Anti Common Market League - Autumn 2002

Address by Brian A. Prime, [a member of the Policy Committee of the Federation of Small Businesses], at the Celebration of the Tenth Anniversary of the UK's withdrawal from the Exchange Rate Mechanism, held outside the Bank of England on 16th September 2002

Speaking on behalf of the Federation of Small Businesses' Policy Committee, it's important I make it clear that we are not anti-European; we are, however, opposed to the European single currency, the Euro.

We are opposed for economic reasons and we are particularly opposed for constitutional reasons. The Euro is about more than changing the coins in our pockets; it's the tool, the key, to fast-track political umon. With constant debate on the benefits and dangers of adopting the European single currency, the tenth anniversary of our withdrawal from the Exchange Rate Mechanism is a good time to remind ourselves of that short period in our economic history as members of the ERM, and the damage it created for our businesses, and for our people in general.

It was the time when economic policy was tailored for nations other than our own, our Government of the day having handed over its economic control to a European system - a system that was out of step with our economic requirements.

Hundreds of thousands of people will have their own personal experiences that provide good reason to remember this period of time, in particular those that lost all they had worked for.

More than half a million businesses failed; some of them were household names, but the vast majority were small and medium-sized enterprises whose owners lost everything, including the roof over their family's heads.

Well over a million workers became unemployed as a result. The loss of employment, accompanied by high interest rates, resulted in more than four hundred thousand having their homes repossessed. The problem of negative equity resulted in further losses continuing over a period far beyond 16th September 1992.

We cannot live in the past, but we are in trouble if we don't learn from our past. The ERM was the testbed for EMU and its single currency with a single policy.

One policy does not suit all. We only have to look to the Eurozone countries to see history repeating itself, with Ireland, Portugal and Spain worried with an economic boom, while France stagnates and Gennany finds itself on the doorstep of recession.

Germany, that had the strongest economy in Europe, with the German mark a most respected currency, has now become an also-ran, with an increasing number of businesses closing. More than four million are now unemployed, and Germany is being reminded by Brussels that it is close to breaking the barriers for the ECB's stability pact criteria.

Portugal, having exceeded the stability criteria, ALREADY has to take severe measures under instructions from Brussels.

We have been down that road. It would be irresponsible to take our people down there again, when all the signs point to no change.

Our Government gives the impression of indecision. Each day the press carries contradicting comment and reports of ministers that constantly change direction; our Foreign Secretary is a recent example. One must ask if this is a Government that doesn't really know what it's doing on this subject, OR, is this a devious concerted effort to keep the Euro as a major focal point on which we keep our eyes and our attention, while other major issues are being introduced?

We need to keep our eyes on the whole field of play, or we will find at the end of the game that we will have lost everything bar our Pound Sterling.

Our nation's economy, our independence, our sovereignty are paramount. All are now under threat. It's a good time for us to remember, while we still have the right to disagree, to challenge and to oppose.

To do nothing is to wave goodbye to the personal freedoms we have so long taken for granted. Events like this [meeting] can soon become illegal, and treated as an offence against the State.

We are to be given a choice to join the single currency or not in a referendum. The Eurozone people were denied that right and were taken in by their politicians. Now, too late, the Germans are calling for the return of their mark, the Greeks want their drachma, now the Dutch are calling for the return of their guilder.

Maybe it's time our Pound Sterling sign became our logo, not only for saving our Pound Sterling but also our personal freedoms (or what's left of them), our independence and our nation's sovereignty.

Few will have watched unmoved the recent flooding of Prague, Dresden and other cities in Eastern Europe; among other things, it will for some have recalled to mind Baroness Thatcher's declaration that "we shall always look on Warsaw, Prague and Budapest as great European cities" in her pivotal Bruges speech of 1988.

We will not enter here into the question of whether these floods (and floods and droughts in other parts of the world) are within normal climatic variation or are part of a climate change induced by man's activity. Readers will have their own views. But one further point is worth making.

It is entirely right that wealthy countries should come to the aid of poorer countries such as the Czech Republic when they suffer calamities of this type, both for humanitarian reasons and to conserve architectural and historical treasures. Britain, to its credit, was among the first countries to offer help. But inevitably, with Romano Prodi quickly on the scene and gaining publicity, we found the European Union taking centre stage and exercising its powers.

How can we provide a framework for international co-operation without at the same time imprisoning ourselves inside a supranational system such as the European Union? Problems such as the flooding tend to cover localised groups of countries. They certainly do not cover all European Union countries, but countries not in the EU often are affected by them. Pollution of the North Sea is also an example, and the decline in its fish stocks is another. Instead of a central authority imposing uniform (and usually unsuccessful) policies on all countries, we would be better off with a looser framework in which groups of countries affected by a particular problem could get together to devise their own practical solutions. Through the overlapping circles of interest and activity that would develop, true co-operation would build up within a framework of self-governing nations. Politics at the European level would then only come into play when it was genuinely needed and wanted.

This is broadly the idea promoted by Sir Richard Body, President of the Anti-Common Market League, in his book Europe of Many Circles*, published in 1990, and remains as good a solution as has yet been devised.

It's a ill wind that blows nobody any good. Although Chancellor Schroder's Social Democrats eventually won the recent general election in Germany, opinion polls until the floods showed them trailing the opposition Christian Democrats of Edmund Stoiber. The principal reason for their unpopularity was the high level of unemployment, currently running at around four million.

This unemployment is, of course, a consequence of Economic and Monetary Union. Tied to the one-size-fits-all interest rate of the Euro and the European Central Bank, Germany is saddled with an interest rate significantly higher than appropriate for the present state of its economy. At the same time other Euroland countries, notably Ireland, have a lower rate than appropriate, and are suffering from inflation.

Germany's present malaise is, in fact, remarkably similar to that endured by the British economy during our membership of the Exchange Rate Mechanism. The essential difference is that we were able to get out of the ERM.

The message of all this is unlikely to be lost on Mr. Gordon Brown; whether it is lost on his neighbour in Downing Street is another matter.

It was widely thought that the outlawing of imperial measurements was motivated purely by a drive for bureaucratic uniformity. However, there could well be more to it than this. Former Commissioner Martin Bangemann complained that "Britain's understanding of pounds and ounces gives the country an unfair advantage in trade with the USA".

We should bear this in mind next time someone tries to tell us of the trade benefits of being part of the EU. As an essentially Napoleonic construction, the EU tends, subconsciously perhaps, to see a free Britain as an obstacle to their ambitions and accordingly will seek to bind and fetter us. Certainly the effect on us of the Common Agricultural and Fisheries Policies could be interpreted as attempts - whether deliberate or subconscious - to exercise power over Britain by increasing our dependence on the Continent for our food supplies.

The shambolic and unreliable nature of the European Union's accounts has long been well-known; for many years they concealed fraud, corruption and waste on a grand scale, and the Court of Auditors repeatedly refused to sign them off. Had these been the accounts of a company, they would probably have knocked Enron into a cocked hat. Whistle-blowing Commission officials Bernard Connolly and Paul van Buitenen were vilified and threatened for their courage in exposing what was going on. Mr. Connolly was dismissed, while Mr. van Buitenen was demoted and marginalised, and recently resigned in disgust. Mr. Connolly did us all a favour by writing his book The Rotten Heart of Europe, which gave chapter and verse on his findings and experiences.

Eventually things got so bad that the entire Commission was dismissed in 1999, although this was widely viewed as a cosmetic exercise as most of the Commissioners returned to their jobs shortly afterwards. One of them was British Commissioner Neil Kinnock, who was actually put in charge of reforming the Commission's workings.

The more recent signs do not suggest any improvements. Earlier this year Mrs. Marta Andreasen, the Chief Accountant, tried to expose evidence of yet more fraud and mismanagement, but she claims that, far from being supported, she was sidelined into another job, prevented from presenting her evidence, and made the subject of rumour-mongering.

The EU budget can never be made open and efficient; the vested interests will usually prevail over the seekers after truth and equity. At the very least, the House of Commons should reassert its right and duty properly to scrutinise expenditure of the money Britain pays to the EU, and to withhold monies it believes would be wasted or misused.

Among much other half-truth and misrepresentation, Britain in Europe has in recent advertisements described the Euro as a "common currency".

Readers of Britain, who are better informed, will know perfectly well that the Euro is not a common currency but a single currency, and that there is a world of difference between the two. The former circulates alongside other currencies, whereas the latter is the sole currency in general usage, with usage of other currencies being suppressed.

Britain in Europe are either ignorant of the difference between the two or are wilfully seeking to mislead people; it has to be one or the other. We will have to remain on our guard against misrepresentation of this type should a referendum on giving up the Pound take plate.

*Europe of Many Circles, Richard Body, New European Publications Ltd., 14 Carroun Road, London 5W8 1JT.

This pamphlet, written by Dr. Brian Burkitt and commissioned by the Anti-Common Market League, continues to be available. It provides a powerful case against giving up the Pound for the Euro, for both economic and political reasons.

It is available at the special price of £3.00 (inc. p. & p.) from the Anti-Common Market League, 28 Highdown, Worcester Park, Surrey, KT4 7HZ. Bulk orders are also welcomed: £10.00 for four copies; £12.00 for six copies. Buy a few for your friends!

It's official. England does not exist. Or, at least, it won't if the European Union gets its way. As far as the EU is concerned, England has been divided into nine wholly artificial and unnatural "regions": South East, South West, etc.; nowhere does the name "England" appear on the EU's map. Nor is this simply symbolic; the EU seeks to by-pass Westminster and govern these regions through regional authorities subservient to Brussels.

The Government, by extraordinary coincidence, is also keen on increasing the scope of regional government and having an elected regional assembly in each of these regions. This will be represented as being an extension of democracy; in reality it will be quite the reverse.

To make way for the regional set-up, the role of county councils would be downgraded; some county councils might even be abolished. And those that remained would have their powers substantially curtailed; already the Government is in the process of considerably reducing the powers of county councils in the fields of housing and planning.

Having evolved over centuries, the counties of England have long been accepted as natural units of government and continue to enjoy much affection; they are part of people's identity and self-understanding. One often hears people declaring they are from Derbyshire or Hampshire. While Derbyshire folk will occasionally say they are from "the East Midlands", there can scarcely be a Hampshire man who declares that he is from "the South East region". Only in the North East is there a significant measure of regional identity, although even here local and county identities are also strong.

Some people see advantages in regional government, and it would be quite possible to have regional authorities as part of the governance of a sovereign Britain. But advocates of regionalism need to realise that what is on offer will not give them what they want; instead it will provide puppet authorities which will have to dance to the Brussels tune and compete with each other for the Brussels funding on which they will depend.

As with abolishing the Pound, there is a major obstacle in the Government's way: us, the people. In each region, the elected assembly will only come into being if approved by regional referendum. Referendums will not be held in all regions simultaneously. The first round of polls will take place in two or three regions such as the North East, where the Government will feel more confident of winning; if successful in these, the Government will use its victories as a means of softening up the more recalcitrant regions.

In some regions, notably South West, EU-sponsored "constitutional conventions" have been set up to try to give the impression of support for regional government, although their progress has not been entirely smooth; campaigners in Cornwall who want to run their own affairs are opposing the rule from Bristol which a South West assembly would entail. In the East Midlands, however, a group opposing regional government has formed a constitutional convention of their own. The East Midlands Constitutional Convention recognises that what most people want in this field is the restoration of genuine local government, and has as its principal aim:

The promotion of improved local government of the historic shires, cities and boroughs of the area known as the East Midlands within a Sovereign United Kingdom under the sole authority of the British Crown and Parliament and the laws, customs and rights belonging to the people.

They also say:

We believe that people prefer those local authorities which are the closest to them and with which they have a traditional loyalty and affinity.

Anyone in the East Midlands interested in supporting the EMCC, which is independent of all political parties, should contact George West, 3 Stanford Drive, Groby, Leicester, LE6 OYD. And folk in other regions should support campaigns against regional authorities in their own areas.

Some readers have enquired about Fourth World Review following inclusion in our last issue of extracts from a speech by its Editor, John Papworth. Sample copies are available to readers of Britain from: Fourth World Review, The Close, 26 High Street, Purton, Wilts., SN5 9AE.

Fourth World Review champions human-scale government and "small nations, small communities and the human spirit". It is on this basis that it opposes what its editor variously calls "the Europlot" or "the common markup".

This prize was founded by the Anti-Common Market League in memory of the late Reg Simmerson, a long-standing supporter of our cause, who was particularly known for writing letters to the press. The prize, of £25, is awarded annually to the writer of the published letter which, in the opinion of the Editor of Britain, has done most to promote the anti-EU case.

If you wish to submit a letter (whether your own or someone else's), for the 2002 prize, please send a copy of the published letter, showing date of publication, to the Editor of Britain.

This is a new and updated edition of a pamphlet first published in 1999, with a substantial amount of new material. With eleven chapters covering "eleven big lies", the author catalogues in remarkable detail the "metrickery and mendacity" with which metrication has been surreptitiously foisted upon a largely unsuspecting public, and the ways in which the consumer is being shortchanged through the metric system.

Available from the publishers: British Weights and Measures Association, 45 Montgomery Street, Edinburgh, EH7 5JX £4.00 for one copy; £10.00 for three copies; £18.00 for six copies.

We are here today to celebrate - to celebrate Ten Years Of Freedom from the straitjacket of an interest rate wholly unsuitable for the British Economy.

We saw what happened.

Nigel Lawson, when Chancellor of the Exchequer, began to shadow the Deutschmark in 1987 as a prelude to membership of the Exchange Rate Mechanism in 1990. The ERM, it was argued, would stimulate the British Economy. Supporters claimed business would prosper, not having to worry about exchange rate volatility and we'd all have cheaper mortgages!

Mr. Lawson's shadowing of the Deutschmark led to interest rate cuts and a speculative bubble; this shows what happens when you don't tailor monetary policy to suit your own economy.

Far from what was promised, ERM membership provoked the UK's worst recession in sixty years: thousands of businesses went bust; 120,000 houses were repossessed in two years; 1.75 million homes suffered negative equity. Just when we needed a low interest rate policy, membership of the ERM resulted in the opposite, which made a recession much worse. The ERM, begun in 1979, collapsed across the whole European Community in 1993, only to be resurrected in 1999. Now all States wishing to join the Euro have to join this new ERM first.

As we all know, Mr. Blair would dearly like to abolish the Pound and adopt the Euro. The Single Currency's one-size-fits-all exchange rate and interest rate cannot suit all the Members at the same time - and the more Members there are, the worse it will function. Under the Growth and Stability Pact, Members must not have a budget deficit of more than three per cent of Gross Domestic Product (or Government Debt of more than sixty per cent). Portugal has akeady breached the three per cent limit, and Germany and others threaten to do so.

The Maastricht Treaty provides for fines of one-half per cent of GDP for a budget deficit breach, and two per cent for a debt breach. Two years ago, for the UK this would have amounted to £3.5 billion and £14 billion respectively.

Governments are thereby left with no room for manoeuvre in times of recession, when Government income falls and expenditure rises. However, the Euro is only part of EMU, which stands for Economic and Monetary Union.

Many people, including Hans Tietmeyer, former President of the Bundesbank, have made it clear that the Euro will lead to Members transferring their sovereignty over financial and wage policy. "It is an illusion", he said, "to think that the States can hold on to autonomy over taxation policy". Harmonisation of taxes, in other words; for us this means sharply higher taxes!

Professor MacDougall was asked as long ago as 1977 by the EEC Commission to produce a report on what would happen in the event of a single currency being imposed on the European Economic Community.

He said that either the economically weaker areas would suffer high unemployment and long-term economic stagnation - and we can already see this happening in places such as Portugal - combined with large-scale migration of workers from such areas to the economically stronger areas (not easy given the dirigiste labour markets and lack of a single common language), or there would have to be large-scale financial handouts to the weaker areas from Brussels.

Professor MacDougall pointed out that no federal state exists without a budget of 20 - 25 per cent of its Gross Domestic Product. As long ago as 1995 this would have meant a UK budget contribution of about £140 billion annually. When you consider that our current annual budget contribution of £11.5 billion equates to £1.4 million per hour, you begin to appreciate just how huge the transfers by UK taxpayers would have to be with a contribution of £140 billion. Clearly, vast swathes of government functions (in reality the whole of the public sector) would necessarily have to be transferred to Brussels and dealt with and administered from there. Whitehall would be a branch office and Westminster would be redundant!

We have a lower inflation rate and much lower unemployment than the Eurozone. Why then transfer, as we should have to, our Gold and Currency Reserves to the European Central Bank, to manage not on our behalf, but on behalf of the EU? Even if by luck (since our economy has not converged with that of the Eurozone, and our economic cycle does not coincide with the Eurozone's) the exchange rate and interest rate fixed for us were more or less correct when we abolished the Pound, they would soon be the wrong interest rate and the wrong exchange rate.

A wrong exchange rate would sooner or later create a re-run of our disastrous ERM membership, but this time with NO EXIT. However, Economic and Monetary Union is in reality a political project; its target is to create a state called "The United States of Europe".

Political Union being the objective - it is strange how reticent Mr. Blair is about the real destination, unlike his continental counterparts. EMU means the permanent, irrevocable loss of self-governance. Abolishing the Pound means transferring control of the economy to unelected bankers and bureaucrats. You will no longer be able to elect a Government which can change anything.

To whom will you turn when a recession comes? No use looking to your MP: certainly not to the European Central Bank, whose primary objective is to maintain price stability regardless of ours or anyone else's needs for a higher, or lower, interest or exchange rate.

He who controls the Currency controls the Government, wrote John Maynard Keynes.

Or, in the words of William Gladstone:

The finance of the country is ultimately associated with the liberties of the country. It is a powerful leverage by which English liberty has been gradually acquired. If the House of Commons by any possibility lose the power of control of the grants of public money, depend on it, your very liberty will be worth very little in comparison.

And it remains just as true now.