England's Sword 2.0

Monday, June 09, 2003

The Bownian Version

I have to say I was distinctly unimpressed by Gordon Brown's announcement that Her Majesty's Treasury doesn't think the Euro will be good for Britain -- yet. In particular, I was annoyed by the full steam ahead annoucement that he will order the supposedly independent Bank of England about:

He said the Bank of England would be told to change the current inflation target of 2.5%, and that a new Europe-wide measure of inflation would be used.

So much for the most widely-praised decision of his Chancellorship. In any event, I think the Telegraph summed up Gordo's stance the best:

Supporters of the euro have, by and large, accepted these facts of life. They agree, reluctantly, that Britain would at present be foolish to contract out its interest rates to Frankfurt. But they want the Government to bring about economic convergence. Convergence, one wonders, with what? With Euro-land's unemployment rate? With its burdensome regulations? With its high taxes?

If so, Gordon Brown is their man. One by one, the Chancellor has been ironing out the things that used to make Britain different from its neighbours, joining the social chapter, buying euros and, above all, raising taxes.

Significantly, his new taxes have been in areas where Britain used to enjoy a competitive edge over the rest of Europe. We had many more private pensions, so he taxed them. We had a higher rate of home ownership, so he raised stamp duty to continental levels. Now he has brought social security levies into line with the EU through his swingeing rise in National Insurance. How Mr Brown has come to be thought of as a eurosceptic is one of the wonders of our age.

I've always said Brown was untrustworthy of Euroskeptic support. This pronouncement underlines why.

The Telegraph also puts forward a powerful case for five real tests of economic performance for Britain:

1. Higher productivity. Britain has just slipped back into fifth place among the world's economies, behind France. Mr Brown's propensity to meddle brought a halt to the extraordinary surge in productivity which Britain enjoyed until 1997. His finicky schemes have created perverse incentives in the private sector, and raised costs for businesses.

2. Lower taxes. (And, equally important, simpler taxes.) Taxes are rising faster in Britain than in any other industrialised nation. The sheer complexity of the system is quite as harmful as the overall burden.

3. Public service reform. If nothing else, Labour has done us a favour by proving beyond any doubt that spending more on the public services does not necessarily improve them.

4. Fewer regulations. No government has imposed so many new rules on our businesses. A recent survey by the British Chamber of Commerce showed, with pretty convincing methodology, that the total cost of these regulations has been at least £20 billion since Labour came to power.

5. A balanced budget. At present, Mr Brown aims to keep the debt-to-GDP ratio steady over the economic cycle. This means, preposterously, that when the economy is growing, he aims to borrow more. A better target would be no net borrowing over the cycle.

Meeting these tests, of course, would make us less rather than more like the rest of the EU. Yet they would make Britain a wealthier country. There you have Labour's problem.

I think this makes a better Tory manifesto than Kelvin Mackenzie's...

Meanwhile, what do they think in Euroland? I find it particularly interesting that even the BBC correspondents find that Europeans just can't be bothered...

The European Central Bank President, Wim Duisenberg, put it thus: "I know why (Britain should join). I just don't know when"...

While Italians have accepted their new currency, and the loss of the lira, it has been less easy to accept the huge rise in prices that came with it.

They welcome the newfound freedom to travel without changing money, but mention the euro, and you will instantly be told that prices have doubled, yet wages have not.

For this reason, Britain's reluctance to join doesn't surprise people in Rome. ...

... few [Spaniards] feel passionately enough about the issue of the single currency to hold a grudge if Britain chooses not to join.

"If they want to keep the pound that's fine by me too," says Iguacelle Mateus, a young woman who lives and works in Madrid. ...

In this enthusiastically pro-European nation, Irish people know full well that the British have a pretty different take on Europe.

And the French?

Alain, a 50-year old doctor, comments: "I wonder sometimes whose side the British are on - Europe's or America's. I'd like Britain to join the euro, but the British will have to decide first which is more important to them." ...

Only one person disagreed - Sybille, a 25-year old Parisian student. She said that by siding with America on Iraq, Britain had ruled itself out of Europe, and did not deserve to participate in the single currency.

Actually, I happen to agree with Sybille. We don't deserve it. Naughty old us. Right, we'll be off then...