Dyson’s five-year legal battle reveals the crony capitalist corruption at the heart of the EU

My biggest beef with the European Union has always been the way it stifles consumer-friendly innovation in the interests of incumbent businesses and organisations. Today’s victory for Sir James Dyson at the European General Court lays bare an especially shocking example. Dyson’s case, which has taken five years in the courts, reveals just how corrupt […]

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My biggest beef with the European Union has always been the way it stifles consumer-friendly innovation in the interests of incumbent businesses and organisations. Today’s victory for Sir James Dyson at the European General Court lays bare an especially shocking example.

Dyson’s case, which has taken five years in the courts, reveals just how corrupt and crony-capitalist the European Union has become. It is no surprise that Sir James was and is a big supporter of Britain leaving the EU. Essentially, the rules have been bent to allow German manufacturers to deceive customers about the performance of their vacuum cleaners, in a manner uncannily similar to – but even worse than — the way mostly German car manufacturers deceived customers about the emissions from diesel vehicles.

In today’s decision – a very rare case in which the EU courts have had to back down — the EU’s General Court said it would uphold Dyson’s claim and that “tests of a vacuum cleaner’s energy efficiency carried out with an empty receptacle do not reflect conditions as close as possible to actual conditions of use”. Yes, you read that right: until now, in Europe only, vacuum cleaners were tested without dust, the better to suit German manufacturers.

The case concerns labels on vacuum cleaners stating how much energy they use. The Energy Label for corded vacuum cleaners is mandated by the EU’s Ecodesign and Energy Labelling regulations. The purpose is to encourage energy efficiency in such products and the job of the Energy Label is to make sure that consumers get clear information about product performance. Dyson was the first manufacturer to support limits on the power consumption of motors in vacuums. Why wouldn’t it be: its Cyclone product is very efficient?

The Energy Label was introduced throughout the EU in September 2014 and updated in September 2017. It covers overall energy rating, rated A to G, with A being best and G being worst; annual energy usage: in kWh; the amount of dust in air emitted from the machine’s exhaust (A to G); the noise level in decibels; how much dust the machine picks up from carpets (A to G); and how much dust the machine picks up from hard floors and crevices (A to G).

All very reasonable, until you find that the European Commission stipulated that under these regulations, vacuum cleaners are tested empty and with no dust. This flies in the face of the methods developed by the International Electrotechnical Commission (IEC), an international standards organization, which have been adopted by consumer test bodies and manufacturers worldwide. It is out of line with the way other appliances, such as washing machines, ovens and dishwashers are tested “loaded”, not empty.

Why would the EC have made this strange decision? Because the big German manufacturers make vacuum cleaners with bags. Sir James Dyson invented ones without bags. And the bag ones gradually become clogged with dust so they have to use more power or lose suction. The decision to test them empty plainly benefits the bag-cleaners. Behind the scenes the German manufacturers lobbied for this outcome.

The result of this is that you can buy a bag cleaner with an A rating, take it home and find that most of the time it performs like a G-rated cleaner.

So in 2013 Dyson challenged the labelling rules in the EU General Court, arguing that, to reflect real-life experience, the performance of a vacuum cleaner should be tested in real-world conditions, and that might actually include – God forbid – encountering dust. In November 2015, the EU General Court dismissed Dyson’s claims saying that dust-loaded testing is not reliable or “reproducible” and therefore could not be adopted, despite the fact that the international standard does use dust. Nonsense: in its labs and in houses, Dyson tests its own machines using real dust, fluff grit and debris including dog biscuits and Cheerio cereals – of both the European and the American kind.

Dyson appealed to the European Court of Justice in January 2016 and on 11 May 2017 it won. The court said that to reach the conclusion it had, the General Court “distorted the facts”, “ignored their own law”, “had ignored Dyson’s evidence” and had “failed to comply with its duty to give reasons”. The ECJ said that the test must adopt, where technically possible, “a method of calculation which makes it possible to measure the energy performance of vacuum cleaners in conditions as close as possible to actual conditions of use”. The case was passed back to the General Court, which was given time to reconsider its verdict at leisure. Today, after eighteen months of cogitation (what do judges do all day?), and with nowhere to go, the court capitulated.

Dyson has this to say about the case: “the EU label flagrantly discriminated against a specific technology – Dyson’s patented cyclone. This benefited traditional, predominantly German, manufacturers who lobbied senior Commission officials. Some manufacturers have actively exploited the regulation by using low motor power when in the test state, but then using technology to increase motor power automatically when the machine fills with dust – thus appearing more efficient. This defeat software allows them to circumvent the spirit of the regulation, which the European Court considers to be acceptable because it complies with the letter of the law.”

How much more shocking does the crony-capitalist corruption at the heart of Brussels have to get before people rebel against this sort of thing? They did already? Ah yes, Brexit, true Brexit, cannot come soon enough.

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Alexander Temerko: The relationship between business and government has never been as meaningless as under May

The key to a good Brexit is empowering UK entrepreneurs to talk to their European counterparts and become ambassadors for Downing Street’s plan.

Alexander Temerko is an industrialist and a Conservative Party donor and activist.

Never has the relationship between business and Number Ten been as meaningless or fruitless as under Theresa May. She continues to repeat the mantra that she is leading a pro-business government, but that is an exaggeration. Hers is not an anti-business government – that would be a more accurate way of putting it.

A pro-business government is what Margaret Thatcher and David Cameron led in their day; it’s what Donald Trump, Xi Jinping and Angela Merkel are leading today. Despite her soft-spot for SMEs, our Prime Minister is undeniably afraid of global business.

Globalisation has shown that big business and public-private partnerships (something we hardly see in the UK anymore) are the real long-term drivers of a steadily growing modern economy. The presence of global business centres is what makes the difference between a country that’s prosperous and one that’s merely surviving. Indeed, such business is the powerful locomotive, pulling along SMEs and much of the socio-economic activity in the regions.

Business leaders have always been there to support May’s Government at the most critical times. Yet our “strong and stable” leader has repeatedly shunned any direct engagement with business in favour of sporadic consultations with the trade lobby, whose academic experts’ interests have long since been prioritised over representation of any actual economy sectors.

The Prime Minister has a presidential style of leadership. Her talent is for forming small, quasi-familial groups of trusted advisers. While David Cameron was comfortable working with big diversified teams, she seems reluctant to engage with the broad meritocratic audiences whose praises she so often sings. This desire to keep discussions tightly controlled has had a negative impact on almost every key policy decision taken to date. It is time to change.

Today, not only the country’s economy but also its integrity hinges on the UK business community backing the Brexit plans proposed by the Prime Minister and her Cabinet. No-one wants Brexit to be a disaster – but how to avoid it without break-through ideas and bold compromises?

The British economy will quickly lose its appeal should financial, industrial and services majors, driven by impending uncertainty and the fear of mounting responsibility to shareholders, relocate their headquarters and investment capital to more profitable jurisdictions with more predictable regulations. This could, in turn, trigger almost instant separatist rhetoric and action by the country’s subsidised regions.

Inside the eye of the Brexit storm, this outcome would be increasingly irreversible. People will start going by the saying “Better a painful ending than endless pain”. One person will certainly be delighted with a “painful ending”: his name is Vladimir Putin. Are we willing to afford him the pleasure? The answer is clear even to Jeremy Corbyn and Jacob Rees-Mogg, both of whom have been aiding this “painful ending” by holding on to his very own wrong end of the stick.

Europe would suffer, too. Take just one example from my industry: 70 per cent of our utilities are owned by European firms. Machinery and metal products are another trade goldmine for European business. At a time of escalating conflict with the US and sanctions or restrictions in trade relations with China, Russia, Iran and others, this is key. Europe just cannot lose Britain with its import-oriented economy as well. If that happens, countries right at the heart of Europe – France, Germany, Portugal, and to some extent Belgium and Holland too – will feel the pain.

However, in these countries, business is much more influential and integrated with the operation of Government. European business wants to live and wants to live well – which makes it our best ally in promoting a sensible responsible Brexit.

Businesses talk best with other businesses. They will not waste time talking when they don’t know if they are being heard by the Government, though. Hence, the key to a good Brexit is empowering UK entrepreneurs to talk to their European counterparts and become official ambassadors for the Government’s Brexit plan.

The other key piece of the puzzle is for May to accept the Irish border backstop – provided that the EU undertakes to guarantee our country’s integrity. This would restrain any spontaneous separatist movements in the UK, at least for as long as the EU continues to exist. If accession to the EU is all but impossible for any breakaway state, withdrawal from the UK would be pointless.

What happens if our Government does not create the broad coalition of business it needs and push bold compromises through? Quite simply, if there is no deal hammered out by December, a new election will be the only option to avoid the catastrophe of no deal.

If the Chequers plan falls through, it clear to almost everyone today that Parliament will not accept any other plan – be it Canada-plus, Australia-minus or a No Deal. The European Commission for its part, will not consider any new proposals, since none of them could get a majority in the UK Parliament and Europe will itself be moving into EU Parliament elections.

All that’s left are two options. They are both domestic – either a new referendum or another snap election. It is up to Parliament and our political elites to choose. They have to choose between their two great fears: the fear of a new election which is highly likely to mean a coalition government, and the fear of a new referendum that goes against Brexit.

George Freeman: There was much to cheer in the Budget. But now we need an inspiring programme for growth.

At the moment, we are treading water and appear to be relying on popular support for Brexit, and the threat of Corbyn, to keep us in office.

George Freeman MP is Chair of the Conservative Policy Forum and The Big Tent Ideas Festival, and is MP for Mid-Norfolk.

On Monday, the Chancellor announced that “austerity is coming to an end”. Politically, there was a lot to cheer in this Budget – some good news and headlines for struggling high streets, our crucial Universal Credit reform, NHS workers and the vast majority of constituents who rely on public services. Furthermore, there were many helpful retail pledges for colleagues in marginal seats. Given the Brexit divisions and infighting, we badly needed some good news.

But if we are going to end the biggest squeeze on disposable incomes since the war, the central question for our future is this: how can we get back to the 2.5-3 per cent growth that we enjoyed pre-Brexit? Before the EU Referendum, we were one of the fastest-growing economies in Europe and the G7. Now we’re one of the slowest-growing.

The Budget invites the public to judge us on different metrics – no longer on our commitment to balance the books (abandoned) or reduce the debt (still growing), but on our ability to “end austerity”. People will now need to feel tangible improvements and see how Brexit can be a catalyst for much higher growth and prosperity.

Because this Budget won’t be decided on the comment pages of broadsheets. It will be decided on the ground.  By parents chatting at the school gates. Families looking after their ageing relatives in care homes. Commuters stuck in traffic jams because the housing has come, but the infrastructure hasn’t. Or the millions standing on trains every morning who’ve shelled out £2,000 for a season ticket and feel ripped off.

I no longer advise the Prime Minister, but here’s what I’d say if I still did. We need to remind people that every public sector pound has to be earned before it is spent, and that we need a more inspiring programme of business-led growth to drive prosperity and opportunity.  This means some big changes.

First, accelerating our transition from a service economy to an innovation nation.  Innovation is key to our driving up productivity, prosperity, inward investment and exports. We won’t escape debt with growth at 1.5 per cent and low productivity.  We need a renaissance of enterprise and innovation.  Such buccaneers as James Dyson and Richard Branson have done more to transform this country’s prospects than any government department ever will.  We need to stop the business-bashing and promote entrepreneurship and innovation. While the UK is still a crucible of start-up entrepreneurship, the engine is not yet humming: we have too many start-ups that are never scaled up, too little of our innovation funded by the City and too little that is taken global by British companies. We need a new national mission. We must be the innovation nation.

Second, tangible access to new markets for our innovation.We can’t just do research.  We need to innovate, manufacture and trade.  If Brexit means anything, it surely means an opportunity to go global. But that can’t mean importing cheap food and cheap clothes from sweatshops. We need to be exporting our innovation. The UK should be using every tool possible to unlock access to the fastest emerging markets in Africa and Asia.

For 40 years our whole economy has been geared to our being a European services economy. Why don’t we make Brexit the moment to embrace a new global strategy for higher growth through exporting technology and innovation into emerging markets? If the opportunity is properly seized, we could use our Industrial Strategy and public sector innovation to make Britain a crucible of new technology scale up and financing through the City.

We could then use our aid budget and global soft power in emerging markets to grow our exports and trade links with the fastest growing economies. Why don’t we offer some of the fastest emerging countries where we have a strong historic links a deeper Aid, Trade and Security Development Partnership?

Third, harnessing the public sector as a test bed of innovation. We’ll never export our innovation if we’re not using it ourselves. Innovation can’t be just about making a lucky few in the City rich beyond their wildest dreams. In order for us to be a test bed for new technology, we need to put enterprise and innovation at the heart of the public sector.  If we want to lead the world in digital health, we won’t do it unless the NHS is already a pioneer. You can have as many digital health clusters in Shoreditch as you like. But if the NHS isn’t testing and buying it, we will never become the innovation nation we need to be. Building, financing and growing these little start-ups into serious businesses of scale. The problem of the austerity era was thinking that our problems could be solved by cutting things. Actually, the only way our problems can be solved is by growing things.

Fourth, empowering local leaders to innovate more. Innovation can’t be ordered from on high. It comes from people having the power to make decisions themselves. That’s why we need to embrace bolder economic localism. Let’s remember that our national economic performance is made up of hundreds of local economies, all of which need to be growing faster. Another five years of ever-tighter spending controls from the Treasury risks undermining local growth and innovation.  Instead of delaying essential local infrastructure holding our growth hubs back, why not let them raise infrastructure bonds in the international capital markets and embrace bold ideas like integrated track and train mutuals which invests users money into better services?

Fifth, a new model of Treasury incentives. Too often, Whitehall’s funding orthodoxy rewards failure.  If you deliver more for less in the public sector we give you…less!   And give more to those failing.  If you ran a business like that it would be bust.  And depressing to work in. It’s no wonder that public sector leaders are so dispirited.  Many are leaving.  We need them to stay.  So why don’t we send a signal to encourage them, be bold and embrace a new model of incentives-based funding which rewards successful local service leaders for delivering efficiency and productivity? We need a new approach based on a radical idea: if an area reduces the deficit quicker than Whitehall’s average we should let them keep 50 per cent of the savings to re-invest.  Why not the same on growth? If councils grow their tax base, why not let them keep 50 per cent for local services?

Our choice as a nation is clear. Do we timidly manage our decline? Or do we set out a bold plan a brighter future? At the moment we are treading water and appear to be relying on popular support for Brexit, and the threat of Jeremy Corbyn, to keep us in office.

For a majority of voters, keeping Corbyn out and delivering Brexit are not good enough answers.  We need to show voters that this is the path to something more inspiring.  We need to start setting out a bold vision for Conservatism in the twenty-first century.

In so many areas the EU’s negotiating stance is sadly defined by the politics of punishment, rather than economics

The news that Boeing has just opened a £40 million manufacturing facility in Sheffield to make parts for their latest 737 and 767 aircraft, which are assembled in the United States, serves to remind us that our world-class aerospace business is global and to torpedo the claims of Airbus – and some car manufacturers – […]

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The news that Boeing has just opened a £40 million manufacturing facility in Sheffield to make parts for their latest 737 and 767 aircraft, which are assembled in the United States, serves to remind us that our world-class aerospace business is global and to torpedo the claims of Airbus – and some car manufacturers – that Brexit will threaten jobs in the UK because it will cause havoc to the just-in-time manufacturing process. Boeing’s plans call for the production of 52 aircraft a month with thousands of parts being shipped every month to Portland, Oregon, so timely delivery will be just as critical to Boeing as it is to Airbus.

So, the question arises: if Boeing can operate a slick production process using parts made in Britain, shipped six times the distance to their assembly line compared to shipping Airbus parts from Bristol or North Wales to Hamburg or Toulouse (and BAE ship 15% of every single F35 Joint Strike Fighter to the Lockheed Martin plant in Dallas), what is Airbus’s problem? The answer lies not in economics but in politics.

As is increasingly clear, despite protestations to the contrary, elements of the EU really do want to punish the UK for having had the insolence to Leave and to deter other countries from following our lead. France seems to be the most determined to press for punishment, partly to try to seize the City of London’s business and partly to promote President Macron as the new EU leader as Angela Merkel’s grip weakens.

Recently there were reports, subsequently denied, that President Macron intended to require UK visitors to France to obtain visas whilst those Brits with homes in France would immediately upon Brexit become illegal visitors. Apparently, the word ‘not’ was omitted in translation and the proposed new law designed to prevent such action. However, Dominic Raab subsequently spoke about the possibility of France ‘deliberately’ delaying lorries entering the port of Calais.

Earlier this year, the EU announced the creation of a fund to develop new defence equipment, a programme from which the UK, home to Europe’s largest defence contractor and with the largest defence budget in Europe, was to be excluded. Furthermore, the UK is to be ejected from key parts of the EU satellite navigation programme, Galileo, despite having contributed £1.2 billion and constituting, through Airbus subsidiary Surrey Satellites, a key portion of the technology. Any reasonable person would ask where was the commercial, let alone defence, interest in excluding such a major European player. Again, the answer lies not in economics but in politics: the UK has to be punished even if it means damaging the defence interests of the continent.

As we approach the sombre commemorations of the centenary of the 1918 armistice which ended The Great War, it is worth pausing to reflect on the role of some of those nations who, in the famous words of Margaret Thatcher, ‘we either rescued or defeated’.  The British people have voted freely but decisively to Leave the EU, yet face punitive measures by some on the continent for whose liberation in two world wars this country and its Empire shed 1,300,000 lives. Whilst falling over themselves to secure favourable trade deals with the rest of the world, the EU’s leaders have adopted the reverse policy with their closest neighbour, refusing to discuss trade arrangements before sorting out an artificial problem of their creation by weaponising the Irish border, a clear solution to which has been proposed by the ERG and others.

In another example of the pathetic approach in Brussels, I understand that the EU’s aviation safety agency, EASA, is debarred from discussing with our CAA how we manage air travel post Brexit.  Given the UK’s prominence in air transport, with Heathrow being the most important transatlantic gateway airport in Europe, why is EASA not engaged in constructive debate? Iceland, Norway and Switzerland are members of EASA even though they are not EU members, so why remove the UK? Again, the answer lies in politics, not economics. They want to cause inconvenience, if not chaos, to rub home to the others the cost of recovering national sovereignty.

All this illustrates the fundamental naivety exhibited by the UK at the outset of the negotiations, namely that if we conceded and acted in a friendly fashion the EU would respond in similar vein, leading many Leave voters to question the motives of those in charge. We never acknowledged the determination of the Commission to protect The Project (to create the United States of Europe) and we failed to recognise the strength of the cards in our hands.

So we threw away the security card, offering unconditional support to the 27, only to be rewarded by exclusion from EU defence programmes. The Prime Minister offered to pay a staggering £39 billion of our money in return for – nothing. Well, if she thinks British taxpayers will tolerate that, I fear she is mistaken. I can no longer withhold my vote in Parliament, but I can withhold my taxes unless I see a fair trade deal is secured.

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