Fast-forward 34 years and that same hand-wringing indecision is now bugging the entire British nation vis-à-vis its future relationship with Europe, specifically, its membership in the European Union (EU). Britons go to the polls today (June23), and that old question has resurfaced: Should we stay or should we go?
“Brexit” is a word you’ve doubtless heard a lot in the past few weeks. Cleverly combining the first two letters in “Britain” with the word “exit”, it refers to the referendum to determine whether or not the British public believe Britain should to leave the EU.
There are a number of issues which concern the “leave” camp, but most of the debate centers around immigration, security, bureaucracy, trade and sovereignty. The “stay” campaign, on the other hand, largely focusses on the benefits of integration, the economy, but also trade, sovereignty and security.
Here’s a closer closer look at the key points in the Brexit Debate.
It is with jingoistic arguments of “Britain for Britons” that the so-called Brexiters are attempting scare voters into leaving the EU. Stories of hundreds of thousands of immigrants arriving in the UK each year to either “take British jobs” or “sponge off the NHS and social services”.
These arguments fail to mention that, while the vast majority of those people are expatriates whose companies have moved them to Britain, British expats are leaving in even greater number to work overseas. Approximately five million UK nationals live overseas – about 7-8% of the population. In Spain alone, there estimated to be over one million Brits – only a quarter of whom are officially registered as residents of Spain.
Some people reading this are doubtless among the five million British expats living around the world.
But when we add up the number of people who are escaping hardship in other countries and looking for a better life in Britain, there are today – according to the British Red Cross – roughly 126,000 refugees living in the UK. Not per year. Not in 2015. That’s 126,00 total, or 0.19 per cent of the UK population.
But isn’t Britain being asked to do too much to help Syrian refugees? Of the 38,878 total applications for asylum in 2015 – not limited to Syrians – only 45% (or roughly 17,500) were actually granted asylum, or 0.026% of the population. Germany, by contrast, admitted over one million asylum seekers in 2015, or 1.25% of its total population.
Finally, let’s come back to the NHS… isn’t the UK being robbed blind by medical tourism from Europe? Well, in a word, no. The UK Treasury has paid £6.2 billion since 2007-08 to other EU countries for giving health treatment to British citizens, but recouped only £405m from EU members for treating their citizens in the UK. In other words, it is British expats in Europe who have cost the Treasury £5.8 billion over the last 9 years.
Control of Borders
Border Control is part and parcel of the Brexit immigration platform, but it warrants a separate heading because it is a facile argument.
Anyone who has ever travelled through Europe knows the beauty of driving or taking the train across borders unimpeded by queues at immigration booths; or of flying from one country to the next with no immigration lines awaiting you at either airport. Unless, that is, the country you are leaving or entering happens to the the United Kingdom.
Having no land borders is Britain’s first defence against illegal immigration. The next line of defence is the fact that Britain is not a signatory to the Schengen Agreement, meaning immigration checkpoints to enter or leave Britain – whether by air, train or sea – even for EU members. Switzerland is not a member of the EU, but even the Swiss signed the Schengen Agreement! (Ironically, many Brexiters think the Swiss have a great deal in Europe, but more on that misguided envy later.)
Part of security is tied to the border issue above, but there is also national security – sharing of information and intelligence to keep Britain safe.
Over the past quarter-century, a common foreign and security policy has emerged in Europe, which allowed for a unified response over Iran’s nuclear programme and sanctioning Russia for the invasion of Ukraine. These are but two examples, but Britain was a prominent voice on both occasions.
Brexiters argue that for UK security, NATO is a more important alliance than the EU, and for intelligence, the “Five Eyes” program (made up of Britain, America, Canada, Australia and New Zealand) is far more useful. Furthermore, they believe that a post-Brexit UK could continue co-operation with the EU through these two agencies.
But this argument ignores the fact that Britain’s NATO colleagues, as well as the other four of the “Five Eyes” all believe Brexit would be a colossal mistake because, post-Brexit, Britain would no longer be “in the room” on EU foreign-policy and security discussions, and that access which Britain currently enjoys is invaluable to NATO, The Five Eyes, the EU and Britain itself.
Anyone who has lived in Britain – or in any Commonwealth country which once formed part of the British Empire – may find complaints of excess bureaucracy in the EU to be slightly disingenuous coming from a nation which some believe invented the concept.
Are there bureaucratic regulations handed down from the EU? Undeniably. But would an independent Britain be without such regulations? Unlikely.
The modern British Civil Service grew out of the need to more efficiently administer the East India Company, and by the time Thatcher was elected British Prime Minister in 1979 had grown to nearly 800,000 employees. The total now is closer to 440,000, with some of the decline being directly attributable to EU bureaucrats “taking over” for British ones. Brexit would almost certainly lead to a “necessary” expansion of the Civil Service (that is, good old-fashioned, home-grown, British bureaucracy).
And while the EU may be bureaucratic, Britain has certainly learned to play – and win – that game within Europe. According to The Royal Institute of International Affairs: “A study of 330 qualified majority votes between 2009 and 2015 found that the UK was the fourth most-successful country at producing an overall outcome that either reflected or was favourable to what it was negotiating; and the second most-successful at securing favourable outcomes in policy areas it cares deeply about.
Furthermore, the UK, like most member states, has rarely been outvoted in the Council of Ministers. During this period, it was on the winning side 87% of the time, despite its insistence on taking decisions in the Council to a vote even on those few occasions when it knew it would be outvoted.”
The EU Budget
That hated bureaucracy is all paid for through contributions by members states, including the UK I and Brexiters have been attacking those contributions.
Former London Mayor Boris Johnson is currently traversing Britain in a big red bus, on the side of which is written: “We send the EU £350 million a week let’s fund our NHS instead (Vote Leave)”
While the sentimental gesture to fund the NHS is touching, it would be generous to say that the figure of £350 million a week is taking liberties with the truth.
Unique among EU members, Britain has a gross EU contribution and a net EU contribution. In the early 1980s, because the common agricultural policy promised to allocate vast sums of money to protect (primarily) French farmers – and because very little of this protection was earmarked for British agriculture – Margaret Thatcher negotiated a rebate on Britain’s dues to join this new European club.
Last year, the gross payment due the EU was £18.2 billion. (Coincidentally, that is exactly £350 million per week, but that is also gross.) Britain’s rebate was £4.8 billion, making the weekly net contribution just under £258 million per week.
But alas, the EU budget also allocated £4.6 billion to the UK (for regional aid to poor areas, and yes, also to farmers), as well as £1.4 billion in EU research grants. Accounting for Britain’s rebate and the money it receives from the EU budget (money which would still have to be spent), the UK actually spends £7.3 billion net, or £140 million per week, or 40% of what Boris Johnson claims on the side of his bus.
By comparison, Germany pays £20 billion, and receives £8.85 billion from EU – a net £11.15 billion.
All told, the next amount is approximately 10% of the annual UK budget and 0.25% of GDP.
In the aftermath of 2008, Portugal, Ireland, Italy, Greece and Spain (known collectively as “the PIIGS”) were on their knees, economically – far more than any other countries in the EU. The ultimate cause of their trouble was the Eurozone’s common interest rate policy. The low interest rates, set to benefit the economies of Germany and France, overheated the PIIGS’ economies, which needed higher rates to counter the inflation they had been experiencing for years. All five continue to struggle in varying degrees because membership in Eurozone does not allow them sovereign control over their own money.
The UK famously managed to keep the Pound as its currency, the Bank of England intact, and with it, control over the nation’s finances. In addition to that, as mentioned above, Britain continues to police its own borders.
Brexiters point to victory in the European Court for Spanish fisherman, who won the right to fish what was once “British” waters. They argue that such laws are made by the unelected bureaucrats in the European Commission. But the reality is, while the Commission proposes legislation, laws must be adopted by the Council of Ministers, which is made up of national governments (elected), and the European Parliament (also elected).
And while UK elections typically see 60-80% voter turnout, EU elections in Britain have never had a turnout higher than 40%. Perhaps it is easier to rail against “unelected bureaucrats”, when they never show up to vote for said “bureaucrats” in EU elections.
David Cameron is admittedly a recent convert to EU membership, and has taken the stance that it is better to reform it, not leave it. Earlier this year, Cameron met with European leaders to hash out another series of concessions for Britain, which included the so-called “red card”. This change forces a re-think on EU legislation if 55% of the national parliaments raise objections. The legislation may then either be shelved or amended to accommodate the objections raised at the national parliamentary levels.
Other concessions won in February were:
- A commitment to exempt Britain from “ever closer union” written into EU treaties.
- Newly arriving EU workers may not receive non-contributory in-work benefits for up to four years.
- Newly arriving EU migrants are banned from claiming jobseeker’s allowance for three months. If they have not found a job within six months they will be required to leave.
- Countries outside the Eurozone, such as Britain, will not be required to fund euro bailouts and will be reimbursed for central EU funds used to prop up the euro.
- Explicit recognition that the EU has more than one currency.
- Where feasible, burden reduction targets in key sectors, with commitments by EU institutions and Member States (in other words, “cutting red tape”)
Three of the six explicitly deal with improved recognition of UK sovereignty; two of them make give benefits to businesses hiring Europeans; and one of them is a commitment to reduce EU bureaucracy.
Britain is a member of NATO, the UN, World Trade Organization, World Health Organisation, the Bank for International Settlement – and those are just five of the nearly 700 international treaties signed by the UK which impinge on national sovereignty.
Before the Financial Crisis of 2008, it seemed inconceivable that any country would want to voluntarily leave the European Union. Free trade, no work permits, open borders… Who would possibly want to leave? After 2008, that question was answered: Greece – or maybe Spain, or even Italy, or Portugal, or Ireland.
What does this have to do with the Brexit? To paraphrase Bill Clinton’s campaign advisors in 1992, “It’s all about the economy, stupid.”
The economic arguments for staying in the EU are essentially inarguable. In a nutshell:
- Freedom to live, work and retire anywhere in Europe
- Free trade among member states
- 3.1 million British jobs were linked to the UK’s exports to the EU.
- Freedom to travel (Brits made 31 million visits to the EU in 2014 alone)
- Consumer protection throughout the EU’s single market
- 71% of all members of the Confederation of British Influence (CBI), and 67% of small- and medium-sized enterprises (SMEs), say the EU has had an overall positive impact on their business.
And yet economic arguments continue to be made.
British farmers, it is claimed, get a raw deal because of the amount of agricultural subsidies that go to France. But the reality is that EU subsidies via direct farm payments make up 54% of British farmers’ income, and 62% of British agricultural exports go to the EU. And let us not forget that the “EU Rebate” itself was negotiated primarily because EU agricultural subsidies were seen as benefiting France more than Britain.
Norway and Switzerland have it good because they enjoy the best of both worlds – free trade while keeping control of their political and economic sovereignty. What goes unmentioned by Brexiters (and surprisingly, unmentioned by the “Stay Campaign”, as well) is the fact Norway’s deal means it must adhere to the EU’s product standards, financial regulations, employment regulations and pay a substantial contributions to the EU budget.
What about those “unwanted immigrants”? Well, a post-Brexit Britain might not be able to stop EU migration anyway. To retain full access to the EU’s single market, Norway and Switzerland are both signatories to the Schengen Agreement, and both have higher per capita immigration than Britain.
Brexiters are convinced that, after leaving, new trade agreements with the EU (and the world) are just a swipe of the pen away. The rules for exit say a trade deal with the EU should be ratified within two years, but the trade talks with Canada took seven years and an agreement has yet to be ratified. Uncertainty over future trade pacts is a big reason why economists think Brexit would damage the British economy.
As reported by The Economist: “former EU trade commissioner, Lord Mandelson, says free-trade agreements ‘do not come free, do not cover all trade and take ages to agree.’ He adds that trade deals are ‘started by liberals but finished by protectionists’. His conclusion is that a post-Brexit Britain would end up with fewer and worse trade deals than it has now.” To once again invoke Switzerland, every Brexiter’s ideal, it has a static free-trade agreement, which does not included services. Services make up over three-quarters of the UK GDP.
Wealthy, developed nations need migration. Germany and Japan, long considered the dominant nations of trade and industry, are both worried about a shrinking population. It is not a coincidence that Germany has accepted so many immigrants in the past year – it is an economic necessity. To once again quote The Economist: “The irony is that the surest way to reduce immigration to Britain is, as one migration adviser puts it, to wreck its economy, and leaving the EU is a quick way to do that.”
A Groningen University (Netherlands) study in 2014 determined that UK trade with the EU was 55% higher than it would have been without membership. Foreign investment in the UK (from within the EU and without) is in part down to the fact that British labour and product markets are already among the least regulated in the EU.
That investment – especially in the automobile and financial services sector – can be directly attributed to Britain’s membership in the EU. A dying industry in the 1980s and 1990s, the auto industry now employs 800,000 people and accounts for and 12% of British exports. Britain now produces more cars than France, but for how long?And that same France is already beginning to court the industry which is synonymous with London, attempting to entice banks and brokers to move their headquarters to Paris, if Britons vote for Brexit.
The impact of losing either of those industries would have a far more devastating effect on the UK economy than the net £7.3 billion it costs Britain to belong to the EU. But while economics is clearly the Remain campaign’s strongest card, they have seemingly failed to play it effectively. The arguments coming from both sides have focussed on fear-mongering, rather than reasoned debate.
Tragically, the shooting of Labour MP Jo Cox by a self-proclaimed UK nationalist may finally be tipping the balance toward “Remain”. The vote takes place today, and given all the fear-mongering from both camps, it would ironic if a fear of being associated with a right-wing assassin – rather than any reasoned economic or political argument – is ultimately what sways the British voters.
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