Sunday, 10 December 2017

EU / UK joint report on Brexit is a blank cheque made of fudge

The EU / UK joint report on Brexit is a fudge. Most glaringly, it has fudged the issue of Ireland, kicking the can down the road yet again. However, unless a way is found to do the impossible of allowing Northern Ireland to be part of single market and outside it at the same time the fudge says:

"In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement."

It also says: "the United Kingdom will ensure that no new regulatory barriers develop between Northern Ireland and the rest of the United Kingdom..."

In other words, the whole UK will remain bound by EU rules forever.

This is not Brexit: just capitulation by a weak and wobbly Tory government!

Now is the time for Brexiteers to declare that no deal is better than this fudge. But Tory Brexit supporters are too scared of a general election and a Corbyn win to rock the boat. Tory flag waver Jacob Rees-Mogg cravenly concedes defeat:
“Arlene Foster saved the day and the Prime Minister has done well to secure a deal that Brexiteers can live with."

Yet again the Tories have shown that they put their own interests above those of the country. It is time for the rest of us to demand the Brexit we voted for.

This EU / UK joint report on Brexit reads as if the whole lot was drafted in Brussels, which indeed it was. It uses EU jargon to muddy the waters and hide the dangers lurking within.

The consequences of this agreement are frightening. Not only will the UK be bound to the Single Market and the Customs Union forever, but also the financial consequences are probably under estimated.

Take one paragraph: "In particular, the value of the RAL, as audited by the European Court of Auditors, will be adjusted to take into account the actual implementation of the Union’s commitments, taking into account decommitments and assigned revenue. The UK opt-outs leading to non-participation in Union programmes existing at the date of withdrawal will continue to apply in respect of the financial settlement."

What on earth does this mean? The RAL stands for Reste à Liquider which, according to the Huffington Post ( http://www.huffingtonpost.co.uk/adam-hamdy/eu-referendum_b_10625150.html ) is "a fancy monicker for the EU's unfunded future liabilities." According to the HP "The EU commits to expenditure on the assumption that member states will continue to fund it. So it might agree to fund a €100 million infrastructure project over three years, but only receive the money for it over a much longer six-year period. This creates a gap between income and liabilities. The original idea behind the Reste à Liquider was to enable the EU to smoothly manage its commitments and not to be tied to receipts from member states."

"The only problem is that the gap between income and liabilities has kept growing to the point where it now stands at around €220 billion (in 2016). Total unfunded liabilities now equate to approximately 25% of the entire EU budget over the last six-year cycle, or over 140% of the EU's annual budget. The liability gap is so large that the ECR Policy Group has warned that the EU may soon be unable to pay its bills. The liabilities are starting to look a lot like an unapproved overdraft that's getting out of control."

The Court of Auditors is so unreliable that they were recently raided by the fraud squad. The EU's finances have never been properly audited, let alone the RAL. So the commitment for the UK to fund all EU expenditure "Committed" before the withdrawal date (according to the EU sometime in 2021) is basically a blank cheque. There is no way that anyone can actually put a figure on these unfunded future liabilities and who knows what additional financial commitments the EU will agree to before 2021. A European Army? The building of the capital of the United States of Europe?
The estimate of a net cost of £36 - £39bn is just a guess. The UK has no legal obligation to fund any of these " future liabilities", so why should we commit ourselves to pay for an unknown figure just to allow the EU27 continued free access to the UK market?

In the last year the UK trade deficit with the EU27 has been £90bn. This will continue and expand if this dodgy deal is allowed to stand. The UK just cannot afford to finance the incompetence of this Conservative minority administration. The country should rise up and demand that as we voted for Brexit, we should have Brexit and have it without this stitch up by the EU.

Tuesday, 5 December 2017

Tory plan for a United Ireland?

The day after the Brexit referendum on 23rd June 2016, I set out my vision on how to achieve a Green Brexit (see below). I think I can safely claim that my planning was considerably more advanced than that of the Tory Government who have looked totally without vision and bumbled from one crisis to another ever since.

One of the positive aspects of Brexit, I predicted, would be a referendum on a United Ireland, a simple solution to the Irish border question. Well, at last, the Tories seem to have caught up, with their proposals for "a continuing regulatory alignment" between Northern Ireland & the Republic, strongly welcomed by the Irish Taoiseach & the EU, but not surprisingly, rejected by the Ulster Unionist Parties. Rejected as it is clearly a first step on a united-Ireland agenda. As both the Tories and the DUP are scared that a general election will see Labour gain power, expect to see a loosely worded re-branding of this "alignment" accepted next week.

Thereafter it will only be a matter of time before Scotland also asks for the same arrangements and new referenda on Irish reunification and Scottish Independence lead to the new paradigm I hoped for.

(You will find my original post from 24 June 2016 in the history of this blog, but I reproduce it below):

Priorities for a post Green Brexit
Those priorities, I believe, should be, as follows:
1. The UK having addressed the democratic deficit in the EU, our next priority should be to address the democratic deficit in the UK. We should call for immediate discussions on electoral reform to give the people of the UK a more representative voting system. We got this referendum because of internal Tory Party squabbles and a weak Prime Minister who promised the EU referendum in the clear expectation that he would not get a majority in the House of Commons in 2015 and not then have to deliver on that promise. Now literally hoisted on his own petard, the Green Party should take this opportunity to attack the electoral system that got him elected with the support of less than one quarter of the electorate and demand proportional representation.
2. Similarly we should renew our campaign for the abolition of the House of Lords and the creation of a new elected senate.
3. The Green Party in England & Wales should support the demands for a new independence referendum in Scotland and a referendum for a United Ireland.
4. One of my greatest criticisms of the position of the Green Party over Europe is that we seemed to have forgotten our basic message of replacing a pro-growth consumer society with a society wedded to conserving our environment. We have been told many times that if the world wishes to avoid exceeding the 2°C, then the wealthiest countries have to adopt a de-growth strategy for a limited period. We should return to our roots and actively campaign for a de-growth economic policy.
5. That would embrace localism in our procurement policies for schools, hospitals and other public institutions, like the military. Making it a virtue of buying local preferably organic food.
6. Step up our opposition to the creeping privatisation of the NHS, especially now that the Tories will no longer have the excuse of EU neo-liberal policies on procurement.
7. Given the new spirit of rebellion engendered in the EU by the UK's unprecedented rejection of the arguments put forward by international vested interests, I believe TTIP is now dead. Obama has already promised that the UK will be put to the "back of the queue" regarding a free trade agreement and we can carve out a unique position by opposing ALL UK free trade agreements.
8. Point out that leaving the EU does not mean that we have to leave the European Court of Human Rights, which is a separate and older institution. Indeed we can champion the Court in our opposition to Tory attempts to water down our rights.
9. Try to develop an electoral pact with the Corbyn wing of the Labour Party, to increase the possibility of a truly socialist and progressive UK Government, to reverse the Thatcherism and austerity favoured by all successor governments since Thatcher, both Labour and Tory.
In this way we can renew and invigorate the Green Party by following this more radical agenda.

Monday, 4 December 2017

Audi Man

What's it with Chuka Umunna and Audis. In the last episode of BBC Question Time (30/11/17), Umunna must have mentioned his preference for Audis half a dozen times. Anything less than an Audi was just not good enough for this Labour MP.

Go back 50 years and Labour MPs had other priorities. Harold Wilson, for instance, felt his challenge was the Balance of Trade. Maximising our exports and reducing our imports was key to economic success in the 1960s. But then came Thatcher and the survival of British Industry was no longer a priority. Indeed the Tories and the neo-Tories seemed to make the destruction of UK industry a priority. The mines, steel, cars, nuclear energy, the UK went from being world leaders to abdicating power to overseas producers. The Tories, for instance, stopped ordering new trains for British Railways three full years before privatisation, putting every UK owned locomotive manufacturer out of business. Now the only manufacturer of trains in the UK is Canadian owned.

Forty four years after Ted Heath took us into the EU, the UK now has a massive trade deficit with the EU27. £90 billion for the last year alone. A whole generation, Chuka Umunna amongst them has forgotten that to import Audis the country needs money. That is why public and private debt is at an historic high. That is why so many UK manufacturers have been sold to foreign companies, using our historic capital to fund revenue expenditure. As any accountant will tell you, using your capital to fund day to day revenue expenditure is a recipe for disaster.

We need Brexit to bring some sanity back into our Balance of Trade. We need to protect and develop UK industry. The new industries of driver less cars and robots need to be built for UK consumers in the UK. Because there are now few items of family silver left to flog off (as former Tory PM Harold Macmillan so famously described privatisation) to pay for our consumerism. We have little credit left to borrow any more money. And we need to jettison politicians like Chuka Umunna, whose primary consideration seems to be the comfort of his backside in his imported car.

Wednesday, 22 November 2017

Democratic Deficits in both the EU and the UK

As an active campaigner during the 2016 referendum I argued passionately for the UK to leave the EU. I campaigned not from the right, but as a member of Green Leaves, the Leave campaign supporting Green Party policies. Until the recent volte-face by the leadership, the Green Party had long been a Euro-sceptic party, its policies reflecting the Party's unease at the undemocratic nature of the EU.

Indeed the number one issue I discussed with voters on the doorstep and in meetings during the referendum was not immigration, but the lack of democracy in the EU.

As the former European Commission president José Manuel Barroso (now employed by big EU lobbyists Goldwin Sachs) said in 2007: “. . . I like to compare the EU as a creation to the organisation of empire. We have the dimension of empire.”

The European Commission is the most powerful pillar of a complicated EU structure. According to the Economist magazine it is "it is the guardian of the treaties, the originator of almost all legislation and the sole executor of the EU’s budget." But its members are appointed rather than elected. From Brexit to CETA it is always the Commission that represents the EU.

The parliament is made up of elected MEPs from across Europe, but it is a weak parliament, with no real power over legislation. Indeed the majority of the legislation drafted by the Commission is not discussed in detail in the EU Parliament before it is enacted. From there it goes directly into domestic UK law. Even arch remainer Nick Clegg admitted that: "probably half of all new legislation now enacted in the UK begins in Brussels."

Meanwhile, EU citizens are led to believe they are voting for true representation in Brussels, when in fact they are voting for a weak Parliament unable to fundamentally change EU policy set by the Commission. Realisation of this has led to disillusionment amongst EU voters. Less than half the EU electorate bothered to vote in the last European Parliament elections. Indeed, many national parliaments have cast doubt on the European Parliament’s democratic credentials, as has the German constitutional court.

The real power in the EU lies with the undemocratically appointed Commission. To put it another way, power is vested in an unelected and unaccountable elite who make laws to preserve the status of their paymasters in large multinationals. Multinationals achieve this preferential status by spending enormous sums of money on lobbying. With over 30,000 corporate lobbyists in Brussels, they are estimated to influence 75% of European legislation. Large numbers of former Commission staff (like José Manuel Barroso) end up employed by these large corporations.

A classic example of this was CETA, the Canadian/ EU trade agreement, which not even MEPs were allowed to scrutinise before its final draft. One of the strongest arguments against CETA and TTIP (the US/EU agreement abandoned by Trump), made by Green Party leader Caroline Lucas and others, was that the structure of dispute resolution, in the form of the Investor-State Dispute Settlement (ISDS) system, was biased in favour of multinational companies. It allowed corporate lawyers to be the final arbiters in disputes between business and governments, usually upholding the right of business to make a profit in all circumstances. Other criticisms of the system are that it’s secret, that it’s dominated by unaccountable big-firm lawyers, and that global corporations use it to change sovereign laws and undermine regulations.

Both Labour and Green Party leaders appear to be ignoring the fact that any new trade deal between the EU and the UK would also have to have a dispute settlement arrangement. It has been shown that ISDS has increasingly become a way for rich investors to make money by speculating on lawsuits, winning huge awards and forcing taxpayers to foot the bill. All of which is a long way from the democratic will of the people.

The democratic deficit in the EU is indisputable, but to be consistent we must also address the democratic deficit within the UK.

Two thirds of the votes cast in the last general election were wasted, in that they made no difference to the outcome of the election.

In the UK's undemocratic "first past the post" electoral system, most constituency MPs are voted in by a minority of the electorate and often more people vote for opposition candidates than for the winner.

The democratic case for Brexit has no legitimacy without electoral reform of the UK parliament to ensure it accurately represents the British people, something this appalling minority Tory government clearly fails to do.

Power should rest not with Parliament, but with the British people. That means not only respecting the outcome of the EU referendum, but also ensuring that Parliament properly represents the electorate in direct proportion to citizens' political opinions. True Democracy depends upon proportional representation (PR).

I cannot agree with the Tory Brexiteer who said that the British people fought in two world wars to uphold the supremacy of the House of Commons. They fought for democracy, which was why the most reforming British government in the 20th century immediately followed World War 2.

The time is right for a new reforming Government, elected by PR and using the limitless possibilities given by Brexit to truly reflect the hopes and aspirations of the British people.

Tuesday, 21 November 2017

The Green and Economically Successful Solution to the UK Trade Deficit

It is one of the great ironies of this world that the most successful capitalist country of recent times is the communist controlled Peoples' Republic of China. The reason for this is not difficult to see. As Irwin Stelzer said in the Sunday Times (19/11/17), "subsidised Chinese Companies have an immense competitive advantage".

As Jeremy Clarkson was so fond of telling us, China has been making knock off copies of European cars for years. How many people realise that the new MG cars now being sold are made by a Chinese company in China? If a foreign company wants to sell cars in China, they must manufacture them there with a Chinese partner, or pay a 25% duty on imported cars.

And yet China has been a member of the World Trade Organisation since 2001, so presumably what it does is within WTO rules?

It is one of the great mysteries to me that the UK does not do the same thing. A 25% import duty on cars would reduce the number of imports and encourage manufacturers to make the cars in the UK. With all parties committed to facilitate the switch from petrol and diesel to electric cars, now seems an ideal time to introduce the measure and ensure the new factories are built in the UK to service our 60 million+ consumers.

Of course, such a tariff is contrary to EU rules, which are designed to help the multi-national companies to source their goods from low wage economies. With 30,000 lobbyists in Brussels, the multi-nationals have ensured that their economic growth is enshrined in EU law. But the UK has voted to leave the EU, which brings forth a multitude of opportunities to have much greener policies. And there is nothing greener than reducing the number of vehicles and the miles they have to travel to get to the customer.

Thursday, 12 October 2017

LIFE AFTER BREXIT - AN ALTERNATIVE TO MOLLY SCOTT CATO MEP's TALE OF DESPAIR

The Sunday of the recent Green Party conference witnessed a further resurgence of "Project Fear" now being resurrected by EU vested interests. In this case it was a speech by Green MEP Molly Scott Cato, who outlined a dystopian future for the UK after Brexit without providing a shred of evidence for her predictions.

So, with the evidence of history behind me, I would like to propose a different view of the UK in the year 2030, an alternative to the doom and gloom predicted by Molly, using the same examples she used, but with a completely different outcome.

The Japanese companies that provided nearly a million jobs since the Tories trashed our manufacturing sector in the 1980s, embraced with open arms the opportunity to work with the National Investment Bank and help manufacture goods and services in the UK after Brexit, rather than import them from low wage economies. Indeed, the "site here to sell here" policy introduced by the Progressive Coalition Government (elected by proportional representation) has meant that the majority of the new electric vehicles sold in the UK are now manufactured in the UK, rather than imported and the number of British manufacturers, particularly of components for renewable energy, has increased. (Vast savings were also made by cancelling the foreign owned Hinkley Point nuclear power station and state investment in offshore wind farms and tidal barrages).

Led by Government owned banks, like RBS and the National Investment Bank, the expertise of the City of London has ensured that banking employment has increased, again with the help of the "site here to sell here" policy which helped to control and localise finance and abolished the right of commercial banks to create artificial debt (positive money). In addition, the aggressive anti-tax avoidance policies introduced after Brexit has outlawed institutions based in countries that actively encouraged tax avoidance like Luxembourg and Ireland and led to a big increase in tax revenues; (also boosted by the introduction of the Robin Hood tax on unnecessary financial transactions across Europe).

As environmentalist Colin Hines described in his book "Progressive Protectionism - taking back control", the UK has re-introduced tariffs, quotas and capital controls, to curb the power of big business to play countries off against each other and threaten to relocate unless the UK bends the knee to open borders and global competition. Similar tactics to those used by China to become the largest manufacturer of goods in the world.

Naturally, leaving the EU as well as the democratisation of the World Trade Organisation (the WTO) has meant that economic growth is no longer the driving force of the UK, but instead a focus on improving the quality of life of its citizens. So free trade deals, like TTIP, like CETA and indeed like the EU single market, are no longer considered necessary.

A Government subsidy to facilitate a switch to more organic vegetable production in the UK, as well as the ability, now that the UK has left the EU, to support agriculture in the developing countries of Africa, has left the UK awash with fresh, healthy vegetables and fruits. Similarly a big increase in animal welfare legislation, banning the factory farming methods so prevalent in the EU as well as banning the use or import of meat adulterated with unnecessary hormones and antibiotics, has led to a big increase in the quality of meat production.

New localism policies have improved prospects for local firms, such as local dairy farms producing milk under higher welfare standards. As a result the health of the nation has never been higher, especially after the big increase in spending on the NHS, paid for in part by the savings made in not having to pay contributions to the EU budget. (There is still debate as to how much that exactly was!)

The un-enforced environmental health standards of the EU, such as for air quality, have been replaced by legally binding UK environmental standards and a big increase in jobs at the Health and Safety Executive.

The border problem between the Irish Republic and Northern Ireland was quickly solved by a unification referendum and the abolition of the border, as Ireland was re-united at last. Indeed relations with all European countries has improved as the UK has stopped stealing staff trained in other countries and instead vastly increased its own investment in training, particularly of doctors, nurses and vocational jobs. With the abolition of tuition fees, universities have once again become centres of learning and not just businesses.

So, no Molly, Brexit does not necessarily mean the Tories continuing in power for the next 13 years. Indeed, we can and should replace the unpatriotic Tories, (whose only concern is to help their foreign paymasters in big business) with a patriotic Government that uses Brexit to put the UK, and its people, first.

Leslie Rowe
October 2017

Tuesday, 3 October 2017

A1 Upgrade?

So, after years of disruption and millions of pounds spent, how is my journey from Brompton on Swale on the A1 improved? It now takes at least ten minutes longer to get anywhere!

The new link road from Brompton on Swale to Scotch Corner is, and will remain, a disaster. Even when the short dual carriageway section is open, the traffic lights at Scotch Corner will ensure a permanent queue as the Barracks Bank traffic from Skeeby and Richmond collide with those on the new link road.

Once again the Tory Governments, both local and national, have proven themselves to be inept. The story of this A1 upgrade is a classic example. The first build scheme was scrapped at a cost of millions of pounds in the first round of austerity, only to be resurrected two years later at an even higher cost. Throughout, the emphasis has been on improving the experience of through traffic at the expense of local residents. Consequently access roads have been closed and local traffic diverted.

The road itself is months overdue, with the A6136 bridge at Catterick Bridge still not open, a year after it was promised. Again local people are at the back of the queue when it comes to planning. And the road itself, when completed, still dips into valleys so that the problem of flooding on the A1 will remain, despite all the dangerous stagnant pools now lining the road.

Just why anyone, watching the ineptitude shown in the planning of this road, or in the Brexit negotiations or the gradual dismantling of the NHS locally (despite the crocodile tears of the usually absent local MP Rishi Sunak) can still vote for this bunch of clowns called the Conservative Party is beyond me.

Wednesday, 2 August 2017

A Green Alternative after Brexit

It was after viewing Paul Mason's "Why it's kicking off everywhere" (Young Vic production broadcast on BBC 2), that I realised why I have become so disillusioned by Green Party and other so-called left wing leaders in recent years.

I remember well the pride I felt as a member of the Green Party, at its support for the newly elected Syriza government in Greece in 2015 and Syriza's fight with the EU over austerity. The shenanigans of Goldman Sachs had been exposed, including its masking of Greece's debt by cross currency swaps, facilitated that country's ill fated adoption of the Euro in 2001.
(Although the EU have never punished Goldman Sachs for this deception, indeed many Eurocrats go on to careers at GS, including the former president of the EU Commission, José Manuel Barosso).
But, as Paul Mason shows in his excellent play, the EU beat the Greeks into submission by closing their banks and threatening them with starvation. Which is why I find the current Green Party leadership's uncritical attitude towards the EU and its "statist oligarchy" (Simon Jenkins) a complete mystery. The Greens exist to promote localism and the devolution of power, yet they refuse to challenge an EU that is about the centralising of power.

A left wing environmentalist and anti-capitalist political movement would surely welcome the UK leaving the EU and striking out on its own? Not to follow the Tory line and negotiate ridiculous trade deals, the dangers of which were laid bare in the debate over TTIP, only then to be meekly accepted by the EU in their Canadian Free Trade deal, CETA. Dangers which would undermine environmental standards (such as imports of chlorinated chickens from the USA) and leave democratically elected governments open to be sued by corporate interests in kangaroo courts (CETA rebranded the politically untenable investor-state dispute settlement system (ISDS) as an “Investment Court System” (ICS)).

Our oldest trade deal, the EU Single market was established in 1992, but has singularly failed to improve our economic position in the world. UK goods exports to the 11 fellow founding members of the Single Market grew over the years 1993-2015 at a compound annual growth rate (CAGR) of just 1.0 per cent. This compares unfavourably with the mean growth rate of the goods exports of Canada, Japan, Singapore and the US and 10 other non-member countries trading with the same 11 founding members under WTO rules, who had a CAGR of 1.93 per cent, which is almost twice as high. It also compares unfavourably with UK goods exports to the 111 countries with which it trades under WTO rules. These have grown over the same 23 years nearly three times faster, at a CAGR of 2.88 per cent. (Source: Michael Burrage, Senior Research Fellow at Civitas).

No, what is needed is a form of the ‘Progressive Protectionism’ proposed by environmentalist Colin Hines in his e-book, ‘Progressive Protectionism – taking back control’. This would involve the UK introducing a set of interrelated and self-reinforcing policy priorities:
. Replacing international trade competition and export dependence with protective safeguards to ensure revitalised local and national economies. These will include the reintroduction of tariffs, quotas, capital controls and the ability to strengthen constraints on the numbers and pace of immigration. Hines describes this as the fundamental "mind wrench" that will do most to curb the present power of big business to play countries off against each other and to threaten to relocate unless countries bow the knee to open borders and global competition.
. Introduce a site-here-to-sell-here policy for manufacturing and services domestically or regionally;
. Control and localise finance such that the majority stays within the UK;
. Control the numbers, rate and ability of new immigrants to stay and work temporarily or permanently;
. Reinforce a minimum wage and outlaw zero hours contracts to stop undermining living standards;
. Introduce fairer and socially positive taxes and resource and pollution taxes and tackle aggressive tax dodging nationally and globally in order to fund social and environmental improvements and help pay for the transition to permanent, sustainable and flourishing local economies. For instance, all businesses that traded in the UK would have to pay corporate taxes in the UK and not be allowed to export profits by imports of over-priced services and goods;
. Increase democratic involvement both politically and economically to ensure the effectiveness and equity of the movement to more diverse local economies;
. Implement a local competition policy to eliminate monopolies, or if inevitable, like in the water industry, to bring them back into Government control, by nationalisation.
. Indeed to renationalise industries, such as the railways, where privatisation has singularly failed.

Although Hines argues this approach on an EU wide basis, the neo-liberal consensus in the EU (directed as usual by Goldman Sachs and other lobbyists) would never allow it. Indeed the strategic plan for the EU, as described in the ‘Five Presidents’ Report’, talked about 'a deepening of the Single Market'.
On 22 June 2015, the Commission described what new powers it wants when it published a key report: ‘Completing Europe’s Economic and Monetary Union’. Dubbed the ‘Five Presidents’ Report’, this document commits the EU to the creation of a ‘genuine Economic Union’, a ‘Financial Union’, a ‘Fiscal Union’ and a ‘Political Union’ by 2025.

However, it could work at a UK level after Brexit, if we were willing to reign in the power of the multi-national corporations and take back our own economy. The UK's massive trade deficit (£70 billion p.a. on average with the EU alone), is not sustainable, even in the short term, as the UK economy goes further and further into debt to fund our massive net import bill. These figures also do not take into account the money sent back by the millions of EU citizens working in the UK. Often a source of cheap labour to undermine wage levels in the UK and negate the UK's need to train its own citizens. Don't believe the lies being told about full employment in the UK. In reality, about 21.5% of British workers are either officially unemployed, inactive, or employed part-time even though they really want full-time work (see http://www.businessinsider.fr/uk/unemployment-in-the-uk-is-now-so-low-its-in-danger-of-exposing-the-lie-used-to-create-the-numbers-2017-7/).
We would need to shift economic policy away from "open markets". In place of that discredited system of global economic governance, the UK would take back control of the scale of capital, goods, services and people entering and leaving our country.

More importantly, it would allow the UK to take the drastic action needed to control pollution and lead the fight against climate change, by being an example for the rest of the world to follow.
One of the greatest criticisms of the position of the Green Party leadership over Europe is that they seem to have forgotten our basic message of replacing a pro-growth consumer society with a society wedded to conserving our environment. We have been told many times that if the world wishes to avoid exceeding the 2°C, then the wealthiest countries have to adopt a de-growth strategy for a limited period. This involves a move away from consumerism and towards social awareness. Replacing fast food and German cars with investment in the NHS, social care and local production.

The goal, as described by Hines, is to allow an economy to rediversify and prosper by maximising local economic activity. Domestic businesses and funding sources would then meet the needs of the majority in society. For instance by Government supported local investment schemes, perhaps by switching Quantitative Easing away from bonds (which just makes the rich richer) and into medium term infrastructure investment.

Or the Green Housing scheme that the then Green Party leader Natalie Bennett singularly managed to fail to explain during the 2015 election campaign. This involves spending seed corn money to build and rent out social housing, then using the rent revenues to facilitate further house building. This and other social investments would help to reduce inequalities and power imbalances, improve social welfare and job security and protect the environment. We could take back power generation by local investment in solar and wind electricity generators, which would also avoid the waste of transmitting power over hundreds of miles (50% of electricity is lost in transmitting it over power lines). It would also bury forever the arguments for allowing foreign interests to build new and ridiculously expensive nuclear power stations.

Across the world people are fighting to be more independent, not less so. They crave democracy and accountability; want to see their identities and cultures live on. The European Union is not new and it is not progressive, "its trail winding back to the Roman Empire" (John King). Britain needs to look to a radically alternative future, in the interests of its citizens and as an example of an alternative economic system for the rest of the world to follow.

Tuesday, 28 February 2017

Proposals for Tax Reform after Brexit: VAT

This is the first of a series of proposals from me, to enhance the UK after Brexit. It is NOT Green Party policy, but I would like it to be!
Value Added Tax (VAT) in the UK is a tax on spending with numerous exceptions, which makes it a complicated system.
There is a strong argument for reform of VAT after Brexit, in particular in relation to imports. Currently VAT is charged on some, but by no means on all, imports. However, the VAT charged on imports can be set off against VAT charged on subsequent sales, i.e. it is fully recoverable if you are VAT registered.
After leaving the single market, the UK will be free from EU VAT regulations. My proposal consists of three stages:
1. Reduce the VAT rate to 15% from the current high level of 20%, which would reduce the cost of all purchases, both imported AND UK produced, by about 4%.
2. Put VAT on all imports, most importantly on overseas service and management charges, which are used by offshore companies to avoid UK corporate taxes. VAT would also be imposed on all food imports, including the over-pricing of commodities by multi-nationals, which is also used to avoid taxation, and on meat. This would be a disincentive to the long distance transfer of foodstuffs (and animals)and encourage more local production, upon which VAT would not be charged. It is also likely to reduce meat consumption, in favour of locally produced vegetables.
3. Stop VAT on imports being recoverable. This would undoubtedly increase the cost of imports, but it is likely that:
(a) it would be an incentive to produce more goods and services locally in the UK and reduce the record levels of imports, now running at £582bn a year;
(b) it would be allowable as a business expense, thus being partially mitigated for importers by a reduced corporation tax bill (if they pay their taxes);
(c) competition would encourage importers not to pass on all of the extra costs to their customers, to avoid being priced out of the market;
(d) the extra cost to consumers for imports would encourage people to prefer locally sourced goods and services;
(e) the extra cost to consumers would be more than mitigated by the overall reduction in VAT on ALL their purchases, both imports and locally sourced;
(f) be a major disincentive for tax avoidance using charging for "fictitious" overseas services, such as management costs or over-priced commodities.
(g) it would, at current rates, bring in an additional £80bn+ in revenue to the UK treasury, which could be used to improve the NHS and social care;
(h) it is likely to reduce consumption overall, as part of a "de-growth" economic strategy, which was recommended for economically developed countries,after the 2013 climate change talks in Warsaw.
Such a change would challenge EU rules and would probably flout World Trade Organisation (WTO) rules as well. But it would be in line with the Green Leaves proposal to shun all free trade agreements, like TTIP and CETA.
However, it is also likely that retaliatory action might be taken by other countries, in the form of tariffs on UK exports, but as imports to the UK outweigh exports from the UK, this is something that can be negotiated favourably on a bilateral basis with each country or trading bloc, particularly the EU, whose exports to the UK are already £70bn more than the imports from the UK.