The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.

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Bruges Group Blog

Spearheading the intellectual battle against the EU. And for new thinking in international affairs.

Financial Services and Brexit

​Project Fear scaremongered more about financial services than anything else during the EU referendum campaign and this scaremongering has unfortunately continued after the Brexit vote. Remoaners and soft Brexiteers (those who want us to remain members of the European single market after Brexit) now tell us that the reason why there was not an imme...
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The New Project Fear

John Bull280

Since Theresa May's Lancaster House Speech in January of this year, two new Project Fears have sprung up. The first (from The Labour Party, EFTA4UK, Liberal Leave, Leave HQ and Dr Richard North) states that “We need to remain members of the EU's internal market after we officially leave the EU”, even though there are over 50 countries outside of the single market which have free access to it via free trade agreements. The second (from Nick Boles, Lord Hague and Chancellor Philip Hammond) states that “We need to have a transitional period of up to four years during which time we would still be members of the single market and the customs union”.

 

Before we pay these campaigns and their claims any attention, we should bear in mind just how wrong the previous Project Fears, which were often run by the very same people, really were.

 

The first Project Fear said “We need to join the European Economic Community (EEC or so-called 'Common Market') and, if we do, we'll export more to the EU”. The exact opposite has happened – we've exported less and less to the EU and, in 2016, we had a record high trade deficit with the EU of £78.1 billion. The second said “We need to join the European Exchange Rate Mechanism (ERM)” but this was then a disaster for us and led to Black Wednesday. The third said “We need to join the Euro and, if we don't, London's business will grind to a halt”. The exact opposite has happened. The fourth said “We need to stay in the EU and, if we don't, there'll be a recession in the immediate aftermath of a leave vote”. We've instead had record levels of prosperity since the Brexit vote.

 

All of Project Fear's economic predictions were wrong except, I will admit, for their prediction about sterling. They correctly predicted that there would be a significant fall in the value of the pound sterling in the immediate aftermath of a leave vote and the pound has fallen in value by about 15% on average. However, remoaners seem to want to think that the value of the pound is the only, or at least the main, indicator of the strength of the UK economy. This is, as any economist will tell you, nonsense. There are other indicators such as the FTSE 100, the FTSE 250, our output, our exports, our unemployment rate, the amount of foreign direct investment we attract and the rate of our economic growth which are equally as important, if not more important, than the relative value of sterling. All of these factors must together be taken into account before a judgement can be made on the strength of the UK economy.

 

The FTSE 100 has hit four new record highs since the Brexit vote: in December 2016 (6 months after the Brexit vote), in January 2017 (7 months after the Brexit vote), on 1st March 2017 (9 months after the Brexit vote and 2 months after the Brexit plans' release) and on 17th March 2017 (9 months after the Brexit vote and 2 months after the plans' release). The FTSE 250, which is widely acknowledged as being the best gauge of domestic economic sentiment, also reached a record high on 15th February 2017 (8 months after the Brexit vote and a month after the revelation of the Brexit plans). I include the relative timings in brackets as remoaners constantly told us in the months after Brexit that the reason why there still hadn't been a recession due to Brexit was because the Government hadn't revealed its position on the single market and the customs union and as Article 50 hadn't been invoked yet. However, a year and three months after the Brexit vote, eight months after the Government revealed its Brexit plans in the Lancaster House speech and six months after the invoking of Article 50, we are still waiting for this recession.

 

We were told that, after a vote to leave, unemployment would rise by 9,000 per month for the rest of 2016 but unemployment has actually fallen by almost exactly that amount and is now at a record low of just 4.4% - the lowest level since 1975. We were told that we would experience two successive quarters of negative economic growth but we actually grew faster in the six months after the Brexit vote than we did in the six months leading up to the vote. At the end of 2016, we finished up as the most successful major economy in the entire world, the fastest growing economy in the entire of the western world and the fastest growing economy in the G7.

 

The Department for International Trade has attracted £15.8 billion of foreign direct investment (FDI) from August last year to January this year and the UK still attracts more FDI than any other country in the whole of Europe. Since the Brexit vote, we've seen a record increase in financial services trading figures and a record increase in service industries growth. As of 30th June 2017 the UK attracted more FDI in financial services than any other country in the whole of Europe. Developers have continued to press ahead with the construction of more office spaces in London, showing fears of a post-Brexit business exodus (a so-called “Brexodus”) to be yet more scaremongering. UK car sales increased by 3.3% and reached their highest level in 2016 after the Brexit vote. Cake and cheese exports have both increased by 25% since the Brexit vote and the UK now exports more food, drink, bread, cakes, pastries and biscuits than it ever has before. Over the last year UK exports increased by 11.5%. As of 31st July last year, 27 non-EU countries with a combined GDP of over £40 trillion reportedly already wanted to sign new trade deals with the UK once it has left the EU and this potential market rather dwarfs the EU’s internal market which is worth only about £12 trillion.

 

Even if we are to take the value of the pound sterling in isolation, the remoaners are far from telling the whole story. Firstly, they all just presume that they can *know* for certain that the devaluation was indeed *caused* by the Brexit vote alone. Correlation does not, however, prove causation - it could just be a coincidence or other factors could be involved. Jacob Rees-Mogg MP has pointed out that both the OECD and the IMF said before the referendum that the value of the pound was too high - even strong remainer Ken Clarke MP has admitted this. Lord (Mervyn) King, the former Governor of the Bank of England, has said that the devaluation is a welcome fact. Therefore, a devaluation was only a matter of time and the Brexit vote merely brought forward this already-inevitable devaluation. The columnist Peter Hitchens foresaw a devaluation way before the referendum and states that the devaluation has nothing to do with the Brexit vote and would have also happened if we had voted to remain.

 

However, remoaners go on to presume that this devaluation has only been a negative thing for the UK economy. This is false. It has not led to out of control inflation as many predicted - inflation actually fell in October of last year, 4 months after the Brexit vote. Jacob Rees-Mogg has pointed out that the last two significant devaluations before the Brexit vote (in 1931 and in the early 1990s) both resulted in lasting periods of prosperity and rising living standards. News of the devaluation has been happily received by UK exporters who have said that the value of the pound has been too high for too long. The devaluation has made their exports cheaper and more competitive relatively-speaking and has consequently increased demand for our exports overseas. In fact, in September of last year, UK exports reached their highest level in 20 years. Finally, remoaners are always negative and pessimistic about our chances of getting a good free trade agreement with the EU agreed by midnight on 29th March 2019. However, even in the most unlikely and worst-case scenario of there being no Brexit deal at all by then, the average ~15% devaluation would easily dwarf an average most-favoured nation (MFN) goods tariff with the EU of just 5%.

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Surrender Is Not Negotiation

In the latest round of Brexit negotiations, the European Union called on Britain to pay a hefty bill before commencing with trade talks. Negotiators are asking the UK to commit paying 14 percent of the EU's budget until 2020, a pledge that could cost British taxpayers billions of pounds.Prominent reclaimer Gina Miller argued Britain shoul...
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Sugar Beets and the Pandemic of Modern Obesity

This country’s change from consuming sugar derived from sugar cane, which Britain historically purchased from its old colonial territories, to consuming sugar extracted from sugar beets from about 1973 onwards has slowly but surely greatly contributed to this country’s obesity problem

S Davies

2nd September 2017
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I pose the question of whether this country’s change from consuming sugar derived from sugar cane, which Britain historically purchased from its old colonial territories, to consuming sugar extracted from sugar beets from about 1973 onwards has slowly but surely greatly contributed to this country’s obesity problem. It is popularly believed that despite us as a nation consuming fewer calories these days than was the case in the 1960's,  obesity has gradually become a real problem. So, is it the EU's forced substitution of sugar obtained from sugar beets rather than sugar obtained from sugar cane making us really fat? 
 
I suggest that the country's obesity pandemic is partly due to its switch to the creation of sugar from sugar beets, which came about after the UK entered the European Economic Community in 1973. The UK had historically relied upon sugar cane for its sugar, which was a state of affairs that hadn't changed since sugar was first introduced into this country and became more widely available from about the 16th - 17th centuries onwards. In fact beets were not discovered as an alternative to cane until the late 18th century and weren't used in manufacturing until the early 19th century, when they had to be cultivated to yield a higher sucrose content than that which they originally and naturally contained.
 
The difference in quality between the two types of table sugars is a matter of debate. From a culinary perspective, I personally find sugar derived from sugar cane to be a far superior substance. I find it crisper and that it gives a lighter result. There is no apparent taste to cane sugar, which is just sweet. I personally find that there is an ever so slight aftertaste or noticeable different texture to beet sugar. Cane sugar is the master baker's sugar of choice, whatever the chemists say about it supposing to be the same. Meringues made from sugar cane are crisper and far superior. Cakes don't flop as easily with cane sugar. Yet the scientists say that “sugar is just sugar” and that there is no difference between the two substances. 
 
So, what is the difference between sugar cane and sugar beets? To look at a 500 gram pack of Silver Spoon (beet sugar) and Tate & Lyle (cane sugar) next to each other, they generally appear to be of the same size, and have the same volume, so there can't be much of a difference regarding the physical density of the product. On closer inspection of the sugar grain or crystals, the beet sugar may seem less crisp and light than the cane sugar. However, I think that to appreciate the difference between them, one needs to look at how the two products are processed, the difference in production being necessary due to their respective botanical composition. 
 
Sugar beets and sugar cane must be processed differently to achieve apparently the same table sugar. Sugar beets, which are a root crop, are sliced and boiled to extract the syrup. This is then evaporated into crystals. Sugar beets produce two by-products: the beet pulp, from which the sucrose syrup has been extracted, and molasses. The beet pulp is dried into pellets and fed into the human food chain inasmuch as it's then sold on as animal feed. The sugar beet molasses is not fit for human consumption but can and is fed to animals.
 
Sugar cane, which grows in reeds above the earth's surface for several feet before it's harvested, is sliced and heated in water to extract the sugar syrup. Cane sugar also produces molasses as a by-product. However, this molasses can be used for human consumption - e.g. in the Caribbean it is utilised in the manufacture of rum. The bark or reeds of the sugar cane crop is then either defunct or can be used in the manufacture of baskets and mats etc.
 
The botanical composition of sugar beets is described on Wikipedia as follows: "The pulp, insoluble in water and mainly composed of cellulose, hemicellulose, lignin, and pectin, is used in animal feed." The botanical composition of sugar cane is described as: "A mature stalk is typically composed of 11–16% fiber, 12–16% soluble sugars, 2–3% nonsugars, and 63–73% water." 
 
I suggest below that the more resinous nature of sugar beet may have a deleterious effect on the human liver. It must be ground down or processed to such a level in standard sugar production that it is then able to permeate the small intestines and enter the liver via the bloodstream. This can then act as a resinous mist on liver cells and affect their ability to act to their required capacity, so forcing the body to rely on alternative glucose-fuelling sources - i.e. cortisol from the adrenal glands. Perhaps cane sugar, having no inherent resinous qualities, degrades more easily, leaves no residue and is thus less taxing on the human body.
 
In attempting to explain my theory, I think that it's important to first go through the stages involved in the body's metabolism of food. The human body, and animal kingdom in general, are glucose-driven vessels who rely upon glucose as their primary source of fuel. This contrasts with the plant kingdom, whose primary source of energy is slightly different and is called fructose. This general blood sugar requirement is irrespective of whether the body ingests fat, carbohydrate or protein. 
 
I initially wondered whether it was fructose, which, as has been noted above, is not the animal kingdom's source of sugar. As a substance, it may impose a bit of a strain on the body because it is not broken down by insulin, as glucose is, and in the usual way. It must be processed in the liver after ingestion, before it's released into the wider bloodstream. It has been suggested that everyone is slightly fructose intolerant, with their ability to break down fructose varying in degree from individual to individual and associations have been made between fructose and fatty liver disease. However, my point here is that where one obtains the fructose or plain sugar from also makes a difference – i.e. whether it’s obtained from sugar beet or sugar cane. 
 
In fuelling the human body, it is of paramount importance to maintain blood glucose homeostasis - i.e. balance - and therefore blood glucose levels hover within a limited range, with a normal range being 70 to 110 mg/dl (milligrams per deciliter). The body will try and move heaven and earth to achieve this balance and therefore has more than one mechanism to ensure blood glucose stability. For immediate use, it will rely on the glucose stored in the liver. This is termed glycogen. Thereafter, glucose is stored in fat and muscle tissues. 
 
The body accesses glucose by synthesizing (i.e. creating) and using insulin, which is a hormone produced by the beta cells of the pancreas. Insulin mobilises blood glucose and ensures it reaches the body's cells and muscles. The pancreas also synthesizes another hormone called glucagon, which is something of a mirror-image to insulin. Glucagon senses when blood glucose levels are low and sends negative feedback messages to the liver that this is the case, so instructing the liver to release more glucose, whilst insulin mops up glucose in the bloodstream and either helps the body utilise it immediately or helps to store it as excess fat. 

If glucose or glycogen stores in the liver are low, the body can also produce a hormone called cortisol from the adrenal glands, which lie on top of the kidneys, to remedy the shortfall. However, the body's usual glucose reserves are stored in the liver. If the body is forced to rely on short-term cortisol from the adrenals to release glucose stores from the body’s tissues, this is not the preferred method and long-term use carries its own problems - e.g. high blood pressure, which is associated with an increased cardio-vascular risk, increased risk of stroke, increased risk of diabetes due to cortisol's glucose-raising effects. Cortisol is also associated with obesity because it slows down the body’s rate and generally deteriorates body tissue etc.
 
So, why would the body choose to use the cortisol hormone instead of the glucagon one? 
 
Simply because it feels that it has to, to maintain blood glucose balance. Either the alpha cells of the pancreas, which produce glucagon, have become impaired, or the liver's reading of and sensitivity to them has become impaired. The body is then moved into emergency mode and cortisol is forced to take over and aid the release of glucose into the bloodstream where glucagon left off. So, we need to ask ourselves whether the liver cells or even the pancreas cells are being caked up with a resinous substance that hinders its ability to detect blood glucose levels and whether this irritating substance is present in sugar beet.

By S Davies

 

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How will Brexit affect British Holidays

champagneinthesun 

Brexit could hit UK travellers like a summer storm. But don’t fret – it’s not all bad. Although it is deemed likely that travellers will needs a visa to travel around Europe, mobile roaming data charges are set to be scrapped entirely across the board. If you plan on travelling around Europe this summer, make sure you apply for an E111 card or renew it if you haven’t already to ensure you are eligible to receive medical treatment away.

With the UK scheduled to begin with the process to depart from the European Union under Article 50 at the end of March, it’s time to consider how it could affect your holiday:

Duty-free

Rules regarding duty and tax-free product are likely to make a comeback. Since 1999, travelling within Europe meant that people held no rights against duty or tax-free purchases. But, the separation of Britain and the European Union could mean that the rule is bought back into practice. So if you rely on buying cheap alcohol or tobacco, you will have to revert to buying products in limited quantities just like all non-EU countries.

The EHIC scheme

One of the many perks of being part of the EU is The European Health Insurance Card, more commonly known as the EHIC or E111 card. The card entities all EU citizens to access public health care whilst abroad, on the same basis as citizens of that country. All travellers carrying the EHIC card are eligible for almost free treatment. When the UK leave the EU, this form of healthcare will be scrapped, and a new scheme will be put into practice. For the time being, there’s no need to worry. You will still be able to use your EHIC card abroad. There will be no immediate effect to how you can use it.

Value for money

Since the second day of Brexit negotiations, the pound weakened. The sterling is predicted to be volatile due to the uncertainty of the outcome. Be aware that some airport currency suppliers have the worst rates in the country, even if you place an order in advance. To save money, don’t buy your currency at the airport. You can find some of the best currency exchange rates online.

The weakened pound may result in increased flight prices. If you have already paid for your holiday, you have already protected yourself. For now, it will only affect those paying for accommodation abroad in other currencies, such as Euros. Visiting good value destinations will help you save money. Currently, two of the most cost-effective destinations are Mexico and Tokyo. Despite seeing inflation rise in the UK, most holiday destinations have seen little, if not no change since 2016.

Until the UK officially completes the leaving process no changes will be made. The good news is that this will be no sooner than two years’ time, so people like yourself are still able to hop between the UK and EU countries.

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