Tuesday 19 November 2019

Johnson's lies and the challenges ahead

Johnson gave a speech to a meeting of the CBI yesterday along with Corbyn and Swinson as well. The employers organisation is natural territory for a Conservative leader and they gave Johnson an easy ride as you might expect, listening respectfully to a lot of the nonsense that he spouts on these occasions. He loves the sound of his own voice and always looks terribly smug and pleased with himself. 

The first four months of his premiership have been like watching a man with Parkinson's disease erect a house of cards with one hand while operating a Kango hammer with the other. It was impossible to know what would happen next. Last week his policy was to offer tax cuts. This week they're off the table. He told the assembled CBI that he would end uncertainty and yet looking ahead that is all he's offering. It is, as Simon Jenkins says, either a lie or a fantasy.

Someone else picked up more lies from the PM at the CBI conference. Rose Shillito tweeted:
Unfortunately, the media is guilty of allowing this sort of stuff to go unchallenged as Peter Oborne recognises in a piece for The Guardian where he carefully lists the blatant falsehoods (you have to read the article to understand the extent of it) Johnson gets away with in a single interview with Sky News in Oldham. I don't know if Johnson thinks he can go the whole hog once he's in the regions or if he was literally off his head on something. Oborne accuses Sky News reporter Samantha Washington of making no attempt to challenge or correct any of the untruths he offered.

This is becoming a huge problem and we should support Oborne's efforts to catalogue Johnson's lies.

Despite all this it looks odds on that Johnson will get a majority and will be able to force his Brexit through, thus beginning the next period of uncertainty.  I noted a Twitter thread from Peter Foster of The Telegraph, a man I respect for trying to report Brexit accurately. He is ploughing a lonely furrow among his colleagues but sticking doggedly to it. He was explaining the problem of a Canada style free trade agreement for the 10-13,000 employees working for egg producers in this country.
Foster says the story is important because it exposes the contradictions and cakeism in much of the Brexit political rhetoric...in this case the claim by Michael Gove that we can have the "gold standard" of animal welfare after Brexit while the Department of Trade is promising a free trade bonanza. They can't both be true for the egg industry which operates to very high EU standards. These standards add 16% to the cost of an egg but after Brexit importers will be allowed to import cheaper egg from the USA (28% cheaper) the Ukraine (25% lower) or even India (18%) or Argentina (16%).

Their eggs are cheaper because they still use intensive battery farming techniques. The EU banned battery farming in 2012 and UK supermarkets have pledged to stop the use of cage produced eggs by 2025...but that adds to the cost.

Latvia is the largest EU importer of eggs from Ukraine but they complain about the quality and the lack of salmonella controls.

Foster explains that "under UK 'no deal' tariff schedule eggs will have NO tariff protection...like 88 per cent of imports into UK...that exposes UK egg industry to competition from cheaper imports"

"If UK leaves EU w/o deal in December 2020, the backdoor will be left wide open to egg products that are 30% cheaper...that will be hard to resist for many UK manufacturers of egg products, and egg processors...but which consumers (when asked) clearly don't want. 

"But they DO want cheaper food and - post #Brexit - the Government will be under pressure hold down food price inflation, which is why HMT (and DIT which needs to go buccaneering) didn't protect the egg and other industries despite lots of lobbying by industry

"The point here is choices - and politically divisive choices - which I fear the public hasn't fully internalised...of course they want both cheap eggs and free range eggs, but #Brexit brings that cakeism to a head. Not just in eggs, but right across the spectrum." 

There will be many more of these "politically divisive" choices ahead in the next few years.

How many people who voted to leave the EU in 2016 realise they may be working in industries protected by benign EU tariffs which could soon disappear and expose them to the chill wind of competition from outside that does not comply with or believe in high welfare, employment or environmental standards?  Are they in for an unpleasant surprise?  I think they are.

I used to sell high value capital equipment for factory and process automation. You are always conscious that every installation is costing someone (sometimes a whole group of people) their job or jobs. Each time you hover at the supermarket shelf and pick the cheaper of two competing products you are forcing the higher priced producer to invest in automation or contemplate going out of business. This is how competition works. If the two producers are UK based this might not be so bad, they are being encouraged to be more competitive and win business overseas.

All too often one of the suppliers is abroad and thus, our import bill grows along with the trade gap and so does unemployment as domestic manufacturers go out of business. 

Regulations are the bedrock of civilisation as I once heard Lord Hesltine say. Regulation is the opposite side of the coin to automation. One reduces cost while the other adds to it. You cannot regulate for the high standards that we all want while exposing the regulated businesses to unfair competition from unregulated ones outside the country.  This is why tariffs and border checks are so important.

I suspect some very hard lessons are going to be learned.