EU CONNECTIONS WON'T END IN 2019 ANYWAY

A couple of items caught my eye this week. Firstly, the BBC reported that we may have to continue paying into the EU budget for years because of "concrete obligations" entered into (HERE) and the whole question may end up in the courts.

And then this piece in The Telegraph (HERE) which was designed I think to cause apoplexy in all those mad brexiteers by claiming we will be subject to EU law for years after we leave!  Great stuff.

DAILY MAIL DOES NOT SEE IRONY

The Daily Mail last week printed an outraged report about the state of the NHS (HERE) and inter alia compared us to the rest of the EU in bed numbers and length of a maternity stays.  The figures are eye opening, particularly in the week when the NHS is under the usual winter pressure and patients are waiting for hours on trolleys in corridors.

The article headline tells its readers we trail the EU average for medics, beds and scanners but the figures for beds is the most shocking. We're well below the average (5.2) with just 2.7 beds per 1000 head of population, with only Ireland and Sweden below us.  But the really shocking figure is Germany with 8.2 and Austria with 7.6 - nearly three times as many as we have. I wonder what patients waiting in a public corridor on a trolley think?

However, the Mail does not mention at all why the EU - a "failing organisation" according to them can arrange things so much better than we can.

LEGAL ISSUES MULTIPLY

Last week saw a number of developments on the legal front. Firstly, The People's Challenge reported that the government has attempted to get an early site of The Supreme Court's judgement but were rebuffed (HERE). It rather looks as if they are starting to panic. The excuse was that they wanted to put contingencies in place!  Amazing.

Then, in Ireland Jolyon Maughan QC (HERE) has released the "letter before action" which is the precursor to starting a legal challenge to get the ECJ to give a ruling on whether or not Article 50 can be revoked. This may mean we will get the chance to vote on the new settlement and reject it if we do not like it.

And finally, and again in Ireland but this time north of the border, the executive has collapsed with the resignation of Martin McGuiness and this has led to suggestions from NI politicians that Mrs May cannot trigger Article 50 until a new executive is in place (HERE). To do so, they say, would be illegal (HERE). New elections will almost certainly be required and this will take at least eight weeks, meaning Article 50 may be delayed by a few weeks or even months.

On top of this Mrs May is to set out the government's thinking on brexit next week and MPs are pressing her to set out her objectives on the single market and the customs union. If she hints that we are to leave one or both the pound is likely to come under increased pressure. She is in an impossible position. I wouldn't like to be her speech writer.

TELEGRAPH SEES "THRIVING" ECONOMY

The Telegraph has another completely unbalanced "whistling to keep the spirits up" piece (HERE). They say there are five signs that the economy is thriving: a rise in industrial output and the FTSE 100, news that shoppers are still buying, housebuilders posting strong results for last year and Mark Carner rowing back a little from his forecasts. All of this let us remember while we are still in the EU!

But in the same piece it warns of inflation, fears of a housing crash, a surprise slowdown in construction and the widening trade deficit. In other words five signs the economy is not doing very well.

They also say the pound has regained "momentum". It fell against the Euro by 0.33% and was flat against the dollar!  Some momentum.

GOVT SAYS IT WILL LOSE LEGAL CHALLENGE

The government is apparently resigned to losing the legal challenge by 7 to 4 at The Supreme Court as reported by The Guardian (HERE). The only surprise is that four of the justices think the government's argument holds water.  We shall see when the verdict is announced.

TRADE GAP WIDENED IN DECEMBER

The Guardian (HERE) report on the latest ONS figures on the economy which show the trade gap widened in December by £2.6 billion. Exports increased by £700 million but imports also rose by £3.3 billion.  Reuters' take on it is HERE

So much for the depreciating pound being a corrective to our record trade deficit.

UK TO LEAVE THE SINGLE MARKET?

Theresa May appeared on TV at the weekend in order to counter the impression that she does not know what she is doing. Unfortunately, it only seemed to confirm that she doesn't. We learned very little as usual.

What she did say was the UK would have control of its borders and the best possible trade deal with the EU. She didn't commit to maintaining "single market access", and she suggested that people who thought the country could keep "bits of EU membership" were missing the point that it "would be leaving". If one believes that the single market is indeed a "bit" of the EU then it looks like we're leaving.

I note the pound dropped 0.87% against the dollar ($1.21770) and 1.04% against the Euro (now trading at 1.15440). Every time she suggests we will have a hard brexit the pound falls.  If this turns out to be the actual plan the markets will pronounce on it.

TORY DONOR THREATENS TO STOP FUNDING PARTY

A supporter of the conservative party has threatened to stop funding if Mrs May takes us out of the single market (HERE). Sir Andrew Cook, chairman of William Cook Holdings, has said at least one of his factories employing 200 people will be threatened if Britain goes for a hard brexit.

There will I am sure be a list of rich brexiteers (of which there are many) who will step in and offer financial support but it must be worrying to Theresa May that long term donors like Mr Cook are making it clear how much being in the single market means to them and their companies.

CHARLES "MAD CHARLIE" MOORE

The tone of some brexiteers is beginning to wear a little thin. They have so little confidence that they have to continually press the case for leaving as if they were still campaigning.  Charles Moore in this Saturday's Telegraph has written a classic (HERE).  The headline says it all:

Only those who don't want to leave see Brexit as mind-blowingly complicated

Well of course this is true, as a five year old could tell you. And so is the opposite although he doesn't say so. Only those who don't want to remain see Brexit as very simple. In fact at the end of the article he says, "Surely brexit is in that category of things which are simple but not easy" as if it can be likened to chopping a tree down or clearing the guttering on your three storey town house.

The real question for Mr Moore is - will leaving be "mind blowingly complicated" or not? Most people, even David Davis, say it will be the most complex task undertaken by the British government since 1945. I look forward to the day Mr Moore admits he was wrong about brexit.

FORMER EU ENVOY NOW QUITS CIVIL SERVICE

Sir Ivan Rogers who resigned last week as UK envoy to the EU (HERE) has now resigned from the civil service (HERE) or at least he has indicated he does not want another job in government. This does not surprise me after the coverage he has had from the mad brexit press.

However, a Canadian who was closely involved with the CETA trade negotiations has written a piece for The Observer (HERE) where he says Sir Ivan was right and a UK/EU trade deal could take ten years to settle. He says:

“Were they [pro brexit UK officials] willing to realistically discuss options for Brexit, as opposed to telling you what they intend to do in a general sense while dismissing the obvious concerns, they may have a chance to minimise the damage from the potentially catastrophic decision to leave. This seems increasingly unlikely. Let’s hope that the courts, parliament and, ultimately, the electorate do it for them.”

POLL SAYS ONLY 11% THINK GOVT IS DOING A GOOD JOB ON BREXIT

It will come as no surprise to anyone that just 11% of the population think the government is doing a good job on brexit according to a poll for Sky News(HERE).

I don't know what it looks like from the inside but from the outside it looks like a shambles.

The brexiteers suggested the government should have prepared for the outcome before the vote. Given that it as so far taken six months to get precisely nowhere I wonder what resources they would have wanted to be spent on brexit before June 23rd? 

SINGLE MARKET NOT FOR SALE

A former top official in the EU Jonathan Faull has said that access to the single market is not something you can buy (HERE). There has been some suggestions that David Davis has been talking about an option that allows us tariff free access in return for a fee but Mr Faull seems to think this is not something that would find favour in Brussels.

He says you are either in the single market or you are a foreign country. It looks like a hard brexit to me.

NEW RESEARCH SHOWS MORE OPTIMISTIC BREXIT SCENARIO

At last there appears to be some serious research showing that brexit may be better than we imagine. The Centre for Business Studies at Cambridge (HERE) has produced a report which casts doubt on some of the Treasury's more pessimistic post brexit forecasts which The Telegraph has seized on (HERE).

The report (HERE) may well be right, after all we are still in the realms of forecasts and assumptions but a note of caution is needed. The CBS uses a completely different model to the one used by the OBR and it has only five years of experience and they themselves say:

From the outset we need to say that no normal forecast is possible. The CBR model is an econometric model which uses a large set of equations to forecast future trends, each equation based on data covering the last few decades of UK economic behaviour. Because this period has been almost wholly one in which the UK has been a member of the EU, the equations contain little or no direct information about how the UK would fare outside the EU. Put simply, leaving the EU is a unique event; no country has ever done this.

We will need to wait until 2025 to see if they or the OBR are right. My money is on the OBR.

CHANGE BRITAIN MISLEADS AGAIN

The leave campaign's new "think" tank, Change Britain is at it again. After producing a highly misleading report (HERE) they are now claiming that new trade deals will create 400,000 new jobs.

However, as many people have pointed out (HERE), (HERE) and (HERE), new trade deals are designed to increase both exports and imports so jobs created are usually balanced by jobs lost through importing more stuff. Change Britain ignores any job losses and focuses entirely on new jobs created by additional exports.  As several experts have said, the number of jobs created is usually between zero and a negligible number and dismiss the report as "entirely fictional".

This is all very worrying. If the people most in favour of leaving cannot show conclusively without resorting to misleading figures that the UK will be better off what chance do we stand?

UK ENVOY TO EU RESIGNS

Sir Ivan Rogers, our most senior envoy to the EU has resigned to predictable comments from both sides of the argument. InFacts (HERE) thinks we will be stuck in denial and The Guardian (HERE) quotes someone as saying it is the wilful destruction of EU expertise. Meanwhile in The Spectator a contributor says brexiteers will cheer his departure (HERE) and The Telegraph (HERE) says Mrs May should recruit someone who is positive about brexit.

This government's attitude to experts is troubling.  They may have difficulty finding someone sane who will tell them that throwing the nation off a cliff is a good thing. Anyone who understands the EU will surely not be in favour of leaving.  Those in favour of leaving will not understand the EU.

His replacement will therefore be a matter of some interest. The New Statesman (HERE) says he or she will need rose tinted spectacles and I suspect, a thick skin.

CONTROLLING IMMIGRATION

James Forsyth writing in a Spectator blog (HERE) thinks getting back parliamentary control will ameliorate some of the problems with immigration and he may be right. But I rather think he is missing the most important point. If we kick out government's that do not control immigration we will simply keep changing them until we get one that does.  But unfortunately it will probably crash the economy.

Some will think this is a price worth paying but this will probably be a tiny minority.

GERMAN CAR BOSS WARNS OF MISSION IMPOSSIBLE

The head of the German automobile industry, Matthias Wissman, has written for a German newsparer saying that it would be mission impossible because Britain and the EU would face "massive negative effects" if we leave the single market (HERE).

Some 57 per cent of the cars made in Britain are purchased by buyers in the rest of the EU. The next largest market is the US (12 per cent), followed by China (7 per cent).

In October, Matthias Wissmann warned that the UK leaving the single market could force companies to move their business elsewhere. His comments marked the first time a senior figure in the German car industry publicly outlined the consequences from a change to Britain’s trading arrangements with the EU.

LEAVE MEANS LEAVE URGES HARD BREXIT

The campaigning group Leave Means Leave are urging the PM to get out of the EU with a hard brexit and without any transitional deal (HERE).  Not satisfied with getting us over the cliff they want us to have a jetpack on the way down.

"The UK must leave the EU within two years of triggering Article 50," Richard Tice and the completely mad John Longworth, the co-chairmen of the organisation, wrote in a letter to the prime minister setting out their principles for the talks ahead.

Meanwhile another prominent brexiteer Moulton was on radio 4 yesterday morning says he was and is still in favour of Brexit but he admits to being surprised how complicated it all is. I am surprised that he is surprised. Given all that was said and published by those in government who knew just how difficult it would be it is amazing that any intelligent human being could be surprised.

Essentially he says no one knows what Brexit is going to be like and yet he is still in favour of it!

He always seemed to me a smart business man but he seems to think we are in the worst possible position now and hence anything is preferable to it. We shall see.