Ukip-vs-EUkip

“I think we’ve proved that we are a serious party that cares about a lot more than just Europe”, says Harold James, an active UKIP member from Weston-super-Mare, veteran of nine conferences.

Predictably, though, the Spectator is less than impressed, accusing a “Floundering Farage” of struggling a little once “away from his hobby horse of a European Union Referendum”. But, had the magazine been on the ball, it could have observed that Farage was struggling even when riding his hobby horse.

That is the only conclusion one can draw from his “Referendum Stitch-Up” pamphlet. His knowledge about the mechanics if the EU was always slight, but in this production he demonstrates that he has not added significantly to his knowledge in the ten years since I worked across a desk from him.

If this was simply a matter of a vainglorious party leader doing what politicians so often do – displaying his ignorance – it would not matter so much. But, as even the Spectator concedes, we are almost certainly looking at a referendum in the not too distant future.

Rigged though it may be – and we could hardly expect otherwise – I have to believe that this referendum is winnable, and that we can successfully deliver a “withdraw from the EU” message to our masters. With contributions such as Farage’s, though, we are set to lose.

To understand why, it is helpful to go back to the debate we were having on Article 50, where we argued that we need to take advantage of the negotiation process offered to draw up a relationship with the EU before finally cutting the knot.

Amongst those who disagreed with this stance was Nigel Farage, one of many who believe that we can unilaterally abrogate the treaties and then expect the “colleagues” to sit down and negotiate with us, without there being any penalty from such action.

Until now, quite how Farage managed to believe that this could be a penalty-free option has escaped me. But, if it is his settled belief that a free trade area can be set up with “a blank piece of paper“, then it is unsurprising that he sets such little store on negotiation – there is only a blank sheet of paper to agree. And that attitude is what is going to lose us the referendum.

The reason why this will happen is because Farage and his supporters are preparing, in an utterly cavalier fashion, to ditch the “single market”, that iconic property which legend has it was breathed into life by the Dragon Queen herself, Margaret Thatcher.

Yet, examine David Cameron’s rhetoric on the European Union and you will notice the emphasis is almost entirely on preserving this mythical beast. To threaten it with extinction is to invite unrestrained enmity from the entire Tory tribe and give hostage to fortune to the other side.

And that is only part of it. The “single market” effectively comprises a huge body of EU law – directives, regulations and decisions – alongside thousands of meticulously crafted standards, which together binds the corporate world and protects it from the cold winds of competition, mainly from small and medium businesses.

Anyone who believes that big business doesn’t like regulation simply knows nothing about big business. As noted in our forum, “complex regulatory structures are a significant barrier to entry, and dominant firms that can afford large compliance departments often lobby for such regulation which prevents the entry of upstart firms”.

And, in their enthusiasm for more and more law, the corporates are the natural partners to the EU. If their precious body of law is threatened by a “no” vote in a referendum, they will pour massive funding into any “yes” campaign.

The best we can possibly hope for from the corporates is their neutrality, which could only be secured – of at all – by assurances that their “single market” is kept intact.

On the other hand, the genius of the EU is the way it has hijacked trade regulation and harnessed it in the service of political integration. In promoting our exit from the EU, therefore, we have to detach the corpus of standards and trade agreements from the community acquis and give it an independent identity.

This, to my mind, is one of the greatest challenges confronting the “outers” in any referendum campaign. It is also one I believe we can deal with by negotiating continued EEA membership – thus keeping the single market intact for at the very least a transitional period, while we sort out better, long-term arrangements.

Whatever might actually be decided though, we cannot afford to ignore the single market, or the rent-seekers who gain so much benefit from it. Allowing a “floundering Farage” to set the pace here would then be to invite a foundering campaign. Protect the single market, or we lose.

COMMENT: “FIGHTING THE GOOD FIGHT” THREAD

There is a joke amongst economists, Nigel Farage tells us in his “Referendum Stitch-Up” pamphlet, that a real free trade agreement can be illustrated by holding up a blank piece of paper.

That, he avers, is because if trade is genuinely free, there are no regulations to follow or tariffs to pay but business people and traders can get on without hindrance or interference in doing business and creating wealth.

Thus, in principle, we are told, “to create a single market or free trade area is incredibly easy if you know what you are doing and think it through. It merely requires an absence of restriction, most easily achieved by the progressive – or instant – dismantling and removal of all existing barriers and tariffs”.

Unfortunately, a regulation-free market is neither desirable nor acceptable, and if this presented as UKIP’s objective for Britain once we leave the EU, it will simply invite the hostility (and derision) of those who understand why much of the regulation at present in force must remain.

One can, or course, make a case of the removal of tariffs and also non-tariff barriers, but it is important to realise how important well-crafted regulation is to international trade.

This can be well illustrated addressing the problems of a banana importer, based in London, buying from growers everywhere in the world to supply wholesale and retail customers throughout Europe.

In the nature of things, the quality of the product will vary and with it price. It has thus long been the sensible habit of shippers to use grading schemes – a common language between buyer and seller – so that the nature of any transaction is fully understood.

This does make sense. Our putative buyer, who might decide to purchase a load from Jamaica, may wish to order Grade A bananas, sight unseen. And, as long as an agreed grading scheme is applied, he will know exactly what to expect for his money.

There could be problems, though, if he wished to buy Grade A bananas from Costa Rica and that country operated a different grading scheme. National authorities in some countries could even give their exporters a price advantage by setting more relaxed standards, while still allowing produce to be called Grade A, to the detriment of buyer and consumer.

More complications arise if different consumer countries dictate their own specific standards, thus leaving our putative importer being able to buy produce from one country which he can then sell in some countries but not others. Thus, each country having different standards – whether producer or consumer – is a recipe for chaos.

On that basis, it makes absolute sense to have international standards.for commodities which are traded internationally. And for them to work, they must be common standards that are known and recognised by buyers and sellers alike.

Such standards are not in any way a restraint on trade – quite the reverse. When properly and sensitively crafted, they facilitate trade and are seen, overall, as beneficial. As such, they are a necessary precursor to free trade. Clearly, that applies here with South African bananas.

This being the case, it is unsurprising that many commodity standards pre-date EU regulations. In fact, much of the current EU legislation for agricultural produce is based on a British model developed long before we joined the EEC. Even in the land of the free, the United States, agricultural produce for inter-state commerce was being regulated as early as 1880.

Nor is it a surprise that much regulation is actively sought after by the trade itself. Take meat safety, for instance. Few people realise that official inspection did not become compulsory in this country until 1963 yet, for decades before that, producers had voluntarily paid for inspection as a measure to improve consumer confidence in their products.

And when, in 1964, the Six in the then EEC imposed mandatory inspection of imported meat, to be carried out at the point of slaughter, the system was based on a regime developed by the British. It had been imposed in response to the Aberdeen typhoid outbreak, which had been linked to Argentinean corned beef, again to promote confidence in international trade.

The important thing, therefore, is not the absence of regulation, but the right sort of regulation – sufficient for the purpose and not too onerous – applied only where it is needed. Where the EU most often went wrong was (and is) in applying export standards to internal trade or – where grading regulations was applied – prohibiting trade in ungraded produce. 

To an extent, this is being addressed, with the EU progressively relaxing standards (allowing misshapen fruit and vegetables), so some of the the issues that Farage raise in his pamphlet have less force anyway.

That aside, regulation does not only apply to goods, but also services such as air travel. Here for instance, if we look at requirements for commercial aviation, we see minimum regulations applied to the equipment required by airliners to enable them to land in reduced visibility conditions.

Knowing Farage’s intimate acquaintance with aviation safety, one suspects he would not want to see such regulations removed or weakened. Would he really be happy with a blank piece of paper when it came to his flying to Strasbourg to pick up his expenses?

Thus, the real issue is that, even if reduced, a huge tranche of trade regulation will remain. It cannot be wished away. We thus have to find a way of dealing with the continuing process of adding, modifying and adapting trade regulations while outside the EU yet still trading with its member states.

In this context, to pretend that we can live without trade regulation is not helpful to the cause. We need more sophisticated arguments to carry the doubters, coming up with real world solutions that demonstrate our understanding of the realities of modern international trade. Farage’s fluff simply isn’t good enough.

COMMENT THREAD

Farage put his finger on the Cameron dilemma this morning, pointing to the Conservative leader’s credibility gap when it comes to promising a referendum.

Talking on the BBC Radio 4 Today programme, he said that he would only consider making a deal if it was “written in blood” that there would be a[n in-out] referendum on Britiain’s EU membership.

What was not raised though – not here or in an earlier programme – is how different the political landscape will look in 2014 when the euro-elections are due to be held. Thus, although Farage consistently claims rising support for his party, he and his followers may be disappointed when it comes to the elections.

Not least, the much lauded poll ratings consistently fail to materialise as votes in real elections.

For instance, in one recent council by-election, Canterbury City – Blean Fores, the Conservatives took 342, Labour 185, Lib-Dem 121, Green 64, UKIP 38 and Independent 24. Cornwall County – St Keverne and Meneage, had the Tories on 585, Lib-Dems 279, UKIP 141 and Labour increasing to 52 (from 33 in June 2009). Scarborough Borough – Esk Valley gave the Tories 606 votes, Independent 151 (down from 417 in May 2011), Labour 87 and UKIP 35.

So consistent is this experience that one can discount the UKIP election hyperbole. And, to make matters worse, there is recently another factor in play. As the Independent reports, in all the recent by-elections, both Labour and Conservatives scored “landslide gains” at the expense of independents.

We may thus be seeing precisely that which we have seen in Germany and in the recent Dutch elections – the classic small-party squeeze, which is so often apparent when times are uncertain. And where the UK election is shaping up for a battle between two unpopular personalities, perversely, that tendency might be accentuated.

In recent years, however, the euro-elections have obeyed their own rules, and Farage might confidently expect a good showing for UKIP in 2014. But again there is another factor at play: Barroso has committed to publishing proposals for a new treaty before the euro-elections. With the commission president determined to make this an EU election issue, electioneering could be sufficiently transformed to make it mainstream – to the detriment of UKIP.

With Cameron planning a major speech on European policy next month, he may well take the opportunity then to commit to a referendum, contingent or renegotiations arising out of the treaty process, essentially marginalising UKIP and its pretender, the “We demand a referendum” party.

Here, the Conservatives are in a much stronger position, as polls on EU sentiment tend to show that the renegotiation option (however unrealistic) is popular with the voters, and Cameron can rely on the “referendum lock” to demonstrate his good faith. He does not need to make a promise “written in blood”, he may say, when it is written into an Act of Parliament.

This does not stop speculation elsewhere about electoral pacts with UKIP, from the usual ill-informed suspects, who currently don’t seem to understand that the chances of a referendum before 2016 are slight. In all probability, we are looking at 2017 or beyond.

Those, like Nikki Sinclair’s little party – which has dreams of a referendum in 2014 – clearly fail to realise that Cameron can use for an alibi, active engagement in EU negotiations. No sensible person could expect a referendum while negotiations are still in progress.

To that extent, also, the Tory europlastics are beginning to outflank the “outers”. Knowing that renegotiation is more popular with the public than the straight “out” option, they have concentrated their firepower where success is most likely. That could well leave Farage and his supporters stranded, being faced with fighting a referendum in the distant future for which they are singularly ill-prepared.

The “outer” fraternity thus looks doomed to get what it wished for. And unless Farage stops whingeing about how the contest might be rigged, and starts working out how to win the referendum we’re going to get, rather than the one UKIP wants, the wish granted could prove his nemesis.

COMMENT THREAD

However, not all is lost. The man at least understands that we are now the mainstream. “No matter who wins the next election, it is likely that abstainers will outnumber those voting for the winning party”, he writes. But that has been the case for a long time. Why is it taking them so long to realise? 

COMMENT THREAD

In a well-judged intervention, Cranmer tells us that the Eurosceptic “movement” (if it be) is fundamentally a clash of gargantuan egos, none of whom will deign to co-operate or collaborate with their co-eurosceptics, principally out of a lack of trust, belief or respect.

So, His Grace tells us, with a referendum on the next EU treaty looming – and, as sure as night follows day, it is coming – please don’t expect political coherence or campaigning strategy from the Conservatives, UKIP, the Democracy Movement, the Campaign for United Kingdom Conservatism, Better off Out, Campaign for an Independent Britain, the Freedom Association, or the Liberty League.

Frankly, he says, you have more hope of persuading a Wahhabi Sunni to sup with an Ahmadiyyan and plant the cornerstone of a new mosque. If a house be divided against itself, that house cannot stand: the referendum may already be lost.

Hesitant as one is to disagree with His Grace, one has to say that he is wrong. This is not a matter of egos, gargantuan or otherwise, but of strategy. Egos we could cope with. The more profound differences over strategy are far more problematical.

Courtesy of Witterings from Witney, we see demonstrated precisely the point in the recent adjournment debate led by Tory MP Andrea Leadsom.

This is a woman who is determined that we should “renegotiate our EU membership – to remain within the EU but to have our absolutely best attempt at renegotiating a relationship that works for Britain, with full and free access to all EU assets, but without being hampered in a global world by EU regulation”. What she wants, she tells us, is “fundamental reform”.

No red-blooded eurosceptic could begin to agree with such a europlastic view, but within the debate there was also David Nuttall, Tory MP for Bury North. As chairman of the Lords and Commons “Better Off Out” group, he wants us to repatriate all powers from the EU.

We would have no difficulty in accepting this desirable objective, except that Nuttall does not think we are likely to be given the choice of an in-out referendum. He thinks we are more likely to get an in/in referendum: the choice of the status quo – staying in as we are now or staying in with 17/20, 18/20 or 19/20 of the status quo and repatriating a few powers.

The trouble is, as Leadsom points out, while a July 2012 YouGov survey had 48 percent wanting to pull out and 31 percent wanting to stay in the EU, if a new deal was renegotiated, the poll suggests that people would vote in a completely different way. Most – 42-34 percent – would vote to stay in the EU.

This is the eurosceptic nightmare: a referendum offering not the in-out option but the “reform-out” option. This would be very hard to win. Strategy becomes absolutely vital.

Then, as WfW reminds us, there is the Lilley point: during a referendum campaign, on average there is a 17 percent swing back in favour of the status quo. This means it is necessary to start with a 34 percent lead for change to have a 50 percent chance of winning. Starting with roughly half of people being in favour of leaving and a third in favour of staying would result in a vote to remain in the EU.

Problematically, though, our people are not thinking strategically. Under these circumstances, the Minford idea of unilateral withdrawal, followed by negotiation, would be a disaster. The uncertainties would drive voters into the EU camp.

Yet, despite the potential for disaster, this is the preferred UKIP option, and the guardians of the message are quick to stamp on dissident thought. There is no debate in this “outer” fraternity. You either conform with the approved message or you are consigned to outer darkness as a “traitor”. 

COMMENT THREAD