Is Populist Democracy an erosion of Democratic Values

Democracy is a given in the Western World – or is it? There is so much debate in recent times about democratic rights of various factions my head is spinning trying to comprehend how this word is being used – or abused.

If we go back to the fundamental meaning of democracy, we need to consider nation States where civil liberties and fundamental political freedoms are not only respected but also reinforced by a political culture based on democratic principles. If we consider the characteristics that should define a democracy, we will see freely elected government representation, respect of civil liberties, an independent judiciary, organised and elected opposition, all enshrined within the Rule of Law.

Being a member of Chatham House I was invited to participate in a session entitled ‘The Pandemic, Populism and the Democratic Recession’ during which Professor Larry Diamond from Stanford University in the USA outlined his argument that, especially during the past 20-years, democracy as we understand it is on the decline as Nation States throughout the World labelled as democracies remove ever more powers from and/or impose more authority over the people, currently Hungary and Poland within the EU. Whereas I fundamentally disagreed with his understanding of both the UK and the EU, both politically and economically, his view that democracy is in recession resonated. I also agreed that the rise of Modern Populism is a major factor in degraded political governance. But what is driving this degradation?

As a Christmas treat in 2004 I took my then 14-year old daughter to Boston and New York City in an attempt to give her some feel for life in the USA using the more sedate and conservative Boston as a marker against the cut and thrust of New York City. Whilst in New York we passed the CBS Building more commonly known as Black Rock. In the window there was a large screen stating, ‘United States of America – the oldest surviving democracy in the World’. This statement, for me, encapsulates the problems encountered by Americans throughout the World. I question whether the USA can consider itself a democracy when I see President Trump with connivance of the Republican led Senate impose their choice of person in the form of Amy Coney Barrett as a Supreme Court Judge for life. This can only be described as political stuffing of the Judiciary where such body is defined as independent within a democracy. Furthermore the turbulence over recent years where the whole Government apparatus becomes stagnant because the Senate and House of Representatives cannot agree a budget suggests the Political System in the USA is in need of structural reform to redefine and enhance democracy to better serve all the people before preaching their form of democracy to others. During my teenage years, segregation was still rife in the USA, and recent events stirring the Black Lives Matter upheaval suggests problems still exist.

Having close ties with Switzerland since the late 1970s I recall earlier this millennium being asked by a former Federal Counsellor of Switzerland to review their speech to an upcoming gathering of EU ministers considering the further integration into the EU of the former satellite states of the former USSR. There was a section in this speech lauding democracy, declaring Switzerland as a glowing example of a stable democracy. I could not help but point out that, in Switzerland, the Executive has total control over the judiciary with several recent occasions where the Federal Council has overridden judicial review to protect their own interests. I consider Switzerland as a Police State where people are declared guilty until they prove themselves innocent – hardly democratic. And they clearly have difficulties trying to govern in four different languages and associated cultures.

Countries such as Russia and China are accepted as undemocratic. We have witnessed both Vladimir Putin and Xi Jinping engineer their longevity in leadership amending constitutional rules as needed to secure their positions. Opposition is summarily dismissed even using horrendous methods such as Novichok agent with apparent impunity. China’s reversal of democracy in Hongkong with its latest dictum that MPs in Hongkong must be patriotic to Beijing if they want to serve demonstrates blatant disregard for the democratic freedoms afforded the people of Hongkong under the hand-over Treaty with the UK.

The recent elections in Belarus demonstrate that power corrupts leaving most of the former socialist States, even those classified as democratic, revealing the flaws in their leadership determined to retain authoritarian power by any means as the people become more aware of the rights they should enjoy as citizens. And, of course, we should not ignore the corrupt Governments in Africa whose leaders will use any level of guile and oppression to retain their corrupt power.

The citizens of the World are becoming more aware of the concept of democracy and seek to exert their rights within the accepted democratic framework. Authoritarian leaders who cannot easily apply direct oppression are seeking other means to retain their power. Knowing that many people have very little if any understanding of politics or economics they use Modern Populism as a powerful aphrodisiac. Knowing the affection of the people for pop artists and movie stars authoritarian leaders personify themselves as superstars worthy of the embrace of the people. Such charismatic leaders manipulate receptive voters by promising outrageous utopia whilst vilifying opponents using the ever-increasing wealth gap to decry the corruption and self-interest cronyism of the elite. Unfortunately, this works for enough voters to swing elections from capable Government into governments in name only. The star-struck voters get what they deserve, only realising their error when it is too late for 4 – 5 years, or as we are witnessing in countries such as China and Russia, for life of the leader holding the power. Constitutions are revised to cement the power base; democracy becoming no more than a word of convenient political rhetoric. This herald back to kingdoms where the leader has absolute power for life – no matter what.

The recent Brexit debacle in the UK sheds interesting light into this discussion. After the first Brexit Referendum the so-called Remainers – the voters who wanted the UK to remain part of the EU – made many outrageous claims that the Brexiteers were duped by Populism, being too uneducated to understand the issues. This view carried into Parliament where MPs from constituencies who clearly voted to leave the EU chose to ignore their local constituency vote instead voting to stifle the process. It took two further elections and the loss of a number of seasoned politicians and some younger opportunistic politicians to give Boris Johnson a mandate to leave the EU but many Remainers still argue that voters were casting their vote to prevent Jeremy Corbyn from leading a Government, not to leave the EU. Thus, we have a perplexing problem of voters not considered capable of casting a reasoned vote thus voting a Populist ticket, and the losers not accepting the outcome yielding a breakdown in credibility of the democratic system.

An alternate way of reading the last General Election in the UK is that Boris Johnson saw the opportunity to use the voters to disguise the Brexit issue within the Jeremy Corbyn ultra-left-wing Modern Populism and rely on the voters to see reason that the outrageous promises to the voters by a Jeremy Corbyn led Government would condemn the UK to the Dark Ages again. The results tend to suggest even in the more depressed, typically Labour stronghold constituencies of the UK the voters were savvy enough to know what they didn’t want both in Corbyn and the EU.  

One of the long-held complaints with the EU is the unelected but powerful European Commission. How can the EU declare itself founded upon democratic principles? The agenda of the EU is clear to ever more of its citizens. The UK has responded. Who’s next?

The current Presidential election in the USA could be described as Modern Populism versus Pragmatism but look how close the popular vote. If we apply the argument that many voters are not capable of understanding the debate one would expect the vote to be more pronounced in favour of Populism or Pragmatism. I don’t envy President elect Joe Biden who must repair such a polarised nation not least because of no clear Republican or Democrat majority in either House likely creating stagnation in policy agenda. And the losing voters will consider themselves robbed of victory especially if led by Donald Trump when his legal challenges fail.

Why is democracy failing when so many oppressed people in the World crave the liberty and freedoms it promises? I grew up in the aftermath of WWII where people relied on resourcefulness and resilience to survive and thrive. Communities worked together to rebuild their lives. Life was not idyllic, far from it, but an attitude was instilled that essentially meant that if you wanted to achieve you are responsible to make it happen. This attitude accelerated during what I call the Youth Revolution – the period between the 1966 World Cup and the landing of Neil Armstrong on the moon in 1969. Resilience and resourcefulness built in prior years now could be expressed in ways which changed the UK from an essentially conservative Government to a more liberal approach. Much wealth creation during this period across the spectrum of voters – class boundaries fracturing. People felt liberated and empowered to determine their own destiny in the World and demanded a more liberal framework by Governments.

This empowerment led to the people looking to exert their rights to whatever they could get for their votes building a now overburdened welfare state where an attitude of entitlement overshadows the need for resourcefulness among the poorer sectors. For example, could a political party now get elected on a ticket of much needed scale back and structural reform of the NHS to reflect need over want? Resourcefulness has morphed into indoctrinated entitlement. Resilience has morphed into insecurity with a new lexicon of mental disorders amongst younger people. Instead of the resilience to cope, people crumble. Having observed the depressing inability of people to cope with Covid-19 lockdown goodness knows what would happen if the lights went out for any length of time. Today there are still many families who have members who survived some 6 years of WWII in the shadow of bombing raids, losing loved ones, coping with rationing, and extreme workload to support the war effort. Has what I would term as Modern Socialist Populism created a complacency that quietly forgets the price paid for the freedoms they enjoy? Thank goodness for the emergence of heroes like Capt. Tom whose positive resilience injected a much-needed dose of reflection and goodwill.

However, we digress. Or have we? Creating unaffordable expectations among the masses in the pursuit of votes is destined towards a reality check. Corporate taxation at uneconomic levels, and personal taxes at levels significantly affecting quality of life are a formula for disillusionment, recrimination and ill-will towards the Government. Modern Populism hits the buffers. The Government coffers are empty. The people are disillusioned with Liberal Democracy and must pay for their sins with a period of Conservatism to rebuild the economy and reset voter expectations.

Is there not a note of déjà vu in this progression? I remember in the 1970s living under a widespread social engineering period by Labour Governments to support its popularity essentially bankrupting the country in the process requiring some 18 years of Conservative resets to prosperity. Then in 1997 Tony Blair and Gordon Brown emerged with New Labour on a Populist ticket spending a further 10-years of cradle-to-grave social entitlement engineering finally leaving the Government coffers empty in 2007 and so many young people disillusioned with their new but worthless university degrees and massive student debt. Another reset to Conservatism, austerity, and realism. The banking crisis did not help but the coffers were empty in any event. And, just as prosperity and the freedom from the EU were set to propel the UK into a new period of accelerated growth, we are hit with Covid-19. Should China have the moral fortitude to inject $2-3Trillion into the global economy to compensate for its failure to contain this virus we will most certainly see the UK thrive and prosper post-Covid-19 before the next General Election thus thwarting the Populists who will certainly make hay if recovery is still slow. In the event that China fails to stimulate the global markets but seeks to exploit the global economic weakness resulting from Covid-19 I would expect the West to reinvigorate the Marshall Plan along with a healthy dislocation from China from where three serious viruses have emerged in the past twenty years.

So what is different today? Before social media and the degradation of conventional press reporting to satisfy 24-hour news channels using their own brand of sensationalism to compete with online social media, voters could only derive information from a limited number of outlets. Social media has completely changed the dissemination of information; good, bad, or downright false or misleading. Unscrupulous entities from individuals, organisations, and even foreign powers can, in minutes, pollute social media platforms with lies, misrepresentation and complete fabrication intended to sway receptive victims to a desired outcome. I overheard a journalist from a broadsheet newspaper declare that the demand on her for articles each day meant that she had no time to fully research and validate her stories. But who, today, reads the second page corrections if indeed any are printed?

An analysis of which degradation came first would take another essay. But what is clear is we have a collision of culture and belief where national boundaries are blurred by new global organised activism built on conspiracy theories. We experience truth decay where facts no longer matter, and people lie with impunity, some merely to seek their 15-minutes of fame, but others with a more cynical intent. We observe more authoritarian countries attempt to curb access to social media. We also observe Western countries trying to marshal content but with little effect to date. One observation of this proliferation of false or il-considered content is the need of people to feel involved in this new-found freedom of expression which requires instant gratification regardless of consideration lest they be left behind. How many celebrities take the view that they need to be connected until the vitriol received causes them to retreat?

Thus, Populists and their cohorts can exploit the lack of any integrity in published works on any platform. If voters are not happy with what is, they can easily be swayed to the promised land. How such interference in democracy can be regulated will be debated relentlessly with little or no consensus throughout the World. Democracy could well become as toothless as the UN.

I put it to my readers that the degradation of integrity in politics has created a mistrust of democracy. This is a breakdown of social cohesion that amplifies by clever manipulators through social media platforms creating false impression, disenchantment, and social discourse. History repeats itself regarding the few people needed to stoke people into war with insane losses before sanity prevails. Does democracy need to follow the same cyclic course before people understand its values and limitations. It was Winston Churchill who remarked that democracy is the worst form of Government, except for all the others. Is it time to revisit the pillars of democracy, ensure that they are relevant, fully understood and implemented, and then guarded against abuse?

Is the NHS using BREXIT to hide its own Social Engineering in the limiting of drugs to save costs?

We are currently facing a constant barrage by the NHS through the media regarding the supply of drugs. But for those already experiencing the scarcity of prescription drugs they know that this has been occurring for some time. I have experienced the lack of supply of a particular brand of Omeprazole for some months now. My partner has also experienced the lack of supply of her HRT drugs and, indeed the supply issue is likely to get worse – but not because of BREXIT in any type of exit deal or no deal.

Any self-respecting biochemist will tell you that all drugs with the same name, but different manufacturer, are not the same as small differences in the manufacture process can lead to significant differences in the way the body metabolises the drug. And I’m not suggesting that generics are worse than the original. What matters is that a patient finds the version of a drug which best suits them. Thus, when I found myself needing Omeprazole as a result of the impact on my stomach of an over-prescription of analgesics a few years back, I tested the available versions to see which left me with the least aftereffects. When I changed surgery there was an attempt to wean me onto a generic form which I already knew had uncomfortable aftereffects, but I resisted and stayed with my preferred brand.

Some months ago, when in need of further supply, I was told that there were manufacturing difficulties and thus my brand was in short supply. This situation persists to this day. However, in April this year I underwent heart surgery in a private hospital in London. They wanted to ensure that my gastric acid was kept under control so put me on Omeprazole – the same brand I preferred. I asked the pharmacist if she was aware of any supply difficulties – none.

My partner is on HRT and was told that her preferred version was again experiencing supply difficulties. She has travelled far and wide around pharmacies to fill her prescription with modest success. It was suggested to her that she should come off HRT because of the increased possibility of cancer, using antidepressants as an alternative should the need arise. The NHS have stormed the media with fear propaganda for the past few months to deflect people away from HRT. But why?

My partner is Swiss, and still consults with her gynaecologist in Zurich, who happens to be the top gynaecologist in Switzerland. He provides her prescriptions. She consulted with him regarding the shortage of these drugs. No such shortage; and sent her a supply arriving a few days later.

Coincidence, or social engineering by the NHS purely on a cost basis. Whereas I agree there is a liberal wastage of drugs in the UK, not least in hospitals whose banal pharmacy procedures must waste considerable sums of money every day issuing drugs before need is established. I was in hospital a few years back where I witnessed the wastage of some £3,600 of drugs prescribed for me over just 8 days because of ridiculous pharmacy process.

So what has this lack of supply got to do with BREXIT – NOTHING. It is social engineering in an attempt to curb NHS costs.

BREXIT – The Use and Abuse of Political Statistics

The European Elections delivered a fragmented wake-up call to Brussels; a comfort in political terms, but hardly a vote of unity. As per usual politicians from all factions engaged with the use and abuse of statistics to shed some light on the outcome in their favour, even if only to say their message needs to be clearer.

Within the UK it would be laughable as these inept politicians squirm if the issue upon which they have failed the electorate is not such a challenge to the UK constitution.

What we saw in the UK was a fledgling BREXIT Party who platformed honouring the 2016 Referendum vote to leave Europe with or without a deal. They polled 32% of the vote and won 29 MEP seats. By far the winner. General Elections have been won at this level of vote.

Then we have the Liberal Democrats who platformed a single message of scrap BREXIT and remain in the EU. How a so-called democratic party can ignore a clear democratic referendum outcome is beyond me, but they polled just 20% of the vote and won 16 seats.

Following them we have the Greens which I think is a singular, more idealistic vote. I would suggest, based on the fact that all interviews I witnessed with Green Party officials and candidates regarding BREXIT reverted to climate change within 30 seconds of the interview, that the issue of political remain or leave was not a factor in such votes. If one believes the commentators, the Greens attracted predominately younger voters who may not have a political view/understanding of BREXIT, or are more preoccupied with climate change and want a voice. Thus, I don’t think it statistically robust to consider the Green vote in the leave/remain argument.

I think that the above parties all profited from a unifying sense of belonging to a singular cause.

Of the remainder there will always be the hardcore Labour or Conservative voters who have always voted in a singular way. We don’t know with any reasonable accuracy where any such voter stands on the leave/remain argument.

The remainder of smaller parties are a mix of rebel causes on the fringes of the system. If there is an argument to put any one of these parties in either camp, then you would also argue that the UKIP vote should be added to the BREXIT Party vote. The sum of these votes does not change the political landscape, so again not relevant to the argument.

In 2016 the result of the Referendum was 52% in favour of leaving the EU. The polarised nature of this result has fragmented and frustrated politics since – a clear demonstration that UK politics is neither democratic nor fit for purpose. Why ask for the majority will of the people who turned out in numbers never before seen in any election, and then ignore it? The European Election results would suggest that Nigel Farage is right. Leavers have hardened to some 60%.

Since then the anti-democratic remain side of the argument has tried everything to scupper BREXIT bolstered by Teresa May’s deal that cannot possibly be approved whilst it challenges the sovereignty of the UK. No true, blue-blooded Brit will allow sovereignty to be under the control of Brussels. It is clear that the backstop agreement is fully intended to be activated with the only way out for the UK is to concede Northern Ireland back to the Republic of Ireland – the game that Leo Varadkar has been playing all along. It will be interesting to see how he feels when staring into the face of a no-deal with the consequences to the Republic losing its largest trading partner. Ireland’s economy decimated again? For sure Teresa May will go down as one of the worse Prime Ministers ever, even worse than Tony Blair.

The motion passed through the House of Commons taking a ‘no-deal BREXIT’ off the table was a shambolic demonstration of abuse of the political system. The EU will only capitulate to a sensible deal when they are faced with ‘no-deal’ as the real alternative. As professional negotiators well know all options must be on the table, and it is certain that the EU will capitulate at the eleventh hour if no-deal is the option facing them – with most of the EU either in or approaching recession they cannot afford this outcome. There is no such person as a hardliner Brexiteer. They are the people who understand the protocols of negotiation.

Jeremy Corbyn has always played politics with BREXIT pushing for a General Election rather than respect the BREXIT result, relying on the younger, gullible voter who will believe promises that cannot possibly be delivered. Opportunist indeed, but I think be careful what you wish for. Climate change has captured the imagination of this younger voter so they can easily drift to the Green Party as throughout Europe. Then we have the hardcore Labour constituencies who voted for BREXIT and demonstrated their disdain with their party by voting for the BREXIT Party. If the BREXIT Party do indeed contest a General Election, I would reasonably expect Labour supporter to move to the BREXIT Party thus decimating the Labour Party. Justice indeed.

As for the Conservative Party the ill-consider snap election called by Teresa May without any understanding of her failings in the Party Manifesto find themselves in a difficult position and need to bring their own MP’s fully into line and then attract dissenting Labour MP’s in fear of losing their seats if they are not seen to support BREXIT to restore order to the BREXIT process. Perhaps it’s time to ask local constituency party association officials to encourage their MP to back the party or surrender their seat to someone more understanding of collective co-operation and respect democratic outcomes.

The UK now need a capable Prime Minister who understands how to negotiate with the EU. A no-deal option must be on the table, and a hard position taken with the EU with the certainty that no-deal will be the outcome should the EU not take a more reasonable stance.

Unifying the UK is best addressed once the people see that all the remain fear tactics are nonsense, even with a no-deal outcome. The UK is the fifth largest economy in the World and has global influence the EU can only dream of. The EU cannot ignore the UK.

The European Elections have pushed the real statistics back in support of BREXIT with, or without a deal, knowing an agreeable deal will most certainly be forthcoming from the EU at the final hour. The other statistic that will be interesting to watch is how many of our current MP’s are serving their final term as in the next General Election voters express their wrath with them for failing to respect the majority will of the people.

 

BREXIT: A Pragmatic Message to the EU

The intransigence of the EU, no doubt fuelled by the traitorous people of the UK attempting to overturn Brexit, now requires a firm, but British pragmatic approach. I would propose the following:

Ladies and gentlemen of the EU we find ourselves at an impasse that could lead to unnecessary harm to our great nation States. Today we are faced with the opportunity to show why our nations have survived great turmoil in the past, and that we have learnt the lessons of failure to achieve equitable relationships. During the past two years the UK has been more than conciliatory in its attempt to smooth an orderly exit from the EU. The imbalanced level of consideration provided to the EU has clearly caused irreconcilable division in the UK Parliament resulting in many difficulties for the UK Government. In order to achieve an orderly exit this must change. Having given great thought to what needs to be achieved before the 29th March 2019 I would agree that reopening the Exit Agreement would not achieve the required progress in the time remaining. I propose we bin it. Of course, there are aspects of this Exit Agreement that can amicably and equitably be transposed to a new agreement.

Let me be clear that we will not extend the leaving date as I’m sure that we all consider that enough time an expense has been expended on this project. Other distractions such as revoking Article 50, a further referendum in the UK, any reference to Norway plus, or Canada plus plus are not considerations on which the EU can rely. The only surety is that the failure to achieve a reasonable and, above all, equitable settlement before 29th March 2019 is that the UK will leave the EU and that the £39 billion demand by the EU will then be subjected to International Court of Arbitration scrutiny and ruling. Failure to agree an equitable way forward will certainly cause short-term economic turbulence throughout the member states and the UK Government could better apply the exit amount to smooth such turbulence within the UK economy. During this exit process the UK economy has shown itself to be resilient and indeed buoyant and I fully expect this to continue regardless of what happen on the 29th March 2019.

From the start of the leaving process the UK proposed negotiation based upon a Strategic Alliance. The EU rejected such proposal insisting that the divorce settlement be agreed before any future relationship. This has proven to be a failed approach. Now we must proceed with an inclusive agreement including a future trading relationship as proposed and submitted to the EU in March of this year. As we are looking to replace an existing trading relationship none of the usual procrastinated negotiation of trade deals is either desirable or necessary. We may have to agree to further refinement during a transition period, but this is the nature of the strategic alliance process. Importantly, within the existing proposal are terms that with the installation of additional electronic surveillance on the Irish, Northern Ireland border as proposed by HMRC and declared as workable by the technocrats in Brussels we can completely illuminate the most contentious issue facing us today; the backstop agreement.

No doubt you will resound with protestation that such an agreement cannot be achieved in the time available. We disagree. Most, if not all, of the required components are at our disposal. All we need is the essential component of any Strategic Alliance; the will and commitment to achieve an economic and political relationship in the spirit of friendship and co-operation, and above all of reasonable and equitable benefit to both parties. Any financial settlement will be fully subject to such parameters.

To the heads of the EU member States I would add the following invitation. Should no agreement be achieved and ratified by both sides before the 29th March 2019 then the UK is fully prepared to continue to trade with any member State on existing terms and give priority to such trade over alternate sources if delivery and reciprocity can be assured. Further political posturing will not solve this problem and thus we must each address the realities of no deal in regard to the best interests of the people we each represent.

Why is the UK Government Shambolic?

Well, well, well, the UK Parliament has now completed their demonstration of irrelevance to the people of the UK. IN 2016 the people provided the most conclusive referendum result in British history instructing our politicians to leave the EU. What have our politicians done about it? We have politicians who claim that 17 million people were completely duped into a decision to leave – what an arrogant lack of respect for the people. They further argue that Brexit will make the UK poorer by 3.9% over 15 years. Such economics is not only irrelevant once projections exceed 5 years, but also assume the remainder of the World remains stable – most unlikely. These people are so deluded that they think people care about such minimal projection compared with maintaining their English way of life.

Then we have Teresa May’s idea of a negotiated exit. She tried to be all things to all people and was duped into an exit deal which is meaningless to all with the first attempted sacrifice of national sovereignty in UK history with the so-called backstop. As an experienced negotiator with some 30-years of experience of negotiated deals throughout the world had I been David Davis and found out that she had been agreeing terms counter to my strategy behind my back I would have ripped her throat out. A negotiator goes to the table with a mandate to agree a deal, not play puppet. She should listen to her own words when she has often said that no deal is better than a bad deal. Then she should understand that united, her enemies stand; divided they fall. Her isolationist approach allowed her enemies both in the UK Parliament and the EU to unite against her. About time she studied Sun Tzu’s ‘Art of War’. She listens to civil servants (who were probably remainers) rather than seasoned negotiators. When have such people ever negotiated a good commercial deal – think PFI and MoD procurement over the years. Her track record with the recent Conservative Party Manifesto which so obviously would lose her votes speaks volumes about her approach. Then she tries to apply a hard line by regularly stating that her deal is not only the best deal but the only deal that can be obtained. What an amateur. Who does she think she is kidding? She gives her very soft Brexit stance away when she insists that she is honouring the 2016 Referendum result but safeguarding economic interests. You cannot go to the negotiating table with one foot in each side of the argument and expect to satisfy anyone other than the EU.

We have a Parliament populated by a few who understand pragmatic democracy, the remainder being either traitors to both democracy and the people they are elected to represent, or opportunists who care only for power at any cost. Even seasoned politicians such as Ken Clarke fail to respect the 2016 Referendum result. Whatever happened to integrity, honour, servitude, and loyalty to the democratic process? The mandarins in Brussels must be laughing their socks off.  I sincerely hope that the people of the UK remember these traitors at the next General Election and cast then aside.

There is no escaping that the weak position adopted by Teresa May in these negotiations means that the UK has very little substance to show after two years of negotiation. Her stance of an amicable, soft Brexit settlement has led to concession after concession and a large exit bill without so much as a letter of intent regarding a future trade deal when such a deal could so easily be on the table today if the EU wanted such a deal. Whatever happened to “nothing is agreed until everything is agreed”? Had M. Barnier arrived at the negotiating table with a contained mandate that no trade deal could be discussed until the exit terms have been agreed a seasoned negotiator would counter with the proposal that exit terms will only be agreed when a trade deal is part of that process. The EU played well. They used the emotive Northern Ireland border issue with great effect, and May’s secret team fell for it hook, line, and sinker forgetting that it is the EU who are insisting on a hard border, and which is not necessary in any event with a suitable trade deal. The UK is not obliged to install a hard border leaving the Irish Government, hence the EU in a difficult position. And the EU’s stance; the UK wants to leave so it is their problem, and May’s team swallowed it. Negotiation is a war where dignity and respect are maintained throughout, but never accepting any responsibility or compassion for the other side’s position.

The collaborative position of the EU and the UK traitors against an ill-equipped negotiating position have manifested itself into the shambles we have today.

It is perfectly clear that the EU will do anything to avoid losing the control they currently enjoy over the UK. It is devastating to the EU both politically and economically to lose the second largest economy within the EU and to lose the influence that the UK provides in the global arena. And they want to avoid having such a large successful trading nation as a neighbour without any influence over such a nation. And off course they want to avoid losing any other major countries of the EU so must make the UK exit as difficult as possible. And we must include vested national interests such as the opportunist Irish Government seeking to use Brexit to re-unite Northern Ireland with Ireland. The contra of this is that the UK is a significant trading partner in the EU with a net surplus of Euro 1 billion per week in favour of the mainland EU. The UK is the third largest trading partner of Germany in the world, and the largest exporting partner for the German automotive industry. France exports some Euro 37 billion of produce to the UK each year. We have just witnessed how a few thousand angry demonstrators react to (needed) social and fiscal reform in France with President Macron being forced to retreat. Think about the impact of some one million farmers, trucker, and other associated business interests on the streets if told that they can no longer deliver such produce to the UK tariff free. Spain have already declared that their close relationship with the UK predates that with the EU and they have no interest in damaging such relationship. And I think Italy will just ignore Brussels. Therefore, reality will be far more powerful than political posturing. What a strong position for a Brexit negotiation. So why is the UK negotiating team sympathising with these EU realities. They are powerful weapons, and I don’t see the EU having concerns over the impact to UK citizens of their proposed stranglehold over the UK with the current deal.

As much as a no deal scenario is not desirable in the short-term because of the inevitable disruptive impact I have to agree that no deal is better than a bad deal. However, I am equally certain that the more devastating consequences to the EU of no deal would instil a needed dose of reality into this situation with the EU coming to the table with a far more reasonable and conciliatory attitude within weeks, if not days. The EU cannot afford a no deal Brexit, so the negotiating position is still wide open if the UK Government wake up and instil some British backbone into these negotiations. The Lithuanian Prime Minister has inadvertently indicated that the EU expects to concede more.

BREXIT – The EU plan to derail Brexit is exposed

At last the EU has declared their devious hand – let’s make negotiations so difficult for the UK Government that they need to put the deal to a UK vote in order the derail Brexit. Typical EU shenanigans. Ark back to various treaties that required ratification by each member State. If any member State could not get the support of the people the orders from Brussels were go back and keep trying until you get the result we require. The EU are desperate to keep the UK within the EU because of the serious impact to them of losing such a powerful member. And no doubt they have been working with compliant members of the UK Government to spread fear and negative propaganda regarding the impacts of Brexit. Even Christine Lagarde from the IMF was brought out this past week to spread her evil discourse, but she did the same just before the Brexit Referendum and what a total fabrication of economic misrepresentation and lies that was.

The interesting question now is the extent to which Teresa May is complicit with the EU as she did vote to remain in the EU. I hope not but the knowledge that she was secretly negotiating with the EU through a separate team of Government mandarins whilst David Davis was officially in office to negotiate the UK exit deal (and over which David Davis resigned) does give cause for concern. If she fails to stand her ground on a ‘no deal’ Brexit then it is time for her to go. She clearly demonstrated in her disastrous General Election manifesto that she is not a competent leader of the people and I do not think her Chequer’s paper comes close enough to what the majority of the people expect. She has repeated stated that Brexit means the UK is out of the Customs Union, the Single Market, out from under the control of the European Court of Justice, and out of the free movement of EU citizens. I agree with the likes of Boris Johnson, Michael Gove, David Davis and many others that Chequers doe not deliver this. The fact that Michael Gove has stated that a future Prime Minister will need to change her proposed deal speaks volumes.

We also see that the EU is specifically targeting the Irish border issue – probably the most emotive aspect of Brexit but in no way difficult to resolve. The UK has no desire to install a hard border crossing into Northern Ireland – a practically impossible task in any event, and not needed. The electronic border process that exists today can be readily adapted assuming that the EU is prepared to agree a free trade agreement with the UK. As this was the original intent of the EEC all those years ago and to which the UK joined – not political union – then this should be relatively straight-forward except that such an agreement would leave the door open for other member States to leave and this is the crux of the problem. The Irish border issue, and indeed Brexit, are not difficult for the UK, but they are a thorn in the side of the EU as they cannot ignore the serious impact to the EU of a ‘no-deal’ Brexit but have so many other problems that they do not want the UK to be the first of other States who see their future outside of the control of the mandarins in Brussels.

So where now? Obviously over the coming months we will see an avalanche of remoaner attempts to derail Brexit. No doubt the EU will both fuel such dissent and measure the impact as part of their strategy. Could I remind these remoaners that the UK has, for the past 100 years, been called upon to be steadfast against the conflicts within Europe. The UK is under attack from European mandarins who want control of Europe and the diminishing of the power of the UK in the process. This process is far from democratic and does challenge the freedom of the British way of life. I have recently visited with a number of different peoples of Europe who all agree that the general difference between mainland Europe and the UK is that Europe tends to be introspective whilst the UK tends to global in interests and reach. If remoaners need positive guidance they should look at the people who put their money where their mouth is. The UK stock market has been remarkably resilient in the face of substantial challenges since the Brexit vote. They believe in the future of the UK outside of the EU and buy into the UK. We see Apple moving its European headquarters to London as with Goldman Sachs, Microsoft and other major corporations. We also see Deutschebank take 25-year leases on two new office buildings in London. These people know where they need to be to prosper post-Brexit. Can armchair remoaners without such financial commitment challenge such business logic?

We are called upon yet again to be steadfast amidst the likes of well-meaning but unrealistic Lord Halifax and Neville Chamberlain attempting to appease the enemy. They are the enemy within and should certainly reap dire reward for their treachery. If Teresa May cannot stand her ground in the face of the EU shenanigans then she must step aside for the sake of the British people. The dogs are at the door; it is time to deal with their rabid intensions.

Does the UK Party Political System need a ‘Night of the Long Knives’?

 

Brexit has amplified blatant dissension amongst politicians of all persuasions. This not only creates difficulties getting anything done but also makes politics irrelevant as there is no longer the discipline within any party to fulfil manifesto pledges under collective responsibility. As politics in its disciplined form functions on mediocrity what we now have is treacherous chaos.

Having recently watched the ‘Darkest Hour’ account of the challenges faced by Winston Churchill during those dark days of May 1940 dealing with the plotting shenanigans of the fearful pacifists headed by Neville Chamberlain and Lord Halifax (whose view was essentially that he knew better than the people what was good for them). They completely undermined any attempt to deal with the fundamental reality that Adolf Hitler was hell-bent on conquering the whole of Europe, including the UK. Any hope of a peace deal as proposed by Halifax was pure fantasy based only on irrational fear. These people were the remoaners of today. Churchill’s ‘Night of the Long Knives’ came after speaking personally to the ordinary people on a tube train to Westminster and which prompted the courage to deliver his famous oratory to the Houses of Parliament on 4th June 1940. He mobilised the people of the UK to save the UK army stranded on the beaches of Dunkirk and to fight for the British way of life in the face of the overwhelming odds within mainland Europe, and in the face of certain members of UK politics. Sound familiar?

Our party-political system is based on people agreeing a basic ideology and creed regarding how to run a country. Like-minded people then form a party, select constituency representatives to stand as Members of Parliament under an agreed manifesto who, having achieved the majority of MP’s, select a leader who then forms an executive in the form of a cabinet. This cabinet is obliged to execute the manifesto upon which the people voted them into power with the full support of back-bench MP’s.

Think of the UK as a major corporate (UK plc) with a CEO (Prime Minister), Board of Directors (Cabinet), Line Managers (back-bench MP’s) and departmental workers (local constituents). Successful corporates will have competent and capable management resources who co-operate to secure their place in the market. Such corporates have a circular information flow in which strategy is fed from the Board down the ranks, and the ranks feed back the merits of such strategy in terms of execution and benefits. A competent Board will consist of Directors representing different factions of the company each expressing their own views without fear within the confines of the Boardroom. However, once a majority vote has been taken as to strategic direction then each Director, irrespective of their own personal view, is obliged to either diligently implement the agreed strategy, or find another job. Likewise with the Line Managers and departmental workers. Anyone expressing dissent or failing to comply will be quickly dispensed. A successful corporate needs allegiance and loyalty of all involved or it will surely fail.

So why do our politicians think that UK plc does not need the same corporate discipline to be successful? Why is it possible within UK plc to have a small band of Conservative back-bench MP’s who, in spite of their rhetoric to the contrary, are hell-bent on sabotaging Brexit – and think it entirely acceptable to attempt to hold the Prime Minister to ransom if she does not comply with their wishes. These people clearly think they know better than more than 17 million constituents and thus believe they have the right of treachery both to their political party and to the people of the UK.

In the case of Brexit David Cameron asked the people where they stand on UK membership of the EU. They responded in numbers never before witnessed – the majority wanted out. The people have spoken. The Executive has their instruction to leave the EU; the obligation of the back-bench MP’s to support the executive in the process regardless of their personal preference or how their own constituents voted – this was a national referendum; not regional.

So why are these rebels not dismissed? There must be a mechanism to dispense with these people. They are on the wrong side of the argument and are naphtha to the politicians in Brussels fighting to hold their power over the UK including extracting continuing contributions to its failing economy. Complex negotiations for Brexit are difficult enough without having the enemy within your own camp. As a trained negotiator the fundamental mindset is that life is simple, only people make it difficult. Unfortunately, the Churchillian orator powers of Socrates are a scarce resource at present so I fear we need an alternative ‘Night of the Long Knives’ to rid us of this treacherous few so that the people get what they expect. I would certainly like the opportunity in open debate to expose their lack of understanding of the EU venture to the UK people. When do these people wake up to the fact that the UK economy is robust despite the politically motivated propaganda of the likes of OECD and IMF. Of course the EU will trade with the UK on fair and reasonable terms – the trade deficit alone in favour of the EU is Euro one billion each week! Of course the most important centre of Global banking will remain in London (the USA have made several unsuccessful attempts to move this influence to the USA). And history has shown that the UK prospers better when it controls its own destiny.

Just a brief note on the antics of the House of Lords remoaners. Anyone familiar with the Corn Law of 1932 will understand the vested interests of hereditary peers in their fear of losing substantial subsidies under the Common Agricultural Policy that should have been scrapped years ago.

If we go back to 1940 Clement Attlee, the leader of the opposition Labour Party understood the realities within Europe and proposed a grand coalition, but absolutely not under Prime Minister Neville Chamberlain. Today we have a Labour Party in disarray regarding Brexit. Last week demonstrated that the rebels in the Conservative Party could easily be countered by the Brexiteers in the Labour Party. Thus, one remedy to rebels against Brexit would be a grand coalition of MP’s committed to the majority will of the people specifically for Brexit to achieve the best possible terms for Brexit putting Brussels on notice that the UK is united across the major parties in responding to the mandate of the British people. This would change the whole dynamic of negotiations with the EU and result in the effective beheading of the remoaners as would be the case under that greatest of Generals, Sun Tsu. Furthermore it would neutralise irrelevant but mischievous minority parties such as the Liberals and the SNP.

Has Democracy As A System of Government Run Its Course?

 

In a speech in the House of Commons on 11 November 1947, Winston Churchill said: No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time. Since then democracy has shown itself as a far from perfect system in that the inherent assumptions are that every voter has the capability to understand the issues, and the people elected to deal with the issues have the appropriate experience and wisdom to conduct the majority view of the people. Recent elections throughout the World demonstrate that neither assumption is reasonable. The result is a range of governments derived from populist to unwitting authoritarian.

My attention was drawn to the breakdown in democracy in Europe during the ratification of the Maastricht Treaty, and later the Lisbon and Nice treaties, where various EU member Governments were unable to achieve ratification of these treaties on a free vote but were instructed by the Brussels apparatchik to continue to poll until they achieved the required result, i.e. undemocratic attrition.

In the UK we have two clear examples. The BREXIT referendum attracted the largest turnout of any election in recent times by percentage of votes, and numbers who voted, thus should be deemed to be compliant with the fundamental principle of democracy. Using the fundamental principles of democracy the outcome should be accepted by all, and the Parliament of the day thus mandated by the people to conclude the exit process. Yet the remainers, or remoaners as I prefer to call them, are so vehemently opposed to the democratic result that they continue to attempt to thwart the BREXIT process without any consideration of the damage that they inflict on achieving a good divorce settlement for both the UK and the EU. To these people I say that you have no regard for democracy, the history and future of the UK, and the turnout for this important vote, but are instead far too consumed with blinkered argument with little concern regarding the damaging consequences for the people who voted, and subsequently respected the outcome of the referendum. I can assure these people that if this referendum were to rerun the vote would be more overwhelming.

Who are these people who cannot accept a democratic majority, and why do they think that they can abandon the principles of democracy in favour of a minority? I noted during the Andrew Marr show last Sunday that Labour MP, Chuka Umunna, was stating that BREXIT is so important that it should ride above party politics or personal ambition of Government members but every sentence he uttered was both party political and promotion of his own ambitions. During this week he has furthered both by stating that Parliament should have a legally binding vote on the BREXIT deal before it can be ratified – yet another attempt to thwart the process, and thus the will of the people. What a hypocrite. For balance I can also identify a Conservative MP, Anna Soubry who caused eyes to roll on the Conservative benches in the House of Commons this past Monday when she continued to vent her vehement attack on BREXIT and her party leaders. If she does not understand the principles of democracy why is she in Government?

Then we have the devastating miscalculation of the recent General Election. Short-sighted and blinkered arrogance in the extreme.  My thoughts on reading the Conservative Party (latterly described as Presidential) Election Manifesto are already published. Why did no one with political clout in the Conservative Party face down Teresa May and alert her to the inevitable consequences of such a poorly considered manifesto? I can suggest that study of the ‘Art of War’ by Sun Tzu is required study by her in future campaigns.

Of course, Jeremy Corbyn understood such consequences and saw an opportunity to seize power. He used the rise of a populist vote, especially with younger voters more consumed in their smart phones than in the real world. He promised them anything for their vote even though it was clear from the outset that none of these promises were remotely deliverable, as per populist socialist governments in South America and Africa. His was a particularly exaggerated socialist agenda that had none of the subtle argument proposed by the likes of Tony Blair. This was blatant abuse of process with the certain outcome of bankrupting UK plc. But why did these voters not see the inevitable outcome?

Today Jeremy Corbyn sees himself as the socialist saviour and although verbally supporting the BREXIT outcome he is using it as a party-political football in an attempt to unseat the Conservatives to seize power for himself. For the remoaners who think that BREXIT will be bad for the UK economy I ask them to consider the devastating consequences of a Corbyn led Government. The centre left government under Tony Blair left the Treasury coffers empty (as with all previous Labour Governments since WWII) – but this will be nothing compared with bankruptcy as Corbyn pursues a left socialist agenda. Perhaps his followers should consider the irony in my past blog ‘General Election 2015 – A Sorry Tale’.

The BREXIT campaign was bruising but, from my dialogue with people, they understood why they wanted to vote as they did irrespective of the blindingly aggressive rhetoric from both sides. My view is that the politicians were so outrageous that their words became an incoherent noise. The doom-and-gloom merchants such as David Cameron and George Osborne hid behind rigged outpourings from the likes of OECD and IMF clearly geared to frighten voters, but subsequently found to be completely false and unfounded. The UK economy has prospered post-BREXIT, and the EU is beginning to understand that THE UK is not about to bail out Europe for the third time in the past one hundred years. Teresa May has offered what the International Court of Arbitration would likely deem as legally obligated under the Lisbon Treaty. Any more requires valuable reciprocity from the EU. The second largest contributor to the EU is obviously a real loss to them, but they had the opportunity to address the needs of the UK people, but chose in their blind arrogance, to ignore such needs. Now they want to put valuable trade for both parties at risk to continue to prop up a failed system which is blatantly undemocratic. My instinct tells me that there will be substantial turmoil within the EU countries if trade is not maintained with the UK. The interview with the Foreign Minister of Spain, Alphonso Dastis, by Andrew Marr last Sunday was very revealing as he clearly stated that the close relationship between the UK and Spain pre-dates the EU. He argued that seventeen million UK visitors to Spain each year plus some 750k of UK citizens choosing to retire in Spain is not something they intend to put at risk.

So, what does all this say about our current form of democracy. We have politicians who choose the ignore the majority will of the people. We now have far too many career politicians who clearly lack the experience and wisdom needed to execute their office. We have an unelected powerhouse in Brussels who have no regard for the will of the people when it does not concur with their agenda. We have multiparty systems in many countries that govern by painful compromise (rather than strong leadership). We have too many politicians who have little regard for the ability of people to think for themselves and thus govern by fear tactics. And we have an electorate who feel disconnected from the process and thus disinterested. Instead of democratically thinking about an issue in the interest of all, they concern themselves with what matters only to themselves. Is democracy about to implode, and what phoenix will rise from the ashes?

 

 

BREXIT – 120 days on

univestBREXIT – 120 days on

It has been some 120 days post-Brexit, so where do we find ourselves when measured against the doom and gloom of the Remain campaign. We have a new PM, Teresa May who appears clear on what Brexit means, discovery that global organisations such as the IMF knowingly misled the British people, even the principal architect of the Eurozone claiming that it is now a ‘House of Cards’, and churlish self-interests trying to scupper Brexit with no regard for the democracy that they claim to cherish.

It is really sad for me to see that, amongst a significant number of people spanning all classes, there are elements of the British character that do no justice to our heritage of the UK great explorers and inventors that shaped this World of ours. I watched in disdain the current and excellent TV costume drama ‘Victoria’ recounting the trials and tribulations of Queen Victoria who reigned during the Industrial Revolution as scaremongers, vested interests, self-righteous, and ‘not-invented-here’ jealousy tried to stop the introduction of the steam locomotive. Thankfully, Prince Albert saved the day. Even today I hear eco-warriors stating that the Industrial Revolution was the beginning of the end of mankind, but where would these people, or even the World be without trains. India thrives on the railways, whereas Brazil, without much needed rail infrastructure, has serious transport and thus economic problems – look at the speed of rail infrastructure development in China.

Then I am reminded of the Neville Chamberlain pacifist era before the second world war when Winston Churchill, with his worldly experience, could see the ambitions of Hitler but, in spite of his fine rhetoric, could not persuade enough people that we needed to prepare ourselves for the inevitable. Indeed, according to Boris Johnson in his captivating book ‘The Churchill Factor: How One Man Made History’, had the war been delayed by some two weeks Churchill would already have been hounded out of office!

We are told that we must learn from the past, but do we? During the referendum debate we had the David Cameron, George Osborne and Nick Clegg elite, all from privileged schooling, all career politicians with ideologies not supported by any worldly experience, and easily persuaded by more scurrilous and self-serving influences, preaching doom and gloom if we did not stay part of the EU project. They rallied any vested interest they could find including the IMF, the OECD, and President Obama – an embarrassing chapter for all of them. But history will not record any of them as good, let alone great politicians. David Cameron was clear in his Bloomberg address that if the UK did not get significant Treaty changes for the UK then he would vote out, yet like Chamberlain he returned from Berlin with a worthless piece of paper. He will be remembered as someone who readily changed his mind on substantial matters – not good leadership. But he has realised the errors of his ways and will fade quietly away. Osborne still finds occasion to try to placate his ego, and Clegg is now trying to rally support for a blatant counter-offensive to Brexit on the basis that people do not know what Brexit means. Let me assure him that the core ‘middle-England blue-blooded Brits’ that always save the day in times of need know precisely what it means – a clean exit from the EU in all respects, returning to a Sovereign State, just like most other countries in the World. As has been shown since Brexit, the UK is a major player in this World, and when we sneeze the World coughs. The EU needs the UK far more than the UK needs the EU.

So what has happened since Brexit. I would suggest that the most significant outcome is the clear demonstration of how the elite politics of today is so out of touch with reality, as is being played out in the USA today. What did go on behind closed doors that caused Cameron to accept that the UK should be sacrificed for ‘the greater good of Europe’? How many more times does the UK have to make significant sacrifices for Europe before Europe (mainly Germany) learns from it?

Let me take some words from a Telegraph article summarising a post-Brexit report from the IMF’s Independent Evaluation Office (IEO). This report goes above the head of the managing director, Christine Lagarde. It answers solely to the board of executive directors, and those from Asia and Latin America are clearly incensed at the way EU insiders used the Fund to rescue their own rich currency union and banking system. It states:

‘The International Monetary Fund’s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of impending crisis, and collectively failed to grasp an elemental concept of currency theory.

This is the lacerating verdict of the IMF’s top watchdog on the Fund’s tangled political role in the eurozone debt crisis, the most damaging episode in the history of the Bretton Woods institutions.

It describes a “culture of complacency”, prone to “superficial and mechanistic” analysis, and traces a shocking break-down in the governance of the IMF, leaving it unclear who is ultimately in charge of this extremely powerful organisation.’

The IEO Report states that since 2011 some 80% of all IMF lending was secretly used to support the Euro – not within the mandate of the IMF, and why Asia and Latin America are so incensed. Add to this the recent publication by Prof Otmar Issing, the first chief economist of the ECB and principal architect of the Euro, in which he states that the rules laid down for the Euro have been so debased by politicians that the currency, and thus the Eurozone, is but a ‘House of Cards’ waiting to collapse. Thus the desperate need to keep the fastest growing economy in the Western World, the UK, inside the EU, not least because of the unique capital raising power of the City of London – thus the lies to the British public by both the IMF and the OECD during the referendum campaign.

By far the biggest everyday loss to the EU is the City of London. With the City inside the EU it could claim to be the most significant financial power on the international stage. Without it the Eurozone does not even have the capacity to clear its own currency. The EU desperately needs the capital raising powers of the City. All of this posturing regarding passporting can be put into perspective by ING announcing last week that it is moving some 40 of its prominent traders from two locations within the EU to London. The worst case scenario is we will return to the days before passporting whereby, under the rules that international banks can only engage in business in countries in which they have a physical presence, banks will re-establish little more than a rep office through which transactions will be directed to London. As for moving banking to Frankfurt and/or Paris it should be noted that during my more than 35 years in the City this has been muted on a number of occasions. Paris is a non-starter for a number of technical reasons, and Frankfurt for even more including that no self-respecting high flier banker would consider living there.

As for corporate business I think that the recent announcement by Apple, the largest company in the World, that it is moving and consolidation its European headquarters in London, with all of the tax implications included, states the blindingly obvious – London is the gateway to Europe.

In a recent French Presidential Campaign speech by Nicolas Sarkozy he clearly stated that his first day in office (if elected) would be spent in Berlin (note: not Brussels) putting a new EU Treaty together that would address the concerns of the UK to encourage them to stay within the EU. He knows that there will be revolution in France if the farmers got even a whisper that tariff barriers were to be imposed on the UK.

In Germany we also have elections on the horizon. I am certain that the elite of Germany will resign themselves to the inevitable Brexit and thus quietly encourage election results that will ensure that no harm comes to the valuable existing trading relations with the UK.

The principle voices of Angela Merkel in Brussels, Donald Tusk, Martin Schulz, and Jean-Claude Junker, are synonymous with the problems faced by the EU. On the one hand they are stating that the EU will survive Brexit. On the other that are issuing instructions to member states to clamp down on rising nationalism.

The good news is that GBP has depreciated from its over-valued level by some 17% causing the UK Stock Market to regain some of its lost value over recent years, and provide the stimulus for the return for a much increased manufacturing base – jobs, prosperity, less dependency on imports. It should be remembered that Germany pushed through the Eurozone project to devalue the over-inflated Deutshemark by some 30% – great for Germany, but a disaster for most other members.

This devaluation will mean price increases to the UK consumer of imported goods and thus stimulate much needed, but controlled inflation reducing the need for QE and restoring interest rates to more normal economic levels. Some of this increase could be artificial as EU Governments put pressure on their major suppliers to increase prices to the UK as per the much publicised Unilever to Tesco increases which resulted in an embarrassing climb-down by Unilever. The real price increases will put upward pressure on wage demands – good for the workers who generate the wealth but contained to 2% pa or less wage growth over recent years, but not so good for fat executives who have enriched themselves with wage growth of around 10% pa during the same period. Also we can be competitive manufacturers and return to the days of ‘Buy British’. We can even return to eating our own delicious apples, currently outlawed by the EU to force import from the likes of France. The UK Government could easily buffer the increased price of fuel and energy (increases not EU related) by reducing, or indeed eliminating all of the absurd anti-competitive eco taxes on UK energy prices.

Trading with the World, including Europe will certainly not get worse, but is likely to improve. The intransigence of the EU Commission regarding trade with the EU is legion – ask the Americans. Our global relationships will prosper far more after the dust of Brexit has settled.

The issues we face today are the posturing, petulance, grandstanding, etc by both a dying EU and those die-hard remainers in the UK who have jettisoned democracy in favour of their own self-interests. This causes turbulence in the markets, no doubt exacerbated by the more influential remainers. The professional financial markets love such turbulence as they use it to generate good profits. The losers are the general public in whose lives the media relish creating uncertainty, and which impacts their cost of living resulting in understandable protest. How many media outlets have directly associated recent fuel price increases with Brexit? Oil prices are recovering from two years of global turmoil, and should settle around US$60 per barrel. The UK has a much needed currency devaluation regardless of Brexit. De facto prices will increase from their extraordinary lows over recent months regardless of Brexit. I can remember when oil prices were US$16 per barrel, and more recently US$120 per barrel – but neither to do with the EU or Brexit.

Brexit has not yielded doom and gloom, not even a technical recession. The UK is now projected as the fastest growing Western economy. Just as with the resistance to the steam locomotive in Victorian times it is time to ignore the doomsayers and grasp the opportunities that now present themselves so that, as with the proliferation of railways, the UK will again rise be a major and great player in this World in its own name.

 

2-weeks post-BREXIT. Where are we?

univest2-weeks post-BREXIT. Where are we?

The EU Referendum has raised a number of issues that show why this referendum was needed. During recent years politics has become too elite and detached from the people it is there to serve. A good shakeout is necessary, as is happening in the USA. BREXIT has triggered this process in Europe, and especially the EU. So where are we post-BREXIT?

Scare Story: The UK will suffer unprecedented political turmoil

This is true, but more in the EU than the UK. The reaction at the quickly convened emergency meeting of the European Parliament on the Monday following BREXIT resembled more a Third World bun fight than a rational First World debate. The exchange of insults and rebuke was extraordinary.

The UK political turmoil has shown that David Cameron lacks the qualities of a true leader. Having consented to a referendum on the basis of a reformed EU, which he did not achieve, a strategically capable leader would have returned from Brussels to announce his frustration with Brussels, and then overseen the referendum debate without expressing his own view, or that of the Government, ready to implement the decision of the people (democracy) thus providing the political leadership and continuity post-BREXIT that is currently so lacking. We have a political vacuum until we have a new leader – not good for confidence around the world.

This political vacuum has fuelled an anti-democratic minority to challenge the outcome of the EU Referendum result. It is interesting to note that these whingers obviously have the view that a democracy can only be democratic when the vote result concurs with their view. And these whingers include people like Richard Branson who, reportedly, saw some 30% wiped off his Virgin empire. The people have spoken and, with a larger turnout than your average General Election, the clear majority voted for BREXIT. In a democracy every citizen has the obligation to make themselves aware of the issue requiring a vote of the people, and to cast their vote accordingly. In this digital age there is no excuse for lack of information. The result is clear, so to the whingers – move on; we will flourish.

The positive result of this turmoil as we approach political summer recess is that the UK Civil Service has time to consider the optimal exit terms for negotiation with the EU, and a period of reflection by the EU machine. As I refine this blog I found an article in yesterday’s London Evening Standard written by Frank-Walter Steinmeier, the German Foreign Minister, in which he acknowledges that the EU elite have been indifferent to the voices of the people, causing great unrest. His solution – even faster political and economic integration. Will they ever listen?

Scare Story: The UK markets will collapse with pensions and quality of life in decline, and London will lose its status as the Global Financial Centre

Since the casino players, looking purely to make money from the volatility surrounding the referendum vote, have gone to sleep (when will the G7 address this global destabilising problem) the UK stock markets have stabilised, and indeed risen some 15% – a vote of confidence by investors, and good for pension funds. Adjustments will occur as the UK realigns itself; albeit the attack on commercial property funds is bizarre. Furthermore all talk of the capital markets moving within the EU has evaporated – the underlying covert motive by both the USA and Germany having been neutralised.

Our EU partners have not been so fortunate in that the BREXIT vote has caused much instability within the EU forcing markets down by as much as 15%. Although they have recovered some of these losses there is little evidence of full recovery any time soon. Italy is on the brink of a banking crisis, and there is much discontent within the EU. We have the USA regulators stating that both Deutsche Bank and Banco de Santander fail their stress tests and thus must increase capital if they wish to continue to trade US dollars. And of course VW are looking at considerably more substantial fines around the world. There is also reported a vote of no confidence for the EU to settle Euro transactions.

The doomsayers claim that the 10% fall in sterling against the US dollar is a major disaster for the UK. On the contrary sterling has been over-valued for some time damaging the ability of the UK to sell its goods overseas. As I write this blog sterling has recovered to 1.29. It would be better for the UK economy if this rate fell below 1.26 for a few months before the US Presidential elections will likely deflate the US dollar, pushing the value of sterling up again. I would remind the whingers that when Germany pushed for the introduction of the Euro the result for Germany was an effective significant devaluation of the Deutschemark which was much needed by the German economy to trade themselves out of the grossly underestimated cost of reunification – but at a real cost to all other Eurozone members.

Scare Story: The UK will require years to negotiate new trade deals with the Single Market and the World

There are a number of countries, including the USA and Germany, who want to be first to sign trade deals with the UK. There is much confusion being hoisted by the whingers about the single market. The UK does not need to be part of the single market for the same reasons that are frustrating the trade deal between the EU and the USA (who already trade more with the EU than does the UK). What we need is tariff-free trade deals with each of the member states who wish to engage with us. If Germany can do this then why not all other member states? The EU is fragmenting, and will need significant reform if it is to survive – including trade relationships. Regardless of the political rhetoric Germany will not risk the loss of its significant exports to the UK, and France will follow.

Scare Story: UK citizens will lose the right to freely travel, work and live in the EU countries

Today UK citizens need a passport to travel into the EU member States, and to return from them. Travelling freely within the EU countries is defined by the Schengen Agreement between member States and thus does not change anything for UK citizens. Moving to an EU member State may change, but looking at the number of EU citizens living in the UK reciprocity is the likely outcome.

Scare Story: The UK is too small and insignificant to go it alone

The UK coughed on the 23rd June, and the whole world sneezed, and is still sneezing. The UK has always punched well above its weight, and always will. London is the most important global financial centre in the world, and thanks to BREXIT, will retain this status. The EU loses one of its two permanent seats at the UN Security Council, and loses the global diplomatic reach enjoyed by the UK. As the fifth largest economy in the world the UK will find its feet over the coming months, and then flourish. The EU may not be so lucky.

 

A few days ago I listened to an interesting discussion regarding the total breakdown of the former USSR. The original discussions with Gorbachev revolved around the satellite states adjoining the eastern borders of Western Europe. However, as the Berlin Wall fell practically all members of the USSR declared their own freedom from Moscow. The view was that Moscow thought it could impose a homogeneous citizen unity across the USSR without any regard for the diverse nature and cultures of each nation state. Thus laws and regulations formulated in Moscow intended to create a homogeneous USSR caused resentment and unrest in these States – the response being typical Roman-type repression by Moscow, and ultimately downfall. Even the Romans knew better when they built their empire. What could the EU learn from this? Brussels relentlessly moves towards a United States of Europe without the consent of the people. Whether they use brute force, or financial pain they attempt to impose their will over each member State. The majority of people in the UK have said ‘NO’, and I fully expect others to follow.

A few weeks before the referendum vote I listened to an interesting debate by university students regarding the EU Referendum. They did not have guest speakers, rather relying on four students on each side of the debate to put their respective cases. The debate was surprisingly articulate. The audience was an estimated 100 students who, after the debate, overwhelmingly voted for BREXIT. This tallies with the young vote of some 25% of 18 – 24 year-olds. The triangle of knowledge for 16 – 24 year-olds (post-university) consists of students who have both the intellect and knowledge to analyse issues, students who have the knowledge but not enough intellect to fully appreciate the issues, and the remainder who prefer to go to the pub and watch football. The proportion of students who have both the intellect and knowledge average around 23%. Thus most of the 25% who voted for BREXIT are likely to have understood why. The other two sectors are likely to take the safe option to stay with what they know, or not vote. Therefore, I do not accept that the older (wiser) voters in any way let the young down. This is why the social engineering of the Blair/Brown Government sending 50% of the young to university was ridiculous, a waste of money, and did nothing for those who leave lesser universities with a degree and considerable debt but with no prospect of the suitable job that was implied was available for them.

I have also heard from the young that they wanted to remain in the EU to take advantage of the Erasmus program to study in Europe not realising that this program has little to do with the EU, but formulated as an exchange program between the universities, and includes universities in the USA. There is no possibility that this will end as a result of BREXIT, not least because of the significant number of European students who want to take advantage of the far superior red brick and CAT universities in the UK.

Just as a footnote, I chose to assess the views of the more canny Scottish voters regarding the post-BREXIT opportunist actions of Nicola Sturgeon, First Minister in Scotland, as I did before the Scottish Independence Referendum. The result then was a resounding vote to stay in the UK. A vote today between the UK and the EU would yield the same result. So Nicola, don’t waste your time as the people do not want your pathway, and I cannot imagine the EU entertaining yet another country joining on a net beneficiary basis in any event. The EU Referendum was on behalf of the whole of the UK, and the people spoke. Let it be. There is a bright tomorrow for the UK, so let us focus on the future together.