Government agency stopped RBS cleaning up after scandal

The Royal Bank of Scotland's Global Restructuring Group (and a similar shady unit at Lloyds) sent many small businesses to the wall in the first two decades of this century. (For some background and a case study, read this by journalist Ian Fraser.) It should be noted that the depredations of the GRG began during the New Labour governments of Tony Blair and Gordon Brown and continued three years in to the Coalition government. One wonders how much chancellors Brown, Darling and Osborne knew or cared.

Now comes a report by the BBC which should surely have attracted more attention than a single mention in the Times. As I understand it, RBS having discovered the disastrous effects of the GRG sought to support customers who had suffered, where it could, but a Treasury agency, the Asset Protection Agency, effectively prevented the bank from doing so. Perhaps the APA was mindful of the Treasury's desire to bring down the levels of UK debt at all costs, but businesses which could have returned to viability were the sufferers.

Perhaps there will be a deeper and more informed examination on one of the BBC's financial broadcasts, like Money Box coming up this Saturday on Radio 4. Judging by previous experience, I would expect the FCA's report referred to at the end of the report to be tardy and superficial.

Tasmin Little (no relation) is giving up concert performances

Jessica Duchen has the story. I am glad to see that Ms Little is not retiring altogether. She is a great communicator and one trusts that we will be able to enjoy more of her warm personality on TV and radio as her touring commitments tail off.

I remember her father as a supporting actor in many TV series of the 1960s, but he was clearly much more than that. As JD writes:

I was enchanted by the Littles. Tasmin is from a gloriously theatrical family. Her father is the actor George Little, whose splendid performances I enjoyed very much - in particular the one-man show he wrote, Paradise Garden, about growing up during the war in Bradford, culminating with the revelation of local boy Frederick Delius's music on the radio... Charismatic, funny and warm, he was an irresistible presence and Tasmin learned much about public presentation from him, as well as how to turn pre-performance adrenaline to advantage. Jilly, her mother, is just as sunny, extrovert and full of good humour.

Cardiff - Swansea rail improvements proceed

It is good to see that upgrading the signalling system on the Great Western main line, which was necessary for the electrification scheme since aborted, is going ahead. The latest information I have is that the work is on budget and on time. This is in contrast to the erection of gantries in England, using untried technology, which gave Transport minister Chris Grayling the excuse to abort the extension of electrification beyond Cardiff.

There is a price to pay locally as crews need occupation of the track and ready access to it. There are several roads in Skewen which butt on to the track. However, the project manager - for good logistical reasons, no doubt - chose to close a very useful footpath under the railway.

No more Gay Meadow

I was glad of the opportunity to give a shout-out to Shrewsbury Town on the local party Web page. The club is clearly on the up. If my old work colleague and Shrews supporter Andy Fryer is reading this, I hope we will meet again in the Premier League, just as we agonised at the Vetch Field when our clubs fought in the lower divisions of the Football League.

Shrewsbury are clearly going places. I had my doubts about their snaffling manager Sam Ricketts from Wrexham after less than a complete season in charge at The Racecourse, but results have vindicated their judgement. Having dumped Stoke City out of the FA Cup, Shrews achieved a creditable draw with Wolves (another club  progressing, after years in the doldrums). 

John Redwood's questionnaire

John Redwood MP challenged Remainers to answer what he considers to be key questions. In fact, he appears to be addressing supporters of the May-Barnier withdrawal deal rather than hard-line Remainers, but here is my contribution anyway (answers in red.)

1. Why do you want to give £39bn away to rich countries on the continent in return for 21 more months of talks with the EU? The rich countries have also made pledges to contribute to projects which benefit the whole of the EU, poorer countries included. Some EU projects aid disadvantaged countries outside.
2. Why do you think the EU will give us a good deal on a future relationship in 21 months of talks after March, when they have failed to offer anything in the 2 years 9 months before March? The 27 will not, because they have stretched the EU rule-book as far as it will go.
3. Why will it be easier to get a good deal once we have given away the money than it is before we do so? N/A - see above.
4. Why did Remain tell us that leaving the EU meant leaving the single market and customs union if you now say we could negotiate our way back in? Er - wasn't it the Leave campaign which said that it was necessary to leave both?
5. If you want to stay in either the single market or customs union what do you expect the EU to demand on freedom of movement, budget contributions and adherence to EU laws? I want to remain, on the same terms as we have now.
6. Why should there be any delays at UK ports where we import food and drugs, when the UK will be controlling the borders there and when Customs and Excise have already said they can ensure a smooth incoming border? I confess to ignorance in this area, but I guess friction-free port movement will depend on customs checks (which will include non-tariff matters which do not apply currently) at the points of despatch and receipt. This will be fine for large companies and regular traders, but clearly impractical to arrange for others. Three Blokes in the Pub from Southampton (video) has some opinions based on experience.
7. Why didn’t the UK economy collapse into recession and massive job losses as Remain and the government predicted for the first year after a Leave vote? Because the headline predictions, made by politicians who should have known better, were stupid. As it turned out, there were immediate ill effects, such as the fall in the value of sterling and the delaying of investment decisions, which were predictable and predicted in more sober quarters.
8. How would you afford the tax cuts and spending increases which Brexiteers plan from the big savings on the EU budget? Do you accept a Brexit bonus budget will boost the economy? Offset by the 4% fall in GDP after Brexit (on Bank of England figures). Certainly a reflationary budget will boost the economy, but it needs to be funded, not based on borrowing like Gordon Brown's efforts. Leavers also have to say how they will make up for the loss of NHS staff returning to mainland Europe, given that the NHS's recruitment drive in the Caribbean has faltered. The scepticism of West Indians as to their reception in England is understandable, given the treatment of the first generation of "Windrush" immigrants. The obvious answer is to increase salaries, further pushing up the cost to the NHS,
9. Would you like to see lower tariffs or no tariffs on tropical produce from emerging market poorer countries, as the UK can do that once out? Wouldn’t removing all tariffs on imported comp0nents for manufacture be a great idea as well? Out of the EU we will lose the very agreements with poorer nations which have been built up over the years and continue to be negoatiated. (There are over sixty free trade agreements between the EU and third countries.) It is going to take another four or five years for our negotiators to get up to speed and the cost of employing them is another drawback of leaving the EU. I suggest that even in the days of Commonwealth Preference we did not do as well. Under WTO rules, if we give tariff-free access to any country, we have to give it to every country. We cannot count on reciprocation. What will that do for our component manufacturers? 
10. Wouldn’t another 21 to 45 months of talks prolong the very  business uncertainty you dislike and worry about? Agreed. That is why I want a commitment to Remain at the earliest opportunity.
11. What would you have said if Leave had refused to accept the 1975 referendum result and demanded a second referendum on the basis that Remain then lied by saying there would be  no loss of sovereignty by joining the EEC/EU? The Leavers never gave up sniping at the EEC/EC/EU after 1975 and the proponents of Remaining then were open about pooling sovereignty. Mrs Thatcher may have lied that the EC was just a common market in her support for the EEC, but not Heath, Healey or Steele.  I do regret that sovereignty was not discussed openly in the 2016 campaign when it would have been possible to rebut the myths that were going around below the surface.
12. Why do you have such a low view of our country that you think we cannot govern ourselves? In the fields of food standards, environmental protection, clipping monopoly power and rights of people at work, the EU has done a better job than any Westminster government, Conservative, Labour or coalition. I particularly remember Labour fighting hard against the working time directive and the one against dismissal on grounds of age.
13. Is there anything the EU has done that you think is wrong or damaging? If so  why didn't you oppose or try to change it? The shunting of the Parliament between Brussels and Strasbourg, clearly, and the fact that the CAP still favours a certain class of landowner. I as an ordinary citizen can do little about these, but when there was still a significant number of Liberal Democrat MEPs, they did try. I note that Michael Gove intends to perpetuate the worst aspects of the CAP upon Brexit instead of committing to a recasting of our support for UK agriculture. Oh, and Dr Fox wants to open trade deal talks with the near-dictatorship of Turkey. Continuing the agreement with Turkey when she descended into illiberalism is another wrong thing the EU has done.

The May-Barnier deal is bad

I have suspected for some time that the deal which Mrs May is trying to force on the British people is not much better than "no deal". It would admittedly give us temporary refuge from the uncharted territory of "WTO terms". There is not much more to be said for it. Caron Lindsay sums up some of the cons. I make no apologies for copying most of her piece intact, though I have added some emphasis.

Back in November, the Bank of England said that all forms of Brexit would leave us worse off than staying in the EU.

Vince said at the time:

The Bank of England has concluded that Brexit – with or without a deal – will leave the UK poorer, less productive and with an economy 4% smaller than if we had stayed in the EU.

Although the headlines are drawn to the dramatic economic collapse forecasted in the event of no deal, this report shows that the deal will cause harm to our economy and the living standards of people around the country.

The Conservative Government must stop using fears of no-deal to pretend that its deal will be good for the economy; today’s assessments put that myth to bed. It is time for a final say on the deal, with the option to remain.

This came around the same time as Philip Hammond admitted that there wasn’t an outcome of Brexit that would leave the country better off.

Tom Brake said:

It was shocking to hear the Chancellor candidly admit that Brexit will make the country poorer.

The Government’s own analysis shows real wages falling, every region in the UK worse off and no Brexit dividend.

The assessment of Theresa May’s deal assumes a rapid transition to a frictionless trade deal with the EU and other free trade arrangements with third-party countries, but the prospect of these negotiations happening quickly is wildly optimistic.

In reality the Conservatives’ deal could leave the UK much worse off than even these dour assessments forecast.

The case is stronger than ever for giving the public the final say on the Brexit deal, with the option to remain in the EU.

And Ed Davey found the Withdrawal Agreement withdrew the UK from useful information networks:

Article 8 of the withdrawal agreement, published by the Government this evening, states that the UK “shall cease to be entitled to access any network, any information system and any database established on the basis of Union law”.

Article 63 states that we will only be able to access the Schengen Information System for a maximum of 3 months after the end of the transition period, and Europol’s SIENA platform for a maximum of 1 year.

Meanwhile, Article 62 makes clear that the European Arrest Warrant will only apply to people arrested before the end of the transition period.

He said:

Theresa May’s deal finally spells out in black and white what the Liberal Democrats have been warning about for the last two years: Brexit will rob the UK of crucial cross-border crime-fighting tools that help to keep us safe.

After the transition period, we’ll lose the European Arrest Warrant and access to vital data-sharing systems, making it harder for the police to put serious criminals behind bars and keep us all safe.

The Government says it hopes to strike a ‘comprehensive’ deal on security co-operation, but euphemistically admits negotiations have been ‘particularly challenging’. Essentially, Theresa May is asking us to trust her to sort all this out within the next two years, while admitting that she’s failed to make any progress over the last two years.

For me, the worst thing is that it kicks so much down the road. We haven’t got a clue about what our future trading relationships with the EU and everyone else would look like.

Failure to reach a trade agreement before the end of the transition period could put us on a dash off the cliff edge at the end of next year. Except at that point we would be out of the EU with nothing we can do about it.

Don’t think the extreme No Dealers in the Conservative Party are going to give up fighting for that calamitous option if May manages to get her deal through. The moment of danger will not pass if we get a deal. That’s one of the many reasons why we need a People’s Vote.

As Vince said when the deal was announced, it is a disaster for the British people.

This is a sad day for everyone involved; the deal the EU have endorsed remains a disaster for the British people.

What has been agreed is vague at best and is essentially an agreement to have an agreement. There is still no majority in Parliament for it, and “No Brexit” remains the only real alternative.

Added to all that is the uncertainty of our people who live and work in mainland Europe, often taking advantage of our current freedom to work across borders. (For instance, a translator based in Italy who works for clients in Germany, Austria and, because of a free trade agreement, Switzerland.) Four-fifths of UK citizens currently in other parts of the EU are there to work* not enjoy pensioned retirement. There will be no guarantee of access to the facilities which our young people currently enjoy. Some continental countries have made friendly noises, but those offers could be withdrawn on a change of government. 

* Statistic from BBC's Money Box Live

Don't tell us businesses are unaffected by Brexit

A frustrated, and now economically ex-resident British businessman has posted this on Facebook. I have changed some details and withheld his name to avoid embarrassment to him and to his business partners, but I have established that he is who he says he is and confirmed his connection with the brand he mentions.

For the last 8 years I've owned a number of high-end stores representing high-end consumer products from a major continental brand. I don't want to discuss the brand itself as I have ongoing contractual commitments under non-disclosure agreements.

I got out this week solely because of Brexit.

Two and a half years ago, after the Brexit vote, with two successful stores already, I pulled out of opening two new stores in London and the South West. Because of Brexit.

Two years ago I put my small business, that is 100% reliant on supply from the EU, on the market. Because of Brexit.

I did so because my costs had risen by over 25%. Because of Brexit.

I finally sold my business on Thursday for a comfortable sum but nevertheless at least less than 50% of its market value three years ago. Because of Brexit.

The money is now in euros at the Tallinn branch of Handelsbanken as I'm an Estonian E-Resident. Because it's not safe in Britain. Because of Brexit.

If you don't run a business, have your house and everything else on the line for it, then please don't dispute these facts as I've dealt with it first hand and watched this utter clusterfuck, that is not being reported, unfold.

I've been knackered with fear for two years and now knackered and drained with a combination of relief and sadness for having got out at the eleventh hour. Because of Brexit.

"I am starting to miss the dictatorship of those unelected Brussels bureaucrats"

The view of the Lebanese/Swiss (so admirably objective) cartoonist Chappatte in Der Spiegel. (For copyright reasons, you will need to click the link to see his take on the post-Brexit British Parliament.)

Homelessness

The final sentence of Peter Black's post today (all of which should be read and marked by AMs and councillors) brought back a chilling memory.

One thing is clear, sweeping homeless people off the street as advocated by this Cardiff Tory Councillor solves nothing other than hiding the problem so as not to inconvenience certain people's sensibilities.

In the 1970s, the Metropolitan Police were in the habit of tidying the streets by throwing (sometimes literally) rough sleepers behind advertising hoardings. The practice was brought to light and thankfully stopped when one such victim in south London was found dead.

I don't want to say "I told you so" again

On the eve of the 2016 referendum, I predicted that withdrawal from the EU would not cause the UK economy to fall off a cliff. There would rather be a barely noticeable but inexorable decline in investment*. Here is part of one of my posts:

[There are few 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.

So Airbus chief executive officer Tom Enders' last-minute warning sadly comes as no surprise:

European planemaker Airbus has warned that it could move wing-building out of the UK in the future if there is a no-deal Brexit.

The firm's chief executive, Tom Enders, said the firm "will have to make potentially very harmful decisions for the UK" in the event of no deal.

Mr Enders said it was a "disgrace" that businesses could still not plan for Brexit.

In all, Airbus employs 14,000 people in the UK.

That includes 6,000 jobs at its main wings factory at Broughton in Wales, as well as 3,000 at Filton, near Bristol, where wings are designed and supported.

Mr Enders said: "Please don't listen to the Brexiteers' madness which asserts that, because we have huge plants here, we will not move and we will always be here. They are wrong."

The Standard also repeated news of other imminent departures:

Sony said it would transfer its European HQ from the UK to the Netherlands to avoid disruptions caused by Brexit.

And appliance maker Dyson announced it was moving its headquarters to Singapore, from Malmesbury in Wiltshire, although it said the decision had nothing to do with Brexit.

The Dyson move may not be directly inspired by Brexit, but the company will no doubt take advantage of the free trade agreement Singapore has with the European Union.

  *Minister George Hollingbery's sanguine statement in the House this morning that UK remains the most favoured nation in Europe for foreign direct investment (FDI) is based on data up to 2017. The trend in 2018, which showed France catching us fast, may lead to a different story this year.

Prisoner voting is part of rehabilitation

A group of academics has called for Welsh prisoners to be given a postal vote to "improve Wales' international standing". This is a rather shallow argument. One might better say that the reform would bring Wales into line with the rest of the civilised world leaving just the United States and the rest of the UK with an Old Testament approach to crime and punishment.

The pragmatic justification, apart from the moral one, for not stripping convicts of one of their civic rights is that it keeps them in touch with their community and thus helps their rehabilitation.

I am aware that it would be invidious to judge which convicts are reformable and which are dedicated career criminals, and that  the latter are predominantly Conservative sympathisers, but that is a price worth paying for the greater benefit.

Station Road bridge

Fourteen years after I publicised the state of the road bridge by Skewen station, a 3-ton weight limit has been imposed. It seems to have taken the signalling upgrade work on this section of the rail line for action to be taken.

Ministry of Justice has seen sense over proposed Baglan super-prison

Prisons minister Rory Stewart has announced that plans for a super-prison in Port Talbot have been withdrawn after strong objections in the community.

Bad news for aged couples buried

Thanks to BBC's Money Box but no other broadcast news outlet that I know of, one learns that a mean tweak to the eligibility of couples to pension credit, which has been on the shelf since 2012, will be brought into operation from 15th May. (The government announcement was slipped out on the eve of a key Brexit vote.)  Basically, couples will only qualify for pension credit when both parties have achieved state pension age, whereas before only one partner needed to have done so.

Brexit or no Brexit, drug availability is a worry

Radio 4's Inside Health this week highlighted shortages of certain medicines. This must cause sleepless nights to all the health ministers in the UK, not just Nick Hancock in Westminster.

[Later] The BBC news site has more here. The graph included is open to several interpretations. One is that stockpiling along the supply chain increased after the result of the referendum became known, declined as it looked as if an acceptable deal with the EU27 could be reached, and resumed as it appeared that the UK government still contemplated a hard Brexit.

A sensible move which could have been made long before Brexit when these shortages first became obvious has now been made because of fears about Brexit. Until now, if a pharmacist recognises that one branded formulation is equivalent to the prescribed one which is out of stock, he or she has had to send the patient back to the GP to request a changed prescription. The "serious shortage protocol" described here is reported to have been approved by government and will be brought into effect "in weeks". Where there is genuine equivalence, a pharmacist will be able to substitute one brand for another without the delay of reference back to the GP.

It has long been suspected that wholesalers have been able to play the market by creating artificial shortages. There is also the problem that insurance-based health providers on the continent are able and willing to pay more for medicines than the more tightly-budgeted NHS can. It seems to me also that the concentration of supply, both in manufacture and wholesale, in fewer hands over the last thirty years has reduced the benefits of competition. As drug companies have become larger, and more sensitive to stock market pressure, they have found that the profit margins on some common drugs are too low and have discontinued manufacture.

Peace for a time

The Versailles conference which began one hundred years ago today probably created more problems than it solved. It should be remembered that officially the Great War was still on, although various armistices round the world had put an end to hostilities. There was therefore pressure to conclude peace agreements. (The fact that no surrender document had been signed to that date was something which Adolf Hitler was later to use.)

Decline of the British civil service

The wrecking of the world-renowned civil service begun under Thatcher and Heseltine continues apace. The high-powered Institute for Governmet reports:

Excessive staff turnover in the civil service is costing the government up to £74 million a year in recruitment, training and lost productivity. The indirect costs of turnover are even higher, including disruptive leadership changes contributing to major projects like Universal Credit going awry and weakened institutional memory damaging policy development in key areas.

Published today by the Institute for Government Moving on: the costs of high staff turnover in the civil service finds that civil servants in the UK – particularly senior civil servants – change jobs much faster than civil servants in other countries or private sector organisations.

Several departments, including the Treasury and the Cabinet Office, lose a quarter of their staff each year. Across Whitehall, managers stay in post less than two years. The Treasury’s Welfare Policy Team and MHCLG’s Homelessness Policy team changed almost entirely in just three years. Rapid change leaves civil servants ill-equipped to advise ministers on crucial decisions.

The report also finds that Brexit is driving higher turnover across Whitehall. While staff have had to be found to work on Brexit, some are taking on new roles as a promotion opportunity before moving on quickly. This is both bad for Brexit work and disruptive for the areas these staff leave behind.

The report argues that excessive turnover is a result of Whitehall’s open internal jobs market and a cap on pay which means officials have to change roles to get a pay rise. Anyone can apply for any job at any time and managers have little means with which to encourage them to stay. This pits departments against one another in a war for talent. Movement of staff is largely unplanned, driven not by where the Government needs skills and experience but by the desire of individuals to advance their career prospects. Overall, there is a culture of valuing generalist civil servants who move quickly above those who develop expertise and see through projects.

There is more here.

Approval of implanted medical devices

The recent BBC story about Oculentis and less-than-perfect replacement lenses, reminds me of the work which the International Consortium of Investigative Journalists (ICIJ) has done in researching and exposing the far more harmful defective implants and the faults in the approval process. Today ICIJ reports world-wide outrage at the failure to inform implant patients of the dangers.

One trusts that those who can will donate to help ICIJ keep up the good work.

Let us wait and see

Yesterday's vote in the Commons staved off withdrawal from the EU for the time being. The debate also showed that a No Deal Brexit (or "clean break" or "WTO terms" as its proponents euphemise it) has few friends. So steps must be taken to adjust the statutory date for leaving of 29th March for fear that the UK falls off the cliff by accident. This must be the first task of the Commons after today's No Confidence vote whether Mrs May wins or loses.

Some excerpts from the parliamentary debate

Stephen Gethins, a Scottish Nationalist, reminded us that the European Union is not an undemocratic tyranny nor a monolithic super-state.
I have found utterly baffling and really quite depressing the lack of knowledge about the European institutions in this place. The EU is made up of independent and sovereign states, which reach agreement and compromise in what is truly a partnership of equals. There is democratic oversight from the European Parliament—Ministers here have attempted to stifle democratic oversight—and there is a Court, not to impose anything on anybody but to resolve disagreements, which will arise in any democracy with 28 independent and sovereign member states.

Conservative Jonathan Djanogly demolished the arguments for leaving the EU "on WTO terms"
First, most business wants a customs union because it allows free movement of almost half our exports between Union members without tariffs and checks and paperwork. Opponents say that this would stop the UK forging its own trade agreements, but, to my mind, the benefits of the EU customs union are far greater. We must keep in mind that the EU has some 250 FTAs [Free Trade Agreements] with some 70 countries, and the UK plan is to “roll over” those deals, meaning that, at best, we would have the same—not better—terms as the EU with one third of the world’s countries. There would be no advantage of being outside the EU. That is, of course, assuming that we are able to make those deals happen, which we know is proving somewhat elusive, as the hon. Member for Nottingham East (Mr Leslie) explained.
Secondly, the chances of negotiating better FTAs as a country of 50 million, rather than a bloc of 500 million, is realistically and simply not how it normally works.
Thirdly, there will be significant costs of going it alone on FTAs, from being forced to take US genetically modified crops to issuing visas to countries, as currently requested by Australia and India.
Fourthly, FTAs take a long time to negotiate—an average of seven years. Fifthly, the claim that Commonwealth countries will prioritise us over the EU is unrealistic, not least considering that the Czech Republic currently has four times the trade with New Zealand than we do and that the Swiss do much more trade with India than we do. Sixthly, “most favoured nation” clauses in our rolled-over EU agreements and the integrated nature of world trade will significantly reduce our ability to get commercial advantage. Finally, high levels of foreign input into our manufactured goods will create huge problems under the so-called rules of origin.

Vince Cable, speaking from personal experience, expanded on the WTO difficulties
long before I came into the House, I was part of a small community of international trade specialists and got involved in negotiating the so-called Uruguay round and then the Doha round as part of the World Trade Organisation—or, as it was then called, the General Agreement on Tariffs and Trade [GATT]. I saw at first hand the way in which the WTO system operates. I realise that there is no longer just a small community of anoraks, which is what we were. A large number of people now consider themselves experts on trade policy, but the glibness with which the term “WTO rules” is applied leads me to believe that there are probably not too many anoraks, because there are some very real difficulties in applying WTO rules.

The World Trade Organisation is to trade what the United Nations is to peace. It has some admirable principles, but I think most Members, and certainly those on the Government Benches, would consider it seriously negligent of us to make our national defence dependent solely on the rules of the United Nations. Rules have to be enforced, and they have to be effective.

We need to look back on what the World Trade Organisation is and what it is trying to achieve. In the post-war world, it has established one central principle, and actually it is not free trade; it is something called the most favoured nation—MFN—rule. It is about non-discrimination. It has one big waiver, which is to allow common markets and customs unions such as the European Union to function on the basis of total free trade within themselves, but its whole objective is to stop the proliferation of bilateral agreements.

Such agreements were common in the inter-war period, and they are becoming fashionable again. Many people who are in favour of Brexit say that they are the whole purpose of trade policy. Those people want deals with numerous countries, but the whole purpose of the WTO was to stop this happening. It was supposed to be a multilateral organisation. In that capacity, the WTO achieved a great deal. It cut tariffs to single digits on most manufactures except agriculture, and it got rid of quantitative restrictions, except for the quotas that still exist for agriculture and textiles. It also began to establish a set of rules around intellectual property and various other intangible non-tariff barriers regarding, for example, government procurement.

The problem is that the WTO reached the zenith of its authority about 10 years ago, when the Doha negotiations collapsed and multilateral trade negotiations ceased to make any progress. This was largely due to the obstruction of India, Brazil and, to some extent, the United States. The European Union was actually the main liberalising force, but anyway, the negotiations collapsed and the WTO’s authority is now much less strong. Where does that leave us in terms of what the WTO rules now mean? If they mean anything, it is the application of the rule of law. In the WTO, the rule of law operates through dispute panels, which in theory have the same force as the European Court of Justice in settling disputes. It baffles me that Conservative Members ​are so affronted by the intrusiveness of the European Court of Justice, because it was designed to achieve precisely what the dispute panels of the WTO were designed to do.

However, like the United Nations, the WTO is not a desperately effective body, and many of its rulings are not carried through. Because it is a weak organisation, it is possible for big countries to bully weak ones. A celebrated case some years ago involved a trade dispute between the United States and Costa Rica—over men’s underpants, as it happens—and Costa Rica won the dispute. The United States felt deeply humiliated and refused to comply. A face-saving compromise was eventually reached, but that dispute sowed the ill feeling that in due course led to President Trump, who has made it absolutely clear that he does not believe in the World Trade Organisation. He does not want it to work, and he is doing everything he possibly can to stop it working, including not sending judges to sit on the dispute panels. It is now a very weak organisation. If we were to crash out of the EU under WTO rules and found ourselves in a dispute with the United States—or, indeed, with the European Union, which we had left—we would not be able to rely on the WTO dispute panels to settle the dispute in an orderly manner.

That is one of the WTO’s central weaknesses. Another is that, throughout its history, it has been overwhelmingly concerned with getting rid of tariffs. The main problem in international trade these days is the divergence of standards, which is of course why we originally entered the single market under Lord Cockfield and Mrs Thatcher. That was perfectly logical. If we are trying to liberalise trade, we attack the non-tariff practices that obstruct trade, hence the harmonisation of rules on mutual recognition. However, the WTO does not do that. It has very weak rules covering government procurement and all the barriers that are dealt with in the European Union through the rules on state aid, competition and the like. That, in turn, means that there is very little in the WTO that covers the services sector, which, as we have been reminded, accounts for 80% of our economy. We have a fair degree of liberalisation in the services trade in the European Union, which benefits our high-tech industries, financial services and so on. No such arrangement exists in the WTO. Those sectors are completely unprotected.

Finally, and not least, the fact is that some tariffs remain, and they are on agriculture. We have the problem that if we leave the European Union with no deal, on WTO terms, the European Union’s tariffs on dairy products, lamb and various other items, which are quite high, immediately kick in. The problem with that, as we discovered when we had the foot and mouth epidemic, is that if we cannot export, prices crash. The only logical response from the farming industry, in order to maintain the value of the stock, is to slaughter large herds. This will happen. We know there is a paper at the moment in the agriculture Department—the Department for Environment, Food and Rural Affairs—setting out a plan for slaughtering a third of all British sheep in order to maintain the integrity of the market. That is an inevitable consequence of a high tariff obstructing British exports.​

I sympathise with Sir David Crausby (Labour, Bolton North East)
When critics say that there should be no second referendum, the fact is that we have already had two. In advance of the second vote in 2016, those who wanted to leave the EU claimed that the public did not understand the consequences of the common market when we first voted in 1975 so, as was their right, they argued for another referendum. Now, the same group who want to leave argue that another referendum—a third one—would be an insult to those who voted three years ago, because it would be tantamount to saying that those who voted to leave did not know what they were doing.

The truth is that nobody knew what they were doing in 2016—if indeed they did in 1975. Only a few anoraks, mainly in this place, actually thought they knew what they were doing, and I have to say that some of them—unfortunately, scarily—still think they know what they are doing. If there has been a mistake in this sad saga it is that we should never have had either referendum in the first place, and that is the fault of nobody but us politicians. We are responsible for this self-inflicted chaos, not the electorate, and we have a duty to resolve it.​

If I have learned anything from all of this it is that yes/no referendums are not the right way, not even the honest way, to make complex policy in the interests of our country. They have been deviously misused by politicians to win general elections: the promise of a 1975 referendum won the election for Labour, just as the proposed 2016 referendum won the election for the Tories. What we should honourably do in the future is make it clear in our manifestos what we stand for and then put that to the public in a general election. I reluctantly have to say that Ted Heath was right in 1970 when he put in the Conservative manifesto that he would negotiate to take us into the common market and did so. That is what we should resolve to do in the future.

David Lammy (Labour, London Tottenham) impressed observers from all parties with his passion.

Owen Smith reminded us of what the Labour party used to be
Any Brexit is irreconcilable with Labour’s traditional social democratic mission and its twin foundations of providing equality and freedom. Throughout history, different wings of my party have always understood that those tandem aims were at the heart of what we stand for. Bevan said that there is no freedom without an end to poverty. Crosland said that our job is to pursue equality and freedom. There cannot be one without the other, just as there cannot be a cake-and-eat-it Brexit. If we are to be true to that mission, we surely cannot accept any outcome that will limit the ability of our people to live and work in this country or elsewhere. What have we come to that we have a Prime Minister who tells the country to celebrate curtailing the rights of our citizens to work and live abroad? It is plainly out of kilter with reality, and it is plainly wrong for our people.

Nor should we in Labour give any succour to a policy that is fuelling the hard-right politics of hatred and repression, the enemies of the social democracy that we all believe in, not even if—I wish to emphasise this point—there is electoral advantage for us in so doing. If there is seen to be electoral advantage for our party letting the Tories carry the can for a Brexit deal that diminishes the living standards of our people and that extends austerity such that we might contest an election and win it on that basis, it would be shaming for my party to pursue that strategy. We would be sacrificing the lives and livelihoods of the people we came into politics to represent.

In conclusion, we have to be clear: Brexit is a terrible mistake for our country, and the only way in which we can reverse that mistake is by asking the people to do so. We have had two years of exposure to the failures, flaws and risks that Brexit entails. Now is the moment for my party to show leadership, to lead the people away from the brink of Brexit, to offer up the proposal that we revoke article 50 and then, crucially, to campaign and win a people’s vote and to stay in the European Union.

And, finally, Sir Edward Davey. I have frequently on this blog, and in Facebook postings, tried to get across that UK's accession to the European Common Market, soon to become the European Community, was pushed through by men who had commanded army units with distinction in the Second World War. (An earlier attempt to had been made by Harold Macmillan, a decorated officer from the First World War.) That accession was endorsed in 1975's referendum by hundreds of thousands of men and women who had either served in that war or seen the devastation that it had brought in our great cities and across Europe. They knew damned well that they were voting for closer economic and social ties which would make future wars between nations in Europe virtually impossible. Ed Davey reminded us of a post-war warrior.

My friend, Lord Ashdown—Paddy—is being buried today in Somerset, so I hope that the House will allow me to speak about this deal as I think Paddy would have done. [...] I worked for him for nearly 30 years, beginning as his economics adviser, and when he talked about Europe, he talked about the way in which countries needed to co-operate and work together. Internationalism was in his liberalism. He talked about how, working with other countries, this country could regain sovereignty and regain control over global capitalism, and the multinationals that sought to undermine the interests of individual countries, people and corporations. His view was that we were stronger and had more control. That was his approach to the European Union.

However, things went much deeper than that. Paddy was a soldier and a diplomat, and he brought that experience and those beliefs to the European question. It was his commitment to peace and to patriotism—he loved his country—that made him such a strong pro-European. We see that in his books and his speeches when he talks about the dangers of rising nationalism and protectionism around the world. He worried about Trump, Bolsonaro and Brexit, and he thought that Britain being in the EU was one of the best ways of combatting those rises in nationalism and protectionism. In his work in Bosnia, he talked about how the EU’s institutions were bringing peace not just within that country, but within the Balkans. Indeed, if we look at what is happening, the EU is one of the magnets that is ending the hostility between those countries, and it can play a key role. It is an engine for peace, as it has been across Europe.

Of course, as man who was born in Northern Ireland, Paddy would look at the threat to the Good Friday agreement with serious concern. Nearly 3,600 of our countrymen and women died in the troubles, but few have died since the Good Friday peace agreement. People inside and outside this House should think carefully about anything that puts that at risk. Paddy certainly did, believing that the EU was a way of gluing people together and moving away from past hostilities.

I was Secretary of State for Energy and Climate Change when Putin invaded Crimea and the Bolsheviks went into eastern Ukraine. There were crisis summits. The European Energy Council got together to work out how to deal with the matter, and one way of undermining Putin was to reduce Russia’s oil, coal and gas exports by ​ensuring that the EU became more secure by going green and by trading within itself, making it less dependent on Russia. That meant less money into Putin’s pockets and therefore fewer soldiers and rockets. That was how the UK could exercise soft power through the EU. Europe’s energy security strategy was written in my office in Whitehall, because we were able to use soft power to try to promote security and peace. That is what the EU is about, and that is why Paddy supported it.

The crisis can be postponed no longer

On the brink of crucial votes in the House of Commons, I quote practically all of a post from Simon Wren-Lewis whose credentials both as a practical economist and as an academic command respect.

We are probably about to take the huge step of leaving the EU that a majority of the population no longer want. We will do so because certain political forces have elevated a rigged, corrupt and unfair vote into something all powerful, that demands to be obeyed. If you doubt this think of all those who claim a second referendum would be undemocratic: a statement which is a contradiction in terms unless 2016 has some unique, special status. The purpose of this post is to argue it does not deserve this status.

The UK is a representative democracy that very occasionally holds referendums. Although referendums have been reserved for constitutional issues, it is not the case that constitutional issues are always decided by referendums. Instead they often tend to be used by governments to put to rest major internal debates over constitutional issues. Cameron promised to hold a referendum on EU membership in order to (temporally as it turned out) silence internal debates within the Conservative party.

I discussed why the referendum was badly designed here. Leave were not required to settle on a particular alternative to being in the EU: EEA membership (Norway), being in the Customs Union or not, being in the Single Market or not etc. For that reason Boris Johnson can claim that leaving without a deal is closest to what Leavers voted for even though No Deal was never proposed by the Leave campaign. This lack of specifics also made it easier for the Leave campaign to spin fantasies like ‘the easiest deal in history’.

The result of the referendum would have its impact on two main groups above all others: UK citizens living in the EU and EU citizens living in the UK. The only people in that group allowed to vote were UK citizens living in the EU and registered in a UK constituency less than 15 years ago. However Commonwealth citizens resident in the UK were allowed to vote. In the 2014 referendum on Scottish Independence EU residents were allowed to vote. How do you describe excluding UK residents who would be most affected by a referendum as anything other than rigging that referendum.

Vote Leave broke election law in at least two ways, yet neither of the main political parties seem to care (one for obvious reasons, the other less so). We still do not know whether the Leave campaign was funded by Russian money or not. To dismiss this by saying the extra spending probably didn’t influence the result misses the point. If all that happens after one side breaks spending rules in an election is a fine then we are on the road to US style elections where money plays a very big role. That in turn leads to a plutocracy of the kind I describe here and which Jimmy Carter has recently talked about. The penalty for overspending has to be very large, and the obvious penalty is to cast doubt on the validity of the vote. Rather than speculate on whether law breaking influenced the result, we should just say the vote was corruptly won.

But there was a much deeper unfairness with 2016 than Leave campaign spending, and that is the behaviour of much of the media. Most of the right wing press effectively groomed their readers long before the referendum with constant stories, often simply false, of an interfering Brussels bureaucracy: so much so that the EU set up a website to correct untruths.

Those untruths continue. I referred to one concerning Slovakia and Jaguar Land Rover in my Sunday post.

During the campaign most of the right wing press (80% by daily readership) were effectively part of the Leave campaign, providing what is bestdescribed as propaganda. The influence of the press was particularly important because, unlike a General Election, most people before the campaign were uninformed about the EU. This propaganda might have been counteracted with information provided by broadcasters, but the BBC in particular decided to balance truth with lies. Elections where information is replaced by propaganda are not fair. 

For all these reasons 2016 was not a free and fair referendum. But the same political forces that had championed Leave in the campaign went about deifying the (narrow) victory. Brexit quickly became the ‘will of the people’, as if the 48% who voted to Remain - and especially EU residents whose future was put in doubt - had either ceased to exist, or have become traitors. This alliance between Brexiters and the right wing press is the main reason why support for Leave has stood up despite everything that has happened since: who wants to be a traitor? An indication of how successful this continuing campaign has been is that if you ask people about how the economy has been since the vote, they will probably mention first the pre-vote Treasury short term forecast that predicted a recession, rather than actual events like the fall in real wages caused by the Brexit depreciation.

It did not help the Remain cause that the then chancellor of the exchequer, George Osborne, given a range of Treasury forecasts, deliberately and dishonestly chose the most extreme.

Once it became clear that the Leave campaign’s claim that the EU would allow us to retain the benefits of being in the EU after we left was pure fantasy, it was natural for the Brexiters and most of their press allies to migrate to advocating No Deal. It is the only outcome that might give the UK some more sovereignty (or perhaps US regulations), albeit at a terrible economic and political cost. Project Fear easily transfers to what might happen with No Deal.

In a rational world, and dare I say in any real democracy, the possibility of No Deal would be eliminated with ease by MPs, who would simply mandate the executive to Revoke Article 50 on March 27th if no other way forward had been agreed.

Sterling all-time low

Will we see the pound fall below its historic nadir of $1.11 reached on this day in 1985?

[Later: it appears that the glimmer of an Exit To Brexit has raised sterling to $1.28 and it is currently (at 16:25) gaining against most currencies.]

Rail finance

Railfuture has published some graphs which show that fares paid by passengers on railways in England and Wales have increased over the years by more than the CPI measure of inflation which is favoured by economists.

The transport minister insists that he will not switch to a CPI-based formula for the calculation of regulated fares so long as the unions base wage claims on RPI, which exaggerates price inflation. However, it is too simplistic to pass all the blame on to the unions; the Department for Transport's interference in the way train operating companies manage is another factor.

Catching up on the EU debate

It was a quiet shopping day in Neath yesterday, and the demonstration by Welsh Liberal Democrats and other anti-Brexiteers, including Labour, was correspondingly low-key. On the positive side, it meant that there was no need for the three police officers in Market Street clearly posted to prevent the sort of far-right reaction threatened by transport minister Chris Grayling.

While I was there, the only argument I had was with a gentleman who protested that the people had voted in 2016 and that was that. It is an understandable point of view; David Cameron had stated that he would abide by the majority vote and on the day after the referendum would begin to oversee the UK's withdrawal from the EU. Voters were led to believe that the cases for either side of the referendum were fairly put, and that the  powers-that-be knew what they were doing and could be trusted to just get on with it.

In the event, Cameron dithered and then resigned rather than "get on with it". It also transpired that the Leave side had not only exaggerated the size of the UK's contribution to the EU budget and lied about the ability of the UK to prevent "benefit tourism", it had also broken electoral law and misused personal data, illegally obtained.

We live in a representative democracy. We elect people we trust to collectively make the best decisions on our behalf. Our MPs are a cross-section of society, not special in themselves, but in a special situation. They have access to the wisdom and experience of their fellow members, to an excellent library and research service and to the deliberations of select committees, who can command the attendance of expert witnesses. So they are better informed than the vast majority of their electors. It is no shame to say that, in the light of what they now know about the implications of withdrawal, it was a mistake to issue the Article 50 letter or at least set such an impractical timetable for leaving. Over the Iraq war, the House of Commons accepted that it had been lied to by apparently impeccable sources; it can do something similar over Brexit. 

The economic implications

Over the two-and-a-half years since the referendum it has also become painfully clear that few people - and I include Remainers like myself - realised what an intricate web of movement of goods, including vehicle and other parts, had been built up during our membership of the EC/EEC/EU thanks to the abolition of red tape. Customs clearance between the EU and third countries involves more than mere tariffs. It was the disruption of this web which Dr Ralf Speth, chairman of Jaguar Land-Rover and others including academic experts warned against last autumn. Their specific fear was for a "hard Brexit" (no agreed withdrawal deal with the rest of the EU), but it seems to me that any withdrawal which sees the UK outside a single market and customs union will impede the "just-in-time" systems which manufacturers with plants in different nations rely upon.

As if on cue, JLR has announced further job cuts. The slow-down in the Chinese market and the panic of potential diesel buyers (in spite of new stringent standards) have been the major factors, but Brexit was also cited by JLR in the company's latest statement. Ford's Bridgend factory, which supplies engines to Jaguar, was hit by the JLR retrenchment and also by a review of Ford's European operations, in which the supply chain was a significant consideration. The scale of losses in Bridgend has not yet been confirmed, but most news outlets agree that eventually 1,000 jobs will go.

There is a story circulating on Facebook that the EU gave money to JLR to set up competing assembly lines in Slovakia. This is not true. The European Commission's only involvement was to rule on Slovakia's decision to give state aid to the company. In this, the Commission was in fact protecting factories in other parts of the EU, including the UK, from unfair competition. The EU rules on state aid are strict. Slovakia convinced the Commission that in this case the aid was necessary for Jaguar Land Rover to invest in Europe rather than in Mexico.

There are authoritative reports from Japan that Hitachi's board is likely to decide to suspend all work on the Wylfa Newydd nuclear plant on Anglesey. Rising construction costs are cited, but there is "mutter from the gutter" that Japanese banks which are presumably the source of the loans enabling the project have lost faith in the UK economy post-Brexit.

A quincentenary

Today is the 500th anniversary of the death of Maximilian the First, anti-Semite and the Holy Roman Emperor who extended the Hapsburg influence in every direction: to the Netherlands, Spain, Bohemia, Hungary, Poland, and Italy.

Traffic pollution: a test case which could cause the world to wake up

The death of a little girl in Lewisham from an asthma attack may soon attract headlines beyond these shores. Her mother and other campaigners have succeeded in obtaining a fresh inquest. If this finds that illegal levels of air pollution caused, or were a major contribution to, her death, government at national and local level will sit up and take notice.

It is not as if the South Circular, bad as it is, is the worst offender. Hafod-yr-Ynys in Crumlin is regularly cited, and I would cite Birmingham, situated in a bowl as it is and addicted to the motor-car, as lethal during a period of temperature inversion.

There are even more deadly cities elsewhere in the world.There is respect overseas for our courts and a key decision here will, one hopes, stir authorities into action.

I thought every politician knew of the WEA

Sir John Hayes (South Holland and The Deepings) (Con)
The present is formed by what we know, and the future is shaped by what we learn. In that spirit the Workers’ Educational Association reaches 50,000 people a year through a network of branches and an army of volunteers. It teaches everything from architecture to arithmetic and from computer skills to competence in English, and yet, alarmingly, it now faces a 28% cut in its core funding. You, Mr Speaker, will doubtless be familiar with the words of the Commission on Adult Education from 1919:

“Adult education is a permanent national necessity, an inseparable aspect of citizenship, and therefore should be both universal and lifelong”.

Is this generation to forget what its forefathers knew: whatever disadvantage people face, they deserve the chance to bask in the light of learning?

Andrea Leadsom [Leader of the House]
I certainly agree with my right hon. Friend about the importance of learning. I am not aware of the organisation he mentions, but I am sure he will, in his usual way, seek an Adjournment debate so that he can raise the issue directly with Ministers.

Disgrace of UK's financing fossil fuel extraction

Harriet Baldwin, minister at the Department for International Development, tacitly admitted that the British taxpayer is financing industries abroad which potentiate climate change. The deputy leader of the Liberal Democrats asked in the Commons yesterday:

Jo Swinson (East Dunbartonshire) (LD) Does the Secretary of State see the huge contradiction between the vital work that DFID does helping countries to mitigate and adapt to climate change and UK Export Finance continuing to subsidise billions of fossil fuel projects?

Harriett Baldwin I assure the hon. Lady that, on climate change, we continue to improve access to clean energy for millions of people worldwide. That is an important part of the work that we do within our UK aid budget.

Ms Baldwin thereby implied confirmation of the reports that UK finances coal and gas extraction and hides the fact. UK aid money even goes to two schemes aiming to “export the UK’s expertise in shale gas regulation” to China. One recalls Tory indignation at aid being given to projects in India, a few ranks below us on the table of richest nations at the time. There has been silence from the Conservative benches in the two months since the Independent's report about a hidden subsidy to a nation which will shortly overtake the USA on several economic measures.

Concorde's fiftieth

5th January 1969 was the date of Concorde's first test flight from Bristol. It was the noise and, especially, the thirst of her Bristol Olympus engines which probably did for her as a commercial venture. However, I do remember Concorde passing over Swansea that year and, noisy though she was even at cruising height, I seemed to be the only one looking up.

"The rôle of the Speaker ... is not working as well as it should"

This was part of the contribution by Conservative Maria Miller to the Commons debate on parliamentary standards last night. She was speaking in the context of Dame Laura Cox's report on the bullying and harassment of parliamentary staff, but she might well have been discussing the conduct of parliamentary business overall. As the deputy speaker Eleanor Laing remonstrated, when she reluctantly had to close the debate:

My decision and my ruling from the Chair this evening has been that my reading of this Chamber was that the vast majority of Members in this Chamber wanted to have a decision on this matter this evening. I agreed with the right hon. Gentleman earlier that it is a great pity that today we had urgent questions lasting for some two hours and eight minutes that were somewhat repetitive, and that we then had statements lasting for three hours and two minutes that were also rather repetitive. As I said to the right hon. Gentleman [Sir Desmond Swayne, who had been prevented from speaking by the closure] in answer to his point of order earlier this evening, these matters are in the hands of Members. If Members insist on having their voice heard again and again, making the same point on the same matter, we will be in a position whereby an important debate such as the one that has just concluded has not had nearly enough time, but these matters are in the hands of Members.

This is more than a procedural quibble. Important debates are truncated or even postponed because of the promiscuous scheduling of Urgent Questions and the reluctance of the usual suspects to forgo a contribution if their point has already been made by another honourable member. The constant banal repetition must put off even those voters interested in current affairs from watching Parliament in action. Thus important matters are missed along with the party political dross.

Speaker Bercow, who has been a reformer in other respects, is alleged to be a bully behind the scenes. A debate on the Cox report could have been expected to produce further criticisms of his personal  conduct, particularly if the debate had started before the evening TV news bulletins and if it had run its natural course. It was therefore helpful to him that two government ministers made lengthy statements (about the "long-term plan" for the English NHS and government policy on drones). But was it necessary to accept an Urgent Question on Brexit which predictably went over well-trodden ground? And, serious though Nazanin Zaghari-Ratcliffe's plight is, could the FO usefully say anything new, considering the delicacy of diplomatic negotiations?