Douglas Carswell's Blog

07 JUL 2015

Human Progress

It's bad news, isn't it?

Greece is poised on the verge of economic ruin. Half a million desperate migrants are likely to have crossed the Mediterranean this summer. A quarter of a million people have been killed in Syria.

These things are all truly awful. Yet when you consider the overall state of human kind, many things have actually got better.

I recently discovered Human Progress, an amazing new website that uses lots of facts and figures to show how much better things are today.

Think the world is getting more dangerous? Not so. We are living longer, safer lives, in a world that is notably less violent than it once was.

Concerned that we live in a world of injustice and inequality? Things are far from perfect, but the developing world has made remarkable progress within a few decades. Most folk around the world are much better off than their grandparents.

Fearful that the world is overpopulated? In fact birth rates are plummeting.

What really messes up the world are efforts by people to try to organise human affairs by grand design. Don't.  Stop it.  Left to human action, the world keeps getting better.

06 JUL 2015

If Greece can afford to reject more Europe, Britain cannot afford not to

This isn't how it was supposed to be. Decades of bungs from Brussels to the Greeks was supposed to create a grateful euro citizenry.

For years, EU money was lavished on Athens. New roads and construction projects were built. Massive agricultural subsidies were paid out. At one time, almost a tenth of Greece GDP was accounted for by such EU generosity.

Yet instead of showing their appreciation, the stubborn Hellenes now loathe the euro system. By a crushing majority the Greek people have rejected the hated Troika regime and what it has done to their country. Euro flags in Athens are today more likely to be burnt than waved.

What has happened in Greece is not just a run of the mill EU crisis. No council of ministers quick-fix can solve this one. This time it is existential.

Why? Because of what this crisis reveals about the viability of the European project that Jean Monnet and Jacques Delors, the two chief architects of EU integration, built.

The Monnet-Delors European ideal is based on the notion that by doing things together, Europe can do things better. The Greek crisis demonstrates how wrong that assumption turns out to be. Instead the European project has allowed public policy errors in one member state to be exported to the rest.

Greece, to be sure, is in a mess first and foremost because successive Greek governments have lived beyond their means. But it is the euro that allowed them to carry on doing so for so long.

Having showered Athens with handouts throughout the 1980s and the 1990s, as the EU prepared to take in new members in the east, a significant slice of Brussels largesse moved with it. But rather than rein things in, having developed a taste for living beyond her means, Athens was able to carry on with the good times by simply borrowing in euros.

The euro created a system of beggar-thy-neighbour economics. Borrow in the Balkans, and pass on the bill to everyone else. It's not just fiscal and monetary folly that the European project exports from one member state to the next.

Can't control your own borders or coastline? Don't worry, you can literally shunt the problem off to Calais. Suffering because your own industrial base is sclerotic and uncompetitive? Fear not. Thanks to the EU, you can create a level playing field by making everyone else in the EU equally uncompetitive too.

According to that old joke, the perfect European country would be one in which the chefs were French, the policemen British, the artists Italian and the officials German. What the EU project actually produces are Greek levels of fiscal irresponsibility, French attitudes towards free enterprise and an Italian system for controlling borders.

The Greek referendum result is crushing defeat for the European elite. Having used every sort of scare tactic imaginable to frighten the people into voting for the Troika deal, the people overwhelmingly rejected it.

This too reveals something terminal about the nature of the Monnet-Delors project. The European house the Jean and Jacque built has fundamental design flaws. It cannot much longer stand.

With no European people, or "demos", the founders of the EU project set out to deliberately create a system that co-opted support for their grand plan from local elites in each member state. The Brussels bung to Athens were not incidental, they were key to expanding the EU empire. 

By giving politicians and officials in each country a vested interest in more Europe, the architects of the EU hoped to create a momentum towards closer integration that public opinion could not stop. This explains why, in every member state including Britain, the ministers and mandarins are always more pro-EU than the people they are supposed to serve.

Yet Greece shows that that does not ultimately work. Without democratic legitimacy, no amount of collusion with local elites will hold the Brussels system together. In Greece – and perhaps soon too in Britain - local political leaders who play the role of Brussels' poodle, may not find themselves local leaders for very long.

The centre cannot hold. The house that Jacques and Jean built will fall apart. Grexit looms. So, too, does Brexit. Sometime next year there is almost certain to be a referendum on Britain's membership of the EU.

Like the Greeks, we, too, will find the EU elite, and their local satraps, trying to frighten us into voting for more Brussels. Already lobbyists with a stake in the Brussels system are pouring money into a nascent In campaign.

Unlike Greece, Britain – mercifully - never joined the euro. We have our own currency. Our economy grows, exports rise and trade with the wider world soars.

If even bankrupt Greece can afford to reject more Europe, Britain cannot afford not to.

03 JUL 2015

Greek poll won't change the laws of maths

Unless it is somehow able to change the laws of mathematics, the Greek referendum this weekend will not change the fundamentals.

This weekend Greece is being asked to vote to approve or reject the creditors demands. Pro Brussels pundits are lining up to cheer on a "Yes" vote.

Yes or No will not change the fundamentals.

Greek debts are now growing faster than Greece's ability to repay them. Only yesterday the IMF was talking about another €50 billion overdraft increase.

Maths means that Greece's debt to GDP ratio is only going to go one way - unless Greece defaults on the debt. No poll or politics can change that.

A Greek default means repaying creditors in a post-Euro Greek currency. It means higher taxes in Greece, most notably inflation tax, where by government prints too much money in order to transfer wealth from citizens to the state. It is not a case of wanting any of this or not wanting it. It is what will come to pass.

Greek governments have lived beyond the means of Greece taxpayers. They have done so for many years, and they were able to do so because European monetary union allowed Greek governments to borrow far in excess of what was sensible.

The poll this weekend cannot change any of that. It merely influenced how long this sorry saga must play out ahead of a default and abandonment of monetary union with the rest of the EU.

Greece might be the first Western state in modern times to have discovered that you cannot live forever beyond your means. She will not be the last.

02 JUL 2015

Osborne economics means £12 debt for £1 growth

Imagine if for every £12 you spent doing something you got only £1 back. If your aim was to make yourself richer, I hope you would soon have enough sense to stop doing it.

Not so if you are the Chancellor of the Exchequer.

Over the past eight years since the financial crisis, successive administrations have tried to stimulate the economy by spending. For all the talk of "austerity", since 2007, government has spent £839 billion more than it has taken in tax.

The past eight years have seen, by definition if not by Treasury description, the biggest Keynesian stimulus in British history.

How much growth extra output has all this fiscal stimulus generated? £71 billion more.  Got that?  £71 billon more output for £839 billion more debt.  

A 130 percent increase in debt has been used to generate a 4.1 percent rise in output. Doh

Britain may well be the fastest growing economy in the G7. But we are the only economy daft enough to have spent £12 of debt to purchase every £1 extra prosperity.

Things might not feel so bad right now. But we can't go on like this.

01 JUL 2015

Northern power house does not mean more power in the North

It's not been a great week for the Northern Power House, has it?

First fracking. Despite sitting on enough natural gas to fuel the kind of industrial revival seen in America, it is proving almost impossible to get the stuff out of the ground. Why? It's not the laws of physics that are different on this side of the Atlantic, but the laws of regulatory restraint.

The gas must remain underground. Any dream of a northern industrial revival on the back of cheap energy must remain precisely that.

Then the rail upgrade between Leeds and Manchester got scrapped.

A day after this much heralded investment in northern transport infrastructure got cancelled, we learned that either Heathrow or Gatwick is going to get an extra runway. So much for regional rebalancing.

Despite all the talk of a Northern Power House, the economy in the north of England is barely back to where it was before the financial crisis.

The economy of London, meanwhile, surges ahead, the financial service sector fuelled by subsidies from central bankers and lashings of easy money. Quantitative Easing (QE) has been a great boon for corporate banks in the south of England.  

If you handed out free flour to bakers it would be a massive subsidy to the baking industry.  QE does something similar to banking, with easy money handouts to the banks.  No wonder the London economy is roaring ahead, while the north struggles.

Far from rebalancing the UK economy, government policy is exacerbating differences. Rather than empowering the north of England, George Osborne's wheeze makes the north of England ever more dependent on the whim of those inside the Treasury.  

30 JUN 2015

Technological innovation needs protecting from politicians

There is nothing inevitable about innovation. In fact, for most of human history there has been a striking lack of it. For most of the past hundred thousand years, one generation of Homo Sapiens lived with the same misery-inducing level of technology as the one before.

When new technologies do come along, what stands out is how often attempts are made to suppress their wider application.

Ming China restricted the use of printing technology to official texts. Efforts were made to curb the use of new spinning machines during the industrial revolution in England.

Often it is not so much an outright ban that is the problem, but regulatory restriction. 

Rather than welcoming newly invented motor cars, MPs in the late nineteenth century passed the Locomotives on Highways Acts. Amongst other things, this required a man with a red flag to walk in front of any motorised vehicle on the grounds of what we would today call "health and safety".

It's a relief to think that we are far to sophisticated and tech-savvy today to go in for any of that sort of reactionary nonsense. Except we are not.

We have been putting lots of men with red flags in front of technological innovation to slow it down.

Yesterday, councillors in Lancashire voted against a fracking development.  A new technology that would enable us to access billions of cubic feet of gas trapped in rock beneath our feet, cannot be applied because government has put in place dozens of regulatory obstacles.  

Of course, no one has actually banned shale gas extraction.  Instead we have created a red flag regulatory system that makes it practically impossible to get any of the stuff out of the ground.  

Medical science is making some extraordinary advances. A whole new range of drugs, based on our understanding of genetics, are being developed. Yet EU clinical trial rules and data protection insanity have put a series of red flags in front of their practical application.

Technological innovation means that cheap air travel is increasingly accessible to millions. Yet we put red flags ahead of aviation capacity.

In France yesterday it wasn't just a case of red flags slowing down innovation.  French officials actually arrested a couple of executives working for the taxi app Uber. (How is that new, competitive dynamic Europe thing coming along, by the way?)

Ours may be the most technologically advanced generation to have ever existed.  If we want innovation to keep happening, we need to ensure that politicians and vested interests are not able to prevent its further application.

26 JUN 2015

Dave's new deal means no real change

The rest of Europe knows that David Cameron is bluffing.  

Whatever new deal they offer him, they know that Mr Cameron wants to lead the referendum campaign in Britain to persuade the rest of us to accept it.  Not really a great negotiating position to be in, is it? 

Read my Telegraph blog which elaborates on the disaster that is Dave's new deal ......

25 JUN 2015

Nothing too grand for the Eurocrats

I popped over to Brussels this week to meet team UKIP in the European parliament.

One thing that struck me was the sheer scale of the EU's imperial ambition. It is reflected in the architecture of the parliament building, with its sweeping glass and chrome façade. It is moulded in the art that litters the corridors. It is etched on the faces of the Euro grandees that strut around the coffee bars and corridors.

If only folk back home could see this, I kept thinking.....

So here are a few photos that try to capture that atmosphere of Euro entitlement.

With so many vested corporate interests embedded in the EU corridors of power, there are special signs for lobbyists (Hat tip Steven Woolfe).

The coffee counter has two separate queues; one for mere mortals, the other for Euro politicians.

Outside the parliament building were several thousand Euro lefties on strike. They were protesting that they, too, should be allowed to live at someone else's expense.

The productive base in Europe today is no longer big enough to sustain a bloated welfare burden. And the EU grandees are too encased in their chauffer driven world to do anything about it.

No wonder Europe's economy is such a mess .....

18 JUN 2015

The left is dying

What is the point of the Labour party?

I don't pose the question to offend. It is what I found myself asking as I followed the turgid Labour leadership "debate" last night. What is Keir Hardie's party for?

The original purpose of the Labour party was, as the name suggests, to stand up for the interests of organised labour. Socio economic change means that we are no longer defined in quite the way that we once were. If the old sectional interest that the Labour party once represented has gone, what sectional interest does the Labour party in Westminster now stand for? That of career politicians, I'd suggest.

The contemporary Labour party is a cartel. It exists to sustain its MPs in office and its staffers on the payroll.

Perhaps the most extreme example of Labour as a self-serving cartel was Scottish Labour. Remember the Falkirk selection row? A small clique were accused of fixing the party's selection process.

That, I suspect, was just the tip of the iceberg. For decades Labour ran its Scottish seats as fiefdoms. The result was that some deeply unimpressive MPs were sustained as MPs in "safe seats".

Yet without choice and competition, pressures built up, erupting in a political Krakatoa in May.

But surely the triumph of the SNP, who replaced Scottish Labour, suggests that the left is alive and well?

I'm not convinced. It might not seem that way right now, but the SNP appears to me to be an aberration sustained by the Barnett formula. It is the by-product of a McPolitical system north of the border in which everyone gets rewarded for complaining about injustice, but no one needs to take responsibility for paying the bill.

Once the Scottish government has to live within a Scottish tax base, the centre of gravity in Scotland will shift dramatically. Give Scotland fiscal responsibility, and the land of Adam Smith will indeed be reborn – if not quite the way that uber lefty SNP MPs intend.

What happened to Labour north of the border could happen further south.  It is not simply that my own party, UKIP, achieved four million votes to Labour's nine million.  Nor is it because we are a close second in many northern seats. Something more profound is going on.

We live in a world of self-selection. From Spotify to our career decisions, making choices for ourselves has become a cultural norm. Who, in such a world, is going to vote for a party that offers only blue prints for how we organise society?

Twenty years ago, a sizeable slice of the electorate had memories of wartime rationing. They had grown up in a mid-twentieth century world in which the state presumed to know best. That has faded away. The last vestiges of mid twentieth century state rationing that remain have become by-words for delay and dissatisfaction.

On all the major topics of the day, the political pundits have shifted their stance dramatically over the past decade – and they've not moved to the left. Governments, they recognise, cannot keep spending money they don't have and call it investment. Uncontrolled immigration, they are willing to concede, is not always an unqualified blessing. Even (Lord) Danny Finkelstein is now willing to accept the need for an In Out EU referendum.

The left's crisis is existential. The left was born of the idea that human social and economic affairs are best organised by grand design. Digital dooms such gigantism.

Politics was once an argument between the capital and labour. It is increasingly a dispute between corporatism and the free market.

Interesting new ideas – on banking and money, political reform, the future of the EU, the digital economy – come not from the left, but from the free market, socially liberal right.

The Labour leadership candidates have little new to say because the left no longer has much new to say.

18 JUN 2015

Default? Which MPs dismissed the idea as "Eurosceptic scaremongering"?


Which MPs saw a default coming - and which ones dismissed it all as "Eurosceptic scaremongering"?

Four years ago, MPs debated the prospect of a default in the House of Commons.

Some MPs could see what would happen - and spoke up.

Others, such as Jo Johnson, MP for Orpington and Claire Perry, MP for Devizes, dismissed the idea of a default as "Euro sceptic scaremongering".  "Highly, highly unlikely" said Jo.

Who's judgement will you trust when the referendum happens? 

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