No Taxation Without Representation!

"London is the centre of financial services in Europe. It's under constant attack through Brussels directives. It's an area of concern, it's a key national interest that we need to defend."


Prime Minister David Cameron, 29 October, 2011

The 26 October, 2011 Euro Summit Statement and the decision by the seventeen Eurozone countries to move towards ever deeper economic and fiscal integration will make Britain and the British people third or fourth class European citizens, after the likes of Belgium and Luxembourg. For the world’s fifth or sixth largest economy and Europe’s strongest military power Britain’s status in the EU was changed overnight from being one of the Big Three in an essentially inter-governmental structure, to being shut out of a German-led integrated system. To force the British people to go on paying for something with which the overwhelming majority of them do not agree with and for which they gain little or no benefit would be to subject a proud, old country to humiliation. That is not going to happen.

Figures supplied by Britain’s Office for National Statistics capture the extent of the unfairness to which Britain is now subject by its European partners. Britain is the second largest net contributor after Germany having injected some €10.5 billion in the EU in 2010. Britain’s gross contribution is also second to that of Germany at €22.4 billion, having leaped 74% since 2009. Some warn that Britain’s trade with Europe could be damaged if Britain left the EU, with some 40% of exports going to the EU. In fact, in 2010 Britain ran an enormous trade deficit with the EU of €53.1 billion, compared with a trade surplus of €11.7 billion with the rest of the world.  The average British household now pays around three hundred euros per year to the EU, which for many is close to the monthly cost of keeping a roof over their head.

The Eurozone breakout of 26 October was thus more than a technical decision to save the Euro. It saw the beginning of a fundamental shift of power inside the EU in favour of Germany and the European Commission. This power shift is manifested by French and German-inspired attacks on the City of London by the European Commission, Britain most important strategic economic asset.  Berlin and Paris are moving to strengthen both Frankfurt and Paris as financial centres at London’s expense. Prime Minister David Cameron warned on 29 October, 2011 that the City of London is under constant attack from EU. He described Britain’s finance industry as a “key national interest”, and warned that the single market must be kept open to non-Eurozone members.

Cameron went on, “Sometimes it’s necessary to have regulation but the regulation is badly drafted, badly formed and it doesn’t necessarily reflect what large financial centres like London need. And, of course, all countries in Europe pursue their national interests. Would the French and Germans like a larger share of financial services in Paris and Frankfurt? Of course they would. I want to make sure we keep them in London”.

Specifically, Cameron is deeply concerned about proposals from the European Commission which are supported by France and Germany which would impose a tax on all financial transactions in the EU to help fund the way out of the Eurozone crisis. Not only would this hinder London’s ability to compete with other global financial markets such as New York, Singapore, Hong Kong, Shanghai and Tokyo but it would effectively mean that the British were contributing 80% to tax to cover debt in a Eurozone of which they are not a member.

The power shift implicit in the Statement is truly historic and historians will come to see it thus. Germany is about to win the 140 year systemic struggle for the domination of Europe.  Given Berlin is the big winner the Germans should perhaps not complain too loudly about the price for solving the crisis as the Euro has done so much for so long to fuel Germany’s export-led growth.  The single currency has in effect acted as a customs union built around Germany thus offsetting the high costs of German production.

Equally, London also has responsibility for the position in which it finds itself. Ever since joining what was then the European Economic Community (EEC) back in 1973 London sold ‘Europe’ to its people as a free-trade zone and nothing more. Indeed, Britain has been trying to hold back the development of a more political and social Europe ever since. In ever more desperate attempts to reconcile what was promised to the British people with the political moves in Europe towards deeper integration London has sought opt-outs, which has simply removed Britain ever further from decision-making in Europe. ‘Brussels’ is now an utterly hated word across much of Britain and unfairly so. Ironically, the most important opt-out was the decision not to join the Euro for the simple fact that Britain was right about the inherent contradictions in the structure of the currency driven as it was by political ambition rather than sound economic fundamentals.

So, where can the British go? In fact Britain remains one of the world’s most advanced economies and by dint of being outside the Euro has better prepared itself for the globalised market than any of the Eurozone countries. Indeed, the Eurozone crisis is the world’s first globalisation crisis of the developed world caused precisely because the Eurozone tried and failed to seal itself off from the consequences of globalisation. It is no coincidence that David Cameron spent the period immediately after the Eurozone summit in Australia with the leaders of the Commonwealth amongst the fifty-three members of which are some of the world’s up and coming economies, most notably India.

And then of course there is the Anglosphere. Ten years of bruising engagements by the British military in Iraq and Afghanistan has seen some eight hundred British soldiers killed and some three thousand badly wounded. It has also demonstrated to the British that when it comes to real danger for all the talk of European defence London can expect little solidarity from its European partners. Family are the only ones that can be trusted; America, Australia, Canada amongst others. The British have done too much of the dying for Europe these ten years past. Libya? Too little, too late and it is seen by many in London merely as a vehicle for re-election seeking President Sarkozy to grandstand. There may even be benefits for both sides as a Europe without Britain can finally get on and do what it pretends it has always wanted, but which it also pretends the British have always frustrated, not least a common defence policy.

No Taxation Without Representation was first used in the run up to the American Revolution against Britain by Reverend Jonathan Mayhew in 1750 Boston. James Otis then said that "taxation without representation is tyranny”. What was right in 1750 remains just as right in 2011.

The day will now come when Britain leaves the EU and it will be perhaps the saddest day of my life.

Julian Lindley-French

A Bridge too Far: Britain Must Now Leave the European Union

There will be “a further strengthening of economic convergence within the euro area, …improving fiscal discipline and deepening economic union, including exploring the possibility of limited Treaty changes”.

Herman van Rompuy, President of the European Council, 27 October, 2011

Alphen, the Netherlands. 27 October, 2011. You will forgive your faithful blogonaut a third blog in a week on the same topic – the Eurozone crisis. However, the mission of this blog is to peer through the political murk and the fog of jaw behind which the Euro-Aristocracy and their faithful Eurocrats love to hide and bear witness to real strategic change. Before me I have the Euro Summit Statement of 26 October, 2011 (strange how it was issued at 0400 hours CET 27 October but is dated 26 October). Historians will come to regard this document as perhaps the most important since the EU’s founding 1957 Treaty of Rome. A political Rubicon was and had to be crossed last night by the Eurozone countries towards political and economic integration, but Britain for a whole host of reasons cannot, nor will she ever follow.

Quite simply the statement marks the moment when the countries of the inner-union broke once and for all with those of the outer-union. For someone who has spent much of his adult life believing in the essential unifying mission of Europe it is with the most profound sadness that I now call on Britain to leave the European Union. To save Greece, Britain has been sacrificed and given the stakes there was little alternative. However, for Britain to stay now would simply heap humiliation upon cost without influence and my proud, old, badly-led country deserves better than that.

As ever the devil is in the detail of Union-speak. It is not the headlines that matter, although as a Dutch taxpayer I am the one who is really going to take the now infamous ‘haircut’…and I will be bald for many years to come. Europe's Dear Leaders are simply inventing ways to avoid saying that. Private banks that hold Greek debt will write-off 50% of their returns; the ‘firepower’ of the European Financial Stability Facility (EFSF) will be increased from €440bn to €1 trillion (it will be €2 trillion within a year); and European banks will be required to raise about €106bn in new capital by June 2012...much more is needed. 

The key breaker with Britain is Annex 1 (the truly dangerous strategic bits of EU-speak are always hidden in the ‘language’ of annexes): “Ten measures to improve the governance of the euro area”. There will be twice yearly Euro-summits at which the Eurogroup meet under the leadership of a President of the Euro Summit who will be ‘designated’ by the Heads of State and Government (HofSG) of the Eurozone. The “Eurogroup will ensure ever closer coordination of the economic policies and promoting financial stability”. One can tell how weak is Britain’s influence as whoever writes this stuff is clearly not English. The non-Euro members and the European Parliament will be “kept informed” by the Euro-summit president, which will be nice.

There will be a Eurogroup work-plan towards deeper integration drawn up by a Eurogroup Working Group, “drawing on expertise provided by the Commission” which will be chaired by yet another “full-time Brussels-based President”…who will be different from the President of the Euro Summit. Still with me? Fantastically, the Onion will soon have five presidents – more high-paid jobs for the Euro-Aristocracy and their Eurocrat friends. What is the collective? A plethora of presidents, or merely a pain? Critically, the ECOFIN Commissioner, Head of the Omission's Economic and Finance Committee; the President of the Euro-Summit; the President of the European Commission; and the President of the Eurogroup shall be responsible for “communicating the decisions of the Eurogroup”. That should be clear then.

Make no mistake for all the Byzantine complexity and secrecy beloved of the democracy-defying Brussels Mafia this moment is the decisive break with Britain. London had an opportunity to shape this moment but woke up too late and did too little.  London will of course do what it has always done at such moments of retreat. Play down the significance of the statement, assure the British people that its impact will be minimal, and that assurances and opt-outs have been secured. There will be failure-masking talk of leading the non-Eurozone members towards a counter-balancing bloc. History will prove that London’s ‘assurances’ will be as empty as the people who make them. The simple fact is that Britain is the big loser (again) from the Euro-crisis. My old country must now take its chances with the wider world which represents over 60% of Britain’s trade. Bring on the Anglosphere!

The statement marks the decisive end of the fifty year struggle between a sort of ‘intergovernmental’ Europe and a sort of integrated Europe. The latter is not at all what the British people signed up to. To stay further would be to pay for someone else’s party and that would be unfair. A German-led inner core will now make decisions with implications far beyond mere issues of economy. Economics is after all power and Britain has no part of it.

Therefore, I call upon the Euro-Aristocracy on both sides for once to do the right thing; prepare for the departure of Britain from the European Union and recognise that Britain has trading rights under the World Trade Organisation that must be respected.

To paraphrase Winston Churchill; this is not the end of the beginning, but rather the beginning of the end for Britain in the European Union.

It is a bridge too far for Britain…and we all know what that means.

Julian Lindley-French

Euro-Crisis: A Little Bit Pregnant, David?

Alphen, the Netherlands. 25 October. Right now your faithful blogonaut should be on a Royal Navy warship somewhere off Europe. No, we are not planning an invasion, but it might come to that. Instead, I am in bed writing this missive on my steam-powered lap-top. Yesterday, having gone through the Eurotunnel, and back into Blighty as far as the ancient town of Rye, I had to turn back laid low by the Dutch Disease – the dreaded lurgy. The long run home through enemy territory – Calais, then Dunkirk and up to the Belgian border was touch and go. But in the end I made it flaps down with seconds to spare, in spite of some dense flak in the form of Belgian traffic near Antwerp and eventually belly-flopped into bed. Gallantly and valiantly I had decided to abort the mission and head home in the national interest, not wishing to infect what is left of Her Majesty’s navy. There is however some good news. Being full of flu for once my head is clear to think.

PR-Meister Cameron is trying to create a position for Britain in the Onion that simply no longer exists - being half in Europe. This Eurozone crisis will end that absurdity and confront Britain with the most profound of choices. We are all moving inexorably towards that moment. Last night almost half of Cameron’s Conservative Members of Parliament voted for a referendum to be put to the British people. The question on offer would be simple; should Britain stay in or leave the European Onion? In doing so they voted expressly against the wishes of PR-Meister Cameron. Rightly in my view, the PR-Meister made the point that now is not the time for such a question to be placed before the good citizenry and honest burghers of Britain. He sympathised with his rebels by suggesting that the British Parliament was "ever more impotent" as the "tentacles" of the European Onion "intruded into more and more areas of national life". The time for reform was at hand, he said…but not just yet.  What matters now is that we all pull together to avert what is a European crisis of the first order.  But the day of reckoning approacheth!

Time will prove the obvious; the PR-Meister is defending the indefensible.  On the one hand he believes the British interest is best served by staying in the Onion but on the other he is promising his revolting back-benchers that a "fundamental change" in the UK's relationship with Europe will soon take place. How?

The contradictions in Cameron’s position are indeed profound. First, the political space Britain now occupies in the Onion is eroding fast. Given events being in the Onion but not in the Euro makes little sense now, let alone a year hence when the consequences of this moment unfold. Logically given London's current position all that is going to happen is that the British will inevitably incur more cost for less influence.  Second, “repatriating powers” from Brussels will not free London from the grip of the Onion. With the European Omission’s powers inevitably strengthened Britain will still be ever more subject to a whole host of European Directives rightly designed for and by the political and monetary core of Europe. The PR-Meister will of course demand ‘opt-outs’ but all these ever do is ensure Britain has next to no influence over the strategic track of the Onion. It is precisely Britain's penchant for opt-outs that over time has led to the loss of critical influence in and over the Onion.  Third, fiscal and economic integration will lead inevitably to even further political integration in areas such as home affairs and defence which are a vital British interest but over which London will have no say. Fourth, having promised no more British cash to solve the Euro-crisis PR-Meister Cameron’s call to us all to douse the fire in the neighbouring house will mean just that – more British cash.

Britain’s real position was captured by President Sarkozy at the EU-summit this week. “We are sick of you criticising us,” the French President said, “…and telling us what to do.” Note the ‘us’. Britain simply is not regarded as one of 'them'.  So much for solidarity. 

Sadly, PR-Meister Cameron’s position on the Euro-crisis is symptomatic of the muddled and contradictory strategic thinking at the heart of the British Government.  Indeed, over Europe Cameron finds himself in the political equivalent of being a little bit pregnant. But here’s the real tragedy – so is Ed Milliband, the Labour Party leader and Nick Clegg, the leader of the Liberal Democrats. Whatever one might think of the Tory rebels at least they see how ridiculous Britain’s European ‘policy’ has become. It is about to get an awful lot worse.  Britain is in the worst possible of all strategic/policy positions - no influence/ high cost.

To properly influence events Britain must be at the core of the Onion. Or, to avoid the costs Britain must leave the Onion. There is no middle ground. In other words, Britain must join the Euro, or leave the Onion. It is as simple and straightforward as that.

Talking of symptoms – where’s the Lemsip?

Julian Lindley-French