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Douglas Carswell's Blog

26 SEP 2016

What's progressive about the Labour party?

62% of Labour members voted for Jeremy Corbyn. 38% voted for Owen Smith. What percentage of the country still cares?

The Labour leadership election pitted 1990s Blair/Brown nostalgics against 1970s CND throwbacks.

People who, three months on, still haven't come to terms with the referendum result against people who, thirty years on, still haven't come to terms with Thatcher.

South Islington against North Islington.

If Labour is lagging in the polls, it's because its whole internal debate takes place within a tiny inner London bubble. The party has become hermetically sealed off from the rest of the country

Just consider: those parts of the party most in tune with the public mood – Labour Brexiteers like Gisela Stuart and John Mann – didn't have a dog in the fight.

So when Jeremy Corbyn talks about his party as the "engine of progress", it's hard to tell if he's being serious. Britain has progressed a lot faster than Labour.

What's retrograde about Labour isn't just Jezza. It's socialism.

Since the Second World War, no system of government has perpetuated suffering for more people than socialism. Whereas no system of government has lifted more people out of subsistence than free-market capitalism.

From Mao's China to Castro's Cuba to Chavez's Venezuela, socialist statism has done nothing but perpetuate poverty for hundreds of millions of people.

Yet these are the leaders Corbyn and his Comrades seem to admire. Chavez's successor, Nicolas Maduro, even tweeted the Labour leader his congratulations.

The Corbynistas can't shake the fantasy that government is better at running people's lives than people themselves. That's why they're relics of the past: they infantilise the electorate.

In the referendum, the majority voted for control. It's a choice we should have more often.

We should be able to vote for control over how our individual shares of education and health budgets are spent. Control over local planning decisions. Control over how we live – without the taxman punishing people for their lifestyle choices.

Labour's implosion presents UKIP with a huge opportunity at the next election. Control is the real progressive alternative we can offer.


23 SEP 2016

Is Theresa May prepared to fight corporatism?

City AM reports that Theresa May is scrapping David Cameron's Business Advisory Group – a forum for the PM to be lobbied by corporate cronies. I hope it's true. Less corporatism can only be a good thing.

Britain may not have a corporate lobbying industry on the scale of K Street in the United States, but it's still pretty extensive.

Whitehall is never short of corporate affairs executives seeking official audiences. Ex-ministers are routinely recruited to lucrative "advisory roles" in big corporations.

Those bidding for government contracts or patronage aren't even shy about currying favour. It's no coincidence Westminster station is plastered with adverts for defence contractors and runway-hungry airports.

The influence of vested interests creates conflicts of interest. MPs – including ministers – are there to stand up for their constituents. It's impossible to represent Big Business simultaneously. Lobbying directly undermines democracy.

"But what's the alternative?" You might say. "Surely businesses would be stupid not to lobby government."

That's true. But only because government makes lobbying profitable.

Our supposedly free-market economy is really a permission-based system. Unless you have official approval – whether from regulators, local authorities, Whitehall, or Brussels – you can't sell your product.

Markets depend less on what buyers want than what mandarins permit.

For big corporations, that creates a huge opportunity. The reason they put so much money into lobbying isn't just to get their products permitted. It's to get their competitors' products prohibited.

Which is why, when leftists say the way to constrain corporatism is more regulation, they're playing right into the hands of the CEOs. Regulation isn't a threat to the biggest players. It's what keeps them in business.

Our permissions-based economy is what allows big corporations to rig the market against upstart rivals, and shut out wealth-creating disruptive innovation. Maybe that's why productivity is stagnating.

To end lobbying culture, we'd need to get rid of the gains lobbying generates. That requires less government intervention, and more regulatory competition.

Closing one cosy corporatist club won't reform our economy. But it's good to see this government might be less beholden to vested interests than the last.


22 SEP 2016

Brexit pessimism is based on dogma, not data

The OECD has backtracked on its prediction of a post-referendum UK slowdown in 2016 – revising its growth forecast up. The ONS says there is no evidence that the vote has had a major effect on the economy. Does this mean Project Fear is finally over? Don't get your hopes up.

The economic data since the referendum has been remarkably positive. Exports, employment, and markets are up. Deficits – both trade and budgetary – are down.

But the doomsayers haven't given up yet. Maybe growth won't slow this year, but it will next year, the OECD now claims. The economy will stall without more monetary stimulus, says the Bank of England.

It's not clear what hypothetical piece of information could convince them that their predictions are wrong.

People in major financial institutions are employed to draw sound conclusions from data. Instead they seem to interpret the data to fit their predetermined conclusions.

Too often, what is sold to us as informed analysis is really a reflection of groupthink and dogma. That's why – from the launch of the euro to the financial crisis to the referendum – global economic forecasters have been so wrong so often.

Instead of trying to prophesy the future, maybe they should look at the past. Nothing in the EU's recent history suggests it's found the elixir for economic success. Where are Europe's Apples, Googles, and Facebooks? Where's the growth? Where are the jobs?

The reason so many of us are confident Brexit will make Britain better off is that the EU is fundamentally broken.

Are the 'experts' so detached from reality that they can't see that?


21 SEP 2016

Why Britain needs to leave the single market

So much of the media debate about Brexit seems to focus on whether the EU will give Britain permission to keep trading with it. Isn't it just as important that, after we leave, we won't need the EU's permission for the rest of our trade?

Of course we want to keep trading with the EU – and, like so many other non-EU countries around the world, we will. Britain doesn't need to be a member of the single market to have access to the single market.

Take EU passporting rights for financial services, for instance. Pundits tell us our banks can't trade in the EU without them, so we mustn't leave the single market.

But that's simply not true.

New EU financial rules (MiFID II and MiFIR) will allow firms in foreign jurisdictions with equivalent financial regulations to the EU to trade in the single market.

The UK's financial regulations aren't just equivalent to the EU's. They're identical. So there's no reason why British banks should lose their trading rights (as Moody's and DLA Piper agree).

In any case, as the Bank of England acknowledges, more EU firms use the current passporting system to trade in the UK than British firms use it to trade in Europe. Is the EU going to hurt its own banks just to spite us?

Surely, though, there's a bigger point here than just our trade with the EU. Yes, British firms that want to export to the EU will still have to abide by its rules post-Brexit. But they make up only 6% of all the companies in the UK.

What about the rest?

Brexit allows us to set the other 94% free from single-market rules. Rules that, according to Open Europe's estimates, cost British industry £600 million a week. Rules like the Clinical Trials Directive, which has kneecapped a whole industry.

Instead of worrying about how to comply with Brussels' burdensome bureaucracy, shouldn't we be looking forward to taking back control of our laws?


20 SEP 2016

The SNP's Brexit claims are bogus

Three months since the referendum, Project Fear's economic warnings have already proven false. But none are more bogus than those of Remain's most recalcitrant rearguard: the SNP.

Nicola Sturgeon makes out that, compared to the rest of the UK, Scotland's economy will be particularly badly hit by Brexit.

But what's the basis for this idea?

As Moneyweek's Matthew Lynn writes, the numbers don't support the SNP's case. Because, compared to the UK as a whole, Scotland does a much lower proportion of its trade with the European single market.

Excluding oil and gas, Scotland's exports to the EU are worth £11.6 billion per year, compared to £15.2 billion for those to the rest of the world, and £48 billion to the rest of the UK. So, if Scotland left the UK post-Brexit, just 18% of its total exports would go to the EU.

Moreover, its exports to the EU fell by 16% last year – the fastest of any of the four nations in the UK.

Plus, businesses in Scotland already use much less cheap EU labour than those elsewhere in the UK. Just 7% of Scotland's workers are born abroad, compared to 13% for the country as a whole.

Then there are the opportunities. New free-trade deals could, for example, cut massive tariffs on exports of Scotch to developing countries, like India.

The SNP's goal of an independent Scotland is fundamentally political, not economic – as Nicola Sturgeon admits. What political union Scotland should be part of is up to the Scottish people. But it's got nothing to do with the economics of Brexit.


19 SEP 2016

UKIP can break the political cartel

Congratulations to UKIP's new leader, Diane James! As I said in my speech at conference, I will be giving her my 100% support. The party now needs to rally behind her. If we do, UKIP can go on to break the political cartel.

Last summer, we didn't just beat the Remain campaign. We beat the political establishment. We beat the cosy Commons cartel who, for decades, told us leaving the EU was not an option.

Westminster groupthink doesn't stop there.

It's the coalition of the comfortable, who back benefit cuts for ordinary people but never challenge corporate welfare for banks or government-to-government handouts masquerading as overseas aid.

It's the class of professional politicians who reflect each other's prejudices more than the views of the electorate.

The big parties don't just collude to maintain an unfair electoral system, which means UKIP can get 4 million votes but only one MP. Their contrived consensus means voters never get a real choice at the ballot box.

Groupthink has run Britain for far too long. And it's running us into the ground.

UKIP needs to be the party that offers an alternative. The party of change.

That's why, working with Mark Reckless in the House of Commons, I've been producing policy papers setting out a real radical alternative on everything from energy, to banking, to the family courts.

This summer, we showed the political cartel can be defeated. UKIP can be the force that breaks it. Our party's biggest victories are yet to come.


16 SEP 2016

Can anything convince our central bank to stop printing money?

The Bank of England has come as close at it's going to get to admitting Project Fear was wrong. "Indicators of near-term economic activity have been somewhat stronger than expected," it now says. So why is it still printing more money?

The predictions of post-referendum economic catastrophe have fallen flat. From the markets to employment to exports to construction, every metric has shown growth. Even the fall in the relative value of sterling looks beneficial, as Britain's gaping trade deficit has shrunk.

Which makes the behaviour of the Bank of England perplexing. Its August stimulus package was ostensibly premised on economic contraction. But, with almost two months of data now available rather than one at the time, it's clear that isn't the case.

Yet, instead of changing their policy, the Bank has merely changed its justification. Now the argument is that the good economic data just reflects the impact of the Bank's actions.

When you think about it, that's an unfalsifiable hypothesis. The economy's expanding? Monetary stimulus is sustaining growth. The economy's shrinking? We need monetary stimulus to stop a recession.

It seems like there is no question, in Threadneedle Street, to which expanding the money supply isn't the answer. Even a surge in inflation won't necessarily provoke a rise in interest rates – as Mark Carney has alluded.

In reality, printing money isn't the solution to economic problems, but their cause. Currency debasement and cheap credit have channelled resources into vast unsustainable asset bubbles instead of productive investment.

Constant monetary stimulus will at some point lead to either serious inflation or an almighty correction. The question – as Steve Baker said in his brilliant Commons speech on QE yesterday – is whether people will recognise that the centralised mismanagement of our money is responsible when it happens.


15 SEP 2016

Libya shows why military action needs Parliamentary approval

I abstained in the vote on military action in Libya because I felt the aims weren't clear enough. Five years on, the Foreign Affairs Committee has shown just how inadequate the government's planning was. This is why military action needs Parliamentary approval and scrutiny.

Two years after Libya, David Cameron requested the backing of MPs for another round of regime change in Syria. He didn't get it.

I voted for military action against Assad. But, for those who voted against, I suspect the unfolding disaster in Libya informed their decision.

Had it not been for Parliament, Britain and the US would probably have removed Assad from power. That would have got rid of a tyrant – and struck a blow against the expansionist ambitions of Russia and Iran.

But it's very possible that IS and other Islamist groups would have become stronger and more dangerous if Syria had become a totally ungoverned space like Libya.

Of course, David Cameron did get Parliamentary approval to go to war in Libya, just as Tony Blair did for war in Iraq. The House of Commons is not a fool-proof failsafe against poorly thought out military action. But it's still is a necessary check on the executive.

The fear of losing a vote on military action, as Cameron did in 2013, will force future prime ministers to think harder about going to war – and come up with action plans that stand up to scrutiny.

Arguably, it already has. Cameron's 2015 plan to attack IS was much narrower in scope than the previous proposal for military action in Syria. Its goals were better defined. That's why I was comfortable voting for it – and perhaps why, on that occasion, a majority of MPs approved it.

One lesson of the committee's report five years after the fact is that, in future, we need better legislative scrutiny before going to war.


14 SEP 2016

Have Remainers reached the acceptance stage?

One-time Remainer Charlie Elphicke is introducing a bill today to "implement the withdrawal of the UK from the EU." It's wonderful to see he's come to terms with the referendum result. Does this mean the Remain rearguard is finally accepting reality?

Charlie Elphicke's volte-face is remarkable. Just a few months ago, he was a full-throated campaigner for Project Fear.

He told us leaving the EU would somehow endanger Britain's bilateral Le Touquet treaty with France.

He made out we shouldn't restore British sovereignty, because it would only result in Vladimir Putin trying to take it away again.

I wonder what changed his mind. Did someone manage to explain to him that Britain and France had diplomatic relations before the EU? Or that the EU isn't the same as NATO?

Or was it the fact that the vast majority of his constituents in Dover voted Leave? Strange that his rigorous warnings failed to convince them.

The government doesn't need Parliament's support to trigger Article 50. It has a clear mandate from the people. Theresa May has made it clear she won't be putting that to a vote.

So this bill – like so much of what happens in the House of Commons these days – is a futile exercise. I'll be voting for it. But Britain is leaving the EU whether it succeeds or fails.

It will be interesting, though, to see how many Remain MPs still believe they can block the will of the people.

Some MPs just can't understand that, in a referendum, their vote is just one in 40 million. They seem to think their view counts for more than everyone else's.

Maybe today's debate will finally convince them that it doesn't.


13 SEP 2016

Protectionist procurement puts corporatism before country

What's the point of the Ministry of Defence? You'd think it has one job: to keep Britain safe. But, if procurement is anything to go by, that isn't how the MoD sees it. Ministers and officials seem to be more interested in protecting defence contractors than protecting the country.

Take our Type 45 destroyers. Yes, they're among the world's most sophisticated ships. But they cost £6.5 billion – 30% over budget. They were delivered two years late. Plus, only six were built – half the number planned.

And they don't work properly. Propulsion system failures mean they all have to be refitted with new engines, less than a decade after they entered service. Taxpayers will be saddled with another multi-million pound bill.

This isn't a stand-out case. Overspends, delays, and technical flaws are the norm. See the Nimrod MRA4. Or the SA80. Or the Joint Strike Fighter.

Procurement failures aren't just a waste of money. They make our armed forces – and our country – less safe. So why do ministers put up with it?

Because procurement policy is protectionist. Instead of choosing equipment based on quality, the government favours a small group of major British contractors.

So, naturally, the contractors have the upper hand. If you know you have a guaranteed customer no matter how expensive, late, or inefficient your products are, why deliver quality?

Defence contracts are really just a subsidy for a corporate cartel.

It doesn't have to be this way. Yesterday, I asked the Minister for Defence Procurement if she would take a different approach for the new Type 31 Frigate.

I inquired whether the government would boost its bargaining power by seeking to purchase jointly with NATO allies – which was the original procurement plan for the Type 45s.

I asked if she would cut costs by ditching protectionism.

Her response? "Complex ships can only be built in the UK."

Theresa May said that, under her leadership, Britain would be a global leader in free trade. Procurement would be a good place to start.


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