Monday, 27 June 2016

As predicted

There was an immediate plunge in the value of sterling and in the stock market indices after the EU referendum verdict, as was to be expected. The markets do not like uncertainty. Once they had taken stock of the situation, those key indicators settled down. The FTSE 100 is now around the same level as it was before the vote. However, it should be pointed out that the 100 comprises large companies, often foreign-owned, which are not dependent on the single market or are exporters which will benefit from a weaker pound. A better overview of the effect on the British economy is given by the 250 next listed companies:



I am not a financial expert, but it seems to me therefore that pension funds which tend to be invested in the top companies will not suffer much from Brexit. On the other hand, UK-based companies most of whose business is in the UK are going to be under pressure leading to increased unemployment. It could be another case of the retired being better off than the economically-active.

Sterling is at $1.32 as I write, a value last seen 31 years ago. There is no sign of it rising soon; indeed there are predictions that it will decline further. So there will be an immediate effect on the prices of petrol and food, with gas and other imports to follow.

Finally, it remains to be seen whether investors in UK government bonds share the rosy opinion of our prospects outside the EU as Norman Lamont and others. If they do not, then the interest on our debt will rise and the accumulation of debt will accelerate. This is why George Osborne envisioned an extra budget this year, and one which would impact benefits. The question is whether the current cabinet will contrive an early election before then, scuttling out before the next administration has to carry the can.


Fair votes and the referendum

I have written a piece for the local LibDem party blog about the high turnout for the EU referendum. It consists largely of a piece by Anthony Tuffin of STV Action. It was directed largely at Liberal Democrat members and friends, but Anthony has also pointed out there are Labour Party activists who want to introduce fair votes. He said:
STV Bulletin - Post Referendum PR election?

There is no need to convince the nationalists. Scotland has had STV in local government for many years now, and their parliamentary elections, while conducted on the same top-up list system as ours in Wales, are at least proportional, unlike those for the Senedd. STV is also Plaid Cymru policy, I believe, as it is for UKIP.

Friday, 24 June 2016

Who sponsored the Lockerbie bomb?

There is a review of Kenny MacAskill's book, written from the point of view of an insider to the judicial process, in the current Private Eye. The review reinforces the evidence pointing to agents of the PFLP-GC as the perpetrators, not al-Megrahi put up by Qaddafi as a scapegoat. Given that Syria sponsored the PFLP-GC and that Iran later supported the organisation, and these were not among the West's favourite nations, I wonder why the Establishment was so keen to accept the Libyan explanation.

And were any related papers recovered from the looting which took place after Qaddafi's overthrow?

An uncertain future

The results of the EU referendum as they came through last night and through the early hours were depressing but not a total surprise. A week ago, a straw poll on a media appreciation panel showed 48% to 38% in favour of  Leave with 14% undecided. A vigorous correspondence on a local online medium was about ten to one (me) against staying in the EU. It has been obvious for some time that the man and woman in the Welsh street take their political information from the Sun, Mail and Express.

As predicted, the immediate outcome was a plunge in the value of sterling and the euro. Shares will open lower on the London Stock Exchange. There will be ups and downs before the currency and stock markets settle, but at what level?

The best future for the UK outside the EU will be in the European Economic Area alongside Norway. However, what the Leave voters most objected to were the contribution from the UK Treasury and the free movement of labour, both of which are implicit in the the Norway model. Whoever does the negotiating for the UK - and I cannot see the present ministerial team continuing long - has a very difficult hand to play.

Wednesday, 22 June 2016

The health service and the EU

Phil Hammond MD, writing in the current Private Eye :

cannot trace one prominent national medical, research or health organisation that has sided with Brexit. Doctors and scientists do seem to believe the UK is better off, healthier and safer in Europe.

The EU is not a prominent threat to the NHS as article 168 of the Lisbon Treaty clearly states that the organisation and delivery of health services is a national responsibility. A far greater threat to the NHS is the current UK government's creeping privatisation and outsourcing of vital service, and a lurch to the right from Brexit is likely to accelerate this.

[...]

Migration* is more complex and clearly puts strain on public services, including the NHS. However, EU migrants tend to be of working age, use the NHS less and pay taxes to fund it. Some even return home for healthcare because they can get quick access to specialists than in the UK.

Meanwhile there are 135,000 non-British European citizens working in the NHS and social care, about 10 per cent of the total, at all levels of the service from consultants to carers. 

[...]

As for the impact on research, Brexit would sacrifice our right to participate in the European Medicines Agency. We would have to pay to keep access to the centralised authorisation system, but have no influence on policy. The National Institute for Health and Care Excellence (NICE) would lose its vital European health technology assessments. To date, the UK has been the most successful country at winning competitively awarded EU funding for research and development in life sciences. After Brexit, the UK would have to pay to keep access to funding but have no influence in settting priorities in research and development.

Apart from the privatisation threat, all these considerations apply to the NHS in Scotland and Wales as well as England. Something I had not realised, and another good reason for staying involved in the EU, is the link between NICE and medical science expertise on the continent.

*Phil Hammond's evaluation of the "immigrant" situation chimes with my own. I am very happy for young fellow-Europeans to come over, take up vacancies which would otherwise remain unfilled, pay taxes which help fund my pension, then return home thus not being a burden on the state. I am sorry that Cameron and Osborne have not stressed the positive aspects of the free movement of Labour, and not made it clear that it is quite separate from the pressure from refugees from Africa and the Middle East. Of course, if they had done so they would have drawn attention to the fact that much of the latter is caused by our friends causing upheaval in the region.

Let's hear it for the social workers

Social workers have had a bad press for as long as I can remember. I guess the Daily Mail has not been among their greatest fans, which is why I chose the Mail's report on the tragedy widely reported by the broadcast media yesterday. The police have often been loth to intervene in child abuse cases until a watertight criminal case can be brought. But in this case social workers, the police and the young victim's teachers all did everything that was in their power to protect young Ellie only to be thwarted by an inexplicable legal decision.


The economic effects if "Leave" polls higher


These are the facts. Anything else the "Remain" or "Leave" campaigners say about what might happen after "Leave" is successful is speculation. However, it is safe to assume that inward investment, which has hitherto been attracted, to Wales and the English regions in particular, by our membership of the common market, would decline. The UK would probably not immediately fall down an economic cliff, contrary to the journalistic claims of some the "Remain" leaders, but the prospect is of a tailing off affecting our children and our children's children.

It should also be pointed out that £350m a week would not become instantly available on June 24th to spend on the NHS and all the other things promised by Vote Leave in their provisional budget (no mention there of the cost of increased border staff, by the way). Negotiation to untangle our relationship with the other 27 nations would almost certainly take the full two years stipulated by the current Treaty and final exit could be delayed until 2020. So we would still be making a contribution to the EU budget for years to come, Since this is based on three factors, all dependent on economic activity, this may come down from 2015's £8.5bn (£163m/week), but then so would much of our own government's revenue which is also dependent on a thriving economy.

Of course the UK could simply immediately renounce its treaty commitments and parliament vote to remove all EU-related laws from the statute book. Parliament has the sovereign right to do this, but the effect would be dismal. If the UK tore up treaties unilaterally, we would lose international trust for a generation at least. We would put ourselves in the same basket as Argentina and Zimbabwe. Who would negotiate tariff-free deals with us?