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Troy's Briefs
Understanding the effect of the EU. A Troy’s Brief.
Lesson one – Institutions.
One can only applaud the latest initiative by the group Open Europe, with a high profile story in The Daily Mail today headed, "Britain has signed 'blank cheque' to EU as 31 powers under treaty are yet to be negotiated".
The story is based on a press release produced by the organisation which states that "the full extent of the powers being handed to Brussels under the new European treaty are still to be finalised", with details gleaned from a "confidential EU paper" obtained by Open Europe.
The leaked document identifies 31 areas of the Lisbon Treaty where working arrangements are not in place. The list includes the powers of a new EU diplomatic service and the extent of co-operation on defence. Neil O'Brien is cited in the Mail piece declaring that, "Much of the Lisbon Treaty is about giving the EU the power to create new institutions (which will particularly effect the finance industry) and arrangements to decide on how they will actually work in practice at a later date," adding, "Many of these crucial decisions will be made by majority voting, so the UK is unlikely to be able to stop any details it doesn't like the look of. Once the treaty is ratified, there'll be no going back."
Well the Treaty is now ratified (1 December this year) and there is no going back. The finance industry is about to be hit by three new regulatory authorities.
There are so many deliberately unanswered questions in the Lisbon Treaty - about things as important as the role and powers of the EU president, foreign minister and finance regulation that MPs effectively signed a blank cheque to the EU "without a referendum."
The details are useful but, the underlying thrust is by no means new. Treaties are part of a process and the ratification of a new treaty is never an end in itself but merely a step which facilitates the next tranche of integration. Even now, the EU is still putting in place measures which rely on the Maastricht treaty and even the original Treaty of Rome.
This then, gets to the nub of the issue; the reality of European political integration. It is a reality that the UK finance industry in the UK appears not to want to address. Where they have particularly not caught up is in the acceptance of the EU's own terminology, with reference to "new institutions".
As I pointed out some time ago the very use of the word "institution" is one of those brilliant deceptions of the EU bordering on genius, which enables them to hide their intentions in plain sight. Only once you replace the word with "government" and you realise that "institutional reform" actually means "strengthening the power of the EU government" do things fall into place.
Thus, what Open Europe has found out is that, armed with their new treaty, the EU are now all set to use the powers they have been given to strengthen their government, cementing its position further as the UK’s central and supreme government.
The failure clearly to understand and acknowledge this has dogged the debate on the treaty within the commercial world, which has so often got bogged down in detail, obscuring that main and all-important issue.
This is also where those who so loosely use the term "superstate" go wrong. One can have endless discussion about the meaning of the term "state", bordering on the theological but the essence is that the EU is not a state and has no ambitions to become one. It is a government detached from the ownership of territory and its ambitions are to become a "super-government", ruling over all the states of Europe.
One would like to think that Open Europe, with their latest work, are a step closer to understanding this, but it will be difficult for them. The basic inconsistency in their position and that of just about all corporate organisations and indeed many lobbying groups in the UK, is that they still project the view that it is in some way possible to reform the European Union, turning it into a construct more to their liking.
The inevitable conclusion to be drawn from Open Europe’s own findings is that this will never happen. The EU managers are not interested in their or any other groups ideas. Their only agenda is the accretion of more power until they have gained their ultimate objective, the status of that supreme government of Europe. The sooner this is recognised, the sooner the pretence that "reform" is an option can be abandoned and we can then all start concentrating on looking for an exit from the all embracing rapidly expanding EU.
Carbon Con
In the North East of England 1,700 Corus workers on Teesside will soon lose their jobs. The true reason for this is the workings of the international ‘carbon market’ and not, as is widely supposed, the result of a worldwide downturn of demand for steel.
In a truly revealing article the head of the UN's climate change panel - Dr Rajendra Pachauri - is accused of making a fortune from his links with 'carbon trading' companies. Christopher Booker and Richard North’s piece in The Sunday Telegraph, is disturbing.
In Utmost Good Faith – Troy’s Long Brief.
An experienced businessman with a successful track record in international business once told me that there were two serious barriers to business growth, Banks and Politicians. Neither truly understands the needs of the entrepreneur namely the provision of sympathetic banking facilities and minimal regulation.
Peter Troy The Publicist Ltd has a long standing understanding of the Banking industry and indeed has acted for many clients seeking publicity in disputes with banks. The platitude of senior politicians towards small and medium businesses has never been higher. We have acted for a number of clients seeking publicity of issues with Banks.
In these long briefs we comment on two high profile examples for where bankers and politicians got it wrong. The wonderfully controversial footage aired by BBC's Panorama two weeks ago showed staff at the Channel Island based arms of state-supported UK banks, Lloyds TSB Offshore in Jersey and Northern Rock Guernsey, apparently explaining to customers how they could avoid paying EU taxes on their savings. Whatever the full detail it is obvious from the BBC Panorama story that neither of these State owned Banks were operating in the banking tradition of utmost good faith.
Both banks deny systematic tax evasion. The question clearly isn't whether what's been going on is legal. It’s whether or not they’re behaving fairly and ethically, at a time when both banks have been propped up by billions of pounds worth of UK taxpayers' money. Clearly the examples of dodgy practice are not the work of a few rouge bank employees – it is reflective of the actuality of the policy of the Banks. There were, I suspect, more than a few senior Channel Island executives thinking recently - but not saying – there but for the grace of media exposé is my bank or finance house.
The UK Government responded to the programme by saying that "at a time when many people are facing difficulties from the global downturn, it is vital that everyone pays their fair share of tax. Having received substantial taxpayer support, banks in particular, must convince us that they are playing by the rules and not encouraging, or engaging in, tax avoidance."
There is little evidence that banks are taking this advice. Instead they are arguing against the government's proposed code of conduct to curb tax avoidance, believing that it would ruin the competitiveness that drives the sector; they have a point.
Is there argument that since banks are also struggling in the recession they should do what they can to survive? Maybe not; especially when considering that small businesses and individuals are being charged more and more to borrow the money they need just to get by in this recession. Many self-employed people, indeed, are borrowing just to pay their tax bills. The average person doesn't have the luxury of accommodating bank staff advising them on how to minimise the tax they pay; a point that needs to be made more often to Bankers that currently owe their jobs to the UK tax payer.
The kind of understanding shown to apparently wealthy customers in the Panorama investigation by a Lloyds TSB banker in Jersey doesn't seem to be available to the average person who is forced to borrow at expensive rates just to get by. Many would agree that banks have contributed to the sorry situation that is the global economy – and are not over-exerting themselves to improve the situation. The BBC's business editor Robert Peston recently wrote that banks should focus more on conducting themselves as retailers rather than manufacturers and stop trying to gain profit from others' debt, built up through mortgages and credit cards.
But there is clearly an onus on the business community’s representatives to make sure that we encourage banks to behave the way we would want them to and perhaps the small business community should thank the Panorama team for exposing the reality of UK banking attitudes.
Turning to the UK’s political ‘elite’, that old war horse Ken Clarke has told the Conservative Party conference this week that he will introduce a nightclub-style "one in, one out" policy on new rules on business, vowing that a Tory government would introduce no new regulation without getting rid of an old law.
"We will introduce a system of regulatory budgets across government, that means no new red tape will be introduced without a compensating cut in the costs and burden somewhere else," he says, promising to serve as a "bouncer" to prevent red tape from reaching the statute book.
Now, this may be the man who had not read the all important Maastricht treaty twenty years ago but he is no fool. He cannot be unaware of the torrent of law coming onto the statue book from the EU – much of it in the form of EU Regulations, which have "direct effect" coming nowhere near the UK Parliament.
The fact is that there is nothing (if he were to become the next UK Government Minister responsible for UK Business issues) he can do about EU law – without, of course, pulling out of the EU. Thus then he obviously must think business people are so stupid that we do not realise he is talking utter tosh. The idea of "one in, one out" is utterly preposterous.
Mr Clark also suggested that the public would also be able to nominate unpopular laws for parliament to debate. And if they are EU laws? What then? When, we ask, are the Conservatives or any UK politician going to stop rushing out these meaningless gimmicks and get down to some serious business? I wonder if Mr Clarke banks with Lloyds TSB or Northern Rock – clearly they deserve each other!
If you want to expose dodgy banking practice or need publicity whilst lobbying your politicians – we understand the issues. Please contact Peter Troy The Publicist by ‘phone or email
Fishermen despair at crippling EU Rules
Once upon a time a in a newspaper in the UK headline such as "Fishermen despair at crippling EU rules" would be seen on the front pages of the national dailies, with tense debates in the House of Commons.
John Buchan, a "top north-east skipper" is warning that the white fish fleet is facing its biggest crisis for 30 years and has called for urgent action to stop boats being forced out of business. But his plea only gets as far as the Aberdeen Press and Journal. It will get no further. It is not that people don't care. Many do – passionately. But the issue is bound up in a sense of futility, hopelessness and despair.
It does not matter what I think. There is nothing I can do about this or anyone else. There is nothing our MPs can do about it. Mr Cameron's Tories have set their face against doing anything, having abandoned Howard's pledge, when Tory Leader, to repatriate British fishing policy. So, I and others stop writing about it. People stop discussing it. There is no point in either. You might just as well complain about the colour of the moon. Sadly therein lies the victory of the EU – it has worn objectors down with its own inertia and huge regulatory demands thus many have given up.
Except some of us haven't and won’t give up. Our resolve has never wavered. When or if the Irish roll over on Friday and bow to the pressure of the EU propaganda machine ones resolve will not waver. But one has no illusions. Getting the UK out of the EU is going to take some time. Activists in the UK’s powerful Federation of Small Businesses voted to demand the UK leave the EU on two occasions. By the time that is achieved as it must be there will be no fishing industry left in the UK worth talking about and also a very damaged small business community as well.
Call it a casualty of war, sadly there will be more before we prevail and the UK is free of rule from Brussels.
Boredom
I have just been reading a report by the Institute of Public Policy Research (IPPR) on "climate change".
The IPPR has been conducting a series of workshops, focus groups, and discussions in corporate organisations and other types of malarkey and found out that, when the subject is brought up, many "participants" expressed a weariness and fatigue about the subject. Many of the workshops became notably less animated following the introduction of climate change as a topic for discussion. Some found the issue very boring. Others dismissed it as "faddy" and "trendy".
It would have been nice to analyse the report more you more but the report turned out to be rather boring as well – incredibly so. Relying on a much shorter summary in The Guardian therefore, we get a much stiffer message. The general public are (is) resentful, cynical and resigned when it comes to the issue of "climate change", we are told.
Troy’s Short (Opinionated) Sunday Briefs
As always we recommend that readers of this web site read Booker with their Sunday Breakfast every Sunday morning; it is good for the constitution. This week-end I have read so much from numerous sources that confirms that “climate change” is not about science it is about “agendas” and control. A key agenda is a naked political coup to impose a corporate uniform view on an unwilling a sceptical population. Like shouting “fire” in a crowded theatre where no risk exists, "climate alarmism" should be made a criminal offence.
A light on EU regulation.
Christopher Booker is hot on the case of the disappearing light bulbs in this week's column, in The Sunday Telegraph. The old bulbs with which we are familar supposedly become "illegal" on 1 September. From then on all we will be able to buy are the energy-saving compact fluorescents.
What Mr Booker has done, by the simple expedient of asking Defra for details of the "legal base" on which authority the incandescent bulbs are banned, is discover a bizarre situation where, despite assertions to the contrary, there is actually no legal power in place to prevent these light bulbs being imported or sold.
The story starts with EU's 2005 directive on Eco-Design of Energy-Using Products directive, Directive 2005/32/EC which, for some unaccountable reason, the Defra official referenced as 2005/31.
This little gem sets up a system which requires member states to implement domestic law which prohibits the "placing on the market" of certain "energy-using products" (EuPs) unless they conform to specific technical specifications, as defined by current (and subsequent) EU regulations.
For this "framework" directive to become law, therefore, it must be transposed into UK law, which Defra tells us it has done, under the Eco-design for Energy Using Products Regulations (S.I. 2007 No.2037). Reference to these Regulations, however, is more than a little bit interesting.
Regulation 3 (Part 2) does prohibit the placing of a "listed product" on the market unless it complies with certain technical criteria. Reference to the definition of a "listed product" (Regulation 2), though, yields a list in paragraph 1 of Part 1 to Schedule 1. And there, one finds just three products: (a) a boiler or an appliance; (b) a refrigerator appliance; (c) a ballast for fluorescent lighting.
Perspicacious readers will immediately discern that there is a curious omission. There is no reference to lighting products – of any description. On the face of it – and certainly relying on Defra – there is no law in force which can be interpreted as banning the sale of incandescent lamps.
What gets even murkier, however, is Defra's insistence that the specific "Implementing Measure" banning the placing on the market of incandescent bulbs takes the form of a directly applicable Commission Regulation (EC) 244/2009.
Sure enough, this makes mandatory conformity with the ecodesign requirements set out in the regulations for any "non-directional household lamps", these being products which "are designed essentially for the full or partial illumination of a household room, by replacing or complementing natural light with artificial light, in order to enhance visibility within that space."
Being a Commission Regulation, this has "direct effect" which means it comes into force the moment it is "done in Brussels", without coming anywhere near the UK parliament. BUT – and it is a very big "but" – as an EU law, it specifies neither enforcement provisions nor penalties. These must be set out in UK law and, so far, we have not been appraised of any such law which applies to the sale of these products.
On this basis, the response of any retailer to being told that the sale of such products contravenes EU law should be "so what?" Without enforcement powers or penalties, there is nothing any official can do.
Even if this hurdle was surmounted, there is another problem. The prohibition applies only to "household lamps", although the Regulation does extend the prohibition to include "when they are marketed for non-household use or when they are integrated into other products."
There is no prohibition, however, on selling any "special purpose lamp", which is defined as a lamp "not intended for household room illumination because of its technical parameters or because the related product information indicates that it is unsuitable for household room illumination." Thus it would seem that as long as incandescent lamps are marked with the labelling "unsuitable for household room illumination", it is perfectly legal to sell them.
Such is the mess in which we now find ourselves that, as Mr Booker observes, in its desire to bend over backwards to meet the wishes of the EU, the UK Government has made a total mess of trying to understand the laws it is so eager to comply with.
The cost of Democracy
It is not surprising that the Leader of the Conservative Party has distanced himself from Sir Patrick Cormack, the Conservative MP who has recently announced that for MPs to do their jobs properly they ought to be paid £130,000. Presumably, even he would not suggest that there should be expenses on top of that but nothing would really surprise me.
Douglas Hogg MP (known in the Commons as The Hoglet) is standing down because of a little trouble with his moat at home, has also called for MPs to be paid six-figure salaries.
They were both described as "living on the planet Zog". The Leader of the Planet Tory knows that it is not sensible to be asking for doubling of MPs' salaries less than a year before the General Election when popular fury may well be visited on those who are associated with those demands.
In fact, there is a lot of sense in MPs receiving their payment in properly accounted for and taxed salaries rather than the hole-in-the-corner manner they have been getting it. But there are a few problems.
One is the question of market forces. Is there, in fact, any evidence that people do not want to become MPs because of the "low" pay? There is not. Every party in every constituency has to beat off applicants. So, really, why bother to raise the salary if people want the job anyway?
The notion that a low salary attracts a low calibre of applicants is risible. None but the low calibre will go into politics now, whatever you pay and, in any case, if we raise the salaries it will be the bozos in there now who will benefit.
Finally, there is the unfortunate matter of the MPs' work, which, according to the egregious Sir Patrick, they cannot do at the moment because of lack of money but we must ask just what is their job that they need to do?
Some time ago I wrote a letter to my MP on the subject of them wanting higher salaries (they were seeking £100,000 at the time so, in the meantime, they have become greedier), in which I enumerated all the many things they do not do: legislate, hold the government to account, scrutinize the budget, take part in debates, find out about important political issues. So far as I can or anyone else can tell, nothing much has changed since December 2006 except that more legislation has made its way from Brussels and more egregious mistakes have been made by Parliament particularly over the issue of defence expenditure.
So here is my suggestion. Let those MPs tell us exactly (and I mean exactly) what it is they do and why they deserve those fat-cat salaries. Then the electorate will see whether they deserve double of what they now get legitimately. Of course, there is a possibility that the electorate – if they pay attention to such matters - will also see exactly how little our so-called legislators do for the money they get now.
Gender and decision making or the difference between men and women
What’s the difference between men and women? It’s this question that underpins Harriet Harman’s recent claim that a mixed-gender team makes “better decisions”. In my view it is it’s not obvious why a political leader’s gender should matter. Anyway although a lot of the evidence (pdf) is ambiguous, economic researchers have discovered some gender differences in decision-making, for example:
- Groups in which women are the majority are more likely to be generous (pdf) to outsiders. However, all-women groups are less generous than majority-women groups.
- Women are less good at negotiating than men, especially in situations where benchmarks are opaque - such as in businesses with unclear salary structures.
- Women perform worse under pressure than men. For example, women tennis players are more likely than men to make unforced errors at crucial stages of a match.
- Men are more over-confident than women. For example, men trade shares more often than women, but earn lower returns.
- Women are more risk averse than men - perhaps because of socialisation rather than innate differences - though not more averse to ambiguity.
Confused, well so am I but please carry on. Do these differences justify Harman’s claim? In themselves, not at all me thinks. These differences are true only of average tendencies. There are loads of women who are less risk-averse than men, for example. Indeed, it could be that selection effects in politics are powerful than gender differences. For example, if political careers only appeal to people who are over-confident, the tendency for women to be less over-confident than men will be irrelevant in deciding who should be Labour leader, as women who aren’t over-confident won’t have entered politics in the first place. Well quite so.
Anyway there is, though, another way in which women leaders might improve decision making, even if they are identical to men in their cognitive skills or lack thereof. The very fact that women are different might help to reduce groupthink - the tendency for groups of decision-makers to become overly homogenous and so over-confident and insufficiently self-critical. Evidence for this lies in the fact that, sometimes women board members can improve company performance.
What’s not so clear, though, is whether this effect is the result of their femininity or just their difference. If it’s the latter then there might be no more case for having a woman leader than having a black or gay one, as these too might reduce groupthink: just a thought.
Missed Troys Briefs? Don’t fret they are still on (the) line for all to see. Read them in the archive 2008
