The EU Referendum

On June 23rd, we will be voting in a referendum that will probably have the most important influence on the lives of people in the UK for many years. Most of the arguments either concentrate on what will happen in the short term, or are totally fatuous. For example, I saw on Facebook someone suggesting that the reason we have privatised coal, steel, water, electricity, gas and the railways was that we were in the EU, implying that, if we were out of the EU, we would have publicly owned corporations making healthy profits from these industry sectors. In fact, it seems to be fair game to blame almost anything that has gone wrong since the war on the EU. We also hear about the European Court of Human Rights. This is NOT actually an EU court, but is under the aegis of the Council of Europe - another organisation that has 47 member states, of which the UK was a founder member. when it was set up in 1949. Even if we leave the EU, we would be bound by the European Convention of Human Rights that this court administers, and people (or states) could still appeal to the European Court of Human Rights.

There IS a European Court of Justice. This oversees the uniform application and interpretation of European Union law, in cooperation with the national judiciary of the member states. It also resolves legal disputes between national governments and EU institutions, and may take action against EU institutions on behalf of individuals, companies or organisations whose rights have been infringed. Basically, it is there to see fair play between EU states. Because all EU states are party to the Convention of Human Rights, the European Court of Justice follows rulings of the Court of Human rights.

It’s possible a bit more complicated that that, but the fundamental point is the the UK helped draft the Convention of Human Rights, and set up the Court before the EU existed, and will still be a party to it if we leave the EU.

Many good things have come about as a result of cooperation with the other EU countries, and EU wide rules and agreements. For example HGV drivers have to take breaks from time to time and there are limits to how many hours they can drive in one week. Basically, no-one wants HGV or coach drivers falling asleep while at the wheel. Many other safeguards are down to EU legislation. We managed to ensure that doctors weren’t caught by the same rules. I guess the Government of the day figured that the NHS would collapse if doctors only worked a 40 hour week.

And we hear that the EU is “undemocratic”. Firstly, any country in the EU HAS to be democratic, or it doesn’t get in. Secondly, the members of the European Parliament are voted for by voters in each country. BUT, because the heads of states (including the UK) don’t want to be bound by a parliament they don’t control, the European Parliament has limited powers, and most important things get agreed by the various Heads of State meeting as the European Council. And yes, our PM is a member.

So, “undemocratic” is sometimes used to describe the fact the the European Parliament can’t really do anything without ratification by the heads of state in the European Council. More often it is used to complain about things that other countries like, but we disagree with. It’s rather like me complaining that the UK is undemocratic because I voted for the Monster Raving Looney Party and we have no say in the UK Parliament!

Now for migration. In the UK, about 8 million, or about 8.3 percent, were born outside the UK. But The majority of these are from outside the EU - 729,000 Indians, 403,00 Irish, 465,000 Pakistanis, 106,000 Chinese, 124,000 Philippinos, 304,000 Germans, and even 217,000 Americans. Yes, it’s true that we have 646,000 Polish, and have Romanians and Latvians that we didn’t have before. But the majority of our immigration has been from outside the EU. The Syrians and Africans from various nations trying to cross the Mediterranean don’t have an automatic right to be here, and will still be trying whether or not we are in the EU. By the way, Boris Johnson (USA) and Joanna Lumley (India) and Mo Farah (Somalia) are among the 8 million born outside the UK.

If we leave the EU, some classified as “foreigners” may leave us. But it’s now reckoned that there are about 2.2 million UK citizens living as expats in Europe. Many of them may have to come home if we remove the ability for EU citizens to live and work here. Basically, we are trying to close the stable door after the horse has bolted and got a job at a stud farm.

All these things aside, I believe most of the arguments for and against are largely irrelevant, because they concentrate on the short term. Frankly, if we leave the EU tomorrow, nothing much will change for several years. You have to think more about 20, 30, 40 or more years’ time.

In 50 years time, it is quite possible that Europe will be more of a federation (it will probably happen faster if we leave). The pattern here is like the U.S.A. By then, more power may have been given to the European Parliament, most (if not all) of the countries will use the Euro, and differences between the economies will have evened out. Harmonisation of most taxes and laws will have continued, and there will be fewer differences than there are now. Not everything will be the same EU-wide. After all, English and Scottish law are still different and we’ve had since1685 to sort that out!

If we stay in, we could be the equivalent of Texas or California in the United States of Europe, a major trading group capable of competing with the USA, China, or whoever else comes along. And the EU, acting as a bloc, has the clout to stand up to the multinationals and (hopefully) avoid their worse excesses. (Can you imagine the UK winning a head-to-head with Microsoft, for example?).

If we leave, nothing much will happen for a while. But, in the long term, do you think firms like Honda, Toyota, Nissan or BMW will increase investment in the UK if we’re not a member of the EU? Over a period of time, production and investment will gradually drift to mainland Europe. Similarly, many services will relocate or be managed from the mainland. The main beneficiary may be the City of London. These are the people that latched onto sub-prime mortgages and ended up needing to be shored up by the Government because the implications if the major banks went bust were too bad to contemplate. Our regulation is much less than on mainland Europe, which is why many in the City want out.

There are two aspects to the City. One is the normal business of retail banking, and providing funds for companies. The other is, basically, gambling - whether on the price of commodities, the price of stocks, foreign currency or what have you. You don’t even need to divvy up your bet in advance. Now, because we are good at it, we make a lot of money out of it, especially when acting as bookmakers (sorry, brokers). However it does contribute to major instability in various markets from time to time. We are also very good at allowing foreign nationals access to our financial markets, pretending that some people who live here are really based elsewhere (and therefore don’t have to pay nasty UK tax) so there’s lots of money sloshing about for us to take a percentage. Even outside the Stock Exchange, there has been heavy foreign investment in property in London. Whether you think this is a good idea or not probably depends whether you are in the property business in some way, or whether you are saving up for a mortgage.

So, in 50 year’s time, outside the EU, we’ll probably be making a packet from loosely regulated City deals. We’ll have some niche products and be exploiting the Royal Family for tourism. Will we all be on the breadline? Probably not, but the wealth won’t be very well spread. And, for the most part we’ll be well down everyone else’s priority list. By then, many other countries will have improved their standard of living and be taken more seriously as potential markets. While the EU population is currently over 500 million people - bigger than the USA, and second only to China and India - the UK has about 65 Million, and is only 22nd in the list - smaller than Thailand and Turkey, for example.

Don’t expect the old Empire to come to our rescue and "make us great again" - most of it has disappeared, or is making deals elsewhere - mostly with the Far East. By the way, goods we export to the EU will still have to meet their rules and regulations, even if we don’t get a tariff free deal.

On the political side, I expect that our Government (of whatever flavour) will lag behind in fundamental protection and social issues. Mainland Europe is essentially more social democratic in flavour than the UK, which has moved to the right.

OK - I don’t expect you to agree with everything I’ve said. I’m sure you don’t. But, for pity’s sake, do think about the long term and make your decision based on that rather than an expectation that your weekly shopping may go up or down by a few quid, or think that we’ll suddenly get over-run by foreigners.

Update

Some friends have suggested that we could stay in the EU and not end up as a state in a Federation. My personal view, like adopting the Euro, is that it's not a case of whether, but when. It may take 50, or even a hundred years, but it would happen eventually.

I have seen some pretty wild suggestions too. One Facebook post suggested that we would not be allowed to celebrate the Queen's birthday if we stayed in the EU. Just don't believe all the scare stories from either side. If they seem a bit far fetched, they almost certainly are.

 

Footnote and declaration of interest: I have worked and holidayed in Europe, and also been to the USA a few times. My first impressions of the USA was that is was just like here - they spoke English (nearly!), all the brands were familiar, and so on. But the longer I spent there, the more alien I felt. Whether it was the gun culture (when I first went to Washington, a cop had just shot and killed a young man for stealing a bike. It was reported on the back page of the newspaper, not because it seemed a bit extreme even for the US, but because the cop had a quick draw holster and might not have given the lad the opportunity to stop and surrender), the lack of medical treatment or support for the poor I can’t say. But I just felt different. It’s not all bad. It’s a much better and positive place to run a business, for example. By contrast, Europe seemed initially alien, but I felt more at home the longer I was there. Their attitudes are generally more in line with ours (well, mine at least), our history has been intertwined for at least a couple of thousand years, and we share a common culture - literature, art and music. I’d love to visit California again, but when it comes to where I’d like to live, it’s Europe every time.