Blog 2023 Malcolm Blair-Robinson

It is very good news for manufacturing and exports and business generally needs to be fleet of foot to take advantage the the opportunities which this presents. It is an open window which may close, so no delay. It provides scope for home production as imports will become more expensive. Since we import almost everything we use, that may stoke inflation. That in turn may provoke a rise in interest rates. Borrowing costs for the government may rise because of the general uncertainty as to where Britain is headed, in or out. If it is out that will trigger a further fall in the value of sterling. Suddenly the economy will be hit by a major rebalancing shock at the start of the summer holidays.

It is obviously bad news for holders of assets valued in pounds and very bad news if those assets have been used to secure loans in another currency such as US dollars.

The short answer is yes, so Cameron is right and Gove wrong? Well no. The true answer is they are both right if you express it all correctly which neither of them has. They have both left out the tricky bits which dent their cause.

The deal is a legally binding international agreement with the force of international law. It can only be challenged if an injured party can show to the European Court of Justice that some aspect of it breaches the terms of an existing treaty. This is very unlikely but, because some of the issues are contentious and agreed to with reluctance to keep Britain in the EU, it is possible. The European Court sits above our Supreme Court and the UK parliament ceded sovereignty to it by the Treaty of Accession in 1972.

So in the normal course of business it is a done deal but as a matter of law whether it conforms with previous treaties in all respects is not for Britain, its politicians, or its courts to say. The EU Court has the last word. That is the whole idea of it.

The report from Ofcom suggesting that Open Reach can be made an arm’s length company while still owned by BT is fundamentally ridiculous. In the end both companies are owned by the same people with the same shareholders. The proposal to allow other companies to put wires on poles and in tunnels is even more stupid as it will cause congestion under ground in many places, more digging of holes and problems with multiple wires on poles in the country. When failure occurs it may not always be easy to identify who is at fault. It is unlikely to enhance good service and will have to be paid for in the end by customers. It is almost as silly as proposing multiple water mains, or sewers.

While it is acceptable to allow privatized communications companies to offer a competitive service to customers, it makes no sense for a private monopoly to control the infrastructure which carries that service. Open Reach should be publicly owned and charged with the delivery of high speed internet and phone communications as a service to every house and business, for which a monthly or annual rental is charged, in much the same way as water, gas electricity and drainage. The owners can then shop around for the right choice of provider. If a break occurs the owner rings Open Reach, not the provider, which is the reverse of the current frustrating arrangements.

There should be a Ministry of Communications responsible for all of this with a Minister answerable for its efficiency. The idiotic quango Ofcom should be disbanded. This notion that government responsibilities can be contracted out to statutory agencies provides unaccountable governance with huge inertia, endless reports and very little action. Moreover it removes responsibility from ministers who are accountable to voters whose money is funding the fiasco, to a whole lot a statutory public servants who appear to be responsible to no one but a rule book.