Thursday, 4 February 2016

It's probably for the best if you don't give Martin Durkin any money


One of the reasons I'm seriously hoping Martin Durkin is not successful in raising funds for his Brexit The Movie is that he is likely to interview all the old eurosceptic wafflers who bang on about regulation. As much as we see silly "bent banana" histrionics, when it comes to the more nuanced arguments even Daniel Hannan makes a pigs ear of it. It's not a field you can dabble in and the usual Eurosceptic fare is a very weak position.

In fact, I was wondering if anyone on the Remain side would pick up on it, and indeed it comes as no surprise that John Springford, writing for the Centre for European Reform, would be the one to step forward, who in this report drives a horse and cart through the classic tropes. In his own words:
Regulations can and do impose costs on companies, and ultimately on consumers (because companies often pass on these costs). When they are badly designed, the costs of such regulations can be unnecessary and damaging. But there are legitimate reasons why governments regulate markets.
Markets are not perfect: they sometimes fail, producing sub-optimal outcomes. An unregulated market may, for example, generate ‘negative externalities’ (such as pollution or congestion) because the social costs of activities are not borne fully by those who engage in them. In such cases, governments have a responsibility to intervene to correct the failure. If the end result is that a firm is made to ‘internalise’ social costs which it had previously managed to ‘externalise’, the fact that its costs have risen is no bad thing.

The EU also has legitimate reasons to be interested in regulation. One is the single market. Since all 28 member states regulate their markets, and conflicting regulations can act as barriers to trade, the EU sets the common minimum standards that are necessary for mutual recognition – the animating principle of the single market – to work.
This basic premise is widely misunderstood in the British debate. For example, one recommendation of the British government’s ‘Business taskforce on EU red tape’, which was asked to find regulations to scrap, was to push for the full implementation of the EU’s services directive.
But deepening the EU market for services would be impossible without more EU regulation. Services markets tend to be more highly regulated than markets in goods. Consumers find it more difficult to assess the quality of a lawyer than an apple before they make a purchase, so the state intervenes to ensure legal standards are high. Member-states would not allow foreign companies, operating under foreign rules, to provide services to their citizens without common standards at the EU level.

Confusion also reigns over the reach of EU regulation. Business for Britain, a cross-party business campaign for a renegotiation of Britain’s EU membership, has suggested that UK companies which do not export to the rest of the EU should be exempt from EU regulation.
That would be unworkable: many UK firms who opt against exporting are still part of the single market; they compete for British customers with firms from elsewhere in the EU. Meanwhile, some companies do not export directly, but supply parts, components and services to firms that do. By exempting non-exporters from EU rules, the UK would effectively be withdrawing from the single market.
Some of these words are so eerily familiar that one could almost swear they were influenced by this blog or Flexcit. The report goes on to deconstruct some of the more common assertions about EU regulation, which I could argue the toss over - but that's largely besides the point. 

Essentially, Springford makes the same point I do that regulation is necessary and desirable and divergence is not without its own complexities and costs. Springford is largely attacking the simplistic and old fashioned IEA influenced school of thought that regulation is bad and that unregulated "free markets" are good. It's born of a Janet and John libertarianism that has become fashionable in conservative circles. For a time I subscribed to it myself but the process of promoting and improving Flexcit has been a real eye opener. 

Particularly, the point about divergence is one the eurosceptic aristocracy have failed to grasp and by promoting that idea, they do by inference suggest leaving the single market. A message that will most certainly lose the referendum for reasons we have outlined ad nauseam

What sets Springford apart is his blinkered Europhillia, where nothing exists over and above the EU. The report makes no mention of the IMO, the ILO, UNECE or Codex, and frankly if you are talking about technical regulation of markets and you're not making reference to such then you're simply not in the game. But this is not by accident. Springford is no fool and such a glaring omission is entirely deliberate. 

His work is all about maintaining the illusion that the EU is the alpha and omega of regulation and that the EU single market is the only game in town. All of Europhile credibility depends on continuing to obscure the global regulatory chain from view. The globalisation of regulation and convergence of regulatory systems is an open secret they would rather remained in the shadows.

What we are looking at is the single-minded determination to establish the EU as the supreme government of a fortress europe, where the EU controls all the rule-making within. What the Leave side needs to do is to modernise and concede the need for regulation, recognise the value of it and instead present the need for full engagement at the global level, shining a torch on all the global organisations that really do make the rules - and showing why the EU is more a nuisance than driver of harmonisation. 

This is what I fully expect Martin Durkin will not do, and what he will produce instead is a hackneyed "EU is baaad" flashy production - with obligatory dramatic music and familiar talking heads, all banging the same old drum. The inherent prestige will mean it goes far and wide, reinforcing the views of true believers, further entrenching bad, losing ideas that do not stand up to scrutiny. 

I have said from the beginning that the Eurosceptic inability to shake off the old baggage is ultimately what will lose this referendum. The classic material has not won any major new allies in recent years and certainly big business is no longer a subscriber to the notion that regulation is bad. Contemporary euroscepticism is wholly obsolete and the eurosceptic aristocracy have not caught up. They are dinosaurs.

If Martin Durkin were to take a risk and produce something original that changed the direction of the debate, setting out a well structured vision of the future outside of the EU, highlighting how the EU has become redundant and an obstacle to global progress (as outlined by LeaveHQ.com), then it would be something to get excited about, but if all we're going to get is more blether from Lord Lawson and Daniel Hannan then there's actually no point, and people might as well save their money. Or give it to me if you are feeling generous. I need it more than he does and can do more useful things with it. 

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