EU referendum

by

On the referendum #12: new ICM poll shows 46-36 for staying in the EU; education, BBC, propaganda, Willie Munzenberg

ICM are going to be asking the referendum question regularly from now on.

HERE is their latest poll of 2,000 over 31 July – 3 August.

The headline figure is 46-36 for YES.

One of the interesting categories is Scotland which has 47-35 for YES. This is contrary to other polls that have shown much wider YES margins in Scotland. I wonder what the truth is about Scottish opinion.

Also note how ABs, better educated than other social groups, are 58:30 for YES.

Another interesting recent poll was done by Survation coinciding with the Farage speech / Arron Banks ‘in the know’ advertising push. The analysis is HERE. The numbers confirm the conclusions I sketched on public opinion last summer based on focus groups.

All the polls show that support for leaving the EU has fallen towards a core vote of about a third of the public. There is no doubt that the NO campaign is in a very difficult position. Some of those who want to leave have made some big errors and the establishment is largely united behind IN. Worse, OUT has become associated with an unattractive moral feeling. Better educated people tend to get their political views from feelings, mood, Zeitgeist and fashion, hence the success of the most brilliant propagandists – the Communists of the early part of the 20th century who dazzled large sections of the intelligentsia: see the career of Karl Radek’s frighteningly effective agent Willie Munzenberg (connected to all sorts of people from Hemingway to Philby et al) and characters such as Otto Katz, the NKVD agent who said ‘Columbus discovered America, I discovered Hollywood.’

It is a mistake to think that the better educated are ‘more rational’ in their political analysis; often they are less rational and more affected by fashion than the un-educated. They also run influential cultural institutions. Much of the techniques of Soviet propaganda (which became the basis for most of modern PR such as the celebrity letterhead) rely on one principle – how to overwhelm reason and humans’ capacity for objective analysis by creating a moral picture such that people send little moral signals to each other by their actions (like those well-educated people who signal each other by attacking the Mail on Twitter).

These phenomena are relevant to the referendum. As one famous BBC correspondent said to us during the euro battle, ‘The thing is we [the BBC] like cappuccinos and hate racists.’ Such feelings tend to overwhelm reason and leave people blind to things that ought to be obvious – e.g. that Delors et al created the euro in order to spark a great leap forward for ‘political union’ and its institutional structure was sub-optimal and risky when they created it (an argument that was perceived as near-loony by many at the BBC for years).

It has been conventional wisdom among the better-educated who control powerful cultural institutions that support for the EU is synonymous with being ‘modern’, ‘not racist’ and so on. This is despite the EU system looking in many ways extremely dated, palpably failing, transferring money from the poor to the rich and multinationals etc. My point is not at all that I am right about the faults of the EU; perhaps my arguments are poor. My point is that there is a morally and intellectually respectable argument that the EU is an outdated bureaucratic mess, built on very dodgy intellectual foundations by Jean Monnet, and supported now by trite soundbites about ‘3 million jobs’ that do not hold up to serious scrutiny – but that the history, ideas, arguments etc count for very little against feelings, and they often count least among the well-educated.

Changing this moral picture such that people think about the issues, rather than adopt positions based on moral signals and emotion, will be extremely hard for the NO campaign in the time available though I do think that the silent artillery of time will change it within a decade.

Ps. I should add that there are two strong emotions on the NO side, regarding immigration and contempt for political elites, which also can lead to faulty reasoning.

Pps. (Added later). Patrick Wintour, the Guardian’s political editor, comments on Twitter that the above ‘may underplay possible Labour volte face.’ He is right. My impression is that the sight of the Bundesbank telling the Greeks to transfer assets to an offshore trust to be privatised by Germany has opened the eyes of some on the democratic Left to the deep institutional problems of the euro and the consequences of the push for economic and political union. However, this is a very recent development. Many on the Left have not thought seriously about the EU since Delors’ extremely clever speech to the TUC in 1988 which explained to the Left how the EU could be used to achieve permanent victory over their political opponents at a time when Thatcherism seemed dominant. Most political speeches are a waste of time. This is one of the few that really changed politics. Many on the Left decided to prioritise unravelling Thatcherism over democratic accountability as a consequence of this speech.

I hope that Labour does, as PW suggests, re-examine its uncritical support for the EU project particularly given it is now heading for yet another Treaty (between our referendum and 2025) based explicitly on the Delors model that will centralise much more power in Brussels in an attempt to prop the euro up and continue the Monnet/Delors vision (see HERE). There are some great Labour MPs, such as Gisela Stuart, who have challenged the conventional wisdom in Labour for years. Other figures in Labour, such as Blair’s speechwriter Phil Collins, really seem to believe the Foreign Office spin that ‘the EU is changing, the Monnet/Delors model is dead’ etc. The Foreign Office knows this is rubbish – the Five Presidents Report makes it untenable – but it is amazing how many intelligent British people choose to believe this time after time. I remember Mandelson saying exactly the same about the ‘Madrid Agenda 2000’ around the same time he was predicting the euro would be great for Ireland and Greece. Actually, this connects directly to the main point above about the delusions of the educated.

by

On the referendum #11: new ICM poll on a second referendum idea, Boris etc

A few weeks ago I wrote a blog on the issue of exit plans and a possible second referendum. According to various media reports, Boris liked the idea and has told people so.

I thought it would be interesting to see some numbers so asked ICM to consider it.

Attached HERE are the results.

Unsurprisingly, they show that 1) the public supports a second referendum, and 2) the prospect of one makes the idea of voting NO in the first vote less scary and therefore may increase the chances of NO winning the first vote.

It is also worth considering that the public has not focused on the first vote yet so the idea of a second vote is necessarily an abstract and hazy thing. As the campaign develops, I suspect these numbers will strengthen.

I have a few thoughts about this though no time to sketch them now, but I thought it would be useful for people to look at some numbers.

NB. It is not for me to decide what the NO campaign position should be on a second referendum and I have not decided what I think about it, but the 5 Presidents Report, the Hollande interview today on the need for another Delors-esque great leap forward etc show how important it is for these things to be thought through quickly…

Please leave thoughts below.

by

On the referendum #10: Do you want to be a hammer or an anvil? Building a team for the NO campaign

‘Better to be a hammer than an anvil… If revolution there is to be, better to undertake it than undergo it.’ Bismarck

Some Tory MPs have said ‘we must wait for the prime minister to return from his renegotiation before we talk about a NO campaign, we cannot prejudge it, party unity demands…’ No, no, no.

Those who care about this issue need to consider a basic organisational issue.

Creating a ~£10-20+ million organisation that can fight the biggest political campaign in decades is not something that can be done in the 8-16 weeks that may elapse between a) Cameron returning from his climactic EU Council declaring ‘victory’ over the dastardly foreigners and  b) the vote.

Such an organisation needs strong, secure foundations. It needs to go from zero pounds and people to millions of pounds and thousands of people across the country. It needs to bring together all sorts of expertise from conventional Treasurers to very unconventional Facebook experts. It needs to build an old school grassroots network plugged into new technology.

Building this organisation should have started years ago. The resources of the old anti-euro campaign should have gone into working out a roadmap for a new UK-EU treaty and building a national movement to support it. It did not happen. Resources were diverted into cul-de-sacs. It cannot be delayed further.

Such a thing cannot be done in a few weeks. It will be a huge challenge to do it effectively in perhaps just 10-18 months. Saying that a NO campaign should not be set up until Cameron declares victory is organisationally equivalent to saying ‘let’s give up now’. I thought it a mistake to try to force David Cameron to hold a referendum but for those who ignored the dangers and pushed for it now to argue that ‘we must wait before we do anything’ is no good.

Further, there is an important point about how the referendum must be treated. Many Conservatives realise this but some don’t. We must focus on the interests of Britain, Europe, and the wider world – not party interests, including ‘party unity’.

All sorts of things are ‘good for party unity’ in the short-term and awful for everyone in the long-term. Those arguing that the interests of the NO campaign be subordinated to the interests of Conservative Party ‘unity’ are just as wrong as those in UKIP arguing that the interests of the NO campaign be subordinated to UKIP’s electoral interests in 2020.

A serious NO campaign that can set out the issues properly must be organised without regard to any party interests, though with sensitivity to different party loyalties.

The vote may be in April – just 8 months after people return from summer holidays. There is no more time to waste.

*

Building a team

‘We would rather suffer the visible costs of a few bad decisions than incur the many invisible costs that come from decisions made too slowly – or not at all – because of a stifling bureaucracy.’ Warren Buffet

As I wrote HERE, I’ve been asked to help recruit people for the referendum. A lot of things have happened over the past few weeks. We are starting to recruit people.

Paul Stephenson is one of the best people in the country at dealing with the media. He has agreed to join the campaign. Others have agreed to help with communications but are not public yet.

We need a lot of different skills. Some of this process must be secret but not all…

– Researchers. We need researchers of different levels of seniority. Some people who have worked on this area for a long time and know it inside out. Others who are young, clever, willing to work crazy hours, and aren’t worried about upsetting a whole load of powerful people, from Whitehall to Goldman Sachs to Brussels.

– Programmers / web designers / digital media etc. British politics is decades behind other countries on advertising, TV etc (partly because of the ban on TV political advertising); if you read the Selling of the President, you will see that No10 and Labour have not caught up to 1968-level sophistication in dealing with visuals. It is also way behind on the internet. This campaign requires innovation and will suck in the resources to allow it. If you are a web designer, an expert in social media, or a computer scientist motivated to help, then please get in touch.

– Advertising, marketing, direct mail, creative design. Have you read William Gibson’s Pattern Recognition or Spook Country? If you work on brands like Tommy Hillfigger – do NOT get in touch with us, go call David Cameron! If you fancy yourself as Cayce Pollard or Hubertus Bigend, if you think your agency is a real life Blue Ant, then we want to speak to you. If you have used Palantir for political campaigns, then we want to speak to you. The NO campaign will have to create an eclectic network of cognitive scientists, marketing people and so on.

Do you want to create something as iconic as this for the NO campaign?

Eisenstein’s ‘October’

Or this?

The daisy ad

Or this?

‘1984’

If yes, get in touch…

(NB. Apple now is routinely touted as the best company in the world at advertising stemming from Jobs’ highly unusual personal taste. When the ‘1984’ advert, one of the most iconic adverts ever made, was first shown to the Apple board, the reaction was – let’s fire this ad agency and get a new one. Cf. Isaacson, p.163.)

– Spokespeople. We need fresh faces. We’ll probably build our own studio in the office that can beam out broadcast quality stuff. If you’re on our side, smart as hell, and fancy yourself a cross between Bill Clinton and Milla Jovovich, get in touch. If you know someone like this on our side, tell them to get in touch.

– Grassroots. We are not yet in a position to deal with grassroots volunteers but we should be by September, hopefully. If you want to help here, start building your own network, figure out how to use Facebook to mobilise people you know to persuade people they know. When we have an infrastructure, you’ll be able to plug into it. This campaign needs to build distributed networks fast in all sorts of ways that have not been done in UK politics. It cannot be a traditional centralised campaign in which supposed wisdom flows from the centre to the edges of the network. Instead, it must apply lessons learned by others: e.g. how the intelligence world has changed over the past decade.

– We will need all sorts of expertise not listed here. We are trying to create a core infrastructure that can use your help, watch this space for further details…

*

Simplification

‘The way we’re running the company, the product design, the advertising, it all comes down to this: Let’s make it simple. Really simple.’ Steve Jobs

‘Peace, bread, land.’ Famous Soviet slogan

Here is an example of simplification that works:

When Steve Jobs returned to a nearly bankrupt Apple in 1997, the once-famous brand was failing. It had no focus, was trying to do far too much, it had lost leadership, and suffered dysfunctional decision-making. Jobs simplified and focused. ‘The product lineup was too complicated and the company was bleeding cash. A friend of the family asked me which Apple computer she should buy. She couldn’t figure it out and I couldn’t give her clear guidance either’ (Jobs). ‘After a few weeks Jobs finally had enough. “Stop!” he shouted at one big product strategy session. “This is crazy.” He grabbed a magic marker, padded to a whiteboard, and drew a horizontal and vertical line to make a four-squared chart. “Here’s what we need,” he continued. Atop the two columns he wrote “Consumer” and “Pro”; he labeled the two rows “Desktop” and “Portable.” Their job, he said, was to make four great products, one for each quadrant’ (Isaacson). He cut all printers and other peripherals. He cut development engineers and software development. He cut distributors and five of the six national retailers. He moved almost all manufacturing offshore to Taiwan. He cut inventory by 80% and began selling directly over the internet (Rumelt).

Whitehall needs this treatment but won’t get it.

The ‘eurosceptic movement’ needs this treatment.

There is huge duplication. The same things are reinvented in dizzying proliferation. Not even the MPs and hacks who are supposed to be following the details can follow what people are doing. This means that the chances of the public following are ZERO.

NB. The net effect on public psychology of a decade of Cameron speeches on all sorts of issues from the NHS to schools to Europe is…? Approximately zero, as market research shows. This is because Cameron did not work on the basis of paying very careful attention to how people think and what arguments work, and shied away from (without properly considering) arguments that could get through to the public. Cameron focused on arguments of interest to pundits – not the public. How did he stagger to a tiny victory over the useless Miliband? Because he put his fate in the hands of someone who dropped everything else the Party was doing and persuaded a crucial section of the public that they were about to have their money stolen by the Scots. It worked, just, against Miliband but is hardly a model of political communication that Roosevelt or Reagan would be happy with.

The point is not about Cameron, it is about our campaign: if the most prominent politician of the last decade can give speech after speech leading the news and have a trivial effect on mass psychology, this ought to strike the fear of God into eurosceptics because people know almost nothing about EU arguments and status quo campaigns usually win. Only a radically different approach will give even a chance of victory.

The NO campaign will need to make arguments that we know are comprehensible and effective. This requires huge discipline, simplification, and focus. We don’t need 18 different people writing their own notes on trade, using slightly different figures and very different arguments, that are read by the same 18 people but ignored even by people who are paid to pay attention. We need to break out of the ghetto.

Everything will need to be pared down to a few fundamental objectives such as: neutralising fear of NO, explaining the gains from regaining control, explaining the costs and dangers of continuing to give away control, and developing a feeling in the country that NO would not just be good for us but good for the world. It will also require avoiding language that confuses. For example, the word ‘sovereignty’ is for many people ‘something to do with the queen’. Stop using it.

And it will require some game changers, of which a second referendum is, perhaps, one.

*

The NO campaign is, obviously, a massive underdog. Almost everyone in SW1 thinks it is doomed. However, SW1 conventional wisdom is often wrong. Many pundits thought joining the euro ‘inevitable’. Nobody thought we could stop Blair in the referendum on the North East Regional Assembly. We won 80-20. I cannot remember a single pundit who thought Gove’s team would change half what we changed.

Referendums are volatile. There is a huge undercurrent of opinion in this country that is deeply hostile to the established parties and desperate for a chance to hit a REBOOT BUTTON on Whitehall and Westminster. The structural wiring of the British state makes it very hard for political entrepreneurs to get a foothold. This campaign gives people who want things to change a chance to do things very differently. If we vote NO, we could do an awful lot to improve not just prosperity but also democratic government and the cause of international cooperation. We could, perhaps, help make a transition from the 1950s era that spawned the bureaucratic centralism of the EEC to a new desperately needed era of decentralised problem-solving networks that we need to help solve humanity’s challenges and exploit the tremendous properties of science and markets (cf. the work of physicist Dirk Helbing at Zurich University).

This campaign will require a lot of risks and some luck. If we fail, we will not fail conventionally – we won’t have bought IBM to avoid looking stupid…

If you are interested, please email dmc2.cummings@gmail.com

Finally, you don’t have to worry about working for me because I am NOT ‘running the NO campaign’ whatever you read. I don’t have the brains, skills, or personality. I am helping establish some foundations and a core team and helping people focus on essentials. One of the essentials is getting the right people. For such a huge event all sorts of extremely talented people will come out of the woodwork. Some of them will be unknown 20 year-olds who will run rings around people like me and supposed ‘grandees’ who’ve been on TV for decades and are so out of touch with how the world works they still think the EU is ‘modern’ (e.g. Ken Clarke). Once things are moving, I will be returning to my studies, helping in minor ways only.

Finally finally – pay. I don’t think anybody working in the campaign should be paid a six figure salary. For many years I’ve watched overpaid people in politics and Whitehall do a rubbish job and walk home with fat salaries while 25 year olds could do their job much better for less than half the cost. SW1 swarms with clueless people on £120k+. I’ve argued for over a decade, to zero effect because the parties are so out of touch, that the rules on executive pay for public companies are a joke. In the DfE I tried and largely failed to tackle grotesque overpaying and to promote young people into jobs held by people on six figures who squandered taxpayers’ money. People (including shareholders) don’t mind entrepreneurs getting rich. They rightly object to hired managers paid like successful entrepreneurs. This campaign should focus money on winning, not making staff rich. We should set an example. People say – ‘you won’t attract the talent’. Wrong. The only people we’ll lose are people we don’t want. If you want to get overpaid for lying to people, call the EU Commission or Roland Rudd – he tells the media he wants to pay his campaign manager 500k: you can hire 20 junior people for that and I’ll bet they’ll drive the guy on 500k round the bend before they’re done…

by

On the referendum #9: Cameron begins his renegotiation, the Commission sets out its timetable for new Treaty pre-2025, BJ & SJ make moves, a Greek ‘no’

A few thoughts on developments over the past week or so…

1. No Treaty change before the referendum. On Thursday 25th at the start of the EU Council, it emerged that Cameron officially dropped the idea of the EU treaties being changed before the referendum. His pledge that there will be ‘legally binding’ promises by the other 27 members to change the EU treaties in certain ways a few years in the future is a useful development for the NO campaign. No such promise will be believed regardless of the choreography. A future EU Treaty can be vetoed by any member and some members will also require a referendum. Nobody can guarantee in advance that a new Treaty will be agreed at all or on what terms, as the EU has found a few times already. A promise before the end of 2017 to change the treaties at some point in the future is the political equivalent of ‘the cheque’s in the post, and it will be paid in a few years time if 28 people still agree to pay it’. The NO campaign will be able to say simply, ‘If you trust all these politicians’ promises vote YES, if you suspect they may be lying as usual, vote NO to get a better deal.’ Polls will show strong distrust.

2. Trivial substantive demands from Cameron. The Guardian leak on Friday confirms how little Cameron is asking for. Do people in No10 really think that deleting phrases like ‘ever closer union’ and having the EU formally say ‘OK we won’t force you to join the euro’ would persuade people that the EU has fundamentally changed?! DC’s approach so far has been to send Llewellyn and Liddington around asking foreign governments ‘what should we ask for that you can give us?’ Unsurprisingly, this approach to negotiations is seen by other countries as consistent with Cameron’s lack of understanding of how EU business is done, as the Monnet-ist Foreign Office officials also ruefully acknowledge. There is no sign that the long-standing desire of Open Europe for a deal whereby Britain remains in the EU and Single Market but is outside all non-Single Market stuff is on the table or that No10 is pushing for it to be on the table.

3. The Commission plans its new Treaty to ‘complete’ Economic and Monetary Union before 2025. Meanwhile, as Cameron plays his role in the re-enactment of Wilson’s 1975 deceit, the Commission has its own timetable. It will be more influential than Britain’s. The Commission has, since Monnet, seen disasters as ‘beneficial crises’ – the answer to a crisis is always ‘more Europe’ (meaning ‘more centralised bureaucracy’). This was true after 9/11 and after the Madrid bombings. It was true after the 2008 financial crisis. It is true again now with the Greek crisis and the immigration crisis in the Mediterranean.

This paper, ‘Completing Europe’s Economic and Monetary Union’, was published on 22 June 2015. It got little coverage in the UK media. It was written by ‘the five presidents’: European Commission President Jean-Claude Juncker; the President of the Euro Summit, Donald Tusk; the President of the Eurogroup, Jeroen Dijsselbloem; the President of the European Central Bank, Mario Draghi; and the President of the European Parliament, Martin Schulz.

It sets out three stages for the ‘completion’ of Economic and Monetary Union by 2025, building on what it thinks is ‘a credible and stable currency’ to create a financial union, a fiscal union, and a political union, in three stages:

  • Stage 1) using existing treaties to push further including: single bank supervision, single bank resolution, single deposit insurance, a European Deposit Insurance Scheme (EDIS) at the European level, ‘further measures … to address the still significant margin for discretion at national level’ for bank regulation, a Capital Markets Union to ‘strengthen cross-border risk-sharing through deepening integration of bond and equity markets’, ‘harmonisation of accounting and auditing practices … addressing the most important bottlenecks preventing the integration of capital markets in areas like insolvency law, company law, property rights’, and a ‘system of Competitiveness Authorities … in charge of tracking performance and policies in the field of competitiveness’.
  • A White Paper in spring 2017 to set out the transition to Stage 2 outlining the legal measures needed to ‘complete’ EMU, following explicitly the model of the Delors White Paper of 1985 which paved the way to the Single European Act.
  • Stage 2) ‘a common macroeconomic stabilisation function’ to ‘improve the cushioning of large macroeconomic shocks’, maybe built on the European Fund for Strategic Investments, and a European Fiscal Board to ‘coordinate and complement the national fiscal councils that have been set up in the context of the EU Directive on budgetary frameworks’.
  • Stage 3) completion of EMU will involve further major steps towards a political union including ideas such as a ‘euro area treasury’ and unified external EU representation on international financial institutions such as the IMF.
  • This will require a new Treaty. It will also ‘require Member States to accept increasingly joint decision-making on elements of their respective national budgets and economic policies’.

Dominic Lawson’s column also shows the dismissive attitude of the German Europe Minister to Cameron’s renegotiation. Cameron has long had what is to me a baffling hope that Merkel both wants to and is able to solve all his European problems. This delusion is similar to many other unrealistic delusions about the EU held in the Foreign Office and Downing Street over the decades.

4. The EU Council dinner witnessed a huge row over the migrant crisis. Although the migrant crisis has been in the news, it is perhaps not appreciated just how much concern it is causing across Europe. (The terrorist attacks also diverted media attention.) The situation is dire, it will get worse as thousands of Africans head north for the coast, it is obvious that the EU’s institutions and laws cannot cope, signatories to Schengen are starting to introduce informal measures that are strictly illegal (e.g. French police checking papers of people coming from Italy contra the Schengen rules), and nobody can agree on what to do. Worried diplomats have described the shouting at the dinner as some of the worst scenes seen in decades. It seems likely that the Italian government will be forced to declare some sort of emergency state and start ignoring EU and ECHR law to a much greater extent than previously. This will create all sorts of dynamics that affect the UK referendum.

5. Boris backs a ‘NO’ vote and a second referendum to get a better deal. In a previous blog in this series, I discussed the issue of exit plans and a second referendum. According to a story by Shipman in the Sunday Times, Boris Johnson, after reading this blog, is considering that this may be the best path for him to take:

‘Boris Johnson is preparing to call for a “no” vote in Britain’s referendum on the European Union in an attempt to extract greater concessions from Brussels than David Cameron is demanding.

In a stance that puts him on a collision course with the prime minister, the mayor of London believes Britain should reject any deal Cameron puts forward because the EU will not give enough ground.

Johnson has told friends that a “no” vote is desirable because it would prompt Brussels to offer a much better deal, which the public could then support in a second referendum.

Johnson said: “We need to be bold. You have to show them that you are serious.”

The mayor’s views, shared with friends last week, will send shockwaves through Downing Street. Both the “yes” and “no” camps had assumed that he would support Cameron in arguing for Britain to vote yes.

Johnson made the comments after reading a blog by Dominic Cummings, the former Tory aide who is organising the “no” campaign, in which he argued that Eurosceptics should say: “If you want to say ‘stop’, vote no and you will get another chance to vote on the new deal.”

A friend of the mayor said: “I don’t think in his heart Boris wants us to walk away. But he’s interested in us saying no because it won’t be what we want. That would mean a second vote. He thinks the only way to deal with these people is to play hardball.”’

A Guardian story on Monday said that BJ sources confirmed the Shipman story and Forsyth’s Spectator story similarly confirmed it.

Since I blogged about this idea, many people have got in touch.

A. It seems likely to many people that a NO vote would have to be followed by a second referendum on a new deal because the scale of importance of the UK-EU agreement, dwarfing the issues in normal general elections, would require giving people a vote.

B. It is clear that escaping the supremacy of EU law enshrined in the 1972 European Communities Act will be a complicated process stretching over years – it will not be a simple event. A NO vote in the first referendum would not, as a matter of fact or law, mean we had left the EU or would immediately leave. It would in practice be a rejection of Cameron’s deal and a direction from the public for a new government team to negotiate a new deal.

C. This issue is entangled in the Conservative Party leadership campaign. Some leadership candidates will like the idea of a second referendum – it allows them to position themselves against Cameron’s deal without committing themselves to OUT.

They will be able to say, ‘David Cameron has got a bad deal that does not solve our problems on immigration or anything else, he’s wasted the historic opportunity handed him on a plate by the euro crisis and migrant crisis to negotiate a completely different European system, and if we vote NO we can get a better deal, we finally have a chance to do this properly’ etc.

D. If it becomes clearer that a NO vote will mean a second referendum on a new deal, then the probability of NO winning is likely to rise.

5. Sajid Javid tells the CBI that they are undermining efforts to reform the EU. SJ has previously said that leaving the EU is not something to be afraid of. SJ gave a speech to the CBI this week in which he said:

‘I heard that the CBI thinks the UK should remain in the European Union no matter what. That the people of Britain should vote to stay in regardless of whether or not the Prime Minister wins the concessions that British business so badly needs… [D]oes it really make sense to say, so early in the process, that ‘the rules of this club need to change, but don’t worry – we’ll always be members no matter what’?

‘You know how negotiation works. You wouldn’t sit down at the start of a merger or acquisition and, like a poker player showing his hand to the table, announce exactly what terms you were prepared to accept. It doesn’t work in the boardroom and it won’t work in Brussels.’

SJ is right. Polls have shown for over a decade that most businesses regard the costs of the EU and the Single Market as greater than the gains and want many more powers brought back than Cameron is now asking for (e.g. ICM, April 2004).

SJ could have added a historical lesson for the CBI about its long record of being wrong on big issues. Its forerunner advocated appeasement in the 1930s with the old ‘stability’ argument wheeled out. The CBI played an important role in pushing Britain into the disaster of the ERM. It tried to play an important tole in pushing Britain into the euro which would have been a disaster.

Fortunately, businesspeople like Stanley Kalms and Michael Edwardes formed Business for Sterling (which I worked for 1999-2002). We surveyed British businesses and proved that the CBI was lying about business opinion and was systematically cheating its own membership surveys to give the false impression to the FT and BBC that ‘British business overwhelmingly wants the euro’ – sound familiar? In fact big businesses were split and small businesses were hostile by about 2:1.

However, the power of the UK Government and the EU Commission makes it extremely hard for senior FTSE people to speak out against the EU while they get brownie points by backing the EU (cf. Branson who still speaks in support of Britain entering the euro). Many businesses were told in 1999 – if you support Business for Sterling, we will screw you. The same thing is happening now. Few journalists understand the politics of company boards whereby pro-EU people are licensed to speak out while anti-EU people are told to pipe down to avoid causing blowback.

Within a year of starting, by January 2000 we had forced the CBI to withdraw from the euro campaign.  Meanwhile the IOD and FSB were clearly hostile to the euro.

31 March 1999, Daily Telegraph: BfS/ICM poll showed business opposition to euro

2015-06-06 17.32.55

31 January 2000, FT: CBI withdraws from euro campaign

2015-06-06 17.35.25

 

The CBI is now arguing that Britain should stay in the EU on any terms. This view is out of whack with the general view of British businesses but the cabal that controls the CBI has never cared about this and the BBC has very rarely challenged them.

The CBI has also just announced that Cridland will be replaced by a former ‘head of strategy’ at the BBC and ITV. Mike Rake said, without apparent irony, that she has ‘an impressive background as an economist, journalist, management consultant and policy strategist’. The CBI represents hired managers, management consultants, lawyers etc – it has never represented successful entrepreneurs. It is always controlled by a small number of politically powerful multinational firms (generally run by non-entrepreneur hired managers) that can be crucified by the Commission. This is why they are not taken seriously as the ‘voice of British business’ other than, unfortunately, by the BBC.

The people who control the CBI should consider 1999. Unless the CBI changes its position, 1999 will be a picnic compared to 2016.

6. Business for Britain has serialised a big report on the economics of the EU which will be published in full shortly.

7. The Greeks have voted NO. Those in the Commission, Eurostat, and other EU institutions who colluded with Goldman Sachs and others to cheat the numbers to ease Greece into the euro have got away with it. The euro financial system was set up so that a lot of bankers made a lot of money out of artificially low Greek bond prices. What about when the music stops? IBGYBG (‘I’ll be gone, you’ll be gone’ as assholes in the City say to each other when ripping off their clients/customers.) Those like Mandelson who predicted the euro would be great for Greece still have their huge pension pots paid for by taxpayers and are invited on TV to pontificate about the EU, largely un-reminded by the BBC of their previous duff predictions.

There are deep problems with the global financial architecture, from China’s shadow banking system to the recurrent flash crashes driven by high frequency algorithmic trading. There are deep problems with the euro financial architecture. Since 2008 global debt has increased enormously. There has been a huge distortion of debt markets with investors holding massive quantities of government bonds that offer very little future reward and great future risk. CDO’s, CDS’s, all sorts of synthetic credit derivatives that contributed to the 2008 crisis are back and being sold to idiots who don’t understand them by some of the same people who used such complicated scams to cheat the figures for Greece’s euro entry. Bureaucrats keep bailing out financiers. The public quite rightly rages that ‘us idiots on PAYE are bailing all these crooks out’. Politicians largely ignore them. In Britain, Cameron even defended the indefensible non-dom rules and has done nothing about the grotesque abuse of executive pay by hired managers paying themselves as if they are successful entrepreneurs, with institutional shareholders happily pushing the merry-go-round and getting their kickbacks. Everywhere one looks one sees insiders ripping off the public and politicians either colluding or helpless spectators.

The EU system is, characteristically, not admitting its own terrible errors that have contributed to the destruction of the Greek economy. Even the IMF has told the EU that Greece’s debts are unsustainable and will need a haircut. But the EU leaders feel they cannot face this reality because it would lead to an explosion of demands from Spain, Portugal, and Italy. Instead of facing reality, Europe’s leaders have decided to turn the disaster into a morality play in which ‘the lazy Greeks’ are blamed for  everything. Meanwhile, Brussels’s real answer is the Five Presidents Report (above) – deeper and further integration because, after all, as Delors said the whole point of doing EMU before political integration was that the problems with the former would force the creation of the latter, like Athena from the head of Zeus.

(I have written elsewhere about the fundamental problem that the 21st century global system has become too complex for traditional states with traditional bureaucracies to cope with, and the need for very different kinds of political institution and very different training for political decision-makers. In other fields, there is innovation: for example, JSOC and UK special forces have completely changed how they operate to cope with networked enemies. In politics, there is almost no innovation partly because incentives are set up that reward people for failing conventionally, a political equivalent to ‘nobody gets fired for buying IBM’.)

*

The combination of no Treaty change and no substantial demands is no surprise to many. The EU timetable always made Treaty change practically impossible before the end of 2017 (other than an Article 48 minor change to lower order things, which NB. could allow DC to claim ‘I’ve got treaty change’). However, Cameron’s position since his Bloomberg speech has relied on teasing the media, his MPs, donors and others that he intended to fight for treaty change to show he was ‘serious’.

He has decided to drop this pretence at the start of the process. His approach since the election has helped rally support for the NO campaign as it becomes increasingly clear that his talk of ‘fundamental change’ was just to keep people onside before the election. Some Conservative Party donors, who have suspected for a long time that the Cameron-Llewellyn team does not know how to negotiate, can see there is no serious attempt to reshape our membership. This is particularly striking given that the combination of the Greek crisis and the African/Med migrant crisis is pushing the EU itself to consider a new Treaty and new arrangements for the non-euro countries.

This approach is also unpopular with some of Cameron’s spads in No10 and Cabinet ministers who think that Llewellyn – a diehard pro-euro/EU campaigner – is harming the prime minister with his approach. Some of them think that rushing it also means rushing the day of DC’s departure as the leadership campaign will effectively start after the referendum. Others have pointed out that rushing so transparently to get trivial changes is hardly the best way to win a YES vote – or to maintain good faith in, and good will for, the prime minister. So far Llewellyn is ignoring such criticism – if he hears it, which is perhaps unlikely given how No10 works. No10 spads are keen to stress to journalists that ‘Ed is completely in charge of this, my responsibilities are domestic only if you know what I mean’.

by

On the referendum #8: Unprofessional pundit – Adam Boulton

I thought a few weeks ago I would keep track of some pundits writing on the referendum (cf. the errors of Steve Richards here).

A few texts yesterday told me to read Adam Boulton’s Sunday Times column:

‘In anticipation of a Greek no, Britain’s “no” champions are urging Cameron to play hardball. They are cheered by the appointment of Dominic Cummings to kick-start the campaign. He is advocating a Syriza-style approach, suggesting that if Britain votes no it will still be possible to renegotiate and hold a second referendum to stay in. Cameron must crush this argument fast if he is not to be undermined among Tory activists. A “yes” vote in Greece followed by firm discipline for Athens would do that. In the meantime, he could point out that Cummings’s strategic brilliance at the education department led to him losing his job and almost cost the career of his master, Michael Gove.’

A few other hacks have called to say that a No10 spad is claiming I was fired from the DfE, while another one claims I was ‘secretly’ fired but allowed to claim I resigned. (Great message discipline Dre.)

If Boulton had googled or called, he would have realised he’d been lied to.

Facts? In September 2013 I told Gove I was resigning from the DfE  but would stay for a few months to help the transition to a new team. In October 2013, it was reported in a few places (first by Tim Shipman) that I’d resigned. I stayed until 31 January 2014 to help replacements figure out how the DfE worked. Boulton would have seen this immediately if he had googled instead of parroted a briefing.

Boulton’s Syriza analogy is also silly. My point about a second referendum had nothing to do with Syriza and was written before the Greek referendum had even been announced.

Boulton has been surly towards me since we were on a platform together discussing the media in 2003. He got cross about criticisms of media professionalism. He’s obviously still struggling with basic fact checking.

I can use Google. Up pops straight away a Boulton prediction on the euro from 2001: ‘Britons will come round to the idea [joining the euro] once they’ve handled euro money’, a line that was straight out of the Blairite spin doctors’ briefing notes at the time. Blairite pundits like Boulton – like their sources Mandelson, Clarke et al – need to be reminded of their duff predictions on the euro when they wheel out all the usual stale conventional wisdom in the coming referendum.

Adam – next time clowns in No10 tell you stuff about the referendum, check to see if it’s true before you repeat it…

Ps. AB responds on Twitter: ‘So there’s no reason to be so pompous, tendentious and offensive. We just see things from different perspectives.’ Odd that he sees correcting factual errors as ‘offensive’. It’s struck me many times over the years how thin-skinned some hacks can be given how they’re always criticising others. Tetlock’s seminal study on ‘political experts’ famously showed that the more a pundit is on TV, the more likely they are to be wrong AND not to admit they’re wrong.

 

by

On the Referendum #7: Transparency for our Potemkin government – Memo to ministers and spads thinking about how you could help the NO campaign

There have been many attempts to quantify the extent to which EU law (primary, secondary, Regulations, Directives, ECJ judgements etc) really determines what happens in the UK. It is inherently hard to come to an agreed answer given the combination of a) the sheer scale and complexity of EU law’s entanglement with domestic law over decades including things like domestic court interpretations of ECJ judgements, b) different definitions of regulation and the units of measurement, c) the desire of the civil service to obscure the issue, and so on.

You – ministers and spads – can contribute something valuable to this debate in a way that will help the NO campaign at a crucial time.

For those not in government reading this… One of the basic mechanisms of government is the ‘Cabinet write round’ system. This involves Secretaries of State being given lots of documents every night in their box from other departments. The SoS is supposed to read these documents and tick the relevant box on the attached form signalling assent, disagreement, comments etc. (When I find a copy of one in my papers I’ll post a photo.)

For entirely domestic things, this process can lead to disagreement and negotiation. An interesting aspect of our membership of the EU is that a large fraction of the documents concerning future law and administrative action come from the EU. For reasons that are opaque, the civil service continues with the write round system. It is, of course, a Potemkin system as ministers do not have a real power to oppose anything – the document in question will become law regardless of how the minister fills in the chitty. Still, the chitties are sent around so everybody can pretend they are in charge. This is a depressing process for some ministers but perhaps the Cabinet Office regards it as a Pavlovian exercise – ministers become habituated to simply tick everything without engaging their brains or ethics.

When occasionally a SoS refuses, the first step is the Private Office asks whether a mistake has been made. No? Are you sure minister? Off the chitty goes to the Cabinet Office (‘very courageous minister’). Step 2 is that the Cabinet Office emails to say – ‘Was your SoS drunk again last night, he seems to have rejected the EU Directive on XXX, better go and tell him to withdraw his objection pronto or Jeremy [Heywood] will be on it.’ This is normally enough to get SoS scuttling to retract his objection. Stage 3 is unusual – it involves the SoS not giving in at Stage 2. What happens then is that the SoS is informed by the private office that Ed Llewellyn has said that the Prime Minister agrees with Jeremy and insists on measure X. This flattens practically all objections. I have witnessed the very unusual Stage 4 – the SoS sends back a message asking for a meeting with Jeremy. Jeremy arrived. ‘This is EU law so there is no basis for us to object.’ Gove: ‘Why do we get sent these stupid forms to fill out then if we can’t stop these awful things, this is going to waste hundreds of millions of pounds for nothing?’ Jeremy [a chuckle]: ‘Haha, yes, so I’ll inform the Prime Minister that you agree after all, we will mention to European officials that ministers have grave concerns, I’m sure Oliver will look at it further, goodbye Michael.’ Game Over: ‘All your base belong to us’, as the old video game said…

The fairy tale that Britain still has Cabinet government involves maintaining this Potemkin process.

I have asked No10 spads a few times over the years what proportion of things they see come from the EU. The estimates have been 50-60%. When I was in the DfE, I would occasionally do surveys of Gove’s box, going through every single paper in it, to see the proportion of EU stuff. I would estimate the same – typically about half, though sometimes much more (though obviously volume does not equate to importance).

With the referendum coming, this will be an important question. The usual surveys will not answer the question. So what could you do?

From now, start collecting stats on a daily basis of the proportion of EU stuff in the box. Spad, create a GoogleDoc – obviously do not use the official system – so that the minister can simply fill in the box on the grid for each day. For the minister (or you) to jot ‘x%’ each day and fill in a GoogleDoc grid will take no more than a few seconds per day, less than a minute per week, less than an hour in a year. (If they are technically hopeless just get him to jot a figure and you fill it in.)  Also, you could take a few photos of some of the boxes (‘This one was 80% EU stuff’) and save them to Dropbox for future use. Keep copies of the 1% most stupid, irrational, and wasteful things. Add ECHR/HRA stuff too – that is all relevant particularly given Cameron is going to do nothing at all about the Charter of Fundamental Rights (NB. this is the EU thing, not the ECHR). No officials will know you are doing it. Neither Heywood nor Llewellyn will be able to know you are doing it.

After Cameron returns from the EU proclaiming triumph and some of you resign, you will then have a record of contemporaneously collected stats on the real importance of EU affairs in Government. You will be able to publish this. It will be recorded over a year or so and therefore have hundreds of data points. Much more than other surveys on this question, people will take it seriously – particularly when you explain it at a press conference holding up some photos and copies of the most stupid documents. It will be impossible for No10 to rebut it effectively. They will not be able to publish documents that could refute it. Heywood will give a statement saying that your claims are wrong but nobody will believe him.

This is a simple thing that could have a significant impact at the right time. You all know how much EU stuff is hidden by Whitehall and how much effort goes into pretending that ministers decide things that were really decided by some lobbyist in a Brussels hotel years ago. You know these Kafka-esque bureaucratic processes, redolent of the dying days of the Austro-Hungarian Empire, that characterise modern Whitehall. DO SOMETHING ABOUT IT!

Lots of you now won’t know whether you are going to resign but you can do this without anybody knowing so you have something useful if you do decide to resign; if you don’t you can delete it all, no harm done. Boris, we know you read this blog, you could do the same thing in the Mayor’s office and surely there will be some committees Cameron puts you on shortly to try to keep you quiet…

Please suggest ideas about how to improve this process,

Dominic

by

On the Referendum #6: Exit plans and a second referendum

[NB. This blog was published in June 2015 but pundits have written about it since then so I’ve added some links at the bottom.]

There are three connected questions that add up to some interesting problems for both sides of the referendum debate:

1) Will the Government suggest a second referendum? Offering a second vote would give them the opportunity to reverse a loss in the first, so that YES means victory and NO does not necessarily mean defeat. European governments have held second votes repeatedly over the past quarter century. One can imagine them saying: ‘If the public votes NO we will have to negotiate an exit deal with the EU and we believe that it is only right that the public has a vote on the final deal.’ If it did, it would be likely that Labour would do the same. Perhaps Labour will suggest this and the Government would feel obliged to agree.

2) Should NO demand a second referendum in the hope of forcing the parties to commit to one? One can see why NO might argue for a second vote. It enables NO to make a NO vote seem much less risky. ‘If you vote YES, you won’t get another vote for another 40 years – if ever. You should vote NO to Cameron’s rubbish deal. If you vote NO, you will force a new Government to negotiate a new deal and give you a new vote. A NO vote is much safer than a YES vote.’ Further, as a matter of democratic accountability, given the enormous importance of so many issues that would be decided in an Article 50 renegotiation – a far, far bigger deal than a normal election – it seems right to give people a vote on it.

3) Does NO need to have a unified plan for exit? A Government trying to leave the EU obviously needs an exit plan. The SNP needed an exit plan. But the NO campaign is neither a political party nor a government. It has no locus to negotiate a new deal. Does it need an exit plan, or does that simply provide an undefendable target and open an unwinnable debate for a non-government entity?

A. Creating an exit plan that makes sense and which all reasonable people could unite around seems an almost insuperable task. Eurosceptic groups have been divided for years about many of the basic policy and political questions. An interesting attempt at such a plan is FLEXCIT based on using the EEA as a transition phase – remaining in the Single Market and retaining a (modified) version of free movement – while a better deal, inevitably taking years, is negotiated. This is an attempt to take the Single Market out of the referendum debate. I will discuss the merits of this idea another time when I’ve studied it more.

B. Even if one succeeded, the sheer complexity of leaving would involve endless questions of detail that cannot be answered in such a plan even were it to be 20,000 pages long, and the longer it is the more errors are likely. On top of the extremely complex policy issues is a feedback loop – constructing such a plan depends partly on inherently uncertain assumptions about what is politically sellable in a referendum, making it even harder to rally support behind a plan. Further, in market research I have done it is clear that 15 years after the euro debate the general public know nothing more about the EU institutions than they did then. Less than 1% have heard of the EEA. Few MPs know the difference between the EEA and EFTA or the intricacies of the WTO rules. The idea that the public could be effectively educated about such things in the time we have seems unlikely.

C. There is much to be gained by swerving the whole issue. No10 is dusting off its lines from the Scottish referendum. Perhaps they can be neutralised.

‘Different people have different ideas about the best way to leave. For example, some people suggest we should leave the EU but simply remain in the Single Market while we negotiate a new deal. Others have different ideas. Global rules set by the World Trade Organisation provide some guarantees against European countries discriminating against British trade. But none of this is the real point. We are not a Government. We can’t negotiate anything. A NO vote as a simple matter of law does not mean that we leave the EU tomorrow. A NO vote really means that a new government team must negotiate a new deal with the EU and they will have to give us a vote on it. If you want the EU to keep all the power it has and keep taking more power as it has for decades, and you’re happy paying billions to the EU every year instead of putting it into the NHS – then vote YES. If you want to say ‘stop’, vote NO and you will get another chance to vote on the new deal.  If the country votes YES, we’ve lost our chance to change anything. We may not get another vote for decades, after we’ve had to bail out euro countries and had another few decades of the EU’s useless and inhumane immigration policy. If the country votes NO, we can force politicians to get us a better deal.’

This approach might allow NO to avoid its biggest problem – the idea that a NO vote is a vote to leave in one jump and is therefore a leap in the dark. It would allow NO to portray YES as the truly risky option. This approach would enable NO to build a coalition between a) those who think we should just leave (about a third) and b) those who dislike the EU but are worried about leaving (about a third) and who may be persuaded that ‘Cameron’s deal is bad and we should try to get a better one but the only way to force this is to vote NO’.

This approach would be based on a legal and political fact: a NO vote would not mean that we had, or immediately would, leave. The day after a NO vote our legal situation would be identical to today: we would remain a member. A NO vote might mean the government is obliged to start negotiating to leave, presumably under Article 50, though many questions arise such as – would the PM have to resign, if not how could he credibly negotiate such a deal, and what about the timing given a 2020 election and it may have to happen with a new PM, etc? What a NO vote really means would depend upon what the political parties say they will do and this remains unclear as these issues have not been explored yet.

There is no clear answer to these problems. The conundrum is inherent in the fact that those who want to change our relationship with the EU are operating in a very hostile environment. Campaigners forced David Cameron to have a renegotiation and referendum instead of focusing efforts on building a national movement that could be used by a leader who actually wanted to leave and could therefore do it in an optimal way.

But – we are where we are, the referendum is going to happen. How to maximise chances of avoiding disaster?

Expanding the debate to consider a second negotiation and a second referendum offers potential advantages. It also has potential disadvantages. But as a matter of fact a NO vote does not mean we would immediately leave and it seems likely that the parties will be forced by public opinion to offer a second vote, and therefore this could be turned to the advantage of NO. There is no escape from the fact that ending the legal supremacy of EU law is an extremely complex enterprise, unravelling decades of legislation, legal judgements, and practice. There is no scenario in which all the problems caused by the EU can be solved in one swift stroke.

I have not reached any conclusion. These are the sort of things that need to be discussed BEFORE a NO campaign launches officially. In the euro campaign we pursued Sun Tzu’s maxim – ‘winning without fighting is the highest form of war’ so we tried to stop a referendum happening. The situation now is different and much more dangerous. In such a situation, going along with the conventional wisdom could easily mean losing in a conventional way. The current landscape means the NO side faces disaster if it loses but no victory even if it wins. In such circumstances, it is wise to consider ways to reshape the landscape.

To those who say these discussions should happen only in private, I strongly disagree. Much about a campaign has to remain secret but these big questions are necessarily part of public debate. A decade has been largely wasted. These big things must be confronted now in parallel to establishing a professional campaigning organisation and public discussion raises the probability of the NO campaign getting things right.

Please leave comments / corrections etc below.

Ps. There is also the issue of what happens with the euro and a new IGC/Treaty. It is likely there will have to be one, the Monnetists want one, and they always see disasters in Leninist fashion as ‘beneficial crises’. So there is also the prospect of a UK government being forced to have another referendum on a future Treaty. One way or another, the first referendum is unlikely to be the end of the matter. It takes a long time to correct a huge historical error, if it can be done at all.

Ps2. [Added 28 June.]

In the Sunday Times, 28 June, Tim Shipman writes re Boris reading the above:

‘Boris Johnson is preparing to call for a “no” vote in Britain’s referendum on the European Union in an attempt to extract greater concessions from Brussels than David Cameron is demanding.

‘In a stance that puts him on a collision course with the prime minister, the mayor of London believes Britain should reject any deal Cameron puts forward because the EU will not give enough ground.

‘Johnson has told friends that a “no” vote is desirable because it would prompt Brussels to offer a much better deal, which the public could then support in a second referendum.

‘Johnson said: “We need to be bold. You have to show them that you are serious.”

‘The mayor’s views, shared with friends last week, will send shockwaves through Downing Street. Both the “yes” and “no” camps had assumed that he would support Cameron in arguing for Britain to vote yes.

‘Johnson made the comments after reading a blog by Dominic Cummings, the former Tory aide who is organising the “no” campaign, in which he argued that Eurosceptics should say: “If you want to say ‘stop’, vote no and you will get another chance to vote on the new deal.”

‘A friend of the mayor said: “I don’t think in his heart Boris wants us to walk away. But he’s interested in us saying no because it won’t be what we want. That would mean a second vote. He thinks the only way to deal with these people is to play hardball.” …’

 

15 October 2015

Three columnists have written about this blog today.

1. Matthew Parris in the Spectator.

2. Simon Jenkins in the Guardian.

3. James Kirkup in the Telegraph.

They all have interesting points that I’ll answer when I have some time.

NB. Fans of Colonel Boyd…

DC

by

On the Referendum #5: reports of an anti-EU advertising campaign; Greece, the euro, and predictions

The Sunday Telegraph reports that a group of businessmen, including Arron Banks (the UKIP donor), plan a £20 million advertising campaign in September as part of an effort to win the referendum on the EU.

Brief thoughts…

Contrary to some phone calls I’ve had, this is not an example of ‘Eurosceptic infighting’.

Now, there are no spending limits as the Bill has not gone through Parliament. If a group of rich businessmen want to use this period to spend money persuading people of the problems of the EU and how Britain can do better, good luck to them. The important question is: does their campaign have the right messages so it is persuasive?

The Exploratory Committee that was announced last week is not the NO campaign. As I explained on Friday (here), it is a vehicle to coordinate discussions, raise money etc so that a professional NO campaign can exist. I am talking to people about how this can best be done, raising money, and trying to persuade appropriate people to leave their jobs to do this campaign.

As I have said hundreds of times over the past few weeks and will say thousands of times in the next few months, in order to win the referendum many people with very different views will have to find ways to cooperate. Libertarians, socialists and others have to find common ground. Also, all sorts of people and groups will, quite reasonably, want to do their own thing.

It is understandable that in the absence of an official NO campaign, motivated businesspeople are looking to do useful things. My concern is building the foundations of an official NO campaign in the right way such that it can grow into what will be an unprecedented organisational network over the next year. Scale and complexity require organisational innovations.

Greece, the euro, prediction, accountability

On a different subject, Greece and the euro is much in the news… When I was working on the campaign against Britain joining the euro, we did many debates/events/TV shows etc with people like Adair Turner, Ken Clarke, Heseltine, Peter Mandelson, Chris Patten et al.

Our businessmen, such as Stanley Kalms and Simon Wolfson, argued that the euro had been badly constructed and would cause problems for the existing members particularly Greece and Ireland. Turner, Clarke et al breezily wafted away such fears and said we would be proved wrong.

Almost the only extended conversation I have had with Ed Llewellyn, David Cameron’s ‘chief of staff’, was in a restaurant around 2002 when, I think, he was working for Ashdown. He of course said that the euro was a great idea, would work out brilliantly, and we would inevitably join. He is leading the No.10 renegotiation team.

As people who follow this blog know, one of the themes I have explored a lot is the issue of predictions in politics. Physics is so successful because it has an architecture for correcting errors of prediction. Politics has lacked this. Tetlock’s Good Judgement Project (with IARPA) is the most interesting project I know of to inject rigour into the issue of political prediction in order to improve performance radically.

Now that a referendum is coming, Clarke, Heseltine and others are all over the BBC making predictions about the ‘chaos’ and ‘loss of jobs’ that would come from leaving the EU. Because politics does not operate on the basis of being held accountable for predictions, they are almost never asked anything like – ‘but given your false predictions on the euro, why should we have confidence in your predictions on the EU, perhaps you simply have an emotional attachment to the EU that is not susceptible to evidence?’ In politics, ‘Bayesian updating’ is not fashionable particularly when moral signalling is so strong. Many in the BBC see the EU debate, as they saw the euro debate, simply as ‘internationalists v racists’ which makes them even less inclined to challenge people like Ken Clarke who is routinely allowed to make factually wrong assertions without challenge on the Today programme. I blogged about this in an earlier blog in this series HERE.

In comments below, please leave the best examples of quotes from the likes of Clarke, Turner, Mandelson etc along the lines of ‘don’t worry about Greece and Ireland, the euro will be great for them’. 

 

by

On the referendum #4: An Exploratory Committee and the beginning of a NO campaign

Yesterday, a cross-party group of MPs announced they have formed an Exploratory Committee to help the formation of a professional NO campaign.

Their statement is below with the text of stories in the Sun and Times. Comments [in square brackets like this] are from me. I briefly mention my role at the end.

Statement on the formation of an Exploratory Committee for the EU Referendum

The following have agreed to form an Exploratory Committee for the EU Referendum:

Steve Baker MP

Douglas Carswell MP

Kate Hoey MP

Kelvin Hopkins MP

Bernard Jenkin MP

Owen Paterson MP

Graham Stringer MP

 

The Government is committed to renegotiating the UK’s terms of membership of the EU and to a referendum on UK membership before the end of 2017.

There must be reform of the EU and fundamental change in our relationship with the EU.  The Prime Minister set this objective when he described the renegotiation in his Commons statement of 23 March as “an opportunity to reform the EU and fundamentally change Britain’s relationship with it.”  However, there is little if any indication that the government is even asking for significant reform or fundamental change.

In particular, there is no sign of any proposals either to end the supremacy of EU law over UK law on ever wider matters, or to resolve the question of what should be the relationship between the Eurozone and non-Eurozone states.  This EU supremacy arises from the 1972 European Communities Act, which incorporates all the EU treaties from Rome to Lisbon.  In order to match the Bloomberg commitment, that “it is national parliaments, which are, and will remain, the true source of real democratic legitimacy and accountability in the EU”, the UK’s national Parliament must be able to decide such vital matters as the level of UK taxpayer contributions to the EU budget, what regulations should apply to UK business, how to control immigration from the EU, and the UK’s trade relations with non-EU countries.

Without this, we believe that the best interests of the UK, Europe, the wider world, and the cause of peaceful international cooperation, would be advanced by the UK leaving the EU and pursuing a different relationship with our EU partners.  We still hope, and urge, the government will listen to, and understand, these concerns.

The referendum will be a historic turning point. Both sides will require the creation of substantial organisations to provide voters with a real choice. There are therefore many issues that need urgent attention, including –

  • Legal issues arising from the Referendum Bill (eg. rules for ‘purdah’, the impartiality of EU and government institutions and broadcasters, funding limits, designation of IN and OUT campaigns, etc).
  • How an OUT campaign might best be formed and run to inform the public about the issues.

We are therefore forming a cross-party group to consider these questions. This is not the ‘OUT’ campaign, but we are seeking urgently to provide resources for crucial thinking and to promote cooperation amongst those who might contribute to an OUT campaign.

The Sun, page 1

TOM NEWTON DUNN, Political Editor

Senior MPs from three different parties have joined forces to launch the campaign for Britain to leave the EU, The Sun can reveal.

The Tory, Labour and UKIP MPs’ new group is a major moment ahead of the landmark In/Out referendum, to be held in as little as 12 months time.

David Cameron suffered a major blow last night when three of his most senior MPs revealed they will lead the campaign to pull Britain out of the EU.

Owen Paterson, Bernard Jenkin and Steve Baker also accused the PM of selling Britain woefully short in his bid to renegotiate our membership.

His former Environment Secretary, the ex-shadow defence secretary and prominent backbencher are acting after becoming convinced their party leader is not asking for enough powers back from Brussels.

A total of seven senior Parliamentarians have formed the Exploratory Committee (ExCom) to put together the No campaign and call on Brits to back a Brexit in the landmark nationwide vote.

Also in the group is ex-Labour Home Office minister Kate Hoey, UKIP’s Douglas Carswell and veteran Labour MPs Graham Stringer and Kelvin Hopkins.

The Sun can also reveal the group have been meeting in secret for a month since the general election.

And the MPs have already won major cash funding promises for a No campaign.

Multi-millionaire and former UKIP treasurer Stuart Wheeler has pledged significant support, and conversations are under way with other big donors.

The ExCom’s seven members issued their first joint statement last night, saying: “There must be fundamental change in our relationship with the EU.

“The Prime Minister set this objective

“However, there is little if any indication that the government is even asking for significant reform.

“Without this, we believe that the best interests of the UK, Europe, and the wider world would be advanced by the UK leaving the EU and pursuing a different relationship with our EU partners.”

They added: “We are seeking urgently to provide resources for crucial thinking and to promote cooperation amongst those who might contribute to an Out campaign”.

The group plan to launch the No campaign formally in September.

In a humiliating snub to Nigel Farage, the UKIP leader has not been asked to be a member of the committee.

[It is not a ‘humiliating snub’ to Farage. The group is a group of MPs. By definition Farage could not be on the group. I am sure that the NO campaign will want to work constructively with Farage and that he will think the same. Anything else would be pointlessly destructive. A successful NO campaign will require people with profoundly different views to cooperate in persuading people to vote NO to Cameron’s deal.]

One of ExCom’s first priorities will be to take on the powerful pro-EU business lobby, lead by the CBI.

They have identified outspoken business leaders who want to remain in the EU instead of pro-EU politicians as the most potentially persuasive voice for undecided voters.

In another worry for the PM, who has declared he wants to stay in Europe, Justice Secretary Michael Gove’s friend and former special Dominic Cummings is coordinating the group’s efforts.

Matthew Elliott, Chief Executive of the Eurosceptic campaign group Business for Britain, said: “It’s absolutely right there is a professional, cross-party campaign for ‘Out’.

“If Britain can’t secure the changes we need then it’s vital the case to leave an unreformed EU is made loudly and clearly.”

Mr Cameron will continue his renegotiation talks today with meetings with the leaders of Slovakia and the Czech Republic.

The PM put his case to Irish Taoiseach Enda Kenny in No10 yesterday, who promised to be as “supportive and constructive” as possible.

But the European Parliament’s firebrand boss sparked fury by declaring “Britain belongs to the EU” before his Downing Street talks with Mr Cameron yesterday.

Ultra-federalist MEPs leader Martin Schultz, a German socialist, also warned the PM would not be able to reverse Brussels’ landmark pledge for “ever closer union”.

The Times, p. 17

Tim Montgomerie, Sam Coates, Ashley Cowburn

A cross-party group of MPs backed by a major Ukip donor is preparing to launch the campaign to take Britain out of the European Union.

Secret meetings between three Tory MPs, three Labour MPs and Ukip’s only MP have been held every week since the election. They have agreed to form a committee that they hope will form the basis of the “no” campaign.

Tory MPs on the “exploratory committee” include Owen Paterson, the former Cabinet minister, Steve Baker, chairman of the Conservatives for Britain group, and Bernard Jenkin, the veteran Eurosceptic campaigner. Kate Hoey, Kelvin Hopkins and Graham Stringer represent Labour while Douglas Carswell attends with the knowledge of Nigel Farage, his party leader. The Ukip donor Stuart Wheeler is one of a number of cross-party funders, according to the group.

Dominic Cummings, a former adviser to the Cabinet minister Michael Gove when he was education secretary, has been recruited to oversee the committee.

[No, I am not ‘overseeing’ anything. See below.]

In a launch statement, understood to have been agreed by all seven MPs, they say that they cannot see how the renegotiation will deliver fundamental reform of Britain’s relationship with Europe. It says: “There must be reform of the EU and fundamental change in our relationship with the EU.

“The prime minister set this objective when he described the renegotiation in his Commons statement of March 23 as ‘an opportunity to reform the EU and fundamentally change Britain’s relationship with it’. However, there is little if any indication that the government is even asking for significant reform or fundamental change.”

The MPs add: “In particular, there is no sign of any proposals either to end the supremacy of EU law over UK law on ever wider matters, or to resolve the question of what should be the relationship between the eurozone and non-eurozone states.”

This is a significant hardening of language by Mr Jenkin who, until now, had made it clear he would wait to see what David Cameron achieved in his renegotiation before setting out his position. Separately, Mr Jenkin yesterday poured scorn on Mr Cameron’s drive to stop migrants claiming tax credits. Speaking at the launch of a pamphlet, he said the ban “offers zero hope of achieving the objective of fulfilling our manifesto commitment to cut net migration to tens of thousands. These irrelevances are just distractions. They are throwing sand in our eyes.”

Martin Shulz, the president of the European parliament who met Mr Cameron yesterday, said the tax credit ban was unachievable.

Mr Cummings’ group [it is not my group] plans to target the CBI and other business groups that have been speaking out in favour of continued EU membership.

Mr Cummings ran the Business for Sterling campaign at the turn of the millennium which helped to end the CBI’s cheerleading for Britain’s membership of the euro. He believes the campaign to keep Britain in Europe faces an uphill struggle to win over the public on immigration and Britain’s £11 billion net contribution to the EU.

Matthew Elliott, chief executive of the Eurosceptic group Business for Britain, said: “It’s absolutely right there is a professional, cross-party campaign for ‘out’. If Britain can’t secure the changes we need then it’s vital the case to leave an unreformed EU is made loudly and clearly.”

The businessmen Lord Sainsbury of Turville and Roland Rudd are working with the European Movement to discuss the shape of the “in” campaign.

My role.

I ignored the election because I don’t think any of the main parties are structured such that they can think and act properly on the most important things (this is entangled with Whitehall’s dysfunction and is only partly a function of the EU). Four weeks ago I was studying and working on projects outside politics.

A few people called me including Matthew Elliott and Bernard Jenkin to discuss the EU referendum. I’ve gone to lots of meetings, talked to people about possible lessons from other things I’ve done like the euro and North East referendum campaigns (and mistakes we made), how a professional NO campaign should be structured etc.

Contrary to some media reports, I am not ‘running’ anything. Contra the Times, I am not ‘overseeing’ ExCom. (ExCom is a set of meetings, it is not an organisation, and I do not chair it.) I go to their meetings, listen, and give advice. I am talking to people about whether they would be interested in leaving their job to work for a NO campaign and how they think it should work. It is extremely hard to create political organisations that can take decisions fast and effectively so getting the foundations right is vital. Also, building a national network of small businesses to make the case for NO in their community, so essential to winning a referendum, will take time so people need to start now.

I will not be ‘running the NO campaign’. I am helping people get something started because I want to see the arguments put to the public in as sensible a way as possible. Soon I will return to my studies.

Why do I want Britain to leave the EU?

The EU suffers a combination of huge debts, mass unemployment, a rapidly ageing population combined with unsustainable pension obligations, and an anti-entrepreneurial and anti-technology culture. It has created a euro that damages prosperity, undermines democracy, and encourages extremism. Its dysfunctional bureaucracy is manipulated by corporate interests who like to use the EU machinery to crush competition (just as people from Adam Smith to the democratic left have warned about big business). From public procurement to international trade, our membership undermines good government and sensible policy and wastes billions annually. It is so bureaucratic and slow-moving that it cannot adapt quickly to challenges and is the opposite of the sort of agile institution necessary to cope with contemporary and imminent global challenges – for example, it is so slow moving that it remains stuck with agricultural subsidies dreamed up in the 1950s and 1960s that raise prices for the poor to subsidise rich farmers while damaging agriculture in Africa.

Meanwhile, we need new forms of governance to cope with the spread of markets and technology. We need global cooperation on many issues including profound technological changes such as genetic engineering and robotics. Such cooperation is undermined by the dysfunctional and parochial EU.

Whether they abandon the euro, muddle on, or make a great leap forward to the long planned political union, Britain will do best for herself and Europe and by removing itself from this experiment and showing an alternative path. We could help strengthen international cooperation on the biggest issues facing humanity. By demonstrating the success of a different approach, we could have real influence, rather than the chimera of influence vainly chased by the Foreign Office from meeting room to meeting room since the 1970s – a chase that simply led to concession after concession rather than influencing Brussels to change path.

A NO vote will force a profound rethink of how we organise politically and enable us to develop new systems based on decentralised cooperation and distributed decision-making. This is vital given all the problems the world faces. My 2013 essay and this blog (here) described many of these problems and suggested some ideas about how Britain could place education and science at the heart of its national policy instead of EU membership. This would be far preferable to our current behaviour –  petulant and embarrassing whining and obstructionism on the euro-federalist project, combined with a complete lack of useful alternative ideas born of post-Suez Whitehall defeatism.

We can do much better…

by

On the Referendum #3: The errors of Steve Richards

It will be useful to catalogue pundit comments on the EU and the referendum.

I just saw Steve Richards’ latest column. In it he writes:

‘Step back from the party-wrecking, PM-destroying obsession with Europe and the EU would have to be invented if no one had already done so. Most sceptics hail the single market. The single market needs rules. Elected politicians must agree the rules. Criminals move between borders. In order to catch them, co-operation and common practice is required. Again there needs to be democratic accountability. It is called the EU. There are many other examples of why we need to be part of it.’

This is badly flawed logic and a very misleading elision of concepts.

‘Most sceptics hail the single market.’

Wrong, but never mind the sceptics. Most businesses do not. Polls going back to 2004 show that most British businesses think the costs and problems with the Single Market outweigh the gains and would prefer Britain to regain the power to make our own trade deals and retake our own seat on the WTO – which would bring real influence, rather than the chimera of influence chased by the Foreign Office from meeting room to meeting room. (Cf. ICM poll of 1,000 businesses, April 2004, reported p1. of The Times.) You will rarely hear a hint of this on the BBC which is repeating its terrible mistake of the euro campaign, conflating the remarks of very political businesspeople running the CBI with the ‘voice of British business’.

Many CBI bigshots have very important interests in keeping in with their regulators in Brussels. This partly explains why they cheated their membership surveys on the euro before they were exposed by Business for Sterling in 1999, after which they rapidly had to pull out of the euro campaign in January 2000. BBC interviewers should ask Adair Turner, responsible for some of the dodgier CBI surveys, more about all his rubbish predictions about the euro, particularly his predictions about how the euro’s low interest rates would be great for Ireland (Mandelson ditto).

The public does not buy the Single Market rationale either and hasn’t for at least a decade. In a September 2004 ICM poll, the public were asked which of the following is a more persuasive argument:

a) ‘Common EU rules make trade and business easier, and the Single Market is good for jobs and living standards.’

b) ‘We can trade and cooperate with Europe without giving away permanent control over the economy to politicians we can’t vote out.’

The public agreed with (b) by 72:24. This view was consistent across all demographics.

Outside the fifth of the country who consistently tell pollsters they would vote to join the euro tomorrow, support for staying in the EU now rests almost entirely on fear of the unknown and not on any positive emotion about its benefits.

‘The single market needs rules. Elected politicians must agree the rules.‘

What is the Single Market? It is not a free trade area. It was created mainly by Delors in order to spark further political integration in the EEC, as Delors said himself on many occasions. It was sold in Britain as a trade liberalising project, partly because of the cunning of Lord Cockfield and the Foreign Office in presenting it as such to Thatcher who did not listen to John Hoskyns on the subject. SM rules were created to fulfil a primarily political purpose, not an economic one. The Foreign Office’s propaganda campaign on this subject has many useful idiots.

In my previous blog in this series, Professor Epstein explained the many differences between i) a free trade area based on non-discrimination and ii) a Single Market based on regulatory harmonisation. You do not need ‘rules of a Single Market’ in order to promote trade, as all the other countries in the world know. In many fields, the regulatory harmonisation of the Single Market is far more extreme than that imposed by the federal government on US states.

Many of the rules are there to please big business lobbyists who want to crush their competition – one of the many reasons Adam Smith rightly warned against the power of big business. These rules apply to 100% of businesses despite EU trade accounting for only ~15% of GDP.

The SM has hardly inaugurated the great boost to European growth that was promised. Many attempts to prove its success have failed. Economists have no reliable way of proving whether the theoretical gains outweigh the regulatory costs. A small proportion of companies would suffer problems if we were to leave the Single Market without any transitional arrangements. Others would gain.

Further, membership of the EU and Single Market are different things. Norway, for example, is a member of the SM but not the EU. I am not saying that this is a preferable relationship to EU membership, just that it is a fact that one can be part of the SM without being a member of the EU, so Richards is wrong on another level.

‘Criminals move between borders. In order to catch them, co-operation and common practice is required. Again there needs to be democratic accountability. It is called the EU.’

Many countries have agreements with EU countries on dealing with criminals. Membership of the EU is manifestly not needed to cooperate on international crime, terrorism etc. In fact, by far our closest allies in chasing terrorists are those countries we have had intelligence sharing agreements with since 1945. The intelligence services of these countries meet each other every week in London to discuss such issues – none of the participants are members of the EU and intelligence is shared on condition that it is not passed to EU members.

‘The EU would have to be invented if no one had already done so.’

There are reasonable grounds to prefer to stay in the EU though I do not agree with them. As Blair admitted in the privacy of his notes to Gould, they are primarily political – not economic.

Particularly given modern technology, there are strong reasons to support international cooperation and all sorts of joint efforts. One can support such goals while also thinking that the EU overall undermines effective global cooperation, economic growth, democratic accountability, and the rule of law. One can think, as I do, that one of the reasons why it would be good for Britain to leave the EU is that we could thereby increase valuable international cooperation, and that an entity very different to the EU would do far better at advancing peace and prosperity.

Reasonable people can be pro and anti the EU. Considering it as if it is a priori obvious that the EU is the best way of organising things is a mistake. It is far from obvious. Given the vast corruption, volume of regulation, bought influence by multinationals and trade unions, and the damage to democratic accountability, there are, a priori, many reasons to think a very different institution would be preferable.

*

Finally, SR was a prominent pro-euro pundit. Like others he bought Blair’s propaganda about the wonders of the euro and how inward investment would flee. He wrote in 1998 that ‘I reach a confident conclusion: Britain will be in the single European currency early in the next century’ and he exhorted Blair to ‘start putting the case [for the euro] more enthusiastically’. It would be nice to see some self-reflection from such people about why they were wrong about the euro before they repeat all the same predictions about leaving the EU. (NB. Tetlock’s groundbreaking study – most ‘political experts’ are no more accurate than chimps throwing darts at a dartboard.)

Pundits like Richards are the first to complain when people make spurious arguments about immigration. They should avoid making similarly spurious arguments about the Single Market, international criminals, and the EU – and they should learn from their mistakes on the euro the danger of following SW1 conventional wisdom.

Updated 4 June

On Twitter, Steve Richards said:

‘1/ You were right about the Euro.Those who opposed it deserve huge credit – does not mean EU withdrawal should follow.

2/ UK is part of a bigger EU and no Euro:- The dream of anti-Maastricht rebels. You'[r]e side has won and shd be celebrating.’

Re 1 he is of course right. It does not follow and I did not say it does.

Re 2. I assume he means that the EU is bifurcating into a core-euro/non-core-non-euro organisation which represents a victory for a strand of UK eurosceptics.

While this is preferable to the entire EU = Eurozone, I would not define this as a ‘victory’ or cause for celebration. The problems of the euro are – exactly as they were intended to do by its architects – driving further political integration. While it remains possible that this will prove to be the wonderful success long promised, it is at least a dicey proposition. Many elements of the process seem to me clearly damaging. One that got little attention last year was the sacking of the EU’s chief scientist at the behest of various anti-science political groups. This hardly augurs well for the EU being the Kantian beacon that Brussels claims as its rationale. The enormous structural corruption, from the agriculture policy to Brussels lobbyists, is another reason to doubt the Monnetist claims.

Further, because the Eurozone dominates the EU and the UK is outweighed under majority voting, the Eurozone does many things it thinks are in its interests but which are not in our interests. I would prefer a situation in which we stopped (petulantly and embarrassingly) blocking the euro countries and let them do what they want while pursuing our own path, based on focusing on science and education and the big problems facing us and the wider world.