Sunday 17 January 2016

Europe: the "ins" and "outs."

We are led to believe that David Cameron's "negotiations" with the other European leaders are coming to fruition, are about to be crowned with success, and our "IN - OUT" referendum could be held this year.

Not only those of us who are enthusiast for the EU, but also, I suspect, most of those who are quietly accepting of it, realise this is all a sham.  Cameron will declare "victory" whatever the terms (as Harold Wilson did in 1975) and the whole show is not about Britain's future but a shabby device by the Tory mainstream to outsmart UKIP and the sceptics still in it, and hold the party together (again, as Harold Wilson did in 1975.)

It is tempting to give a shrug, murmur  plus ca change. . . , and wait for the whole nonsense to be over so that we can get on with engaging with the real problems facing the UK  - a yawning balance of payments deficit, growing inequality, a housing crisis, desperately low productivity, a shaky economy dependent on increasing private indebtedness - to name but a few.

Such indifference  would, unfortunately, be a mistake.  Supporters of our EU membership have to remember that, whilst we are legitimately bored by the whole silly pretence, to the "OUT" crowd it is an issue which puts fire in their bellies.  If we are to avoid the tragedy of a vote to leave we must stir our stumps and react with similar passion.

An article in the January 2016 issue of Prospect  by John Springford and Simon Telford, both of the  Centre for European Reform, highlights several facts, some of which, of which, I suspect, the "OUT" campaign would rather glide over.  They are (additions in italics are mine):

1       Financial Contribution

UK’s gross annual contribution for membership was £19.2bn in 2015, but we received in return £9.4bn in eg agricultural subsidies, regional development and the British “rebate.”
So the net contribution was £9.8bn, or about 0.6% of GDP (slightly less than the foreign aid budget of 0.7% of GDP)  (I calculate this is just under £3 per person per week)

But if we leave the EU we shall still have to subscribe if we want favourable access to the market (eg the European Economic Area, EEA option). 
Most access (the Norway option): would reduce our net contribution by one tenth (by, not to). 
Less access (the Swiss option): by about half.
(These figures are net of the economic benefits of trading within the community, which some estimate as around £3 000 per household per year).

2.  Access

Norway option: more or less as now, but with no say on making the rules and regulations.
Swiss option: preferential access on goods, but not services.
Word Trade Organisation (WTO) option (no preferential status)*: would face EU tariffs  like any foreign country, but would still have to abide by product specifications.

  3.  Immigration.

Both Norway and Swiss options would require our acceptance of  free movement of labour. (My emphasis.  UKIP certainly keep quiet about this)
Only by adopting the WTO option could we control immigration from Europe.  (We should still have to abide by international law, to which we have willingly subscribed, regarding refugees and asylum seekers)

 4.  Trade with the rest of the world.

We should be “free to do as we like" (under WTO rules) but would not inherit  the EU’s bilateral agreements.  Would have to re-negotiate with other trading partners, eg US, China, India, Brazil et al.  UK alone has not much bargaining power, as we are already pretty open to imports and inward investment

Inward Investment: will it go elsewhere?.   

   Probably.  (The UK is a major recipient of inward investment (eg from the US and Japan)

6.       The City of London
Outside the EU would be able to bolster competitiveness by lighter regulation (my emphasis).  But European banks may remove themselves from the City  because they would still be  required to observe EU regulations.

7.       Agriculture
Farmers would lose EU subsidies (the CAP)  but probably demand, and get, them again from the UK government.
Food could become cheaper (by 13%?)
UK would not have to observe EU ban on GM crops.

8.       Regional Development
Wales and Northern Ireland are net gainers.
Scotland breaks even.
England is a loser.
Westminster would probably pick up the tab.

9.       Universities.
UK receives some 20% of EU research funds (about double our share)
Biggest loss would be  loss of equal access by UK academics  to EU jobs (and EU academics to UK).

10.   Greenhouse gas emissions.
Not much difference.  EU targets are feeble and the UK is poised to miss them anyway.
11.   Security
Would probably be able to remain in European Arrest Warrant and extradition agreements.
In foreign policy main weapon is economic sanctions, and EU has much bigger clout than UK alone.

12.   Scotland.
A vote to leave would probably trigger another referendum on Scottish independence (and thus break up the UK?)

Comments (by Keynesian Liberal, not from the article)
 *Britain’s leaving would be a severe blow the European “true believers” in the EU project and could open up other bids for exit.  Hence we should expect a tough stance from EU’s negotiators in the subsequent discussions about access and other perks (so as to discourage any others.)  We shall not leave overnight: the exiting process could take up to 10 years

I doubt it the trading of economic facts and figures is going to have much effect “ on the doorstep.”  People tend to believe whatever supports their prejudice.  Although we enthusiasts need to have the above and similar facts in reserve in countering arguments, I  believe we should base our campaign on the “higher ground”:  continued participation in a brave political adventure, the success of 60 years’ peace in (most of) Europe, a say in our future, internationalism, the advantages to the young (Leonardo scheme for apprentices, Erasmus for students), the weak alternative as a satellite  of the US with no say in what they decide.)

We must not be complacent.  The "electoral reform" referendum started with a two to one majority in favour, but was lost.  We must not let this happen again.

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