I have been wanting to sit down and do this for a long time, but today I was finally provoked into articulating the reasons why I think Britain should leave the European Union on the 23rd of June. I am simply bored of people attacking personalities and not engaging with the arguments. I am bored of ‘straw-men’ being constructed so legitimate economic and democratic arguments can be portrayed simply as the ramblings of ‘loons’ or ‘racists’. More than anything I am bored of allegiances to this Campaign group or that obfuscating the actual facts as they are stand and the legitimate concerns people have over the European Union.
This is my own argument, borrowed from nobody but influenced by my teaching of politics over the last 3 years, digesting every article about this topic I can get my hands on and watching every Daily Politics without fail for the last 12 months. This is an informed opinion, this is my opinion and so any criticisms of it I welcome, as long as they focus on the arguments as put to you here and not on some conflation with the views of people I have no control over and most likely don’t support.
You have the decision in this referendum, the politicians are there simply to convince you. If you don’t like them thats one thing, but proving them wrong is quite another; focus on the arguments.
Addendum – Since originally posting this I have received some follow up questions on other social medias which have reminded me of points I will like to go over. I have attempted to answer in the Q&A section at the end of the post.
The Economic Argument:
The question raised on the Facebook post was originally economic and so that is where I will focus attention first. It is a legitimate question to ask whether the 0.37% reported yesterday is significant enough a figure to worry about, but when you think that the UK’s GDP is 2.678 trillion USD, that 0.37% of 2.678 trillion actually amounts to around $9 billion; which is hardly an ‘insignificant’ figure. That is about how much the NHS deficit is currently running at. However, that is not the full story here.
As a Historian by trade I have to point out that the source of this information needs greater scrutiny. You might expect the ‘The EU budget office’ to pick the lowest possible legitimate figure they could to minimise the scale of our contribution to the EU; particularly considering their unashamed and understandable wish to keep us within the Union. This is exactly what they have done. This is the figure minus the rebate we receive and the money we get back from the EU (with conditions).
If you take those into account the figure more than doubles to £17.8 billion or £12.9 billion with the rebate off; as reported in the Telegraph’s analysis of our contributions. This is actually a conservative figure I’m using to show that I’m not inflating this in any way; if I was to use the ONS (Office for National Statistics) figure, it is actually more like £13.4 billion with the rebate taken into account and closer to £19 billion without. To completely avoid any further accusations of bias, these are the figures supported by the Government, the ‘Better in Europe’ campaign and are derived from the European Commission’s own statistics.
Even taking the lower of those figures, that’s enough to cut 3% off of the basic rate of income tax, it is significantly greater than our entire Home Office budget which in part pays for our Police service and is about 25% of the entire UK education budget (as shown by government’s own figures). What more could I say to convince you that this is not an ‘insignificant’ amount of money? There is much good we could do with that money and it’s fundamentally money taken from us as taxpayers.
But ‘Ahh’ you say. ‘We get this rebate and the money back and this will continue’. Not necessarily. The EU budget is renegotiated every 7 years and the rebate is subject to that budget. In other words we do not control whether we have it, or at what rate it is set. This means that in 2020 the rebate could be and likely will be cut, meaning our net contributions to the EU will increase as a result.
This isn’t just speculation. While it is true that the EU budget must get unanimous agreement from all member states, the last time this was negotiated in 2007 Tony Blair was strong armed into conceding a 20% reduction in the rebate, adding billions to our EU contributions. Considering the budget is proposed by the EU Commission, whose President Jean-Claude Juncker has vowed to ‘make an example of Britain in future negotiations’ regardless of the result of the vote, I would say that a reduction in the rebate is almost inevitable, especially considering our recent lack of ability to negotiate with the EU. This would mean we would lose even more in our net contributions to the EU.
You may still be temped to say, ‘but we could veto the budget if it reduces the rebate’. Technically yes, but you would have to veto the entire budget to do so; and to then make any difference to it, you would need support from other member states. As the rebate only benefits us and means that the other 27 member states have to contribute more, we would not get this support. In short, we cannot count on this rebate, which is why mentioning the higher figure without the rebate is both prudent and proper.
The EU budget contributions are also linked to GDP meaning that as we continue to grow,we pay even more, eating into our standard of living and negating any positive impacts of the membership of the single-market. You may or may not remember that the EU Commission demanded that the UK pay an additional £1.7 billion into the EU budget in 2014, because of the growth we had experienced since the EU budget agreed in 2007. Back then, our PM was avidly against such a demand, saying we wouldn’t pay. In the end the ECJ (European Court of Justice) would have made us and so we quietly coughed up in April last year. We do not have the power to reject these rulings, and therefore the EU which is contemplating other projects that will cost billions will likely demand great contributions in the next 2020 budget negotiations.
Additionally, while the money we get back in farming subsidies and for regional development is often deducted from the total contribution in some figures, I believe this is disingenuous at best. That money comes back to us with conditions, we are instructed on how to spend it by the EU commission via the budget. Now, nobody serious is arguing that this £4.57 billion, used to subsidise farmers keeping food costs low, or funds university research is not laudable or a merit-good. However, we are not given this money by the EU as some sort of generous and benevolent gift, it is already the UK’s money in the first place; this is because every year we lose a net £8.37 billion pounds into the EU budget completely, we give more than we get back. That £8.37 billion goes to maintain EU institutions.
The argument for leaving is that we could continue to spend the £4.57 billion we already do on these projects, but also have the other £8.37 billion that disappears into the inefficient bureaucracy of the EU, whose own auditors admitted that 4.4% of the EU budget, amounting to tens of billions is ‘wasted’. Again this is a conservative figure because of course, we would get all the money under our direct control again; all £17.8 billion of it, to apportion to whatever we elected a government to spend it on.
Now you say, ‘the Tories will get in and they wont spend it on those EU projects and investments and wont protect the worker’s rights they give us’. Well then you don’t elect them, you don’t vote for them; and if you do vote for them and they get into government promising to implement a British equivalent of these EU provisions and rights (which of course they will as they would lose if they campaigned to remove them) and renege on such a promise, then you don’t vote for them next time. The EU dilutes the accountability of our elected officials, because right now they actually don’t have the control over many aspects of our economic development, employment law etc and can shift the blame onto the EU or give supine excuses because they know they cannot legislate when their power to do so has already been ceded to Europe. By leaving, you know who’s fault it is, there is no ambiguity about this. Thus if you are still the kind of person that would prefer the EU to ‘stop the Tories’, then you just have to admit that you are an enemy of democracy when you don’t get your own way, a contemptible and juvenile attitude.
Now, some would legitimately argue that leaving the EU and/or the single market would lead to some economic uncertainty and/or loss of trade that would impact GDP and eat into the amount we save; in essence you say, “even though we get it back, the pot will slowly reduce over time because of negative growth, so we will actually be worse off”. Indeed, there is some evidence of the money markets reacting negatively in recent months. However, there is little to no evidence that this is because of the prospect of Brexit. Indeed, with the polls still leading for remain one could argue that at best, the markets are reacting simply to the uncertainty produced by the referendum itself and withholding investment until they know the result.
However, what if we do get negatively affected? Well, using the current figures mentioned, this would mean that we would need a sustained recession of -1.5% growth over a whole year, to lose that £17.8 billion figure. Yet, in the worst case scenario outlined in the Treasury report into the impact of Brexit, written by a Government openly for remaining, the UK economy would continue to grow regardless of Brexit, in every quarter up to 2030. Clearly then, the pot would not reduce and we would be saving further money as our increased growth while in the EU, means increased contributions too.
This report is also where the Government’s misleading figure of £4300 per household lost comes from. This figure assumes firstly that the recession could be as bad as 6%, which is worse than the Great Recession of 2008 and the Great Depression of the 1930s; a prediction which lacks any historical credibility, as there is no logical reason to expect that leaving the EU would not produce the kind of reduction in world spending that these two crises did. Additionally, this ‘loss’ is actually a prediction about how we would ‘grow less’ as a result of leaving the EU, not actually a prediction about recession.
Coupled with this, all of these predictions assume that we will have no access to the single-market whatsoever and more importantly will make no trade deals with other countries in that subsequent time, which of course we would. Part of the big problem with the EU is that even though many laud its power and benefits when it comes to trade, it is not the free-trade zone it is made out to be. Many who argue for remain argue that we need to work and cooperate with countries around the world and so we must be part of the EU to continue that work. Well of course we need to work and trade with the world, but the EU doesn’t actually aid in that as much as you would expect. For example, by leaving we would gain a seat on the World Trade Organisation, as currently we pool that seat with the other EU members, and this would increase our ability to make independent trade deals outside of the restraint of the EU.
Yet when it comes to trade, the fundamental point is that the EU acts more as a protectionist block for the 28 countries inside it than it does as a bastion of free-trade, which many in favour of remain rightly argue is important for prosperity. We have heard a lot about tariffs being put up against our exports in the event of us leaving and on this I agree with the remainers; they will put tariffs up against us, as the EU is the most prolific organisation in still using this economic construct. Their ‘in the club’ mentality is the antithesis of free-trade and is now being threatened on us vindictively as some kind of punishment for leaving. Less a club then, more an abusive relationship.
To protect German Cars and French food, the EU has erected tariffs on these products from other countries to artificially keep their industries competitive. If you bought a car from Asia recently, a Hyundai or Kia or Lexus, you will have already paid a 10% tariff to buy them and they would still have been cheaper than a Mercedes or a Renault, tariffs are relative and it does not mean that instantly we will be 10% worse off as a result. In fact leaving the EU would instantly abolish these tariffs, and in theory make these products 10% cheaper unless we decided to erect tariffs ourselves. Leaving the EU opens up these kind of economic scenarios to our consumers and gives the UK the kind of flexibility to use them appropriately where our economy needs them, not where the other countries do.
Indeed, the objections of other countries is the main reason we still do no have trade deals with the USA, China or any of the other developing countries that represent huge potential markets for our goods and services, along with opportunities to make goods from those countries cheaper for our consumers by lowering tariffs. Conducting negotiations on behalf of 28 countries with different concerns and different economies has simply proven to be the metaphorical ‘horse designed by a committee’. Current negotiations with the USA have taken 8 years and are likely to be abandoned completely after the election in November, representing billions of dollars of lost opportunity for growth.
Independently, Britain could have easily constructed a trade deal with the USA in less than half that time, because of our strong diplomatic links with them and the decreased complexity of the venture. Don’t take my word for it, according to the Civitas research group that “The EU has… opened services markets of just $4.8 trillion to UK exporters, whereas the Swiss have opened markets of $35 trillion, the Singaporeans of $37.2 trillion, the Koreans of $40 trillion and Chileans of $55.4 trillion.” If these independent countries of economies far smaller than ours can construct trade deals opening up these huge markets, so can we. The EU is not a free trade group, it shuts us out of these markets and engages in bunker mentality to save the only economic area in the world that isn’t growing from complete failure.
Let us even imagine the EU did erect tariffs on our biggest export product, cars. In this case the EU would be committing an act of harmful self-flagellation by denying us an amicable trade deal. We are the EU’s biggest export market for cars, and so they want to keep trading them too us. Additionally, as their cars are expensive, they do not have many alternative markets to sell into, whereas we have plenty of alternative markets to buy from. If they put tariffs on our car industry exports into the single-market we would return fire, and up to 1m German car workers lose their jobs. They will not do it, Angela Merkel has an election coming up next year and an unhappy car industry would be the end of her. We are not Switzerland or Norway, the big hitters in the EU stand to lose big if they want to deny themselves access to our market and so come crunch time, they are unlikely to deny us entry to theirs.
Additionally, collective trade deals and EU regulations damage some of our most successful industries. One example I heard from the radio was of how independent trade deals could be tailored to benefit the Tate and Lyle Sugar company based in London since 1921. Tate and Lyle employ over 4000 people and have revenues of £2.35 billion a year, contributing significant tax revenues into the UK economy. The problem for Tate and Lyle is that other EU countries produce sugar from sugar beat, and Tate and Lyle produce cane sugar. This has meant that the majority of EU countries have fought to impose tariffs on sugar cane, making this more expensive compared to sugar beat. This is damaging Tate and Lyle’s bottom line and thus putting those 4000 jobs and our public tax receipts at risk. This is just one example among many that demonstrates how the EU is harmful for our industries, whereas independently, we could do more to support them.
The Immigration Argument:
Another area over which the EU restricts our flexibility is immigration. Now some Brexiteers will make valid arguments about the issue of migratory flows into Europe and its detrimental effect. I will not make as much of this other than to say the only way immigration is guaranteed to be a negative thing for an economy or society is when it is uncontrolled or uncontrollable. Unfortunately, that is exactly what the EU means our immigration policy is. I am pro-immigration in principle, as basic logic dictates that if we do not have to pay to educate people, but can ‘import’ the skills their education has given them for free, then they are net-asset for our economy.
The problem with EU freedom of movement is five-fold. Firstly the EU has encouraged more unskilled immigration which depresses wages for the lowest paid in society, as opposed to skilled migrants. The Bank of England has found that on “closer examination reveals that the biggest effect is in the semi/unskilled services sector, where a 10 percentage point rise in the proportion of immigrants is associated with a 2 percent reduction in pay”. Considering EU migration accounts for about a 1% in total population increase per year (48% of the 2% increase per year or 333,000 added to 64.1m per annum), this impact is palpable.
Secondly, the EU is a ‘brain-drain’ for our own society. 1.2 million Brits live in the EU largely because of the ease of freedom of movement. While you could argue this is good for them, it is not helpful for our economy writ large. The kind of people that migrate out of the UK (teachers, bankers, doctors) have cost the taxpayer thousands to highly educate and now contribute to economies other than our own. Along with this they are still entitled to UK pensions and public healthcare benefits without paying into the UK economy, we could do well to encourage them to stay instead.
Thirdly uncontrolled immigration is bad for social cohesion, whereas controlled immigration can demonstrably produce integrated immigrant communities. When migrants arrive in large numbers from their native communities they face the huge barrier of integrating into British society and potentially having to learn English on the one hand, or the ability to settle with their own countrymen with none of these barriers. We have demonstrable examples of these impermeable and unintegrated communities up and down the country.
Fourthly, the original concept of ‘freedom of movement’ was the freedom of movement to work. Almost every other country in the world controls their immigration policy using a combination of travel or work visas that are given on the basis of need in their economies. EU free movement as it stands is not what the British people consented to in 1975.
Lastly, EU migration which is mainly White in origin and that we cannot restrict or control, forces us to discriminate against immigration from outside of the EU; which indirectly means we are discriminating against people of colour. This is why blanket accusations of racism against people who are concerned about our immigration policy with regards the EU are ignorant and themselves bigoted. Some of the most successful waves of migration into this country have been from our colonial links around the world that we are currently having to largely ignore in favour of European migrants.
I’m sure some people who support Brexit are racist Neo-Nazis, I am also sure that some people who support remain are dangerous radicals on the Far-Left; the fact is, the people that support these arguments on both sides are completely irrelevant, as the logic of the arguments does not rely on their ideology to make sense. What is more important to me is that our current policy towards immigrants is actually discriminating against people indirectly based on their colour, whereas if we had control of our own immigration policy we could discriminate in a non-racist way, based on matching their skills with our economy’s needs without reference to their colour or nationality whatsoever.
The Democratic Argument:
I have already touched partly on the benefits of making our MPs accountable again when making the economic argument, and that is the heart of the benefit we will receive by leaving, but I will add more detail on the democratic deficit we currently have as members.
For a start, Leave campaigners are not wrong when they say Europe is run by unelected elites. While we do elect MEPs to the European Parliament, the European Parliament has next to no power. Most parliaments are ‘legislatures’, they make laws; and can do so only because they hold the consent of the people they are elected by to carry out their will appropriately. The problem is that the European Parliament does not have the power to initiate laws. This is done by the unelected and appointed European Commission and is driven by the unelected and appointed EU Commission President. On top of this the European Parliament has no power to revise legislation and MEPs are given very limited amounts of time to debate legislation. Indeed one British EU commissioner revealed statistics showing that the average MEP only has the chance to speak for 6 minutes per year, and costs around £1.79 million a year to the EU taxpayer; by comparison, a British MP costs around a third of that a year . On top of that, Britain only has 73 of the 751 seats in this Parliament, so our ability to influence the Union through the Parliament is limited.
Instead, legislation is proposed by the unelected 28 member EU Commission. EU Commissioners are proposed by the 28 national governments and then are appointed with the consent of the EU Commission President, who himself is appointed by the European Council and confirmed by the European Parliament. The Council is perhaps the only part of the Union that has a legitimate claim to democratic credentials, as it is made up of the elected Heads of Government of the 28 member states, David Cameron included.
However, in theory even this is not democratic as after 2014, the Treaty of Lisbon meant that European Councillors effectively lost their ‘weighted vote’ where countries with greater populations had greater say. Now groups of much smaller countries, can override the democratic will of the majority of the EU Councillors who represent the majority of the EU’s people, as long as there are at least 4 of them and they represent at least 35% of the population of voting countries. On top of this, if the five most populous countries all voted the same way (65% of population), they could impose their will on the other 23 sovereign nation states. The EU council can simultaneously fail to protect the democratic will of sovereign nation-states and the will of the democratic majority, given certain conditions.
Thus, the EU Commission President is nominated by an undemocratic body, elected officially by a European Parliament that is a lame duck and that we only control 10% of and subsequently has a huge influence over the kinds of laws and regulations the EU passes that we are bound to follow by judgement of the ECJ (European Court of Justice) which itself holds and inordinate amount of power over our democracy; and yet again, is appointed. The final absurdity of this insane collection of unelected suits, is that many of them are people who have been flatly rejected by their electorates in general elections. Fail at democracy? Try being an EU Commissioner!
The ‘revolving door’ that exists between failed national politicians who find a happy home in EU institutions, appointed Commissioners and bureaucrats Sir Humphrey Appleby would be proud of, means that the structures of the EU are also impervious to reform. If the current systems and structures of the EU have delivered them the cushy jobs on huge salaries, with yet larger expenses and no accountability they have very little incentive to instigate change. It only stands to diminish the positions they currently hold.
Finally, if you want to see the extent of the EU’s attitude and lack of respect for democracy, look no further than the recent example of Greece, fittingly the historical birthplace of democracy. In July 2015, the Greek people resoundingly rejected by nearly 62% the terms of the EU bailout package. To cut a long story short, the will of the Greek people was ignored and the terms were imposed upon them by the European Council regardless. Later that year the socialist and anti-austerity party SYRIZA was elected, yet their mandate was ignored by the European Union institutions, who clearly didn’t agree with the Greek people. The effect of the EU’s circumnavigation of Greek democracy can be seen in the turnout for that election, which was the lowest in Greece since democracy was restored in 1974.
The EU has demonstrated in this case among others, that it has no regard for the democratic will of a sovereign people, because it has no regard for national sovereignty whatsoever. There is no reason at all, why the European Union could not one day flout our democratic will in a similar way. Indeed, if the ramblings of EU Commission President are anything to go by, we will soon “have to accept being considered as a third party”. I would ask, who wants to be part of a club that threatens and intimidates its own members if they want to leave? If that was a husband talking about his wife, I’m sure you would be mortally offended and concerned, you would take her to a women’s refuge and take out a restraining order. When its an unelected President talking about your country, you should feel no different.
The simplest and strongest argument I can make in regards to this question, is to make you think with your instinct. If the question was whether you would join the EU now if we were not a member, would you join a group that makes open threats to its members and ignores the sovereign democratic decisions of its constituent states when it doesn’t like the answer? Or a club which publicly admits that corruption and mismanagement leads to lost and pilfered taxpayers billions? Would you join the most unsuccessful body at putting together trade deals in the modern world? Would you join the only continent on the world that is not growing? Would you give up controls over your borders for the dubious privilege of protecting uncompetitive continental industries?
The list could go on, but I should hope our membership of the EU does not…
Conclusions
For me there has been far too much talk of personalities and who supports what campaign in this referendum, I’m not interested in that, I’m interested in the arguments that should speak for themselves. In short my conclusions are:
-That leaving the EU will give us the potential for greater economic flexibility, allowing us to make laws that are tailored to our economy and reach out to the large growth economies of the world for trade deals with trillions more than those done by the EU.
-That the EU itself hinders our ability to trade with these growth economies, and has no intention of reforming in this regard, as it is actually a protectionist block and not a free-trade area.
-The ‘apocalypse now’ vision of the Remain arguments range from hyperbole about it being worse than the Great Depression, to admitting that we will still grow as a nation with Brexit even when predicting ludicrous reductions in GDP growth.
-We will be able to keep the £17.8 billion a year that we send to the EU, and direct our politicians to spend it how we like, rather than see it wasted entirely or be instructed how to spend it by unelected officials.
Immigration will be fairer as it wont discriminate against those from outside the EU and will be focused on skills, not country of origin. It will also mean we can control immigration for the context of the time, bringing in more when we need it and less when public services or communities suffer as a result.
-We will free ourselves from a European Union that erodes our national sovereignty, and more importantly, has a flagrant disregard for democracy and the will of national populations.
-You wouldn’t join now, so why stay?
Q&A
Q.) What is the 0.37% figure reported?
A.) It’s what the European Budget Office say we contribute to the EU as a % of our GDP each year. But that figure doesn’t include the rebate or the money we get back in the CAP (Common Agricultural Policy) and other grants. I’ve since found that this 0.37% figure is also adjusted for growth in the GDP in between each budget (7 year intervals), that we eventually get surcharged for if we exceed growth predictions. This happened in 2014, and if we take that example that is another £1.7 billion. Figures like the EU Budget Office one does not account for this.
Q.) Isn’t our contribution still an insignificant figure anyway?
A.) The bottom line is we need to know that even by the most conservative estimate I can find £17.8 billion is pledged to the EU per year, which is around a fifth of the entire NHS budget. I don’t want to be accused of saying it all would be spent on the Health Service if we didn’t, this is just for comparison. In fact is, I am sure that any government after a Leave vote would replicate the subsidies and grants the EU returns back to us if they wanted electoral success. What we also need to know is that as we grow economically that contribution increases, essentially creaming off of the top of our success; along with the fact that the budget would continue to grow as it has on every previous occasion, meaning the cost to us will go up further.
Therefore this is a gerrymandered figure in the first place. If you take the ONS figure, minus the rebate it’s 13.4billion, which is equivalent to just over 1% of our GDP. If you count that the rebate will probably be renegotiated it will by around £16 or 17 billion. Which represents more like 1.5% of our GDP. If you count that the budget is being renegotiated in 2020 and our contributions will increase, alongside an increase in contributions as a result of GDP growth, it will be even more than that. If we were to go into a recession of -1.5, about 60% of what we did in 2008-9 we would lose way over a million jobs. So conversely by getting that money to invest in public services or cut taxes to encourage consumer spending we would see a compound effect on our growth rate every year.
Ultimately, the narrow view would be to consider only the current money pledged to the EU. The future goes beyond simply the potential for increasing costs to prop up the Eurozone, a project that needs closer political union to match the economic union for those countries inside it. With the struggles the Euro is currently experiencing, we will be asked to fund political union even if we are not compelled to join it fully. Yet even on this, the democratic argument I made shows that as long as 15 countries and 55% of EU country commissioners voted in favour, supporting the political project financially is not an opt-out issue. The Eurozone has 19 countries and over 60% of the population, they have an inbuilt majority and could in essence compel us to prop up the Euro even if we wished not to.
In short, the potential costs in the near future even if you do not consider the current figure significant, represent chunks of our GDP.
Q.) How can you be sure that we will make up for lost trade access when and if we leave the EU?
A.) When it comes to trade, the ONS show that our trade deficit in both Goods and Services with the EU, which essentially is the part that drains money from our economy into the wider EU has increased year on year. At the same time, our trade surplus in Goods and Services with non-EU countries, where economy actually profits, has increased year on year.
The rub with EU membership is that our ability to expand this profitable aspect of our economy is restricted because the EU negotiate foreign trade deals on our behalf, and have only managed to negotiate access to around $5 trillion worth of Non-EU markets . With independence and regaining our seat on the World Trade Organisation, we could get access to way in excess of $55 trillion that Switzerland has negotiated access to worldwide.
The point is that the EU is the market we sell into right now because we have no other choice viable alternatives. We have free-trade with only $5 trillion of economies outside the EU, so we are forced to sell the bulk of our goods and services within the EU, as we cannot make deals with other nations around the world to make our goods and services competitive there. We therefore are stuck with the EU as a large section of our export market, largely out of circumstance.
Just consider this:
-The EU is only 16.5% of the world’s economy including us.
-The world economy is worth $74.3 trillion.
-We have access to only $5 trillion of that outside the EU, that’s 66.63 trillion, obviously not including our $2.67 trillion GDP.
-The EU is therefore $12.25 trillion including us. So minus our GDP the EU is worth only $9.58 trillion to us in potential markets .
-So minus off of that the potential markets left and we get $57.05 trillion the UK does not have access to because we are banned from making unilateral trade deals with them.
-This amounts to the potential we are missing out on as price for our access to the single-market.
-Finally, if Switzerland can get access to $55 trillion of that potential, I’m sure we can manage $57 trillion.
I also mentioned previously that as we buy more from the EU than we sell to them, particularly on our biggest goods export of cars, they would be cutting their nose off to spite their face to erect tariffs; so rhetoric about punishment maybe, but rhetoric it will probably stay. I would argue that we shouldn’t negotiate access to the Single-Market like Norway at all, but let the EU make a trade deal with us, if they want to continue selling into our lucrative market for their expensive cars.
The biggest fallacy is that we even need trade deals to do trade anyway. Trade has opened up because of globalisation and the Internet and is driven by consumers not governments. Trade deals will help improve the rates at which we buy and sell things but the market will correct itself. We will buy the most competitive products available to us.
Q.) Why do so many important institutions like the Bank of England, the IMF and CBI support Remain if you think you know better?
A.) I do not want to be accused of donning the tin-foil hat, but this is largely due to the fact that these institutions wish as much as possible to maintain the status-quo.
In essence, the BoE and the IMF don’t like change. Their job in large part is to make accurate future predictions about economic growth. Changing the model represents the most monumental hassle for them, so they will use their energy and resources to argue for the status quo to maintain the accuracy of their current predictions as much as possible. The trend is if you currently work for the BoE you are pro-remain (Mark Carney). If you’ve retired and have more experience you are more likely to be a Eurosceptic (Mervyn King).
On top of this IMF is run by the ex-French finance minister, and has proven itself completely incompetent on this issue before. It suggested we join the ERM and the Euro, the former leading to Black Wednesday in the 1990s were our interest rates rose phenomenally by 5% in one day to 15%, the latter the tanking currency that is dragging the Eurozone into the doldrums. I would trust them about as much as a long-nose Pinocchio.
The CBI also receives a €1m grant from the EU, so is hardly impartial on this issue.
Q.) Why do many big businesses support the Remain side if it is bad for our economy?
A.) Well this is relative for a start. Many business leaders have come out to back a remain vote, but many have also deftly illustrated why being a member kills entrepreneurial spirit. See the owner of Wetherspoons Pubs, James Dyson of Dyson and the Chairman of JCB for their own arguments on this.
What I can say without a shadow of speculation or doubt, is that many companies would support continued EU membership because it allows them to continue very favourable tax arrangements. To simplify the process they use, they set up their EU headquarters in one of the member states with low corporation tax, such as Holland or Luxembourg or Ireland (as Google has) which gives them access to the rest of the single market as a whole. They then charge their regional outfits in the UK and elsewhere for sundries or other services, so that on paper the UK branch of the company makes less money, and pays less corporation tax.
By leaving the EU, companies that want access to our huge market would be forced to set up legally within the UK, and pay their full share of taxes into the exchequer. Another example of how leaving could see tax receipts rise.
In short, they support remain because it suits their interests rather than necessarily the wider interests of the economy or the people of the UK.
Q.) If the argument was so cut and dry then why do the majority of MPs support staying?
A.) While the full list of MPs who have declared can be found here there are many reasons why MPs would support remain even if they were not particularly ideologically convinced by it.
For one even though the concept of collective responsibility has been suspended, which in theory allows them to descent from leadership of the party, most Conservative MPs will still feel pressure from the government to tow the party line and keep themselves in favour of the front-bench team. One example that was much reported is Sajid Javid, the Business minister. He has been a long time Eurosceptic, but stuck with Cameron for political reasons.
However, if you look at the Tory party you will see its about 55/45 split, which much better represents the split in the country at large. The Conservatives hold this issue much more closely to their chests than the other parties do for historical reasons, and so I would argue that here it is much more an issue of conviction than elsewhere.
In Labour, there is an interesting dynamic at the moment. Corbyn has fought the EU all of his political life and so have others on his front-bench. His ideology’s last heyday in the 1980s campaigned on Michael Foots manifesto of leaving Europe. It was seen by him as a supranational club that could be used to suppress the rights of workers. He has come about for a few reasons, mainly that he couldn’t rally his MPs to support a Leave vote on top of the current issues he has with Parliamentary Party support.
Writ large, Labour supports EU membership because many see it as a stop-gap that binds Tory governments into accepting more liberal workers rights that Europe guarantees. They also have a long standing ideological commitment to internationalism, so naturally support the political aims of Europe that the majority of British people are very sceptical about indeed.
The SNP support it for similar reasons as Labour, but more importantly for them if they were to gain their goal of independence for Scotland, their much smaller economy would need the subsidies and support of the EU; and if nothing else, would need the Euro as their currency as we would not cede them the pound. It’s basically a cornerstone of their ideological vision without which they would have to go back to the drawing board.
Most importantly however, the reason we are having a referendum is to bypass MPs and have our say. Let them play their politics on this one and lets focus on the arguments and their respective merits.
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