Friday, April 22, 2016

The Gove Interventions

I have been dashing round the country over the past three days and did not have time to write up in full what I thought about Michael Gove's interventions this week at the time he made them.

Gove is certainly the most senior minister, and probably the most respected figure, among those who are supporting a "leave" vote. He is one of comparatively few people on either side who had, up to this week, had a reasonably good referendum campaign.

However, although there were some positives to his speeches this week, on balance I found them disappointing.

As John Rentoul of the Independent pointed out, this was Gove's most powerful and important contribution.

It sounds great, but I'm far from certain that he's right.

For a start, there is the basic problem that David Lidington pointed out with the position of almost all supporters of "Leave" including Michael Gove, and it shows clearly in the above argument.

Virtually to a man and woman, "Leave" supporters seem to believe both that the other EU countries are determined to outvote anything the UK wants, even if this is irrational  - since many aspects of the reforms Britain has been calling for the EU to adopt would very often help the rest of Europe too - and yet they simultaneously believe that if Britain votes to leave, rational self interest would make them offer us good trading terms as an ex-member.

I just don't buy that. If they're irrationally against us now they will be more irrationally against us if we vote to leave. Not least because if Britain wants to retain access to the Single Market without accepting free movement of EU citizens or paying into the kitty we will be seen as a free rider.

I wasn't happy to hear Michael Gove describe the cost of EU membership as £350 million a week when as Andrew Dilnot pointed out the figure of £190 million a week would be more accurate and the £350 million figure is potentially misleading.

I have already linked to an article by Peter North which explains why Michael Gove's suggestion that Britain could leave the EU without activating Article 50 was foolish and completely unhelpful.

This was not an argument that you would expect a serious player to make. Boris Johnson seems to have a license from the electorate to get away with talking complete rubbish - although he may find his comments on Barack Obama's Kenyan ancestry were pushing the limits of it. The sort of voters who have up to now liked Michael Gove are the kind who like people to get their facts right.

For the same reason it was incredibly foolish for Michael Gove to quote "Open Europe" and nominate them as a counterpoint to the (overwhelming majority of) economic commentators who have suggest that there will be a negative shock from leaving.

I presume the Open Europe report he is referring to has to be  Where Next: A liberal free-market guide to Brexit to which I have previously linked.

What this document actually says about Brexit is not that there will be no negative impact from leaving. Is says that other things being equal there  WILL be a negative growth impact from leaving the EU, which Britain MIGHT be able to use it's increased freedom to reverse IF the right policies are followed. To quote the executive summary of the Open Europe document:

"The EU referendum is a crucial decision about Britain’s future, but the campaign so far has failed to adequately address how life outside the EU might look. It will not be an apocalypse and it will not be a utopia. The growing economic evidence suggests that there would be a small negative economic result from Brexit, probably in the region of 0.5% - 1.5% of GDP in the long run, presuming a reasonable trade agreement is struck between the UK and the EU.
The question then is whether the UK can use its new found freedoms to offset this cost or reverse it to a positive outcome.
We believe it is possible, but the path to prosperity outside the EU lies through:
  * free trade and opening up to low cost competition,
 * maintaining relatively high immigration (albeit with a different mix of skills), and
 * pushing through deregulation and economic reforms in areas where the UK has historically been sub-par compared to international partners

There is no doubt that such an approach would disappoint a number of people on the "Leave" side and whether there is appetite for such changes in the UK is unclear.
One thing that is clear is that Brexit cannot be all things to all people."

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