THE BLOG

The Chancellor's Threat to Pensioners and the NHS Is a Clear Sign of Panic

15/06/2016 16:54
ASSOCIATED PRESS

Oh! It was never meant to be like this! It can never have been the original intention of the Chancellor of the Exchequer that he should finish up 10 days before the EU referendum poll promising to implement a Brexit emergency budget to butcher pensions and the NHS in the event of a Leave vote, which is looking increasingly possible.

The polls last summer persuaded most people that a win for the Remain side in an EU referendum was a foregone conclusion. I remember, because it was hard to rustle up much interest in starting an official Leave campaign. The government's intention was, like Harold Wilson's administration in 1975, to bring back a renegotiation package that would be hailed as a transformation of our terms of membership, and which, with the backing of all the machinery of government would the push Remain into an unassailable poll lead. It was never intended to have a photo-finish, like the Scottish independence referendum.

This time it could still be different from that. The SNP could not explain what currency an independent Scotland would use. The UK has its own currency. The SNP could not explain how it would manage the Scottish government's finances without the £8billion subvention from the rest of the UK. The UK government will be net £10billion per year better off when we stop contributing a gross £350million per week to the EU budget. And Scotland really was choosing between the status quo in the UK, or a "leap in the dark" to Scottish independence. But there is no status quo option in this referendum, because it is clear that the EU must change if it is to contain the migration crisis and to save the Eurozone from implosion.

The Chancellor's decision to threaten pensioners and the NHS should be treated with some good natured derision. When I first heard that they were planning this, and I saw a leaked draft of a press release, I could not believe it. I asked Vote Leave to check it was for real. I thought it might be some kind of spoof. When it turned out to be true, I was absolutely astonished. It is a clear sign of panic in the Remain camp, and a loss of perspective.

All the anecdotal evidence that has come in since then is that it has backfired. It is not credible to threaten massive cuts in public spending when the Prime Minister has said previously that the UK can thrive outside the EU. He assured Andrew Marr earlier this year that it was sensible to have this referendum because even if we leave the EU, "of course the trading would go on" he said.

The attempts to bully and intimidate voters into voting remain have become increasingly ludicrous. It begs the question: how do all those countries outside the EU manage on their own? Most of them do just fine. In fact, most countries outside the EU are doing better than many inside the EU. Famously, the only continent with slower economic growth than the sclerotic Eurozone is Antarctica. There are no countries in the world that have suffered the economic meltdown which the Euro has inflicted on some of its member states like Greece, Portugal, Spain and Italy.

Of course, there are a lot of myths about trade and trade agreements. You don't actually need a trade agreement to trade with the EU. The US hasn't got one. Nor has China or India. In fact, the US is the UK's biggest single trade partner (where we have a big surplus), and there is no trade agreement.

It is worth recalling what the Remain campaign chairman, Stuart (Lord) Rose, said in his Times interview last autumn. He said leave the EU would be "a gentle process" - and we would not see much difference for the first five years. This is rather at odds with the latest scare story from No 11, which we had best dismiss as 'campaign over- enthusiasm'.

As Vote Leave has just pointed out in its proposals for leaving the EU, it would in fact be relatively straight forward for the rest of the EU and the UK to make a bi-lateral trade agreement, because for years so much business and product regulation has been harmonised across the EU. Leaving the EU brings all these matters in the UK under UK control, but none of it is going to be changed instantly.

At the heart of this referendum is the question: who governs the UK? Is it to be your own democratically elected politicians, or a cabal of anonymous and unaccountable commissioners and officials in Brussels? What this debate has demonstrated is how many ordinary people, who concerned about the pressure on wages and public services from uncontrolled immigration, understand this basic point much better than 'the Establishment': the big banks, the big corporates, Whitehall and Westminster. They can see that the deal we get from the EU Single Market is a poor one - a £67billion trade deficit and a £10billion net subscription for the privilege.

Bernard Jenkin is the Conservative MP for Harwich and North Essex

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