UKIP and other Euro-sceptics believe that EU membership is a blow to the UK’s sovereignty and damaging economically. However, the economic facts contradict the sceptics’ claims: the UK would not be better off alone.
The most important argument of all is that being part of an economic zone with a combined GDP of approximately £11 trillion is extremely beneficial. The EU consists of roughly 500 million people and Britain is an important gateway to the world’s largest single market. There is no question that Britain receives much of its foreign direct investment because of that. For example, the largest car plant in the UK, Nissan’s Sunderland plant, would not be located in the UK if it were not in the EU. This plant has earned a notable track record in embracing new technologies and securing new business. It also provides hundreds of jobs to those residing the north east of England. It is not as though leaving the EU would mean the instant loss of 3.5 million British jobs, as Nick Clegg seemed to imply. More to the point is that foreign investment into Britain would not remain so high if it were to leave the single market and thereby become less attractive. In terms of the total stock of FDI, the UK is rated third in the world behind the US and France and ahead of Hong Kong and Germany with $1.125 trillion flowing into the UK in 2009. This is in large part thanks to EU membership.
Furthermore, only as part of the world’s largest single market can Britain assert greater influence on the world stage. At world trade negotiation talks, Britain’s calls for free trade and the removal of tariffs have greater weight than if it stood aloof from Europe. Only as part of Europe can the UK influence some of the most important world trade deals. For example, the EU and US are currently working on what could be the biggest bilateral trade agreement in history with an estimated worth of £100bn to the EU economy, £80bn to the US and £85bn to the rest of the world. Alone, Britain could broker its own trade deals, but none as significant as what it can achieve within the EU.Britain needs to be part of Europe in order to counterpoise the global economic giants – the US and China. The EU is stronger with Britain and Britain is stronger within the EU.
As part of this single market, trade is free and uncomplicated. It can flourish in the absence of customs duties and under a common set of regulations. To see the benefits of being part of a free-market Europe one need only recall the French ban on British beef in 1999 which cost British farmers as much as £600 million. The European Court of Justice declared France’s continued ban illegal in 2001. If Britain were to leave the EU, it would have no protection from unfavourable EU regulations and this sort of economic discrimination. Who knows how the French and others might punish British trade. By leaving Europe, British trade would leave itself open to tariffs and outright bans. By remaining in the Union, Britain is protecting, not jeopardising its economic health.
Contrary to the argument that the EU increases administrative costs and bureaucracy, common regulation within the EU makes life a lot easier for British businesses. Having one set of rules for exporting to and operating in other member states greatly reduces bureaucracy. For example, EU businesses have to register for a patent or an industrial design only once and it will be recognised by all 27 Member States. Moreover, EU competition laws have been instrumental in opening up markets for new businesses hoping to expand. The freedom to move goods over a vast geographical area cannot be underestimated.
Similarly, freedom of movement for EU citizens greatly benefits British businesses as well, enabling greater access to skilled labour. UKIP’s anti-immigration stance, fuelled by a perceived rise in immigration of Eastern Europeans, especially Bulgarians and Romanians, is xenophobic and neglects the key advantage for businesses: the ease with which they can find and employ hard workers. Look at the Poles who have impressed with their work ethic and ability to integrate for years. A nationalistic fear of other peoples is no reason to leave the EU.
Nor is the inadequacy of EU foreign policy a reason to leave. Recently, the EU has been criticised as passive in the face of Russian aggression during the Crimean crisis. Critics have claimed that the EU is too weak and too reliant on Russian oil and gas to impose sanctions. How, then, do these critics expect individual nations to be able make a stand in these situations? If Britain were to leave the EU what feasible action could she could take against Russia alone? The answer is none whatsoever. Yes, the Crimea crisis has revealed the deficiency of EU foreign policy, but the solution lies in greater co-ordination within, not abandonment of the Union.
Finally, UK citizens reap the personal benefits of EU membership. We can work, live and holiday without visas anywhere in the EU. Having lived in a EU country for five years we can obtain the same rights as “native” citizens. We can drive without having to pass a separate test and our health is insured. The well-known ERASMUS programme allows British students to study at universities in EU countries, as over 7,000 went to do in 2008/09, and cross-boarder research projects are also flourishing.
It is clear, then, that membership of the European Union is extremely beneficial, even essential to British interests.
In the Treaty of Rome, which established the EEC, the signatories agreed that they were “determined to lay the foundations of an ever closer union among the peoples of Europe”. The political goals of the supposedly economic European project were clear from the beginning. The EEC was manifestly conceived as merely a step on the road towards a political union. And yet, before the referendum in 1973 Ted Heath dismissed those “who fear that in going into Europe we shall in some way sacrifice independence and sovereignty”, claiming that the only thing British citizens were voting for was a free trade area. The last forty years have consistently undermined the position of those, like Heath, who originally advocated entry. It has become clear that the EU increasingly sacrifices economic logic on the altar of political dogma, just as its founders intended. There could be no clearer reason for a referendum-the purely economic union the UK voted for in 1973 never existed and never will. This conceit also underpins every reason why Britain should leave the EU.
It has often been argued that the economic cost of leaving would be fatal. Sacrifices in sovereignty are justified by economic necessity. Nick Clegg declared that “we get more clout rather than less by being part of this big economic superpower”, being able to negotiate larger trade deals as part of a larger trading bloc. In reality, the loss of Britain’s ability to make bilateral trade deals has not led to more profitable, freer trade. It had to abandon its historic trade links with the Anglosphere, and with them uncountable further trade deals that could have been sealed across the world. Free trade agreements (FTAs) are common in the rest of the world. In 2005 America and Australia negotiated one. Much has been made of the recent negotiations between America and the EU in pursuit of an FTA, even though Britain could have had one with America years ago, just like Australia, an independent nation. We can draw a contrast between these two different models of FTA negotiation. The bilateral approach produces results and reinforces ties between sovereign nations. What better way is there of showing Britain’s wider engagement with the developing world than an FTA with perhaps India? The extended negotiations between the USA and the EU have taken far too long to come to fruition and are still bogged down by the conflicting priorities of member states. It is startling that the negotiations have been at times rancorous because of the concerns of the heavily subsidised French film industry. In 1973, the links with the EEA seemed sensible as Europe’s economy was outperforming the commonwealth and America. After Britain gained entry, however, the oil crises of the late 1970s crippled Europe and the continent has continued to stagnate while the rest of the world has moved on.
Not only has the economic growth of the Anglosphere been well above that of Europe but it will continue to be so. This is due to the disaster of the single currency, and by contrast the relative dynamism of the economies of the commonwealth and the shale gas revolution in America, which has already cut energy prices to 1/3 of the costs in Britain. Unlike the US, the EU is set on stifling the manifest economic benefits of cheap energy, implementing stringent environmental restrictions, from which the UK has happily extricated itself. According the IMF, the commonwealth is forecasted to grow by an average of 7.3% over the next five years while Eurozone will grow by only 2.7% a year. Yet, many argue that much benefit comes from intra-European trade. The lack of trade restrictions with the rest of the EU make it easy for British business to make and sell products to a key export market. However, the economic benefits of the single market, an economic construct, are again diluted by the political nature of the project. The working time directive, for example, is part of a French and German tradition of social protection quite alien to Britain’ historically flexible labour market. The very nature of a political project, designed to create political union, reduces the ability to derive national economic benefits from both other countries in the EU and from the rest of the world.
Another reason to leave the EU is its failures in foreign policy. The intervention in Libya showed Britain at its best. The UK worked with France and America to provide rapid support to the people of Benghazi as the troops of Gaddafi bore down on them- a model of independent democracies cooperating on a bilateral basis, to defend the weak against aggression. This model enabled a quick solution to be found, and intervention to be well coordinated. The Crimean crisis in contrast reveals the inadequacy of what passes for EU foreign policy. It is true that Britain can do little about Russian aggression on its own. Swingeing defence cuts and the historical complexity of the conflict make military intervention unfeasible. The EU however, if it could ever act as a unitary actor, would have had the capacity to take a stronger line. The Ukraine wishes to join and the affair is being played out on Europe’s doorstep. Furthermore, the EU has recently taken great steps to give the impression of a united foreign policy. Under the Lisbon treaty, the post of EU foreign policy representative, currently manned by Baroness Ashton, was given more weight. It could have now exercised its power as a political bloc with a united foreign policy with one spokesman in defence of a free people. Yet, its response has been weak since it is unwilling to impose decisive economic sanctions. Its national leaders have been reduced to defiance in rhetoric which is not backed up at the European level.
The response has come across as half-hearted, characterised by the tension between a futile desire to show strength and the weakness of the bloc as a whole to impose it. Precluding the argument for EU membership, even if it were to indulge in greater policy coordination at a European level-nation states will always have different priorities, different responses, which can never be reconciled with the aims of the whole. This shows the essentially unworkable nature of the EU. Britain knows that it is impossible for it to indulge in meaningful intervention in the Ukraine: as a sovereign power it can be sure of where its limits and capabilities lie. However, the EU, by its nature, can only act as an expression of conflicting priorities, lacking the statecraft necessary for a meaningful presence on the world stage. Although Libya and Crimea are very different, we can take some lessons from these crises and identify two different models for foreign policy, two different political visions. Does the UK want to be part of an unworkable project, where our own interests are subordinate or do we encourage what is best in Britain, not only its openness in trade, but also its willingness to shape the world for the better when it can?