Douglas Carswell

01 MAR 2017

Real free trade is only possible outside the EU

"Leaving the single market is protectionist", claims George Osborne. He couldn't be more wrong. Quitting the 'single market' is what will make free trade possible.

The so-called 'single market' is really a single regulatory system. Its purpose is not so much to facilitate trade but to create supranational law. As George might recall, that's what the electorate rejected on June 23rd last year.

Remainers like Osborne seem to believe that free trade requires supranational regulation. But that's patently false. We don't need to have the same laws as another country to trade freely with it.

Instead, all we need to do is mutually recognise each other's laws. Whatever it is legal to buy and sell in the EU, for example, it should be legal to buy and sell here – and vice versa.

Think that can't work?

Actually, that's exactly how free trade in the European Common Market worked some forty years ago, before widespread harmonisation. It's called the Cassis de Dijon principle.

Supranational regulation isn't just undemocratic. It can be trade-destroying, rather than trade-creating. It results in overregulation, inflexibility, and – worst of all – regulatory capture, as corporate special interests with expensive lobbyists co-opt the rules to cut out competition.

In place of barriers between countries, it creates barriers to small business and disruptive innovation.

We should have a free-trade deal with the EU. It's in our mutual interests to strike one.

But that deal cannot entail any kind of 'single-market' membership. Britain must no longer be subject to EU laws.

If the EU refuses to trade on new terms, we will have no option but to walk away. But that will be their protectionism, not ours.

Post-Brexit, we will be free to set our own tariffs, make our own trade agreements, and decide our own rules. Our trade will be as free as we want it to be.

I'd like to see Britain make a raft of free-trade deals, based on the principle of mutual recognition – as per a forthcoming paper to be published by the UKIP PRU.

Brexit will only end in protectionism if people like George Osborne keep insisting free trade must be tied to supranationalism. That false assumption must now be laid to rest.

28 FEB 2017

Has Brussels given us a blessing in disguise?

Brussels looks to have blocked the merger between the London Stock Exchange and Germany's stock exchange, Deutsche Boerse. For Britain's sake, that's probably just as well.

The European Commission's demand that the London Stock Exchange divest its stake in MTS, an Italian bond-trading platform, came as a shock. Stock Exchange bosses and shareholders are understandably annoyed.

But, for Britain, it could well be better for the merger not to go ahead – because of the assets that EU institutions could threaten further down the line.

The European Central Bank has been trying to move euro clearing from London to the Eurozone – and the London Clearing House is owned by the London Stock Exchange.

So, for the ECB, a merger would be a boon. A majority of the shares in the new entity would be held by Deutsche Boerse shareholders, who might back moving euro clearing to Frankfurt. Moreover, German and EU regulators would have greater powers of oversight.

Even beyond euro clearing, there's good reason to be concerned about closer financial ties with Frankfurt. The Eurozone is teetering on the brink of financial meltdown. Its authorities are becoming ever more interventionist.

The City may not be able to escape exposure to this unfolding disaster, but there's no reason to court it.

Unintentionally, Brussels may have done us a favour.

27 FEB 2017

Public spending is out of control

In their attempt to block Article 50, many Remainer MPs rebranded themselves as champions of Parliamentary sovereignty overnight. If they really believed in it, they would call out Parliament's powerlessness over public spending.

Preventing the Crown from spending public money without Parliament's consent was one of the key provisions of the 1689 Bill of Rights. Our democracy is built on that limitation of prerogative power.

It follows that approving how the government uses public money should be one of Parliament's most important jobs. So why are only three days a year set aside for it?

On these Estimates Days, as they are called, hundreds of billions of pounds go through on the nod. Sometimes there isn't even a vote.

The Supplementary Estimates for 2016-17, which the House will discuss this week, cover £68 billion of additional public spending. The details stretch to 756 pages. Yet only a few items of spending will even be debated on the floor of the House.

Three centuries since the Bill of Rights, the executive has effectively regained full control over the public purse.

Is it any wonder the state has racked up trillions in debt?

Ministers shouldn't get such an easy ride. If Select Committees had the right to veto departmental spending, we might even be able to balance the books.

But the state is now so big, it is virtually impossible for Parliament to scrutinise it properly. Perhaps we need a twenty-first-century Bill of Rights to bring it back under control.

24 FEB 2017

The EU has much bigger problems than Brexit

And so it goes on. The Euro crisis looms larger than ever. Six years since Greece hit trouble, financial contagion is still spreading. Britain can't leave this unfolding disaster soon enough.

As Ambrose Evans-Pritchard highlighted in yesterday's Telegraph, the Eurozone is set for its biggest crisis yet. The Target 2 payments system has facilitated a huge socialisation of debt.

Debtors in southern states (especially Italian banks) now owe northern bloc central banks, via the ECB, hundreds of billions of dollars – money that they won't be able to repay. If – or rather when – they default, the aftermath will engulf the entire Eurozone.

The debt crisis happens in the context of a banking system that is already dangerously fragile, even in Germany and France.

Research published by the UKIP Parliamentary Resource Unit in 2015 found that major European banks were still dangerously undercapitalised, in spite of post-financial crisis banking reforms. The weakest of all was Deutsche Bank.

Then there's the politics. Depending on elections this year and next, both France and Italy could attempt to leave the Eurozone. Either scenario would amount to a huge debt default.

Many British commentators look at Brexit as if it's happening in a vacuum. They seem to assume we're leaving a successful economic project that will sail serenely on.

That's clearly not the reality. We're leaving a failed political project that is heading for economic catastrophe – possibly, as Allister Heath suggests, even before Brexit negotiations are completed in 2019.

The EU is collapsing under its own weight. The sooner we're out, the better.

23 FEB 2017

Who will save the liberal order?

Do you support Donald Trump, or side with the anti-Trump protesters? Are you persuaded that Theresa May is doing great, or convinced Comrade Corbyn is the answer?

Look at how polarised politics is becoming. It's supposed to be about deciding which box to mark on the ballot paper. Instead, it is increasingly all-encompassing. People are coming to be defined by their political allegiance.

But is that constructive?

There is a real divide in politics. On one side are the New Radicals – e.g. Trump, Five Star, Syriza. On the other are those who might loosely be called the liberal elite.

Yet the truth is that neither is a particularly compelling proposition. The critics of the New Radicals have a point. But so do those who are fed up with the established ruling class. There really is a political and economic oligarchy emerging in most Western states.

Is this a new phenomenon though? Maybe there have been other instances in history where elites have concentrated power, and provoked an insurgency in response. Perhaps it's worth thinking now about what kind of fightback worked – and what didn't.

If we want to preserve the liberal order that has been the norm in the West since the end of the Second World War – and expanding to the rest of the world since the fall of Communism – then self-styled liberals may need to ask themselves whether they are really true to liberalism.

These are some of the themes I explore in my forthcoming book.

22 FEB 2017

Paris is no match for London

French presidential candidate Emmanuel Macron says he wants London's talent to move to Paris post-Brexit. A decade ago, Nicolas Sarkozy made a similar pitch to French citizens in Britain. There's a reason they stayed here.

France isn't exactly in great shape economically. The unemployment rate in France right now is 10%, compared to 5% here. That figure rises to 26% among young people, as opposed to 12% in Britain.

Which is why many have left France to work here. Estimates suggest London is home to as many as 300,000 French citizens – and has been for years. It's no coincidence that Sarkozy campaigned here in 2007. France's loss of so many able people is our gain.

Britain has higher employment partly because our labour market is much more flexible. In France, not only is the working week legally limited to 35 hours, but it can also be impossible for employers to dismiss underperforming staff.

Increased protection for workers is great – if you already have a job, that is. Not if you don't. Because it's so hard to get rid of staff, employers are reluctant to hire them in the first place.

Brexit doesn't change the fact that the cost of employing people in France and elsewhere in the EU is often prohibitive. Far from relocating, as Macron might hope, British banks are already identifying Brexit opportunities.

Not for the first time, business is months ahead of politics.

But there's a more important point here.

Economic prosperity comes from flexibility. To thrive, economies need to adapt to changing conditions. Static economies decline.

Brexit allows our economy to become more dynamic – because we'll no longer be subject to single market overregulation. That's why economically – not just politically – we made the right choice on June 23rd.

21 FEB 2017

Peers are playing with fire

The unelected oligarchy in the House of Lords could vote to amend the Article 50 Bill today. They don't seem to recognise how self-defeating that would be.

Some peers – Lord Mandelson, for example – think they can get away with obstructing the referendum result. That attitude betrays an incredible lack of self-awareness.

The most the upper house could do is delay Brexit, not block it. But if peers do decide to dig their heels in, they risk triggering a constitutional crisis that they will definitely lose.

The House of Lords did just that a century ago. Peers thought they could block David Lloyd George's "People's Budget". Instead, not only did the budget pass, but the Lords ended up losing their power of veto.

"Surely, peers today can't be quite that tone deaf", you might think.


The upper house may no longer be made up of hereditaries. But it is no more representative for being stuffed with ex-MPs, donors, and party placemen instead.

Today's House of Lords is an excellent cross-section of the House of Commons ten years ago. It is almost designed to be outdated.

There is widespread consensus that the House of Lords is long overdue for radical reform. Peers could start that process today.

20 FEB 2017

All the President's pundits

Media types seem to be perpetually outraged at President Trump's comments about the press. If they want to rebuild public trust in journalism, they are going the wrong way about it.

Reporters called the President's press conference last week "extraordinary". But was it? He has been criticising the media consistently for almost two years. It's part of what won him the election.

Trump's attacks on the media resonate with voters in middle America because they have long since lost faith in the press. Rightly so.

The leftist bias of mainstream American news outlets, like CNN and NBC, is pervasive – much like it is at the BBC. Yet, just like the BBC, they refuse to acknowledge it.

You would think growing public dissatisfaction with the press would prompt some humility and reflection. Instead, it appears to have the opposite effect.

Journalists now seem to think of themselves as great heroes of the Trump "resistance". The greater his criticism of them, the more sanctimonious and self-congratulatory they become.

Apparently, pundits still don't get that they are merely justifying his message in the eyes of voters. They aren't hindering the President. They're helping him.

The remarkable thing about President Trump isn't that he attacks hostile media. It's that he has managed to harness them. He has made them his useful idiots.

Throughout the campaign, Trump got billions of dollars of free publicity thanks to news outlets broadcasting his every critical tweet. He has created a kind of feedback loop: the more he attacks the press, the more hysterical they become, the more support he wins.

There's a big gap in the market for reasoned, dispassionate, insightful analysis about what's going on in Washington. If mainstream journalists weren't so preoccupied by their own wounded pride, some of them might seize it.

17 FEB 2017

Europe needs to recommit to NATO

NATO is supposed to be a partnership. Yet, for too long, European countries – including Britain – have effectively subcontracted their defence to the United States. That has to change.

We may be one of the few countries in NATO to spend anywhere near 2% of our GDP on defence. But it's a close-run thing. Numerous reports suggest that the MoD relies on some pretty creative accounting to meet the commitment.

Besides, 2% isn't a target. It's the bare minimum. Given that defence is one of the government's most basic responsibilities, you wouldn't think it would be something to skimp on.

Spending, of course, can be a bad metric. Much of the defence budget is wasted on overpriced equipment that doesn't work, delivered by a price-gouging contractor cartel that ministers and mandarins often seem only too happy to subsidise.

But there's a deeper issue here. Since the beginning of the Cold War, we in Europe have come to expect America to defend us. Consequently, our governments haven't taken defence seriously.

Now the danger of that complacency is becoming clear. Americans have come to resent supporting Europe's defence when Europe is not prepared to defend itself.

What's lacking is the right political will. Some European governments have gone to great lengths in the attempt to save the Eurozone. Imagine if they put the same effort into saving NATO.

Our safety doesn't come free. European governments may need to rethink their priorities.

16 FEB 2017

How to cut the cost of living

A third of British households now live on inadequate incomes, according to the Joseph Rowntree Foundation. To increase prosperity, it's not enough to raise wages. We need to scrap the policies that are pushing up the cost of living.

Unemployment is exceptionally low in the UK. That's the upside. The downside is that high employment has been achieved through wage compression.

Downward pressure on wages is partly the result of the free movement of cheap labour from Eastern Europe. But that's not the only reason.

The government is also subsidising low pay – through tax credits. Employers are incentivised to keep wages low, knowing taxpayers will top them up. In-work benefits are also an added incentive for immigration.

But low pay isn't a stand-alone problem. Wage stagnation is an issue because the cost of living is high and keeps rising. For that, government bears much greater responsibility.

Regressive taxes – VAT, 'green' levies, duties on fuel, alcohol and tobacco etc. – place the greatest burden on the least wealthy households. According to official statistics, the poorest fifth of households spend an average of 30% of their disposable income just on indirect taxes.

The poorest are also hit hardest by monetary policy. Decades of low interest rates have not just raised prices that would otherwise have fallen, but also stoked a housing bubble – transferring wealth from the asset-poor to the asset-rich in the process.

Letting people keep more of their own money, and not debasing its value through constant monetary expansion, would raise the welfare of the poorest at a stroke.

The answer isn't more state intervention. It's less.

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The End of Politics and the Birth of iDemocracy

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