A Happy New Year For Liberal Democrats?

To begin at the beginning, at least 2017 is over! It wasn’t a great year for us. Our 24-month climb back to prosperity since May 2015, buoyed by thousands of new members and encouraging Council election results, was paused at the June General Election. The two big parties in their nose-to-nose confrontation swept up more than 80% of the vote, leaving us with less than double figures, though now a dozen good MPs.

It seemed our progress was no more. We lost an inspiring leader in Tim Farron, though gained one of great experience and knowledge in Vince Cable. (It felt a bit like living in the old Rose and Crown joke routine. “They’re closing down the Rose and Crown. Boo! And building a new one. Hurrah!” But yet too serious to joke about just then.) Besides, our commitment to a referendum on the negotiated deal was continually queried, even within the party, though it was reaffirmed at the September Conference. According to the national opinion polls, the Leave voters weren’t coming over in droves to Remain, and our share of voting intentions stayed at around 7%.

All in all, we couldn’t rejoice too much that the quasi-presidential campaign of Theresa May and the Tories’ ill-conceived manifesto failed, so that a hung Parliament unexoectedly emerged. It still meant that the country would have to put up with a Tory minority government backed with expensively-purchased DUP votes. It still resulted in the Government backing a potentially ruinous ‘hard’ Brexit, with the apparent acquiescence of the pallid Janus-faced Official Opposition. The EU negotiations moved at a snail’s pace as impossible outcomes were sought. The Brexiters demanded minimal payments, no further jurisdiction of the European Court of Justice, and all to be as usual on the Irish Border – and,  Why can’t we have trade talks NOW!? 

Eventually they had to concede that everything will stay the same for a transitional period. And that was the first indication of our Happy New Year – that, and the fact that Parliament will at least pass a law on the final deal negotiated.

Yet it feels as if we, together with a few rebels from the big parties, are the only sane inhabitants of a fools’ paradise. Why, in a Parliament still containing more Remainers than Leavers, is there not majority agreement that at least staying in the EU’s Internal Market and the Customs Union is essential for the country’s welfare? And that modified freedom of movement is a price worth paying to keep our thousands of EU nurses, students, scientists, agricultural workers, catering industry employees and the rest? Agreement may be forced at last by the poor terms offered or by the impossible Irish Border issue, but why do we have to go through all this?

Our conviction alone can’t bring us happiness. But a gradual change of view does begin to show in the country, along with some belief that the self-harm of Brexit can yet be averted. This is a time of hope, that Parliament will later this year reflect and accept these views, which we need now to work vigorously to promote.

Meantime we see that the two big parties in Parliament both cover up deep internal divisions. We by contrast are a party united by progressive, distinctive values and policies, committed to proper funding of the NHS and schools, to relieving the welfare shortfall, ending child poverty, providing affordable homes and protecting the environment. If we decide in our conferences this year on a resolute economic and industrial strategy, aimed to increase growth and productivity, rebalance development to all areas of the country and reduce inequality, we shall affirm our commitment to stable and solid advances. Then, if progress is assured by the right Brexit outcome, we may indeed be propelled forward towards a renewed share of power, as the larger parties begin to fall apart under the weight of their internal contradictions. There is all to play for in 2018..

* Katharine Pindar is a long-standing member of the Lib Dems and an activist in the West Cumbrian constituency of Copeland and Workington.

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66 Comments

  • paul barker 5th Jan '18 - 3:56pm

    We are in a transitional period right now, based on Local Byelections (including yesterdays) our Local support is about triple our National Polling. Obviously that isnt going to last – either our Local support will crash or our National Polling will start to creep up.
    We have ground for real hope that we will make big gains in May & that may be enough to get The Media & The Public to start taking us seriously at a National level.
    If we can be seen to be taking votes from Labour that will increase pressure on them to shift towards opposing Brexit, their current Leadership are already isolated & are open to being pushed.

  • Katharine Pindar 5th Jan '18 - 5:47pm

    It has been useful to have your updates on the level of support over the months, thank you Paul, which even though Peter Watson pegged it back to 16% average always sounded so encouraging compared with the national 7%. Yes, it will be good if we can push Labour to come off the fence on Brexit partly through achieving good May results.

  • nvelope2003 5th Jan '18 - 5:57pm

    Paul Barker: I seem to recall that in last May’s local elections the Liberal Democrats lost ground despite very good by election results. I hope things improve a bit this year.

  • David Evans 5th Jan '18 - 6:24pm

    I am afraid that there are still too many people who choose to ignore lessons that have been well proven over the years and instead prefer to believe that their personal theory which has never worked in the past will suddenly become true.

    However, for those who are prepared to learn from those who have done it for over thirty years and have not been proved wrong in that time:

    It has always been the case that we have done better in local government by elections than in general elections. The difference varies but is usually between 6% and 12%. Indeed there is a hierarchy:- Local government by elections best; Parliamentary by elections (in good times and where we are seen to be in with a chance) second; Local government elections each May, third; General elections (and parliamentary by elections where we are not seen as competitive) – fourth.

    Hence there is nothing incompatible with us polling quite well in council by-elections, but much worse in a general – equally as opinion polls are based on a voters intention at a general election, there is no reason why ‘our Local support will crash or our National Polling will start to creep up.’ The two statistics are in fact fully compatible.

    Katharine is in fact part right when she says “the 16% average always sounded so encouraging compared with the national 7%”, but it does just *sound* encouraging, it is just in fact normal for the gap to be that big. It is simply an easy statistic to use to rally the troops – nothing more.

    Now if we start to average 20% in council by-elections – That is a cause for celebration, and that is what we need to achieve.

  • paul barker 5th Jan ’18 – 3:56pm…

    Paul, if I remember correctly you predicted a late LD rally, and umpteen seats, in the 2015 GE..You also predicted the fall of Corbyn, the meltdown of the Labour vote, etc., etc.

    Where did you buy your crystal ball?

  • “is there not majority agreement that at least staying in the EU’s Internal Market and the Customs Union is essential for the country’s welfare?”

    I think you’re exaggerating here; major economists haven’t even predicted we’ll have recessions if we get a Canada/Ukraine style deal but instead have said we’ll end up with lower growth than we would have done if we stay in the single market and customs union. Using language like this can end with us looking mad to the public, if not now then definitely when they realise the country hasn’t collapsed 2-3 years down the line.

  • Katharine Pindar 5th Jan '18 - 9:10pm

    Canada/Ukraine style deal, Liberal? What’s that when it’s at home? I’ve heard of other countries’ deals (taking years to fix), and other countries’ compromise arrangements over trade with the EU, but nothing that could replace the benefits that we enjoy now with our closest trading partners. including the deals they have negotiated in which we share.

  • @Katharine
    “I’ve heard of other countries’ deals (taking years to fix)”

    The reason other trade deals have taken years to fix is because they have started with a blank sheet of paper so to speak.
    That is not the case with the UK/EU, We have hundreds and hundreds of pages already written into agreements on trade, customs, standards and cooperation. All we have to do between the EU/UK is negotiate and delete where appropriate.

    There is a vast difference between them and they cannot be compared.

    If the wonderful Lord Kerr and his companions did not think negotiations could be completed within 2 years, why did they not make it longer when writing article 50?
    We would surely have to question their competence would we not?

  • paul barker 5th Jan '18 - 10:20pm

    There isnt actually a huge difference over recent Years between our performance in Local Byelections & The National Equivalent Vote share each May. (The actual Vote share of course can only be compared with the same Seats, ie over a gap of 4 Years.)
    The relationship between Local & National Elections held on the same day is a bit more varied, in 2010 we got 23% in each & in 2015 we got 8% in The General Election & 10% in The Locals, not a huge difference.
    2017 saw our Local support rise gently to April, fall like a stone to July & then recover quickly to December. That why I just report whats happening without making predictions anymore. Hope isnt certainty.

  • Peter Martin 5th Jan '18 - 10:27pm

    Katharine,

    You write:

    “We by contrast are a party united by progressive, distinctive values and policies, committed to proper funding of the NHS and schools, to relieving the welfare shortfall, ending child poverty, providing affordable homes and protecting the environment. If we decide in our conferences this year on a resolute economic and industrial strategy, aimed to increase growth and productivity, rebalance development to all areas of the country and reduce inequality, we shall affirm our commitment to stable and solid advances “

    Yes sure. But isn’t his all motherhood and apple pie stuff that we’ve heard many times before? How? That’s a short word but a big question.

    If you are going to have any hope you have to try to understand how the economy works. I’ve just looked at the last two Lib Dem manifestos. In 2015 you said:

    “Our first fiscal rule is that, from 2017/18, debt must fall as a proportion of our national income every year – except during a recession – so it reaches sustainable levels around the middle of the next decade”

    I’d have to give the Lib Dems a F, for Fail, for this comment. Falling debt must mean that the Govt runs a budget surplus. If Government even tries to achieve that it will provoke a recession.

    In 2017 you wrote in your manifesto:

    “Liberal Democrats reject the Conservative Government’s damaging and irrational commitment to run budget surpluses on both capital and revenue, which imposes completely unnecessary deep cuts in spending and limits the scope for much needed capital investment.”

  • Peter Martin 5th Jan '18 - 10:27pm

    continued:

    Why was a surplus irrational in 2017 but part of the manifesto in 2015? But credit where credit is due. This is some improvement. But then you go and contradict yourself with:

    “Liberal Democrats will therefore commit to eliminating the deficit in day-to-day spending by 2020. This means we will be able to keep debt as a share of national wealth falling through the parliament, unless there is a recession”

    It all depends on how you define “day to day”!

    You can’t make claims on just what the Government should do, or shouldn’t do, re deficit spending unless you also take into account what is happening with trade. If money is leaving the economy to pay for net imports the Govt has to run a deficit to replenish, by deficit spending, the money lost to prevent the economy falling into recession.

    It’s not a difficult concept. Anyone genuinely wanting to properly fund the NHS, end child poverty etc, as I’m sure you do, has to make an effort to understand this.

  • We need to focus outside of Brexit. Many are fed up with Brexit and want parties to focus on other matters such as racism, homophobia, misogyny and anti-semitism. Human rights are something we can focus on in 2018 and doing so climb up the polls.

  • Something of a David (or should I say Vince) v Goliath at the moment.

  • Katharine Pindar 6th Jan '18 - 12:32am

    Well. Manfarang, David actually won, didn’t he? I do think that Tim Farron’s vision of our becoming the main Opposition party in time is not impossible. The Tories shed their skins and renew (not of course that I would ever compare them to snakes!), and I suppose they will do that if and when the Brexiters are disposed of, not only because of their unfailing instinct for power, but because they can represent the vast quantity of voters who want steady- state conservative thinking, even if the age-range of their supporters is not helpful to them. But Labour? Their fratricide is serious, and it’s difficult to see how Momentum can co-exist with the moderates sufficiently to seize power, or, if they manage to do so, how the City can live with revived Marxism if that prevails. We shall see – but probably not for a little while yet.

    Peter, as ever I am disappointed with myself, in understanding about two-thirds of your economic explanations, and being baffled by the last third (where you usually say ‘It’s quite simple!’). Surely though our exports are growing because of the weak pound, and imports at least of consumer goods and foodstuffs will fall if people can afford less of them. There, that’s enough exposure of my thickness on economics for tonight!

  • I think you are an optimist Katharine. While I accept Brexit might be stopped and we might get a deal with the EU that reduces freedom of movement and includes reforms to the EU to reduce the push factors causing economic migration, I don’t think they will happen. We need to get ourselves prepared for a UK outside of the EU.

    I am not even sure we are united. I find on here that Liberal Democrats do not share one vision of what an ideal liberal society looks like.

    @ Peter Martin

    Like you I don’t understand why the Liberal Democrats would include in their economic policy eliminating the deficit. A policy which should have been ditched in the 1930s.

    Also I don’t understand why we don’t have the policy of running the economy to provide full employment.

    Hopefully by the time of the next general election we will not be talking of reducing the deficit but we will talk about reducing the National Debt / GDP ratio once we have full employment and we allow economic growth to do it automatically as it has done over most of our past back to 1694. Also we can hope our main economic target will be reducing economic inequality significantly within five years.

  • Lorenzo Cherin 6th Jan '18 - 1:56am

    Katharine

    A thank you to our fine enthusiast positive message as often.

    We need to be mainstream. The feel about us is not this, even if we are. We need to be seen as sensible and not fanatical, we are yet seem what we are not if not talking about those issues not just effected by BR….

    Michael BG

    No philosophy or practice is uniform, and should not be. I want a Liberal and Democratic society. The latter as important as the former.

    My idea of reformed justice means more democratic, not just what some misguided think is Liberal. A certain serial rapist would not be released in my society because it would not be decided by an unacountable so called parole board.

  • 50 years work to build the party into a real elecoral force, destroyed by a few brief months of the coalition. There is no quick fix, peoples memories are long, “Tuition Fees are our Iraq”. Nothing is likely to change in 2018, it is too soon, indeed I estimate that nothing will move in our favour until Brexit has taken place. What an irony, needing Brexit for our own future salvation.

  • Peter Martin 6th Jan '18 - 9:12am

    Katharine,

    I spent a couple of years teaching maths and physics in my younger day before my health gave out, with glandular fever which knocked me back for a year or so, and I had to find something else. So I don’t feel that I’m such a failer at it! I found that often the students would approach the subject with the idea that it was going to be much more difficult than it actually was and therefore they weren’t going to be able to understand it. Get over that and we could start to make some progress.

    So why can’t we discuss the government’s deficit in isolation? Germany doesn’t run a Govt deficit so why should we? Let’s take a look at a simple equation.

    Government Net Spending (deficit) = Savings of Private Sector + Trade Deficit (Current Account Deficit.

    In words, this means that the money created by Government either ends up in our savings accounts (or safes, piggy banks etc) or it goes overseas to pay our import bill. In other words there are two reasons for Governments to run a deficit. One is to enable us all to save some money. The other is to pay our net import bill. Germany doesn’t have a net import bill, but we do, so our deficit has to be higher than theirs. German people save more than we do, though, which is the other factor to be considered.

    So when would be a good time to run a surplus? That could happen if we weren’t saving any money and somehow we’d turned around our trade position and were net exporters. It’s difficult to assign cause and effect to all this but what we do know, from experience, is that if Govt is too spendthrift/taxes too little it can cause unnecessarily high inflation. On the other hand, if it doesn’t spend enough/taxes too highly we end up with high levels of recession and unemployment.

    There’s no reason to unduly worry about Government debts and the deficit. But if they are of concern we just need to follow Michael BG’s suggestion and make them smaller by growing the economy.

  • Katharine Pindar 6th Jan '18 - 9:27am

    Lorenzo and Michael, thank you for your late night contributions! Liberal Democracy can be accepted as mainstream, I think, Lorenzo, because actually other parties are always borrowing one or the other part of our title and claiming it as theirs, so we need to point out that the two parts go best together. Michael, perhaps it is best to try to be realistic rather than either positive or negative, but I think you were perhaps a touch negative in doubting our unity: there is I hope general acceptance of our 2017 Manifesto, but there will be legitimate liberal discussion still of, for instance, whether there should be basic citizens’ income. Certainly compared with the other two parties we are united! (Thank you, by the way, for your former helpful thoughts about council tax reform, which I haven’t absorbed yet and will go back to.)

  • Katharine Pindar 6th Jan '18 - 9:52am

    Theakes, I think your conclusion is right. But the whole business is a great irony – politicians who mostly think it is a mistake striving to get us to leave, rather than saying it IS a mistake and we must do what is best for the country. Peter, I see and agree about the need for the deficit, but I’d rather we think about the question of the piece’s headline, for the moment. Thank you to everyone who has been contributing.

  • Catherine Jane Crosland 6th Jan '18 - 10:08am

    It is good to see that Vince is focusing on homelessness, and affirming the party’s concern for the underdog. I see this as a hopeful sign that in 2018 the party may begin to return to its core values – among them, that no-one should be “enslaved by poverty”.

  • Katharine Pindar

    We appear united because of the nature of our differences. Also I think before 2010 we didn’t realise how large our difference were. We discovered how large they were when some members called on Social Liberals to leave the party. It is easier to see the divide in the Conservatives over the EU and Labour over support for Jeremy Corbyn. Ours is more difficult to see because we often talk of trying to achieve the same things – a more liberal society, a more equal society and a society where individuals are freer. However we are divided not only on means but the extent to which everyone should be equal economically and how this affects their freedoms.

  • Sue Sutherland 6th Jan '18 - 1:06pm

    For me, Katharine, the main policy has to be that ‘resolute economic and industrial strategy’ because, at the moment, I’m afraid we are just known as the anti Brexit party which makes us vulnerable to charges of being undemocratic. We have to go out on a limb to sort out the problems of poverty and lack of hope for the future, that many of the Leave areas are struggling with or else we’ll disappear down the Brexit plug hole along with every other hope for a decent society. To do that we have to make a break with the past and come up with something revolutionary not something that’s safely tied in to existing economic policy. I’m afraid no one knows about our well intentioned policies you mention and taxing people more to fund the NHS a bit better isn’t really worth a headline.
    We have the only party leader who is capable of leading the country to a better future economically and therefore socially as well. We have to be exciting, strong and courageous or our nation will either return to Victorian poverty or a bleak authoritarian socialism. All our children and grandchildren deserve better than that.

  • Katharine Pindar 6th Jan '18 - 2:25pm

    Thank you for your positive thinking, Sue. I quite agree with you, and look forward to our Spring Conference when our policies can be thrashed out and strong directions agreed. The differences Michael mentions are healthy for a thoughtful and fully alive party, but we shall have to decide our policy priorities and overall strategy and shape our public platform this spring. I have no doubt we can do those things successfully, because we are clear on our values and principles, and the stark differences between ourselves and the two big parties are well suggested by you in the contrast you make in your penultimate sentence. Thank you!

  • Lorenzo Cherin 6th Jan '18 - 3:31pm

    Superb from Sue Sutherland!

    We need to be where the vast majority of people are, compassionate and common sense policy, but radical as well as moderate where it is needed.

    Where there is extremism, to be moderating as an influence, is radical, because it is different, radically !

    We do not need prison councils and consideration of the human rights, we need prison release for the non violent and consideration of the wrongs of those we would put there !

    W need massive investment in health care and a complete change in delivery to include every freelance therapist and practitioner not in the system yet and not every administrator or manager, but the key ones given support.

    We need an economy that works for all because it supports all who want to work!

    We need the education system to include every innovative non state contributor but not sponsorship and control or funding and involvement by supermarkets!

    We need supermarkets, but they must pay well and allow profit shares and be ethical and understanding of the needs of workers as well s customers , animals, and the environment.

    We need an environment that is sustained but which is more than an obsession with climate and an attention also to quality of life and well being.

    We need to see the answer to everything is not one thing, and whatever that thing is that s the answer, need not be the polar opposite of that we do not like !

  • Peter Watson 6th Jan '18 - 4:34pm

    @Michael BG “we often talk of trying to achieve the same things – a more liberal society, a more equal society and a society where individuals are freer. However we are divided not only on means but the extent to which everyone should be equal economically and how this affects their freedoms.”
    I think this is an excellent description of what looks like a significant split within the party, particularly because it does not attempt to label either side in terms of a type of liberalism or with reference to a coloured book, and also because it emphasises the shared goals of Lib Dems on both sides of the divide.

  • How can we regain control of our borders, make our own trade deals and take back the supremacy of our courts if we remain in the single market and customs union?

  • The obvious answer to my own question above is that we cannot satisfy the Brexit objective of regaining control if we remain inside the internal market of the EU and its customs union.

    I realise that Lib Dems care nothing about such controls, preferring that the EU has supremacy in these matters. After all, the UK has 3.5% of the voting influence.

  • I do not know the Brexit plans of the Government but as I understand it the strategy is to leave both of the EU organisations in order to free the UK from the requirements discussed. Then, as a third party, we shall seek to negotiate access to the internal market and possibly the customs union.

    Clearly, it would be difficult to negotiate exactly what existed before on the same terms without their requirements, but then It is in the interests of the EU and the UK to get as close to that as possible. Given that Brexit will proceed, it would be helpful if all UK politicians threw their weight and support behind the government and ceased trying to scupper the process.

    Of course, the Brexit issue is not just about trade and economics. The Lib Dem party must be the only one that has bought into the EU dream of a Country of Europe or its watered down Federation of European States. I would estimate that 50% of LD voters are lukewarm about this.

    Most Remainers wish to avoid financial risk. If they could retain the single market and get rid of the EU they would do so immediately. Unfortunately, the EU grew the depth and scope of its market via competences and regulation so that all participants are bound by a comprehensive legal web. This is what makes leaving so difficult and hazardous. It is why remaining or leaving is a binary option.

    In my opinion, the trend towards further EU integration will make future UK membership politically impossible. It is better that we leave as soon as possible because exit becomes more and more difficult if we remain and remaining becomes impossible as opt outs are removed and Eurozone membership becomes compulsory.

    What does this mean for the Lib Dem Party? If you accept that UK wide support for the EU project is minimal AND you accept that the UK will persist in Brexit of some form for as long as the EU dream continues, then you have to decide whether the party has a sell by date or whether this Brexit thing is a big, destructive distraction in your survival plan.

    You are not going to persuade UK voters to sign up to the EU dream, ever.

    Personally, I recommend concentrating on what the best third party internal market deal would look like and push the government to achieve that.

  • Katharine Pindar 6th Jan '18 - 11:55pm

    Peter, your extraordinary monologue in three parts shows you belonging to I know not what anti-EU faction. I will only take up one theme, your idea that our party is wedded to a United States of Europe. On the contrary, we can envisage a two-tier Europe if we stay in, with Britain in the outer tier, where we would like to negotiate less restrictive obligations regarding free movement of labour, a greater emphasis on subsidiarity and a relinquishing of competencies not essential to the EU’s operations for those outside the Eurozone. We will look for a harmonious continuing relationship, not just for us but for the other EU countries opting to stay in the outer tier. (Thanks to Joe B. for this description, with which I thoroughly agree.)

  • Peter Martin 7th Jan '18 - 9:07am

    @Katharine,

    Just to make it clear I’m not the same person as ‘Peter’ above who does make some valid points. We’ve all heard ideas for a supposed “two-tier” Europe which would mean that the stronger Economies would have use Euro-A as a currency and then the less strong economies would use Euro-B. What would happen at the end of the year? Would there be automatic relegation from Division One for the worst performing economy who would then be replaced by a newly promoted country from Division 2?

    And how would the new multi- tier system be introduced? It would have to be done overnight to stop everyone else changing their euros into German euros who we can assume would be in Division one. Then there would have to be a third division for countries like Denmark who wanted to be a part of the EU in everything else but the shared currency. Then a fourth division for countries like the UK who didn’t want Schengen, or either of the euros, but would like to somehow claim to be EU members. Would UK MEPs have lesser voting rights because we weren’t full members in the same way as EU Div1 countries?

    It’s thoroughly unworkable. It’s a terrible idea! Those who are pro-EU should have the courage of their convictions and advocate full membership of the EU to exactly the same extent as France and Germany. We should be either totally in or totally out.

  • Catherine Jane Crosland 7th Jan '18 - 9:43am

    Katharine, if you actually want to win Leave voters over to the pro EU cause, I’m afraid you are going to have to show them more respect and courtesy than you show to Peter. Peter’s comments are not an “extraordinary monologue” at all. He has paid your article the compliment of trying to respond and engage with it, and has done so politely. Even if you strongly disagree with his views, there is no need to be insulting. The general tendency of many Remainers to be rude to Leavers must be one reason why there is little or no sign of Leavers changing their minds.

  • Catherine Jane Crosland 7th Jan '18 - 10:12am

    Katharine, you say that you would like to see a “two tier” Europe, with Britain in the outer tier. This may well be what many people would like. But we cannot ask Leavers to change their minds and agree to stay in the EU after all on the basis that we will aim for such a “two tier” Europe, because there is no guarantee at all that we would be able to achieve such a “two tier” situation, or any sign that it is likely.
    Recent statements by Junker and others suggest that it may be more likely that we will find ourselves forced into a United Stated of Europe, with an EU army. If this occurred, it is hard to imagine that the British people would accept such a situation. So it does seem likely that, even in the highly unlikely event that we did not leave the EU in 2019, we would probably have to do so a few years down the line. Starting Brexit negotiations all over again! Peter does make a valid point that the longer we stay in the EU, the harder it would become to leave.
    Could I ask whether you would still wish to remain in the EU if the “two tier” Europe proved to be impossible, and remaining meant becoming part of a “United states of Europe”?

  • @ Peter Martin

    We have a multi-tier EU at the moment. As you state some EU members are not in Schengen. As you state Denmark and the UK have a permanent opt-out of the Euro and there are other EU members who while agreeing to join the Euro when the time is right are not using the Euro. The new difference would be an acceptance there does not have to be conformity across the whole EU (a liberal idea).

    I don’t think there could be division one and division two Euros. A country is either using the Euro or it has its own currency. To make a success of the Euro there has to be a lot more cross border financial assistance. Germany will have to pay more towards the poorer members of the Euro zone than it paid to East Germany after unification. The German people might only agree to closer financial union with France, Belgium, Luxemburg, the Netherlands, Ireland and Austria and possibly Italy and Finland. This would increase the GNI per capita average from $39,162 to $53,757 (rounded). The lowest would be Italy’s $34,270 instead of Latvia’s $15,280. (I don’t know if the three Baltic States would want to share a currency as a step on the way to re-joining the Euro zone. I don’t know if Spain, Portugal and Greece would benefit from sharing a common new currency. I am not a supporter of common currencies.) I used this map to assist in deciding which countries should stay in the Euro zone plus historical reasons for Italy (http://ec.europa.eu/eurostat/statistics-explained/images/2/2e/Gross_domestic_product_%28GDP%29_per_inhabitant_in_purchasing_power_standards_%28PPS%29_in_relation_to_the_EU-28_average%2C_by_NUTS_2_regions%2C_2015_%28%25_of_the_EU-28_average%2C_EU-28_%3D_100%29_MAP_RYB17.png).

    The European Central Bank would have to support the restored currencies of those countries leaving the Euro and this support might be linked to their government deficits.

    There might have to hypothecation of taxes, so those in the Euro zone pay more into the EU and the poorest of those in the Euro zone receive more assistance followed by those outside the EU which are close to alignment with the poorest Euro members and who wish to join the Euro zone. The EU Parliament would have to accept the need that the Euro zone budget would have to run deficits and issue gilts and bonds to finance it.

  • Van Rumpoy explored the concept of associate membership in a two tier EU back in 2014. Under current leadership, the intention is to press ahead with integration in the perhaps mistaken belief that will restore the EU’s crumbling popularity.

    Catherine is right. Those who advocate remaining must explain what renewed membership is likely to entail.

  • Katharine Pindar 7th Jan '18 - 2:37pm

    Hello, everyone. Many thanks, Michael, for explaining the situation regarding the UK and the Eurozone (with impressive statistics!) while I was at church. There is no question, Catherine, of this country being ‘forced into a United States of Europe’. or of any other state being ‘forced’. A USE may never happen anyway, despite Mr Juncker’s wishes, as states in the Eurozone may well not wish to surrender sovereignty in that way. (By the by, I was not intending to insult Peter by calling his three posts an ‘extraordinary monologue’, that was just an expression of my wonderment.)

    Peter M,, I knew it would not be you under that name, but am surprised that you had got the idea that there could be an inferior ‘Euro B’, which I have never heard suggested. As Michael writes, it is expected that states in the outer tier will continue to keep their own currencies.

    Michael discusses interestingly which countries might enter a closer union, which might only be sought by Germany for the states with the stronger economies within the Eurozone. As has often been discussed here, for instance by Peter M., there needs to be strong financial assistance from Germany to the weaker economies. However, we are not concerned with the Eurozone and its financial development. There are many differences of requirements and wishes within the EU states, and maybe those of France and Germany are not identical. Further co-operation on defence and security, complementary to the NATO umbrella, seems more probable than further economic integration, but again would be no threat to us. It would however be good if we could join in and influence developments and reforms of the EU by remaining a member.

  • @ Peter

    I think in September President Macron suggested a multi-speed EU. He even talked of giving the EU back to its citizens. He implied that the EU should be able to run deficits financed by EU bonds. I don’t know if he could get German support for EU bonds and increased funding from Germany in exchange for a reduced Euro zone.

    As I see it there are two main issues which motivated lots of Leave voters – freedom of movement which has resulted in the UK having unsustainable levels of migration from other EU countries and “Control”.

    I can’t see the UK population voting to stay in the EU unless both issues were reformed. Freedom of movement would need to be curtailed and member countries be allowed to limit the number of different types of workers which are allowed into their country. I would advocate countries buy this restriction in some way and for the money to be invested in the countries from where the economic migrates come from to bring their economies up to our level.

    Control is more difficult. We accept international justice and therefore it seems sensible that there is a role for a European Court to interpret EU wide laws. Wikipedia states this, “The ECJ is the highest court of the European Union in matters of Union law but not national law. It is not possible to appeal the decisions of national courts to the ECJ, but rather national courts refer questions of EU law to the ECJ.[5] However, it is ultimately for the national court to apply the resulting interpretation to the facts of any given case. Although, only courts of final appeal are bound to refer a question of EU law when one is addressed.”

    The UK has 9.72% voting power in the EU parliament. It still has a power of veto on some things in the Council of Ministers so we have total power. Also because of having 12.86% of the EU population we have at least that much power in the Council of Minister, but even more if we consider that a qualified majority needs 65% of the EU population being represented by the member countries voting for it.

    Perhaps we need to reform the Council of Minister so unanimity is required more often and the member countries’ legislative has to have agreed that country’s position before the minister votes and the ministers become delegates with no representative powers.

  • Katharine Pindar 7th Jan '18 - 6:02pm

    Yes, I think that if we do stay in, one of the reforms we might press for is for each member country’s legislature to discuss and mandate their ministerial representative on the Council of Ministers as to what line to take on major issues, and to recommend what their stance should be on lesser matters. This ties in with the legislatures taking more interest in and giving more time to consideration of EU proposed legislation.

    I don’t know how it is in the other states, but here the general lack of interest in what our MEPs are doing could be – I think, should be – revitalised by asking for regular reports from them to Parliament, and for them to be in regular close contact with our ministerial representative. Perhaps there should be a specific committee set up with members from both legislative chambers here to receive and discuss such reports from MEPs, receive news of proposed regulatory changes, and expect attendance and response from a government Minister for Europe who might become or deputise for our minister on the EU Council of Ministers. We could also ask for more powers for the EU Parliament, for instance to initiate legislative changes. The aim would be to improve the democratic functioning of the EU, by increasing involvement and control by elected representatives at each level. It would be good to have an opinion on this by someone with greater knowledge of the system, for instance from any of our ex MEPs.

  • Peter Martin 7th Jan '18 - 6:58pm

    Katharine,

    This, below, is one suggestion for a split eurozone. Stiglitz who I normally agree with has floated a similar idea from a more leftish perspective. If it had been initially set up this way there could have been some advantage, but it’s too hard, IMO, to now split it up.

    Everything comes back to the phrase “ever closer union”. I don’t believe ignoring that is an option. The EU has to become a union in the same way as the USA and the UK are unions to survive. German taxpayers won’t like the idea but they have to recycle their huge surpluses to make everything work. The ECB has been doing quite a good job in recent years in keeping the system working after the euro zone looked to be danger of falling apart four or five years ago. Unemployment has fallen and there’s been reasonable levels of growth.

    Those who look at the EU through rose coloured spectacles have therefore claimed that the problem is solved. It isn’t. The ECB has bought some extra time that all. Ultimately a single currency needs a single government to manage it with a single taxation system and centralised spending.

    https://www.reuters.com/article/us-germany-election-afd-euro/split-euro-zone-in-two-says-germanys-far-right-leader-idUSKBN14U0V6

  • Katharine Pindar 7th Jan '18 - 7:45pm

    Peter, I think the article you post (thank you) only provides further information on the diversity of views within the EU states. Your telling us that the EU has to become a union to survive is your view, but I don’t see any evidence of its being held by the states themselves. M. Macron would like a common Finance Minister, budget and bank for the Eurozone, and perhaps he and Mrs Merkel will agree on that, but there is so much loss of sovereignty involved that I cannot see even the richer states yielding to such pooled financial management.

    I suggest it is you who are looking through fixed-focus spectacles! You keep saying they can’t survive without real union, when in fact the EU is showing healthy economic growth, and Germany if that is the only way forward can indeed ‘recycle their huge surpluses’. But as I keep pointing out we Lib Dems aren’t suggesting a ‘split Eurozone’, but only (as Michael wrote above), a two-tier EU, as now, with the non-Euro states in the outer tier. Never mind how the EZ continues to survive, the interesting question to consider in future is the arrangements of our continuing life, along with perhaps eight other states, in the outer tier.

  • @ Peter Watson

    Thank you for your kind comment of yesterday at 4.34pm.

    @ Peter Martin

    I am disappointed that you did not respond to my suggestion on how the Eurozone could be reduced and reformed.

    @ Katharine Pindar

    I know lots of Liberal Democrats want to increase the power of the EU Parliament but it is not popular with the British public and we should be thinking of reducing its power rather than increasing it.

  • Katharine Pindar 7th Jan '18 - 11:08pm

    Hi, Michael, after agreeing with you all afternoon, I am a little surprised by your last comment. Surely we should not think of whether to reduce or increase the power of the EU Parliament because of its popularity or otherwise with the British public? I mean, surely we should propose policies that we think are right, regardless of their popularity? We certainly do so when proposing policies on the home front. That is not to ignore our possible supporters, such as people in public service whom we (as you have mentioned elsewhere) may have neglected, but we must do what is right first. I suppose that is a major objection I have to this Government, that they are proposing to do what a flawed referendum told them to do, rather than what is right for the country (assuming of course that they do really think it is right to stay in).

    Actually I think we can find a win/win situation here. Firstly, we can propose increased power for the European Parliament because that would help to increase the democratic working of the EU system. Secondly, we can make the EU Parliament less unpopular (if it is – though I doubt that – I would guess there is much indifference to the Parliament, but dislike of the unelected Commission) by making the MEPs report regularly to our own Parliament, as I have suggested. They have been remote from most of us, even from the politically minded, and I would like to have them drawn into our politics, so that people are aware of what they are doing and can influence them. Do you not think those are fair points?

  • OnceALibDem 7th Jan '18 - 11:59pm

    “by making the MEPs report regularly to our own Parliament,”

    Constitutionally you can’t really require representatives in one Parliament to report to another.

    In any case what is this report going to take the format of? Who will make the report – the Conservative or UKIP MEPs? They aren’t a homogenous block.

    This would – even more – cement the tendency of some MEPs to see themselves as the EUs representatives to the people not the other way round.

    There is a body called the European Scrutiny Committee which has the sort of role (in theory) you are talking of about mandates to ministers as regards Council decisions:
    “Under the scrutiny reserve resolution passed by the House, Ministers should not vote in the Council of Ministers on proposals which the Committee has not cleared or which are awaiting debate.”

  • Katharine Pindar 8th Jan '18 - 12:19am

    Thank you for that information, OnceALibDem, especially about the Scrutiny Committee. All this is a new exploration for me. Would it not be possible for MEPs for instance to make regular reports on line, if not to our own MPs – I take your point – but to some scrutiny body set up in their own region which would include local MPs? Or even if they were asked to regularly contact local radio or press. Some way of making their duties as elected representatives of an area include reporting back to their electors would surely be good, in order to enhance voters’ interest in electing them.

  • Peter Martin 8th Jan '18 - 9:16am

    @Katharine and Micheal BG,

    To answer both your questions at the same time. There is some scope for EZ reform. The ECB has recently made quite a bit of progress by conveniently ignoring the rules on such matters as QE. Of course, German economists and politicians, who wrote the rules, don’t like it. There’s been movement in the courts to have much of what the ECB has been doing declared illegal. The ECB has been able to move much faster than the European judicial system and so they’ve managed to get away with it so far.

    There could be a relaxation on the 3% SGP rule, say to 5%, on allowable budget deficits. That would help, but again Germany won’t allow it. Emmanuel Macron is on the right lines when he says that proposes “the creation of a eurozone budget to finance growth-oriented investments and to extend financial assistance to struggling member states.” A eurozone budget has to mean a government in charge of it and so this is the first step to the USE.

    The problem, as always, and as the article puts it:

    ” this would be anathema to the German chancellor, Angela Merkel, and finance minister Wolfgang Schaeuble, whose conservatives face an election this year and have faced domestic resistance to bailouts for Greece by hawks who say such payments turn the euro zone into a ‘transfer union’.”

    WS may since have retired but there are plenty more with exactly the same views to take his place.

    https://www.theguardian.com/world/2017/jan/11/euro-will-fail-in-10-years-without-reform-emmanuel-macron

  • Peter Martin 8th Jan '18 - 11:06am

    @ Katharine Pindar,

    As OnceaLibDem points out you can’t expect one Parliament to report to another in the way you suggest. If anything it should be Westminster reporting to the Euro Parliament. Which is the main “Parliament” in the USA? The Congress at Federal level or the Assemblies of each constituent state of the USA ?

    You really need to ask yourself what is the point of having an EU Parliament. It’s ultimately going to have to fulfill the same role as the US House of Representatives and the Senate or there is no point at all. It will just carry on being a talking shop which no-one is really interested in.

    If you’re in favour of all that then, fair enough, you’re pro the EU. But if you aren’t ……

  • A very interesting discussion. I think that the creation of a treasury, finance minister, central taxation and wealth redistribution is the only fix for the Eurozone. It would allow it to function more fairly, but at huge permanent cost. The problem, which is the diverse nature of its members, cannot be solved. Much will depend on who leads Germany.

    The deal, as always, will involve a massive transfer of power to the centre in order to save the currency. The current growth is welcome but does not address the structural faults.

    Ever closer union will continue. Its main driver is the often overlooked extension of the single market to almost ever aspect of our lives. Every product, service procedure or human role is being regulated with the EU assuming shared or exclusive competence. The much discussed subsidiarity has all but disappeared.

    I have huge admiration for the architects of this scheme, a sort of takeover by stealth. It was never intended that any country would try to leave and I would suggest that only a country with our wealth and resources would attempt such a thing.

    The fact that everything in the EU is bound up with regulation ensures that membership is a binary choice. Opt outs do exist but these were designed in when the treaties were drawn up. Making changes after the event involves unpicking the treaties. This is why partial membership is likely to be impossible or unsatisfactory for both parties.

  • Laurence Cox 8th Jan '18 - 2:10pm

    @Peter Martin

    During last year’s general general election I was volunteering at HQ and one day Shirley Williams came in to talk to everyone. One of the points she made was that she regretted that in the past we had not been proactive in requiring the Commissioners, not the MEPs, to appear before Parliament to explain themselves and their policies. She thought that had we done so when we first joined the other countries’ parliaments would have taken up the idea and that many of the Commission’s fudges that occurred would have been exposed much earlier.

  • @ Peter Martin

    I am glad we can agree that reform of the Eurozone and the “Growth and Stability Pack” could be done and we also agree that Germany is the one most likely to block the reforms we both feel are necessary.

    @ OnceALibDem

    It is surprising that no one mentioned this committee when discussing the lack of control that the UK parliament has over EU laws. I think the UK public want to know that every law passed by the EU has been discussed and voted on by the UK Parliament. I want this agreement or none agreement to be very public so the British people can know that in fact our Parliament did agree to the new EU law. I don’t think there are many laws that come from the EU which are applied in the UK which the UK government has not voted for in the Council of Ministers. If this is true we need to ensure the British public hold the UK government to account for the laws passed by the EU.

    @ Katharine Pindar

    I hate large electoral areas especially where my vote is one of 2,348,168 votes counted (South-East England EU Parliament election in 2014). I don’t feel empowered. I am lucky I have been a member of regional committees with Katherine Bearder and she has in the past responded personally to my emails and in the past I remember doing some electioneering with Sharon Bowles during a by-election somewhere.

    I think public accountability for making EU laws would be better placed in national legislatives rather than the EU Parliament. The EU Parliament should only have limited powers such as scrutiny and supervision of everything the EU does and the power to remove individual Commissioners. It does not need the power to make laws. I think we need to consider reducing the power of the EU Parliament if doing so would change some votes in a future referendum which has the option to stay in a reformed EU.

    @ Peter

    You didn’t really comment on my reply to you. I think maybe I should have added the removal of the EU’s aim of ever closer union. I agree with you it appears almost impossible to repeal an EU law. This needs fixing. This is another reason I don’t like the way the EU Parliament works because it never seems to overturn a decision made before the last EU Parliament elections.

  • Laurence Cox 8th Jan '18 - 2:30pm

    The Economist article “The Phillips curve may be broken for good” is well worth reading:

    https://www.economist.com/blogs/graphicdetail/2017/11/daily-chart?fsrc=scn/li/te/bl/ed/

    If this is the case, then we don’t need to worry about inflation taking off as unemployment falls, so there is no reason to raise interest rates at all. Control of the economy may be better achieved by taxation rather than by interest rates; I would have liked to have seen the UK data rather than the OECD data for this, though.

  • @Michael BG – Sorry, Michael. I fully agree that free movement and control are key. I cannot see Poland agreeing to restrictions in movement so I think change is not possible within the single market. I agree that the ECJ supremacy is of minor practical importance but is of enormous perceived importance in terms of sovereignty.

    I doubt if many UK citizens know or care about our voting power within the EU. They know that we are greatly outnumbered and would prefer that we conduct our own affairs. The EU is trying to get rid of unanimity and the right to veto because of the difficulty in getting agreement with 28 members.

  • I’ve enjoyed our discussion and thank you all. So many good points were raised that it is difficult to comment on them all. Also, it is difficult to discuss complex issues with the brevity required without it descending into a monologue . I thought I would try to summarise what I take away from it.

    I saw a willingness to discuss the concerns about the EU and found that very refreshing. There seems to be a strong wish to reform the EU but there is realization that reform is not easy to achieve.

    I suspect that the small group represented here are resigned to the fact that a majority of UK voters would reject a large step towards more integration whether it be joining the Eurozone, financial control, raising an army, planning for federalism, etc., and that if the EU continued in this direction, some sort of partial membership would need to be considered.

    In a way, that brings us to the current reality where such scenarios have already been played out. Cameron promised reform but failed to achieve anything.

    We are already partial members, being opted out of the Euro and schengen. Even so, the current level of integration and threat of more made many people decide that the EU project was not for them.

    Partial membership, assuming it is possible, would need a whole new definition and analysis of costs and benefits, bearing in mind that it would have to compete with the alternative which is freedom, autonomy and some sort of trading deal.

  • OnceALibDem 8th Jan '18 - 3:41pm

    “I think the UK public want to know that every law passed by the EU has been discussed and voted on by the UK Parliament. I want this agreement or none agreement to be very public so the British people can know that in fact our Parliament did agree to the new EU law.”

    That’s not really the role of that committee. They don’t have say yay or nay over EU laws. Regulations take effect whether Parliament approves or not. So there is a large tract of EU law over which the UK Parliament has now say. With Directives there is more scope for this as they need tecnhincal approval by Parliament (though often as a negative resolution SI which doesn’t need a vote).

    As for EU Commissioners appearing before a parliamentary committee I don’t know if that has happened. Or if they would agree to it as they are servents of the EU Parliament not national ones.

    What a lot of these suggestions point to is a non-soverign EU tier of government which has specific powers devolved up to it. Rather than what there is now.

  • Katharine Pindar 8th Jan '18 - 3:48pm

    Returning to the interesting discussion above about EU structures and governance, if we stay in I think we should be aiming basically for more information-sharing from EU bodies to British people and more chances of control over legislation passed there. If MEPs cannot be called before our Parliament, as I accept, I suppose it is impracticable for Commissioners to be expected to appear before 28 different legislatures. How would it be if a powerful Minister for Europe were appointed in our Government, supervising a department charged with keeping track of EU legislative developments t, requiring information from the Commissioners’ departments, and asking MEPs to provide regular information on their own work and comments on developments?

    The MEPs should be required, though, to report to their electors regularly at least on line, so as to become less remote to us all. I don’t accept that their role should be reduced, or that it is insignificant. Lib Dem MEPs such as Chris Davies from the North West did valuable work, Chris if I remember rightly on fisheries, and on carbon capture and storage, and no doubt Catherine Bearder as our remaining Lib Dem MEP could fill us in on her major activities there also.

    It seems likely to me – though I have no inside knowledge – that the Eurozone will continue, but that M.Macron’s most fervent wishes, for EU budgets and a finance minister and monetary controls, would indeed require a United States of Europe and that that will not be accepted by the other EZ states. Some halfway house will be found, just as the idea of a European army has been dropped but a pact has been made which involves inter-EU military training and, I would guess, co-operation on acquiring and sharing military hardware. Co-operation and compromise worked out by excellent minds will I believe keep the EU together and flourishing. with a continuing two-tier structure.

  • The Problem with a 2 tier Europe is, it will still never be agreeable with the majority of the UK electorate.
    Just because the UK retains certain opt outs and is not committed to an ever closer union does not mean that an ever closer union between the inner-tier would ever be good or acceptable for the UK. It could even prove to be more detrimental to us than it is now, especially if the UK did not have a veto over a policy / policies adopted by the “inner tier” which could be damaging to the uk economy or prosperity.

  • @Katharine Pindar
    We have had about 23 Ministers for Europe since 1979, though I doubt if any of them did anything useful, even if they tried to be powerful. The instructions are handed down, not the other way.

    We also have a parliamentary Committee scrutinising what comes out of Brussels but I understand that this is a rubber stamping exercise and at times the volume of regulation has been overwhelming. I agree that these matters are all crying out for reform.

  • OnceALibDem 8th Jan '18 - 8:01pm

    “I understand that this is a rubber stamping exercise and at times the volume of regulation has been overwhelming. I agree that these matters are all crying out for reform.”

    Big issue post Brexit will be how Parliament deals with the need to handle all its own rule and regulation making. A lot of this has been done in Brussels – or at least the heavy lifting bits of it. Secondary legislation scrutiny is diabolical in Parliament (well actually primary legislation isn’t that great but that’s whole other matter!)

  • @ Peter

    Thank you for responding. It is not in a country’s interest for those with talent and the most get up and go to leave their country. I expect the Polish government would like these people to be employed in Poland and contributing to Polish society and Polish well-being. That is why giving the Polish government money to expand their own economy may well be very welcome.

    You may be correct that the leadership of the EU does not see the need for the reforms I suggest and they are unlikely to happen. However, I was not stating these reforms would happen. I was suggesting they should happen and if they did EU membership might be acceptable to a majority of the British public.

    I am not sure David Cameron actually thought he would lose the referendum. And if he didn’t think he would lose I expect he didn’t convince the leaders of the other EU states that they really had to make meaningful changes to keep the UK in the EU. Now those leaders know. I very much hope they will make the necessary changes but I am not optimistic.

    All but two regulations and directives which have come out of the EU have been agreed by the Council of Ministers. The Commission should not have the power to make any laws on its own. According to Wikipedia there are only two laws which have been made by the Commission acting alone – “one on transparency between member states and companies[24] and another on competition in the telecommunications sector.[25]” (https://en.wikipedia.org/wiki/European_Union_legislative_procedure).

  • Katharine Pindar 9th Jan '18 - 12:32am

    @Peter and OnceALibDem. Thank you for helping develop our ideas of what differences and reforms may be needed in the EU and in its relationship to the UK if we are able to stay in, or to have a very close relationship with most of the current advantages. The weight of scrutiny of EU legislation and passing of Statutory Instruments to accept Directives does suggest to me that there would need to be a newly powerful Department of a Minister for Europe in our Government, relating to an important Parliamentary Committee. Developing the outer tier of nations, building on our extended partial membership, will indeed require much rethinking of functions and powers devolved, and of the relationship with the inner tier of EZ states. I don’t see why the EU powers should not be open to discussions about such developments in due course. Michael, it is academic but I should be interested to know where power does lie in the EU, and I suspect that, as with the Treasury in our Executive, it may truly lie in the permanent staff of the Commission.

  • Peter Martin 9th Jan '18 - 10:01am

    @Katharine,

    “that M.Macron’s most fervent wishes, for EU budgets and a finance minister and monetary controls, would indeed require a United States of Europe and that that will not be accepted by the other EZ states. Some halfway house will be found…”

    Either there is going to be an EU budget or there isn’t. It’s not something that can be compromised on in principle. The compromise will be on the amount of the budget and the powers of whoever is in charge of this.

    Brexit isn’t a done deal, yet, and it’s possible the UK will somehow remain part of the EU. If we do it’s important not to try to put a spanner in the works. EM is pushing for an EU budget not just because he thinks it’s a nice idea, or even because he thinks France will be a net beneficiary. It probably won’t make much difference. If we take him at his word he’s one of the few people who are thinking about the EU as a whole rather than what their own particular nation state can get out of it. What is good for the EU, as a whole, has to be good for the UK whether we are in or out ourselves.

    In that respect I would wish him well, even though I don’t support the idea of the UK being part of his ‘ever closer union’ plan. The risk of failure is just too great. Even those who claim to be pro EU will be working against him. All they’ll be doing is working to ensure the failure and ultimate break up of the EU.

  • Katharine Pindar 9th Jan '18 - 4:35pm

    Let’s forget about ‘Ever closer union’, Peter. I’m convinced our country is against it, our party (declared or not) is against it, probably most of the EU states are against it, in short it ain’t going to happen, and even if I’m wrong and it did, Britain won’t belong to it! And while it seems right that, as you say, ‘Either there is going to be an EU budget or there isn’t’, I still muse about compromises. I can’t as you know argue with you about financial matters, but I wonder whether there are not some agreements possible in a new Financial Stability Pact for the Eurozone.

    It’s good anyway that there has been some constructive discussion here about the possible reforms and developments in the EU we might like to see, given that even Mrs May’s tottering government seems to want a continuing close relationship with ‘Europe’. And as Liberal Democrats we need to have some answers, if people whom we are trying to persuade to oppose Brexit ask us what reforms we would like the EU to agree to as a condition of our staying in. I hope this kind of discussion will be held in the party outside of LDV, including among our parliamentarians and elected party leaders. It seems one of the worthwhile tasks for the party in this crucial year.

  • Katharine, you mention compromise, I think that the UK might be able to purchase access to the single market. Brexit will leave a massive hole in the EU budget. The net recipients of EU funding are desperate to avoid making a net contribution and the net contributors refuse to pay any more. The Commission refuses to back down and trim the budget.

    In these circumstances they might jump at a way of retaining some income.

  • @Peter Martin. The step towards a federation and the stability of the Euro are closely linked. All economists agree that a central government, treasury and finance minister normally exist before the currency. To create the currency first is going to lead to a crisis. Some people claim that the architects of the EU understood this and yet deliberately created the currency first. Why would they do this?

    They knew that persuading member states to relinquish power to create centralised financial governance would not be easy. They decided that a single currency would soon flounder without a centralised structure and the resulting crisis would force the member states to make sacrifices. The EU has used the technique before, coining the name, “beneficial sacrifice.”

    The plan goes something like this. Germany has a strong economy and the Euro exchange rate is beneficial because it is undervalued, dragged down by the other countries.The Southern countries, such as Greece, have weak economies and the Euro is highly priced for them, making them uncompetitive. Germany should redistribute her wealth to the poorer countries via a central treasury. German tax payers made it very clear that they would not throw good money after bad, but if a central administration had controlling powers over the likes of Greece then that should reassure Germans that their money was being spent wisely.

    I thought that the time to act was during the low point of the Eurozone when Greece nearly left the bloc. The German taxpayers were very voluble and Merkel backed down. Since then, Mario Draghi has done a remarkable job stabilising the Euro. Brexit, from the announcement of the referendum onwards has put EU plans on hold. The next window of opportunity is after we leave. That is a long time in politics.

  • Mike Falchikov 10th Jan '18 - 12:00pm

    A very interesting and informative discussion. As regards greater accountability and
    liaison with EU institutions and MEPs which has been raised by several contributors, why
    not make this part of the remit of a reformed and properly elected second chamber replacing the House of Lords?

  • Katharine Pindar 10th Jan '18 - 7:18pm

    @ Mike Falchikov. That’s an interesting suggestion, Mike. Election of the Second Chamber is one of the policies we should keep pressing, though I think a case can perhaps be made for some part of their number still to be appointed by the elected parliamentarians of the First Chamber. The current House of Lords includes many thoughtful and useful people of great experience, but as you suggest their duties and responsibilities should be looked at in any reform. Meantime our Lib Dem peers are hard at work, and we have to be very grateful to them.

    Peter M. Yes, I suppose there could be some attempt to buy retention of single-market membership, but Mrs May can’t keep the Brexiters happy if she offers still more cash, and if she is seen to go soft on any of the Four Freedoms. Incidentally, what an abject performance by the Labour spokesperson on The World at One on Radio 4 today! Apparently relying now on the transitional arrangements, which as our Vince has said only kick the can down the road, avoiding saying what the final deal should be. But a new development strengthens our case for Remain, if today’s ministerial visits to Germany fail to gain agreement on the continuation of the Passporting rights for financial services, as seems likely. One of the fantasy castles in the air likely to collapse.
    (Peter, I think France might finally jib at what would appear as German hegemony.)

  • Paul Barker at 10:20pm on 5th Jan you say “That why I just report whats happening without making predictions anymore. Hope isnt certainty,” but just 6 hours and 24 minutes earlier, you say “Obviously that isnt going to last – either our Local support will crash or our National Polling will start to creep up.”

    Looks a bit like a prediction to me.

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    Arnold Kiel says that “luckily in this game between Trump and Kim Jong Un one player is rational”. But which one?
  • User AvatarMalcolm Todd 19th Jan - 2:31pm
    Rob Parker 19th Jan '18 - 2:22pm If I may simplify: "Taking a new, more radical approach, might make a difference, such as [becoming the...
  • User AvatarNigel Ashton 19th Jan - 2:26pm
    What a lovely article Lucy, which brings back many fond memories of your grandfather. Gruff was a mentor to me as I worked my way...