What have the Europeans ever done for us?

So Teresa May wants the UK to abandon the human rights act. This would put the UK in a very exclusive club with the likes of Belarus and Kazakhstan as some of the few countries not subject to the European court of Human rights.

A nice parody video from the Guardian, with Patrick Steward asking the Monty Pythonesque question “what has the ECHR ever done for us?“. And what sort of leftie eurotrash Trotskyite came up with this idea anyway? Oh, ya, Winston Churchill!

Welfare for tax dodgers, cuts for the rest of us

A man stands outside a BHS store in Leicester

The collapse of BHS has a bitter ring to it. It would seem that noted tax dodger Philip Greed Green, who sold the company for £1 just a few months ago, left a massive hole in the companies pension fund. Keep in mind that with the firm now in administration, if its liquidated (which seems likely), it is the UK taxpayer who will bailout the BHS pension fund.

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How the pension fund could be so depleted isn’t clear. Keep in mind, that even in November Phil Greed Green was reporting profits for his firm were up, although he predicted “tough trading conditions ahead”. BHS itself did make a loss in 2015, but it it is still difficult to believe the company could slide under so quickly, with him declaring a profit for the holding company year on year (i.e. taking money out…which he would not have paid any tax on). And now there’s a £571 million hole in the pension fund.

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It does unfortunately look like he and the other shareholders ran BHS into the ground, bled it dry, didn’t even bother to pay tax on any of these profits and have now dumped the whole sorry mess on the UK tax payers. I would note that a common tactic of organised crime was to do just this, buy up a business, run it into the ground (e.g. buying up stock on credit, selling it for cash out the back door, leaving the debt on the company books), then burn it down for the insurance money. The Kray twins pulled this trick all the time. The only difference is, they didn’t quite think big enough. Its all eerily similar to the banking crisis, leading one to question, has anything really changed?

And where’s the government in all this? Are they investigating Green’s Greed tax affairs? Looking into this dodgy pension deal? You’re joking right! No Cameron saw fit to hire Phil Greed Green to advise the government on ways Whitehall departments could save money. That’s like hiring the Hatton Garden robbers as advisers in bank security.

Needless to say this raises serious questions about Cameron and Osborne’s judgement, not to mention their commitment to dealing with tax avoidance. As it would appear that they favour welfare for billionaire non-doms, yet for taxpayers or those on welfare, its cuts galore, more austerity and more pain.

Why we could all learn something from the Americans

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The Americans, be it President Obama or the last eight treasury secretaries (under both democrat and republicans) have been very clear in their views – Brexit will harm relations between the US and the UK and likely lead to the UK being worse off. There will be no fast track to a US/UK trade deal, instead the UK will go to the back of the queue of nations waiting for this. This directly contradicts a central part of the message that the Brexit camp have been preaching (that the UK will get a better deal from the US if we leave the EU). And no, this is not Obama signing up to “project fear”, because the Americans have been saying pretty much the same thing for several years now.

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Give a guy enough rope….

Given that such statements make a mockery of much of the pro-leave fantasy, the result has been several attacks on the Americans. I think we can ignore the mildly racist birther stuff from Boris, or the suggestions from UKIP that the EU is some sort of anti-colonial plot against the UK (not sure which version of history they are reading, but didn’t the Americans save your butts in the 1940’s?). But the Leave camp also accuse the Americans of “hypocrisy, after all, the US would never surrender its sovereignty to another nation or pay the Mexicans billions a year to be a member of the same club? Would they? Well actually they will and they do! A little geography and geopolitics lesson is in order for the leave campaigners.

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How the US Federal system works

You see the US is a “federal” system, not a single nation state, i.e. not unlike the EU. The US is a union of 50 states, all with effective internal sovereignty over a wide range of issues (a state constitution, state supreme court, state police, national guard, a governor, legislative branch, etc.), all highly competitive with one another and with a very diverse array of different politics, economics and cultures.

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Economies of US states and EU countries compared

California for example has a population of 38 million, while Wyoming has only about half a million. Texas is twice the land area of Germany. New York state has an economy as big as Spain, despite having a population a fraction of the size of Spain. While solidly republican, Texas and Iowa are both strong promoters of wind energy. California, while consistently one of the most liberal states in the union, tends to elect Republican governors. And while the sales taxes in California is around 8%, its half that in Obama’s home state of Hawaii and its zero in the liberal leaning state of Oregon. And needless to say there’s a world of a difference between the Cajun culture of Louisiana and the cowboy rodeo’s of the Great Plains.

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How European nations compare in size to US states

And as I discussed in a prior post, many US states are net contributors to the US federal government, knowing that there are other states that are net receivers (i.e. they get more back from the US federal government than its citizens pay in taxes). Do you see Californians lining up to call for “Cal-exit” (or should that be Californication?). Or New Yorkers calling for Nyexit? No….although if Trump gets elected that might well change…because they understand that the strength of America is that its union is greater than the sum of its parts. They would all be worse off without the USA. A house divided will fall and all that.

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Indeed the only major difference between the US and the EU is that the US represents tighter more federal union. There are plenty of people, including Winston Churchill (and recently Jeremy Clarkson of all people) who will argue that the problem with the EU isn’t that the Brussels is too powerful, but that its too weak and not sufficiently democratically accountable. They argue that ceding further powers to Brussels, making the post of EU president a democratically elected post (by the people, much like in the US…oh & btw given the UK’s population that would make the UK a key “swing state” in any such election), including a second chamber in the EU parliament (i.e. eliminating the unelected commissioners and replacing them with a democratically elected body, with each country getting at least one seat at the table) and you would solve many of the supposed problems with the EU.

And as for ceding sovereignty to Mexico (a specific claim made by Boris Johnson) well that’s equivalent to asking whether the UK or the EU would cede sovereignty to Russia. And on the issue of trade, and to a certain extent immigration, yes the US HAS ceded some sovereignty to Mexico and Canada under the terms of NAFTA and reaped the rewards for that.

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Contrary to the rhetoric of white supremacists like Trump, US trade with Mexico through NAFTA is creating jobs in America, not destroying them

So all such statements show is how little the Brexit camp know about America and also how unlikely it will be that they will get their way with the Americans afterwards.It is also worrying to see how far to the right the Leave camp have drifted, given that they are now spouting the sort of birther cram that even Trump gave up on sometime ago. Indeed in amongst Boris’s bluster there is a very serious risk of him antagonising the Americans to the point where they quickly distance themselves from the UK and refuse to talk to the country so long as we allow the lunatics to run the asylum.

From Project Fear to Project Fantasy

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Last week, the Brexit camp rolled out another of their tabloid friendly slogans, why don’t we take the £350 million a week we spend on being an EU member and give it to the NHS? This unfortunately is an excellent example of just how divorced from reality anything we hear from the Leave camp is.

For starters, the BBC (who have recently been criticised for being overly negative about the EU in a recent study)  points out the true figure is closer to between £276m to £161m, depending on whether the Leave camp are admitting that farm subsidies will end as will much support for university funded research. Also, like Norway, the UK would have to pay some sort of fee for being a member of a the European Free trade Area. This currently costs the Norwegians about 82% per capita what it costs the UK (although its previously been suggested the UK would be paying 94% of what it currently pays for such arrangements). So that implies you could divert around £32 million a day (at most), or about 1.6 billion a year more to the NHS…about 1.7% of the NHS budget at present rates.

So at least we’ll make some sort of a saving? Right? Well actually, no, that’s only if we assume tax revenues stay the same. The current UK tax take is around £600 billion, so a fall of just 0.5% in tax revenue post-Brexit would wipe out this “gain” and leave the NHS considerably worse off. Indeed a recent Treasury report suggested that the UK tax take could fall by as much as 6% post Brexit.

This would create a hole of £36.4 billion in the UK’s balance sheet. And on top of this would be the £56 billion hole Osborne’s being trying to hide, leaving the UK with an annual deficit of £92 billion, or about 14% of current spending. Note that this would exceed the level of deficit that Greece experienced when it got into trouble (a mere 12.7% at worst).

To be clear, this £36-92 billion budget hole is not the one off costs of Brexit, those will run into the hundreds of billions. This is the year on year deficit the Treasury will have to cope with post-Brexit, after everything has settled down. And we’re assuming no mad rush for the exit by corporations, no banking collapse and no messy breakup of the UK due to a second Scottish vote. In short, we’re assuming as good a scenario as the Leave camp will get and yet they’ll still be worse off.

And plunging this hole will be a big ask. All the easy to make (or easy to hide) cuts have already been made. Any further cuts will mean cutting back on fundamental public services that are currently ring fenced. And I mean going after things like the free TV licences, winter fuel allowances, perhaps even reneging on current pension commitments (e.g. means testing for the old age pension) or significant cut backs to NHS services (perhaps charging for certain NHS services, or again perhaps means testing for them). And far from tinkering with working tax credits, they’d likely have to go altogether.

To be clear I’m not calling for such things, I’m merely pointing out the sort of painful measures that would have to be taken to plug this big a budget deficit. I’d prefer tax rises instead of cuts (of course I’d prefer not to leave the EU and thus not to have to choose!). But it will take more than simply “taxing the rich” to solve this big a problem. Cracking down on non-doms and tax havens, higher rates of tax for higher earners are all good ideas, but it simply won’t be enough to fill a hole that big in the budget. No, in conjunction with such measures all taxes would have to rise, income tax, VAT, council tax, etc. Of course that will push up inflation, drive up salaries and mean anyone on a fixed budget (such as pensioners planning to vote for Brexit) will be much worse off.

In short, the reality is that voting for Brexit will fundamentally alter the UK economy. The consequences of which will be felt hardest by the very sorts of people most likely to vote for Brexit. I would only recommend voting leave if you don’t plan on getting sick anytime soon or retiring….ever!

In defence of EU regulations

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Thanks to those pencil pushing killjoy’s in Brussels we’re not allowed to let children work in factories like this anymore!

In amongst the bigoted BS about migrants, the Brexit brigade will often trot out the phrase freeing us from burdensome EU regulations. It was a central part of Michael Gove’s rambling speech (which for some reason reminded me of Marlon Brando’s monologue from Apocalypse Now) regarding Brexit (he also made various wild claims, such as the fantasising that the EU will break up if the UK leaves…and then claim that the UK will get a better trade deal from a now non-existent EU….rather than a worse deal from 24 different countries!).

This is a falsehood, because if there’s one thing that we can guarantee will happen post-Brexit, its that the UK will still be subject to many pages of EU rules (oh, and EU citizens will still be able to come over here in unlimited numbers…oh and we’ll be paying for the EU to administer all of that too). Why? Well firstly because there is no way the EU will sign a free trade deal with the UK if we don’t, nor indeed will any of the other trading blocks. But also because it is in the UK’s interest to keep those rules….unless you fancy turning the country into North Korea!

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Thanks to “burdensome EU regulations” accidental deaths are falling across the EU

What the Brexiters don’t mention is that these “burdensome” EU regulations are mostly devoted to setting safety standards , protecting the environment and workers rights. In other words stopping kids being exposed to dangerous chemicals contained within toys (or air pollution), making sure food doesn’t poison us, preventing workers being maimed at work and making sure you aren’t impaled on the steering column in the event of a car crash. So unless there’s anyone whose okay with taking a few chances (i.e. you want to expose your kids to carcinogens and see workers losing hands and feet at work like back in the old days), I suspect most of these regulations will be staying. Not least because so much trade depends on it.

Let us take the car industry by way of example. Across the EU car makers, or the producers of car parts, are subject to a long list of regulations. These rules keep us safe and mean that despite the fact that year on year the number of cars has been growing, the number of road deaths have been falling for some time now. And as I discussed on my energy blog a few years ago, the benefits of these regulations are all too easy to see.

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EU regulations help keep car drivers safe, while also allowing vehicles like this British made car to be exported more easily, while keeping insurance premiums down

I would note that the EU rules relating to vehicle safety are (arguably) weaker than those in the US (we’ll discuss the reasons for that later), notably in that they don’t absolutely require a vehicle crash test (simulations and calculations to prove safety will do) for cars sold in small volumes. This loophole is crucial to many smaller UK car makers (think Caterham, Morgan, TVR, etc.) who rely on it to stay in business (and why importing UK made sports cars into the US is a bit of a minefield).

These rules on vehicle safety are not dictates from Brussels, but are the result of years of negotiation between governments, safety bodies, academics, car makers and insurance companies to try and find a compromise that everyone is happy with. These regulations are important because car companies and insurers rely on them both in terms of setting bench marks for acceptable levels of safety that they can design too (while giving insurers the confidence to insure those cars). But also to back them up in court, they will often cite “complying with all specified safety standards” in the event of a lawsuit. So long as they can prove their car was within the regulations it means that A) a lawsuit is less likely to succeed and B) there are legal liability limits to how much they can be made to pay out. However, if for some reason the court finds that they failed to meet the regulations (as has happened in the past), the sky is the limit. Lawsuits with eyewateringly high pay outs have been the end result.

So if post-Brexit the UK government were to follow Gove’s advice to relax or in anyway loosen the “burdensome” EU rules on vehicle safety, the end result would be the collapse of the UK car industry. Insurers would refuse to insure UK made vehicles, the EU and US authorities would ban the sale of UK made cars or car parts within their borders and the driving public would stop buying them (after all which car are you going to drive your kids around in?). UK vehicle manufacturers would have to move abroad (or ignore the UK rules, adopt the EU rules and pay the costs of arranging for inspection and enforcement themselves).

Similarly the aircraft industry is tightly regulated (and again, the US FAA regulations are arguably stricter than those in Europe). “Airsafe” parts are quite literally “reassuringly expensive” as a result. So much so there’s actually a big black market in counterfeit or non-standard aircraft parts, which the authorities (and the airlines) are trying to crack down on. And again, the airlines, aircraft makers, insurance industry and the regulators themselves (who have been sued in the past for not regulating airlines enough!) all rely on these rules both to protect planes and passengers (airlines don’t like losing aircraft, not a good business model to go around killing your customers!), but also protect themselves from lawsuits and limit their liability in the event of an air crash. If an airline or aircraft maker breaks these rules or is found in non-compliance, the result is usually a massive payout, customers boycotting your planes and usually the collapse of the airline in question.

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So again remove these “burdensome” EU regulations and you’d have all of the UK’s aircraft industry and airlines relocating overseas, under threat of them being banned from US or EU airspace if their planes included any cheap British knock off parts. And of course the insurance companies would refuse to insure these aircraft and passengers would likely refuse to fly in them.

Finally, let us consider food. Listen to the Brexiters they’ll have you believe Brussels has 26,000 words devoted to regulating cabbages (not true! As the Beeb’s “more or less” discusses). Farmers represent a problem for the leave camp. Country folk are naturally conservative and distrustful of foreigners, but many farmers are heavily dependant on both EU farm subsidies and trade with the EU. Indeed studies have shown that in the event of Brexit farmer incomes will be on average £34,000 worse off and food prices will increase.

The leave camp have tried to counter this by preposterously suggesting that much of the increased food price will go to farmers (actually it represents an increase in their costs as they find it more expensive to important consumables from the continent) and that subsidies will remain (I’ve yet to hear a single mainstream politician confirm that the UK government can afford to pay such subsidies).

Ignoring such obvious fallacies, the leave camp also try to claim that farmers will be freed from EU “red tape” by voting to leave. In which case, I hope farmers like the taste of their own produce, cos its all you’ll be eating from now on! Much of this “red tape” relate to food safety and environmental protection, so the EU will immediately ban all produce that does not meet its standards (as likely will other trade bloc’s too). And you would even struggle to sell such produce within the UK. Supermarkets know their customers. They know that customers will react to the slightest hint of risk when it comes to food safety by boycotting said products. Customers also demand that products meet various environmental standards (dolphin friendly Tuna, fair trade coffee, free range eggs, no GM crops, etc.). There’s been enough food scares in the past for them to know not to take any chances and the would cease to stock any food that they know that even a minority of customers will refuse to buy.

So I’m afraid, these EU rules and reg’s will be staying and as noted earlier, like Switzerland and Norway, we’ll be paying the EU to send bureaucrats to the UK to make sure we are compliant. Indeed I would argue the other way, in the event of Brexit don’t make our rules weaker than the EU, make them stronger. You will recall I pointed out that in some areas US regulations are actually stricter than those in the EU. In part this is because the US is a more litigious society, so the regulations have been tightened over the years to match this. On which point, the UK tends to be fairly litigious compared to the continent. So post-Brexit we’d expect a natural creep upwards of regulations, rather than downwards.

However, some accuse the US of using its tough regulations on trade as a defacto means of protectionism. They know US firms have to set the bar pretty high to meet the demands of US consumers, so it makes no odds to them if the rules are strict……but it might make a Chinese competitor think twice before entering the US market (or allow them to halt the sale of UK made Cadbury chocolate bars). To those Republicans who say “big government get off my back”, I say can you sign the following legal disclaimer in which you accept full personal liability and responsibility for any injury, death, maiming, disability, dismemberment, loss of livelihood, destitution or HMO refusal (due to “prexisting conditions”) that may impact on you, your family, children, partners, pets or acquaintances from big government getting off your back.

So in a post-Brexit world, I would argue the opposite would be a sensible strategy, make the UK reg’s stronger than the EU’s to protect UK trade. Okay those very same neo-liberal types arguing for Brexit will be rolling around and chewing the carpet when they realise what they’ve gotten themselves in for, companies will whine a lot about red tape and all this form filling, but it would be a entirely rational decision. Of course, push things too far and companies will eventually get the hump and leave the UK for countries that are less heavily regulated.

There is a happy medium between enough regulation to keep us all safe and keeping the insurers and financial services industry happy, but not burdening companies with too much red tape. If only we had some sort of organisation that could find that happy medium?..oh ya we do, its called the EU!

Project Fear v’s Project Doom

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The government, when not defending themselves from accusations of tax dodging have embarked on “project fear for the EU referendum….although this mostly seems to consist of pointing to various reports by organisation such as the IMF, the CBI, the LSE or the recent report from the farmers union. In essence the message from the experts is that leaving the EU will have a negative economic effect, in part because it will not be as easy to undertake as the “leave” camp would have us believe (the only country to actually leave the EU was Greenland and that took three years….where the main sticking point was merely the issue of fisheries!).

So the government position is just mirroring expert opinion, they claim. However trying to get this through to euroskeptics is next to impossible. I’ve had several conversations with leave supporters whose constant point is that they can’t trust the information they get from mainstream sources. They demand to know the “true” facts. They believe the stay camp are just trying to scare us, because they have some sort of secret unstated agenda. But what exactly is that agenda?….aside from the obvious (they don’t want to see the economy collapse and spend the next ten years negotiating with the EU for a trade deal that will leave the UK permanently worse off).

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Project fear from the May 2015 elections

Certainly, the last time we saw project fear (May 2015), where we were warned that Alex Salmond would be appointed PM by Ed Miliband and the wearing of kilts in London would be made compulsory, well yes then the Tories did have an agenda (make sure the lib dems got the blame for all the crap the Tories pulled in coalition). And during the Scottish referendum there was also a clear agenda, given how devastating Scotland leaving would be for the UK’s defence, losing control of the oil, the bulk of the UK’s renewables, etc. As I recall pointing out at the time, in the event of Jockexit the SNP won’t all have it their own way (so again, there would be some sort of economic correction), although I was still minded to support independence, in part because I worried this EU referendum might be round the corner. So there was some truth to “the fear”, although it might well have been blown out of proportion somewhat.

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During the Scottish referendum, project fear did start to sound like the arguments a couple in a divorce would make

And in the AV referendum we were warned that it would lead to electoral chaos and governments that were constantly divided and unable to govern….which we seem to have gotten anyway with a Tory majority and an EU referendum. So again, the Tories clearly had an agenda here too, that of protecting the duopoly of themselves and labour. But as regards the EU vote, the agenda does seem to be as advertised. Although one is left with an element of boy who cried wolf syndrome.

Some UKIPer’s will at this point mumble something about “an agenda” involving steps towards “a European superstate” which the “stay” camp favour. Certainly some in the “stay” camp do. But David Cameron and Jeremy Corbyn (who like quite a few lefties is something of a euroskeptic….just one who isn’t a raving racist loon), nor any of the other economic institutes I mentioned earlier are supporters of that. If you honestly believe the UKIP propaganda, do you really think Cameron would campaign for an EU superstate when he knows the first thing that state would do would be to crack down on the tax havens were he stores all his money? And again, too what end? Indeed the only member of the stay camp I’ve heard talking up an EU superstate recently was (of all people) Jeremy Clarkson.

Project Doom

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Of course Farage would never resort to using scare tactics to win….

So it would appear that in this case “project fear” is justified. But the UKIP’ers won’t listen. And it has to be said that the “leave” camp have been running its own version of project fear, which I’d describe as “project doom” given the anti-EUscare stories the tabloids been circulating. The only difference being that while the government position is based on academic views and peer reviewed research, the leave camp’s scare stories are based on hearsay, half truths or outright lies. And the whole reason why we are having a referendum has been several decades worth of the tabloids running an anti-EU project fear.

Take for example a recent story, where the Express tried to claim that the EU wants “control” of your pensions. The implication was that eurocrats would cease people’s pensions. Well no, actually the EU is more interested in making sure pension contributions can be transferred across national borders, important for those who work and live in different EU countries (as applies to quite a few brits). Also, and this is not the first time this has come up, the commission is worried about the massive difference between welfare payouts in different member states. They worry that this could be creating “benefits tourism” whereby people head from one EU nation to another with better benefits.

And contrary to what the tabloids would have you believe the UK is not likely to be a victim of this given our benefits system pays out a lot less than other EU nations. At most, all the EU is proposing is setting guidelines for what level of benefits nations should pay out, so we don’t end up with a massive pull on one country or another. And like I said, in the UK that would likely pull up pension payments rather than drop them, given that the British pension is one of the worst in Europe….although I suspect the Treasury will point out that UK pensioners get all sorts of things like winter fuel payments and free TV licenses.

Of course one cannot help but notice that the EU is actually doing something about an issue the tabloids have spent several years making a big deal out of and the tabloid response is to criticise the EU for doing what they’ve been lobbying for !?! That’s like some old duffer complaining to the council about boy racers racing up and down his street and then when the council puts in speed bumps complaining about the speed bumps and how much his council tax costs.

The devil’s rejects

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And since we are talking of “agendas” its worth noting that many in the leave camp very much do have an unspoken agenda. Clearly many of the cabinet ministers who broke ranks and supported leave are on a downward career path. They know their days are numbered and backing “leave” is really a sort of forlorn hope. Boris Johnson is clearly only backing “leave” because he reasons its his best chance of becoming PM.

And quite a few of those bankrolling the “leave” camp, at least those who have gone public, have very clear financial motivations. Take for example the boss of Phones4U (amongst others), who is no doubt annoyed at the EU’s plans to end roaming and stopping phone companies fleecing customers when they make calls abroad. And that’s the “nicer” end of the spectrum. Much of the leave camp, are the sort of corrupt tax dodging, hedge fund managing troglodytes of a bygone age.

While Cameron, Osborne and even Boris all disclosed their tax returns recently, I think there’s very little chance of you seeing Farage’s or the Rothermere’s (Daily Mail owner, leave supporter and tax exile) or Richard Desmond‘s (Daily Express owner, also a tax exile) accounts…largely because it would likely get them arrested!

Suffice to say those in the leave camp have a very clear agenda, they worry about the EU’s long standing push for greater equality, and more recently a crackdown on tax avoidance. They also plan to profit from the carnage that follows. As the saying goes follow the money. And the money trail says this lot have clearly got something to hide, quite apart from the fact that they are all neo-facist bigots So their “agenda” for backing “leave” isn’t too difficult to deduce.

So while yes, the government does likely have “an agenda” by campaigning for staying in the EU, there is a strong element of truth and genuine fear backing this one up. And if were are going to accuse the stay camp of fearmongering, then its only fair we acknowledge the fearmongering that the “leave” camp are also engaged in much of the same. The only difference is the “leave” camp’s fear is mostly based on half truths and race-baiting. It is in truth very difficult to be a “leave” supporter without also being a tinfoil hat wearing conspiracy theorist.

The Panama files

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The revelations from the Panama files of the law firm Mossack Fonseca have been on the one hand shocking, yet on the other oh so predictable. It is a well known fact that a large chunk of the world’s capital exists in a sort of “dark matter” like state. We know its there, we can see its effects when the rich flaunt their wealth, but nobody can pin down where it is, so its widely assumed to be tied up in tax havens.

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Note the data above based on a 2008 estimate, actual numbers may be much higher now.

Details are sketchy, but the estimate is that between $11.5 trillion and $20 trillion dollars is squirrelled away in tax havens, about 15% to 25% of the entire net worth of the global economy. That equals (or exceeds) the annual economic output of China. Its estimated that global governments lose out to the tune of between $100 billion to $255 billion in unpaid tax. And quite a lot of this money represents the proceeds of crime, or funds looted by corrupt regimes from the state coffers. At least $6.2 trillion of that money comes from developing nations (i.e. nearly half of the total, even though developing nations represent only about a quarter of the global economy).

What Mossack Fonseca were in the business of doing was acting as the intermediaries for transactions that allowed money to be spirited away, cached offshore in shell companies and then laundered back, often through the purchase of assets such as property in London for example. And as the BBC’s panorama reveals 95% of this company’s business was devoted to this kind of activity.

When most of us think of money laundering or offshore banking, we envisage some guy in a small office in the Cayman Islands wearing a Panama hat and Bermuda shorts with a safe in the back of the office. But no, Mossack Fonseca employs thousands of people and have many times this number in offices worldwide whom they will hire out to act as stool pigeons for dodgy deals. This is tax evasion and money laundering on literally an industrial scale. And the banks are clearly aware of this and compliant in such transactions.

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The top ten banks linked to the Panama papers

One of the methods that David Cameron’s dad employed, which was also used by the Brinks Matt robbers was “bearer bonds”. You’ve probably heard of these in a Hollywood film, where thieves break into a bank or an armoured car to steal a small suitcase which is somehow worth tens of millions because it contains “bearer bonds”. Well in truth bearer bonds have been largely banned in most of the world, given the obvious means by which they can be abused by criminals (or terrorists) to circumvent tax or money laundering legislation. However, it would seem that they are still in use, which is both shocking and on the other hand, not a surprise.

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In the wake of the Panama papers Putin searches for places he can hide away his millions in ill-gotten gains

And as noted many of the rich and powerful have been left with awkward questions to answer. A lot of the time its not what they have been saying, but what they’ve not been saying that counts. Osborne refused to answer any questions (then terminated the interview) on the issue of his offshore dealings. Parallels could be drawn with the same reaction from the Icelandic PM who has now resigned.

Cameron released a series of increasingly carefully worded statements which all but admitted that he had benefited from these offshore tax haven funds set up by his father. Indeed at the time of writing he’s actually now admitted that he had a stake. Now you’d expect Boris Johnson to use this as an opportunity to knife Cameron nice and quietly. Instead he’s been defending the PM, all but confirming that he too has had his hand in offshore deals like this. Oh, and search the Fox News site for “Panama files” brings up no hits (guess where Murdoch keeps his millions….).

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Cameron’s attempt to draw a line under all of this tonight, still leaves a lot of questions. Why would you set up a firm in the Bahamas, whose main beneficiaries (those that weren’t clearly front men….one was a local bishop) were all based in the UK, other than to avoid tax? He claims it was so they could trade in shares in dollars….then why not set up in New York or Delaware? And, given how many of these offshore shell companies often use property deals to re-shore funds, that raises questions as to how Cameron afforded a multi-million pound house in London. And it has also been revealed that while publicly talking tough about cracking down on offshore finance, Cameron has in private opposed efforts by the EU to crack down on tax havens.

And this brings us back to the EU referendum. The EU has been pushing quite heavily to end the “phantom zone” of offshore tax havens….which probably explains why so many of Farage’s hedge fund buddies favour Brexit  (Farage has been previously forced to admit he used tax havens). You can draw a direct correlation between EU efforts to crack down on tax havens and funds flowing the way of UKIP. The UK is a key hub around which many of these tax havens orbit. If the UK ceased to support them (Corbyn proposed direct rule be imposed on them) the system would start to break down.

And again, to be clear this is not a victimless crime. When Ian Cameron (or Farage) avoided paying tax, you paid the tax for them. Yes, Farage and Cameron as good as went around to every taxpayer in the UK and picked their pockets. And one of the facts that the Panama papers revealed is the degree to which the London property market is dominated by offshore dealings (Private Eye have a handy map tool available here). After all, the next best thing to a bearer bond, is the title deeds to a London flat. Of course the end result is British being priced out of the housing market by wealthy foreign billionaires using UK property (which they often leave empty) as gambling chips in a casino. Meanwhile Farage gets to blame foreigners for London being overcrowded.

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UK citizens now make up a minority of London property buyers…oh and the EU are just 4.7%

The company at the heart of this whole debacle have responded by pointing out that the only crime committed was by the person who leaked all this information. They also made some flippant statement about their e-mail being hacked. But its doubtful that anyone could access Terabits worth of data via e-mail (if they can what kind of an outfit are these jokers running!). No, I suspect an internal mole is involved. But unfortunately, they are almost certainly right, the only crime here was whoever leaked all this data, which perhaps highlights everything that is wrong with offshore banking.

Suffice to say action needs to be taken. Withdrawal from the EU will play right into the hands of those who want to turn the UK into essentially a giant tax haven (keep in mind that tax havens still need to be financed, typically through higher VAT rather than income tax, so those living in the country still end up paying quite a lot of tax). While I suspect Corbyn is going a bit far when he talks of imposing direct rule, some economic sanctions launched by Britain and the EU (block all trade, forbid anyone UK/EU citizen from owning shares in offshore funds, freeze all assets of said companies, travel bans, etc.) would have the desired effect.

However, perhaps the most obvious measure is to apply the blinding light of transparency. Make all companies that do any form of business in the EU, regardless of where they are based, declare all of their shareholders as well as the pay and earnings of senior company officials. Like vampires, these blood suckers prefer dark places, force them into the light and they’ll explode.

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Cameron’s Panamanian lawyer makes the mistake of opening the curtains

Unfortunately, neither the current PM, nor anyone else in the cabinet, are credible candidates to lead such an effort.

The iron and steal business

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This week saw the Tories in trouble over the risk of a sudden collapse of the UK steel industry. UK steel companies have been under pressure for several years now. And with losses mounting it seems Tata plan to cut their losses and get out. Something which seems to have taken the government by surprise. Even though it was inevitable to anyone who had actually been paying attention.

Of course some tried to blame the EU. The trouble is, its since been revealed that the EU had a plan to save steelmakers in the EU from cheap steel imports, only it was the Tories who acted “as ringleader” in opposition to this plan, no doubt fearful of its impact on their buddies in Bejing. Indeed, its been pointed out that concerns about Brexit have probable worsened the situation surrounding the Port Talbot plant.

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Somewhat ironically, the Chinese have now announced potential tariffs on European and UK made steel imported into China. The Tories responded by telling everyone not to worry their pretty little heads about it….you won’t be in business long enough for this to matter! Far from the defenders of British industry, recently the Tories have sounded more like a branch office for the Chinese communist party.

And one has to contrast with the unwillingness of the Tories to do anything to save UK steelmakers, yet they are willing to lavish vast subsidies and bend over backwards to accommodate Hinkley C (which the Chinese are also a partner on). The only difference between nationalising the steel industry and Hinkley C, is that with Hinkley C we are paying French and Chinese government owned firms (at great expense) to do the nationalisation stuff for us, for a period of fifty years. While the steel industry would probably only need a much lower level of support for a shorter period of time and it would save many times more jobs.

The bad news for steelworkers is that the only reason why the Tories are currently taking any action is all about saving face, in truth they simply don’t care. They have to at least pretend to do something now, because the media are making a big deal about this and defence chiefs are climbing the walls over the strategic implications. But the Tories are a self serving party of the wealthy. Very few Tory voters work in this industry (worse, some steel workers vote UKIP) and very few of their paymasters have a vested financial interest in UK steelmaking. They have nothing to gain from saving jobs at Port Talbot.

Hence Tata’s policy here is quite understandable. Put yourself in their shoes. They are losing £1 million a day. They know that the UK governments cares so little about manufacturing that they will hold an EU referendum just to settle an internal dispute within their own party, despite the disastrous consequences this will have on UK manufacturing. You know they’ve been lobbying to stop any attempt by the EU to help the industry. What would you do? Continue to throw good money after bad, or get out fast?

And I seriously doubt any white knight will ride to the rescue. Likely any buyer the Tories cook up will be akin to the infamous Phoenix Consortium who bought out Rover….then let it crash and burn!

In short the only steel industry the Tories are involved in is the kind where Osborne irons  the statistics and Cameron steals from the poor and the working class. I once worked in Port Talbot (research post in the labs on site) and the sad fact is that myadvice to people there would be to start brushing up on their CV’s, as I don’t think the plant will be there for much longer.