EU referendum: Leaving EU could lead to ‘less growth’, says Carney – live
- Mark Carney, governor of the Bank of England, has told peers that leaving the EU could lead to lower growth. In evidence to the Lords economic affairs committee, he also defended the Treasury’s report about the long-term implications of Brexit, saying it made “broad sense”, and said the City could lose its status as a a pre-eminent financial centre if the UK left the EU. Carney is still giving evidence, but is now discussing other issues. My colleague Nick Fletcher will be keeping an eye on it in the business live blog.
- Rob Wilson, the civil society minister has urged charities to speak up in the EU referendum debate, despite a warning from the official watchdog that they should only get involved in exceptional circumstances.
- Shadow culture secretary Maria Eagle has accused her opposite number John Whittingdale of “bullying” the BBC over Europe.
- Nicola Sturgeon, Scotland’s first minister, has said public sector bodies will be able to bid to run Scotland’s railway next time the franchises come up for renewal.
- The British government released licences for the export of £7m of arms to Saudi Arabia in the last three months of 2015, taking the total value of such licences since the country entered the civil war in Yemen to £2.8bn.
- Welsh Labour has launched its assembly election manifesto with a “plan for prosperity” the party says will “get the country moving”.
- The former Lib Dem MP John Thurso has been elected to the House of Lords in one of the rare byelections used to fill vacant hereditary slots. Thurso, a viscount, was one of seven candidates in the contest. Only three Lib Dem hereditary peers already in the Lords could vote.
That’s all from me for today.
Thanks for the comments.
Carney says Brexit could lead to lower growth and higher inflation
And this is what Carney said in his opening statement about how Brexit could lead to lower growth.
A vote to leave the EU might result in an extended period of uncertainty about the economic outlook, including about the prospects for export growth. This uncertainty would be likely to push down on demand in the short run.
Uncertainty regarding the supply side of the economy might also increase, reflecting any alterations to product or labour market regulation, adjustments in labour flows or changes in the rate of technology adoption as a result of different arrangements governing foreign trade and capital flows.
A vote to leave could also have significant implications for asset prices. In addition to affecting the exchange rate, a rise in uncertainty could weigh on other asset prices, tightening financial conditions. Rising risk premia, all else being equal, would depress activity.
Any positive impact of a depreciation on activity would need to be set against any net negative impacts (whether on investment, consumption, exports or potential supply) stemming from its underlying cause. There is a range of plausible scenarios including ones where the combined effects of the exchange rate move and its drivers on aggregate demand, aggregate supply and exchange rate pass through lead to a lower path for growth and a higher path for inflation.
Carney says City ‘less likely’ to maintain its pre-eminent position if UK leaves the EU
In his evidence Carney has just said London would be “less likely” to retain its position as a pre-eminent financial centre if the UK left the EU.
But exactly what would happen would depend on the withdrawal renegotiatons, he said.
He said the City’s standing was “unlikely to be enhanced”.
Carney says uncertainty created by referendum seems to have had negative effect already
In his opening statement to the committee Carney said the uncertainty generated by the EU referendum was already seemed to be having a negative effect on the economy.
Here is the passage in full.
[The Bank of England’s financial policy committee] noted [at its most recent policy meeting] that pressures associated with the Referendum have the potential to reinforce existing vulnerabilities in relation to financial stability, including risks emanating from the very high current account deficit, property markets, market liquidity, and possible negative spillovers to the rest of the EU.
Some elements of these risks may be beginning to manifest.
Since November, the trade-weighted value of sterling has fallen 10%, with more than half of that occurring since the MPC’s last forecast in February.
The cost of buying protection against a marked depreciation of sterling has risen notably, with sterling risk reversals falling to their lowest level in over a decade.
UK short-term interest rates have fallen by around 60bps since November.
The equity prices of UK-focussed firms have underperformed by around 10% those with a more global orientation since the middle of February.
The Bank’s indicator of uncertainty has increased by 1.5 standard deviations, which on past relationships would be associated with a marked reduction of the rate of GDP growth.
Commercial real estate transactions have fallen by around 40% in the first quarter across the country and by around 60% in London.
Such developments reflect a growing uncertainty about the UK’s macroeconomic outlook. As the MPC has observed, there might be some softening in growth during the first half of 2016 as a result, but, given Referendum effects, “the Committee is likely to react more cautiously to data news over this period than would normally be the case.”
Carney says leaving the EU could lead to ‘less growth’ in the short term
Here is that last Carney quote in detail.
He was asked if the risk to funding the current account deficit would increase, depending on the outcome of the referendum.
These are balances of probability, but the likelihood is that it will become more expensive to fund that deficit [if the UK leaves the EU] and, with a shift in the structure of it, it may mean that for a period the UK economy cannot run as large a current account deficit, which means – it means that there would be less activity in the economy, less growth.
He was asked whether an increase in interest rates like this would be dangerous. He replied:
It would unhelpful. It would be pro-cyclical. It would reinforce the slowdown.
Updated at 4.35pm BST
Carney says leaving the EU could damage growth
Q: Do you think the risk of funding the current account deficit could increase if we left the EU?
Carney says it would be more expensive to fund the deficit.
That means the government would not be able to run such a high deficit.
And that could damage growth, he says.
Q: That would be dangerous, wouldn’t it?
Carney says it would not be helpful.
- Carney says leaving the EU could damage growth.
Updated at 4.35pm BST
Carney says Brexit would lead to UK being less integrated with EU
Carney says it is safe to say that the degree of integration with the rest of the EU would be reduced as a result of renegotiation, were the UK to leave.
But the extent of that is something that would have to be determined, he says.
- Carney says Brexit would lead to UK being less integrated with EU.
Carney says Treasury’s EU report is the product of a ‘sound economic process’
Carney is now taking questions.
Q: What did you make of the analysis published by the Treasury yesterday?
Carney says he would not mistake an analysis like that for a forecast.
The analysis is primarily valuable for what it says about the direction of an economic impact, he says.
He says he read the report last night. He has not audited the report. And the Bank of England was not involved in writing it.
He says the only other comment he would make is that the analytic framework used, using gravity models layered through other models, is “a sound economic process”.
He says the conclusions are consistent with the Bank of England’s assessment of the value of openness to the UK economy – an approach the country has followed since the repeal of the Corn Laws.
- Carney says Treasury’s EU report is the product of a “sound economic process”.
UPDATE: This is from Sky’s Ed Conway.
Updated at 4.02pm BST
Carney says whatever the outcome of the referendum, the Bank will use its powers to control inflation.
Carney says the Bank’s financial policy committee concluded recently that the risks associated with Brexit pose the most significant near-term risks to financial stability.
He says there is evidence this has already happened.
The pound has fallen in value by 10% since November, he says.
Mark Carney says the Bank of England has not made and will not make any assessment of the costs and benefits of leaving the EU.
But he says the Bank does have a duty to assess risks. And it has a duty to report this information to parliament. This does not amount to getting involved in politics, he says.
He says the Bank published a report on EU membership last year. It said EU membership had reinforced the dynamism of the UK economy. That judgment is grounded in evidence, he says.
He says gravity models show EU membership contributes positively to trade, even allowing for the size of the country involved.
Being a member of the EU also contributes to inward investment, he says. And he says the UK economy has maintained a flexible labour market despite being a member of the EU.
Mark Carney gives evidence to the Lords economic affairs committee
Mark Carney, the governor of the Bank of England, is giving evidence to the House of Lords economic affairs committee.
He gives evidence to the committee every year.
I will be posting anything he has to say about the EU referendum, but my colleague Nick Fletcher will be covering what he says about banking and the economy generally on the business live blog.
Why Michael Gove hates the EU
As the Press Association reports, Michael Gove got his geography muddled up in the Q&A after his speech when he was talking about fishing.
Asked about the impact of Brexit on the fishing industry, he replied:
Some in this audience might know that my father inherited a fish merchant’s business in Aberdeen from my grandfather and that business went to the wall, partly as a result of the common fisheries policy.
The common fisheries policy essentially gave other European Union nations unfettered access to our fish stocks and – I would hope – that if we leave the European Union we can once more see the ports of Peterborough and Fraserhead and Grimsby flourishing, because we will take back control of our territorial waters.
I recognise that fishing is perhaps not the most high employment industry in this country, but it’s a symbol of what we lost when we entered the EU, control over national resources that if we retained them we could have husbanded in our interest and indeed in the interest of others.
As the Press Association reports, Gove “was mocked on Twitter after stumbling over the names of two Scottish ports – referring to Peterborough and Fraserhead rather than Fraserburgh and Peterhead.”
The anecdote about his father’s business is important because it helps to explain why Gove has hated (and that’s probably the right word, if his wife is to be believed) the EU all his adult life.
This is what he said about his father’s business in a recent interview in the Sunday Times (paywall).
Because of the common fisheries policy my dad’s business went to the wall. That has a profound impact, seeing something that your family have worked to create and build up suddenly taken away.
- A British exit from the European Union could spark, “the democratic liberation of a whole continent”, as other member-countries follow Britain’s example and throw off the shackles of Brussels, the justice secretary, Michael Gove, argued in a speech on Tuesday. As Heather Stewart reports, Gove said that if voters chose to leave the EU in June’s referendum, it would be a reassertion of the system of democratic self-government pioneered by Britain and copied all over the world. “Democratic self-government has manifestly brought benefits to India, Japan, Norway, Switzerland, South Africa, South Korea and scores of nations all making their way in the world. Indeed the truth is that it is membership of an organisation like the European Union which is an anomaly today.” He compared the EU, with what he called its “mock parliament”, to sprawling and ultimately unsustainable regimes throughout history, from the Ottoman empire to tsarist Russia; and claimed that by leaving, Britain would force the EU to reinvent itself.
- Philip Hammond, the foreign secretayr, told MP that British warplanes and battleships could be deployed to counter Islamic State (Isis) in Libya although frontline fighting is not expected for UK troops. As the Press Association reports, Hammond said it is “quite possible” the fledgling government of national accord (GNA) would request air and naval support to combat IS, also referred to as Daesh, as it will not be able to develop its own forces of this nature. Hammond added no request or talks on such a military deployment have taken place but he said the UK would consider the idea if it is proposed and indicated MPs would be allowed a vote. His refusal to rule out air and naval operations in the region came after he insisted there is “no appetite” in Libya for foreign combat troops on the ground.
- The Department for Work and Pensions may be forced to disclose details of secret investigations into the suicides and other deaths of benefit claimants, after a successful tribunal appeal.
- William Hague, the former foreign secretary, has defended Barack Obama’s right to make clear during his visit to Britain later this week that it is “unambiguously” in American interests for the UK to remain in the European Union. Writing in his Daily Telegraph column, he said:
The president has the right wherever he is to explain what is in the interests of the United States of America. And since the US is our one indispensable ally, our biggest single trading partner and the ultimate guarantor of our security, its interests matter to everyone in Britain whether we like it or not.
When Obama gives his hint, nudge, direct appeal or whatever he chooses to say on Friday, it will not be on some vague basis that it would be handy if Europe had one phone number. His comments will reflect the analysis of all the foreign policy advisers to this Democrat administration, and indeed to the previous Republican one, that it is, unambiguously, in the interests of the United States that Britain stays in the EU.
My colleague Alan Travis has written a Reality Check on immigration, which asks whether a points-based immigration system would be a good idea. Here’s an excerpt.
Question: What about an Australian-style points-based immigration system for all EU migrants as Gove now suggests? Wouldn’t that “win back control” of Britain’s borders?
Answer: Britain already operates an Australia-style points system for non-EU migrants but anti-EU campaigners seem strangely unaware of its existence. It means that skilled migration to Britain from outside Europe is capped at 20,700 a year, and from this month such people cannot settle in the UK unless they are in a job earning £35,000 a year or more. Extending it to EU citizens would apply as much as to the 500,000 Irish community in Britain as to those of any other EU state.
And here is Tim Farron, the Lib Dem leader, on Michael Gove’s speech.
Here is the writer and former political journalist Robert Harris on Michael Gove’s speech.
Here is Britain Stronger in Europe’s take on Michael Gove’s speech.
My colleague Owen Jones has written a response to Michael Gove’s speech, based on the excerpts released overnight. He wonders who “other than the terminally disingenuous and the chronically mischievous, can convincingly argue that the Vote Leave campaign is doing anything other than infantilising the electorate, of waging a quite frankly sinister campaign of fear?”
Gove’s speech – Snap verdict
Gove’s speech – Snap verdict: Speeches matter. They receive a minuscule amount of attention compared to TV soundbites and newspaper headlines, and you have to be a fairly hardcore political obsessive to read them in full, but nevertheless they are where arguments get created and refined and promoted. And, by some mysterious political alchemy, arguments can lead to change.
So this was an important event. It was probably the longest, most wide-ranging and most intellectually robust speech we’ve had during the referendum campaign from the Leave camp. In overall seriousness, the only thing that came close was David Davis’s speech on life after Brexit in February. Davis showed he was engaged in a heavy-weight exercise by include graphs. Gove achieved the same effect by including 54 footnotes.
And Gove’s speech was also very well-written, as you would expect from a former Times columnist. There was at least one laugh-out-loud moment when he delivered it.
But what about the content? Those arguing for Britain to leave the EU tend to focus on three arguments: sovereignty (the UK should be free to govern itself); immigration (it needs the power to exclude EU migrants); and growth (it could be better off outside the EU). Gove, who despite being Scottish seems at heart to be a romantic English Roundhead, was at his best on sovereignty, and on the glories of “democratic self-government”, and those passages were quite stirring.
At times he also did sound like the leader of the Leave movement. In news terms, one of the most interesting things he said was about how the UK would not need to conclude withdrawal negotiations within two years, because it would be possible – and sensible – to delay triggering article 50 for quite some time. (Jon Cunliffe, deputy governor of the Bank of England, also suggested last month in evidence to MPs that it would be a mistake to rush into invoking article 50.)
But on immigration and on growth Gove was less persuasive. On both issues the Leave camp have to address what is essentially the same question: why would the EU grant the UK a free trade deal with all the advantages of the status quo, and without forcing the UK to accept free movement? Gove did address this question, essentially by saying that it would be in the interests of EU states to agree. But there is a strong element of wishful thinking in this. Gove did not really address the points about non-tariff barriers and the single market that Nick Robinson raised on the Today programme this morning (see 9.34am), and his assertions about trade did not answer the multiple concerns raised by Lord Mandelson in his EU trade speech (one of the other two or three really important speeches of this campaign). And Gove could not answer the question George Osborne put on the Today programme yesterday: why would Germany and France agree to giving the UK an EU-relationship deal that would be better than the one they’ve got themselves? If EU states were to agree to this, there would be no point in any of the other 27 states staying in.
Gove probably would not mind. Although he did not say so explicitly, his peroration implied that he would like Brexit to lead to the collapse of the entire EU. (See 12.11pm.) That may appeal to many of the EU’s critics but it is unlikely to boost relations with Brussels if Gove ever finds himself playing a leading role negotiating withdrawal in the event of a vote to leave.
Updated at 2.48pm BST
Q: Were you offended yesterday when George Osborne described members of the Leave camp as “economically illiterate”?
No, says Gove. He says Osborne has said much worse about him, in public and in private.
And that’s it. The speech is over.
I will be posting a summary and reaction shortly.
Q: David Cameron says he will trigger article 50 immediately. Is he lying?
Gove says there would be no need to trigger article 50 immediately. When Greenland left the EU, it did not trigger article 50 at all.
Q: Do you feel the government is stacking the odds against the Leave side?
Gove says he did not think the spending on the government’s EU rules was a good use of money. But he is not going to complain about the rules. He pays tribute to David Cameron for letting ministers campaign for Brexit.
Q: Has the report into extremism in prisons been shelved by Number 10?
Gove says this will be published in due course.
Gove says the Leave camp have a “full spectrum argument”, covering all topics.
He says he thinks Britain could be stronger outside the EU. He will give a speech on this subject in due course.
Q: What would happen to the fishing industry if we left the EU?
Gove says this subject is very close to his heart. His father inherited a fishing business from Gove’s grandfather. But that business went to the wall, partly because of the common fisheries policy.
Q: Are there any other countries that have their cake and eat it in the way you are suggesting, by having access to the single market but not being subject to its rules?
Gove says that there are countries that thrive outside the EU. He does not think Germany would want its car manufacturers to stop having access to the UK market.
Q: Is it your policy to leave the single market, and therefore to leave the EEA, and therefore not to have access to the single market for banking services?
Gove says it is Leave’s policy to have access to the free trade area. He says the ingenuity of the City will ensure the financial services sector continues to thrive.
Gove is now taking questions.
Q: What would our trade relations look like? And are you ruling out being part of the single market?
Gove says he is proposing that the UK would be part of a free trade area covering the whole of Europe. And it would have access to the single market.
Gove says Brexit could be start of ‘democratic liberation of a whole continent’
Gove is now winding up.
For Europe, Britain voting to leave will be the beginning of something potentially even more exciting – the democratic liberation of a whole Continent.
If we vote to leave we will have – in the words of a former British Prime Minister – saved our country by our exertions and Europe by our example.
We will have confirmed that we believe our best days lie ahead, that we believe our children can build a better future, that this country’s instincts and institutions, its people and its principles, are capable not just of making our society freer, fairer and richer but also once more of setting an inspirational example to the world. It is a noble ambition and one I hope this country will unite behind in the weeks to come.
Gove says, if Britain were to leave the EU, other EU countries would realise an alternative approach is possible.
What will enrage, and disorientate, EU elites is the UK’s success outside the Union. Regaining control over our laws, taxes and borders and forging new trade deals while also shedding unnecessary regulation will enhance our competitive advantage over other EU nations. Our superior growth rate, and better growth prospects, will only strengthen. Our attractiveness to inward investors and our influence on the world stage will only grow.
But while this might provoke both angst and even resentment among EU elites, the UK’s success will send a very different message to the EU’s peoples. They will see that a different Europe is possible. It is possible to regain democratic control of your own country and currency, to trade and co-operate with other EU nations without surrendering fundamental sovereignty to a remote and unelected bureaucracy. And, by following that path, your people are richer, your influence for good greater, your future brighter.
So – yes there will be “contagion” if Britain leaves the EU. But what will be catching is democracy.
Gove calls for points-based immigration system
Gove says he would like the UK to have an Australian-style points-based immigration system.
I think we would benefit as a country if we had a more effective and humane immigration policy, allowing us to take the people who would benefit us economically, offering refuge to those genuinely in need, and saying no to others.
And my ambition is not a Utopian ideal – it’s an Australian reality.
Instead of a European open-door migration policy we could – if a future Government wanted it – have an Australian points-based migration policy. We could emulate that country’s admirable record of taking in genuine refugees, giving a welcome to hard- working new citizens and building a successful multi-racial society without giving into people-smugglers, illegal migration or subversion of our borders.
Gove says yesterday’s Treasury report “is an official admission from the In campaign that if we vote to stay in the EU then immigration will continue to increase by hundreds of thousands year on year.”
Gove says being in the EU means the UK has lost control of immigration.
At the moment any EU citizen can come to the UK to settle, work, claim benefits and use the NHS.51 We have no proper control over whether that individual’s presence here is economically beneficial, conducive to the public good or in our national interest. We cannot effectively screen new arrivals for qualifications, extremist connections or past criminality. We have given away control over how we implement the vital 1951 UN Convention on asylum to the European court. We cannot even deport convicted murderers.
Further, there are five more countries – Albania, Macedonia, Montenegro, Serbia and Turkey – in the queue to join the EU – and the European Commission, as we have just experienced ourselves during the recent negotiation process, regards ‘free movement’ as an inviolable principle of EU membership.
Gove says British business would benefit from being outside EU regulations.
The cost of EU regulation on British companies has been estimated by the independent think tank Open Europe at about £600 million every week.
Now some of those costs are incurred in a good cause.
But many EU regulations – such as the Clinical Trials Directive, which has slowed down and made more expensive the testing of new cancer drugs, or absurd rules such as minimum container sizes for the sale of olive oil, are clearly not wise, light-touch and proportionate interventions in the market.
Gove says that, even though some of the UK’s contribution to the EU returns to this country, the money could be better spent by Westminster.
I also acknowledge that some of the money we send over we get back – whether in support for farmers or scientists – although we don’t control exactly where it goes. And we don’t know how efficiently that money is allocated to those who really need it because of the opaque nature of the EU’s bureaucracy.
Indeed there’s a lot of evidence the money sticks to bureaucratic fingers rather than going to the frontline.
The physicist Andre Geim, the genius who won the Nobel prize for his work on graphene, said of the EU’s science funding system, ‘I can offer no nice words for the EU framework programmes which … can be praised only by Europhobes for discrediting the whole idea of an effectively working Europe.’
Gove says UK contributions to EU due to go ‘up and up and up’
Gove turns to the advantages of not having to contribute to EU membership.
If we left the EU we would take back control over nineteen billion pounds which we currently hand over every year – about £350 million each and every week.
Now it is true that we get some of that money back – £4.4 billion through a negotiated rebate – and £4.8 billion in money the EU spends in this country on our behalf.
But it is also vital to note that the amount we give to the EU is due to go up – and up – and up.
From £19.1 billion this year to £20.6 billion in 2020-21. Since 1975, we have already sent the staggering sum of over half a trillion pounds to Brussels. If we vote to stay we will send about another £200 billion to Brussels over the next decade.
Gove says after leaving the EU it would be easier for the UK to negotiate trade deals.
An independent Britain could choose to strike free trade agreements with emerging economies and lower tariffs, extending new opportunities to developing nations and in the process, allowing prices in Britain to become cheaper.
And Gove rejects the claim that the the EU would only agree a free trade deal with the UK if it agreed to accept free movement.
It is sometimes claimed that we will only get free trade if we accept free movement. But the EU has free trade deals with nations that obviously do not involve free movement. You do not need free movement of people to have free trade and friendly co-operation.
Gove rejects claims EU states would want to punish UK
Gove rejects claims EU states would want to punish UK for leaving.
It has been suggested that, in a fit of collectively-organised and intensively-sustained international pique, all 27 nations of the EU would put every other priority aside and labour night and day for months to bury their own individual differences and harm their own individual economic interests just to punish us.31
Now I accept that some in the Brussels elite will be cross at our temerity in refusing to accept their continued rule.
But the idea that the German government would damage its car manufacturers – and impoverish workers in those factories – to make a political point about Britain’s choices; or the French Government would ignore its farmers – and damage their welfare – to strike a pose; or the Italian Government would undermine its struggling industries just to please Brussels, is ridiculous.
Gove says it would be in the interests of EU states to maintain a free trade deal with the EU.
As our European friends adjust to the referendum result they will quickly calculate that it is in their own interest to maintain the current free trade arrangements they enjoy with the UK. After all they sell far more to us than we do to them. In 2015, the UK recorded a £67.7 billion deficit in the trade of goods and services with the EU, up from £58.8 billion in 2014.
German car manufacturers, who sell £16.2 billion more to us each year than we sell to them, will insist their Government maintains access to our markets.28 French farmers, who sell us £1.37 billion worth of wine and other beverages, £737 million more than we sell to them, will insist on maintaining access to our supermarkets.29 Italian designers, whose fashion houses sell the UK £1.0 billion of clothes will similarly insist on access to our consumers.
Gove says UK would not have to negotiate EU withdrawal in 2 years
Gove is now discussing what would happen if the UK were to vote to leave.
The leader of the In campaign, Stuart Rose, has acknowledged that there will be no turbulence or trauma on Independence Day. “Nothing is going to happen if we come out … in the first five years, probably,” he confessed, and admitted “There will be absolutely no change.”
And just as it is the case that when Britain votes to leave nothing in itself changes overnight, so the process and pace of change is in our hands. There is no arbitrary deadline which we must meet to secure our future – and indeed no arbitrary existing “model” which we have to accept in order to prosper.
It has been argued that the moment Britain votes to leave a process known as “Article 50” is triggered whereby the clock starts ticking and every aspect of any new arrangement with the EU must be concluded within 2 years of that vote being recorded – or else…
But there is no requirement for that to occur – quite the opposite.
Logically, in the days after a Vote to Leave the Prime Minister would discuss the way ahead with the Cabinet and consult Parliament before taking any significant step.
Preliminary, informal, conversations would take place with the EU to explore how best to proceed.
It would not be in any nation’s interest artificially to accelerate the process and no responsible government would hit the start button on a two-year legal process without preparing appropriately.
- Gove says UK would be able to take more than two years to negotiate withdrawal from the EU. There would be no need to trigger article 50 (which starts the clock ticking on the two year deadline) immediately, he says, and it would be sensible to delay.
And, cleverly, Gove quotes Dominic Grieve – who was on the Today programme this morning criticising him – to reinforce his case.
The [ECJ] has rejected deals on human rights which the EU nations agreed at the time of the Lisbon Treaty.20 It has also overridden the deal that the Danes did with the EU on citizenship in 1992.
We know that it is entirely up to the European Court itself how to interpret the terms of our recent new deal – there is no appeal and nothing we can do about its decisions, just as there was nothing we could when it sank our supposed opt-out from the Charter.
Don’t just take it from me. The former Attorney General – and In campaigner – Dominic Grieve said only last year: “the European Court of Justice in Luxembourg has predatory qualities to it that could be very inimical to some of our national practices”.
Gove attacks the influence of the charter of fundamental rights.
The European Court now has the perfect legal excuse to grab more power – the Charter of Fundamental Rights, which goes even further than the older post-war European Convention on Human Rights.
Of course, we were promised that we had a cast-iron opt-out. The Blair Government originally said the Charter would have all the force in our law of ‘The Beano’. In which case Dennis the Menace must be the single most powerful figure in European jurisprudence, because the ECJ has now informed us that our opt-out was worthless and has started making judgments applying the Charter to UK law.
The ECJ can now control how all member states apply the crucial 1951 UN convention on asylum and refugees because the Charter incorporates it in EU law. So Britain has lost control of a vital area of power and the European Court will increasingly decide how our policy must work.
Gove says Cameron has failed to protect UK from ever closer union
Gove says he wants to explain the risks of staying before explaining what would happen if the UK were to leave.
If we vote to stay, the EU’s bosses and bureaucrats will take that as carte blanche to continue taking more power and money away from Britain.They will say we have voted for ‘more Europe’. Any protests on our part will be met with a complacent shrug and a reminder that we were given our own very special negotiation and our own bespoke referendum and now we’ve agreed to stay and that’s that. Britain has spoken, it’s said “oui” and now it had better shut up and suck it up. In truth, if we vote to stay we are hostages to their agenda.
And he says David Cameron’s EU renegotiation has not protected the UK from ever closer union.
Deleting the phrase ‘ever closer union’ offers no protection.
It’s a fact that as a phrase – or doctrine – in its own right, ‘ever closer union’ has only been cited in 0.19% of cases before the ECJ and has not been relevant to any of the ECJ’s seminal judgments that expanded its power.8
The In camp cannot name a single decision of the court that would have been decided differently had the phrase never been in the Treaties. The Court has the power and freedom to interpret the Treaties as it wishes – which is always in the service of greater European integration, regardless of what our deal might say about “ever closer union”. The inclusion of the phrase has not been a driving factor in the EU’s expansion. Removing it makes no difference and will not stop the next EU power grab.
Gove says Remain are wrong. If the UK left, Britain could begin “a happy journey to a better future.”
Gove mocks the Remain camp for what they say about what would happen to the UK if Britain left the EU.
The City of London would become a ghost town, our manufacturing industries would be sanctioned more punitively than even communist North Korea, decades would pass before a single British Land Rover or Mr Kipling cake could ever again be sold in France and in the meantime our farmers would have been driven from the land by poverty worse than the Potato Famine. To cap it all, an alliance of Vladimir Putin, Marine Le Pen and Donald Trump, emboldened by our weakness, would, like some geopolitical equivalent of the Penguin, Catwoman and the Joker, be liberated to spread chaos worldwide and subvert our democracy.
I sometimes think that the In campaign appears to be operating to a script written by George R.R Martin and Stephen King – Brexit would mean a combination of a Feast for Crows and Misery.
Updated at 11.44am BST
Gove compares EU to failing historical empires
Gove compares the EU to failing historical empires.
The former President of the Commission himself, Manuel Barroso, likes to describe the EU as an ‘empire … because we have the dimension of empires’.2 The facts suggest he has a point though not quite the one he intended.
It is a fact that the EU is a multi-national federation with no democratically elected leader or Government, with policies decided by a central bureaucracy, with a mock parliament which enjoys no popular mandate for action and with peripheries which are either impoverished or agitating for secession.
It’s a fact that also describes Austria-Hungary under the Habsburgs, the Russian Empire under Nicholas the Second, Rome under its later Emperors or the Ottoman Empire in its final years.
It is hardly a model for either economic dynamism or social progress. Which is why we should not be surprised that the countries of the EU are proving neither particularly economically dynamic or socially progressive.
Gove says self-government is ‘a roaring success’
Gove says the In camp keep asking what Britain would be like outside the EU, “as if the idea of governing ourselves is some extraordinary and novel proposition that requires a fresh a priori justification.”
There is nothing unusual about self-government, he says.
Democratic self-government, the form of Government we in Britain actually invented, has been a roaring success for most of the nations who’ve adopted it. While we enjoyed democratic self-government we developed the world’s strongest economy, its most respected political institutions, its most tolerant approach towards refugees, its best publicly funded health service and its most respected public broadcaster.
Michael Gove’s speech
Michael Gove is starting his speech now.
He says the case for staying in the EU is couched in negative terms. But the case for Out is positive.
The In campaign want us to believe that Britain is beaten and broken, that it can’t survive without the help of Jean-Claude Juncker and his Commission looking after us and if we dare to assert ourselves then all the terrors of the earth will be unleashed upon our head. It treats people like children, unfit to be trusted and easily scared by ghost stories.
Michael Gove will be starting his speech soon.
And it may go on for a while, if the Sun’s Harry Cole is right.
Michael Gove is due to deliver his speech in Westminster soon.
Britain Stronger in Europe are staging a stunt outside.
Alan Johnson, chair of Labour In for Britain, has put out a statement accusing Michael Gove of ignoring the evidence about the economic impact of Brexit. He said:
Michael Gove wants to wish away reality, but the truth is every credible independent forecaster says Brexit will hurt our economy. The fact is Britain is better off remaining in the EU and no amount of false promises and bluster from the leave camp can change that.
Reports from the IMF, the LSE, Oxford Economics the CBI and others all show how important it is to jobs and our economy to remain in the EU. But it’s vital for workers’ rights, protecting our environment and keeping our social protections too – all issues that the Leave campaign have no credibility on and no interest in.
The Royal College of Midwives has come out in favour of Britain staying in the European Union, arguing that a Remain vote in the June 23 referendum would be “better for women and better for midwives”. The EU “protects and supports important safeguards both for the midwifery profession and for the public” and has a “vital role to play in ensuring decent and safe working conditions” as well as supporting the vibrant economy which allows the government to invest in the NHS, the RCM said in a statement.
I started in a bit of a rush today and so my first post did not contain the day’s agenda. It does now. But you may need to refresh the page to get it to appear.
In his Today interview Michael Gove cited Open Europe as an example of an organisation that has said the UK could benefit from being outside the EU. (See 9.34am.)
As the Times’s Sam Coates points out, Gove overlooked the fact that Open Europe said the UK would only prosper outside the EU if it continued to keep immigration at a relatively high level.
Gove also arguably misrepresented Open Europe because, although it said the UK could see GDP growing by 1.6% as a result of leaving, it also said it was possible that GDP could shrink by 2.2%. The forecast is fairly evenly balanced, but the report suggests the risks of a negative outcome are higher.
Updated at 10.42am BST
Gove ‘simply wrong’ about impact of EU on intelligence agencies, says former attorney general
In his Today interview Michael Gove said that the European court of justice was now restricting what the intelligence services can do. He will go further in the speech he will deliver later, at 11.30am. According to an extract released in advance Gove will say:
The ECJ has recently used the charter [of fundamental rights] to make clear that it can determine how our intelligence services monitor suspected terrorists. How long before the ECJ starts undermining the Five Eyes intelligence sharing agreements that have been a foundation of British security since 1945 and which are the source of jealousy and suspicion in Brussels?
It seems to have been this point that prompted Dominic Grieve, the Conservative MP and former attorney general who chairs parliament’s intelligence and security committee, to let rip against Gove in his own Today interview. Grieve is voting to stay in the EU.
As I said earlier, Grieve’s intervention is significant because, as a QC, he can speak on legal matters with more authority than Gove. Gove is justice secretary and lord chancellor, but he is not a lawyer. As attorney general Grieve was the government’s most senior legal adviser.
Here are the key points.
- Grieve said Gove was “simply wrong” to claim that the European court of justice was preventing the intelligence services from doing their job. Gove did not understand EU law properly, he said.
I thought the examples [Gove] provided were unfounded, and indeed untenable. For example, his suggestion that the European court of justice was interfering with the ability of our intelligence services to do their work is simply wrong. There has never been any suggestion from our Five Eyes partners [the US, Canada, Australia and New Zealand] that they are concerned the European court of justice might make it impossible for us to cooperate. I cannot think of any instance in which there has been a case that could undermine that cooperation …
I think he’s labouring under a very serious misunderstanding about the European Union. The court of justice of the European Union is there to interpret the treaties. The treaties don’t cover national security.
I accept it is possible that you can have some areas of overlap. There has been the recent case bought by his colleague and my colleague David Davis, who also wants to leave the EU, invoking the EU in respect of data privacy, although that case is not yet determined in Europe … These are far removed from interfering with our intelligence relationships. Even if that judgment were to go against the government, it would not make it impossible. It would simply require a change to the law we are currently enacting in parliament.
- Grieve said Gove has a track record of coming out with false claims about the EU.
The problem I have with what Michael says is that he has had a fairly consistent pattern since the start of this referendum campaign of coming out with statements which simply don’t bear proper scrutiny.
He alleged that the prime minister’s Brussels agreement wasn’t worth the paper it’s written on, and no international lawyer has agreed with him. Indeed, I don’t think his own department would agree with him on that.
- Grieve said Gove was wrong to claim that the UK can no longer exclude EU citizens from the country. He said:
I think you’ll find that if you ask the home secretary she will tell you that she has excluded a very large number of EU nationals … It does not happen very often, but if she has a need to do it, she can.
Updated at 10.13am BST
Gove’s Today interview – Summary
Here are the key points from Michael Gove’s Today interview, including from his introductory three-minute mini-PPB.
Although Gove put in a confident performance – he is one of the very best debaters in UK politics – some of his answers, particularly on economics, left quite a lot to be desired. For example, he had no plausible answer to the points Nick Robinson was making about non-tariff barriers and what French and German ministers are saying about trade. His response to the question about all major economic organisations saying the UK would be poorer if it left the EU was also fairly weak.
- Gove claimed that the British rebate could be cut if we remain in the EU. He said:
The rebate isn’t in any of the treaties. If we vote to remain there is a real risk that our rebate could be whittled away. It would be open to other EU nations to seek to reduce it. And as other EU countries join, then the amount of money that the other countries would expect us to pay in would inevitably rise.
- He indicated that he did not want the UK to remain in the single market. Asked if the UK would be in the single market if it left the EU, he said it would be part of a free trade area. This seems to rule out the UK choosing the “Norway option” – retaining access to the single market as a member of the European Economic Area. Robinson put it to him that this would allow EU countries to use non-tariff barriers to keep out British competitors (ie, regulations designed to stop outsiders getting business) but Gove dismissed this argument, claiming that it would not be in the interests of countries like France and Germany to do this. When Robinson pointed out the French and German finance ministers have said British trade would suffer if it left the EU (see here and here), Gove dismissed this argument too, claiming that he knew what was in their countries’ interests. In his opening statement Gove said trade would benefit if the UK left the EU.
The EU has failed to secure trade deals with the huge economies of India, China and America. Outside the EU, we can cut those deals. Outside the EU, we’d still benefit from the free trade zone which currently stretches from Iceland to the Russian border, but we wouldn’t have all the EU regulations which cost our economy £600m every week.
- He said he was not proposing that the UK replicate the kind of trade deal that Canada has with the EU. Britain should get its own deal, he said.
One of the things about the different models that different countries have is it proves there is no single model that Britain has to accept which is a currently existing alternative.
Yesterday the Treasury used an assumption that the UK would have a Canadian-type deal to justify its claim that GDP would be 6.2% lower by 2030 if the UK left the EU.
- Gove said he did not accept that all experts say leaving the EU would lead to a short-term shock, and a long-term cost to the economy. He said an Open Europe report said the UK could benefit from being outside the EU. And, when it was put to him that organisations like the IMF, the World Bank, the OECD and the Bank of England all warned about the economic impact of Brexit, he said they were countered by people like Nigel Lawson, the former chancellor, Digby Jones, the former CBI director general, Simon Wolfson, the Next chairman, and John Longworth, the former BCC director general. (This table lists all the economic bodies which have published forecasts suggesting Brexit would harm the economy. As it shows, Open Europe’s report did say the UK could gain from leaving. But it also suggested that it was more likely that leaving would harm the economy.)
- Gove accused the In camp of suggesting the UK was “too small and weak” to flourish outside the EU. This is what he said in his opening statement.
Britain is a great country, it’s the world’s fifth largest economy with the world’s best armed forces, best health service and best broadcaster. We’re first in the world for soft power, thanks to our language, culture and creativity. And yet the In camp try to suggest that we’re too small and too weak, and our people are too hapless and feckless to succeed without Jean-Claude Juncker looking after us. That’s a deeply pessimistic and negative vision.
- He said if the UK stayed in the EU, we would be like “hostages locked in the back of the car driven head-long towards deeper EU integration”. This is what he said in his opening statement.
I want us to vote to leave the EU before it’s too late because that’s the safer choice for Britain. If we vote to stay we are not settling for a secure status quo, we are voting to be hostages locked in the back of the car driven head-long towards deeper EU integration. Brussels has already set out some of its plans for the next great transfer of powers to the EU in what’s called the five presidents report. The EU is clear; it wants more power over our taxes and our banks.
- He said the European court of justice was now restricting what the intelligence services can do. In his opening statement he said:
The court has been strengthened recently, through the new charter of fundamental rights. It can now control how we apply asylum rules, how our intelligence services monitor suspected terrorists, and even who we can deport. And just as we’re losing all this power we are also on the hook to pay more money to the EU, as new countries join the union. But if we were to leave, we can take back control.
- He proposed a points-based immigration system. This is a long-standing Ukip proposal.
Updated at 7.27pm BST
Grieve says Gove was wrong to say the UK cannot exclude EU citizens.
If you ask the home secretary, Theresa May, you will find she has excluded many, she says.
And that’s the end of the Grieve interview.
It was a formidable take-down. Grieve was never a cabinet minister, but he is a QC. Gove by trade is a journalist. On legal matters Grieve has more authority.
I will post a summary with full quotes soon, but the Gove one is coming first.
Grieve says he accepts that there may be some grey areas relating to the competence of the European court of justice.
But he says the examples cited by Gove are not supported by evidence.
Gove seems to be motivated by “single issue obsession”, he says.
He says Gove “cannot see the wood for the trees’.
Grieve says Gove has been making a series of wrong statements about the EU.
For example, he says that Gove was wrong when he claimed that the prime minister’s EU renegotiation did not have legal force.
Grieve says Gove is ‘simply wrong’ about the impact of the ECJ on intelligence
Dominic Grieve, the Conservative former attorney general is on the Today programme now.
He says Michael Gove was “simply wrong” to suggest that the European court of justice is interfering with intelligence gathering.
He suggests Gove does not understand how the European court of justice operates.
Here is some Twitter comment on Michael Gove’s Today interview.
From the New Statesman’s George Eaton
From the Sunday Times’s Tim Shipman
From the Guardian’s Michael White
From the Guardian’s Rafael Behr
From Bloomberg’s Robert Hutton
From the former Guardian journalist David Gow
Q: You say if we stay we cannot retain control over our justice system and our immigration system. So if we vote to stay, you should resign as justice secretary?
Gove says he wants people to vote to leave.
And that’s it. The interview is over. I will post a summary soon.
Q: You are saying if we leave the EU, all sorts of positive things will happen. Aren’t you insulting the intelligence of people.
Not at all, says Gove. He says he was accused earlier of being negative.
Q: You are saying intelligence sharing with the US would be at risk if we remain in the EU.
Gove says says European court of justice decisions are having an effect in intelligence gathering.
Q: You say the EU would get new powers. But your government passed a referendum lock. Are you saying that won’t work?
Gove says the referendum lock only covers new treaties. The EU can take on new powers with a new treaty.
Q: Every independent economic forecaster says there is a cost to leaving the EU, a short-term shock and long-term cost. Do you accept that?
No, says Gove. He says Open Europe says the UK would benefit by not having regulatory burdens.
Q: So it is just Open Europe.
No, says Gove. There are other figures, like Nigel Lawson and John Longworth saying the same thing.
Updated at 9.50am BST
Q: But German banks and French insurance companies won’t want competition from the UK. You are choosing examples, German cars for example, where it would be in their interests to trade.
Gove says Robinson’s argument is the same argument used against the single currency.
Q: What would our relationship with the EU look like if we left?
Gove says we would have a relationship of friendly cooperation. We could have free trade with the EU, like Canada.
Q: Canada has to pay tariffs under its deal on many goods. Is that the best you could hope for?
No, says Gove. There is no single model we would have to accept.
Q: So what would it look like?
Gove says the UK would be part of a European free trade area.
And we would have a seat on the WTO, instead of being represented by the EU’s representative, a former sociology lecturer from Sweden.
Q: Would we be in the single market?
We would be part of a free trade area.
Q: The single market was created, partly by Margaret Thatcher, to cut invisible barriers to trade. If we were not part of the single market, we would not get protection from those non-tariff barriers.
Gove says it would not be in the interests of other EU countries to do that.
Q: We would have no legal right to redress.
Gove says it would not be in their interests to do that. They would lose jobs and income.
Q: But French and German ministers say the opposite. We should listen to them more than you on this, shouldn’t we.
Gove says he knows what is in their interests.
Updated at 8.59am BST
Robinson is now interviewing Gove.
Q: You painted a negative image, didn’t you?
Gove says that is not correct. He was being positive. If we left, we could save £350m a week.
Q: That is inaccurate. It is a gross figure.
Gove says the actual figure is higher.
Gove’s case for leaving the EU
Gove says he wants to vote to leave the EU before it is too late, because that is the safer choice.
If we don’t leave, we will be hostages, locked in the car driving towards greater integration.
These plans are set out in the five presidents’ report, he says. That proposes further integration.
He says the European court of justice is getting more powerful.
And the UK will have to pay more to the EU, as new countries join.
If we leave, we can take back control of our economy.
The EU has failed to strike trade deals with China, India and the US. Outside the EU, the UK can do this.
If we leave, we can take back control of our borders. At the moment any EU citizen, even with a criminal record, can “breeze in to the UK”.
We could have a points-based immigration, he says.
He says the UK is the best in the world for its health service, its army and its broadcaster.
We are the leading world power for soft power, he says.
It is time to take back control.
Michael Gove’s Today interview
Nick Robinson is interviewing Michael Gove.
Today are giving Gove the chance to make his own case before the interview starts.
Michael Gove is making a big intervention in the EU referendum debate today, with a speech accusing the pro-EU camp (ie, the prime minister, and most of Gove’s cabinet colleagues) of treating the electorate like “mere children”.
Here is the Guardian’s preview story.
And here is how it starts.
Michael Gove will accuse remain campaigners of treating people like “mere children” after his close friend and cabinet colleague, George Osborne, warned that leaving the EU would create a £36bn tax blackhole.
The justice secretary will say that a 200-page report published by the Treasury also contains an admission that immigration will continue to rise by hundreds of thousands year on year, amounting to a failure by his own Conservative government to reduce the net rate to below 100,000.
A day after the chancellor’s warnings dominated the news agenda, Gove will say: “The remain campaign want us to believe that Britain is beaten and broken … It treats people like mere children, capable of being frightened into obedience by conjuring up new bogeymen every night.”
Gove is about to be interviewed on the Today programme.
Here is the agenda for the day.
9.30am: Sadiq Khan, Labour’s candidate for London mayor, gives a speech on health.
11am: Nigel Farage, the Ukip leader, launches Ukip’s London election manifesto.
11.30am: Michael Gove gives his EU speech.
3.30pm: Mark Carney, the governor of the Bank of England, gives evidence to the Lords economic affairs committee.
I will mostly be focusing on the Gove speech today, with reaction and analysis, but, as usual, I will also be covering other breaking political news as it happens, as well as bringing you the best reaction, comment and analysis from the web. I will post a summary around lunchtime and another in the afternoon.
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Updated at 10.49am BST
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