Diary Day 325: Vote Leave’s £350m lie officially refuted. Government has a problem about leaving EEA. Top judge asks for clarity on ECJ. Non-food sales struggle. Former DExEU aide urges MPs to reverse Brexit.

My #Remainer’s Diary Day 325: after a lot of hunting and some help from a kind colleague, I tracked down the Treasury document which confirms that the true contribution by the UK to the EU is (and was at the time of the referendum) less than half what Vote Leave claimed. 

It is in a spreadsheet on the Gov.uk website called PESA 2017 Annex C Tables. (PESA stands for Public Expenditure Statistical Analyses.) Table C.1, called “Transactions with the institutions of the EU, 2012-13 to 2019-20”, has a column for the year 2016-17, which gives the net payments to EU institutions in the year 2016-17 as just over £8.1bn, or about £156m a week. 

I knew the public was misled, badly, but it’s nice to have confirmation from HM Treasury. I’d like that long overdue apology and some genuine remorse from the Vote Leave cheerleaders now. I’d like to see them put in prison for what they’ve done, too. While they are in there they can reflect on the millions of lives they have thrown into turmoil by their selfish and reckless conduct. 

This £8.1bn figure does not take into account European Commission payments direct to private recipients. They include funding for research and innovation (Horizon 2020), education and training (Erasmus), cultural and creative industries and support for small businesses. If they were taken into account the UK’s 2016-17 net contribution figure would be a billion or so lower. 

Business Insider reported that a letter sent by George Bridges, a former minister for the Department for Exiting the European Union (DExEU) says that the government is considering steps to “formally terminate” Britain’s membership of the European Economic Area. He wrote: “We are considering what steps, if any, might need to be taken to formally terminate the EEA Agreement as a matter of international law.”

In other words the Government is not sure whether separate legislation will be needed to terminate Britain’s membership of the EEA. 

I happen to have a copy of the EEA agreement. Article 127 provides: 

“Each Contracting Party may withdraw from this Agreement provided it gives at least twelve months’ notice in writing to the other Contracting Parties. 

“Immediately after the notification of the intended withdrawal, the other Contracting Parties shall convene a diplomatic conference in order to envisage the necessary modifications to bring to the Agreement.” 

I have never understood how the Government could be so sure that no separate notice to leave the EEA under Article 127 would be needed. Now it turns out that they aren’t sure. It is just bluster. 

They will not get a vote to leave the EEA through Parliament. 

Lord Neuberger, who is stepping down from the Presidency of the UK Supreme Court, criticised clause 6 of the Government’s draft bill designed to drag us all out of the EU. He told the BBC that if the provisions didn’t express clearly what the judges should do about decisions of the European Court of Justice (ECJ) after Brexit, or indeed any other topic after Brexit, “then the judges will simply have to do their best… If the UK parliament says we should take into account decisions of the ECJ, then we will do so. If it says we shouldn’t, then we won’t. Basically, we will do what the statute says.” 

Clause 6 as it stands (viewable online) is long, opaque and inelegant. 

The ECJ has jurisdiction over matters within the scope of the EU Treaties because in 1972 the UK Parliament passed an Act which agreed that it should have jurisdiction. There is no big issue of principle here about sovereignty. ECJ jurisdiction ensures uniformity of interpretation of EU laws across all the member states. Uniformity is good because then you can have a single set of rules and standards to regulate cross border interactions like civil aviation, trade, consumer rights,  employment rights, extradition and so on, and on. The Brexit zealots are determined to get rid of ECJ jurisdiction but why? What is all the fuss about? The problem is not the ECJ but what is going on in Theresa May’s head.

The British Retail Consortium-KPMG Retail Sales Monitor for July reported that on a total basis (meaning, I think, both in store and online sales), sales rose 1.4% in July, against a growth of 1.9% in July 2016. Paul Martin, UK Head of Retail at KPMG said: 
“From afar, retail performance appears to have been stable in July… Looking at the figures in more detail though, the food sector continues to perform strongly whilst non-food sales struggle. Food price inflation continues to play a role albeit this pressure is reportedly easing, however it’s also important to note that a major driver behind increased consumption is rising household debt.” 

Not sure what to make of that. I hope it doesn’t mean people are borrowing in order to eat. 

Brexit-watchers greatly enjoyed some tweets from someone who worked as an aide to David Davis until June. He tweeted: “Past time for sensible MPs in all parties to admit Brexit is a catastrophe, come together in new party if need be, and reverse it.”  

He later tweeted it was “well past time for sensible journos on papers that supported Brexit to admit it is going to destroy lives of many of their readers.” 

That could be awkward. But best to admit mistakes promptly while there is time to limit the damage. 

Where are those sensible journos? Come forward please. 


Diary Day 324: EU membership looks extremely good value. Study says predominant factor in referendum was access to higher education. Neoliberal and protectionist Leavers are at opposite poles. Remainers plan to protest.

My #Remainer’s Diary Day 324: it was widely reported that new Treasury figures confirm that for the 12 months to March 2017, the UK made a net contribution to the EU of £8.1bn or about £156m a week – less than half the £350m a week claimed on the side of the Vote Leave bus.

Tom Brake MP quite rightly commented that this contribution “pales in comparison to the economic benefits we get from being part of the single market and customs union”. 

I am still trying to track down the Treasury report that this came from, but we knew already that the claim on the bus was a lie. That is the dire standard of campaigning we were subjected to. 

The Leave campaigners, who repeated the lie until the end, will shrug and say so what – any big number would have done for our purposes. If it had been a company prospectus they would be prosecuted and lucky if they escaped long prison terms and got away with just being barred from holding office as a company director for a long time. What actually happened was that they received great offices of state and sit in the Cabinet. 

There is something rotten in this country. 

The Department for International Trade has issued a statement that it has increased its workforce to over 3,200 people. How much are they costing? 

The Department says it has “top talent”. There are 20 lawyers working on trade issues and there is “significant demand for roles at all levels”. A parliamentary answer disclosed that it is also budgeting £2.5m to train existing staff, which is disconcerting. 

Meanwhile James Slack, a spokesman for Mrs May (who is away on holiday – in Europe, funnily enough) denied a report that the UK is prepared to pay £36bn (€40bn) to settle up before leaving the EU. 

At a rate of £156m a week, I calculate that £36bn would take about 23 years to pay off. 

EU membership is looking extremely good value nowadays. 

A new paper by Dr Aihua Zhang, from the University of Leicester’s Department of Mathematics, suggests that access to higher education was the ‘predominant factor’ dividing those who voted Remain and those who voted Leave.

The press release says the research “applied Multivariate Regression Analysis combined with a Logit Model to the real data to identify statistically significant factors that have influenced voting preference simultaneously as well as the odds ratio in favour of Leave.” 

The paper itself is available to accredited members of the press on request but I have not seen it. The press release says that: 

  • An increase of about 3% of British adults accessing higher education in England and Wales could have reversed the referendum result;
  • A decrease of about 7% in turnout in England and Wales could have also changed the result of the referendum;
  • The factor of elderly voters, although having an effect on the outcome, was generally over reported as a dominant factor;
  • Sex is found to be a statistically significant factor, while British born proportions and local income levels are insignificant factors. 

Dr Zhang said: “The EU referendum raised significant debate and speculation of the intention of the electorate and its motivations in voting. Much of this debate was informed by simple data analysis examining individual factors, in isolation, and using opinion polling data. 

“This, in the case of the EU referendum where multiple factors influence the decision simultaneously, failed to predict the eventual outcome.” 

Indeed it did. Dr Zhang’s work was mapping, not predicting. But if the paper is accurate, it also predicts that the extent to which people have access to higher education will influence the outcome of future elections. 

Brendan Chilton, the general secretary of Labour Leave, relying on opinion, predicted to the New Statesman that “…you could see a fundamental realignment of British politics if people feel betrayed.” Perhaps. Not just Leavers though. People who want to stay in the EU feel pretty betrayed by their politicians lying to the electorate and acting against the national interest, but he doesn’t mention that. 

What is interesting about the interview is his definition of Brexit (and hence of betrayal): control over territorial waters and borders, an end to freedom of movement, no more contributions to the EU budget and an end to the jurisdiction of EU institutions. He says of the referendum: “It was a vote in some respects for protectionism and economic patriotism.” 

He and the Tory free market ideologues are at opposite poles. Theresa May and her protectionist acolytes are closer to Mr Chilton than to neoliberal Tories. 

But he claims to have spoken to half a million people, which undermines his credibility with me. 

Meanwhile the protectionist, economically patriotic (allegedly), wildly inconsistent President “America First” Trump lurches towards a reckoning with the US Federal State over his Russian links, first uncovered by chance over here in dear old Blighty by GCHQ as they monitored phone traffic. He, too, won with the help of lies. He, too, wants to undo the EU. 

The super rich in the UK, USA and Russia all want to undo the EU. Why do ordinary people think they are on the same side? It doesn’t make any sense. And what are Mrs May and her lieutenants playing at? 

Pro-EU campaigners are planning a “stop Brexit” march outside the Conservative party conference, which is to begin on 1st October in Manchester. Among other organisations, the Lib Dems will be there. Tom Brake MP said: “Brexit is the battle of our lives and it is vital we make the Conservatives see the strength of feeling against their disastrous extreme Brexit, which threatens to crash the economy and damage the life chances of millions.”

He added that Liberal Democrats didn’t take the decision lightly to protest at another party’s conference but “ministers should be under no illusions that a lot of people are very, very angry at their disastrous handling of Brexit, which has made a difficult situation a million times worse.” 

They certainly are. Not only at the handling of Brexit. Also at Brexit itself, full stop. 

Diary Day 323: Self-declared Brexit martyrs challenged. Questions for Theresa May, the DUP and Sinn Féin. The Bank of England’s Brexit dilemma. 

My #Remainer’s Diary Day 323: Brexit zealots fumed and spluttered at Sir Vince Cable, who wrote at length in the Mail on Sunday. (The Sunday edition does not drip with the same weekday anti- EU venom;  it is not edited by Paul Dacre.) 

Vince wrote that the Remain argument about economic damage is now largely accepted, and more and more Brexiteers are embracing economic pain as a price worth paying for ‘taking back control’: almost as a badge of honour. 

“To describe such masochism as ‘martyrdom’ is dangerous… there is an undercurrent of violence in the language which is troubling…” 

He compared Iain Duncan Smith’s tactics attempting to shut down debate with how McCarthyism began.  He said the Brexiters were becoming desperate, but instead of closing down dissent should explain how Britain could flourish outside the Single Market. 

He continued: “Another concern is that the self-declared martyrs may be planning to sacrifice other people rather than themselves. It is striking that the martyrs appear predominantly elderly… 

“The martyrdom of the old comes cheap, since few have jobs to lose. And even if the country were to become poorer, their living standards are largely protected by the ‘triple lock’ on the state pension and many can rely on occupational, final salary, pensions which are closed to younger people. When I joined the Coalition Cabinet in 2010, we took pride in the ‘triple lock’ to banish the scourge of pensioner poverty. But one of its unintended consequences has been a growing rift between generations…

“The old have comprehensively shafted the young. And the old have had the last word about Brexit, imposing a world view coloured by nostalgia for an imperial past on a younger generation much more comfortable with modern Europe…” 

“No 10 confirms that freedom of movement will end in 2019. Therefore, the single market ends. There will be no transition. The cliff edge draws closer. For the Brexit martyrs, paradise beckons.” 

They absolutely hated it. But I have countless times met people like these. They are in an echo chamber, their opinions reinforced by the company they keep and what they choose to watch, hear and read. Their ideas about the unelected superstate, patriotism, what WW2 was about, what Magna Carta was about, the Anglosphere, and so on are munged. The underlying emotions are all about their world view, their wants, their prejudices, their dreams; not about people whose opinions legitimately differ, nor about young people or their prospects, and certainly not about the millions of EU citizens whose lives are being cruelly disrupted. And like as not, when asked to explain how EU membership has adversely affected them, they can’t. 

Articles like Vince Cable’s are part of combating the spread of, to use Tim Berners-Lee’s phrase, “nasty mean ideas”. Such articles are a kind of preventive inoculation, even though the self-declared martyrs’ brains may be incurably infected with nonsense. 

Writing in the Meath Chronicle, John Bruton (Taoiseach of Ireland 1994-97, EU Ambassador to the United States 2004–2009) posed three crucial questions. 

First, exactly what sort of deal does Theresa May want with the EU customs union? 

Her wish list in her Lancaster House speech was impossible to achieve. Mr Bruton pointed out that the World Trade Organisation (WTO) worked on the basis of the “Most Favoured Nation” principle. It means that if the EU Customs Union grants any concessions to the UK, it must grant the same concessions to all its trading partners. There is an exception to this if the special UK concessions cover substantially all trade between the UK and the Customs Union. (The WTO came into being in 1995, replacing the General Agreement on Tariffs and Trade. It requires members to grant “most favoured nation” status to each other. No special favours. Exceptions allow for preferential treatment of developing countries, regional free trade areas and customs unions.) 

Thus, as Mr Bruton puts it, “the UK will have to be either ”substantially in”, or “substantially out”, of the Customs Union. Which does Mrs May want? She should be able to answer that question by now.” 

Mr Bruton decribed the burden on Ireland if it had to carry out checks for compliance with safety, sanitary, origin and other EU rules and collect the EU Common External Tariff on food products arriving at the land border or at ports from the UK. “This is something being imposed on us, as an EU member, by a UK decision.” 

He also pointed out that the impacts on Ireland’s trade will be very significant. And if UK rules diverge, UK businesses will have two sets of standards: those for the UK market, and those for the EU. 

Secondly he asked the DUP what sort of agricultural policy it wanted in Northern Ireland after Brexit. 

The DUP, “which supported Brexit, and which is now dispensing gratuitous advice to the Irish Government on EU matters, should tell us exactly what sort of UK agriculture and food policy it expects post Brexit. It is now in a good position to get an answer to that question from the UK government. Its own farming supporters would like to know.” 
I’m sure they would. They could face bankruptcy. 

Thirdly Mr Bruton asked Sinn Féin why it would not go into the House of Commons next month to fight for Irish interests on the new Brexit laws. 

The point here is that Sinn Féin has a long standing policy of abstentionism – standing for Parliament but not taking up seats there, except for the salary. I had thought it was due to their refusal to swear loyalty to the Queen. But as Mr Bruton points out, since 1998 this principle has been breached. 

Sinn Féin won seven seats on 8th June, a significant number as it turns out in this hung parliament (especially as it took seats from the SDLP, who used to take up their seats). I have written about the finely balanced arithmetic before. 

After the result of 8th June Sinn Féin’s leader Gerry Adams told Sky News that the party had won the seven seats “on the basis of us not taking our seats.” He said, “We don’t have any real interest in what happens in the British Parliament.” But in view of Brexit and its effect on the people of Ireland, both sides of the border, that is not true. 

Returning to Mr Bruton’s article, he wrote: “Sinn Fein should remember that the Irish people, on both sides of the border, accepted the Good Friday Agreement in a Referendum in 1998, and that removes any “nationalist” argument Sinn Fein might have had for not taking their seats. If Sinn Fein can shake hands with the Queen, if they can take their seats in Stormont, they can take their seats in Westminster! 

“There is work for them to do there now.” 

A Sinn Féin TD, David Cullinane of Waterford, wrote in a different publication: “The people of the North have already spoken, they voted to remain within the EU in June 2016. This democratically expressed view of the cross-community majority who consented to Remain must be respected…

“The Tories and the DUP… are pressing ahead against the wishes of the majority of parties and the interests of citizens in the north.

“EU chief negotiator Michel Barnier made clear that he will only negotiate with sovereign member state governments not devolved administrations.

“The Irish Government therefore must… work with all those parties that represent the majority of voters, to ensure that vote in the north is respected, that our agreements are protected and the interests of all Ireland are represented at the EU negotiation table… now and over the next 12 months…” 

Mr Cullinane did not say anything in his article about the delicate arithmetical balance at Westminster. On his logic, Sinn Féin MPs should turn up at Westminster and use their votes. If the UK Government can not get Parliament to back its chosen stance, it has to back down, or go. It cannot impose its will. Parliament – the Queen, the Commons and the Lords together – is sovereign. Because of that balance, and unrest in Tory and Labour ranks, there is a significant chance that Sinn Féin MPs could affect the position of the UK Government. 

Simon Nixon, of the Wall Street Journal, wrote analysis of what he called the Bank of England’s Brexit dilemma, and why the market reaction has been that “sterling fell 0.6%, and the gilt yield curve flattened” (signifying market participants’ belief, I suppose, that the BoE would continue to think boosting economic activity was more important than controlling inflation). 

First, last week only two members of the MPC voted to raise interest rates. The previous month it had been three.  

A second reason, he suggested, was that the Market thought the BoE was underestimating the Brexit hit to the economy. “The BOE’s own central scenario is based on the most optimistic outcome for Brexit, including a smooth transition to a new trading arrangement that preserves a large degree of access to the EU market.” 

A third reason, he suggested, might be that markets put the probability of an extreme hard Brexit as high as 25%. Such a Brexit “would not only do even greater damage to the U.K.’s supply side potential, it would also likely lead to further erosion in sterling, driving inflation further above target, while creating a hole in the public finances that the government probably would aim to fill with increased borrowing, raising doubts about its fiscal credibility.” 

Sounds awful. 

The Government should just call Brexit off. Just write to Mr Tusk that the UK has changed its mind. 

Diary Day 322: UK is told to find that elusive credible fallback position.  Experts are baffled by Government’s stance on Euratom. Economic warning lights are flashing that have nothing to do with Brexit.

My #Remainer’s Diary Day 322: former governor of the Bank of England and now crossbench peer Mervyn King said the UK needs a “credible” alternative if Brexit negotiation fails.”But it cannot succeed without a credible fallback position and that is something which I think is a practical thing that the civil service ought to be taking a lead on.

“It’s do-able proposition if we start now. We’ve probably wasted a year but we need to be much further along the road to making that a credible fallback position.” 

He’s right that a negotiation cannot succeed without a credible fallback position. But how is it a do-able proposition? A credible fallback position cannot be conjured out of the air. It depends on the facts, and if the facts point to your best alternative being worse than a negotiated agreement, you can’t rationally walk away. You are in trouble, especially if the other party knows the facts as well as you do. 

That is the position the UK is in. 

Commentators picked up on a piece by Professor Martin Freer, Head of Nuclear Physics and Director of the Birmingham Energy Institute at the University of Birmingham, in the Independent on the Government’s decision to leave Euratom. He argued that the decision conflicts with the Government’s policy favouring electric cars, which will require new nuclear power stations. 

He wrote: “The reason every single expert in the civil nuclear industry, the nuclear medicine industry and scientists alike are so baffled by the Government’s decision is that it is completely unnecessary and has zero benefits. The best case scenario is that we spend an enormous amount of money, time and resources to create the same situation we have now. No one is calling for anything other than close scientific cooperation with our allies.

“However, the risks are immense.

“If we leave Euratom without the necessary arrangements in place, then we will be unable to import the material to power our nuclear power stations. Our scientific collaboration will be hindered, and funding may dry up.” 

Iain Begg wrote on the LSE Brexit Blog that “three warning lights are flashing” with regard to the UK’s economy: first, the lack of productivity growth; second, the low rate of investment by businesses and in infrastructure; third, the persistent gap in skills. 

He wrote that with both government and opposition “fixated” on Brexit, “fundamental and necessary measures to underpin the economy” might be neglected. 

It seems pretty clear that Mrs May is uninterested in the economy and business, and that has already caused the Government to make some poor, no, disastrous decisions. So yes, it quite likely will neglect such measures. The DUP seems business-unfriendly too. As for Labour, its current leader favours the Venezuelan economic model. 

Diary Day 321: leading Irish figures speak out. Brexiters get upset when border controls affect them. Gove is caught lying again. Car sales fall again. Business organisations get restive. Ken Clarke still resists. 

My #Remainer’s Diary Day 321: another thing about day 320. Irish ambassador Daniel Mulhall wrote in the London Evening Standard that he was “dismayed” by the Brexit vote and still fails to see its rationale; that it seems based on “misapprehensions about the EU’s nature and purpose” and disdain for the EU’s achievements. He points out the major challenges it poses for Ireland, both economically and in relation to the border, and calls for efforts to understand each other’s concerns. He hopes the UK will stay in the EU, or failing that, at least stay in the Customs Union. 

I am anguished by the harm the Brexiters have thoughtlessly inflicted on Ireland. The British-Irish relationship was bad for so long. Since the Good Friday Agreement it has been returning to health, until 23rd June 2016. I say thoughtlessly, but some Brexiters did this damage not thoughtlessly but recklessly, and they deserve contempt. 

Mr Mulhall was in London for four years and saw the whole referendum campaign up close. 

The £100m-per-seat DUP is in the completely wrong place on Brexit. With 56% of votes in Northern Ireland having been for Remain, how they got 10 seats – no, any seats – at Westminster in the General Election is a mystery to me. 

Writing in the Belfast Telegraph, James Anderson, Emeritus Professor of Political Geography at Queen’s University, Belfast, called a hard land border across Ireland a “disaster waiting to happen”. 

Irish Taoiseach Leo Varadkar, on a visit to Northern Ireland, said in a speech at Queen’s University that it was up to advocates of a hard Brexit to come up with proposals as to how a hard border would work, and persuade citizens, students, academics, farmers and business people that it was in their interests. “They have already had 14 months to do so, which should have been ample time to come with detailed proposals. But if they can not, and I believe they can not, then we can start to talk meaningfully about solutions that might work for all of us.”

He said that European identity is “an enhancement, not a dilution of who we are. And in my opinion it’s a tragedy of the Brexit debate that it appears this common European identity is not valued by everyone on these islands.”

Absolutely right. 

The Irish passport office is inundated with applications from people of Irish ancestry in the UK and across the EU for Irish passports. Brexit has made it matter where our ancestors were from. One of my ancestors on my father’s side came from Ireland. He was an immigrant. So completely did it not matter that most of my family don’t know. I found it out from the register of births, marriages and deaths, merely from curiosity. 

There was general hilarity at the Daily Mail’s screaming headline “shambles at EU airports” (in capitals filling half the front page, as usual) complaining of British holidaymakers having to queue while their identities are checked against relevant databases.

What has happened is that the European Council, in response to the Paris and Brussels terrorist attacks, adopted new rules in March requiring Member States as from 7th April to carry out systematic checks against relevant databases on EU citizens who are crossing the external borders of the Schengen zone. The Council stated at the time: “Alongside the ongoing roll-out of the European Border and Coast Guard, the reinforcement of the Schengen Borders Code reflects the EU’s joint commitment to preserving the freedom of movement within the Schengen area and ensuring the security of EU citizens.” 

The Schengen zone includes 22 EU member states plus Iceland, Norway, Switzerland and Liechtenstein. The UK is not in the Schengen zone. Nor is Ireland. 

I feel sorry for the Irish citizens caught up in this, and for British Remainers, but not at all sorry for Brexiters. You got what you voted for. This is what taking back control actually means. 

The retorts of Remainers on social media were barbed. The satirical website Newsthump summed it all up with a spoof news item about fictitious Brexiter Simon Williams, who voted leave to “keep forriners out”, and now insists that tighter border controls should not apply when he is going on holiday. It wasn’t really funny at all. Too close to the bone. Good satire then. 

Michael Gove allegedly told a Danish audience that the UK “does not have the capacity to catch and process all the fish in British waters” and foreign boats will be able to catch “large amounts”.

The Lib Dems branded him a hypocrite. Brexit spokesman Tom Brake MP said his comments had exposed “yet another lie of the Leave campaign”.

Alan Sugar said Gove and Johnson should be in prison, or at least they should have a criminal record, for their lies during the referendum campaign. He added: “I promise you in five years’ time, three or four years’ time, people will be kicking themselves for leaving the European Union.” 

The Society of Motor Manufacturers and Traders said that just under 162,000 new cars were registered in July, down 9.3% on the same month last year. This is the fourth month running when new car sales have fallen. 

Mike Cherry, chairman of the Federation of Small Businesses, asked the government to delay the planned increase in the National Living Wage. He said: “It’s vital that the NLW is set at a level that the economy can afford, without job losses or harming job creation. Cost pressures on small businesses are building, and with most recent economic indicators underperforming, we are now facing the reality that the NLW target may need to be delayed beyond 2020.” 

The message to low-paid people who voted for Brexit in the belief that it would benefit them is: that worked, didn’t it! 

The Institute of Directors has published a paper called “Bridging the Brexit Gap: Options for transition”. Studiously it avoids criticising Brexit, without which none of this hand-wringing would be happening. You are a bit late, chaps. Where were you during the referendum campaign? Some of you have some serious thinking to do about having funded the Conservative Party, whose misjudgements and internal wrangles are to blame for this whole mess. You fed it, it grew into a dragon and now it is devastating the country. Are you going to deal with it? 

Ken Clarke MP, Father of the House of Commons, vowed to go on resisting Brexit. He told the FT of the “wave of anger and frustration” that had swept away the former consensus. He said: “I’ve just never seen anything like this present mad situation.” 

Diary Day 320: second referendum may become the Tories’ life raft. Mixed bag of economic results.  

My #Remainer’s Diary Day 320: Vernon Bogdanor, professor of government at King’s College, London, wrote in the Guardian: “…there is no logic to a “soft” Brexit… The ultimate choice we face is either “hard” Brexit or remain…” 

In his opinion, the recent general election re-opens the issue of Europe, for four reasons. First, probably there is no majority in the House of Commons for Theresa May’s Brexit. Second, the Remain vote was important in Labour’s gains. Third, internal splits in the Tories and Labour have been intensified. Fourth, the Lords will feel emboldened to argue that a minority government has no mandate for a hard Brexit.” 

Professor Bogdanor concludes that Parliament is deadlocked, and suggests (paraphrasing James Callaghan referring to Labour in 1971) that a second referendum may become, for the Conservatives, “a rubber life raft into which the whole party may one day have to climb”. 

He stated firmly that those on both sides of this issue have “every democratic right” to go on campaigning for their respective preferred outcome. 

“Brexit after all raises fundamental, indeed existential, issues for the future of the country. That is why the final deal needs the consent not only of parliament, but of a sovereign people.” 


The seasonally adjusted IHS Markit/CIPS UK Services PMI Business Activity Index picked up to 53.8 in July, from 53.4 in June. 50 represents flatlining. Services account for over three quarters of UK economic output.  

Chris Williamson, Chief Business Economist at IHS Markit, commented that “the current picture remained one of an economy showing overall resilience in the face of concerns about the outlook”, but “the subdued level of business optimism” suggested that growth would “at least remain modest and could easily weaken in coming months”. 

“Firms’ prospects for the coming year have slipped to a level which has previously been indicative of the economy stalling or even contracting, having taken a lurch downward since the general election, largely reflecting heightened uncertainty about the economic outlook and Brexit process.” 

Duncan Brock, Director of Customer Relationships at the Chartered Institute of Procurement & Supply, called July’s data “a worryingly mixed bag of results reaffirming the impact economic uncertainty and the weak pound can have.” 

The previously announced Markit/CIPS UK Construction Purchasing Managers’ Index PMI fell to 51.9 from 54.8 in June. Construction was described as “struggling to maintain momentum”. It accounts for about 6% of British economic output. 

For the 19 Euro area countries the final IHS Markit Eurozone PMI Composite Output Index posted a six-month low of 55.7 in July, down from 56.3 in June and the earlier flash estimate of 55.8. 

Chris Williamson, of IHS Markit said: “The surveys indicated a slight cooling in the pace of growth in July, but this is still an encouragingly upbeat picture of business conditions.” 

The Bank of England held interest rates at a record low of 0.25% and its quantitative easing programme announced in August 2016 (purchases of government bonds to the total of £435 billion) unchanged.

The transcript of the news conference – available on the BoE website – is interesting Brexit-wise, at least if you are not afflicted with extreme Brexit zealots’ delusions. (Some of them have left bizarre comments about the BoE and Mark Carney on the Leave.EU Facebook page.) 

The BoE attributes current price inflation to the plunge in the exchange rate of sterling, and that plunge to the assessment worldwide of the UK’s future economic prospects in the light of the referendum result. 

It acknowledges that real wages have fallen over a decade. Governor Mark Carney said: “The fact is that… real income growth has not been this weak in this country since the middle of the 19th century and that is the product of several things. It’s very much related first to the financial crisis, and now related to other factors which may prove temporary, but that remains to be seen. These are big, big structural issues that the country has to face…”

The BoE had opted to promote employment rather than rigidly keep inflation down to 2% because “…ultimately the biggest distributional issue is between being in work and not being in work…”

Ben Broadbent said: “The weakness of real pay is not because the amount of money in the economy has been shifted in large order from one group to another, it’s because aggregate income per capita has grown extremely weakly… The same is true of productivity and that is the fundamental point, not a distributional one.” 

The BoE refused to say whether it expected a smooth transition for Brexit, couching its remarks instead in terms of what UK consumers and businesses expected. 

Mark Carney said: “What matters is not what we think, it’s what households and businesses across the country think about the end state… There are a series of issues around Brexit about which we are not necessarily better informed, but are much more in the public domain than they were several months ago, back in May. That’s got to be a healthy thing.” 

Forbes magazine commented: “What’s happened is that reality is sinking in as the country and the E.U. enter the uncharted waters of the complex and politically-fraught exit negotiations… 

“As Carney pointed out, the declining pound… triggered inflation that has pushed hard on consumer spending which, in turn, has sent the UK’s growth rate to the bottom of the group of G7 developed economies.” 

This was not on the Leave campaign literature. 

Diary Day 319: DUP politicians criticise Taoiseach. Irish Ambassador speaks of black swan event. Michael Dougan speaks truth to power again. 

My #Remainer’s Diary Day 319: I have become averse to the bossy, bullying kind of person who, when faced with any criticism or doubt about Brexit, gives any one or more of the following three responses: 1. “That is disrespecting the will of the British people.” 2. “Brexit is going to happen.” Or 3. “We are leaving the European Union.” 

Arlene Foster, who leads the £100m-per-seat DUP, came out with all three when reacting to Irish Taoiseach Leo Varadkar’s remark that he hoped Brexit would never happen.

Virtually all sensible and well informed people hope Brexit will never happen. I do not see what the fuss is about if Mr Varadkar says what he and sensible well informed people generally think. 

Northern Ireland will suffer enormous problems from Brexit because the 300-mile land border across the island between the Republic and the Northern Irish province will become a section of the external border of the EU. And it will put the Good Friday agreement under possibly intolerable strain. 

I gather that the conundrum of what to do about this is now top priority in the EU-UK negotiations. 

DUP colleague Sir Jeffrey Donaldson MP said on RTÉ radio: “I think the taoiseach would be the first to protest if we were to suggest we were to devise the plan and implement it. Does huffing in the corner solve anything? The reality is the UK is leaving the EU. We need to be pragmatic about this, no point in huffing, this is a challenge we must rise to meet.”

There. Annoying response number 3. 

We are only leaving the EU if the dreadful DUP votes for it and faction-ridden Labour fails to find its backbone. There is not a Conservative majority at Westminster for Brexit. Labour and the DUP are keeping the Brexit show on the road. 

It will be a disaster for Northern Ireland’s farmers. Presumably the DUP realises that. 

Outgoing Irish Ambassador Dan Mulhall, who has been posted to Washington, told the Guardian: “It’s not acceptable to have a border on the island of Ireland because it would be economically disruptive and politically risky. 

“You can’t have a border, it’s not practical. It’s a 300-mile border. It has no geographical basis – it’s not like the river Rhine is running along the border. It’s got hundreds of crossing points. It’s just not feasible to have a border. So you don’t try to do what you can’t do.” 

Mr Mulhall said Brexit was a “black swan event” that had given Ireland its “biggest economic, political and diplomatic challenge in the history of the state”. 

“We’ve already taken a degree of pain from Brexit – this is why I feel so sad – and to some extent discomfited, because it has come at a time when our relationship was at a peak of satisfaction and friendship. I feel a degree of sadness personally that I have had to witness this…

“Our first hope would be … a decision on part of the British government to remain in the customs union or something akin to the customs union.” 

Viewed from outside the pages of the Express, Mail, Sun or Telegraph, outside the Facebook echo chambers, outside the narrow mental obsessions of little England, all this seems completely bonkers. With all the immigrant-bashing, number-crunching and crystal ball-gazing, why is no one in Britain’s batty Brexit Government praising the value of peace, the foundation of prosperity? 

Some clever person on Facebook found an article about the EU from the Daily Mail on the eve of polling day in the referendum. It is so mendacious that I think I’ll lodge a complaint. 

I listened to the latest lecture on how Brexit is going by Professor Michael Dougan of the University of Liverpool (publicly available online). What a joy. It starts very sober and academic in style. But as it proceeds it gets more entertaining. Strongly recommended.