The Spectator's Notes

Brexit is none of Mark Carney's business

David Cameron might have done better to stay out of things too

12 March 2016

9:00 AM

12 March 2016

9:00 AM

Surely there is a difference between Mark Carney’s intervention in the Scottish referendum last year and in the EU one now. In the first, everyone wanted to know whether an independent Scotland could, as Alex Salmond asserted, keep the pound and even gain partial control over it. The best person to answer this question was the Governor of the Bank of England. So he answered it, and the answer — though somewhat more obliquely expressed — was no. For the vote on 23 June, there is nothing that Mr Carney can tell us which we definitely need to know and which only he can say. So when he spoke to the Treasury Committee of the House of Commons on Tuesday, his opinion was no better than that of any intelligent and well-connected person who deals with money. In one respect, it was much worse. Unless the Governor must say something before a vote, there is a strong presumption that he should say nothing, since his remarks can compromise his hard-won independence. Mr Carney does not seem to understand this. His claim that a vote to leave was ‘the biggest domestic risk to financial stability’ was a speculation, a market-wobbling piece of punditry from a man whose ‘forward guidance’ has had to be surreptitiously retracted. I wonder what he thinks is the biggest non-domestic risk to financial stability. If he thinks it is the euro, would he dream of saying so?

Unlike in the 1975 referendum, where the ‘yes’ campaign was an almost free-standing enterprise led by first-rank politicians of all parties (Edward Heath, Roy Jenkins), the ‘remain’ campaign so far is driven by Downing Street. True, nice Alan Johnson and the ponderous, bewildered Lord Rose pop up a bit, but all the tricks — the public letter purporting to be written by ex-generals, the interference with the British Chambers of Commerce, perhaps even Mr Carney’s warm endorsement of David Cameron’s deal — have been inspired by No. 10. In 1975, Harold Wilson, the Prime Minister, adopted a position almost of neutrality so that he could emerge after the vote as a reconciler, but Mr Cameron has pitched in. He is a good campaigner, so his tactic may pay off, but there is a serious risk that voters will feel that, by voting ‘remain’, they are being asked to endorse his government. At the last election, only 11,334,576 people voted Conservative, and on 23 June large numbers of those will vote ‘leave’. In 1975, 17,378,581 people voted yes. Will such numbers vote ‘remain’ to give Mr Cameron a vote of confidence?

People — nice people, members of the public, concerned voters — keep coming up to me saying, ‘We want to hear the arguments about the EU referendum.’ It sounds a strange thing to want because, since the last years of Margaret Thatcher’s government, the arguments have rarely been out of the news for a week, and jolly boring they often are. But what such people go on to say is that they seek the objective facts and cannot get them from either side in the campaign. They would like some useful fact sheet which answers all their questions. Well, from time to time, papers like the Telegraph and the Times do contain short investigations of claims made about many of the issues involved, but the truth is that it isn’t easy. One’s judgment of the facts is bound to be affected by one’s view of the EU. In his statement declaring for ‘leave’, for example, Michael Gove said that Mr Cameron’s ‘victory’ over Britain’s commitment to ‘ever-closer union’ could not have the force of law. The European Court of Justice (ECJ), he asserted, could always overrule any agreement (even this one which, as Mr Cameron’s people excitedly boasted, would be ‘lodged at the United Nations’) if it deemed it in conflict with the existing European treaties. In my view, Mr Gove is right. His point goes to the heart of the matter, because the ECJ’s relentlessly one-directional political interpretations of EU law are what make the structure beyond redemption. It is a core objection to the EU way of doing things that facts are endlessly twisted to fit the teleology. But in such a politicised legal order, facts are murky. This argument is like Protestantism versus Catholicism, communism versus capitalism. The facts matter, of course, but they will never settle the question.


One usually reads that the other member states of the EU want us to stay in. But I hear anecdotally that the French and Germans are now so annoyed with us that they actually would like us to go. They think we are being selfish in not helping the union in its hour of need. Why, when it is menaced by the problems of the euro and of migration, do we fuss about our own little problems instead of showing ‘solidarity’? I suppose their complaint is justified, or at least shows the gulf between the two sides. The British, with our transactional view of the EU, cannot see much point in making huge sacrifices to shore up something which isn’t working when our first duty is to our own people. Most of the others think that the higher duty is to the ideal and so want us to shoulder ever-greater burdens, like poor Boxer in Animal Farm.

This column has mentioned more than once the dreadful treatment posthumously handed out by the authorities of the Church of England to George Bell, the heroic wartime Bishop of Chichester. Without due process, they declared that he had abused a child, later revealed to be a girl, between 1949 (when she was five years old) and 1953. Supporters of Bell are working hard and will soon have something pretty comprehensive to say about the case. In Oxford recently, I visited Christ Church, where (see Notes, 13 February), the Bishop Bell altar remains honoured in the cathedral. It is a rough-hewn table of blackened oak with a crucifix, cut out of its side, lying beside it. It was moving to discover that the altar was given by the Queen, who is the Visitor of the college, and the oak is her oak, from Windsor.


 

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Show comments
  • flipkipper

    To quote grandson Fatty, Boris isn’t a real Leaver. Booom!

  • WFB56

    “…since his remarks can compromise his hard-won independence. Mr Carney does not seem to understand this.” Another on the rapidly growing list of items that Carney doesn’t understand.

    A grossly overrated policitican who regularly claims credit for the work of others, first Stephen Harper’s and more recently Mervyn King’s.

  • The Active Citizen

    Hello Charles, two points if I may. Firstly Mark Carney and Sir Jon Cunliffe’s evidence to the TSC.

    Overall, a significant problem with their evidence orally and in the Governor’s letter to the Committee is the way they almost ignore the risks of an increasingly-dysfunctional Eurozone. Mr Carney mentions in his letter, almost in passing, that “The euro area accounts for over 85% of the GDP of the rest of the EU, it is the largest destination in the world for the UK’s exports, and its financial system is tightly linked with that of the UK. This had implications for both UK monetary and financial stability during the crisis.”

    Despite this statement, Mr Carney seems very relaxed about the risks to the UK from staying in the EU when the Eurozone suffers further. It’s as if the EZ crisis is over. Apparently the only risks worth talking about concern the UK’s problems on a possible Brexit, not the effects that the Eurozone’s future failures could have on the UK if we remain in.

    Mr Carney spent 13 years at Goldman Sachs, well-known for their work helping Greece get into the EU and more recently as a big funder of the BSE campaign. Mr Cunliffe was UK Permanent Representative to the EU and previously Cabinet Office Permanent Secretary responsible for EU coordination. So one man worked for a firm thoroughly embedded in the EU and the other worked for the UK Government in Brussels. Hmm…..

    Listening to their evidence, it’s now clear to me that both men are constitutionally pre-disposed to favour our membership of the EU. In fact I believe they tried to be fair with their testimony to the Select Committee. It’s just that their very natures precluded real balance, and they may even be
    unaware of the full extent of their evident bias.

    Finally, it was interesting to see Mr Carney getting angry when Jacob Rees-Mogg questioned him. First time I’ve seen him lose his cool.

    [Sources: BoE website http://www.bankofengland.co.uk, Carney’s Letter to the Committee, The Live Hearing. ]

  • The Active Citizen

    Charles, my second point is that there is news on the ‘legally-binding reforms’ which the PM claims.

    Mr Cameron: “The reforms that we have secured will be legally binding in international law, and will be deposited as a treaty at the United Nations. They cannot be unpicked without the agreement of Britain and every other EU country.” (Hansard, 22 Feb, PM’s statement on EU Council Meeting.)

    However the respected House of Commons Library has now produced its Briefing which states: “It is not a binding EU treaty or EU law in itself…. even if the Decision binds the parties under international law, it does not bind the EU institutions, and is not necessarily legally enforceable under either EU or domestic law. It could be very problematic if either the Court of Justice of the EU or a domestic court found an inconsistency between the Decision and the EU Treaties…. it cannot guarantee all of the outcomes envisaged in it.”

    It’s clear that Mr Cameron deliberately misled the House in his statement – one of the most important this year. He knew that his claim that the reforms “cannot be unpicked” is a lie. Michael Gove was right all along.

    • irina palm

      Nobody cares. What is ever set in stone? Will the plebs ever answer this simple question. No. Ergo, nobody cares.

  • Shieldsman

    David Cameron’s claim to have reformed the EU is a confidence trick, no changes to the Treaties were made or planned to be made at the moment.

    One should read Lawyers for Britain: “Ever Closer Union” will remain in the Treaty and the summit
    deal makes no difference to the UK’s legal obligations. They make it quite clear
    With the parts of the decision relating to “ever closer union”, it does not matter how binding or
    non-binding they are because, as we shall see, none of the terms when read carefully produce a substantive change in the legal position of the United Kingdom.

    Despite wild and misleading media spinning leading up to and during the summit, it should be stressed that none of these are new rights for the UK and none of them have been “won” by David Cameron in his negotiations. The inclusion of references to these existing opt-out rights, which are not enlarged in any way, seems to be pure window dressing for political purposes which does not produce a legal effect.

    “It is recognised that the United Kingdom, in the light of the specificsituation it has under the Treaties, is not committed to further political integration into the European Union.” “The substance of this will be incorporated into the Treaties at the time of their next revision in accordance with the relevant provisions of the Treaties and the respective constitutional requirements of the Member States, so as to make it clear that the references to ever
    closer union do not apply to the United Kingdom.”

    It is not the intention to remove those three little words ‘ever closer union’ from the Treaty, and this can be confirmed by reading European Council meeting (18 and 19 February 2016) – Conclusions.

    We have further evidence that it is a confidence trick: Writing for EurActiv.com, both the head of the Project for Democratic Union London office and a policy officer at the same institute have concluded there is nothing of substance to Mr. Cameron’s renegotiation agreement, describing it as “the point at which politics is completely supplanted by political communication”.

    Since Cameron’s announcement of the June referendum, politicians across the UK and the rest of Europe have taken to the airwaves to attest to the seismic changes that have been made, announcing that the EU is now fit for continued British membership. Some, including Angela
    Merkel, have gone so far as to suggest that Cameron’s reforms will not only be good for Britain but for other member states as well.

    None of this, of course, is in any way true. The concessions that Cameron claims to have won are entirely cosmetic, if that: many, such as cutting regulatory red-tape and the involvement of national parliaments in law-making, were already permissible under treaty law or form part
    of the European Commission’s current legislative plan; others, such as welfare support for intra-EU migrants, tinkered at the margins of the issue whilst failing to alter anything substantial.

    But then, this was the result that many predicted. The renegotiation process was never about any problems with the state of Britain’s EU membership, but rather a haphazardly choreographed attempt to manage the divisions within the British Conservative Party.

    Having conceded to rising Eurosceptic sentiment in his own party and the British public more widely for over five years, he could not be seen to support continued EU membership in its current form; however, it was also abundantly clear that other European countries had no appetite for British special pleading, beset as they were by a chain of crises and impatient with Cameron treating European Council meetings as a series of domestic media opportunities rather than as forums for serious diplomacy. There was only one solution: to launch a ‘renegotiation’ that would change next to nothing, but sell it as a wholesale rewrite of Britain’s membership conditions.

    These facts have been completely missed by the BBC and the Media, perhaps under orders who knows. So perhaps the Spectator can do the decent thing and spread it around throughout the media.

  • JoeCro

    Brexit is a bad idea, The prime minister, the governor of the bank of England and the First minister of Scotland all agree. Leaving Europe will hurt trade and investment and cost UK jobs. The social, security and economic risks of Brexit are frightening.

    • rhys

      Rubbish. The existence of NAFTA / other regional trade agreements such as Caricom / WTO rules etc. shows that it is perfectly possible to have trade agreements without mass uncontrolled immigration of people.
      But even if there were economic arguments in favour of remaining they take no account of the fact that a society is , or should be, a lot more than just a bunch of individuals making things and selling them to one another ( or others across the seas ).
      British society, with all its faults, has built up one might say over the 1000 years since the Norman invasion. It has been woefully damaged already by mass uncontrolled immigration over the last twenty or so years.
      London is no longer really an English or even British city More of the same will finish the country off altogether.
      Purely economic arguments in 1939 would have pointed to welcoming Herr Hitler over the Channel. Luckily arguments based on higher principle ( just ) prevailed.

      • mikewaller

        The last point is nonsense. By 1939 it was already very clear how the Nazis treated those who didn’t toe the line or were considered dispensable for some other reason. The only reason doing a deal with Hitler was then contemplated was that the appeasers thought defeat was inevitable. Economics weren’t a factor.

        The problem with your wider thesis is that for well over a century prior to our joining the ECM the Britain we both love had been steadily slipping down the world economic rankings because of its inability to compete on equal terms with its Northern European rivals, the US and Japan. Indeed we joined the ECM in the hope that it would give us the market access and stimulus to close the productivity gap. Sadly, we still continue to under-perform whilst Germany in identical circumstances remains a world beater. Quite why you and folks like you think that getting back out into the cold will suddenly transform us back into the being the economic star we haven been since the mid nineteenth century, I am at a loss to understand.

        My puzzlement is all the greater because, unlike the mid nineteenth century, we are now in an era in which the world-wide productive capacity is rapidly increasing to the point at which it will be massively in excess of any feasible global demand. So it we wish to retain our globally excessive standard of living the only hope is to remain within a major trading bloc as global free-trade has now largely run its course. As for London – which, if we leave, Frankfurt and Paris will do their utmost to screw – however it has change and whatever it has become, it does have one great redeeming feature : it keeps the rest of the country financially afloat!

        • rhys

          By the logic of your argument then, Canada is due for some kind of economic Armageddon unless it subsumes itself wholly into the USA / adopts the US dollar and all the rest .

          • mikewaller

            Nonsense. It has no need to give up its own currency and nor do we. It is already in one trade bloc and that is why it has been able to hang about for 7 years waiting to get somewhere with the EU. It is also far richer than us in term of natural resources. Get real.

          • rhys

            You are ignoring ( studiously ) my main point : you can have mutually advantageous trading arrangements for goods / services withOUT having a package involving uncontrolled mass immigration.

            We could easily strike the same arrangement, or one analogous, with the remaining EU once we are free of it.

            Uncontrolled mass immigration has done terrible harm to the country: most especially to persons on average and below average incomes.
            Everywhere the green belt is encroached upon, and inevitably must be more so as time goes on.

            The rich and powerful are to a great extent, isolated from the deleterious consequences of mass uncontrolled immigration.
            Even so it is catching up with them: even the 20 and 30 something children of MPs are now in a situation where they will NEVER be able to afford their own small place. ( Blair’s brood excepted, of course because of all the grotesque dictators paying him megabucks for his ridiculous ‘advice’ ).

          • mikewaller

            You cannot EASILY have that. Norway most certainly doesn’t and the period in which Switzerland had something like it is now coming to an end. If you think that the Europeans are going to be happy that we cherry pick the bits we like and dump the bits we don’t, think again. Much as Spain would/will bust it ‘s braces to screw Scotland in the event they exit the UK to dissuade its would be breakers-away to forget it, the wider EU would drag its feet and do whatever it could to shaft a Brexited Britain. Capturing as much of the City of London’s business as possible will be at the top of their action list. As for the usual canard about their still wanting to sell us things, for how long will we have the money to buy them?

            The real issue – which you ignore – is the ease with which incomers from the rest of the EC seem to find work here when so many of our own people can’t. Yet the latter are the very people whom you seem to think will suddenly be transformed in to world-beaters if the door is closed on their European rivals. As I have said before, whilst we have a very able, say, upper quartile, the UK has not had the real strength in depth necessary to be a first class trading nation for over 100 years. Putting ourselves in a position where we are being cold-shouldered by the EC and just crossing our fingers and hoping we can compensate by making massive breakthroughs in places where currently we are failing seems to me insane.

            Where I would agree with you is that freedom of movement within the EC became a major issue once countries with a much lower standard of living became members. My recollection is that other wealthy members were alert to this at the outset and imposed initial moratoriums, something which we did not do. Given the impact of the middle-eastern refugees, I should have though the anxieties about unrestricted numbers would be even more intense in such countries now. The way forward I should like to see is use of electronic technology to deal with job applicants at a distance with entry into areas where housing is in very short supply being limited to those with both a job and accommodation to go to. Within the EC this would have to apply within countries as well as between them, but seriously reducing the inflow of talent from other parts of the UK into London,for example, might be no bad thing. In the past, this would have been unthinkable across the EC, but now, who knows?

          • rhys

            Crikey.
            Your head seems to be all over the place : first you want to stay in the EU even though that of necessity ( Frau Merkel told Dave so and he accepted it as given on a tablet of stone ) means totally unimpeded uncontrolled immigration from all the EU countries ( soon to include Turkey – Frau M has just agreed ).
            Next thing you want ( and seem to think there is a snowball in hell’s chance of Frau M agreeing ) to impede people moving from the UK provinces to London – and also from everywhere else in the EU to London ( but you somehow have faith that because this would be done by computer software Frau M would agree ).

            But by making such a suggestion you almost seem to be accepting that uncontrolled immigration from the EU is, in fact, deleterious ?

            If so, then why complicate anything ? The option is there in June to end it and control our own borders, whether with computers or whatever would be a matter for our Parliament to decide.

            Going back to the trade without uncontrolled immigration arrangements which we will have with the future EU once we throw off its shackles : here’s why it would be very very easy to have such an arrangement : BECAUSE IT WOULD SUIT THEM – the Germans sell more to us than we to them. Thus anything short of simple free trade arrangements hurts them more than us – why would they do it ? .

            Don’t forget your Adam Smith : it is not to the benevolence of the butcher or the baker that we look to allow us to obtain meat and bread for our table ; but to his self interest.

            It suits the Germans to sell us their cars etc..And the French their wines. Therefore it will suit them to have a free trade arrangement – just as Canada and the USA have with Mexico; and as the Caricom countries have with one another – but without all the supragovernmental fol de rol and especially without the mass uncontrolled immigration which has already hugely damaged the country ( especially the country of persons on average and below average incomes ).

            PS: if you want to know why persons from very poor countries are happy to take jobs local British prefer not to ……ask your friend Lord Rose : they are content to work for lower wages, sometimes MUCH lower wages. Lord Rose thinks if the UK leaves the EU wages of the lowest paid workers in the UK will RISE………..
            he obviously thinks that’s a bad thing. I do not. Do you ?

          • mikewaller

            Regarding your last point, if you had any regard for the UK’s very poor productivity record I suspect hat you would not be so sanguine. . I suspect that what recovery there has been in recent years has been largely driven by hungry incomers beating the lowest decile or the indigenous workforce to the available jobs. Kick then all out as you plan, to be replaced by marginal local candidates, and our productivity must go down.

            As for the German’s selling us their cars etc. if we are not selling them goods and services to an equivalent value – which we don’t at present – we will not be able to pay for them. We are already maxed out on the national plastic and our debt continues getting bigger so what’s your plan? Sprinkle stardust over all?

            As for Frau Merkel, don’t you listen to the news? Her open borders policies have cost her shed-loads of votes. Democracy will drive national governments to better protect local employment. There will also be a major shift from globalisation to protectionism as there are now far too many industrialised workers in the world. To maintain their own standards of living, the EU would increasingly prefer to export unemployment to a post-Brexit Britain rather than goods and services for which we would increasingly unable to pay. Oh, and something else they will be surreptitiously exporting from every creek and harbour is refugees and illegal immigrants, Turks included.

            I would be the first to agree that the EU is no bed of roses and some of its policies are insane. However, it is my belief that we are far better inside doing what we can to get them modified rather than going it alone in a world of unprecedented turbulence.

    • Chamber Pot

      Balls.

    • Bertie

      How will it hurt trade and UK jobs? We’ll still trade with Europe,and they with us, on WTO rules.
      it’s not as if Europe will levy significant tariffs on us…

      Why do we need to be a member of a political union to trade with Europe? We don’t

      ” The social, security and economic risks of Brexit are frightening.”

      Not half as bad as remaining,whether or not 75 million radical moslem Turks get freedom of movement throughout Europe.

      What happened in France / was a direct result of no border controls…how does that assist our security in your “Social,Security,and Economic risks” claim?

      The risks of remaining are frightening

      1) A rising EU tribute from current gross £19bn(£11bn net)
      2) Even more loss of control over sovereignty, rule of law, justice, Immigration
      3) A mandatory bogus migrant migrant
      (We take 600,000 economic migrants per year already before any bogus refugees)

      4) Free movement to 75 million Moslem Turks.
      5) our immigration policy determined by a nation bordering a war zone.

      no, no, no and no.

      Greater risks remain. Don’t get conned again as we were in 1970’s – trade area fine, political union,no thanks.

  • mikewaller

    This made my blood boil! That of the Governor of the Bank of England is precisely the kind of opinion I want to hear as he actual had something useful to say. In contrast, the gut reactions of Moore, Delingpole, Rees-Mogg, Boris etc. are to me so much vacuous spume. As Moore himself points out on the same page, attitudes to Brexit [and global warming] are much more a function of personality than hard facts. Hard facts are therefore in very short supply. What seems to me absolutely shameful is that the moment a referendum was decided upon, a Royal Commission reviewing all the pros and cons was not set up.

    The reasons why are obvious. Those for remaining hoped to rely upon inertia, the Brexiters hoped to induce an emotional spasm. A plague on both their houses!

  • VioletEyes

    Oh grow up Charles Moore!

    Brexit is ‘everybody’s’ business…

    Stopping people from saying their piece is pathetic, particularly if those speaking are in the position of the Governor of the Bank of England.

  • Chamber Pot

    Carney is a Goldman shill like Sutherland what would you expect him to say ?

    Why we have to have these creatures infesting our Central Banks after the chaos they caused in the US with mortgage backed securities and the consequent global crisis and with the misery they have inflicted on Greece is anyone’s guess.

  • ReasonableVoice

    This is a ridiculous argument. At a time when the debate is dominated by political grandstanding, the UK public has the right to hear intelligent debate which analyses how its future economic welfare (including that of its children & their children) will be impacted by their voting decision on June 23. The UK has enjoyed remarkable success in attracting extraordinary levels of foreign direct investment as a result of its current hybrid position, inside the EU but not the euro, as well of course as its other assets such as English language & market-oriented economy. The economic implications of Brexit are so far being shrouded by shrill voices.

  • trobrianders

    What Carney won’t do to remove guilt about his position and salary.

  • ottovbvs

    Er…Carney is the governor of the central bank…and it’s none of his business? What?

  • albertcooper

    The awful Pro European experiment are using all the political force they can muster and scare tactics to boot !! Do not be fooled its all a question of how can I line my pockets ! without a care for the glory of our beloved country

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