It would be a mistake for the UK to end its involvement with the European Investment Bank, according to South East England MEP, John Howarth.

The European Investment Bank (EIB) provides investment in the infrastructure, business and social requirements of communities all over the European Union but also invests in projects outside the immediate boundaries of the European Union. Because the UK holds 16% of the EIB’s shares it would be entirely logical for the UK to continue its involvement and continue to benefit from the bank if and when the UK leaves the European Union.

Importantly the EIB lens in line with EU social and economic priorities, not just commercial lending criteria, at rates well below those of the commercial markets. In other words also for need, not just for profit.

Among its investments, the EIB’s lending has backed:

• Crossrail in London and the Thames Valley
• New secondary schools
• The Thames Tideway Tunnel
• The Port of Dover’s Western Docks expansion
• 7 million smart meters in UK homes
• The National Grid Upgrade  

John was speaking in a debate on the EIB’s annual report in the European Parliament and explained that the future infrastructure needs of a competitive Europe urgently require investment in low carbon infrastructure and inclusive digital networks and that the EIB would empower “the changing face of cohesion policy”(1). He also hit back at false UKIP claims, challenging them to campaign for the real interests of the UK and continued involvement with the EIB.

John adds; “The UK has received more than 30 billion in investment from the EIB for a 3.5 billion capitalisation stake in the Bank – the same as Germany, France and Italy. The UK, along with the other member states also provides guarantees on the EIB’s lending – but this was never a cash contribution. The phase withdrawal agreement clearly states that the UK’s guarantee ‘liability’ will be written down over the period of the outstanding loans it backs while the cash capitalisation contribution will be returned in a number of instalments (2).

“There is no question of the UK ‘not getting its money back’ as UKIP falsely claim. I think, however, it would be a much smarter approach to remain involved with the bank. There are all sorts of projects in the UK that badly need investment – not least the critical shortage of social housing.

“UKIP either don’t understand how an investment bank works, they can't add up or they are deliberately trying to mislead people. You decide.”

Despite the uncertainty over Brexit the UK continued to benefit from EIB continuing investment to the tune of 2.1 billion in 2017 alone.

Notes

(1) ‘Cohesion policy’ is the EU jargon for investment that improves the competitive position of poorer regions, including in the UK, through modernising infrastructure and social investment.

(2) UK officials regard the ‘liability’ of outstanding EIB loans as largely theoretical and the chances of the guarantees being called upon so unlikely that they have not included the figure in any part of the proposed financial settlement with the EU.

MEPs take part in delegations representing the European Parliament. In John's case he is a member of the delegations for the Caribbean states (CARIFORUM) and for the Former Yugoslav Republic of Macedonia. Speaking at a meeting of the Joint Parliamentary Committee, John, a member of the National Union of Journalists, talks of the challenges facing states in seeking to enhance media freedoms alongside reforms to judicial, parliamentary and public institutions and argues that similar challenges now face long-established democracies.   

President, fellow MEPs, Ministers and representatives of the Former Yugoslav Republic of Macedonia. At the outset I was to emphasise that the nature of reform to the media, while part of the same set of essential reforms to enhance freedom and democracy, are qualitatively different to reforms to the judicial process, parliament, public administration and so on. Different because they take place against a rapidly changing backdrop of technological change that has transformed the industry in my working life as a media communications professional.

The challenges facing journalists and media organisations in countries inside and outside the European Union are in many respects the very same challenges. Financial, technological and political challenges that threaten the basis of the fundamental freedoms that this Union was established to protect and enhance.

The inability of first world democracies effectively to address these challenges has become only too evident through the events that have come to pass over the last few years.

So it almost seems to me a patronising process to talk with national representatives wrestling with fundamental problems of evolving democracy and I have no desire to appear to lecture. Nonetheless to join a club there are entry requirements and standards to be met and that’s the context in which this discussion takes place. The EU regards as essential:

• Reform of the Public Service Broadcaster in order to ensure its independence and increase the quality of its reporting and overall content production
• Establishing mechanisms for transparency and accountability in regard to government advertising
• Addressing the media obstacles which journalists face in obtaining access to public information
• Revising the legislature and procedural rules related to defamation, and promotion of self-regulation and arbitration as alternative to court action

The ‘Copenhagen Dilema’, in which the European Union seeks to assure itself of standards in candidate countries and accession states while there is no real means of maintaining those standards within member states, has always been there but is an escalating dilemma given the modern media landscape.

In this context the state is far from being the only actor of critical mass that can manipulate media to the benefit of vested interests. The same tools of disinformation are available to major corporations, to well funding interest groups and to rival states. While the techniques of disinformation have always existed their channels of influence on the population have been a great deal fewer and less direct.

In the end, however, the channels offered by new media technology are just channels - they be either can be channels of free expression or channels of control. The challenge for this Union and democratic states it to ensure they are the former.

I don’t often agree with the Australian/US media magnate Rupert Murdoch, particularly in view of the approach of his outlets toward the European Union and the UK’s membership, but he was absolutely right when he said that “professional journalism is not free, it has to be paid for”. To extend that, neither is a free media in a free society without cost.

Advertisers, if they can find a more direct route to consumers and decision makers through more cost-effective technologies, will take it. Consumers, if they can gain information in a more-timely and more cost-effective manner will take that route. Viewers who can watch programmes at their convenience and not at that of schedule managers will choose to do so.

All this adds up to declining profitability for print media and new formations for broadcast media, both of which mean fewer journalists, less investigative reporting - which is expensive and news that is harder to verify as factual. When coupled with an environment where immediacy is everything all this adds up to less professional, less reliable news.

This is the market context in which journalism and the media now operates but in which progress on issues of media freedom must nonetheless take place.

Progress there has been. The civil society organisation, the Observatory of Media Reforms, is monitoring the implementation of the 3-6-9 Plan re the reform of the media. They issued a periodical report in November that announced that the Macedonian Government has on the public broadcasting service, government advertising and access to information “partially fulfilled its obligations”. Unfortunately, on defamation, there has been no revision of the legislation at all, and the OBR believe that this is still “completely unfulfilled.” So while we welcome the progress that has been made on media freedoms within the Former Yugoslav Republic of Macedonia we note the further progress to which we must all turn our minds.

State funded public broadcasting, able to compete effectively in the modern context I have outlined, remains an essential element of a free media - in fact I would argue it is more important than ever as a trusted sources on which populations can rely. In this respect establishing funding and regulatory frameworks which put publically funded broadcasters at arm’s length from the state and maintain and enhance journalistic independence are more essential than ever.

Equally, ensuring real balance, real choice and trustworthy journalistic standards in broadcasting networks, maintaining diversity of ownership and ensuring that output reflects cultural diversity will remain the challenge for all broadcasting regulators.

But possible the most important element of all is that journalists are able to operate freely and without fear; are able to challenge powerful interests without attack, are protected by the forces of the state and that those who would intimidated and coerce reporters are held to account. The acid test of this is when prosecutions take place and such attacks are eliminated.

The ability of all forms of journalism to operate effectively independent of pressures brought by political interests, in particular those holding the reins of state power will only remain possible if journalism is effectively funded so that publishers are able to withstand external pressure and financial leverage.

These things, as I have said, are not just a challenge for candidate countries and accession states. The European Union was established to maintain peace and enhance freedom. To continue to carry out that mission in the future this Union will have to give serious thought to how media freedom and journalistic integrity is safeguarded in a changing world where surpa-national powers are able to outgun the legal frameworks of all but the very largest nation states.

I look forward to the point where the Former Yugoslav Republic of Macedonia joins us in meeting that challenge.

Southampton University Hospital is a leading teaching hospital within the NHS. Its ultra-modern cancer centre will open soon following a major fundraising effort. The hospital is at the forefront of clinical trials and new treatments for a range of conditions. Much of that work is funded with assistance from the Europeans Union. All of this is threatened by Brexit.

I visited the Hospital on 1 February and met with Professor John Harrison (pictured below) who heads up the research faculty. He explained a series of factors that together mean that outside the EU and in particular outside the Single Market the UK’s medical science efforts and with them the NHS will be hard hit. These are the factors that will hurt the NHS:

Recruiting leading researchers

Since the referendum it has proved very difficult to tempt leading medical researchers to Southampton. It’s the same story elsewhere. It would be wrong to say there is a single reason, but a string of family, personal and practical reasons, uncertainty over the rights of EU citizens and pension insecurities have led to sought after applicants turning down offers in the UK for offers in Europe and the USA or simply declining to apply.

Keeping EU citizens

There is not a flood of high profile medical staff queuing at the check in with one way tickets to Berlin and Paris, however, there are enough to worry research leaders.

The success of UK Universities

Ironically, these problem are made worse by the success of the UK Universities and research institutions. UK academic qualifications are up with the best and a passport to interesting work all over the world. So talented scientists from the UK will always want to travel and work overseas just because they can. If the salaries are good - and they often are - even more so.

Some will say that people will always leave whether the UK is part of the EU or not - which is true, and it isn’t a problem so long as you can replace those you lose with new recruits. If you can’t it becomes a vicious and decreasing cycle that cannot be easily addressed.

Follow the Money

Researchers follow research money. First of all because it might pay their salaries or provide their job security and secondly because it means they can do their work with a better chance of success. Many of the UK’s programmes are carried out through the European Union’s Horizon 2020 Programme. This funding stream, otherwise known as ‘Framework 8’ ends in December 2020 - the point where the UK intends to end its much touted but yet to be agreed ‘transition phase’. Unless the Brexit extremists like John Redwood get their way the current programmes should continue to their conclusion.

What happens after 2020?

All we can say for sure is that in 2021 there will be a new 7 year EU Budget which will include funding for Framework 9. The UK’s involvement in Framework 9 (which doesn’t yet have a snappy title) won’t be agreed until the negotiations over the UK’s future relationship with the EU and the corresponding price tag is agreed. The Conservative UK Government has, so far, indicated that it wants to be involved BUT, and it’s a big BUT, it is highly probable that while UK institutions may be partners in EU projects they are unlikely to be able to lead them - as many currently do. It is worth saying here that the leading player in a typical project will receive more funding that a partner institution. It is hard to imagine the likes of Oxford, Cambridge, UCL and Imperial - among the top 10 universities worldwide - are likely to be happy to play second fiddle but they may not have much choice. If the Brexit extremists get their way they won’t be able to play at all.

Why doesn’t the UK just do its own research?

Because research, particularly, medical research, doesn’t work like that. To trial treatments and drugs and therapies most effectively big populations with different samples in different places reflecting different social conditions and circumstances are needed - I’m not an expert on this but, unfashionably, I choose to believe those who are.

Approved by who, for who?

This is the really sticky bit. Like them or hate them, the pharmaceutical companies invest a great deal in new drugs. Naturally enough they want to see their products approved for use across the biggest market possible. So if there are two different regulatory regimes do you choose to seek approval in that which makes the product available first to around 500 million people or do you seek to make it available to 60 million? The EU Medicines Agency has been based in London for good reason. The UK has led in this field, has great expertise and so it was a logical place to put it. Now the Agency will move if the UK leaves. The scientists tell me that clinical trials will, logically, be based in the area of jurisdiction even if it is not strictly required. If that is outside the EU, and at least the single market, then the future for clinical trials and therefore the early availability of drugs and treatments is clearly affected. In practice this is likely to mean a two year delay. The UK, of course, COULD decide that drugs approved for use in the EU are ‘deemed’ approved for use in the UK but if we were to take such a course what of all that stuff about sovereignty and taking back control?

A spiral of decline

So a decline of leading staff, less funding for projects, fewer engaged institutions, few if any institutions leading research projects, leading edge clinical trials done elsewhere, later approval of drugs and treatments. The result, new treatments available to patients later than would otherwise have been the case and, bluntly, lives lost that may otherwise have been prolonged.

Of course there may be strategies institutions can employ to protect their funding, to maintain their involvement in projects and to assert their leading roles through excellence alone but in the landscape outlined to me at Southampton there is little prospect that this could be successful across the sector. The world leaders may do OK, even well, but the middle tier of Universities and the generality of the NHS will suffer and that is a great worry. What we need, if the UK is indeed to leave, is a framework of free movement for academic, science and research staff, full involvement in Framework 9 programmes and being part of a single regulatory framework - something like the single market? Don’t be surprised, however, if the EU27 were to say, 'well, that’s called the EU'.

It is easy to dismiss all this as the concerns of an engaged elite who have done well from the UK’s EU membership. That’s true, but it’s also true that ordinary patients have done well too. Try telling the cancer patient who can’t get access to a new drug or take part in a clinical trial that two year’s extension of their life is a price worth paying for an abstract concept of sovereignty.

Holocaust memorial day takes place on 27 January each year. The European Parliament marks the day during the week in which 27th falls. These thoughts from our office lest we forget.

Photo: Sign used during the anti-Jewish boycott: "Help liberate Germany from Jewish capital. Don't buy in Jewish stores." Germany, 1933.

John Howarth with Fiona Thomas

Words have always had power. We only have to look at today’s political events to see how much words, or even 140 characters, matter.

The power of words is never clearer than when looking at the Nazi regime.

The Holocaust did not start with the gas chambers. It started with words: hate speech, anti-Semitic tropes, ‘fake news’ and the normalisation of lies. Words and images were pivotal in Hitler’s assumption of power. The campaigns of the NSDAP, from Mein Kampf in 1925, scapegoated the Jewish population, and any people who the regime deemed ‘undesirable’ creating the climate in which violence, coercion and intimidation were normalised. Having seized power in 1933, The Reich Ministry of Public Enlightenment and Propaganda churned material that changed German political culture. This prepare the ground for the regime to ‘legalise’ the persecution of ‘opponents’ of the NSDAP.

The Nuremberg Laws were a series of anti-Semitic laws introduced at the 1935 Nuremberg Rally. These forbade marriages and extra-marital intercourse between Jews and other Germans, and stated that only those of German or related blood were eligible to be citizens of the Reich, with the remainder classed as state subjects without citizenship rights. The ‘final solution’ - the euphemism for the systematic murder of the Jewish population, cloaked in the lies and denial of ‘resettlement’ would never have been possible without the systematic cultivation of anti-Semitic hate.

The Soviet Army liberated the Auschwitz-Birkenau death camp on the 27th January 1945. In five years of industrialised murder, it had consumed more than 1.1 million ‘undesirable’ people. What started with words ended with the murder of two thirds of the Jewish population of Europe - one in six of whom died at Auschwitz.

However, words can also be a force for good.

On the sixtieth anniversary of the liberation of Auschwitz-Birkenau concentration camp in 2005 the UN resolved to create an International Day of Commemoration in memory of the victims of the Holocaust.

This six part resolution:

• urged Member States to develop educational programmes that will inculcate future generations with the lessons of the Holocaust in order to help prevent future acts of genocide
• rejected any denial of the Holocaust as an historical event - either in full or part
• commended those States which have actively engaged in preserving those sites that served as Nazi death camps, concentration camps, forced labour camps and prisons during the Holocaust
• condemned without reserve all manifestations of religious intolerance, incitement, harassment or violence against persons or communities based on ethnic origin or religious belief, wherever they occur, and;
• requested the Secretary-General to establish a programme of outreach on the subject of the ‘Holocaust and the United Nations’

Through this resolution, the UN works to ensure that the world will never forget the Holocaust. Words keep memories and histories alive; we use ours to commemorate the victims of the Holocaust, to tell future generations of its horrors and to understand that words of hate are never ‘just words’.

Angling, for many years, has been the leading participant sport in the UK. In its various forms around 2.9 million people go fishing in the UK (1) - some occasionally, some obsessively but all spending money in the process on licences, equipment, gadgets, hotels, boat hire, food and drink. Angling is a quiet, but not insignificant, driver of local economies around the UK with a value estimated by The Environment Agency at £3 billion annually (2).

By comparison the UK’s commercial fisheries landed £936 million worth of fish in 2016 (3) - less than a third of the economic value of the recreational sector. If you allow for the proportion of anglers who fish the seas (about 1 million) the contribution to the economy of the two strands of fishing are roughly equal.

Yet because commercial fishing, whatever its economic worth, is part of food production it gets the lion’s share of attention from governments and the European Union. That’s a balance that badly needs to be re-set if only for one very good reason. Research shows a high level of both awareness of conservation and environmental issues and further potential for involvement in environmental protection among anglers; meanwhile the historic evidence of over fishing, ecological and environmental damage caused by the fishing industry is indisputable. It is an ongoing battle that goes to the heart of sustainability policy. A key vote in the European Parliament in January demonstrates a possible turning of the tide.

The problem of pulse fishing

‘Pulse fishing’ is described by its commercial backers as an ‘innovative and environmentally friendly’ technology that avoids damage to the sea bed, minimises ‘by catch’ and avoids incidental harm to marine life. The technique involves sending an electric current through the water enabling the trawler to sweep up the fish more easily. Those opposed to the method claim that ‘pulse trawling’ results in over fishing and the creation of marine deserts. What is indisputable is the threat it represents to sustainable artisanal fishers, of who those in Queenborough, Whitstable and Thanet were involved in lobbying for a ban. Each side presents their science, of course, but instinct, the balance or evidence and past form weighs against the claims of the fishing industry; more accurately in this case against the view of a small vested interest based in the Netherlands. For good measure take a look at the places where the practice is already banned; including the USA, China and Australia.

The European Parliament voted for the first time to support a complete ban on pulse trawling in European waters. Pulse trawling’s backers had hoped the practice might be licensed beyond its current areas in the North Sea. Having won the backing of the European Commission the commercial interests might have expected to do rather better.

John Howarth MEP said: "The vote to back a ban on pulse trawling is a landmark decision and marks a shift in Parliament's thinking. I'm very pleased. When I and several MEP colleagues started to push for a complete ban I thought it unlikely to succeed but awareness of the problem of over exploitation is certainly growing. There is a long way to go, but it is a step in the right direction." 

So what happens next? Despite the vote in Parliament it is unlikely a total ban will come into place soon. The view of Parliament on this along with a host of other technical fisheries issues will be taken into negotiations with the European Commission and the Council (the member states). From this process a compromise recommendation of some sort will emerge, most likely restricting pulse trawling to its current experimental basis. However, the direction of travel has been set by the Parliament’s vote - there is an increasing willingness among European politicians to address damaging commercial practices that seek ever more creative ways to exploit ever dwindling fish stocks.

Resetting the terms of debate on fisheries

Like the decision of the Fisheries Council on Sea Bass these are small victories, though angling voices and the conservation interests they reflect are becoming more evident and influential in Brussels. UK organisations have been key to this and will need to remain engaged even if Britain leavels the EU. This will be essential to re-setting the balance on fisheries issues and will remain important because those unpatriotic fish simply refuse to recognise national boundaries.

Unfashionable factual stuff

(1) The National Angling Survey 2012 - Substance for The Environment Agency and The Angling Trust

(2) Our Nation’s Fisheries - The Environment Agency, 2004

(3) UK Fisheries Statistics 2016 - The Marine Management Organisation for UK Government

See also:

UK Sea Fisheries Annual Statistics Report 2015 - The Marine Management Organisation for UK Government

UK Sea Fisheries Annual Statistics Report 2016 - The Marine Management Organisation for UK Government

Yesterday the Taoiseach, Leo Varadkar, addressed the European Parliament, the first in a series of debates between EU government leaders and MEPs on the Future of Europe.

On Brexit, Mr Varadkar was clear that there could be no “backsliding” by the UK government on the commitments it made on the border with Ireland during the first phase of Brexit negotiations last year. He said his government would work to ensure that “what has been agreed in theory would be delivered in practice.”

So what was agreed in theory?

During the first round of Brexit negotiations, the UK guaranteed that there would be no ‘hard border’ between the North and South of Ireland, and that “in the absence of agreed solutions, the United Kingdom would maintain full alignment with the rules of the Internal Market and the Customs Union”. They Government did not say how this would be achieved. As Mr Varadkar reminded us yesterday, this means no new barriers to movement or trade between the North and South.

This commitment will come as a relief to the majority of people in Northern Ireland who voted remain in the Brexit referendum, the majority of Northern Ireland resident who are EU citizens, as well as the majority of politicians in Northern Ireland who want to stay in the Single Market. As Mr Varadkar said yesterday, it is a commitment that Ireland will ensure is turned into “legally binding language”.

So no border in Ireland means a border in the Irish Sea? Not while the DUP wields a veto.

In the same round of Brexit negotiations, the UK government also agreed that “in the absence of agreed solutions, the United Kingdom will ensure that no new regulatory barriers develop between Northern Ireland and the rest of the United Kingdom,” ensuring that the United Kingdom will continue to ensure the same unfettered access for Northern Ireland's businesses to the whole of the UK internal market.

With the DUP - who are propping up this minority Conservative government - effectively wielding a veto over negotiations, this was a commitment Theresa May had no choice but to make. It ensures that if there is to be full alignment with the rules of the Single Market and the customs union in Northern Ireland, there must also be full alignment across the UK.

Doesn’t this imply continued membership of the single market and customs union?

If you’re now thinking that these dual commitments seem hard to reconcile with the Conservative government’s mandate-free, hard-Brexit stance that the UK must leave the single market and the customs union, you’d be right.

So, the UK government has made promises it can’t keep?

Correct. It is simply not possible for Northern Ireland and/or the UK to exit the single market and customs union without there being checks and controls on the movement of goods. Being part of of the Single Market and Customs Union requires these in order for it to function. And if there is to be full alignment with the rules of the Single Market and the Customs Union in Northern Ireland, the DUP have been clear that there must also be full alignment across the UK. Which, by the way, would be fine by me.

This leaves the government hoping that it can come up with some kind of technical fix. An “agreed solution” that will allow it to continue with cross-border trade without having to impose customs posts and borders. Trouble is that’s not how a customs union works - at some stage checks on what is actually in the lorries has to happen. It has effectively kicked the can down the road; unable to impose a hard border with Ireland, prevented from doing the same in the Irish Sea, and committed to a hard-Brexit stance on membership of the single market and customs union.

So what comes next?

The answer to how to square this circle is blindingly obvious: continued membership of the Single Market and the Customs Union. Anything else will be deeply damaging to the UK economy and, as the UK will have to abide by the rules to trade with the EU27 in any case we might as well have all the advantages.

It may well transpire that Theresa May is finally forced into this position as the only solution to the unresolved Irish border issue, but in the meantime, Labour must start leading. Labour has a clear opportunity to attack and further undermine this weak Tory government and it has the country with it as it is increasingly clear that support of a hard Brexit doesn’t command any sort of majority.
The Labour front bench did the right thing in calling for a transition period inside the Single Market and the Customs Union after Brexit. But it must be bolder still. We must listen to the overwhelming majority of Labour members and commit to membership of both long-term.

Today is Blue Monday- allegedly the most depressing day of the year.

Based on a formula devised by ‘life coach and happiness consultant’ Cliff Arnall, factors in this calculation include the grim January weather; debt accrued over the festive period; the amount of time that has passed since Christmas and the likelihood that the good intent of New Year resolutions more than probably lies in tatters; and wider feelings of demotivation that people are likely to be feeling.

Sounds a bit scientifically sketchy? You bet. Pseudo-science? Not entirely unfair either, though some of the above are observed phenomena. But even though you cannot shoehorn sadness, let alone clinical depression, into a single day, and I am pleased to see that the mental health charity, Mind, are tweeting today using #BlueAnyDay.

Nonetheless, Blue Monday is a useful peg to raise awareness of wider mental health difficulties that affect a huge amount of lives across the UK, irrespective of the time of year. According to Mind, approximately 1 in 4 people in the UK will experience a mental health problem each year, and in England, 1 in 6 people report experiencing a common mental health problem, such as anxiety and depression, in any given week.

The Samaritans are holding various ‘Brew Monday’ events today around the UK to open up opportunities to get together and chat about mental health over a cup of tea.

If you can get to one of these events, do go and check it out.

The point is talking to someone helps. Usually - it’s better than not talking.

If you want to talk to someone about a mental health problem for yourself, your family or your friends you can also talk to Mind’s helpline.

https://www.mind.org.uk/information-support/helplines/

There’s no easy answer - but not talking is no answer.

The constant claim of the Brexiteers, amid their ‘they need us more than we need them’ narrative, is that without the U.K. there is a gaping hole in the EU budget that will cause the remaining 27 a near-existential crisis. The truth is rather different - there is certainly a hole the budget but it’s extent and significance is wildly exaggerated.

This week Key players in the budget drama met to explore EU finances Post-Brexit. The EU’s budget planning is a seven year cycle known rather grandly as is the Multiannual Financial Framework (MFF). Much of the UK’s ‘debt’ to the EU relates to the commitments made during the current MFF. The next cycle runs from 2020, conveniently just after the UK is scheduled to have left - to many EU leaders see it as a clean slate.

The trouble with any debate on EU finance is the amounts are vast - but so is the continent. In reality the EU Budget sticks to around 1.2% of GDP - a tiny slice of member state spend.

The funding gap led by the UK’s departure roughly between 12-13 billion Euros, amounting to between 8% and 9% depending on how it’s calculated (1). Not a small gap but much less drastic than the shortfalls facing local Councils in the UK since the Conservatives regained power in 2010. There are all sorts of options open to the EU27, it’s really a question of political will.

There are, of course, some who would wish to take the opportunity to reduce EU programmes, but judging by the rhetoric EU leaders are instead focused on how to restructure EU spending to ensure it better delivers the EU27’s shared goals. Commission President Jean Claude Junker talked of a ‘no cuts’ budget while Gunther Oettinger, the Commissioner in charge of budget, spoke of an even stronger focus on pro-growth, pro-innovation and pro-youth programmes; Erasmus+ and the research fund Horizon2020 as well as the need to maintain ‘cohesion’ spending - the EU’s jargon for infrastructure and social investment in less well-off states and regions. But all of this is wishful thinking if the income gap is not addressed.

Of course there might be some reductions - there are always programmes the time for which is passed and, in a budget of €160 billion or so, always room for efficiencies. But the scope for income growth is considerable. Across the EU aBridging the income gap a direct Financial Transaction Tax (FTT) is a potentially lucrative option even at very small percentages, while there is also much talk of climate/sustainability related levies, such as on unnecessary plastic packaging. The latter carries a risk, the former less so, because the best taxes are the least avoidable. The point of levies aimed at behavioural change is that they ARE avoidable! There are also a whole range of creative financial instruments available to maintain programmes based on loan financing and credit arrangements.

So just for example €3 billion, 2% or so, of efficiencies, €5 billion of new income and €5 billion from the use of financial instruments. The income gap starts to look less of a crisis and something of an opportunity to re-position how the EU thinks about its budgeting. The stumbling block remains the willingness of member state governments to back their rhetoric of unity with their wallets.
But if the UK were to go through with the self-harm of quitting the Single Market membership tariffs on the 50% of UK exports to the EU, this could bring billions of Euros to EU coffers, if on the other hand the UK government sees sense it will end up making a contribution to the EU and reduce the budget gap.

Brexit is not in the interest of either the UK or the EU for reasons much more important than money, but Brexiteers’ claims that the EU faces financially catastrophe if and when Britain leaves are yet more wishful thinking.

John Howarth MEP (Labour, South East England) is a member of the EU’s Committee on Budgets.

1. The calculation is based on the EU’s total expenditure in 2016, which stood at EUR 136,4 billion, and the commitment appropriations in the EU’s 2016 budget which stood at EUR 155 billion.

Speaking today (10 January 2018) at the European Parliament’s SME Intergroup (the ‘all party’ groups of MEPs) John Howarth, Labour MEP for South East England, called for increased action to improve payments to small firms.

According to research conducted by the Federation of Small Businesses (FSB); 37% of small firms have run into cash flow difficulties because of late payment, while 61% of small firms are paid late by their big business customers. FSB estimates that 50,000 businesses would remain open and the UK economy would be boosted by £23.5 billion each year if businesses were paid on time.

John Howarth, who was a business owner and director before becoming an MEP, said:

“Late payments are a real limit on the growth potential of small firms. When your cash is tied up servicing cash flow your potential for growth is limited and as you grow that cash flow requirement increases. This limits the growth potential of our economy.

“Late payment legislation, which started at EU level, has made a little difference but nothing like enough. To make it work better we need firm action from governments in member states, including the UK, to compel the public sector to pay small firms on time. That would make a big difference and would create a positive knock on effect. Business organisations need to play their part by creating pressure on larger firms to understand that the corporate bullying of paying small firms late will hurt their reputations. it is naive tho imagine small firms can do this alone, or risk damaging relationships by charging interest on late payments.

“Local Authorities can take a lead and don’t need to wait for central government. They should all implement the 14 day payment standards as the best among them have and councillors should monitor performance to ensure their authority delivers. I am writing to all South East authorities drawing their attention to this.

“At EU level the next logical step would be to outlaw unfair payment terms imposed by larger firms at the expense of their smaller suppliers and implement a single payment standard for the single market. This would still matter to UK firms if and when the UK leaves the EU as we will inevitably have to follow EU standards if we want to continue doing business with the rest of Europe.”

New Year is a time that we try to look forward with hope.

My main hope is that we will see a greater level of honesty in our public debates and a degree of understanding that to fail to address glaring societal problems will only diminish the lives of the great majority of our people.

I hope that engagement with the challenge of how we again create a cohesive society in which every individual has real, rather than merely theoretical opportunities to fulfil their potential and provide a good life for their families, companions and communities is not too much to hope for from those in public life.

And at a time when many of our leaders are keen to talk of a ‘belief in Britain’ it is perhaps not too much to ask that they flesh out what they really mean and what a modern vision of Britain might involve.

In doing so I hope we can re-discover the tolerance, mutual respect and ‘live and let live’ philosophy and practice that I grew up believing was inherent to the values of British society. In other words a genuinely patriotic pride in the freedom of the individual within a society framed for the common good.

That is a vision that will always rise above enforced conformity and coercive patriotism against which the great generations of the 20th century fought and won through. Somewhere along the line much of that vision has been lost and the failure of political leaders to articulate its relevance to the modern world sits at the heart of the challenge we will face in the coming year.

Here’s hoping.   

John Howarth MEP

PS For more reflections and hopes for 2018 read on here