Monthly Archives: June 2016

The EU Referendum

People are probably by now getting fed-up with all the arguments around the EU Referendum, and maybe don’t need yet another opinion to consider. However there is so much mis-information and scaremongering being put out, by both sides, that I’d like  to try and bring some clarity to the debate.

Whatever happens there are going to be winners and losers both ways,  and even for any individual there will be positives and negatives whatever the result. The decision is complex, and when people state categorically that we’re better off if we stay or if we go, they are guilty of a gross over-simplification. What follows is therefore my attempt at a simple impartial review of all the main arguments put forward so far. Here goes:

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The vote on EU membership is the biggest decision Britain has taken for generations. Picture © Eric Chan

THE ECONOMY:  This has been the main thrust of the Remain campaign. They are predicting that the economy will crash if we leave and we’ll all be worse off, and are using the evidence of numerous economists to support this. It should be remembered though that hardly any economists were able to predict the crash of 2008, and most economists thought we would be worse off not joining the Euro. It’s also worth remembering that when the International Monetary Fund criticised George Osborne’s fiscal policies he said they didn’t know what they were talking about (but now they agree with him on the EU he supports them).

Economics is a very dark art, and because its predictions are dependent on the mood and behaviour of millions of ordinary people, it is almost impossible to get right. If we leave the EU we may lose our Free Trade deal with the EU, damaging our economy; but on the other hand we might cut a deal with them and little damage is done. We might be able to make our own Free Trade Deals with other major countries, boosting our economy; or maybe that will be prove to be very difficult. We may rebuild our trading relationship with the Commonwealth, again boosting our economy; but then again maybe we won’t. If the pound crashes on the exchange markets the effect might be to boost our economy by making our exports cheaper, so increasing trade; or it may damage our economy by making imports more expensive – or maybe the pound won’t crash at all.  On the other hand if we stay in the EU we may be seriously affected by any one of the numerous economic risks coming down the line there, and it might be better for us if we get out while we can – or maybe that won’t happen either.

The truth of the matter is that all the economic forecasts rely on so many assumptions that it is impossible to say anything with any degree of certainty. People will inevitably quote the economists whose predictions they like, but in my view there are so many unknowns here that the issue is almost irrelevant. There is as much chance of an exit from the EU boosting our economy as there is of it damaging it, and the truth is no-one knows. If you want to submit to fear – ‘better the devil you know’ – then fine. But in my view if we always ran our lives by forever ‘playing safe’ we’d never achieve much of any value at all. Overall I think the economic future is too vague to be able to form any reasonable judgments.

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Jean-Claude Juncker is President of the un-elected European Commission. Picture © Factio popularis Europaea

DEMOCRACY: The EU gives us the illusion of Democracy, by allowing us to vote for the European Parliament. However all legislation is actually driven by the European Commission, which is not elected, and is therefore not democratic. The only thing the European Parliament can do is review and amend the legislation, but it cannot introduce or recommend policy. If that’s not clear consider this: in the UK we vote for the House of Commons, based on political parties, candidates, and the manifestos they propose. The House of Lords (which is not elected) can amend, and very occasionally block legislation. However all the main legislative processes take place in the elected House of Commons, as they should do. In the EU the reverse is true. Policy is discussed and put forward by the (unelected) European Commission, and all the European Parliament can do is talk, discuss and amend that. That is why you will never see a manifesto during the European elections – because members of the European Parliament are not in a position to put forward policies. The whole set-up is a complete undermining of democratic principles. Why is it like this? Because the EU elite do not trust the people of Europe to vote for the right policies or make the right decisions. The remain camp say we should stay in the EU and attempt to bring reform, but there has been no progress on this issue for 30 years, and anyway human history doesn’t have a very good track record at getting un-elected bodies to reform themselves.

WORKERS RIGHTS: A lot has been made of the undeniably excellent progress that has been made on workers rights by EU legislation. The argument has been put forward that if we leave the EU, the Tory government will repeal that legislation and all those rights will be lost. What we have to consider therefore is whether the government would actually do that and, more to the point, if they did so what would stop the British public just voting them out at the next election, and replacing them with a government that would reinstate such rights. The UK Parliamentary System is far from perfect, but we don’t yet live in a right-wing dictatorship, and it seems quite likely that any Tory government pursuing such policies would deliver the next election into the hands of Jeremy Corbyn and the Labour party.

ENVIRONMENTAL LEGISLATION: As with workers rights, the EU has done excellent things on the environment, and as with workers rights there is no reason why we should not be able to maintain that legislation within our democracy. On some issues (eg Climate Change) the argument is put forward that we cannot succeed without international co-operation. True. But with huge issues like that, the EU is nowhere near big enough anyway – countries like the USA, China and India must also be included. Therefore as good as the EU may be, effective co-operation has to be at a world level, not EU level, and our membership of it, or otherwise, seems to be pretty much irrelevant.

EU GRANTS: Many areas of the country who are the beneficiaries of EU grants worry their sources of funding will dry up if we leave the EU. However bearing in mind we are a net-contributor to the EU (arguments about the exact figures notwithstanding), there is no reason why such funding cannot be provided by the UK government, and with cash to spare.

WAR AND CONFLICT: The Remain side are constantly putting out the opinion that Europe has only been at peace for the last 70 years because of the EU, and if we leave the EU we are risking another world war. However the EU is an economic union, not a military one, so it seems more likely to have been NATO which has kept the peace not the EU. Similarly there are claims that leaving the EU could spur Russia to threaten Poland and the Baltic States. However, again, all those countries are members of NATO, which, as a military alliance, is surely a better defender against war than the EU, which has no military component. This line of argument seems to be something of a red-herring.

TERRORISM/SECURITY: Remain put forward the argument that by not being in the EU, international co-operation against crime and terrorism will be compromised, and we will all be at greater risk of attack. You have to ask yourself whether you think it is realistic that EU countries would really put us, and themselves, at greater danger of attack by refusing to co-operate on security matters, simply because we refuse to be in an economic union with them. It’s also worth remembering that a large part of our international anti-terrorism work is carried out through the ‘Five Eyes’ (Australia, Canada, New Zealand, the UK and the USA), which has got nothing to do with the EU at all. This argument again seems to be something of a red-herring.

WORLD/EU LEADERS: Apparently lots of world leaders have come out in support of us staying in the EU. Just remember they are supporting what is in THEIR interests, not OURS. Enough said.

Free movement of people is probably the biggest single issue of the Referendum debate. Picture © Opihuck

FREE MOVEMENT/MIGRATION: This of course is the big issue of the whole referendum. Originally the idea of free movement of people in the EU was to facilitate mobility of labour to wherever the work was. Until 2004 this generally worked pretty well, with as many people leaving the UK as arriving. However after the accession of the poorer countries of Eastern Europe, this changed to migration, as millions of people came not looking for work, but simply because they wanted to emigrate to wealthier countries and enjoy a higher standard of living. Nobody can blame them for wanting to do that, but the effects on the UK have been dramatic. Though more people in the country undoubtedly leads to increased overall wealth (as the Remain camp are constantly stating) there are huge discrepancies in the way that wealth benefit is distributed. In general businesses and the upper and middle classes do well, as they benefit from the lower wages that new arrivals are prepared to work for, while the lower classes do badly as they have to compete with people prepared to work for less money, and so see their own salaries pushed down. In addition the housing crisis is made worse by the arrival of a net 184,000 EU citizens every year (enough people to fill a city the size of Colchester) pushing up house prices and rents – good for home owners and landlords, but bad for people not wealthy enough to own their own property. Of course there is also the massive pressure on public services (schools, NHS, transport etc) as it is simply not possible to expand public services at the rate necessary to keep up with the flow of new people. The Remain camp are quick to highlight how many immigrants staff our public services – particularly the NHS – though with 1.6 million people unemployed the root cause of this has been the failure of successive governments to train enough of our own people to do those jobs.

Economic impacts aside, the huge rush of new people has created massive cultural changes to the fabric of our society – changes which not everyone wants but which no-one gets any choice in. And any attempt to address the housing crisis will inevitably lead to more pressure to build on green-belt land, which many environmentally-minded people are vehemently opposed to.

I don’t think anyone, on either side of the argument, disagrees that immigration is a good thing, the question though is whether it should be managed and controlled by the government, or whether it should be uncontrolled and left simply to the desire of whoever decides to turn up and live here. This, in my view is the defining issue of the Referendum, and also the most contentious one, with many people, unfortunately, being unable to distinguish between arguments about numbers and arguments about racism.

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George Osborne’s claim that every family will be £4,300 better off if stay, takes no account of disparities in how the wealth generated by EU membership is distributed. Picture © M. Holland

PERSONAL EXPERIENCE: This ultimately is what will decide the referendum. Many figures and statistics have been bandied around, but they are all ultimately just averages, and mask the vast discrepancies in individual experiences of being in the EU.  George Osborne claimed that every family will be £4,300 better off if we stay, but even if that figure is true (debatable), it is only a statistical average, and hides the fact that while many people will indeed be tens or even hundreds of thousands of pounds better off if we stay, many more others will in fact be thousands of pounds worse off.

In general, the wealthier you are the better the EU is – due to being able to take advantage of all that cheap labour; while the poorer you are the worse it is – due to having to compete with all that cheap labour. (It’s worth pointing out by the way that though being in the EU may indeed guarantee many jobs and low unemployment rates – many of those jobs are on poverty wages, not to mention the 800,000 people on zero-hours contracts). Home owners and landlords will do well – with ever-increasing property prices; while renters find themselves paying an ever-larger percentage of their income in rent. In addition people in very cosmopolitan, urban areas may have little problem with the cultural changes going on around them, and an ever more-crowded society; while people in more provincial, rural, or sparsely populated areas, may consider those changes to be unacceptable. And finally the pressure on public services will be more keenly felt by those who use them the most – whereas those whose children are in private schools, have private health-care, or who rarely use public transport will probably perceive little difference.

The decision about which way to vote in this referendum will be a very personal one, but hopefully people will be able to do so without being misled by all the misinformation coming out from both sides.