Eurosceptic Contradictions

Eurosceptics are now limbering up for the ‘No’ campaign in the UK’s forthcoming EU referendum.  It is becoming clear that their key arguments for a ‘No’ vote in the referendum include the following:

  • If the UK does not leave the EU, we will be dragged willy nilly along the path to a European ‘super state’ that no-one wants.
  • We will save huge amounts of money as a result of leaving the EU, around £900 per family they say.
  • British businesses will no longer be subject to the stranglehold of EU regulations, which inhibit them from selling their goods and services both within the UK and to foreign countries outside the EU, such as China, India, Russia and Brazil.
  • For trading purposes, we will be just as well off outside the EU as in, because we can rejoin the EFTA/EEA countries like Norway and Switzerland, that have free trade with the EU without being members.  As a result of this, companies like Toyota, Honda and British Aerospace (and their employees) that export much of their production from the UK to the EU, have ‘nothing to fear’.
  • The rest of the EU will have no alternative but to give us a good trading deal, because we are the EU’s largest trading partner.
  • We must regain control of our borders, so that we will not continue to be ‘swamped’ by migrants from the rest of the EU.  We can only do this if we leave the EU altogether.
  • Our social security system is being ‘abused’ by migrants from the rest of the EU.

While I am basically in favour of the UK remaining in the EU, I do accept that the EU as presently constituted has substantial weaknesses, in particular a vacuum of leadership as I have discussed in a previous post.  I also accept that the introduction of the Euro has changed the UK’s relationship with the EU, as the Eurozone countries will have to forge closer economic and financial relationships to underpin the Euro, which could potentially undermine the UK’s financial services industry.  I am therefore prepared to wait and see how David Cameron’s re-negotiation of the UK’s relationship with the EU works out, before making a final decision about how to vote in the referendum.

Nonetheless, I am very concerned that the arguments being advanced by Eurosceptics are riddled with contradictions which are not being adequately countered by the media in the UK.  For example:

The EU will inevitably develop into a ‘super state’

There is no danger of the UK being dragged along to the creation of a European ‘super state’, as we (like all other EU members) have a veto over any changes that would increase the EU’s existing powers.

Brexit would save the UK the enormous costs of EU membership

While it is true that the UK’s EU membership entails significant costs, we will not avoid all of those by leaving the EU and joining the EFTA/EEA countries like Switzerland and Norway.  Norway, for example, makes payments to the EU that are almost three-quarters of the payments made by the UK on a per capita basis.  We could hardly expect to join the EFTA/EEA countries without making substantial payments to the EU.

UK business would be freed from the stranglehold of EU regulations

As for freeing ourselves from the stranglehold of EU regulations, Eurosceptics are always extremely coy in answering questions about exactly which regulations they would roll back if we do leave the EU.  Some of them do refer to the UK regaining its powers over employment rules. But what rules do they have in mind?  Would they water down or remove the existing protections under UK law for redundancy, unfair dismissal, discrimination, excess working hours or the protection of employment rights when a business changes hands?  Would they water down product safety regulations?  I suspect they have a lot of these rules in mind when they talk about freeing British business from excessive regulation, to create a ‘leaner’ and ‘fitter’ business sector.  Also, if the EU’s existing regulatory framework is so onerous for UK traders, how does Germany (which is subject to the same regulations) manage to sell four times as much worth of goods and services to China as we do?

We could protect our trading rights with the EU by joining the EFTA/EEA countries like Norway and Switzerland

The Eurosceptics say we could protect our trading rights with the rest of the EU simply by joining the EFTA/EEA countries such as Norway or Switzerland.  However, they fail to point out that both Norway and Switzerland have freedom of movement with the rest of the EU.  As a result, if the UK opted for a similar trade deal, the UK’s departure from the EU would have no impact on migration from other EU countries.  More importantly, the Eurosceptics fail to acknowledge that the UK would not have a ‘right’ to a trading deal like those enjoyed by Norway or Switzerland.  Any deal would have to be agreed by all 27 of the remaining EU countries, including countries like Poland and France that may have little love for the UK if it votes to leave the EU.  The Eurosceptics say that the rest of the EU would be bound to give us a good trading deal, because we are the EU’s biggest trading partner.  However, this involves a fundamental fallacy – while the UK may indeed be the EU’s biggest trading partner (purchasing10% of the EU’s exports), the rest of the EU is a much bigger trading partner for the UK, taking around 50% of our exports.  The UK would be in a much weaker position than the rest of the EU in any such negotiation.  The Eurosceptics need to reflect on this.

We would regain ‘control over our borders

As for ‘regaining control of our borders’, it is true that migration to the UK from the rest of the EU would be slashed if the UK were to leave the EU.  Unless of course we are forced to accept continuing freedom of movement with the EU as the price of joining the EFTA/EEA countries.  However, migration from the UK to the rest of the EU would also be slashed, with the result that many British people who have benefited from freedom of movement over the past several decades, in particular the young and the retired, would find their future horizons seriously circumscribed.  There would also be the question of what happens to the two million plus UK nationals who have moved to other EU countries over the years.  I suspect they would be allowed to remain where they are in the event of Brexit, as would the existing EU nationals in the UK, but their social security, medical care and tax entitlements in the countries where they reside may be adversely affected.

Brexit would stop abuse of the UK’s social security system by EU migrants

Leaving the EU would certainly save on social security and tax credit payments to EU nationals living in the UK.  While David Cameron may be able to secure a four year waiting period for out of work social security benefits through his re-negotiation efforts, he will struggle to secure an opt-out for tax credits.  EU Treaties set out different rules for tax and social security payments, so it would not be easy for the UK to impose a four year waiting period for tax credits, in the absence of Treaty change. However, how many people in the UK are aware that UK nationals residing in Germany and France enjoy significant tax concessions for married couples that do not exist in the UK?  Germany and France do not seek to withhold these tax benefits from UK nationals just because they are British.  A similar issue arises in relation to child benefit payments.  Almost everyone in the UK seems to accept that nationals of other EU countries residing in the UK should not qualify for child benefit payments that they then send to families in their home countries.  However, many other EU countries provide child benefits through special tax credits.  Do they withhold such tax credits from UK nationals resident in their countries whose families have remained in the UK?  I do not know the answer to that question, but somebody should look into it.

Conclusion

It is critically important, as the EU referendum approaches, that the UK media and non-Eurosceptic politicians should investigate very carefully the arguments being put forward by Eurosceptics.  The points I have made above should always be borne in mind by journalists who interview Eurosceptics and comment on their arguments.  At present they are being given a far too easy ride.

There is also the ‘small matter’ that a referendum vote for Brexit would almost certainly lead to another Scottish referendum, in which the Scots would very likely vote to leave the UK so that they can remain in the EU.  What answer do the Eurosceptics have to this?

Michael Ingle

Advertisements


Categories: Economics, EU, Politics

Tags: , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: