The new (and very old) Scaremongers

The new (and very old) Scaremongers

by Bill Jamieson
article from Thursday 19, February, 2015

CENTRAL to the forthcoming general election in May will be the critical question of Britain’s relationship with the European Union and in particular the Conservatives’ commitment to renegotiation and a subsequent referendum. 

This supreme issue has almost been lost of view underneath the war of statistics on admissions at casualty departments and patient waiting times in selected regions over certain periods. 

It’s either this, or claim and counter-claim on Tory donor “dodgy” tax avoiders and whether or not we should demand receipts for window cleaning and garden odd-job work. 

Could anything be more absurd than losing sight of the major issue that has dogged British economic and political life for the past 50 years?

This week saw a major conference in London setting out alternatives to UK membership of the EU. It explored options such as an ‘EEA Lite’ agreement and the Swiss set of bilateral agreements.

And it heard from Nile Gardiner of the hugely influential US-based Heritage Foundation saying that the “European project is doomed to failure” and urging Britain to withdraw from the EU to become “a truly sovereign nation, free to shape its own destiny on the world stage.” 

For those unable to attend the conference, and who are looking for an informed briefing on the debate, an outstanding Global Britain and Democracy Movement research paper The Scaremongers has just been published. It provides key facts and figures on our trade statistics, both with the EU and the rest of the world. 

The analysis, by Ewen Stewart, Stuart Coster and Brian Monteith, provides an informed and well sourced primer on the realities of our trading relationship with the EU. It is especially cogent in addressing long-voiced fears that millions of jobs would be lost if we left the EU. 

For example, Nick Clegg, the Deputy Prime Minister, has asserted that there are  “three million of our fellow citizens, men and women in this country, whose jobs rely directly on our participation and role and place” in the European Union.”

True or false? The figure was first cited 15 years ago in a National Institute for Economic & Social Research paper and was constantly repeated by the BBC until a robust and repeated challenge by Lord Pearson to the broadcaster’s bias towards the Britain in Europe lobby, backed inter alia by Peter Mandelson, brought a grudging climb down. 

Indeed, so wildly inaccurate was the regurgitation of these scare stories that the respected NIESR dismissed some of the more extreme assertions as “pure Goebbels”. 

In truth, the EU has compelling reasons to continue to trade – and grow its trade – with the UK, as many member countries enjoy a favourable surplus on their trade with us. Indeed, many more jobs are dependent on what the other EU member states sell to us. 

A study by Ruth Lea and Brian Binley MP concluded that since the original 1999 Britain in Europe ‘3 million jobs’ claim, 6.5 million jobs are now related to what the rest of the EU was able to sell to the UK, with almost 4.5 million UK jobs linked to trade with the EU.  As the Global Britain study concludes, 

“the EU, therefore, has almost one and a half times as many jobs ‘at risk’ in the unlikely situation that they choose to initiate a full scale (and illegal) trade war with Britain if we vote to leave.”

These points continue to be validated by recent trade statistics showing how valuable we are for companies in the EU selling into Britain. 

In December last year the UK recorded a trade deficit with the EU of £6.3 billion. Imports from the EU totalled £18 billion while UK exports to the EU came to £11.7 billion. The net UK import figure on trade with the EU is up £1 billion on a year earlier. 

In 2013, our biggest trade deficits were recorded with Germany, China, and the Netherlands. The biggest trade surpluses were recorded with United States, Ireland and United Arab Emirates. 

“This”, dependence on access to the UK market, says the Global Britain paper, “is one of the reasons Brussels would be extremely unlikely to want to erect trade barriers should we quit, even were this legally possible under World Trade Organisation (WTO) rules”.

The study also warns against hitching ourselves to a fading star. The EU’s share of global GDP has shrunk from 34 per cent in 1980 to just 23 per cent today. As emerging economies continue to blossom that share will continue to decline.

The UK’s total EU trade is worth 17 per cent of our GDP, with the rest of the world accounting for 26 per cent. Exports to non EU markets have risen from £322 billion in 2009 to more than £395 billion. We should do better. But the pointer to our future is clear to see.    

We are constantly told that “business opinion” – a diverse, multi-headed agglomeration if ever there was one – is warning, not just about the outcome of a referendum but that even a referendum itself on our membership would “damage confidence” and create “uncertainty”.

Might this be the same “business opinion” that has chaffed and complained for years about job-destroying EU Directives, ‘one-size-fits-all’ regulation and the relentless push towards economic and monetary union? 

Why, the very same. 

Now leaving the EU would be a momentous step for the UK. It is not a step to be taken lightly. Concerns over jobs and investment merit a factual and informed response. But “business opinion” is not the single, uniform voice that is often assumed. And of late some of the proclaimed business opposition to an EU referendum has been contrived for political purposes. 

The Confederation of British Industry has long been sounding the klaxons on a UK exit.  Its chief executive John Cridland has dismissed demands for an in/out vote on Europe as an “unnecessary distraction”. 

But is this the settled consensus of business opinion? Towards the end of last year more than 1,000 business leaders signed a Business for Britain letter firmly supporting a referendum, followed by an in/out poll and called for a fundamental change in the UK’s relationship with the EU. A YouGov poll also shows that business leaders support an EU referendum by 66 to 28 per cent, demonstrating that the CBI is out of touch with mainstream business opinion on this issue.

Finally, what of the potential loss to the financial services sector? It contributes a fifth of the UK’s annual economic output and had a £19 billion trade surplus with the EU in 2013.

The big global investment banks are pushing for Britain to stay in the EU. Dutch giant ING has just published a scary assessment predicting catastrophe for the UK economy in the event of a Brexit.  And co-chief executives of Goldman Sachs International, have warned that European banks will relocate from London to the Continent “in very short order” if Britain leaves the EU.

But few sectors have been more vocal in their criticism of EU Directives and oversight than the financial services industry. And the banking behemoths with a big London presence have not exactly been forming an orderly queue to relocate their bulge-bracket top earners to Paris, there to share the joys of Francois Hollande’s benevolent tax regime. 

Given voter concerns, the UK is right to seek a renegotiation of our membership terms. And we surely deserve better than a re-run of long discredited scare stories. Global Britain and the Democracy Movement have provided an invaluable service in setting the record straight. 

 

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