WE MAY BE ON THE CUSP OF A BOOM (NO, REALLY)

Matthew Lynn (who forecast our growth in 2017 will be far ahead of the EU - see sidebar) is at it again (HERE). He thinks brexit is blinding us to the real danger of an out of control boom!

Mr Lynn seems to be the only commentator actually forecasting this so it may be that he has better foresight than everyone else - or he's just plain wrong.

HANNAN TOPS POLL

Of all the conservative politicians who campaigned to leave, Daniel Hannan has been voted the one who did most to achieve brexit according to voters on the Conservative Home website (HERE). He was way out ahead of anyone else with 40%, almost twice the figure of Boris Johnson in second place.

So, if we have anyone in particular to blame, it is Mr Hannan. He has been caught out on any number of occasions with misleading statements but always refuses to back down. He is an eloquent version of Donald Trump - say whatever it takes to get the job done.

THE CUSTOMS UNION

There seems to almost universal acknowledgement that we will need to leave the customs union if we want to sign up trade deals with other countries. I say almost universal because I came across an article (HERE) where Richard North claims that this may not be the case. In fact he seems certain that we can sign up trade deals according to WTO rules.

What the government or the EU will make of the arguments made I don't know. However, the article does say we would have the pay the difference between the import duty we charge and the CET if we re-export the goods into the EU. So I assume there will need to be customs checks or declarations and this is going to add time and costs.

LLOYDS BANK TO SET UP UNIT IN THE EU

After Lloyds of London insurance brokers we now learn that Lloyds banks is to create a separate unit somewhere in the EU in order to maintain access to the single market (HERE).  I think we can take it as read that they won't be the last.

The London-based lender is targeting either Germany or the Netherlands for the unit, according to the Financial Times.  It is this sort of news that might, just might start some people beginning to realise that brexit holds no good news for our future and they may think again about leaving.

IPPR REPORT PAINTS BLEAK PICTURE FOR UK

The IPPR has published a report (HERE) suggesting that by 2030 we will be more unequal and blighted by the impact of brexit. The Institute For Public Policy Research think tank said the decision to leave the European Union had delivered a “profound shock” to Britain. It claimed this could see the country into lasting lower growth.

The Guardian reports on it HERE and The Independent HERE.

This makes devastating reading for the brexiteers but you can bet they will again claim it's all scaremongering,

NEW LEGAL CHALLENGE OVER EEA MEMBERSHIP

If the government didn't realise the legal complications before they certainly do now. A new legal challenge is being made (HERE) concerning Britain's membership of the EEA. The challengers maintain parliament (assuming the first challenge is upheld) needs to separately approve our withdrawal from the EEA.

The background to this is HERE.

There is no majority in either house for us to leave the single market so this approval may not be forthcoming and we may yet have a Norway style membership.

MAY LACKS COURAGE TO EXPLAIN REALITIES OF BREXIT

In a remarkably astute piece, the head of the First Division Association, Dave Penman says the PM is struggling to find the political courage to admit there will be difficulties with the brexit negotiation (HERE). He says the civil service is not going to be able to fulfill all of the ordinary policy agenda and cope with the brexit negotiations which are said to be the most complex we have ever undertaken. The civil service is at its smallest for many years but faces a huge task. The BBC report it HERE

I have always thought that this is what will happen.  Davis, Fox, Johnson, Gove and all the others will never admit to having any doubts and will take us all over a cliff if it means saving face. We are all going to pay a very high price for their face.

GOVE DOUBLES DOWN ON NHS PLEDGE

In an amazing display of hubris Michael Gove (HERE) he claimed the £350m a week figure was robust and argued it could not yet be proved true or false because the UK had not yet left the EU. “The money is there and it’s for the government to decide how to spend it once we leave,” he said.

This is the man who has been claiming for months that all the economists (or rather the majority and especially those who argued remain) have been proved wrong. Note, not that their claims have yet to be proved true or false, but that they were wrong, full stop.  I cannot wait for the day he is confronted with all the lies and hypocrisy.  

Mr Gove is a dangerous simpleton. He looks as if he knows what he's talking about when patently he does not and this is what makes him dangerous. He now says his earlier remarks about experts were "unfairly quoted" and he been referring only to a “sub-class” of economists and pollsters.

“In the now notorious comment that I made..the point I made is not that all experts are wrong, that’s manifestly nonsense – expert engineers, expert doctors, expert physicists" are now it seems OK.

CHANGE BRITAIN'S FIGURES RIDICULED

Response to Change Britain's "research" (see HERE) has been utterly scathing. Any number of expert economists including Jonathan Portes have joined forces and described it as junk (HERE).

The Independent suggest rather mildly that we should take it with a pinch of salt (HERE) while Sam Bowman of the Adam Smith Institute describes the claims of £450 million a week as "complete rubbish" (HERE). Richard North at EUReferendum says it isn't even research (HERE) and muses on how some of the national press even accepted it.

The Lib Dems say the figures are fantasy (HERE) and (HERE). It turns out the figures are even worse than I thought.  The basic savings in EU contributions don't even exist as Richard North points out in this well argued piece (HERE).  And in the "savings" from dumping EU regulations the number has been whittled down from the £32Bn originally suggested by Open Europe before the vote, to £1.2Bn of which £1.0Bn is saved by doing away with the Data Protection Act!!  The remainder is from some supposed EU regulations governing motor vehicles which actually comes from the UN and which we couldn't save anyway.  Stunning!

What is worrying is that this is the best they have to offer. These are the supposed benefits accruing from brexit and none of them are anywhere near being possible or even reasonable.

CHANGE BRITAIN - SAME OLD LIES

Change Britain, one of the successor organisations to Vote Leave have published a "report" (HERE and HERE) claiming we would be better off by £450 million a week or £24 billion a year if we go for a "clean brexit", that is leave the single market and the customs union. The so-called report is a bit simplistic and assumes our trade with the EU suffers no damage at all!  This is an amazing (but unspoken) assumption made in the report which only calculates savings in EU contributions and regulations plus increased trade with other countries. The Guardian's take is HERE. It seems like they are simply continuing their dishonest campaign and are determined to see us out of the EU regardless of the economic damage.

The regulatory savings include thing like Batteries and Accumulators (Placing on the Market) Regulations 2008; Waste Batteries and Accumulators Regulations 2009 which they claim would save £17.53 million a year.  But it would also presumably make it impossible for any UK manufacturer to export to the EU. The same applies to Welfare of farmed animals.  The alternative is for UK companies to have two sets of regulations to follow!

The Huffington Post (HERE) notes that the OBR said we would be worse off by £122 billion by 2020.

And now this morning the BBC reports (HERE) that prominent leave campaigner John Longworth has written to all 27 EU members Chambers of Commerce, urging them to pressure their government to allow free trade to continue. If I was in one of these chambers I would firstly think he has amazing chutzpah considering he campaigned hard to get OUT of the single market free trade area and secondly I would be concerned that Britain doesn't want to follow the rules but prefers to try and undercut companies in Europe by reducing standards - which would be very unfair.

ECJ RULING ON SINGAPORE MAKE BREXIT HARDER

The ECJ has today published the opinion of its Advocate General (HERE), stating that the EU-Singapore Free Trade Agreement ‘can be concluded only by the European Union and the member states acting jointly.  Although the ECJ has to finally rule on this, it would be a surprise if they found the Advocate General (a British woman by the way) was wrong.

This means almost certainly that our future trade deal (if there is one) will be deemed to be mixed and will require ratifying by all the member states as well as the commission. The job of the chief negotiator Michel Barnier just got a lot more difficult with far less room for compromise.

THE QUEEN BACKED BREXIT (SAY THE BBC)

The BBC are reporting that the Queen backed brexit although the palace is refusing to comment (HERE).  As you might expect the brexit newspapers have all seized on this as if the Queen, however much we might respect her, is some kind of super authoritative economist whose opinion trumps that of The Treasury and the 95% of economists that think we will be much worse off.

I am afraid her opinion is just that. An opinion, and just as wrong as all the other leavers.

Some papers I note are arguing that we will be better off by 2030 compared to where we are now. But this misses the point. If our competitors are becoming wealthier it is no comfort that we are also getting wealthier, but just not by so much.  We cannot afford the standard of living we have at the moment and any reduction is income is not going to improve matters.

PROSPER LIKE NEVER BEFORE - WE SLIP TO SIXTH IN GDP TERMS

Six months after the vote and with very little idea of what our future holds, far from prospering like never before we learn we have officially slipped into sixth place behind France in the world GDP league (HERE).  The Independent's take on it is HERE

And although we are expected to get ahead of the French again by 2021, we will both fall behind India and Korea and we will be in eighth place by 2030.  And remember, this is before the Trump presidency with all its protectionist rhetoric or the brexit negotiations have even started,

US TRADE DEAL

After the vote and during Trump's election campaign we were told that far from being at the back of the queue for a trade deal we would be at the front. Farage in particular made this claim.

Now we learn (HERE) and (HERE) that the man appointed by Trump to be his trade secretary, Wilbur Ross, made a speech just after the brexit vote where he urged other countries to take this "God given opportunity" to take a slice of Britain's financial industry which he said would inevitably relocate.

Farage, like others in the brexit press, seems to think the world owes us something and will be bound to give us a good deal. No.  They will look after their own interests and will do the dirty on us at any and every opportunity. We will soon see what international friendships mean.

SELF DELUSION IN THE PRESS

Both The Telegraph (HERE) and The Spectator (HERE) and probably others too, have run editorial pieces this week exhorting everyone to be optimistic about Britain’s future outside the EU. Like Mrs May they now expect remainers to do a volte face and become enthusiastic leavers. This is not going to happen.

In many ways the journalists who produce these pieces have little or no idea what they are talking about but have an infinite capacity for self-delusion, a bit like England football supporters. No matter what the evidence of past performance is they continue to have an unshakeable belief in the team. They both seem to forget what life was like in the late 60s and early 70s and why we joined the EU in the first place. 

At least then we had industries like steel, cars, tyres, motorbikes, cement, energy, chocolate and a host of others. They are now either gone or are foreign owned. If we were unable to succeed then how on earth do they think we'll do it now?

CHRISTMAS SUMMARY

There was a bit of good news (apparently) just before Christmas with newspaper polls in the West Midlands and Sunderland (HERE) showing a huge swing to remain. They were dismissed as unscientific but at least they don't show a swing to leave!

The Independent claimed, after an interview with the head of the Irish agency trying to attract businesses to Ireland, that more than 100 companies are enquiring into a move and "dozens" of them are actually planning to relocate (HERE).

Roger Bootle of Capital Economics says pundits need to eat some humble pie over Christmas (HERE) but I hope that one day we will be able to ask him to eat all of it.  Mrs May in her Xmas message has urged everybody to unite behind brexit (HERE) but I think she seriously underestimates the depth of pro-European feeling.  We are not going to become believers in brexit - ever.

And finally Mervyn King, former BoE governor has once again shown he is not an economist and has no idea how the British economy works, says we should be optimistic about brexit and we should leave both the single market and the customs union (HERE). Some people are born fools.

THE EU AND 100 AGENCIES

In one of the reports published today for The UK in a Changing Europe, it was mentioned that when we exit the EU we will lose access to over 100 different agencies that oversee various aspects of life in the UK. This struck me as an enormous number but it is apparently true. Many people I speak to and articles I read in the right wing press think the EU do nothing and the money we pay is all wasted.

When we have to recreate these agencies we will find out exactly how much we rely on the EU.

ANDREW MARR - AN OPTIMIST FOR BREXIT

Andrew Marr has written a piece for The New Statesman (HERE) titled An Optimists Guide to Brexit which demonstrates perfectly why journalists should stick to talking about things they know. 

He says we should be optimistic about our future prospects and thinks the government should have a more "direct influence on business and industry generally" something he says "politicians have been talking about since the 1970s, from Harold Wilson to George Osborne, to relatively little effect".

He talks about the "lack of German-style support for industrial manufacturing" and "Some of the measures the left would like to take to support and protect the steel industry, or engineering, or to enhance our growing advantage in robotics, are made impossible not by British Conservatives, but by EU regulations on competitiveness and state funding".

One can only shake one's head at the sheer wrongheadedness of it all. If he thinks Germany's success is all down to government support and that we have a growing advantage in robotics he is truly living on a different planet to the rest of us.  Either he has made it all up which would be bad enough or he's been talking to industrialists who think like that, which would be even worse.  As for the government influencing things - God help us!

BREXIT 6 MONTHS ON

The BBC's Mark Easton has written an article about what he thinks prompted the leave vote. You can read it HERE.  He says brexit is rewriting the political map with conservative and labour areas voting the same way and is particularly struck with Port Talbot an area that has benefited a lot from EU funding bu has very low levels of immigration.

He thinks they vote against a global elite who make decisions about their lives from faraway places. Mr Easton may well be right but his conclusion is wrong.  Tata would not interfere if Port Talbot made a profit - in the way that Nissan don't interfere in their highly successful Sunderland plant. And note Sunderland also voted to leave.

I believe much of Port Talbot's problems are the age old British problem of low productivity and a belief that the world (i.e. The Global Elite) owes us a living.  Tata make decisions because they are having to send a lot money every month to keep the plant going and who can blame them?

Also, there is an interesting report from The UK in a Changing Europe (HERE) about the progress or lack of it since June 23rd.  Sky News (HERE) quotes from it saying the EU thinks we are still living on fantasy island - and Mark Easton shows we are. 

John Curtice says in the report there is little evidence of people changing their mind - but let us see where we are this time next year.

SCOTLAND PUBLISHES BREXIT PLAN

Nicola Sturgeon has published Scotland's brexit plan (HERE) which involves Scotland remaining in the single market even if the UK as a whole decides to go for a hard brexit.  Whether this has legs or not remains to be seen but it has been produced with a lot of legal and intellectual input so it might be possible.

You can read the whole report HERE

MAY REFUSES TO ALLOW PARLIAMENT A VOTE ON NEW DEAL

Mrs May appeared in front of the Liaison Committee yesterday and in spite of a lot of pressure, refused to say if she would allow parliament to vote on the terms of the withdrawal deal (HERE). The Independent says she risks parliamentary fury.

I am sure this cannot hold. Parliament will have to ratify any deal, especially if it involves any changes to UK citizens rights and obligations. It is impossible to see that she would be able to force this through without a vote especially when a majority in the commons are remainers anyway.

CBI SAYS BARRIER FREE ACCESS NEEDED

The CBI has said that "barrier free" access is required after brexit (HERE) more or less echoing what the Breugel think tank said a few days ago (HERE).

One wonders if anyone in government is actually listening to these voices. If they are and we find ourselves edging towards a very soft brexit with "controlled" but not necessary less immigration, payments still being made to the EU and the ECJ still having power over what we do I wonder what the mad brexiteers will do.

We will have put ourselves through one of the most divisive events of modern times for virtually nothing and with everything looking pretty much like it does today. Except we will have much less influence.

THINK TANK SAYS WE SHOULD STAY IN SINGLE MARKET

Breugel, a European think tank believes it is important for us to remain in the single market (HERE) even to the extent of paying money to the EU.  They say we will be affected by brexit much more than the EU and WTO tariffs will add £4.5 billion to the costs of the automotive industry alone. 

While other sectors like chemicals/minerals and electronics/optical equipment will be much less affected other service based sectors like retail, distribution and finance will be, albeit to a lesser extent than cars.

THE SCIENTIFIC COMMUNITY & BREXIT

There seems to be a conflicting view about what brexit means for science and scientific research in the UK. Brexit Central carried a piece by someone from Cambridge who says (HERE) remainers shouldn't panic and brexit is an opportunity.

Meanwhile the House of Lords has produced a report following extensive research and they conclude brexit is already having a corrosive effect on science sector (HERE). While the report admits there is no direct evidence so far that scientists from the rest of the EU were choosing not to work in Britain following the vote for Brexit but found that "nervousness about immigration and nationality persists in the science community".

COMRES POLL STILL SHOWS MAJORITY FOR LEAVE

ComRes have carried out a poll (HERE) which seems to show there is still a majority to leave the EU and Brexit Central takes a lot of comfort from it. But are the figures all they seem?

The poll says 47% would vote to leave and 45% to remain with 8% not knowing how they would vote. On the surface this looks good for the brexiteers.  In June the vote was 52%-48% a four point advantage - but today there is only a 2% difference.  If we assume the 8% don't knows break evenly either side then today's result would be 51% - 49%.  Given another 6 months there should be balance.

It is hard to understand the result. Apparently 44% think they will be worse off and only 24% think they will be better off while 47% thought our long term prospects outside the EU will be better and only 36% thought we would be worse off . We wait to see what voters think next year.

Incidentally, this is not quite how a YouGov poll saw it earlier (HERE)

PRO BREXIT NEWSPAPERS PANICKING

Richard Corbett, the labour MEP, thinks pro brexit newpapers are beginning to panic (HERE). He has criticised the right-wing press about his amendments to an “obscure report” about Brexit as “silly and contrived” and said they're concerted attack on him shows they are panicking over the likelihood of a second EU referendum. Richard Corbett, deputy leader of Labour’s MEPs, was accused of “plotting to sabotage Brexit” by amending European Parliament legislation. He also drew criticism for suggesting Leave voters may want a second referendum in order to change their mind.

This chimes a little with Nick Cohen's piece (HERE) questioning why the right wing press is so angry. Nick thinks it's because they fear "the demagogic rage and charlatan tricks they have used against others will one day be used against them". One day the lies used by the leave campaign and the press will be exposed for what they are.

LEAVE VOTERS SOCIALLY ISOLATED

New analysis (HERE) and (HERE) shows that leave voters were likely to be more socially isolated then remainers. A report from the think tank Demos claims people who have little contact with those from outside their own neighbourhoods are overwhelmingly more likely to have voted for Brexit, according to the first in-depth study of the social attitudes that drove the vote to leave the EU.

I must say this doesn't come as a surprise.

MAY SNUBBED ON UK EXPAT RIGHTS

The Telegraph is reporting that Mrs May was greeted with silence when she raised the question of the rights of EU nationals here and UK expats in Europe at a summit this week (HERE). As usual, the pro brexit Telegraph makes it appear as if we were the wronged party rather than the one to blame for the mess.

Apparently, when the silence went on for an embarrassingly long time she is alleged to have said, "I think I’d better leave now."  Isn't it all pathetic and a terrible harbinger of things to come. We haven't even started negotiating yet and there is already ill feeling.  

The same piece carries a report that yesterday Tory MPs called for Theresa May to be legally bound to trigger Brexit negotiations by the end of March to stop remain campaigners from sabotaging Britain's exit from the EU. Peter Bone, the lunatic MP for Wellingborough, proposed the Bill that would legally force the Government to trigger Article 50 by the end of March next year.  So, when we are on the cliff edge he will be behind us with legislation forcing us all to leap off.  Madness!

SWISS U TURN ON IMMIGARATION

The Swiss are a bit cleverer than we are.  After a referendum in 2014 calling for the end of freedom of movement the government thought they might be able to renegotiate the terms of the bilateral deal with the EU.  The EU played hardball all the way through and faced with the prospect of Switzerland ending its entire relationship with the EU they have now proposed a small change to the law which requires employers to give preference to Swiss nationals (HERE). This only applies in areas with high unemployment so I assume it will change from time to time.

There are parallels here with brexit. I wonder if when faced with a loss of access our politicians will be bright enough to pull back from the brink?  Don't hold your breath.

PRODUCTIVITY IN LONDON DOUBLE THAT OF THE UK

To underline the potential cost to the UK of losing any of the London financial services businesses it is being reported (HERE) that output per person (i.e. productivity) in London is twice that of the rest of the UK. Much of this is in the many huge financial organisations based in The City.

We can ill afford to lose any of these revenue raising businesses when our productivity across the country is about 30% less than our competitors.

Prosper like never before.

BREXIT BILL WILL BE £50 BILLION

Michel Barnier, the EU's chief negotiator, is reportedly suggesting (HERE) our bill for brexit will be up to £50 billion in money that we have already committed to and for pension and other residual costs from our membership. This is just one of the myriad items to be settled in the withdrawal agreement and before the trade talks even begin.

Update:  Mrs May has rejected the £50 billion figure. He spokesman has said a figure for our liability arising from membership "does not actually exist" (HERE) which I take to mean that even we haven't yet worked out how much leaving the EU will cost.

JAPANESE BANKS WORRIED ABOUT BREXIT

Phillip Hammond has been in Japan trying to reassure banks there that London will get "the best possible access" to the EU (HERE).  I wonder how he explained that Lloyds of London the insurance business that has been based in The City for 328 years is moving part of its operations to the EU in order to protect the 11% of its market that comes from the EU (see HERE).

It might be a case of look what we do not what we say for the Japanese.

Update: It has emerged, according to The Independent, that the japanese warned Mr Hammond that they would begin to leave the UK in 6 months (HERE) unless they get clarity on access to the EU market.

TRADE DEAL MIGHT TAKE 10 YEARS

The British Ambassador to the EU Sir Ivan Rogers, has told the government that a trade deal could take 10 years to negotiate and still fail to be ratified (HERE). Even the Daily Mail is reporting it (HERE).

Some of the brexiteers are taking exception to this with Dominic Raab appearing on tv and radio to rubbish him. The government say they "don't recognise" the figure. They are all deaf to reality.

INSTITUTE FOR GOVERNMENT REPORT

The Institute for Government (IFG) has produced a report about the progress in Whitehall on preparations for  brexit (HERE). It is worrying that the government are trying to carry out planning for brexit with a civil service smaller than it was before WW2 and with a full programme of work that was in place before brexit was even a possibility.

Sky News is saying that the report's authors believe that secrecy is damaging preparations (HERE).

The report also says the Great Repeal Bill is going to be far more complicated than many people first thought.

FINANCE JOBS AT RISK

The Guardian (HERE) are claiming that the House of Lords report (see HERE) on the financial sector has been told up to 200,000 jobs in the city are at risk from brexit.  Banks and other financial institutions have told the committee producing the report that unless there is some clarity they will need to begin planning to relocate some parts of their businesses to mainland Europe or Ireland.

They are concerned that the licenses needed take 18-24 months normally and if there are a lot of organisations applying at the same time this will be delayed and they will be left unable to trade.

HOUSE OF LORDS REPORTS

The House of Lords (HERE) has started to release reports this week on various aspects of brexit. These look extremely authoritative and detailed, the result of a lot of written and oral evidence. You can read the reports as below:

UK - IRISH RELATIONS
OPTIONS FOR TRADE
ACQUIRED RIGHTS
FISHING POLICY
FINANCIAL SERVICES
SECURITY COOPERATION

The HoL committee on brexit says expectations on the part of some in the fishing industry may be too high (HERE).

WTO - ARGENTINA RULES?

The Independent (HERE) has a sobering report about our potential membership of the WTO.  To get a new schedule of tariffs at the WTO would need the unanimous agreement of all 160 existing members including Argentina and Spain (and the EU). 

These and other countries that are not well disposed to the UK would use the opportunity to block our membership to exact a high price. The Falklands and Gibraltar better look out!

INFLATION EDGES UP AGAIN

The BBC are reporting (HERE) that inflation has risen to its highest level since October 2014 and reached 1.2% in November. Historically this is still very low but those of us over sixty will remember how quickly inflation becomes embedded in an economy.  First, prices rise then big industries and the public sector unions press for wage increases which of course results in even higher prices.

Perhaps if we see 2-3% by March 2017 even Nigel Farage might begin to have second thoughts - or is that going too far!

HAMMOND THINKS TRANSITION PERIOD NEEDED

The chancellor, Phillip Hammond has told a select committee that in his opinion a transition period will be needed after the two year period to "cushion" our exit from the EU (HERE).  This won't come as a surprise to most thinking people but to brexiteers it will be anathema.

They are capable of phenomenal self-delusion and think everything can be done more or less overnight without any problem at all. Of course, this is true of most things you are not doing yourself.

ROGER BOOTLE THINKS IT'S THE END OF THE EU

Roger Bootle of Capital Economics thinks it's not too soon to begin planning for the end of the EU (HERE). Most of the article is behind a pay wall but since we know Mr Bootle is a confirmed brexiteer we don't need to read all of it to know he thinks the EU is doomed.

I think the UK will come to an end before the EU does.

RED TAPE AND PLENTY OF IT

Before the vote we were told red tape and regulation was stifling British industry but now a report for Open Britain, a pro-EU think tank, says if we exit the customs Union there will be an "avalanche" of paperwork for businesses that export or import from the EU (HERE).

The report claims we made 70.5 million import declarations and 6.5 million export declarations last year. If we leave the customs union this will add another 60 million declarations.

This will not help the car industry which was already vulnerable see HERE

UK CITIZENSHIP PROBLEMS FOR EU NATIONALS

The pro brexit think tank British Future has released a report (HERE) about the anxiety felt by EU nationals living and working here after the vote. To me this all seems like crocodile tears on the part of Gisela Stuart who has written the forward to the report but who campaigned vigorously to create the problem she now says she is worried about.

The report smacks of Germany in the 1930s with lists of the nationality of the EU citizens living here as if they are an alien species.

The problems are immense as you can see from the report. What a pity she didn't consider this before she decided brexit would be good for us.

The BBC cover the story HERE

BCC WARNS OF SLOW GROWTH AHEAD

The British Chambers of Commerce have issued a warning (HERE) that although growth this year will be above their earlier forecast at 2.1%, next year it will fall to 1.1% and in 2018 to 1.4%. It said, business optimism was continuing to fall, and it expected "a bumpy road ahead in 2017 for British businesses and the economy".

Prosper like never before!

THE LUDDITES

A poll (HERE) by ComRes seems to show we blame globalisation and what the report calls a backward-looking dislike of modern technology for many of our economic ills. And yet Liam Fox thinks we should be signing trade deals with the rest of the world in a huge increase in globalisation.

Trade is our Achilles heel and is surely connected with our appalling productivity which globalisation can only improve (witness the car industry as a great example).

At the same time a piece in The Sunday Times Business section this week says British industry expects to install about 1800 robots in 2016. This compares with more than twice this number for Spain and Italy and 20,000 for Germany. How do we expect to earn our living?

HANNAN ALWAYS THE OPTIMIST

Hannan says we will get a good deal from the EU (HERE) in his usual blindly optimistic way. It occurred to me that whatever deal we do get from the EU Mr Hannan will tell us it is a good one, the absolute bees kness. No matter that we will be significantly poorer, that unemployment will rise and the UK will shatter. No, they will be as nothing compared to the deal Theresa May signs up to.

The New Statesman has a take down of Hannan's piece on Conservative Home (HERE) which is always worth reading.  Nationalists like Hannan are, as Orwell noted, capable of stunning self deception in their cause.

ORWELL AND THE CAPTIVE MARKET OF EMPIRE

There is an interesting note about Nationalism from George Orwell writing just after the second world war (HERE) with some terrific insights into the differences between the patriot and the nationalist. This was sparked off by a piece in The New Statesman by Paul Heslop (HERE) about the age of outrage as Ian calls the present time.

However, in reading it I note how Orwell talked about empire and how it was a captive market for British goods.  I hadn't really thought of it like that but of course this is exactly what it was.  The railways in India were built by British workers in Britain along with a lot of other stuff that we supplied in return for Indian tea.  We made money both ways, selling them our expensive goods and buying their cheap ones - and then selling them on expensively to other countries.

My neighbour has always believed we were never competitive and I think this might be correct. It was the empire that made it appear that we were. After brexit we are going to have to change a couple of centuries of industrial practice in a year or two!

DECADES BEFORE WE KNOW IF BREXIT IS WORKING

James Forsyth in The Spectator (HERE) says it will be "decades" before we know if brexit has been a success or not but still seems to think it is a good thing.

I believe he is being optimistic. Leave voters are not going to give him decades. He likens it to a revolution but we are not like the Russians who accepted jam would always be arriving tomorrow for seventy years. Unless people are better off by 2018 (as David Davis said they would) brexit will be toast.

IRISH COURTS TO BECOME INVOLVED?

There is an attempt to involve the ECJ via the Irish courts (HERE) which may be helpful if it succeeds. The legal bid is being crowdfunded (HERE) and it may make life that much more difficult for the mad brexiteers - let us hope it does.

You can check on the total in the link above. If it gets more serious I'll put a link on the sidebar.

EU CITIZENSHIP MAY BE POSSIBLE AFTER BREXIT

Reuters (HERE) and The Independent (HERE) are both carrying stories that the EU are seriously considering offering citizenship to Britons after brexit.  I think this would be a perfect way to retain close ties with Europe until we can rejoin the bloc. However, many leave politicians are absolutely opposed to it - as usual.

UPDATE:

It seems the EU parliament will not be discussing this - for the moment - see HERE

POLLS BEGIN TO TURN

Polling from YouGov and Which (HERE) appears to show that the majority of people won't accept a brexit that leaves them worse off including half of those who voted leave in June. Only 10% of the population would accept losing up to £100 per month and these presumably are people who are so viscerally opposed to the EU they are effectively beyond persuasion.

But more importantly the poll, conducted for Open Britain also suggests that the prolonged period of uncertainty since the 23 June referendum has chipped away at the pro-Brexit majority. If a rerun of the vote were held tomorrow, remain and leave would be tied at 44% each, with 5% not voting at all and 7% undecided. Also there is an increased number of people who think they will be worse off next year because of  price rises (HERE).

So we are already at balance with all the negotiations and the economic impact to come. Things are looking up?  The Huffington Post (HERE) has an item claiming that 120,000 leave voters have already died and 126,000 young remain voters have been added since June 23rd and if you combine this with leave regretters netted off against remain regretters (amazing) there is a 52-48% majority to remain. This might be fantasy but it shows we are headed in the right direction.

NIGEL ADAMS MP AND EU EMISSIONS TRADING

Our local MP, Nigel Adams who campaigned vigorously for brexit and said that one of the main reasons for him doing so was the EU regulations that he claimed were responsible for jobs being lost at Eggborough Power Station (HERE).

Now we are told the government is said to prefer remaining a member of the EU emissions trading system after brexit (HERE) so I assume another pillar of his argument has now been removed.

By the time we reach 2020 we will be beginning to see the results of brexit across the economy and I will be very pleased to remind him and everyone else that he bears a grave responsiblity for a lot of it.

REGULATIONS AND PRODUCTIVITY

This morning there is a stark contrast in the analysis of Britain's productivity problem. The BBC (HERE) has an item about investment in R & D by British companies showing we are 152nd in an IMF league table of business investment as a percentage of national income. A newly announced innovation fund from Oxford University of £600m we are told contains nothing at all from British companies. The writer seems shocked but I am not in the least bit surprised.

On the other hand The Guardian (HERE) has a story about Gove and Whittingdale asking British companies for a list of regulations they want to scrap after Brexit. They think our poor productivity is down to stifling regulation. My guess is that they will be surprised how little of the EU regulatory
regime industry will ask to be scrapped.

John Longford, the former chair of the British Chamber of Commerce, who campaigned to leave, speaking to the Brexit Select Committee, told them that he thought the “opportunities for deregulation are legion. Some of it will be to do with employment rights. Some of it will be to do with the fact that people might not be allowed to do overtime that they wish to do,” he said, citing lorry drivers as an example.

“But the fact of the matter is also that there is a lot of regulation that is nothing to do with employment rights that causes cost to business.”

One example he mentioned was the EU ergonomics directive, which he said made small businesses keep a ledger of checks of the positioning of computer screens and chairs. As far as I can see this has never been adopted and a H & S website (HERE) claims it "bit the dust" in 2013.

So there we have it. Our poor productivity is down to regulations - the same ones that German and French companies operate under without any problems - and not working long enough hours driving HGVs. According to the leading Brexiteers is is nothing to do with lack of investment. It was good to see Carolyn Fairbairn caution the select committee about focusing on “silly” anecdotal stories about over regulation (ie John Longworth's), which she said were of less concern to her members than the threat of losing access to European markets.

MANUFACTURING OUTPUT DROPS

UK Manufacturing showed an unexpected 0.9% drop in October (HERE) compared to the anticipated 0.2% increase. This was the biggest decline since February. Industrial production fell 1.3% led by a slide in the oil and gas sector.

I think also the fall in investment that we have seen will increasingly feed through into manufacturing output figures next year.

BANKS LIKELY TO BEGIN RELOCATION NEXT YEAR

The BBC have carried out an investigation into all the talk of banks and financial institutions moving some operations into the EU in order to continue trading inside the single market. Newsnight had the report last night including an interview with the a French financial regulator.  The BBC news website has the story (HERE).

Of course this is something the brexiteers told us would never happen. Well now it seems it might.

The regulator says he is in advanced discussions with "large international banks" about moving to Paris including due diligence work. He says many other companies had made informal enquiries and he thought the same things were happening in up to eight other European financial centres. This is not to say everyone will move or even that those who do will move everything, but the sector produced £71.4 billion for the exchequer in 2015-16 (HERE) so even a 10% drop in revenues is going to be painful. 

EU CHIEF NEGOTIATOR SAYS DEAL BY OCTOBER 2018

Michel Barnier gave his first press conference (HERE) in which he said a deal needs to be reached by October 2018 in order to give time for ratification by EU member states and the parliament.

However, I think there was also an interesting point he made in answer to a French journalist's question about withdrawal and trade negotiations and whether they would be simultaneous or sequential. I think he said that the trade deal would begin when we are a third country which I took to mean we won't be able to discuss the trade deal until after we have left.

Oddly, very few journalists picked this up. The only story I can see is by James Forsyth in a Spectator blog (HERE) who says:

"But Barnier’s position is that only once this deal has been agreed, can talks move on to what the future relationship between the UK and the EU will be. In other words, no talks on trade until the exit process has been agreed".

This is all going to drag on for years and years.

ARE THE REASONS FOR BREXIT BECOMING CLEAR

Jacob Rees Mogg (HERE) is saying that after Brexit we can slash environmental and safety standards "a very long way". So it looks like the main objective for Mr Rees Mogg is to make Britain the sweatshop capital of the world and if a workers have to suffer a few accidents and ill health this is all OK.

Germany, France, Italy, Holland, Belgium are all more productive than we are inside the EU and apparently weighed down with all those expensive environmental and safety regulations. They are 20-30% more productive and instead of addressing the real problems, his answer is to try and close the gap by cutting standards. It won't work.

TAX REVENUE FROM FINANCIAL SECTOR

Reuters are reporting that the financial services sector paid £71.4 billion in taxes in 2015/16 (HERE). This is a huge amount of money and some of it at least is at risk from brexit. 

If we lose passporting rights into the EU many companies will relocate some staff to the EU and we will lose revenue.  Brexiteers think any losses will be more than made up elsewhere but it is a gamble and the Reuters report shows just how big a gamble it is.

BOJO FURIOUS!

In an article about a leaked memo warning about leaking (you could hardly make this up but it's HERE) BOJO is said to be "furious" about his comments to EU ambassadors being misrepresented. These were comments he is said to have made about his views that migration was a good thing (HERE). He has denied it.

There is a terrific irony here since Johnson has made an entire career out of misrepresenting the EU and everything it does. I hope he is beginning to learn how it feels to be on the receiving end.

NOW WE MAY STAY IN THE EUROPEAN PATENT SYSTEM

Hot on the heels of indications our position on payments into the EU and migration are beginning to soften (HERE) it has been announced that we are going to ratify plans to create a European wide patent court (HERE). Apparently, some leavers had assumed we would pull out of this but now it appears not.

Andrew Lilico, the pro-Brexit executive director of Europe Economics, said the move was “the first really concrete commitment of the Government towards Brexit, and as it stands it implies the softest of soft Brexits, much softer than has been discussed”.  Let us hope he is right.

It seems we are going to demolish our European house and painstakingly rebuild it brick by brick 10cm to the left!  The difference finally will be so small as to be almost unnoticeable.

WE NEED TO LEAVE TO BE SURE WHAT LIFE OUTSIDE THE EU IS LIKE

The Huffington Post carries a piece by someone called David Vigar (HERE) which coincides with my own thinking.  He says we must leave the EU and have a taste of life outside. This, he says, is the only way to end the argument about our future prospects.  I agree with this.

Those in denial need to have their noses rubbed in the economic faeces that brexit will cause before they will accept we are better off in the EU. Of course, many of the most extreme like Farage, Cash, Redwood, etc will never admit we are worse off even if half the population is on the breadline or eating grass.

I think given five years outside the EU (so about 2024) there will be a majority in this country to try and rejoin the EU and we remainers will have been vindicated.  It will not even be enough to say things have not got much worse given the massive disruption we are going to go through. Brexit must be an enormous success or it's nothing.

JOHN LONGWORTH

The former head of the CBI John Longworth, an enthusiastic leave campaigner has an item in the conservative home blog (HERE) where he talks about the "wreckers and Remainers" bringing "mendacious" court cases. 

He says, "Brexit provides Britain with an unparalleled opportunity to crystallise the taking-back of control of our own affairs, and then to open up the potentially huge economic benefits that will arise from a clean and early exit from the EU. Yet deeply-in-denial Remainers will stop at nothing in their attempts to at best delay or water down Brexit – and, at worst, to stop it entirely".

Racing towards the cliff edge, Mr Longworth rages against anybody whose foot might look as if it's hovering anywhere near the brakes. If anyone is in denial it is him.

NISSAN - GOVERNMENT REFUSES FOI REQUEST

The government has refused a FOI request from the Financial Times (HERE) to release the Nissan letter giving "support and reassurance" on the grounds that it is "too sensitive".  I assume the FT will now go to the Information Commissioner and ask for the decision to be reviewed.

What have they got to hide?

GISELA STUART ADMITS THERE WILL BE SACRIFICES TO BREXIT

Gisela Stuart has given an interview to The New Statesman (HERE) where she accuses journalists of exaggerating reports of racist crimes following the brexit vote - even though the 45% increase is I believe, a police statistic and not from the press.

In the interview she is asked how can she justify pushing for a full-fat Brexit, when the people who Labour is supposed to represent would be hit the hardest? Communities struggling financially, and migrants who have been victims of racism?

“You have to have a conversation and say, in the long-run, this was the right thing to do,” says Stuart of the former. “Restoring democratic accountability in a way, which makes a society resilient. It gives it that base on which you then become economically successful.”

So it is an acceptance of short-term sacrifice then? “Yeah, I think so. Yeah,” she concedes.

I cannot remember anyone on the leave side saying there would be any short-term sacrifice, in fact Digby Jones (see right) was among the majority of leavers when he said "there won't be any economic pain".  Stuart herself was on stage with BoJo when he told us we would prosper like never before.  What happens when voters realise they have been duped?

THE MIGHTY SHIP BEGINS TO TURN

With a headwind beginning to freshen and the sound of creaking timbers the mighty ship Brexit begins to turn slightly. After all the claims made in the referendum campaign and afterwards it now seems the government is setting a new course on immigration (HERE) and on payments into EU coffers (HERE) and (HERE). With a bit more realism on the horizon it is not impossible to see we might accept judgements of the ECJ on matters affecting the single market or at minimum some supranational legal body to adjudicate disputes.

On this basis, the difference between the status quo and our future relationship with the EU will be virtually zero and many people will wonder what it was all for.

The Lib-Dems won a stunning by election in Zac Goldsmith's constituency last night (HERE), overturning a 23,000 conservative majority, the candidate standing on an openly pro EU ticket and promising to vote against Brexit.  Who knows where we will end up?

BREXIT CENTRAL

Andrew R T Davies (an economist) has written a piece for Brexit Central (HERE) where he rails against all the delays in triggering Article 50. The abstract for the piece says this:

"Nobody said Brexit would be easy – the European Union was designed to be extremely difficult to pick apart".

But this is one of the remainers biggest gripes. We WERE told it would be easy.  He goes on in the article to say:

"Despite Brexit: unemployment fell again this month to 4.8% – a far lower rate than the EU average; consumer spending rose by 4.2% in September; and we now know that Britain will have the fastest growing economy in the G7 this year (although you wouldn’t necessarily know it if you had a quick scan of the Twittersphere…)".

Remember we are still in the EU, Article 50 has not been triggered and we are still burdened by all the EU regulations. It will be fascinating next year and perhaps also 2018 when the economy slows and unemployment rises, to see how Mr Davies will explain the apparent conflict of the UK doing well inside the EU and then doing much worse after Article 50 is triggered.

LEGAL CHALLENGE UPDATE

Lawyers for the claimants have lodged their written submissions at the Supreme Court ready for the case to begin next week (5th). If you're interested you can see the case for The People's Challenge (HERE) and the written arguments for Miller/De Santos (HERE).

I assume we will also get to see the legal arguments for the Scottish and Irish governments and if so I'll post then here as an update.

Update 2nd Dec:

Scottish Govt case HERE
Welsh Govt case HERE

The Supreme Court website on this particular challenge is HERE.  The government is not confident of winning and have published a short bill (HERE) that they will try to rush through parliament in the event their appeal is rejected (as I strongly suggest it will).