrat) to what we were trying to say in 2012. Come November, you’ll be hearing from us again, louder and clearer.
— MARK KRASCHEL Portland, Oregon

From where I am standing, the Remain campaign would do well to take a big dose of humility and immediately stop hectoring from the pulpit. We don't like being threatened and no one likes a bully. Similarly, the Leave campaign must start explaining the positives of leaving and how the mechanics of extraction will work in practice and do so with calm authority and dignity. I'm obviously not holding out much hope for any of this to transpire and confidently expect proceedings to deteriorate into an unseemly squabble punctuated with more hysterical warnings of plague and pestilence from a political rabble who are increasingly detached from Planet Reality. Voters will take action accordingly.

 

Brexit Ahoy!

As June 23rd rumbles into view the debate, such as it is, is reaching new levels of hysteria with the Prime Minister this morning citing the increased risk of a ground war in Europe as a reason not to leave the EU. That follows utter nonsense promulgated by ex heads of intelligence over the weekend in a letter to the Sunday Times, one of which has already been discredited with the disclosure that he said completely the opposite in a recent private conversation. The spooks, whose entire careers are based on disinformation and manipulation, should get back in their Box. 

The problem for the Remain campaign is that the British voter has so far been implacably unmoved by scare tactics and misinformation from both sides. It is a bigger problem for Remain because they need to mobilise their voters on the day whereas the Brexit camp are already motivated to make an active choice. Remain will also suffer because many students, who generally are more relaxed about the status quo, will have left university, some will have cocked up their voter registrations and be unable to vote from home, others will be travelling while some will find it too much trouble to get out of bed. 

In general, the campaigns have been unimaginative and negative. That largely reflects the quality of our politicians and comes as no surprise at all to any of us. Neither side is really pitching a positive vision of what their favoured outcome would look like. There are no sunlit uplands to behold, only scorched earth if we don't vote their way.... apparently. 

There is however, a genuine thirst for knowledge out there, certainly among people to whom I have spoken, and a frustration that there is no balance sheet of facts on which to base a fair and measured decision. That is, voters seem to me to be treating the referendum with much more earnest reverence than are either the campaign leaders or the media. 

It has long been my view that on the day most voters will disregard the hyperbole, walk into the voting booth and go with their gut instinct. Like it or not, immigration will be a big factor in nudging that instinct. Many of our citizens see their life chances and opportunities being impacted by unrestricted immigration and the flavour and character of their homeland changing in years when before it would have happened imperceptibly over decades or centuries. Many Remain campaigners simply will not accept this but then many of them are those least affected by immigration or benefit directly from cheaper labour. I am well versed in the advantages of selective immigration just as I am of the unintended consequences of the current situation in which we find ourselves. No one is suggesting we slam the door shut forever but the current policy is simply unsustainable. Here then, are some of the facts from Migration Watch UK that will be weighing on voters minds,

  1. The current scale of migration to the UK, 330,000 a year, of which roughly half is from the EU, is completely unsustainable.
  2. As a result of this mass immigration our population is projected to rise by half a million every year – the equivalent of a city the size of Liverpool – for as long as immigration is permitted on the present scale.
  3. England is already twice as crowded as Germany and 3.5 times as crowded as France.
  4. The additional population growth makes congestion worse and adds to the pressures on public services. This comes at a time when public spending is being reduced.
  5. One in four children born in England and Wales is to a foreign born mother. The rise in the number of births has put pressure on NHS maternity services.
  6. It has also led to a shortage of school places. 60% of local authorities will have a shortage of primary school places by 2018.
  7. The UK has a serious housing crisis. Mass immigration is the main reason for the additional demand. We must build a new home every six minutes for the next 20 years to accommodate the additional demand for housing from new migrants.
  8. Population growth on this scale renders integration of newcomers virtually impossible.
  9. Three quarters of the public want to see immigration reduced and half of them want it cut by a lot.
  10. To stop the rapid rise in the UK’s population size, net migration would have to be reduced to well below 100,000 a year. It is currently at over 300,000.

The Remain campaign also makes the galloping assumption that all is well within the EU. It most certainly is not. The EU is rotten to the core and is unravelling from within as events in Greece over the weekend demonstrate. 66% of Germans are now against Merkel and there are many across Europe who see Brexit as the potential catalyst to shake down the EU and force it to get it's house in good order. Yes, we might actually be a force for good in effecting change for the wider European community. 

British citizens have not had the opportunity to express an opinion on the EU with referendums on treaties as the citizens of other nations have. This democratic deficit has created an under current of unease about Europe and the obvious implication in the here and now that a vote to Remain will be forever. I want out but then I always have and am therefore not typical. My one real concern, and this is a biggie, is that while I have no qualms about the ability of British industry to compete, I have severe doubts about the quality of our civil administrators and politicians to execute Brexit efficiently. Just as we have cocked up our participation in Europe by not sending our best people to European institutions, we could easily underplay the execution risk of getting the mechanics of leaving right. We will need to muster our very best people who will have to be at the very top of their game to get it right. 

A Good Day

Mr Cameron has done a good thing in fulfilling his promise and offering us a straight answer in-or-out referendum on Europe. While I don't agree with his personal view, I respect him as a man and a politician for having the courage to face down what has been a corrosive issue in British politics for a generation. Some would say it has been corrosive for Britain but then we have the referendum to settle the issue. He at least has done what none of his predecessors had the confidence to do.

Westminster and the media are loving the whole thing. They relish plots, intrigue, alliances, broken loyalties, subterfuge and everything else that goes hand in hand with the self feeding circus they live off. After all, this is why they all did PPE at Oxford and this is their moment. Well, actually... sorry to rain on your parade boys and girls but it isn't. The rest of us have been waiting an awfully long time to make ourselves heard and I suspect the sound is going to rattle and reverberate across the world on June 24th at a level that will spin the needle off the clock. My view, for what it is worth, is that the leave vote will overwhelm those who wish to keep the status quo by a margin which Westminster, and the EU, are simply not prepared for. 

We have already heard many short sound-bite arguments from both sides, usually in less than 140 characters. Much of what is said is simply made up and has no basis in fact. The principle tactic employed by both sides appears to be one of who can scare us the most. Well it won't wash. In the voting booth most citizens will disregard all the hysteria that has been pumped out and will simply apply their own reasonableness test based on their own experience of family and community around them. No nation on earth is better equipped to be reasonable, it is what we are. That gives me confidence.

Nonetheless, in a modest contribution to the discussion allow me to share an illuminating discussion paper on Brexit written by former colleague Dr Savvas Savouri of Toscafund, in which he deconstructs some of the more alarmist claims being banded around the television studios by the Hampstead and Notting Hill crowd. It is worth taking the time to read.

Why We're Leaving Europe

A Choir Called Dave

A Choir Called Dave

William Hague threw his hat in the ring today supporting retention of our membership of the EU. As the referendum debate warms up over the holiday, before getting into full swing in 2016, I hate to disappoint Mr Hague and his fellow EU enthusiasts but he, and they, are wrong. Here's why.

I had the deep joy of popping over to South Harting the other day to listen to Mrs Flashbang and her chums in 'A Choir Called Dave,' for their Christmas concert. I sat next to an old boy and this is how the conversation went,

'Are you from the village?'

'No,' I said, 'I'm from just outside Compton, (two miles away),'

'Oh,' he said, 'It's different over the hill.'

It's a lot more different in France mate I thought. Hague and Co have their hands full if they think this lot are going to sit down and quietly give an inch after being taken for a mile for the last thirty five years.