21 April 2016
Week in Brief: UK
European Referendum
TREASURY REPORT: The Treasury have published their analysis of the economic effects of Brexit. This estimates the amount by which leaving would reduce GDP in the year 2030 on three different bases:
- that the UK’s relationship with the EU becomes equivalent to that of Norway (a member of theEuropean Economic Area). On this basis the estimated reduction is 3.8%;
- that the UK’s relationship with the EU becomes equivalent to that of Canada, Switzerland or Turkey (ie a bilateral relationship). On this basis the estimated reduction is 6.2%;
- that, in the absence of a new agreement, tariffs are set at WTO levels. Here the estimate is a reduction of 7.5%
The modelling, which is very comprehensive, is more optimistic than results from the LSE and less optimistic than those from Oxford. It is not an economic prediction of growth since the calculation is of the proportion of GDP which would be lost by leaving the EU so that the actual amount of GDP is not relevant. It is assumed that migration and regulation will not be affected by leaving the EU and no account is taken of transition costs, it being assumed that these will have worked their way through the system before 2030.
According to Treasury estimates, a 1% reduction in GDP reduces revenues by £6bn so that a reduction of 3.8% would reduce them by £22.8 bn. per annum. That compares with a current contribution to the EU of just over £6bn.
See comment The Treasury Paper.
REACTION FROM “LEAVE”: Ex-chancellor Lord Lawson of Blaby has denounced the report as spurious and Michael Gove, Justice Secretary, has accused the Remain campaign of treating people like children and trying to frighten them into obedience.
Mr Gove also set out his views on the consequences of Brexit which he believed could trigger a democratic liberation of Europe as other states followed the UK’s lead. That would force the EU to reinvent itself and he envisaged the emergence of a free trade zone from Iceland to Turkey open to European countries whether or not they were EU members.
Mr Gove also said that the Treasury Paper envisaged further immigration of hundreds of thousands and that in the event of a vote for Brexit, the government would not, as the Prime Minister had suggested, immediately press the button for a two-year departure but would follow a more orderly process.
OTHER COMMENTS ON EU DEBATE: Mr Corbyn has spoken out in favour of remaining in the EU, suggesting there should be a standardised EU minimum wage linked to the cost of living to reduce immigration and protect British workers. Mr Corbyn, who has been opposed to the EU in the past, suggested that the government would withdraw protection for workers in the event of Brexit.
EU Commission President Jean Claude Juncker has admitted that the EU has been wrong to interfere so much in the private lives of citizens and that more authority should have been left with member states.
Eight former US Treasury Secretaries have written a joint open letter to “The Times” stating that a strong Britain within the EU is the best hope for securing Britain’s future, creating a prosperous Europe and protecting a healthy and resilient global economy.
Employment minister Priti Patel has said that tens of thousands of parents will miss their top primary school preferences because of unsustainable levels of immigration.
EU Regulation
WHISTLEBLOWERS: Paul Gilroy QC, a leading barrister, has criticised the new European Trade Secrets Directive which imposes imprisonment and fines of up to £350,000 on those who disclose trade secrets, on the basis that it will make whistleblowing very risky.
Health and Education
UNICEF REPORT: According to the study “Report Card 13,” the UK is fourteenth, tied with Germany, Greece and Hungry, in a table of child inequality in 35 rich countries. The table was put together by reference to a combination of education, income, health and life satisfaction, the countries at the top of the table being the least unequal.
DOCTORS’ STRIKE: The suggestion by Johann Malawana, chairman of the junior doctors committee, that paediatric units should be exempted from next Tuesday’s strike has been rejected by the committee. Mr Malawana was concerned that doctors walking out of such units was difficult to defend and could result in fewer of them taking part in the strike.
FOOD LABELLING: The food company Mars is to set a new industry standard by attaching labels to some of its products indicating that because of the fat, salt and sugar content they should only be consumed once a week. The company is also cutting the salt and fat content in food for more frequent consumption.
Transport
ROADWORKS: According to figures published by the Department of Transport, the average speeds in rush hour were 23.4 mph on A roads and 14.6 mph in London. The Department is proposing to crack down on failures to remove roadworks when there is no work being carried on.
ESCALATORS: TfL is running an experiment at Holborn Underground Station, trying to get passengers to stand on both sides of the escalator. It is believed that this will produce a better flow than the old system under which passengers stand on the right to allow others to walk past them. The trial will last for 6 months.
General Politics
ACCOUNTABILITY: The Government will not now change the law to incorporate the convention that the House of Commons should be consulted before troops are committed to action, because of concerns that that would constrain the operational flexibility of the armed services. According to a statement made by Defence Minister Michael Fallon, the Government will continue to keep Parliament informed of significant operations and deployments.
TRADE UNION BILL: The Government has dropped the provisions preventing trade union dues being paid by deduction from payroll.
HMRC: The House of Commons Public Accounts Committee has criticised the chairman of HM Revenue and Customs for not doing enough to counter tax evasion. According to the Committee only thirty-five people are prosecuted for evasion each year and cases are often dealt with by giving immunity in return for the payment of back tax and penalties.
AID: In the four years from 2011 to 2015 the UK, whose foreign aid budget tops £12 billion, spent more on foreign aid than any country apart from the US.
PRISONS: It is understood that an unpublished review, commissioned by the Justice Secretary Michael Gove, reveals that a number of Muslim prison chaplains employed by the Ministry use their position to promote Islamic radicalisation. The report prepared by ex-prison governor Ian Acheson is believed to be critical of the National Offender Management Service, the Ministry of Justice body charged with the oversight of prisons.
DRONES: A British Airways flight has been struck by a drone whilst preparing to land at Heathrow. A consultation paper on how to control the use of drones is to be published by the Department for Transport shortly, one option being registration of ownership.
LABOUR: The party’s decision to ban McDonalds from running a stand at its conference has come under pressure from members of the National Executive Committee who are calling for it to be reversed. The ban was put in place by a sub-committee.
Labour is considering whether Mr Corbyn should meet President Obama, who is due to visit the UK later this week. Last year Mr Corbyn wrote an article for the New York Times criticising the US for its treatment of a prisoner in Guatanamo Bay.
According to reports in the press, the shadow chancellor John McDonnell, speaking in Trafalgar Square, called for a determination to bring the government down before 2020 by working together in parliament, on the picket lines and in the streets.
MAYORAL ELECTIONS: Sadiq Khan, the Labour candidate, has been criticised for objecting to the treatment of a radical Muslim cleric when giving evidence in 2004. See comments The Shadow of the Past and Big City Blues.
EXPENSES: Lord Bhatta, a crossbench peer, has been banned from the House of Lords for eight months for claiming expenses both from Parliament and the charity Ethnic Minority Foundation. He was similarly suspended in 2010. The latest case, however, only concern the sum of £756.
Courts
INJUNCTION REVERSED: Although the Court of Appeal had overturned the “celebrity threesome” injunction, the injunction itself remains in place pending an appeal to the Supreme Court.
Sport
JOGGING: Stoke Gifford Parish Council has been criticised for its decision to charge the organisers of a charity fun run £1 for each participant. The council says that the run puts a strain on local facilities, including the surface of the park on which it is held. Parkrun, which organises the event, is non-profit making and wants it to remain free to participants. A number of well known athletes, including Paula Radcliffe, have protested.
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