Project Fear continues unabated!
Screams the Independent (“the rag”), “Move exposes almost immediate impact of Brexit on UK economy”.
The article reports that UKGov has suspended payments from the European Regional Development Fund (ERDF). The rag’s “evidence” for this is a letter - a single letter - from a variety of London-based corporate claimants - headed by Capital Enterprise - to the then Chancellor OsBo about releasing funding, citing the concern within the letter that this was somehow connected to Brexit.
Allegedly, the Dept for Communities & Local Govt also wrote to the Treasury to complain about the lack of release of funding, but also told the Greater London Authority to tell Capital Enterprise about the lack of release.
We have to turn to another source to find out more relevant detail that the rag deliberately left out of its Remainiac propaganda piece. According to ISP Review, the original “instruction” to suspend payments from the ERDF arose in March 2016. Even then, the ISP Review found itself referring to the rag as it primary source of evidence.
What does any of this mean?
It looks like the Treasury has suspended payments from ERDF partly to blackmail claimants into being Remainiacs pre-referendum, and is perhaps now taking revenge on the claimants for everybody else having voted Brexit. If one buys into this pantomime of a non-story, one might start to shout “Bad evil Treasury” and all that.
I posit a different analysis. It could be that a now-Brexited UKGov has just woken up to the fact that ERDF is just another way in which the European Union launders taxpayers’ money to strategically placed lobby groups, in the hope that, once drenched with a good dose of Euro-money, the lobby group won’t bite off the hand that feeds it.
With this laundering in full flow, it would substantially undermine the strength of UKGov’s hand.
Moreover, HM Treasury is probably quite aware of the funding gap that it would need to underwrite if any such spending ran over the Article 50 deadline date. I say “probably”, because I still harbour doubts about the competence of any UKGov department.
Economically, government spending doesn’t magically create economic growth, never has done and never will do. Keynes himself said Keynsianism was wrong, and he was very right to admit how wrong his “demand management” theory was.
Historically, UKGov public policy doesn’t readily demonstrate an understanding that Keynsianism is wrong, but there is a slim chance that perhaps somebody in the Treasury has finally twigged it and realised that the greatest risk to UK at present is the conflict of interest that the ERDF represents. I guess “hope” and “faith” have to converge at some point in the short-term.
So, the claimants of the ERDF will just have to wait. Or otherwise generate a proper business case for the spending of other people’s money that they are so desperate to spend.
Naturally, UKGov made no mention of any of this on its own website.
But I can’t help but notice that also in March 2016, the European Commission suspended interim payments from the same ERDF to Hungary. Hmmm… did OsBo also take advantage of “conflated plausible deniability”?