Wednesday, 31 August 2016

The Irish Apple hoo-hah

There is something very troubling about the "ruling" of the EU Commission that a company that has a base in Ireland should pay more tax than the laws of the Republic of Ireland require to be paid.  That the company is a hugely profitable international enterprise with its home in the USA is neither here nor there.  The Commission has decreed that carefully and deliberately drawn laws of a member state of the European Union are not acceptable and must be replaced by something the Commission considers better.  

The magnificent Mr Paine has written on the subject ( and I agree with every word he wrote.  I want to look at the matter in a different context.  

Mr Paine's argument is that the UK can benefit enormously because international corporations could find an advantage by basing themselves here in the post-Brexit world rather than being subject to the risk of capricious retro-active laws being imposed by what remains of the EU commisariat.  He is undoubtedly correct.  

I respectfully suggest that two consequences can follow from what the EU Commission has done, neither of which will further the European Union "project".  The first is that the Republic of Ireland (and possibly other states) might consider it an appropriate reason to consider whether their own membership of the European Union is sustainable now that the Commission has made clear that it considers itself a better judge of domestic tax laws and, therefore, of domestic economic policy than the nation states that form the EU.  The second is that international companies, whether based in the USA or elsewhere, will have to think very carefully about establishing in EU countries now that they know their liability to tax (and, no doubt, to other policies that are bad for business) can be changed at the whim of the unelected Eurocrats.  

It is, I think, important not to get too excited about this issue.  As things were believed to be before the Irish Apple "ruling" international companies trading in any democratic country, EU or not, were at risk of changes of governments and changes of policy.  Included in what can properly be called the "democratic risk" was the risk that a new government would take a radically different approach to taxation that would negate the whole basis on which the company trades with that particular state.  We know that risk always exists because we have seen it so many times - every time it involves the populace electing a government that is opposed to the very idea of the market being the determinant of business success.  They always call themselves socialists when in fact they are the particular brand of socialism that is known as fascism.  It has happened all over the world and it can happen in an EU state if the people decide that is what they want.  Fair game, people can vote for whatever they want but they have to face the consequences.  I will chip-in with the obvious point that when the poor vote for the fascist form of socialism they are always the ones who lose the most; at least reality gives them the chance of thinking about what they have done and changing their choice at the next election.  

The context of the Irish Apple issue I want to address is something rather different, something more fundamental about the whole EU "project".  The Commission's "ruling" is, I believe, the clearest example yet that the EU "project" requires the elimination of the nation state.  It is one thing for the EU to make laws requiring uniformity in the regulation of health and safety rules at work or setting standards for the state fruit and vegetables should be in before they can be sold to the great unwashed.  It is something wholly different for it to rule that one nation state cannot adopt taxation policies that might give it an economic advantage over other EU states that choose a different tax strategy.  

Behind this is the need to eliminate competition between EU states in relation to their dealings with the rest of the world.  The government of the Republic of Ireland has adopted business taxation policies that it believes will be of the greatest benefit to the people of Ireland.  Whether those policies are or are not beneficial to the people of Ireland can only be tested over time, but they have been adopted because the Republic of Ireland is a democratic nation state and it is for the people of that state to decide at the next election whether those policies should remain or be replaced by whatever alternative(s) are offered at that election.  

The EU Commission clearly believes that decision is not for the electorate.  It believes, as all forms of unelected dictatorship have believed throughout political history, that it knows better.  Maybe it does, maybe it doesn't, but whose decision should it be?  On something as fundamental at business taxation - something Ireland itself proves to be a major factor in attracting business activity to a country - there is a stark choice.  Either it is for the nation state or it is not.  If it is not, the very concept of the nation state becomes redundant.  

My mind is taken back to one of the big television debates held prior to the referendum.  I think it was hosted by the BBC.  On the "remain" side there was a woman who holds a senior position in a trade union or possibly in the Trades Union Congress.  I cannot remember her name.  She bleated on about how leaving the EU would destroy what she quaintly referred to as "workers' rights".  I listened to her whitterings and was incredulous that those debating against her did not make the most obvious retort.  If our Parliament - that bunch of people who stood for election and were returned to our Parliament to make our laws - wanted to change "workers' rights" laws they have every right to do so.  The changes might or might not be welcomed by the trade union whitterer, but they will be legitimate changes because they are made by our Parliament.  

We now know that the legitimacy of laws passed by democratically elected parliaments of nation states is not recognised by the EU Commission.  Some of us will say we have known it for a long time.  The Irish Apple "ruling" is undeniable proof that the EU "project" involves the destruction of the nation state.  

Tuesday, 19 July 2016

Where has all the chaos gone?

So here we are, approaching a month since the modest victory for Brexit at the referendum.  

Something that might or might not have been surprising was in the headlines for several days.  Apparently it's generally known as "buyer's remorse" these days.  People who voted leave were spread around every pore of the BBC telling us what a dismal thing they did because the country was plainly collapsing around their ears and all because the UK voted to extricate itself from the European Union.  Calls for another referendum were promoted by the State broadcaster at every opportunity. 

In a way it was surprising because the vote actually changed nothing constitutionally or economically, we were as much in the EU on Friday the 24th of June as we were before the polls opened the day before.  We had not exited the EU, we did not find our exports to and imports from EU countries subject to tariffs, we did not need visas to visit countries in the EU and their citizens did not need visas to come here, citizens of other EU countries living here did not need to leave and Brits in EU countries were not expelled.  

That, however, does not reflect the rhetoric employed by both sides of the "official" leave and remain campaigns.  Overstatement is often the currency of politicians, no doubt it has always been so yet when there is only one issue at stake it is perhaps inevitable that it will be amplified and each side will say voting against them will result in disaster.  That, of course, cannot be said in a vacuum, it must be backed by reasoned argument and under the scrutiny of questioning by both journalists and, more tellingly, the ordinary people it is probably impossible to resist putting flesh on the bones even though no one on either side was in a position to know what that flesh should be.  

Extremes were promoted on both sides.  Very silly extremes spouted in the hope people would be fooled rather than in the expectation they would ever prove to be accurate.  

And so it was that remainers panicked and reacted to wobbles in the share and currency markets as proof they had made a disastrous mistake.  That reaction is no more rational than the silly exaggerations employed by both leavers and remainers during the campaign.  Now things seem to have calmed down.  

The swift-ish ascendance of a new Prime Minister appears, so far, to have led to a further thinning of mindless panic.  I have to confess that my initial hope was that Mrs Leadsom might be up to the job but she went desperately flaky when the going got tough and had the good sense to leave it to Mrs May to do her best.  Mrs May has the advantage of not having to face a Parliamentary opposition except from the neo-Communist Scottish National Party whose representatives in the House of Commons really are piss-poor.  

My local MP is someone called Jeremy Corbin.  I last saw him on the day of the London mayoral election when he was outside my polling station with a couple of similarly wispy-bearded, middle-aged, naive, scruffy Trots.  He and they approached certain voters but, in a rare example of good judgment, realised their time would be wasted on me. 

I sometimes wonder whether Mr Corbyn knows that the mass migration to Labour Party membership comprises predominantly two categories of people: (i) some opposed to hard-line Socialism who have joined to ensure he remains leader and, thereby, ensure Labour is unelectable and (ii) rather more who are even more hard-line Socialist/Communists than Mr Corbyn.  Whether the latter group really think a policy platform that would make Enva Hoxha envious would make Labour electable is an open question, the religious nature of Socialism/Communism makes me think they probably do.  Not only does the SNP have piss-poor MPs, Labour has two piss-poor people trying to stand against Mr Corbyn.  Angela Eagle has, through her tears, proved herself at least as flaky as poor Mrs Leadsom - far too emotional to take serious decisions on any big issue.  Her opponent, whose name eludes me because I don't think I'd heard of him before the last few days, seems to have few policy platforms to distinguish him from Mr Corbyn and no public profile.  

That's where the chaos seems to be this week.  Things might change next week but I doubt they will.  

The noises coming from the Cabinet ministers responsible for extricating us from the EU and making new trading agreements with countries outside the EU are exactly what I had hoped to hear.  Securing free trade deals with as many non-EU countries as possible provides, in my view, the strongest negotiating platform against the EU on issues of trade barriers.  

The USA, Canada, Australia, New Zealand, South Africa, South Korea, Brasil and India all want free-trade deals as soon as possible (you can ignore President Obama's suggestion we are at the back of the queue so far as his country is concerned, we are absolutely at the front for recent historic reasons of comity and because it's an easy deal compared to anything they could negotiate with the EU and because he only has months to serve).  How long it takes is impossible to tell, although Australia, New Zealand, Canada and India shouldn't take even a year - and the same applies to various smaller countries who export a lot of stuff to us; for example Chile makes wines we like, Kenya sells us vegetables out of our season, food exports are also an important part of the economies of most Caribbean islands and we buy loads.  China is probably a harder nut to crack, although Hong Kong might be the key because it undoubtedly wants to maintain it's very good trading relationship with this country. 

If, and it is a big if, deals with these and more countries can be agreed in principle the EU's negotiating position will be undermined.  As it is we know we buy far more from them than they do from us so any tariffs are more likely to hurt them than us; and they will all have to pay more into the EU's coffers when we go so they are risking what I believe the young people call a "double-whammy".  

Who knows?  Maybe further chaos will emerge in the months to come.  At the moment the only chaos I see is between a parliamentary Labour party that is far to the left of any that has been electable since 1974 and the Corbyn faction that is so far to the left it makes Michael Foot's famous "longest suicide note in history" seem like a lullaby.  

We'll see what happens, at the moment I am enjoying observing it all  

Wednesday, 24 February 2016

The EU thing

Well, here we are, at long last the referendum is to happen.  

Before the 2010 General Election both parties that formed the 2010-2015 coalition government promised an In-Out referendum.  Of course everything changed when the coalition agreement was forged.  The Conservatives couldn't agree to a referendum because the Liberal Democrats wouldn't agree the terms the Conservatives wanted, and the Liberal Democrats couldn't agree to a referendum because the Conservatives wouldn't agree their preferred terms.  It was all jolly convenient for the career politicians at the head of both parties for whom the European Union was the perfect model for established party elites to be guaranteed not just well-paid jobs for life but also political influence long after they lost electoral support in their own constituencies and countries. 

The repetition of that promise in the 2015 Conservative Party manifesto coupled with that party's win in the election forced the Prime Minister to do something about it.  His chosen course was a renegotiation of the terms on which the UK is a member of the EU and then the presentation of that new deal to the common people of the UK.  

Mr Cameron did not, in truth, have any other option open to him.  Successive manifesto commitments could not be ignored so something had to be done.  His choices were to give us a "take it or leave it" referendum against the existing relationship between the UK and the EU or to try to change that relationship and then offer the vote.  I am happy to accept that he went into the renegotiation on the basis he claimed - namely, with the intention to return certain law-making powers to the UK Parliament.  As it is, he returned with a deal that returns no law-making powers and merely tinkers at the edge of a few minor matters of detail on how existing EU laws will be implemented.  

I must make clear that I am not criticising Mr Cameron's achievements in the negotiation process.  I believe he achieved the absolute most that could be achieved.  He is a clever man, a determined man, a clear communicator and a Prime Minister who wants the best possible deal for the UK.  And therein lies the problem.  Despite his determination to return powers to the UK Parliament and the use of his clever and clear ability to communicate, he achieved nothing of substance.  

He never could achieve anything of substance because of two aspects of the way the EU works.  He was facing not only the self-perpetuating, superannuated bureaucracy in Brussels; he was also facing the honest and understandable national self-interests of the leaders of the other member states of the EU.  The bureaucracy would never allow a return of substantive powers and the other member states would never allow anything to be done to diminish their citizens' access to the benefits of living and working in the UK.  Against this background, to achieve even the tiny change he did is a matter of great credit to Mr Cameron. 

Since the referendum was announced we have been subjected to a bombardment of ludicrous guesswork about how an exit from the EU will affect the UK economy.  The simple fact is that no one knows how it will affect our economy.  Let me give an example of the main arguments I have heard on a central economic issue. 

Those in the "remain" camp assert that we will be excluded from trading with EU countries.  That seems extremely unlikely, although the terms on which we deal with them might well change.  How will they change?  No one knows.  What we do know is that we buy a greater value of goods from the other EU states than we sell to them, so excluding us from trading with them will (in monetary terms) hurt them more than us.  That doesn't mean we will necessarily be allowed to continue to trade without tariffs.  It's something that will have to be negotiated.  Whether - in the short, medium and long term - the UK economy will benefit cannot be predicted.  

Those in the "leave" camp assert, with great confidence, that we will continue to trade as we do now because we buy more from them than they do from us.  That is not necessarily so.  They will be much bigger than us and might use their ability to freeze-out our goods in order to secure a trading agreement which is to our detriment compared to the current position.  

In reality both sides are saying the same thing.  They both say that we will continue trading with the EU but they do not know whether the terms of trading will be the same.  So what?  If we stay in things will change that might or might not benefit the UK.  If we leave things will change that might or might not benefit the UK.  The whole economic argument is a nonsense because no one knows whether the next year of economic activity will be good or bad for the UK, or for France, or for Spain, or for Germany, or for Italy, or for any other country - be it an EU country or one of the 168 countries not currently in the EU.  

For me the most important issue in this referendum is not economic, it is political.  

I believe that the most powerful force in maintaining stability in any country is the general populace having the power to remove its current government and replacing it with another.  Everyone knows that elections every four or five years do not allow Mr & Mrs Ordinary direct power over everything.  They do, however, allow millions of Mr & Mrs Ordinarys to make their decisions and, if, collectively, they are so minded, to remove one government and replace it with another.  

There was, I believe, something very significant in the result of last year's general election.  Despite being bombarded by the BBC and every entertainer and "celebrity" who was given airtime that the Conservative Party promotes the interests of the rich and seeks to oppress the poor, that party was returned with a Parliamentary majority.  It was returned through the votes of people of all ages, races and levels of wealth.  A secret ballot allowing the quiet people to take a decision in private can overturn the consensus view of any self-appointed elite.  

For me the most important issue in the referendum, indeed the only issue of any importance, is the need for the people of the UK to be able to have as much control as possible over those who govern them.  That control occurs not just through the ballot box but also through the ability to influence politicians in numerous other ways.  Some of those ways are affected only very indirectly by the ordinary people, for example they have little direct influence over what the newspapers say and how television and radio stations report issues.  But opinions polls, phone-in programmes and petitions are legion.  In addition MPs attend their constituency surgeries and numerous public events at which views are expressed.  No doubt a huge number of people take no part in any of these means of communicating their views to their governors, nonetheless they are direct means of not only influencing politicians' opinions but also of holding them to account for their previously-expressed opinions.  

If you think our politicians are idiots you might or might not be right.  But they are our idiots and we can, in so many ways, hold them to account.  In my lifetime there have been so many that held high office but were rejected by the little people once they were accountable to Mr & Mrs Ordinary making a choice with a stubby pencil in a voting booth.  They had no right to political power unless it was given to them at an election because government exists for the people and not for the politicians. 

We have absolutely no control over the unaccountable powers of the EU.  We have MEPs but they have virtually no power - they cannot even introduce proposals for new legislation. 

I am a great believer in self-determination.  I believe in it for individuals and I believe in it for countries.  The more the little people have the ability to influence politicians, the more likely it is that those politicians will have to think carefully about every decision they make and the more likely it is that the parish, district, county, constituency and country will be stable.  Influence is not enough, the power to say yea or nae to a particular politician continuing to have the possibility of power is fundamental.  The two most high-profile recent examples are Michael Portillo and Ed Balls - politicians of the highest profile ejected from any political power by the greater power of the stubby pencil in the voting booth.  Long may it continue.  

Whether we stay in the EU or leave, the power to influence our own politicians will remain unless the EU passes laws to the contrary.  I don't expect it to, but it has the power to do so and there will be nothing we can do about it.  I would rather keep that power with Mr & Mrs Ordinary and their stubby pencils rather than with politicians who have been rejected by their own national electorates and been rewarded with more power as part of the EU commissariat. 

Self-determination has kept this country stable for a long time.  Long may it continue.  That is much more likely outside the EU than within.