Tuesday, April 12, 2016

The Pound the Euro, and Brexit.

One of the strongest arguments that the "Leave" campaigns have deployed to neutralise the impact of many "Remain" advocates, and a completely legitimate one which I would certainly be exploiting for all its' worth if I were in their place, is to look at what those "Remain" advocates were saying a decade and a half ago about whether Britain should scrap the pound and replace it with the Euro.

Very few serious economic, political or business thinkers in Britain now believe that joining the euro would have been a good idea. But a significant number of prominent advocates for "Remain" including many (but not all) centre-left politicians who back remain, and a lot of business people and companies, have been using almost identical arguments for EU membership this year to those they can be quoted as having used around the turn of the millennium in support of surrendering the pound for the euro.

This is embarrassing enough where the arguments concerned cannot directly be disproved - for example, if someone had suggested that joining the Eurozone would bring a specific benefit this cannot be tested because we never did. But all too often people making cataclysmic warnings of disaster if we leave the EU turn out to have made very similar warnings of what would happen if Britain did not join the Euro - of events which manifestly failed to materialise when we didn't.

In such cases bursting the credibility of such statements like a pricked balloon is child's play and the headline for the Leave Campaign response has written itself - "Wrong then. wrong now."

An entirely justified and reasonable riposte which in their position I would certainly make too, provided they don't overstate the case by inferring that everyone who is now making the pro-remain was pro-euro back then. You can count the Tories to which that applies on the fingers of one hand.

To quote the late Ian Fleming,

"But, but, but, and again, but ...

If many of those who supported scrapping the pound have been repeating the same arguments in favour of remain, that prompts a question; what are the people who were then the most prominent advocates of keeping the pound saying now? And that's where it gets interesting ...

Here is an article which lists the top five Britons who, in the opinion of the article's author Nicholas Watt, did more than anyone else to keep Britain out of the Euro and explains why. I might quibble about the order, but I agree with his list and his arguments: it consists of Sir John Major, Ed Balls, Martin Wolf, Gordon Brown, and William Hague.

And as I pointed out a few weeks ago, the really interesting thing is that every one of those five currently backs "Remain."

So does Nick Herbert, who was Chief Executive of "Business for Sterling" but is now head of the Conservative In campaign.

Anyone reading this will probably already be aware that John Major and William Hague have made statements in favour of the "remain" side of the debate.

Ed Balls, who persuaded Gordon Brown to stop Blair and Mandelson bouncing us into the Euro told the British Chambers of Commerce last year when he was shadow chancellor that EU exit is the biggest risk to our economy in the next decade.

Gordon Brown himself is signed up to the "Remain" campaign.

And FT journalist Martin Wolf, who as Chief Economics Correspondent of that paper was one of the most prominent journalistic critics of Euro membership in the nineties and the early years of this century, recently wrote an article headlined "A vote for BREXIT is a leap into the abyss," adding:

"The big argument against is that the UK, with less than 1% of the world's population and less than 3% of its' output, can achieve what it wants more effectively from within the European club. The UK's main allies believe the latter. So do I."

The fact that the prominent people on both sides of the previous pound v. euro debate now back remain is interesting.

Is this a conclusive argument for Remain? I don't think so. In fact it doesn't prove anything except, perhaps that the economic arguments for and against remain are a LOT more complex and subtle than people always realise - and that simple slogans such have been used too much by both sides are not the best way to assess or debate them.

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