I’m not sure the Russians have got the hang of this sanctions thing yet

I’ve been continually amused by the Russian reaction to the sanctions that have been imposed upon the country over Crimea and the Ukraine. First they ban imports of fruit and veg from the EU and US. That’s clearly and obviously something that damages Russian citizens more than it does anyone else. Then there was the delightful idea that they would have price controls on the supplies they could get: exactly what not to do to encourage domestic production and imports from new suppliers. And now we’ve got them closing down McDonald’s branches in Moscow over “food safety violations“.

Russia has shut down four McDonald’s restaurants in Moscow for alleged sanitary violations in a move critics said was the latest blow in its tit-for-tat sanctions tussle with the west.

The federal monitoring service for consumer rights and wellbeing announced on Wednesday that the offending outlets included the famous restaurant on Pushkin Square that opened just before the fall of the Soviet Union. The body said the eateries were being shut down for “sanitary violations” discovered during inspections this week.

No, no one at all believes that it’s for any reason other than those sanctions. Quite apart from anything else the floor in a Maccy D’s will be cleaner than the average food preparation table elsewhere in Russia.

But of course there’s more to it than that: obviously, those who would eat at McDonald’s, ie the Russian citizenry, are discomfited by this. McDonald’s Canada, which owns (last I heard at least) 50% of the stores will lose money. But here’s where it gets really fun. The other 50% owner is Moscow City Council (again, last I checked).

So, err, Russian sanctions against the US reduces the cash income of the local council in Moscow.

I’m unconvinced that they’ve quite got the point of sanctions just yet: you’re trying to hurt the other guy, not yourself or your own citizenry.

There’s no reforming the EU without understanding it

Once again the Daily Telegraph (“Brussels plots fresh City of London power grab”, 8th August) and like-minded media have become irrationally frenzied by EU moves that are wrong but nevertheless entirely rational.  London has been reminded that the three UK financial regulators will have to give up their regulatory powers to Brussels and become merely supervisors. As this Institute pointed out in our letter to The Times in June 2009, the UK governmentagreed that the previous March.  It was President Sarkozy’s price for attending the London G10 Summit in April.   The necessary legal framework was agreed by Parliament before that summer’s recess.

The government and the City were silent at the time and in the five years since.  It is no use yelping now.  Brussels is only implementing what we agreed.

The worry now is that the City and the government ignorance of Brussels and its processes make EU reform all the less likely.  One needs to understand and then work the system to succeed.  The UK negotiators’ failure is demonstrated by the 55 occasions on which we have sought to block some new Brussels initiative or other and been over-ruled each time.  The French and the Germans know how to garner support for what they want done; the British government clearly hasn’t a clue.

If the past five years, during which the EU financial regulation issue has been ignored by City and government, show anything, it is that the Foreign and Commonwealth Office and HM Treasury have been asleep at the wheel.  The FCO lacks backbone and is notoriously pro-EU. We need a new team.

Obviously some of the existing team do have some understanding of the EU.  Perhaps we need an exam, supervised by Michael Gove, to sift out the good ones and then complete the new team with our finest negotiators first to understand what has to be done and then to prepare the way.  It will make little difference to the UK’s position in the EU if our involvement, for the few years preparation will take, is little more than keeping bums on seats.

The Coalition has at least done some of the preparation in asking and thinking about what reforms Britain would like but that is no more than a Santa Claus wish list without a plan to achieve any reform.

A final thought along these lines is to put the new team under John Major’s charge.  He is the last British Prime Minister successfully to have negotiated any substantial matter with the EU.

A new ASI report finds a foreign player crackdown would do nothing to help England’s football team

A new report released today by the Adam Smith Institute blasts the FA’s proposals to crack down on foreign players, finding:

  • No link between native play time in the Premier League and performance of English national team
  • No link between amount of minutes played by Englishmen ten years ago and performance today
  • A strong link between foreign players and Premier League quality

The FA’s plan to crack down on foreign players in the Premier League would damage the league’s quality and success in European club competitions, without any benefit to the English national team’s performance, according to a new study from the Adam Smith Institute, an economic think tank.

In the first research of its kind, there was no link found between the time English players get on the pitch and the performance of the national team.

The report, “Sweet FA – Why foreign player crackdowns hurt English football“, found this to be true for performance measured in FIFA points, world ranking, or placing at major championships—i.e. the World Cup and European Championship. This also goes for the other major leagues in Europe—Spain’s La Liga, Germany’s Bundesliga, and Italy’s Serie A.

The report also rejected as baseless the claim that a reduced amount of playing time for English players five or ten years prior affected English international performance.

But the report did find evidence of a strong link between a league’s UEFA coefficient and the prevalence of foreign players—leagues with more non-natives are stronger, and stronger leagues have more non-natives.

This suggests that Greg Dyke’s scheme to tighten up work permit rules for foreign (or just non-EU) players would harm the English Premier League—the world’s most popular and successful league—without any concomitant benefit to the English national team.

Paper author Ben Southwood, Head of Policy at the Adam Smith Institute, said:

“It is widely believed that England’s perceived underperformance at recent international competitions owes something to the reduced fraction of minutes English players are playing in the Premier League—but up until now no one’s really studied the question with any kind of rigour.

“My numbers are not final but they suggest there is no real link between the amount of football English players play in the Premier League (or across the top four European Leagues) and English international performance.

“If the reduced quantity of experience is a problem, then it is being balanced out by the massively improved quality—or something else”.

For further comments or to arrange an interview, contact Kate Andrews, Communications Manager, at kate@adamsmith.org / 07584 778207.

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Boris’s BOGOF

Boris Johnson’s putative return to the Commons overwhelmed any publicity for his, or rather Gerard Lyons’s, strategic analysis of the UK’s in/out EU options: The Europe Report: A Win-Win Situation, released 6th August.  Four possible outcomes are envisaged: staying in either a largely unreformed EU or one reformed to the UK’s liking.  The two departure options are seen as (a) good EU relations and pro-growth UK reforms and (b) poor EU relations and an inward-looking UK.

Lyons makes the good point that “the UK can only achieve serious reform if it is serious about leaving, and it can only be serious about leaving if it believed that is better than an unreformed EU.”  The title would have you believe both staying in a reformed EU and leaving are “Win Situations” that we can either choose one or use it to achieve the other, i.e. Buy One and Get One Free.

Lyons has produced an important review of the issues facing each sector but, at the end of the day, his conclusions are based on simple assumptions of the economic outcomes from each option.  We do not need 108 pages of report, and 130 pages of appendices, to be told that the two high growth scenarios are more attractive than the two low growth ones.  Furthermore, the conclusion that the two high growth scenarios are economically equivalent is similarly based on heroic assumptions. Lyons’s Panglossian vision of the UK outside the EU and reforming itself begs a great number of questions.  The world is not ordered according to the way we order ourselves: trading with the EU will still be governed by EU regulations, likewise the US.

The paper has a number of failings: in particular it is not specific about the EU and UK reforms that would be needed, still less how they could be achieved and how likely that would be.  For example, the only hope of securing the EU reform the UK seeks is for the UK to show benefit for EU as a whole, not just the UK.  UK proposals to improve the EU market for financial services looks, to the rest of the EU, like UK self interest.  We know that the rest of the EU does not accept the UK arguments because it is outvoted every time.

How would, as Lyons suggests, the UK leave the EU whilst at the same time improving the UK’s EU relationships?  The chilling legal issue is EU Article 50 under which the remaining members decide the terms of the separation with no involvement of the departing member.  Obviously there would be negotiation so that may not be as ugly as it seems.  Trade would continue and we import more from the rest of the EU than we sell them but that is beside the point: could the UK protect its EU exports better than it could reduce its EU imports?  De Gaulle reckoned that the UK needed continental Europe more than vice versa and the 1960s proved him right.

We should welcome this report for its discussion of many of the issues but we cannot rely on its findings.  The City really does need to come up with a plan to protect its future but this is not it.

Time for a human rights review?

The Times law report (15th July) concerned a Muslim school-age immigrant, granted asylum in France, who had come to the UK instead on the grounds that she was not permitted to wear the burka in French schools. She claimed that to be a human right and therefore the Home Secretary was wrong in seeking her return to France.

The rights and wrongs of human rights and clothing indicating religion are not my concern.  The issue here is the extent to which foreigners are entitled to legal representation to fight their cases at UK taxpayers’ expense.  Some lawyers claim that justice has no price but can that really be so?

In this case, Mr Justice Hickinbottom refused a judicial review of the Home Secretary’s decision.  On 24th June, the Court of Appeal, being the Master of the Rolls and two other Lord Justices, resoundingly supported the earlier judgment.  The appellant needed to show that there was a “flagrant violation” of the European Convention on Human Rights.  In this case, there was no violation at all, never mind flagrant.

Although the report does not say so, it is hard to believe that this school-age asylum seeker had the funds to cover the original hearing, still less the appeal. Perhaps we will be paying for a further appeal to the European Court of Human Rights itself even though the ECHR has already ruled several times that France is entitled to ban the burka in schools so long as it does not do so in general.  Other forms of education are available, e.g. distance learning.

Some will feel that an asylum seeker is lucky to be accepted at all and such acceptance should not entitle them, free of charge, to the full panoply of rights built up and paid for by the citizens.  Obviously as time goes by and they integrate, so their rights should build up but not immediately and certainly not before they have gained admission.

One solution would be to require asylum seekers as part of their acceptance to sign, with legal advice, a binding agreement that they are not entitled to legal aid until assimilated into the country as defined by learning the language to conversational level, paying UK taxes for, say, five years and not being found guilty of a crime normally punishable by a prison sentence.

Some will say that the last is both unfair and inefficient.  In effect they would be deemed guilty before being judged and self-defence by someone without the language would clog up the courts.  But the present system lands the UK taxpayer with the not inconsiderable cost of prison followed by a failure to expel them, as we legally can, because deportation is appealed and the Home Office is overwhelmed by cases.  The UK taxpayer funds not only the legal costs of asylum seekers’ “rights” but all the associated civil service, police and imprisonment costs.

Time for a review?