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Call time on the countries of convenience

Call time on the countries of convenience

The Isle of Man and the Channel Islands aren’t most people’s idea of ‘paradise’, but they provide useful addresses people you might otherwise spot in Monaco or Montserrat.

This week’s BBC Panorama documentary on the Paradise Papers exposed some of the flagrant abuses of these British ‘Crown Dependencies’ That’s the official ‘self governing’ status of these places and it enables major international brands, companies and wealthy individuals to pay less tax that the typical British man and woman.

That’s because, technically, these ‘British Islands’ are not part of the UK. However, in reality they are. They are ‘countries of convenience’ created to enable a lucky few to play by different rules - especially on tax. The islands have in reality been part of the British state - in so much as the Crown represents the state - for hundreds of years and they rely on the UK for defence and foreign affairs. Their people are British Citizens but they are officially outside the legislative reach of the UK Government and are not part of the European Union. The legislatures of the Islands make their own laws, and then these are rubber stamped by either the Privy Council, or if in the Isle of Man, the Lieutenant-Governor of the Island - proving the point that they are really British.

In reality there are a number of fundamental laws in these rotten boroughs that the UK has, effectively, insisted the local legislatures change. The Isle of Man was, for example, rightly compelled to abandon barbaric punishment regimes that they retained well into the 20th Century. Bearing in mind that you can fit the entire population into Wembley Stadium, it is absurd to suggest that this is a country in its own right; it’s more like a local council with its own tax law. This is very convenient to all sorts of people rich enough to buy houses that they don’t actually want to live in.

Why have a succession of British Governments let big brands, companies and the super rich get away with billions of pounds of tax evasion?

Some, like the authorities in Guernsey (the population of which would fit into Old Trafford) argue that having tax-dodging businesses located in theory (but not really) in St Peter Port somehow benefits the UK by bringing “liquidity” into UK banks and financial institutions that would otherwise just go to some other offshore bolt hole.

Maybe so, getting to grips with offshore tax dodging requires concerted action, not least by the EU but it is high time the UK Government realised the tax shelters of these ‘countries of convenience’ help convince people in the UK that the system is unfair. Even though the British are a tolerant lot and generally don’t blame weather people for taking advantage of what is, after all, perfectly legal - maybe they would do the same if they could. But ordinary folk simply can’t take advantage of these strange and wonderful rules. Seeing those with great resources play by a different set of rules on the doorstep of Blackpool undermines trust in the system.

If it were up to me the independent tax status of these islands would be ended tomorrow. For the moment, however, the leak of the so-called Paradise Papers from Appleby should make us pause for thought as to whether the Ministry of Justice should further review their definition of ‘conflict with international obligations.’

I am pleased to see the Labour Shadow Treasury team taking up this issue, and calling for some much needed transparency in the murky world of tax evasion. It should not be the case that companies like Apple can get away with routing most of their business through Jersey, or that companies like Lewis Hamilton’s Stealth (the clue’s in the name there) can form a VAT-registered leasing business on the Isle of Man to avoid paying VAT on a private jet.

The Government should have the guts to do the same. Nobody likes paying tax, but we accept it as the price of a civilised society all most people want is to know that the share they are paying is fair.

Posted by John Howarth
Do you trust the Tories on employment rights after Brexit

Do you trust the Tories on employment rights after Brexit

Boris Johnson and Daniel Hannan have demonstrated precisely why we can’t trust the Tories with our rights in the workplace.

Many of us in the Labour and Trade Union movement have doubted the Conservative promise to protect employment rights once Britain has left the European Union.

On the face of it the Conservative promise is unequivocal - the rights of people at work will be moved into UK law without change. Whatever they say, however, there is a big difference between employment rights inside the EU and the same rights transferred to UK law. Within the EU employment rights are guaranteed by treaty. Changing an EU treaty is hard to achieve - requiring agreement from all member states. Changing UK law requires a majority in the House of Commons - or just an Order in Council (a Minister’s decree) for some laws under the provisions of the withdrawal bill.

So outside the European Union rights are only guaranteed so long as the Government sticks to its word.

It should now be crystal clear that whatever the lame duck Prime Minister might say, other Conservatives don’t intend that the pledge on employment rights will last very long. At the launch of the new Think Tank led by Brexit extremist MEP, Daniel Hannan, ‘The Institute of Free Trade’ (IFT), both Boris Johnson and Hannan himself set out their vision of a Singapore-style, low-tax, low-regulation ‘offshore’ economy. In such an economy the rights of employees are rarely the number one priority.

The fact is on rolling back rights at work the Conservatives have form. One of their first acts after they took power in 2010, with the support of current Liberal Democrat leader, Vince Cable, was to remove protection from staff in post for less than two years. During their campaign to take the UK out of the EU, employment rights legislation was frequently listed among the ‘red tape’ constraining business that could be when outside the bloc.

It’s also worth remembering that the Conservatives fought tooth and nail to keep the UK opted out of the aspects of EU law that protect employment rights. Those rights were never forced on the UK by ‘Brussels’, but were eventually adopted by the UK as one of Labour’s manifesto promises at the 1997 General Election. TUC General Secretary, Francis O’Grady, recently pointed out that the immediate risk to employment rights is to those regulations that protect part-time and agency workers which are gradually chipped away by the Tories under the guise of cutting ‘red tape’.

A year of reassurances from Tory ministers that our rights in the workplace would be protected and enhanced. Theresa May said in her Lancaster House speech, that she would like to build “a fairer Britain is a country that protects and enhances the rights people have at work” but whether she means it or not we all know her days as Prime Minister are numbered. Her Party is in thrall of Brexit extremists like Mr Hannan, Jacob Reece-Mogg and Ian Duncan-Smith who are devoted to the ideology of the unfettered free-market. They have turned a very narrow referendum vote into an excuse for a ‘hard Brexit’ that they told voters wasn’t on the ballot and which this year’s general election rejected.

How long before the promises of guaranteed rights at work go the same way as Mr Hannan’s infamous claim that “nobody is talking about leaving the Single Market”?

Posted by John Howarth
EU Cities for Fair and Ethical Trade

EU Cities for Fair and Ethical Trade

The EU Cities for Fair and Ethical Trade Award provides a platform for towns and cities to showcase their work to promote Fair Trade and to exchange best practice and new ideas.

Towns and cities all over South East England have fair trade policies and elected councillors work hard with NGOs and community organisations both to project the issue and to implement practical steps to integrate fair trade products and practices in their communities.

Fair trade and linked aid can make a real difference to developing communities, redress the balance to provide greater equity in international trade. Fair trade organisations, NGOs and suppliers with ethical policies, backed by consumers support produces, help raise awareness and campaign for changes in the rules and practices of conventional international trade. The objective of fair trade supporters and politicians backing these campaigns is to mainstream fair trade practices, combat poverty and improve livelihoods. The changes brought about at European level have enabled local authorities and public bodies to specify fair trade requirements in public tenders and it is changes such as this that the award is intended to help promote.

I would strongly encourage local authorities in South East England to participate and have written to Labour local authority leaders to encourage them to do so.

You can find out more about the award here, more about the work of my colleague, Linda McAvan MEP who set up and Chairs the European Parliament’s Fair Trade Working Group here.

It is also worth saying that The Co-op, which has long been an integral part of the Labour and progressive movement, is the largest UK supplier of fair trade and ethically sourced products. So if you want to do something practical to help fair trade, get down your local Co-op and check out their range.

 

 

Posted by John Howarth
The European Parliament decision on Brexit – not enough progress

The European Parliament decision on Brexit – not enough progress

Today the European Parliament passed its second Resolution on Brexit. The resolution re-stated the position of the European Union on the key issues and stated that insufficient progress has been made to move on to the next stage of the negotiations. This is not good news for anybody but it is nonetheless a statement of fact.

Council President Donald Tusk had warned that insufficient progress is being made in the negotiations. His thoughts had been echoed by the EU’s chief negotiator, Michel Barnier, who suggested last week that Brexit talks could take months to move to the next phase. Even the Conservative Government seems to understand that there is very little has been achieved thus far.

But, though the clock is ticking, this is how negotiations go - there has been some progress and who, after all, didn’t expect this to go to the wire? Today’s Resolution calls for commitments made as part of Theresa May’s Florence speech to translate into tangible changes to the UK’s position. Now is the time for concrete proposals.

On any financial settlement, Theresa May has set out a series of principles, sometimes coded, that are a basis to settle accounts but she can’t name a figure, as it is certain to trigger a renewed round of cabinet infighting. Her inability to control her own party is hindering the UK’s negotiating position. She must regain control or go. In an earlier blog I wrote that it was time to grow up, stop posturing and start negotiating seriously.  The sooner those in and around Number 10 accept the reality that you don’t build a ‘deep and special relationship’ by walking away from your debts, the better. In the meantime, the EU awaits concrete proposals from the UK. On this evidence, they may be waiting some time.

On citizens’ rights, it is remarkable that the Conservative Government seems to have so little regard to the future of UK citizens living in the other 27 European Union member states. This is the area in which least progress has been made yet where the solution is most obvious.

There are 3.2 million EU citizens resident in the UK, but the number of people affected by uncertainty over Brexit is far higher. Those that have chosen to move freely in both directions within the EU have become partners, lovers, friends, relatives and colleagues to many millions more. The Conservative government must wake up to the fact that citizens’ rights are reciprocal. How the government chooses to treat EU citizens living in the UK is likely to impact on the treatment UK citizens receive abroad. 1.2million UK citizens living in Europe know that.

The idea that the Home Office can competently process 3 million individual residency applications and have a new immigration IT system working by 2019 is laughable. Those that have already received Home Office deportation letters - despite having lived and worked in the UK for many years - will be rightly skeptical. It’s no wonder Tory plans have been dismissed by EU officials as “magical thinking”.

Lastly, on Northern Ireland, there is broad agreement that there should be no physical border within the island of Ireland. The problem will be achieving that. For those of us old enough to have lived through the troubles, safeguarding the Good Friday Agreement is paramount, and any hardening of the border places it in jeopardy. The EU had hoped for substance when Theresa May delivered her Florence speech. It didn’t get it. Her assertion that she would not accept physical infrastructure at the border was not backed up by any suggestion as to how that might work in practice. What she seems to favour is some sort of magical IT solution to the customs issues. Their faith is touching but far from practical.

But once again, Mrs May has to deal with her unreliable allies. Hard-line Brexiteers and the DUP will make it difficult for Theresa May to deliver the obvious solution: Northern Ireland must remain within the single market and the customs union. It is also the only workable solution. The people of Northern Ireland voted overwhelmingly to remain. There is no mandate to pull them out of the single market or customs union and even less appetite for endangering a lasting peace.

We find ourselves in a negotiation where a Prime Minister lacking in any kind of authority cannot break free of the infighting of her party; where a substantial minority on her own side want negotiations to fail so they can achieve the ‘cliff edge’ outcome they desire and where the rest of her party are held hostage. This, more than anything else, is what is putting the UK’s national interest at risk. It has been thus ever since Mr Cameron’s disastrous decision to hold a referendum.

Posted by John Howarth
How Brexit will hit the NHS

How Brexit will hit the NHS

Boris Johnson’s Big Lie about £350 million a week for the NHS is part of the fantasy Brexit peddled to the British people who care deeply about the service. The facts about #Brexit and the NHS are quite different.

Any Brexit at all will damage the NHS. The damage to tax revenues, the value of Sterling and the vast costs of new customs facilities and the army of civil servants we are going to need to do the jobs the EU ‘bureaucracy’ has done for us, matching grants to farmers, universities and so forth will gobble up the UK’s contribution before the NHS gets a look in.

But even worse than all this is the catastrophe that ending EU migration, as the Government seems to want to do, will create for the NHS. Figures analysed by the news organisation ‘Politico’ (a US owned ‘real news’ outfit that does facts). Show how the UK relys on doctors and nurses from Europe to keep the NHS running. You can read the full article here, but for now just take a look at these charts:

They show the UK taking the lion’s share of the doctors and nurses working outside their own country in the EU. I’ve met many of these doctors and nurses and you know what, they really believe in what the NHS stands for, love working for it and pay tax. What’s more, these dedicated staff cannot simply be replaced by people from the UK. It takes years to train doctors. We should certainly train more, but nobody seriously believes that we can do that overnight. Nursing, sadly, is not the attractive profession we might like to think. Hard work, long hours but pay that can easily be beaten in many other, easier jobs.

Those uncomfortable truths mean we just won’t be able to fill these rolls without overseas recruitment – and if that doesn’t mean the EU it will mean Africa or South East Asia instead. So we will end up recruiting people through a system of visa and work permits, English tests and all kinds of other bureaucracy that will mean extra cost for the NHS and all sorts of skills gaps and staff shortages.  

The Tory Government needs to come clean and Labour should take note and think very hard here. If Labour is serious about being a Government in waiting then it will look at these figures and understand very quickly that Brexit will inevitably make its plans to revitalise the NHS impossible to deliver.

On this and much else the country should get to grips with reality and re-think before it is too late.

 

Posted by John Howarth
Who will trust a UK that walks away from its debts?

Who will trust a UK that walks away from its debts?

In the disingenuous bluster that for Boris Johnson constitutes a speech there are, despite appearances, some carefully chosen words. Aside from creating a NEW LIE, the repetition of the BIG LIE of £350m a week for the NHS is, when closely scrutinized, an attempt to re-write history. To qualify the lie, he pre-fixes his repetition with “once we have settled accounts” and states “It would be a fine thing, as many of us have pointed out, if a lot of that money went on the NHS, provided we use that cash injection to modernise and make the most of new technology”

No easy ways to wriggle out of that down the line then! He doesn’t say how, when or from what pot. The implication, should he need to revise history yet again, being that he never actually meant it in the first place. If you have been caught lying as often as Boris then it is best to muddy the waters as much as possible.

Mr Johnson knows fine well that the UK and the EU will need to reach a financial settlement if there is any hope of an exit from the EU that holds the prospect of anything other than short term ruin. He also knows that he and his leave advocating friends have painted themselves into a political corner and he knows it isn’t clever. Boris Johnson may enjoy being the fool but stupid he is not.

Agreeing a financial settlement is, as expected, proving a major sticking point in the first phase of the UK-EU negotiations.  Until agreement is reached on that issue, it is highly unlikely that the Council will agree in October that 'sufficient progress' has been made in order to move onto discussions of the new UK-EU relationship.

The longer it takes to agree a financial settlement, the less time will remain to agree a future relationship that delivers for, and protects, British people, their jobs and their rights - and the longer the period of uncertainty for British businesses and foreign-owned businesses based in the UK. Continued uncertainty contributes to those business considering their options for the future, one of which is certainly moving their key functions (and tax contributions) from the UK.

So wise heads need to prevail, and we need to stop the ludicrous posturing that we have seen, not just from the usual suspect Tory backbenchers, but from Cabinet ministers whose idea of a productive contribution is to tell 27 sovereign countries to "go whistle".

The UK government has said it wants to go through financial settlement proposals “line by line”. Labour would take this approach too were it in Government. The EU and elected politicians there will also go through any proposals from the UK ‘line by line’. Why would they not? As elected politicians we have a duty to ensure any public funds spent are in the best interests of taxpayers and deliver value for money. There are a number of areas where the UK has outstanding commitments to the EU but equally there are also many EU assets the UK has paid into. We need to ensure a fair deal which reflects both assets and liabilities and our continued cooperation in many important areas. The Commission and the Council will want to get a fair deal for their citizens, and the UK government will want to do the same for Brits.  That is only right.

But that cannot, and should not, mean trying to walk away from our obligations.  It is undeniable that we have signed up to certain EU projects which do not neatly end on the arbitrary date of 29 March 2019 as well as our long term commitments over the term of our membership. Only spivs and charlatans would suggest that we walk away from our nearest neighbours and longstanding allies without paying a penny towards those projects from which we have benefitted and can continue to benefit.

So the UK Government will need to consider what best serves the ‘interests’ of the country, and rather than simply consider what’s ‘legal’ or ‘contractual’.

The UK is a responsible, grown-up democracy that has a proud history of upholding the global rule of law and meeting its international commitments. The EU27 will still be our neighbours and democratic allies after we leave. They will still be our friends, our partners in security and trade at the very least. In these negotiations, the UK must show itself to be the fair-minded and responsible country that we have always been in the past.

So please, let's end the nonsense of "we don't owe them anything" and the idea that we can act like amoral directors of a bankrupt company and walk off into the sunset leaving someone else to pick up the pieces.  Because I can guarantee that it will be ordinary British people who suffer the consequences of that kind of behaviour. In any case, how will it take us closer to an agreement, how will we gain an advantageous deal by at the first question effectively refusing to negotiate?

It's time to grow up, stop posturing and start negotiating seriously.  Yes, we need to make sure that we pay a sum that is justified, one with a sound evidence base and one that is rooted in law.  But the UK will have to pay a sum and from doing so we will gain a benefit. And the sooner those in and around Number 10 stop posturing and accept the reality that you don’t build a ‘deep and special relationship’ by walking away from your debts.

Posted by John Howarth
Prophets of doom wrong: the EU is far from over.

Prophets of doom wrong: the EU is far from over.

In the UK it would be easy to believe that the UK’s exit from the European Union is the top item, if not the only item, on the European Union’s agenda.

After all, the UK is the second largest economy and one of the ‘big four’ member states with, accordingly, the biggest influence over decision making. The UK was instrumental in creating the single market, is a net contributor to the EU Budget and, in the aftermath of World War 2, was the author of the framework of rights under which the EU operates to this day.

But, no, the UK’s exit is not the top priority for the remaining member states - ‘the EU27’. Reactions to the UK’s looming exit from EU27 politicians I meet (though it’s fair to say I don’t prop up the bar with fascists and nationalists of the far right) range from continuing disbelief and incredulity to sadness and regret. There is some anger too from those who follow UK politics closely - that the situation was ever allowed to happen and with the spineless and the deceitful in our body politic who’s negligence helped bring it about. Some still believe - I guess because they also believe in rational thought - that the UK will collectively come to its senses and either reverse the decision or not go through with it. This may be wishful thinking (there’s a lot of that about these days) but what is very clear is that the vast majority of EU politicians would love Britain to stay and the door to that remains very much open.

All that said there is a realisation among the 27 that the EU needs to look to the future after Britain’s act of self-harm is complete.

That view was reflected in EU Commission President, Jean Claude Juncker’s ‘State of the European Union’ address to the Parliament during this week’s Strasbourg session. I’m not a big fan of Mr Juncker - he comes across as somewhat arrogant, grumpy and self-important. His world view is not one I share. I also think that losing one of the ‘big four’ on his watch, would have been a resigning issue for any UK politician.

BUT Mr Juncker, believes in the ideals of Europe. He’s without question committed to the future of Europe. It is also his job and that of the Commissioners to come up with ideas for the future.

His statement of the EU’s priorities - economic growth, the challenges of a digital single market, automation, security, climate change, the skills agenda and migration - accurately reflects what I hear from the Parliament’s mainstream and even some of the far left.

His future vision involved a whole lot of proposals and ideas. Some have as much chance of happening as I have of running a marathon (not entirely impossible, but almost). Some will come to pass.

In reaction, we have the usual predictable slogans from the usual suspects. Year after year we have heard from the opponents of the EU that the whole thing was about to collapse: the Euro was a disaster, the Eurozone would be trapped in permanent recession, the populist wave was unstoppable and the dominoes would fall. UK’s Exit would be followed by France, the Netherlands, Italy, Denmark and Hungary.

Well they were wrong. Repeatedly and utterly wrong. The dominoes did not fall - and they are not going to. Nobody else is remotely contemplating leaving the Union - not even Hungary under Victor Orban - who has said as much recently. The EU’s popularity has risen in the 27, where looking at the example of the worsening situation in Britain has been an example to others. Le Pen lost heavily, Wilders lost heavily and the centre looks likely hold convincingly in Germany later this month. The Eurozone economies are now all growing more quickly than that of the UK. The Euro itself has not collapsed, in fact it has proved remarkably resilient through the longest and deepest depression in a century. It will not be allowed to collapse and its governance will only strengthen. The migration crisis remains a challenge, but there are signs the worst may have passed.

This apparent, and I think genuine, renewal of confidence sadly does not bode well for the UK in the negotiations over its exit. If anything, the UK is slipping even further down in the EU27’s thinking.

Anyone who doesn’t think this is a problem needs to wake up - it’s a glimpse of the future where the UK has no influence over events. Half of the UK may wish to live on nostalgia, the EU27 know they can’t.

Posted by John Howarth
An EU macro-regional Strategy for the North Atlantic Area?

An EU macro-regional Strategy for the North Atlantic Area?

The European Parliament’s Regional Development Committee today (7 September 2017) discussed the bi-annual report on the progress of EU Macro Regional Strategies. The UK is one of a minority of European Union member states that isn’t involved in one of these strategies. Now that Britain is on the road to leaving the European Union it is unlikely ever to do so, right?

Not exactly. The EU’s Macro-Regional Strategies are about co-operation between a group of nation states within a particular geographic area - and all the existing strategies involve countries that are not currently members of the EU (and in some cases which are unlikely to be any time soon). For example the Alps region involves France, Germany, Italy and Austria along with Lichtenstein and Switzerland from outside the EU.

The networks function very differently in different regions. This is admirably ‘flexible and imaginative’, as seems to be the phrase of the moment, and gives the lie to the notion that all EU policies and structures are handed down from on high in a ‘one size fits all’ way. In reality it isn’t like that. The Macro strategy regions work flexibly, set their own priorities and promote co-operation on the issues that matter to the countries in the region. They involve no new EU money, create no formal EU structures and neither require nor propose new EU legislation. This is all, in fact, a rather British approach. Unfortunately this type of network is exactly the kind of thing the UK has sometimes found it hard to understand in the past, although encouragingly over time UK local and regional bodies have become more and more engaged in similar kinds of structures.

Of course the UK has been part of a region with excellent co-operation across the Channel, North and Irish Seas: the European Union. While I would of course like to see us remain part of that very effective union, if we are not going to then we should think about what new kinds of ties we can build with our neighbours. Not least Ireland (all of it) has a continued interest in getting through the UK to the other 26 states: then there’s all that fishing and marine conservation and now, sadly, border management to think about with a group of countries where English is almost universally spoken.

In the meeting, I made the point that UK may yet have a use for what might become EUSNAR (EU Strategic North Atlantic Region) that might comprise something like Belgium, The Netherlands, Denmark, Sweden and Ireland with Norway, Iceland and the UK from outside the EU. If the Conservative Government of the UK had anything like a serious plan for leaving the European Union and establishing the ‘special and deep’ relationship to which its position papers pay lip service, it would be thinking about how such a relationship might be defined, in what way it might move forward and what forums it might take advantage of to help the process. Instead it shouts from the sidelines and tells its allies to ‘go whistle’.

The fact is in practice the UK, having sacrificed its considerable influence over EU policy, will need every channel available to mitigate the damage Brexit will inflict - so it might be wise to start the ball rolling as soon as possible.

Posted by John Howarth
SME businesses gain from EU membership – and stand to lose massively from Brexit

SME businesses gain from EU membership – and stand to lose massively from Brexit

The London Stock Exchange today launched the 2017 edition of its ‘1000 Companies to Inspire Europe’ report. The overall tone, both in the report and at the accompanying launch event that I attended at the European Parliament, is positive for both the EU and the UK. There are 23 million small and medium-sized enterprises (SMEs) across Europe, and the thousand chosen to be featured in the report have boosted job creation by 43% over the last two years, and have collectively grown by over 100% over the last three years. Companies like these are the engines that drive the European economy.

And I’m pleased to say that the UK, and the South East, is doing particularly well. Of the thousand companies highlighted, 170 of them are from the UK - more than from any other country except Germany.

The report acknowledges that there is still much more to do. For a start, many of these smaller firms could grow and take on more staff if they were better able to access equity and risk finance (if they could sell shares on stock exchanges, or attract venture capital and private investors) rather than having to rely on bank loans and other forms of debt.

This is something the EU is actively trying to address through its ‘capital markets union’ project, aimed at removing the barriers to finance and meaning that investors and companies from right across the continent can make use of a genuine single market for capital. It is an ambitious project, and one that could be game-changing.   

Unfortunately for British SMEs, of course, just as the EU is making real progress in this area, the UK is going to turn its back and walk away. And if those who are pushing for a “Hard Brexit” get their way, we’ll end up on the outside of the single market and life will become more and more difficult for our businesses.

That’s partly because of the risk of having to pay tariffs (which EU membership exempts us from), but also - and perhaps more importantly - because of the significant bureaucratic burdens that companies have to comply with when you are on the outside of a market and looking in. One of the supreme ironies of the Brexit vote is that leaving the EU is going to mean a massive increase in red tape for many of our businesses. As a former director of several successful SMEs which traded with EU states, I warned of this before and during the EU referendum and contributors at today's event supported the view.

These kind of burdens tend to hit smaller businesses hardest, because they cannot just absorb the extra costs in the way that their giant competitors can. So while the EU is doing all it can to make life easier for small businesses - making it easier for them to access finance, dedicating specific sources of funding to SMEs (which I am currently fighting to help protect as part of the EU’s Budget for 2018) - the UK is going in the opposite direction. A country which used to pride itself on being a good place to do business is actually in the process of throwing up barriers and cutting off sources of funding, all to satisfy an increasingly deranged group of Tory backbenchers who seem to have lost touch entirely with one of their traditional audiences.

This all matters. A whopping 99% of British businesses are SMEs. Three in every five private sector workers are employed by an SME. Successful small companies frequently pay well, take care of their employees and pay their fair share of tax - which is more than can be said for quite a few multinationals. If leaving the EU is about to make it harder for them to do business - and, and as one speaker at the LSE event pointed out, Brexit is a number one concern for SMEs - then we will all suffer the consequences.

Posted by John Howarth
Cyber security: freedom and democracy under threat

Cyber security: freedom and democracy under threat

Yesterday I attended a session of the EU Ambassadors Conference - this forum gathers the EU’s permanent representatives from across the globe to exchange information and ideas with MEPs and others from the EU institutions.

The session I attended was themed around how the EU (and by implication the member states) can improve cyber security in the light of increasing attacks around the globe. The past few years has seen apparent and attempted interference in the democratic process of nations including the United States and the apparent state sponsorship of cyber aggression in various forms including mass disinformation and counterfactual propaganda.

Among those speaking to the session were the ambassadors to the Russian Federation and the United States. The picture painted was bleak. Cyber aggression is now the front line of espionage and would, almost certainly, be a pre-cursor to any physical warfare involving major developed nations. The dangers of these assumptions when heavily armed states are involved should be obvious to anyone, however, in the pseudo-cold war battle of information mass-disinformation is a key tactic that works by ensuring that the truth (i.e. factual information) is blurred, overwhelmed and discredited along with the vehicles through which factual information is disseminated.

Ensuring that populations cannot discern facts, are sceptical of factual news sources and are mistrustful of factual debate is nothing new. It has been a tactic of every totalitarian regime throughout the 20th century and into the 21st. It has been employed by the enemies of democracy to discredit democracy and by pedlars of hate to scapegoat their targets. When employed by the state it becomes one of the tools of oppression and coercion that are the apparatus of dictatorship. It is an uncomfortable truth that in both the former cold-war powers organs of the state are now employed in mass efforts to discredit factual sources and in different ways are succeeding. This more than anything else is the common ground between Donald Trump and Vladimir Putin.

The use of internet channels, social media and the decline of conventional forms of communication have not of themselves created the world of ‘alternative facts’ but they have made it a great deal easier for the purveyors of such lies to go unchallenged because there is no real difference between a population that believes a lie and a population that cannot discern what is the truth. The problem for democrats is the same as it ever was - our ‘alt’ opponents play by rules that if we adopt they win anyway. That’s not to say that the battle is hopeless, but there is little doubt that democracy is playing catch-up. In the UK the modern approach to balance in the media has led to the counterfactual claims being given equal weight to the overwhelming balance of scientific or economic thinking. It allowed counterfactual reporting of the EU by discredited reporters, one of whom now holds one of the UK’s great offices of state, to go effectively unchallenged and in the EU referendum the reporting of counterfactual statements alongside their distribution on social networks helped the leavers to prevail in the face of overwhelming factual evidence of the real damage not taking place.
Democratic politicians are fighting an information war with one hand tied behind their backs and while today’s conference made the problem clear, there is an urgent need for creative solutions that would seem to be in short supply.

Posted by John Howarth