Britain can't be more like Switzerland

This article was published on the Dale&Co. website

Let's Stop Dreaming of Being Swiss

14 December 2011

Switzerland is one of the best countries in the world. But Britain it isn’t. The dream of Britain becoming Switzerland plus nuclear weapons and a seat at the UN Security Council is just that – a dream Here’s why.

        

In the film version of Graham Greene’s “The Third Man”, Orson Welles, makes the point that “after 500 years of history all Switzerland has produced is the cuckoo clock.” That was inaccurate and unfair. The cuckoo clock comes from southern Germany, not Switzerland. And the history of Switzerland is full of far more turmoil and conflict – including a civil war in 1848 and the army opening fire to kill and wound scores of unemployed workers in Geneva in 1933 – than is commonly realised.

        

A Swiss anti-fascist shot dead the leader of the Nazi party in Davos in 1936 and the stability in Switzerland is the product of an iron discipline that arises from endless consensus and compromise. But once a decision is arrived at it is accepted. “What is not banned, is obligatory “ is a Swiss dictum. There is endlessly minute regulation from the number of potatoes that can be grown – all much more generously subsidised than the EU’s Common Agricultural Policy allows – to rules about running a bath or flushing the lavatory after 10 pm.

        

The core secret of Switzerland are the cantons which have control over taxation, education, policing and other swathes of policy which in London are controlled by Whitehall. The full title of the canton of Geneva is “the state and republic of Geneva” and Swiss cantons are very clear about their identity and independence. 

        

If British Eurosceptics want every county in England to decide its own tax levels it might have some idea of what their vision of a Swiss Britain might be. In 1938, the Swiss equivalent of the CBI and TUC signed what is called the “Peace Treaty” which enshrine trade union rights in exchange for unions agreeing to avoid strikes.

        

It is this industrial peace rather than the legendary bank secrecy laws that have made Switzerland rich. Industry takes up 29 per cent of the Swiss economy more than twice the share of British manufacturing. Swiss watchmakers did not roll over in face of cheaper watches flooding in from Asia. Instead they rolled up their sleeves, massively re-organised the industry into luxury watch-makers and the mass selling Swatch. This is the Swiss secret. The application of mind to matter to produce a product that becomes a world-beater on both price and quality. 

        

Vince Cable wants to rebalance the economy. He will have a long way to go before he can match the Swiss share of manufacturing in the economy. The devalued British pound has done little to help exports compared to the over-valued Swiss franc – now pegged to the Euro. Swiss banks have to have much higher capital reserves than the City would ever accept. As for banking secrecy, as Nick Shaxson, argues in his exposé of tax havens, “Treasure Islands”, the world centre for funny money transit and preservation is the City, the English trust system and the network of Cayman and other islands protected by Britain to allow companies and individuals wriggle out of paying tax.

        

Would we accept in Britain the permanent coalition which has awarded the Swiss Socialists a quarter of all seats in the Federal Cabinet since 1959? Do we want referendums on the design of religious buildings as the Swiss organised to humiliate Muslims and their mosques with minarets? The share of immigrants in the Swiss population stands at 15 per cent. Albanian is the fourth language in Switzerland as more Kosovan asylum-seekers were accepted there than any other EU country. UK’s ugly anti-foreigner outfit Immigration Watch would explode with rage if it contemplated Geneva where nearly half the population was not born in Switzerland.

I lived and worked in Switzerland for more than a decade. Two of my children were born there and I love its culture, cuisine and mountains. Income tax was low but property, defence, and cantonal taxes plus astronomic health and dental insurance costs took away just as much of my pay as if I had stayed in Britain. The Swiss countryside is a delight but the flats and houses are the smallest in Europe.

Every Swiss law has to be in full compliance with EU directives and the Swiss pay a billion francs to Brussels to help new member states. So the idea that there is a non-EU Alpine heaven on offer to Britain is nonsense. Let Switzerland be Switzerland. What is to be done with Britain is a different question.

The Tory Eurosceptics have won their once-lonely battle

This article was published in the "Comment is Free" section of The Guardian.

There's little point in Britain staying in the EU now – Bill Cash has won

10 December 2011

The massive slump in imports into the UK announced on Friday is in many ways more important than Bill Cash's victory in Brussels. The voice we are hearing is that of David Cameron, but the script has been written by Bill Cash. His long (and initially lonely) campaign to reduce Britain's place and influence in Europe is now gathering speed. There is now little point in Britain being in the EU as all the key decisions will be taken by the 17 eurozone nations, plus the six which want to join the euro. Denmark keeps its currency but the Danish opt-out is purely nominal as the Danish crown follows the ECB policy in all regards and Danish exports are based on quality of goods, not a devalued currency.

Economic analysts are urging caution on the better trade figures announced today. The main news is the massive slump in imports as British demand shrinks thanks to the drop in consumption brought about by government policies. Britain is not spending and banks are not lending, so it is little wonder that fewer goods are coming into the UK. In that sense Britain is part of the generalised crisis of the EU economic zone. Tories and the rightwing press have sought to paint the EU as the source of the UK's economic troubles. It would be more accurate to report that weak, near-recession UK economic policy is doing serial damage to the rest of Europe, which no longer find buyers for their goods and services in Britain.

Bloomberg Business News has noted that manufacturing shrank "at the fastest pace in two and a half years in November". So much for rebalancing. And David Cameron, whose family wealth comes from the City, showed that in Brussels he would prefer to leave Britain isolated rather than negotiate a deal with the rest of Europe for a new treaty that began to move Europe away from the era of unchallenged, unregulated finance capitalism that brought about the crash of 2008, and provoked the subsequent recession.

George Osborne is currently taking the EU commission to the European court of justice over its decision that euro derivative trading should take place within the eurozone. Currently 75% of this trade happens in London, where hundreds of thousands of EU financial sector workers are located. The ECJ, like any court, smells the political coffee and Cameron's isolationist veto will reduce still further the UK's standing as a serious EU player. The loss to the UK of euro derivative trading may not matter in Rotherham, but it will hit the City and financial sector employment in London.

Cameron was within his rights to insist that any new EU treaty should not damage Britain. And, paradoxically, he may have saved the eurozone rescue package, as it is doubtful any new treaty would get through the sieve of an Irish or Danish referendum. But EU leaders knew that, and were happy to guarantee Irish low corporate tax rates and other sweeteners to ensure the treaty would be accepted.

Instead Cameron now finds himself without any friends. He has isolated Britain from the dominant centre-right political grouping where many EU decisions are discussed ahead of the main council meetings. Contrast this to Margaret Thatcher who was a robust, engaged European player. Yes, she won her (fully justified) rebate, but she did so by being in the room where decisions were made. She supported the Single European Act – the biggest sharing of sovereignty with other nations in UK history. She backed Jacques Delors for commission president. She increased the UK contribution to the EU from £656m in 1984 to £2.4bn in 1990. She lost her cool over the famous Delors TUC speech, but history will place her as a powerful influence wielding UK prime minister operating in Europe.

Cameron has now handed over power to France and Germany to decide Britain's fate. The iron law of five centuries of British statecraft – opposition to any continental hegemon – has been cast aside. The new rules will be shaped without UK input. They are not narrowly on sorting out EU debt problems, though it is remarkable that a Conservative prime minister is rejecting German demands for tough enforceable controls on public borrowing and spending.

Britain will have to comply with the new rules of face restrictions on access to the new market arrangements. John Major thought he had won "game, set and match" with his Maastricht treaty opt-outs in 1992, but his victory proved hollow – just as Cameron's veto will turn out to be.

On Tuesday, at a major business leaders conference, a top French business leader said Britain was "anti-European". I corrected him, pointing out that France had voted "non" to the EU constitutional treaty in 2005 and that 400,000 French citizens made a living working in the City – our country was that EU-friendly.

But I fear the Frenchman was right. Bill Cash has won and there is little point in Britain staying in the EU now. Will we prosper outside, or semi-withdrawn? Norway implements more EU directives than Britain and all of Swiss laws have to be EU compliant. Both nations pay billions to Brussels as a kind of fee to get market access.

But no one has made the case for Europe in British public life for several years now. The press is vehemently hostile. Tony Blair did make some pro-EU speeches but always in Europe, never in Britain. After 2007, the pro-EU cause was silent in government. The chief boast for some in the party is that Britain never entered the euro – something which was never on the cards, because of well-known economic difficulties. The once proudly pro-EU party of Paddy Ashdown, Charlie Kennedy and Ming Campbell is now silent. Britain has never been so marginalised and few MPs have won as big a victory as Bill Cash did in Brussels this morning.

Press Release


Serbia Does Not Merit EU Accession Status After Tadic Again Snubs Kosovo Says UK MP

8 December 2011

Speaking at the National Endowment for Democracy in Washington DC Denis MacShane MP, former Minister for the Balkans in the UK Government said that the EU should not reward Serbia’s refusal to bring about a  final settlement in the Western Balkans by its continuing refusal to admit that Kosovo exists.

MacShane, a senior foreign minister in Tony Blair’s government travels regularly to the Balkans and has just published a book, ‘Why Kosovo Still Matters”. “Today we have in a nutshell the problem that confronts all policy-makers in the Balkans. The president of Kosovo, Aitfete Jahjaga, one of the new young women political leaders in the region addresses the Kosovan Parliament in Serbian, appealing for help from Belgrade to find a settlement. To speak in Serbian will be seen by some ultra-nationalists amongst Kosovo Albanians as a provocation. But Kosovo is Albanian and Serb just as Spain is Spanish and Catalan, Belgium is Flemish and French, Switzerland is German and French and Italian. She is reaching out to Serbs in Kosovo and to the political elites in Belgrade with this linguistic gesture.

“But from Belgrade we have an article from my friend, President Boris Tadic, in the Frankfurther Allgemeine Zeitung, saying No, Never, No Way will Serbia recognize Kosovo as an independent nation state in line with the ruling of the International Court of Justice in the Hague and along with 85 other nations like the US, France, Germany, the UK, Japan, Canada and Turkey.

“It cannot be right for the EU to reward such intransigence and contempt for EU policy on recognition which is backed by the democratic international community. Sadly I believe that the EU should continue to try and knock heads together but it would be wrong to open accesses negotiations for Serbia based on the Serb nationalist myth that Kosovo is just a breakaway province that one day will return to Belgrade’s rule.

“In his FAZ article, Mr Tadic makes a bizarre comparision between West and East Germany – one in the European Community, and one outside until reunification. But there is no question of “reunification” of Kosovo and Serbia. In addition, there were many West German politicians at height of the Cold War who refused to recognize East Germany until Willy Brandt came along and decided that reality was moer important than fantasy. The reality is that Kosovo exists and the fantasy is that Serbia should not exercise hegemony over any part of Kosovo.

“It is a tragedy that President Tadic, a profoundly decent man, has not had the political support in Belgrade to face down his ultra-nationalist and a the remaining nostalgics for the days of Greater Serbia in the Milosevic era but the EU cannot afford to compromise its principle and values by indulging Belgrade’s belief that it does not have to come to terms with the reality of Kosovo’s existence,” Dr MacShane told international policy experts at the National Endowment for Democracy in Washington DC today ( 1230 EST 8^th December).