Tag: Press Release

The press release issued by 29 October 2015.

David Cameron yesterday said that he would ‘strongly guard’ against the Norwegian option as it means the country ‘has no seat at the table’ to negotiate EU laws. The Prime Minister has previously said that he would ‘rule nothing out’ following his renegotiation, but it is becoming clear that he is siding with the pro-EU BSE campaign. He has lost all confidence in his reform package, and now he is talking down Britain.

The UK needs a say at the global level, not the EU

The argument that the UK should stay in the EU to keep its seat at the table is outdated, as more and more rules are now made at a global level. As the world’s 5th largest economy, the UK will have a leading voice in shaping standards and regulations across the globe.

Pro-EU groups claim that the UK needs to shape EU laws on financial services in order to protect the City of London. However, much of the UK’s financial regulation is influenced by the Financial Stability Board. And the chair of the Board? Mark Carney, Governor of the Bank of England.

Similarly, a key export market for Norway is the fishing industry. It just so happens that the Norwegian government is chair of the international food standards committee on fish and fish products.

In any event, our research shows that the UK has opposed 72 measures in the EU Council which have gone on to become law. This has cost the UK taxpayer an eye-watering £2.4 billion a year.

Collective responsibility

With the Prime Minister losing any semblance of neutrality in this debate, it raises the question of collective cabinet responsibility. David Cameron has said that he will make a decision over this once he returns with his reform package. However, ministers who want to campaign for Brexit could be forgiven for being annoyed that they have not yet been given a free vote, let alone allowed to publicly announce their position.

Clegg takes up his role on BSE campaign

Former Deputy Prime Minister Nick Clegg weighed into the debate on the Today programme this morning. He argued that all of the models for relationships with the EU offered by non-member European countries were ‘worse than being a full member of the single market’. This is coming from the man who claimed that ‘if we remain outside the euro, we will simply continue to subside into a position of relative poverty and inefficiency compared to our more prosperous European neighbours’. It is clear that Clegg will help the BSE campaign run Project Fear II. They should stop doing Britain down.

We do not want a Norway option. We want to secure the best deal for the UK. This means stopping sending £350 million each week to the EU; regaining the ability to make our own trade deals; ending the supremacy of EU law and taking our seat on world bodies.

David Cameron’s negotiation will not achieve fundamental reform. The only way to achieve the best deal for the UK is to Vote Leave.

The press release issued by Vote Leave on 28 October 2015.

Responding to reports that the Prime Minister will today warn of the dangers of adopting a ‘Norwegian model’ outside the EU:

President of Conservatives for Britain, Lord Lawson, said:

“It is disappointing that David Cameron is resorting to talking down Britain’s chances of getting a good deal outside the EU. The Government is clearly worried because their EU negotiations do not seem to be going very well.

Many countries around the world and in Europe have a free trade deal with the EU without being subject to the supremacy of EU law. I believe that Britain can do the same.

The Prime Minister should stop talking Britain down and pretending that the British people have no choice but to accept the supremacy of EU law. If we vote leave, we can have a new UK-EU deal based on free trade without having to accept the supremacy of EU law.”

Labour Leave Co-Chair Kate Hoey, said:

“I believe in the UK and I know we would get a good deal if we leave the EU. So I am shocked that the Prime Minister is now doing down the UK. I want British politicians, not unelected EU judges, deciding our laws.

David Cameron should stop talking the UK down. We’ve known for a while that his negotiations are going nowhere but the fact that he is now talking about what might happen when he loses the referendum is a sign of panic.”

Peter Cruddas, Co-Treasurer of Vote Leave, said:

“David Cameron promised to deliver fundamental change to our relationship with the EU and that he would be prepared to walk away if he couldn’t secure a good deal. Those who supported the PM in his approach will be disappointed to see that he has given up on the renegotiation and instead is campaigning to stay in at all costs.”

The press release issued by Vote Leave on 26 October 2015.

The Prime Minister’s renegotiation is failing. He has dropped nine out of ten demands. This failure has sparked some panic in Downing Street. There’s been three examples over the weekend.

Playing the UN gimmick

The Sunday Telegraph reported that the Prime Minister would take his renegotiation to the UN in an attempt to ensure that all 27 other member states keep to their agreement. We suspected that the PM might do this and said so in last Friday’s weekly update. Number 10 claims that lodging the agreement with the UN will make it ‘legally binding’. UN regulations make clear that registering an agreement does not affect its legal position. This ploy is a classic PR gimmick that further undermines No10’s renegotiation.

Government spin doctors ordered to prop up BSE campaign

The Sunday Times noted that David Cameron called an emergency meeting of special advisors and senior spin doctors today in Downing Street to discuss ‘pro-EU’ stories to give to the BSE campaign. Until recently Downing Street was trying to claim it was not backing either side in the referendum debate and that only when it had secured reforms would the PM decide whether to campaign for ‘leave’ or ‘remain’. They have been rattled by BSE’s failure and Rose’s disastrous interview.

PM rules out two referendums

Over the weekend a number of papers reported that David Cameron has ruled out a second referendum in the event of a ‘Leave’ vote saying that ‘leave means leave’. This ignores the reality that were the Government to lose the referendum, most in his own party think David Cameron would have to resign and a decision about how to handle a ‘leave’ vote will be for his successor. No10 wants Vote Leave to commit to the ‘Norway option’. We have not and will not. After we Vote Leave, Britain will negotiate our own agreement – we will not just take one off the shelf. We will say more about this shortly.

‘Tampon tax’

An amendment to the Finance Bill could force the Chancellor to negotiate with the EU an exemption from VAT for women’s sanitary protection products. The 5% rate is the minimum set by EU law and the UK has no power to cut VAT any further. If we Vote Leave, we will end the supremacy of EU law and regain control of our taxes.

The press release issued by Vote Leave on 21 October 2015.

Co-Chairman of Conservatives for Britain and leading Vote Leave supporter Steve Baker MP said:

“Mark Carney has sent a clear warning about the dangers of Eurozone countries giving more power to Brussels. He says that the EU’s next treaty will give itself even more power and warns that this creates risks for the UK and how the Bank of England safeguards our economy.

British jobs will be much safer if we have control of how our economy is regulated. The only way to get control is to Vote Leave and negotiate a new UK-EU deal based on free trade and friendly cooperation.”

Key extracts from the report

The report is ambiguous on the impact of EU membership

‘The wave of UK and EU financial deregulation polices in the 1980s and 1990s may have helped propagate the general trend towards larger firms. The specific role of EU membership, however, is difficult to judge as the trend toward larger banks is not specific to EU countries’ (p. 56)

‘Free movement of capital and financial services within the EU is likely to have facilitated greater financial integration among its member states. In this regard, EU membership may have added to the rise in interconnectedness between EU banks. However, since non-EU countries have adopted similar approaches to capital flow management through mechanisms like the OECD’s Code of Liberalisation of Capital Movements, it is difficult to separate the role of EU membership from global factors.’ (p. 59)

‘The crisis affected the UK economy directly through its impact on the UK financial system. However, during this period, the UK’s membership of the EU may also have had an indirect bearing on the UK’s economic outcomes’ (p. 61)

It warns that the UK and other member states have lost control over financial laws and warns about the impact of further integration

‘Participation in the single market means that the majority of the legislation and regulation applying to the financial sector in the UK is determined at EU level.’ (p. 6)

‘the general movement away from setting minimum standards in favour of ‘maximum harmonisation’, which prevents national authorities from strengthening regulation to meet particular risks in their jurisdiction, has in some instances been problematic.’ (p. 6)

‘closer union between euro-area member states is likely to necessitate further harmonisation of financial regulation across the euro area. It is also likely to lead to reduced flexibility and discretion of the national authorities of euro-area member states in favour of decisions and rules by the authorities of the Banking Union – the ECB, the Single Supervisory Mechanism and the Single Resolution Authority.’ (p. 6)

‘A reformed domestic institutional framework for financial stability is in place to address the shortcomings exposed by the financial crisis and protect financial stability. This framework depends in part on the quality of financial regulation set at the EU level and the flexibility to apply that regulation to meet the specific financial stability challenges in the world’s largest international financial centre. In the main this combination has been achieved thus far. It may, however, become more challenging as the euro area integrates further.’ (p. 7)

‘As home to the world’s leading international financial centre, it is vital that the UK authorities are able to apply the highest standards and have the flexibility to take action to address financial stability risks.’ (p. 72)

‘the Bank of England is subject in its operations and policies to EU competition law and the monetary financing prohibition. Consequently, the design, or operation of, any unconventional monetary policy operations must comply with these laws. EU legislation also places restrictions on the use of capital controls or interventions designed to influence the exchange rate.’ (p. 74)
‘[on the bonus cap] this measure could have undesirable side-effects for financial stability if it limits the scope for remuneration to be clawed back.’ (p. 80)

‘since under the EU’s financial services passporting rules, as described in Chapter 1, it is not possible to require EU firms that do business in the UK to establish subsidiaries regulated and supervised by the Bank of England.’ (p. 76)

‘The requirements specified in CRR and CRD IV are generally maximum-harmonising in nature, which could constrain national authorities’ ability to support domestic financial stability in some cases.’ (p. 80)

‘Solvency II follows a maximum-harmonised approach in most areas, however, including for establishing capital requirements and disclosure. Given the structural differences in the insurance industries across EU member states, this could in future reduce the ability of regulators to account for country- or firm-specific risks.’ (p. 81)

‘Overall, finding the right balance between full harmonisation and national flexibility has been more challenging in the post-crisis period. The need for national regulators and supervisors to have the flexibility in applying EU rules to address the particular risks they face has in the main been respected. However, the general movement away from setting minimum standards in favour of ‘maximum harmonisation’ which prevents national authorities strengthening regulation to meet particular risks in their jurisdiction has in some instances been problematic.’ (p. 82)

It acknowledges that further EU integration will nevertheless take place

‘The euro-area member states have made clear that much remains to be done; as highlighted in the EU’s Five Presidents’ Report (p. 67)

‘Ultimately, as the Five Presidents and other reports have made clear, in order for monetary union to succeed, further financial and fiscal integration will be required among the euro area’s member states. That union would also contribute to the stability and dynamism of the rest of the EU, including the United Kingdom.’ (p. 67)

‘The need for national regulators and supervisors to have the flexibility in applying EU rules to address the particular risks they face has in the main been respected. However, the general movement away from setting minimum standards in favour of ‘maximum harmonisation’ has in some instances been problematic.’ (p. 72)

‘Looking forward, closer union between euro-area member states is likely to necessitate greater harmonisation of regulations and integration of supervision across the euro area. It is also likely to lead to reduced flexibility and discretion of the national authorities of those euro-area member states in favour of decisions and rules by the authorities of the Banking Union – the ECB, the Single Supervisory Mechanism and the Single Resolution Authority. It is important, particularly given the weight of the members of the single currency in the EU, that arrangements are put in place so that the future development of the EU regulatory framework aids the necessary deepening of the integration in the euro area without impairing the ability of the Bank of England to meet its financial stability objectives.’ (p. 72)

The report notes that other parts of the EU remain less open

‘Other parts of the EU financial system are less financially open… From a borrower’s perspective, there is a lack of depth in capital markets.’ (p. 28)

‘there are areas where EU member states appear to be constrained by common EU rules, notably in product markets’ (p. 33)

It also stresses that other factors, aside from the EU, have increased the UK’s attractiveness

‘Studies suggest that it is likely that membership of the EU has played some role in boosting the attractiveness of the UK as a destination for FDI, though this effect may have varied over time, with other factors such as the integrity of the UK legal system also playing a role.’ (p. 28)

‘More foreign banks operate in the UK than any other country and around half of the world’s largest financial firms have their European headquarters in the UK. EU legislation – such as the passporting regime – is likely to have facilitated this expansion, but it is also likely to reflect other factors such as the large pool of skilled labour located in London, the English language and a convenient time zone.’ (p. 31)

It shows how membership of EU has not delivered on promises of 1970s

‘The UK government’s White Paper of 1971 laid out the UK government’s perspective on the main benefits of EEC entry, noting the impressive growth performance of the EEC countries in the 1950s and 1960s. This performance enabled the EU6 countries to converge on the US in terms of both productivity per hour (Chart A) and GDP per capita (Chart B), whereas the UK had stood still relative to the US… However, there has been relatively little convergence in terms of domestic income (GDP) per capita by either the UK or the EU as a whole.’ (p. 47)

It argues that EU membership has exposed the UK to financial shocks

‘Increased economic and financial openness means the UK economy is more exposed to economic and financial shocks from overseas’ (p. 3)

‘Greater openness can increase the exposure of the UK economy to overseas shocks. This has the potential to amplify economic volatility in the UK – for example, if foreign shocks are bigger, or more likely to occur, than domestic shocks’. (p. 50)

‘The crisis also showed that greater interconnectedness can undermine the resilience of the system in times of stress’ (p. 59)

It argues that over-exposure to the EU financial sector led to the crisis being worse

‘Banks in the rest of the EU withdrew cross-border funding from the UK rapidly – and by much EU membership and the Bank of England more so than US banks. Since the crisis, banks in the rest of the EU have continued to reduce cross-border funding – contributing to the tightening in credit conditions seen globally and to the weakness in lending seen in the UK. Thus, while the primary impact of the crisis on the UK financial system and economy came through direct channels from overseas, capital flows between the UK and the rest of the EU may also have been a secondary channel.’ (pp. 54-55)

‘By enabling bank branching, the EU passporting regime may have played some role in affecting the volatility of the UK credit cycle during this period… These issues were partly caused by a lack of adequate liquidity standards before the crisis’ (p. 55)

‘Given the close links between UK banks and those in the rest of the EU, the EU banking system represented a key link in the chain by which the global financial crisis affected the UK… The UK’s membership of the EU is likely to have made this link stronger than otherwise would have been the case – exacerbating the impact of the global financial crisis on the UK economy via the withdrawal of funding by EU banks’ (p. 61)

‘EU membership had a significant effect on the UK during the euro-area crisis. The UK’s strong economic and financial links with the rest of the EU economy, over 85% of which is accounted for by the euro area, means the euro-area crisis is likely to have had a material impact on UK GDP growth’ (p. 64)

‘Given the degree to which the UK economy and financial system is intertwined with the euro area, a more severe crisis – particularly if it prompted renewed concerns about euro-area break up – would almost certainly have a material impact on UK economic and financial stability’ (p. 67).

The press release issued by Vote Leave on 21 October 2015.

Ahead of Mark Carney’s speech tonight, the EU Commission has published a remarkable set of plans to hand further powers to the EU over Britain’s economy and to diminish Britain’s voice at a major international institution. The controversial plans that would affect all EU members are part of the EU’s drive for further integration set out in the Five President’s report.

Included in the document:

Greater EU supervision of the UK’s budget – The Commission today establishes an ‘advisory’ European Fiscal Board which will ‘provide an evaluation of the implementation of the EU fiscal framework’. The Board will ‘also cooperate with the national fiscal councils, aiming at exchanging best practices and facilitating common understandings.’ This will apply to the UK. The Board will advise the Commission on the ‘implementation of the Union Fiscal Framework, and ‘may also make suggestions for the future evolution of the Union fiscal framework’.

EU moves to take over the UK’s seat on the IMF and other key international bodies – The Five Presidents’ Report stated that ‘in the international financial institutions, the EU and the euro area are still not represented as one’, singling out the IMF as an example. Today, the Commission openly calls for the common external representation of the eurozone in the IMF. However, the draft Council Decision makes clear that Britain will be affected. The UK will not have a vote on whether or not this decision will be adopted. The UK will lose its autonomy in the IMF.

Use of single market legislation as a driver for integration – The Commission today makes clear that it will use single market legislation as a means of achieving integration in the Eurozone. The UK will not have an opt out and the Eurozone has an inbuilt majority in the Council of Ministers.

No treaty change before 2017 – The Five Presidents’ Report made clear a new EU treaty was coming, but not before 30 June 2017. The Commission today confirms this approach. This all but rules out a new treaty being agreed before the UK’s EU referendum, which must occur before the end of 2017, as a new treaty must be ratified by every member state in accordance with its constitutional requirements. Real reform of the EU ahead of the referendum is not on the cards.

Robert Oxley, Head of Media for Vote Leave, said:

“This remarkable EU plan would give Brussels even more control over our economy. It is clear as daylight that the EU is seeking greater control over Britain’s budget and wants to control policies on tax and spending in the UK. The Commission’s agenda would diminish our voice at the IMF, a major international institution. It is increasingly clear that David Cameron’s renegotiation is a smoke screen that will not secure Treaty change. The EU is planning Treaty change after the referendum to further centralise power in its institutions. The only safe option is to vote to Leave.”