Adam Smith Institute

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Another ten bad arguments for staying in the EU

Here are another 10 of the arguments for remaining in the EU that do not stand up. 11. A leave vote would be a leap into a perilous and unpredictable unknown

It is certainly true that an exit from the EU would take the UK into an unpredictable unknown, though there is no reason to suppose that it need be particularly perilous. It would be unpredictable because the future always is. If we stayed in the EU we would also face an unpredictable future.

It is important to understand that status quo is not an option. If we vote to remain, we are not voting to stay inside an unchanging EU, but to stay in one that will continue to develop and change. Many in the EU wish it to move to "ever closer union," and they mean political union, with ever more decisions being taken collectively by EU institutions rather than by the governments of member nations.

The choice between "remain" and "leave" thus comes down to a choice between staying within an organization that will develop towards closer political union, or choosing not to be a part of that closer unity. The UK could survive and prosper outside the EU; many other countries do. For much of our country's history it has stood alone, outside of political union, but intertwined with other nations by treaties, alliances and agreements.

A post EU Britain would continue to enjoy those relationships and the advantages and security they bring. It would retain friendly relations with the EU, as many countries already do. A UK that voted to stay in the EU might be able to retain a considerable area of independence from centralized decision-making. It might be an outrider, inside the EU, but outside of the central core of nations driving toward ever closer union. It depends on the terms that can be agreed. But there is no reason to suppose that our absence from that process need be perilous.

The least unknown course is to remain an economic partner of the EU, while choosing no longer to be a part of the political union. This would be achieved by a vote to leave.

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12. Britain's voice is stronger in Europe

Some think that the UK doesn't count for much by itself these days, but by joining our voice into an EU chorus we can make ourselves heard more. The EU presently represents 28 nations with a combined population of over 500m. If the EU were a country it would be the world's third most populous and have the second biggest economy. With such a size, goes the argument, the EU has to be listened to. It can make its voice count for far more than any of its individual members, including the UK, could.

The problem with this argument is that it assumes that our interests coincide with those of the EU, and that it does in fact speak for us when it makes its voice heard. The reality is that the UK is one small voice within the EU, and one often not heeded. The UK is regularly outvoted within the EU, so EU positions are often ones that were opposed by the UK when they were first put forward. Securing agreement between 28 nations is difficult, so many collective decisions will act against the interests of some of the individual members.

The EU is also cumbersome. It takes time to negotiate a position that takes account of the preferences and views of its individual members. A single nation can declare its position on issues that arise, but the EU might take weeks or months before a joint position can be hammered out. And even then the position will probably be a compromise rather than a clear expression of its position.

A UK that was independent of the EU would, it is true, speak with a smaller voice than that of the EU, but it would be a voice that actually represented its interest every time, rather than having that interest swallowed up in the interests of others. An independent UK would also have its own seat in many of the world's assemblies, instead of having that seat occupied on its behalf by the EU. Its voice would speak for itself. ____

13. It will cost us money to leave the EU. We'd lose EU grants

While it is true that some UK institutions such as research laboratories receive grants from the EU, these are a tiny fraction of the amount that Britain pays in as its annual contribution. In 2014 that was £19.1bn. It would not, therefore, cost us money to leave the EU. On the contrary, the UK would end up well ahead financially if it did vote to leave.

The EU's record of money management has often come under attack. It has a huge budget and spends money on a lavish scale. Its expenses for parliamentarians and officials are notoriously profligate, and it gives grants to organizations within member states, choosing to reward pro-EU groups and to withhold funds from those that do not actively support it.

The UK would come out well ahead if it left, and would no longer have the EU interfering in its domestic politics through it use of grants to influence political thinking in the UK to support the EU and its policies. An independent UK would be more careful in spending its funds than the EU is with those funds it allegedly spends on our behalf.

The EU takes huge sums from the UK and spends large parts of them on projects in other countries, as well as in this one, that an independent UK would probably not choose to back. An independent UK would also gain economically by not having to follow the many EU regulations that raise the costs of business without achieving anything worthwhile. A UK that spent the funds for itself would certainly choose to spend them on things it decided were more in its interest.

There would be a positive effect on our national debt, too, in that if we were no longer in the EU we would no longer bear any liability (through our central contribution to its budget) to support states within the Euozone that have suffered economic collapse and need to be bailed out. ____

14. UK businesses would lose out if we left

This is almost certainly untrue. Once the trade deal is put in place, which will be well before we actually leave the EU, UK businesses will have continued access to the Single Market. Since less than half Britain's trade is with the EU, and since 95 percent of UK firms do not export there, the expectation is that UK businesses will continue after exit much as they did beforehand. Some firms will take advantage of the more favourable regulatory climate after exit to lower their costs and increase their worldwide sales outside the EU.

Some firms, especially in the financial industry of the City, will have to overcome difficulties by making changes to the way they do business. But with the difficulties come opportunities. Unconstrained by the EU on the global stage, UK financial firms are well placed to expand into new areas. London's role as the key global player in the finance industry will not be harmed if the referendum vote takes the UK out of the EU. Nor it will find that role threatened any more by EU encroachments designed to support its other members to our detriment. On the contrary, its new independence will enhance its status as a neutral ground on which the world finds it advantageous to do business.

It is noticeable that countries such as the US, Australia and Switzerland are not lining up for admission to the EU. They know the losses if they did join would far outweigh the gains.

It is generally true that UK governments have been more sympathetic to the needs and problems of businesses than have their EU counterparts. EU legislators and bureaucrats often seek to impose a political agenda on business, whereas the UK usually oversees business with a looser rein, preferring to see it seize opportunities to generate wealth rather than to constrain it within a political plan. A UK independent of the EU would almost certainly create a climate more favourable to business than any the EU itself might bring about. UK businesses would benefit, not suffer, if this were to happen. ____

15. International peace and stability are safer with Britain's EU membership

Peace and stability featured among the motives when the European Economic Community was first established. France and Germany had fought in two disastrous and costly world wars, and the thinking was that further wars could be prevented if they were bound together to each other by strong economic ties. These later developed into political ties. The strategy worked to some extent, in that France and Germany learned to negotiate and settle disputes by compromise and arbitration instead of by military posturing.

This was over 60 years ago, and represents yesterday's solution to yesterday's problem. It is no longer part of the EU remit to keep France and Germany from making war on each other because that is not a modern world problem. Some have pointed out in any case that it was the need to unite against the threat of Soviet aggression that threw France and Germany together more securely than did the EEC.

Indeed, military commentators and historians have made the case that it was not the EEC and its successor EU which preserved international peace and security, but the network of military alliances led by NATO which acted as a sufficiently strong deterrent to resist threats to that peace from the Soviet Union and its Warsaw Pact allies.

It is noticeable that the EU failed in its attempts to bring peace to the Balkans in the wars of the 1990s following the break-up of Yugoslavia. The killing and ethnic cleansing continued despite attempted EU mediation. It was only when NATO intervened with its armed forces, thereby causing the US to bring military force into the conflict, that peace was eventually restored.

A departure from the EU by the UK would not involve its departure from NATO or its other co-operative alliances, and would not bring any weakening of international peace and stability. ____

16. The UK farming industry would be destroyed if we came out

There is no doubt that farmers across the EU benefit from the subsidies and supports that the EU provides out of its budget. Determined to protect their farmers, together with the traditional look of their countryside, the French bargained hard to get the EC (as it then was) to support farming with subsidies and tariffs, and the Common Agricultural Policy was born.

The CAP subsidized over-production, leading to such excesses as "milk lakes" and "butter mountains" as surplus goods were stored. It had a malign impact on developing countries, since the EC closed its borders to their primary produce, while dumping its own surpluses onto world markets to undermine world prices for them. Its subsidized beet sugar, in particular, undercut poorer countries dependent on cane sugar exports.

The CAP was also charged, and still is, with promoting excess application of fertilizers and pesticides. More recently it subsidized bio-fuels from food crops, leading to food price rises in poorer countries so EU members could move to renewable fuels. The CAP record has been malign on the environment and world living standards.

Undoubtedly UK farming would change if we left the EU and its CAP. It would be more exposed to world markets and world prices, outside of the EU's protective bubble, and would have to adjust accordingly. It would have to move to farming crops and animals for markets, rather than for subsidies. Fortunately the more than £19bn that the UK would save in its membership payment would provide a buffer from which support for UK farmers could be phased out gradually as they adjusted to real-world conditions. The UK might choose to continue support to some areas of farming but, once out of the EU, these would be chosen to aid UK farmers rather than those of other EU members. UK farming would not be destroyed, but it would change for the better. ____

17. Civil rights would be weaker in Britain if we left the EU's jurisdiction

If the UK left the EU, it would cease to come under the rulings of the European Court of Justice (ECJ), but would continue its accession to the European Convention on Human Rights, which is overseen by the European Court of Human Rights. The ECJ fundamentally rules on EU law, but there is some overlap because it is obliged to weave into its findings a due respect for the ECHR. This Convention covers not just EU members, but the 47 nations of the Council of Europe.

This distinction reminds us that Europe and the EU are not the same; the latter is a subset of the former. There would be no loss to the UK in leaving the jurisdiction of the ECJ. The latter interprets EU law, and has usually ruled against the UK's when it has opposed interpretations of EU law that it believes are opposed to its interests.

It was a European Court ruling that declared it to be illegal to have a blanket ban on giving prisoners the vote, a move opposed by the UK which has traditionally denied them this right. There have been other cases, notably the ban on "whole life" sentences. Those adversely affected by decisions of the UK courts have resorted to appeal to the ECJ if the issue concerned interpretation of EU law, or to the ECHR if they felt they their human rights had been infringed. These include those charged with terrorist offences and those who have openly urged violence against Western nations including the UK.

If the UK quit the EU, it would still be bound by the ECHR, whose decisions UK judges have agreed to respect. There have been calls for a UK law to enshrine civil rights in a UK law that would replace the 1998 Act that took us into the ECHR. But this issue is not bound up with our membership of the EU, and would not be affected by our withdrawal from it. ____

18. The UK would be more likely to break up if we left the EU

SNP members have suggested that Scotland would also have to vote to leave in order for a UK-wide 'leave' vote in a referendum to be valid. There seems little if any evidence that Wales of Northern Ireland would want to seek independence and remain in the EU if the UK as a whole voted to leave, but the question is valid as to whether an exit vote might precipitate Scottish independence.

In law the position is fairly clear. If the UK votes to leave, this will apply to all parts of the UK when it is implemented. There is no question of Scotland being allowed to remain in the EU if Scots were outvoted in a UK-wide referendum, any more than Yorkshire would be allowed to remain if a majority of its residents bucked the national trend of a 'no' vote. Scotland would leave as part of a UK exit.

Whether this would inflame the nationalism of a Scotland determined to unite with Brussels rather than London is something that cannot be predicted. It seems strange that Scotland would want to leave one union in order to join another. A future independent Scotland would have to start the application process from scratch if it wished to join the EU.

As far as opinion polls can give any indication, they show that the Scottish population is divided on the issue, just as is the population of the rest of the UK. It is true that Scotland voted to elect many SNP Members of Parliament once they could safely do so without fear of separation from the UK after the independence vote was defeated. It seems that the Scots quite like the SNP without liking the idea of independence.

In the coming referendum it is likely that millions of Scots will vote to remain in the EU, though it is unlikely that a majority of the population will do so. It is also likely that millions of them will vote to leave the EU, though this, too, is unlikely to constitute a majority of the population. Scotland may or may not choose the path of independence in future, having recently rejected it. But whether the UK votes to leave in the EU or to remain within it does not seem likely to affect that outcome. ____

19. If we left we'd lose the regulatory controls through which the EU makes our banks and businesses behave properly

The supposition here is that the EU is in a better position than is the UK to ensure that banks and businesses conduct their affairs in ways that are satisfactory to people in the UK. There is no evidence for this. There is, however, considerable evidence that EU bureaucrats and politicians have far less knowledge or understanding of how business actually works than do their UK counterparts, which themselves are not always adequately competent.

It is also patently clear that EU regulations on business are subject to political horse-trading as EU member states vie to gain advantage for their own areas of business. In financial regulation, for example, there are many allegations that other EU members, envious of the UK's leading position in finance, deliberately seek to impose regulations that will restrict the UK's position in order to advance their own.

The notion that the UK is too weak-willed to adequately monitor and circumscribe the behaviour of its banks and businesses is a strange one. The implication is that we in the UK are prepared to condone irregularity and even immorality in our business affairs to a lesser degree than our EU counterparts. Given the business ethics that prevail in some EU countries, this is a truly remarkable notion.

The UK seems both ready and capable of introducing and implementing the regulations needed to ensure acceptable ethical and sound business practices within its shores. We have done so in the past and currently do so; but we can only do this at present within EU rules. We would enjoy greater flexibility outside the EU.

There is nothing to suggest that we need the distant decisions of EU bureaucrats and politicians to ensure that this happens, and much to suggest that we could do it better and more appropriately ourselves. ____

20. Leaving the EU would see the UK retreating from the world to become insular and narrow in its outlook and influence

This claim is the opposite of the truth. In fact the EU is characterized by a narrow regionalism that is anti-global in its outlook. It looks inward from behind its protective walls, and tries to keep out the world influences it thinks might upset its delicate balance. Too often it seeks to insulate itself from the rest of the world rather than to embrace and interact with it.

Furthermore the EU is growing less significant internationally as time passes, constituting a smaller share of the world economy. A UK which voted to separate from the EU would not be retreating from the world but advancing into it. The UK could make global trading partnerships and negotiate free trade deals that opened its markets to other countries and gave it access to theirs in return. The UK could think and act globally instead of tying its future only to the other members of the EU.

If the UK votes to leave there is no question of putting up shutters and fences to keep the world out. It is the exact reverse. The UK would play a full part on the global stage, recognizing that the future of the world lies not in seeking regional advantage, but in recognizing that the world is becoming one that interacts more widely for mutual advantage. We are moving into a world of interconnectivity, where people in distant parts of it impact daily on the lives of those in the far reaches of it.

The UK is held back from this by the need to conform to EU rules and to let the EU negotiate on its behalf agreements that are more restrictive and confining than those we could have negotiated for ourselves. A UK that voted to leave would not be retreating behind the walls of a 'Fortress Britain,' but declaring itself ready to deal and trade with the wider world beyond the EU's borders, and confident that it can do so effectively and in ways that make it a better place.