Some post-referendum thoughts
2 July 2016
Whether we want to “be in the single market” or “have access to the single market” is a widely discussed topic, and it’s pretty crucial to our new relationship with the EU.
If you are not sure what it is then read my explanation of the single market.
26 June 2016
French government say border deal won’t be affected by Brexit – The Guardian. So, that’s one scare story out of the way.
A lot of labelling went on during the campaign. I’m sure 51.9% of voters are not xenophobic, but are 10% or 1% or 0.1%? No one knows how much xenophobia there is in the UK nor how much it affected the vote.
What I strongly believe is that xenophobia will decline as a result of Brexit. To stay would have been to keep the lid on the pot and turn up the heat.
People’s eyes have been opened to politics and they feel their voice counts. There will be a push for better accountability from ‘the establishment’ and a more open and democratic government. Part of this will be to break up the two cosy two party club that has existed for far too long. Most votes don’t count in elections, and MPs are not free to speak their mind. This might involve proportional representation for which there is a petition (deadline 18 August 2016).
Here is a very nuts and bolts view of the way forward from Lord Digby Jones, who knows about business. Well worth a watch.
I’m Tony Blighe. I became very frustrated by the quality of debate over the EU referendum on 23 June. So I did my own research and did my own thinking and I’ve written some of it down on this blog. I hope it proves useful.
There are lots of links, so can check for yourself that I’m not making stuff up. Leave a comment or contact me if you think I am.
I think we should leave the EU.
What are we voting for?
We must bear in mind that we are not voting for a government, we are voting on whether to leave the EU.
If anyone comes up with a detailed Brexit plan they would be leading people to believe that this is what they are voting for. The reality is that the existing government will still be in power on 24 June and it will be up to them to propose and negotiate a new relationship with the EU.
I have my own ideas about what could happen after Brexit.
How can we help EU members that are struggling?
This whole debate has been about what’s best for the UK. Let’s stop for a moment and think about what’s best for the EU countries that have massive debts and horrific levels of unemployment: Greece, Italy, Spain and Portugal in particular. There is strong case to be made that Brexit would help these countries get back on their feet.
Sovereignty has almost become a dirty word. Why should wanting sovereignty be embarrassing? It simply means that we want the 64 million people in the UK to control what happens here, rather than people outside the UK who cannot ever understand this country as well as we do.
Sovereignty is our right to elect a government to administer law, defence, policing, taxation, external trade and a myriad details of everyday life that affect all of us in some way.
A country should strike a very hard bargain to consider giving control of its affairs to a foreign body.
Sovereignty means we can make decisions that suit us, and make them quickly. It does not mean that we ‘turn our back on Europe’, ‘pull up the drawbridge’ or ‘shut ourselves off’. Of course we will continue to work and cooperate with other countries and international organisations.
Small is beautiful
A) an independent self governing nation
B) the province of a country called the EU
Some would say these are extremes and there is a sliding scale between. Stay with me.
So, putting aside any emotive feelings, which end of the spectrum do you instinctively feel works better?
An independent UK would be able to innovate and respond to changes much more quickly than as part of a huge bureaucratic mash up of 28 countries. Speed and flexibility are major economic advantages that do not get entered into economic forecasts.
Things are speeding up. Medicine, computing, energy and technology are developing at great speed. Big changes are around the corner and we need to be quick and nimble to take advantage of new opportunities.
As the world’s fifth largest economy the UK is hardly small, but it’s considerably smaller than the EU. I’d say the UK was somewhere in the goldilocks zone when it comes to size and location. We’re lucky.
Disagree with anything so far?
I’m not talking about isolationism (aka “shutting ourselves off”, “little England”, “pulling up the drawbridge” – all terms used by David Cameron). A smaller country is perhaps able to cooperate more fully with other countries in areas of mutual interest because it can respond quickly and retain flexibility. This certainly seems to be the case with trade deals, the EU is awfully slow at these.
Big companies need to buy smaller companies because smaller companies are more innovative, nimble, malleable and dynamic than big companies.
Huge companies don’t innovate well. When was the last time you saw something innovative from Microsoft? Even Google haven’t come up with any game changers recently.
I believe the same applies to countries.
Voluntary cooperation and trade are good for the economy and for the nation’s well being. Subjugation to a vast bureaucracy is the polar opposite.
Continued EU membership will strengthen the big, cumbersome, slow businesses and strangle innovative newcomers.
The single market takes control of public procurement. To be honest, I’d prefer my hospital to decide where to get the best products at the right price, not a lobby-dazed pen pusher in Brussels.
Public procurement is just the start, the single market also controls product standards, intellectual property rights, parcel delivery, e-commerce, construction, market surveillance, health and safety, taxation, legal metrology (weights and measures) and more.
A main plank of Remain’s argument is that we “need a seat at the table”. Why? We don’t have representatives in the US senate but as a country they buy the biggest share of our exports, and we get along just fine.
A vast single market means a lot of bureaucracy and it’s wheels grind slowly.
EU import tariffs
Stop yawning at the back. Import tariffs are interesting because they put up the cost of things you buy that come from outside the EU. We could buy a lot of things cheaper outside the EU but the tariffs mean we have to buy a more expensive EU product.
The ability to set or remove our import tariffs is a big chunk of sovereignty we need to get back. EU tariffs make non-EU imports more expensive and protect inefficient EU producers. This is how we ended up with a trade deficit with the EU of £67.8 billion last year. We are forced to buy products from the EU because non-EU goods have tariffs (read taxes) applied which put up their cost.
When I got to grips with what the single market really is, by reading the official website, I started to think that the single market is a terrible idea that slows progress down by trying to regulate everything top-down.
We should let cooperation happen freely and naturally between nations, institutions, business and individuals.
Trade between the UK and the EU
We have a huge trade deficit with the EU and it’s getting worse. In one month alone, February 2016, the EU sold us £8.6 billion more than we sold them. That’s nearly £4,000 per household per year. But the UK has a trade surplus of £3.8 billion with the rest of the world.
We should be buying more from people who buy from us. It’s rude not to, especially if they make the best products or services at the lowest price. But we can’t while we’re in the EU because the EU sets our import tariffs. Setting the ‘Common External Tariff’ is integral to the EU, so that can’t be changed.
This graph says it all. We are locked into a trading block that’s selling us more and buying less from us every year.
We need to be able to make arrangements with other countries to reduce or eliminate tariffs and encourage two way trade. If we leave the EU we can buy more from the rest of the world and the rest of the world will have more pounds sterling to spend with us.
So, does the EU improve our trade? It seems unlikely. The EU’s share of our exports is diminishing. The EU has the slowest growth of any area of the world. In the ten years to 2015 the EU’s GDP grew by 1.0%, while the Euro area grew by just 0.7%. This compares to global growth of 3.8%, UK growth of 11% and growth of 16% and 28% in New Zealand and Australia.
EU membership fee
The EU is expensive. £10 billion a year net (£375 per household). Arguably I should add the £4 billion of our money that the EU spends in the UK, because we don’t decide how it is spent. This £10,000,000,000 is spent on administration, grants, major projects and subsidising EU businesses and farming (often our competitors).
Grants are provided for huge range of projects and organisations “which further the interests of the EU or contribute to the implementation of an EU programme or policy“. A cynic might say that EU grants are used to buy support by keeping favour with as many movers and shakers as possible. In other words, bribing us with our own money.
The status quo is not an option
The Eurozone needs to either revert to national currencies or form a much closer union, with central control of banking, taxation and spending. These are seismic changes and there’s a big risk it will go wrong. Is that scaremongering, or common sense?
If you are still in any doubt, read the EU’s Five Presidents Report which says “Progress must happen on four fronts: … Economic Union … Financial Union … Fiscal Union … And finally, towards a Political Union. In practice, this would require Member States to accept increasingly joint decision-making on elements of their respective national budgets and economic policies.”
How will this work in practice? The Eurozone will continue to move towards the formation of one country. EU decisions will, quite rightly, be geared to the needs of the majority Eurozone, leaving Britain and Denmark in an isolated and vulnerable minority.
As you can see from the tweet above, Martin Schulz, president of the European Parliament appears to equate ‘Europe’ with the Eurozone, forgetting that the EU is not Europe, and that the UK and Denmark have vowed to retain their own currencies.
If we remain we’ll just get in the way of progress by scrutinizing every letter of every new law or treaty (or at least we should be), and demanding pesky opt-outs. The EU will be better able to sort out its problems without us.
After we leave the EU the remaining members will have to stump up another £10 billion every year, and they risk losing some valuable exports. So it’s not surprising they don’t like the idea of us leaving. But it’s a pill that needs to be swallowed if the Euro is to survive.
So, what is this fantastic offer that’s worth the loss of sovereignty, costs us £10 billion a year, opens our borders to 508 million people (and rising), hampers our trade and risks our political stability?
Some say we would not have clean beaches without the EU. I am the first to agree that some EU rules have had good results. But would we not have done them anyway? Or done them better? We’ve been in the EU for 43 years, it’s hardly fair for the EU to take credit for everything that’s gone right in that period.
I’ve heard people say that it’s better for the EU to make decisions for us because our government makes bad decisions. This, to me, is a dangerous argument. Should we just replace one bunch of incompetents with another bunch who are more expensive, less accountable, further away and impossible to get rid of?
What happens if the political leaning of the EU veers towards the extreme right parties that are springing up around Europe? Or to the extreme left and everything gets nationalised?
Surely the honourable thing to do is to work to change our own country and make it a shining beacon of open democracy. I think we have a good opportunity to do this when we leave the EU.
The word democracy comes from the Greek demos ‘common people’ and kratos ‘rule, strength’. The trouble is, we don’t have a ‘demos’ in the 28 countries of the EU. A common language and culture is vital for democracy to work properly. We can hardly expect Estonians and Latvians to understand what’s important for Essex and Lincolnshire, and how can we know what’s best for France or Poland?
Our MPs take all the credit when things go right and blame the EU when things go wrong. I am looking forward to having the buck stop with our Prime Minister once again.
Wouldn’t it feel great to be properly involved in the decisions that affect us? To have laws and taxes we can understand and have agreed to. To be led by honorable people who are not just interested in feathering their own nest. That’s not a feeling I get from the EU.
The EU referendum has opened people’s minds to politics. We all now have a better understanding of how democracy works, or doesn’t. With this enthusiasm and the help of the internet I’m sure we could make our democracy much more transparent and effective, perhaps even fun! But there’s no point in thinking about this while our government’s power is steadily transferred to the EU.
Tim Martin (founder of Wetherspoons), Dominic Frisby and others argument that nations with better democracies and more freedom are more prosperous. Look at North vs South Korea, or East vs West Germany, or USSR vs USA as examples. Freedom and democracy are difficult factors to put a number on when making economic forecasts and have therefore been ignored.
NATO has ensured our security for many years. It works rather well, and NATO don’t insist on making our laws, or charging us £10 billion a year.
The EU’s plan to become a new military force will change things, it will complicate and destabilize the balance of power. It will also lead to confusion: is this a job for NATO or the EU?
Of course, when we leave the EU, we will still work and exchange information with other security forces exactly as we do now. We all gain by pooling resources against terrorism. To suggest that the EU would somehow put their own and any non-EU country’s security at risk in a fit of pique paints a rather dismal picture of the EU.
Unemployment in some areas is appalling. Greece will never be able to pay off its debts. The EU is not a great place to do business. We need to be free to set our own tariffs so that we can buy more stuff from the countries that are able to buy more from us.
The EU takes credit for much international collaboration that has nothing to do with the EU. Even the well respected scientific journal Nature got this wrong, claiming “The fusion reactor ITER in France could become less accessible to UK scientists in the event of a Brexit.”.
Will the EU knobble us if we leave?
I’ve been told that the EU may discriminate against London as a financial centre if we leave. Or they may ‘punish’ us in other ways. But that’s unlikely because we buy £290 billion worth of stuff from them every year. Is that a lot? Yes, 3,800,000 jobs in the EU depend on our willingness to buy their products. That’s 31 times the total number of people employed worldwide by BMW, and more than the entire population of Berlin.
Why did I pick on a German company? Well, it turns out that we buy nearly twice as much from Germany as Germany buys from us. It is no wonder that Angela Merkel is rather keen for us remain a captive market by means of the common external tariff.
I can see BMW, Volkswagen, Renault and Fiat getting very upset if we put WTO tariffs on their cars. And I can see French farmers putting up blockades if we apply tariffs or impose quotas on their food products.
The EU would not be kindly thought of by their citizens if 3.8 million EU jobs were put in peril for political purposes. That would create a stampede of further exits.
What about the European dream?
Isn’t it a great idea for Europe to unite? It turns out that most British people don’t buy into the dream, as we didn’t buy into the Euro. For a whole bunch of reasons, most of us in the UK resist political union with other countries and I can’t see that changing any time soon.
Perhaps the dream can come true for some members of the EU – if we stop getting in their way and leave them to get on with it.
Control of borders is a fundamental part of being an independent nation. But the right to live and work anywhere in the EU is a fundamental principal of the Union. We can’t be in the EU and control our borders.
It’s frustrating when the EU laws are forced on the UK. A great deal of time and energy is wasted in scrutinising and fighting EU legislation.
For example, the UK’s duty exemption for small cider makers is being overruled by the EU. This will result in rural craft businesses going bust and orchards being grubbed up. It’s simply none of the EU’s business.
Big business wins
Big businesses can afford whole departments to lobby the EU to implement laws that favour them. Small businesses can’t hope to do that. This unavoidable bias to big established businesses helps to stifle the small innovative businesses that will provide employment in the future.
Relations with other countries and our role in the world
If we remain in the EU our government will always be distracted by arguments with the EU. There are better things for our government to be doing, like forging better relationships around the world.
As an independent nation we will have our own voice rather than have the EU speak for us. This is not a ‘power’ thing, it’s simply that I would rather our contribution to making the world a better place comes directly from the UK.
While in the EU our great ideas are watered down, slowed down and compromised with 27+ other countries.
If we remain in the EU, frankly, we don’t know what will happen, and there won’t be a lot we can do about it if we don’t like it.
If we leave the EU, the UK’s future will be in our hands. No-one else will be able to interfere. That sounds like a much greater degree of certainty to me, a certainty that we can leverage to plan for a better future.
Remember to get out and vote on 23 June, but first, make sure you know what you’re voting for.
Thanks for reading