Friday, 4 March 2016

The EU referendum gets started



The EU stars have aligned (which is unfortunate because they are supposed to be in a circle) but in fact I mean that the senior Tory politicians have declared which side of the in/out EU debate they are on. Long term sceptics like John Redwood reliably pronounced for “out” on day one. But sadly for the “out” campaign mainy of their main supporters in government are second-raters such as  Chris “Failing” Grayling who wrecked the Justice Department and is now having his mad schemes reversed by Michael Gove (perhaps himself the best of the Outers in government) or Iain Duncan Smith who has spent the last six years failing to deliver “universal credit”.

Boris “the Buffoon” has belatedly come down on the side of “out” after spending a day wracking his brain looking for the main chance. His computations seem to have boiled down to: I support “in” and “in” wins I’m just another face in the Prime Minister’s adoring crowd but if “in” loses I’m on the wrong side of history, whereas I support “out” and “out” wins then it was me that won  it for the country because I’m the biggest fish in the “out” kettle, but if “out” loses I can continue to point out how right I was every time the EU does something stupid (like let in a million migrants) which is bound to happen quite often and anyway the PM is quitting before the next general election so will be yesterday’s man the day after tomorrow.

So Boris prefers a glorious failure to an “I was there, you just didn’t see me,” success. Actual national interest has no part to plan in such cogitations.

The fracture in government has gone quite deep, mainly because the government has taken a side – ie “in”. “Out” supporting ministers are not allowed to ask civil servants to do research for them and are not allowed to see papers used by the “in” side. But “in” ministers have the use of the civil service because “in” is government policy. It gets a bit tricky when a minister says he hasn’t decided whether he is “in” or “out” yet! And even trickier when a minister changes sides – he could have papers ripped out of his hands.

The campaign will be dominated by “Fear” and “Apathy”. The Inners will appeal most to people’s fear of change and make out that jobs will be lost and Europe will never talk to us again. On the Outers’ side you have the fact that people content with the status quo may not bother to vote. Idealistic Outers are far more likely to turn up at the voting booth than browbeaten Inners.

An interesting case is Chancellor George Osborne. He has a big moment coming up on the 16th of March when he presents his next budget. GO is a firm Inner and seems to live in fear of the economic effects of leaving the EU. And no doubt there will be some negative economic consequences; all serious Outers will admit that but they still want out because the freedom and independence (re)gained outweighs the wealth lost, especially as the freedom is permanent but the wealth loss temporary.

GO has his big speech day coming. He may use it to project fear at the nation. And it may be he actually feels fear himself. He has the economy stacked up like a house of cards. The “lowest ever” interest rates are still in place. The highest ever QE is still there. Asset prices are pumped up like a helium balloon at an illegal rave. Osborne knows more than most that it wouldn’t take much of a push to bring it all down. Imagine the pound comes under pressure by a lot of fickle foreigners selling. GO would have to raise interest rates to defend it, then down comes all the leveraged assets and with them jobs and trade and all.

But dare he, in his speech, actually say, “Don’t vote Out, my house of cards would collapse”? Probably not. The public mainly considers the 2007/8 depression done and dusted and no one wants to remind them it was just put on ice with heaps of printed money.

We still have more than three months before we vote. Of special interest will be “migration season” when the Eastern hordes march across Europe kicking down any fences in their way. Small boys drowned on beaches may help the In side. Another mass rape in Cologne would be good for the Outers.

The campaign has a long way to run.

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