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An Open Letter to Sir Mike Rake from Dr Ruth Lea

Open letter to Sir Mike Rake, President, CBI
From Ruth Lea
 
Dear Sir Mike,
 
I read your recent speech to the CBI’s annual dinner with bemusement. Putting aside the CBI’s appalling track record on key policy matters (support for the UK membership of the euro, for example) or the fact that business is divided on the pros and cons of full EU membership (note Lord Bamford’s intervention), your assessment of the UK, the EU and the global economy is, quite simply, more than a generation out of date.
 
It is a truism to say the global economy is changing fundamentally. But, crucially, the EU’s share is in secular decline. In 1980 the EU28’s share of world GDP was over 30 per cent of world GDP (Purchasing Power Parity terms), which had fallen to 24 per cent by 2000 and was just over 17 per cent in 2014. Its decline can only continue, reflecting mature markets and adverse demographics in key EU economies. Growth markets, so crucial for internationally focussed British firms, will overwhelmingly be located outside the EU.
 
Reflecting this key parameter, the share of British exports (goods and services) is also in secular decline. It was over 52 per cent in 2003. Within a decade (2013) the share had fallen to under 45 per cent.
 
So your statement that we have a choice ‘…between shaping the future or retreating into the past’, implying the EU is the future, is redolent of the 1970s, 40 years ago. The EU may have been the ‘future once’ but it is clearly not the future now. 

Honouring the Pledges

Friday 15th May:  As the new government sets to work to honour its manifesto promises, two subjects will be prioritised.  NHS reform will continue and the Human Rights Act is to be replaced with a British Bill of Rights. This week’s blogs from Dr Tony Hockley and Jocky McLean suggest that though the election has been won, the battles are about to begin.
 
Policy v Politics
 
The NHS faces a huge challenge (says Tony  Hockley); it must transform, and do so whilst addressing deep-rooted structural and operational inefficiencies. The £8bn funding commitment is the minimum that NHS England thinks viable to achieve this. This time the upfront funding commitment cannot be allowed to be swallowed up by internal inflationary pressures. With the cuts that must take place in the other public services, giving the NHS more cash without fundamental change is simply untenable.

Opportunity Knocks

 Opportunity Knocks    
Scotland’s vote MUST BE England’s opportunity
 
Friday 8th May: The general election will bring into parliament a substantial party aiming at the partition of the United Kingdom - something the British electorate has realized rather suddenly. It will not be the first time: the Irish Nationalists held the balance of power in 1910, causing Asquith’s Liberal government, dependent on their support, to pass a Home Rule Act in 1914. The circumstances were infinitely more dangerous and traumatic than those surrounding the rise of Scottish National Party today.
 
Indeed, a striking aspect of today’s politics is how easy it would be for the United Kingdom to break up, and how few are the barriers against it.
 
In much of the Western world, disaffection from established politics has produced a variety of populist parties. In several countries - Spain, Belgium, Italy, Britain - this has taken the form of national, ethnic or regional particularism. But Britain is uniquely susceptible to actual division. Its component parts are already recognized nations, whose separate identities have always been officially fostered by the great state institutions, and whose actual independence is far more easily imaginable than that (for example) of Flanders or Northern Italy. Secondly, our electoral system magnifies regional differences, and is now giving the Scottish National Party a near monopoly of Scottish parliamentary representation far beyond its actual share of the vote. Thirdly, not having an entrenched constitution - in many ways an advantage - means that there are no high legal barriers to major change: compare Spain, where last year the Constitutional Court ruled that an independence referendum in Catalonia was illegal. In short, it is hard to see any way of preventing Scottish independence in the medium term if the rise of the SNP is maintained. It seems certain, in any case, that Scotland will become self-governing inside or outside the Union. The Smith Commission has recommended a statute declaring the Scottish Parliament and government permanent: this would create a quasi-sovereign state within the United Kingdom.

Neither Democrats nor Liberal

Friday 1st May: Lord Acton, Regius Professor of Modern History in Cambridge, warned of the tendency of power to corrupt. He might have added that the wish for power can do the same.
 
That’s the message from the 2015 election campaign, reinforced by the latest ‘scare’ on potential benefit cuts, ‘leaked’ by the chief secretary to the treasury, Danny Alexander. Alexander revealed to The Guardian that the Tories secretly plan to cut £8bn from the benefits bill. It’s hardly surprising that he is resorting to ‘scare’ stories: he and his Lib Dem co-religionists face a wipe out in Scotland and the West Country, with polls suggesting the party’s share of seats will collapse to around 27.

All at Sea on EU Immigration Policy

Friday 24th April: The loss at sea of hundreds of would-be migrants, drowned as they crossed the Mediterranean from Libya to Italy, has prompted a chorus of recrimination against EU failure to support an adequate rescue service. A number of countries, including the UK, have now pledged to help, and at a special a summit yesterday the EU's leaders agreed to increase spending on search and rescue and to the settlement of a limited number of those who are saved.

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