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Thursday 9 May 2013

Reacting to UKIP?

If David Cameron believed that his albeit weak offer of a referendum on a renegotiated relationship with the EU would quieten the euro-sceptic voices in his own party, then events over the past week will have come as a bit of a surprise.  The dramatic showing of UKIP in the local government elections a week ago led to an abject apology that politicians should not ridicule political parties that gained significant numbers of votes (especially if they happen to be in Conservative areas) and the clown analogy has been used to some effect by the Labour leader responding to yesterday’s Queen’s Speech.  Fear that Nadine Dorries, unceremoniously denied the Conservative whip for six months for being a contestant on I’m a Celebrity Get Me Out of Here, might defect to UKIP led to her brought back into the fold on Wednesday: yes I know this was planned anyway and it’s just a coincidence that it occurred after the disastrous showing of the Conservatives in the elections…does anyone actually believe this?  More seriously, Nigel Lawson on Tuesday and Michael Portillo today have called for a British exit from the EU.  Whether this makes a referendum more or less likely is debatable.  The government is committed to renegotiation and a referendum if they win the election in 2015 and few are giving odds on them doing so.  The Labour Party is unlikely to honour a Conservative commitment after 2015 if it wins: Labour contains fewer euro-sceptic MPs and its record on offering referendums on Europe and then not honouring them is well know: remember the Lisbon Treaty was for Gordon Brown not significant enough of a constitutional change to warrant a referendum. 

Lord Lawson

The heart of the problem is that in 1973, and this was legitimated in the 1975 referendum, was that the UK thought it had joined an economic union while, in reality, it was joining an evolving political process.  Whatever the arguments for greater political and fiscal union in Europe in addition to the already existing monetary union, this is not what most people believed they voted for in 1975.  The UK has largely been left behind by these developments and we are already, because we are not a member of the euro, excluded from key decisions and with the increase in majority voting find ourselves having to implement decisions over which we have little or no influence.  In addition to this, the EU is already devising laws and regulations that are to the detriment of key British industries, notably the financial and banking sector.  This is a process that reflects the growing concentration of economic power in an increasingly centralised euro-zone and will intensify as political and fiscal union becomes a reality.  David Cameron says that having a strong euro-zone and fiscal union is in Britain’s interests but, as Gisela Stuart commented in her article ‘The EU has pushed Britain ‘out’ already’, in yesterday’s Times, this conflicts with ‘the historical objectives of British foreign policy’.  Since the late-seventeenth century, Britain has fought to prevent the continent being dominated by a single power: France under Louis XIV and Napoleon, Germany under the Kaiser and Hitler, and the ‘Cold War’ against the Soviet Union.  Yet, the growing concentration of power in the EU leads irrevocably to the emergence of a European super-state in which Germany is the dominant player if only because it is economically the strongest.

Gisela Stuart also argues that the EU is undemocratic but ‘worse, there is no great demand from within any other major European power for this democratic deficit to be addressed.’  The notion of the democratic deficit at the heart of the EU has long been recognised but little has been done to remedy it.  There is little demand for the accountability of institutions and individuals that is a central feature of the British political system and the European project is proceeding with no serious discussion about what democracy means within the EU or how democratic principles might be advanced.  Britain has a different constitutional and democratic tradition to much of Europe where executive authority has been given precedence over any democratic representation and where democracy was largely the product of twentieth century developments.  So the idea of an unelected technocrat as Prime Minister in Italy or Greece is less problematic than it would be in Britain where having the support of the people is considered sacrosanct.  The tendency towards executive despotism, even though elected, has been evident in Britain since the 1920s and has gathered pace since the 1980s with Prime Ministers taking on a more presidential stance.  This makes appeals to the people through referendums something to be avoided at all costs and explains why promises of referendums have never be actually carried into practice despite clear evidence that this is what the people want.

 Britain's Prime Minister David Cameron arrives at the Global Investment Conference in London May 9, 2013. REUTERS/Andrew Winning

Given that the EU has already changed fundamentally and that the European project will continue whether Britain likes it or not (and hoping that it might fail is not a viable political strategy), there are several key questions that politicians and the public need to consider:

  • Is it likely that the proposed renegotiation of Britain’s relationship with the EU will deliver real change?  Well, no despite what the Prime Minister still appears to believe. in a speech to an investment conference this morning: some pessimists ‘say there is no prospect of reforming the European Union, you simply have to leave. I think they are wrong…I think it is possible to change and reform this organisation.’   Why should the other members of the EU allow Britain to negotiate a different relationship (and it already has outside the euro)?  For them , it is an unwarranted irritation and Britain should decide whether it wishes to embrace the European project or not and get on with it. 
  • Can mainstream politicians afford to give the people an in-out referendum that, if polls are to be believed, they could well lose?  Past experience of political promises suggests not and past political practice dictates that you never give people a referendum you know you won’t win. 
  • Should Britain, outside trade and cultural co-operation, remain in the EU?  Arguably this is what Britain signed up to in 1975.  Enter scare tactics.  Yesterday  in an interview Nick Clegg said that 3 million jobs depend on the EU.  He may well be right but this does not mean that those jobs will disappear if we left the EU.  The reality is that no one has reached any unequivocal answers to what would happen if Britain did leave the EU and it is unlikely that anyone will.  Those who favour leaving argue that the economy might even be better while those in favour of staying in say leaving could be an economic disaster.  I remember being told by a leading economists that Britain not entering the euro would lead to economic meltdown but, of course, it didn’t. 
  • Finally, given that our relationship with the EU has become increasingly fractious, what should our relationship with continental Europe be?  If and when we are finally given the choice the issue is whether, as a country, we are prepared to embrace the European project as it is (and not how we would like it to be) or whether we are prepared to face the uncertainties of being outside given Gisela Stuart’s opinion that we have already been pushed ‘out’?

Wednesday 8 May 2013

Gold in Victoria

Victoria soon overtook NSW as a gold producer and between 1855 and 1865 annual production exceeded 2 million ounces and gold was being mined at Ballarat, Bendigo, Stawell, Castlemaine and Clunes. In 1856, the nation’s output peaked at some 3 million ounces with 95% coming from Victoria. This brought enormous wealth to the colony and financed the construction of many fine nineteenth century buildings in Melbourne, Geelong, Ballarat and Bendigo. As in Ballarat, gold mining at Bendigo started by working near-surface alluvial deposits but there were no deep leads so many diggers left for other fields when the alluvial gold was exhausted. There was, however, gold contained in hard quartz veins and Cornish miners from South Australia who had tended to avoid the soft, dangerous deep leads were in their element drilling and blasting quartz. Some hard rock pioneers, such as the ‘father of quartz mining in Bendigo’, the German Theodore Ballerstedt, had learnt their trade in California, others learnt by trial and error.[1]

The Bendigo field consisted of a series of rich ‘saddle reefs’, quartz veins ‘sandwiched’ between country rocks in anticline folds.[2] At each mine, similar reefs were found as the workings extended downwards.[3] Quartz had to be crushed to liberate the fine particles of gold and this required steam powered ‘stamp mills’. The steam engines were also operated pumps to drain the mines. These machines and the sinking of shafts through hard rock required large capital investment so that mining syndicates, share issuing companies and local ‘stock exchanges’ were formed to raise the necessary capital. By 1871, more than a thousand companies were being traded on the Bendigo stock exchange. Many companies failed, largely because they paid out all profits as shareholder dividends instead of retaining cash for mine development, maintenance and mechanisation. The companies that planned their mine development ahead of production prospered. Speculation in gold shares during the 1860s caused significant problems. A common practice was for companies to spend all available shareholder funds and then borrow from banks. As debts mounted, the company operators and other persons in on the deception would pass their shares to ‘dummies’, people of no realisable wealth, leaving honest shareholders to meet all the debts when the company failed. In 1871, Victoria enacted the No Liability Act for mining companies, whereby an investor lost only the value of their own investment.

By the close of the nineteenth century, mining activity had expanded across Australia, from NSW and South Australia to Victoria, into Queensland and the Northern Territory, across to the coast of Western Australia, then inland to Kalgoorlie and Broken Hill. Great bodies of ore were yet to be discovered and vast tracts of territory were largely unexplored. During the first half of the twentieth century, new mines continued to be established but the mining companies also expanded their scope and influence and the period saw the emergence of Australia as a world leader in new minerals engineering technologies.


[1] Fahey, Charles, ‘The Ballestedts and the Bendigo quartz reefs’, La Trobe Journal, Vol. 30, (1982), pp. 29-32.

[2] Palmer, A.V., The Gold Mines of Bendigo, (Craftsman Press), 1976.

[3] By 1990, the Bendigo mines were amongst the deepest in the world.