When we joined the EEC in 1973, virtually no one called it that. It was popularly known as the Common Market. This is what even went on the ballot papers for the 1975 referendum. For Britain, being a member of the EU has always been about the money.
This means that it is on the economic front that much of the battle has been fought.
I'm going to take many common economic claims about leaving the EU, and try and tackle them.
We'll be x amount better off. If we leave, we can spend more of our own money on what we want
Actually, it is approximately 2% of total British government spending. In 2015-16, the UK governments spent £772 billion. Now, that is a hell of a lot. But even if we take the number of around £300 million a week at face value, it isn't that much. Modern states are expensive to run. If we leave the EU in June, on the surface we will have a bit more cash to spend on ourselves. But not enough to simultaneously fix the NHS, fund science and technology projects, reequip the army, end unemployment and homelessness, or whatever else the Leave people claim we could do with it.
It is also a spectacular mis-representation of the way the EU's money operates. The EU is not hoarding all that money in Brussels. It spends it to try and make the Union better. We get approximately £5 billion a year spent on us. Yes, we are sending more out than we get back. But that money we do get back gets spent on helping people in the UK. Every region of the UK, in every avenue imaginable: industry, business, agriculture, media, the arts, sport. All have benefited from EU regional development cash.
Also, some benefits are hard to find on a balance sheet. Does reduced cost at airports thanks to fewer border controls feature? No, but you can be sure it is in there somewhere as an advantage of paying to be a member.
So, before you look at the £300 million a week, panic and vote to Leave, just stop and think. Millions of the poorest in Britain have benefited from EU spending. If we suddenly got that money back, it represents a drop in the ocean of government spending. And there are major benefits from paying to be a member which are hard to pin down.
After all, our annual contribution to the UN is (very!) roughly £10 million. I've never benefited from a UN peacekeeping mission. But you can be sure as hell I think the money is well spent.
We will get our own seat at the World Trade Organisation
What, to go with the one that we've already got? We've been members of the WTO since it was set up. In fact, we're quite lucky. The UK is one of 28 countries that has two membership slots at the World Trade Organisation. All EU member states are represented twice; once as themselves, and once as part of the EU. We would be changing a double weighted voice for a single weighted one.
Anyway, I'm not sure the World Trade Organisation is a good thing to be getting more involved with. To all intents and purposes, the WTO is moribund. The WTO works by getting member states to engage in 'rounds' of talks, which aim to reduce trade barriers, regulations, and generally reduce obstacles to global trade. The last successful round was conducted between 1988 and 1994, under the WTO's predecessor organisation. That means it began before I was born, and finished 22 years ago. That is a long time ago.
The current round of negotiations, the Doha round, began in 2001. The aim was to have it all wrapped up by 2005. Here we are, eleven years after that deadline, with no end to the negotiations in sight. Compared to the WTO, even the EU looks efficient.
To all intents and purposes, the WTO is a moribund organisation. There'd be no point in placing faith in our economic future in an institution which has failed to finish a piece of work it began when I was just starting high school.
We will make trade deals with other countries
Now we know that doing this through the World Trade Organisation is a waste of everybody's time and effort, this becomes much more problematic. The sheer scale of trying to negotiate open market access to every country on Earth is daunting. As part of the EU, we are already stuck into negotiains, many of which will take years to complete. If we leave, we would be starting again.
Imagine how annoyed the other countries will be, to suddenly have the UK team appear and ask them to open more talks. They're probably bored stiff with the first set, and I can't imagine they'll be happy to start more. President Obama may have caused offence when he said we would be at the back of the queue in a transAtlantic trade deal. The thing is, he is right. The truth hurts.
If we can't do it en masse, we will have to do it individually. What an absolute bloody mess that would be.
We will trade more with the Commonwealth
We will trade more with the Commonwealth
Obviously, we trade with everyone and anyone that will buy British. However, with the loss of our easy access to the EU, we'd need to find something to replace this market with. But fear not, for waiting in the wings, there is the Commonwealth, ready to jump in and become our new number one trading partner.
This seems to be an attractive offer that makes perfect sense. After all, when Britain entered the EEC in 1973, it was forced to surrender a very lucrative trading arrangement with the Commonwealth. Although we were able to extract some concessions from the EEC, overall we were forced by our terms of entry to orientate our markets towards the Continent.
1973 was a very long time ago. Using some rough guesstimates from the population pyramid, only about half of the current UK population was alive at the time. If you discount anyone under the age of 16, the then school leaving age, that leaves 23% of the UK's current population with working experience of the world before we joined the Common Market.
That will also hold broadly true in many Commonwealth countries. In fact, many are developing countries, which have experienced massive population growth in the late 20th century, so theirs will be even lower. Less than a quarter of the workforce has any experience of operating in the pre-Europe days.
This means that there aren't really any residual ties to our former markets left. Had we left the EEC in 1975, as we could have done, then re-establishing those relationships would have been much easier. But they will have faded into the distant past, like the Sunningdale Agreement, the Cod Wars, the Lonrho affair, and Rick Wakeman's Six Wives of Henry VIII (All also from 1973). There aren't any companies waiting by the phones to resume trading. Times have moved on.
Britain enjoyed a close relationship with these places because it had been, until very recently, their lord and master, or at least first amongst equals with respect to the former Dominions. Much of this trade had taken place on terms which had been disastrous for the colonies. Empires are rarely benign to their subjects, and Britain was no exception. I can't see that they will want to resume a relationship which represents the darkest period in their histories.
The notion is that the former colonials will jump at the chance to make the mother country the 'most favoured nation' for trading again. This is laughable, and also flies very close to the line in terms of imperialistic racism. The Leave campaign can't really think that these places have spent four and a half decades pining after Britain. They've moved on. Perhaps we should too.
We will be the number one export market for the rest of the EU
If we will struggle to trade with the rest of the world, or the Commonwealth, then that leaves us with one last great hope. As part of the EU, we conduct a lot of trade with Europe. And I mean a lot. It accounts for 48% of our exports, according to HMRC. In March 2016, we exported £12 billion to the EU, and imported £20.2 billion in return. Both our imports to and our exports from Europe have risen in recent years.
This is a reason the Leave campaign give for us being in a good position to barter with the EU if we leave. They need us, and we need them. In fact, they need us more than we need them. So we are bound to get a good deal in negotiating access to the EU's trade area. Otherwise the EU will be cutting off its nose to spite its face.
Perhaps. But what troubles me is that, if we do leave, the EU are not going to be very charitable. Leaving will probably deliver a profound shock to the European and global economies. If nothing else, the uncertainty around how exactly we leave, and on what terms, will inject a nice shot of uncertainty. Economies hate uncertainty. It causes them to slow, and sometimes contract. The EU's economic model barely weathered the storm of the Euro crisis. The chaos of the second largest EU economy trying to pull out would be severe.
Also, the UK is not the only country to have its Eurosceptics. A vote to leave would embolden these movements all over Europe. What would the EU's last weapon against them be? To show that leaving the EU is not an easy move. We can expect them to fight us every inch of the way. Yes, it is bitter and nasty. But from their point of view, it would be a mess of our own making.
So, if we do vote to leave in June, I wouldn't be expecting our spurned European neighbours to be rushing to welcome us back. Depressingly, this does seem to be the Leave campaigns view of affairs.
Summary
So, there you have my take on it. I'm sure you can find plenty to dispute in this. I have tried my best on figures and statistics, and am happy to provide references for those sad enough to want to check.
Overall, have the Leave side made the economic case for leaving convincing? I'm not convinced.
1973 was a very long time ago. Using some rough guesstimates from the population pyramid, only about half of the current UK population was alive at the time. If you discount anyone under the age of 16, the then school leaving age, that leaves 23% of the UK's current population with working experience of the world before we joined the Common Market.
That will also hold broadly true in many Commonwealth countries. In fact, many are developing countries, which have experienced massive population growth in the late 20th century, so theirs will be even lower. Less than a quarter of the workforce has any experience of operating in the pre-Europe days.
This means that there aren't really any residual ties to our former markets left. Had we left the EEC in 1975, as we could have done, then re-establishing those relationships would have been much easier. But they will have faded into the distant past, like the Sunningdale Agreement, the Cod Wars, the Lonrho affair, and Rick Wakeman's Six Wives of Henry VIII (All also from 1973). There aren't any companies waiting by the phones to resume trading. Times have moved on.
Britain enjoyed a close relationship with these places because it had been, until very recently, their lord and master, or at least first amongst equals with respect to the former Dominions. Much of this trade had taken place on terms which had been disastrous for the colonies. Empires are rarely benign to their subjects, and Britain was no exception. I can't see that they will want to resume a relationship which represents the darkest period in their histories.
The notion is that the former colonials will jump at the chance to make the mother country the 'most favoured nation' for trading again. This is laughable, and also flies very close to the line in terms of imperialistic racism. The Leave campaign can't really think that these places have spent four and a half decades pining after Britain. They've moved on. Perhaps we should too.
We will be the number one export market for the rest of the EU
If we will struggle to trade with the rest of the world, or the Commonwealth, then that leaves us with one last great hope. As part of the EU, we conduct a lot of trade with Europe. And I mean a lot. It accounts for 48% of our exports, according to HMRC. In March 2016, we exported £12 billion to the EU, and imported £20.2 billion in return. Both our imports to and our exports from Europe have risen in recent years.
This is a reason the Leave campaign give for us being in a good position to barter with the EU if we leave. They need us, and we need them. In fact, they need us more than we need them. So we are bound to get a good deal in negotiating access to the EU's trade area. Otherwise the EU will be cutting off its nose to spite its face.
Perhaps. But what troubles me is that, if we do leave, the EU are not going to be very charitable. Leaving will probably deliver a profound shock to the European and global economies. If nothing else, the uncertainty around how exactly we leave, and on what terms, will inject a nice shot of uncertainty. Economies hate uncertainty. It causes them to slow, and sometimes contract. The EU's economic model barely weathered the storm of the Euro crisis. The chaos of the second largest EU economy trying to pull out would be severe.
Also, the UK is not the only country to have its Eurosceptics. A vote to leave would embolden these movements all over Europe. What would the EU's last weapon against them be? To show that leaving the EU is not an easy move. We can expect them to fight us every inch of the way. Yes, it is bitter and nasty. But from their point of view, it would be a mess of our own making.
So, if we do vote to leave in June, I wouldn't be expecting our spurned European neighbours to be rushing to welcome us back. Depressingly, this does seem to be the Leave campaigns view of affairs.
Summary
So, there you have my take on it. I'm sure you can find plenty to dispute in this. I have tried my best on figures and statistics, and am happy to provide references for those sad enough to want to check.
Overall, have the Leave side made the economic case for leaving convincing? I'm not convinced.
No comments:
Post a Comment