A Grumbling Inner’s Guide to the EU Referendum

I am not a great admirer of many aspects of the EU. It needs further reform, and it needs it quickly. I am very much a “grumbling Inner”. Someone asked me the other day what I would say if the decision tomorrow was about joining rather than leaving; other things being equal, I wouldn’t necessarily vote to join. But history and economics do not give us the lazy luxury of “what if?” speculations. We have to deal with the situation as we find it now.

We know what will happen if we stay in the EU. Immediately, nothing, and then we get back to the reform process which the Prime Minister has led and which we know the rest of Europe wants to join in with.

What we don’t know is what plan Brexiteers have for the future. They can’t predict what the EU reaction will be, and when EU leaders say “the UK will get no special treatment”, Brexiteers say it is a stitch-up to scare voters. So many of them are conspiracy theorists. It is saddening, but it is the way of modern social-media obsessed politics. I shall come back to the undoubted “culture war” going on between the extremes and the political centre-ground in another blog. It is too tender a subject to go into now.

But there are four areas I would identify where UK interests are best served by staying in. This is not a decision like choosing what to have for dinner; this is a decision about survival in a changing, competitive, dangerous world. There follow some meandering and disjointed thoughts on each of these.

The Strategic

This is an area where Leave have been busy waving “Project Fear” stuff at Remain when we talk about the uncertain world we live in. Remain talk about the threat of terrorism, the threat of Putin – both threats repeatedly demonstrated, not theoretical – the threat of emerging military powers, the threat of the proliferation of weapons of mass destruction, the threat of bonkers leaders like Kim Jong Il. All of these are very real.

Those who seek to undermine the Western order will seize on any weakness in it. It is not enough to say “NATO keeps the peace in Europe”. It did not stop the Russian aggression in Ukraine, the chaos in the Middle East and North Africa, the Balkan wars, and was weakened by the Eurozone economic crisis. The USA will withdraw further unless European NATO members start getting near the 2% of GDP commitment to defence spending; our “special relationship” rests in part on us being a bridge to Europe for the US.

European martial abilities are an area where Brexiteers are in a right muddle. Many of them deride the uselessness of European militaries, yet quake in their boots at the thought of an “EU Army” (against which we have a veto – as long as we are “In” – but which is not on the table anyway). On the other hand, the UK is becoming the leading economic and military power in the EU, and will increasingly be in a position to exert influence within the EU if we stay at the table.

A sure way to encourage those who seek to destroy western civilisation is to start weakening our collective security in any form. Brexiteers have a thing about “controlling our borders”, but the fact is that if chaos spreads throughout continental Europe, British life will change and we will be dragged down too. Our cultural and economic borders are those of the EU’s frontier states and that will be the case even if we leave. Migrants do not think “we want to go to the UK because it is in the EU”. They want to come here because we are the UK, full stop. Leaving the EU solves no problem of migration at all – it just makes it harder to deal with because we have no say on how the rest of the EU handles it.

The integrity of the UK is at risk if we leave. A partitioned UK will be weaker, will contribute less to the stability of Europe, and will be less able to defend its component parts even working together. The English Channel and North Sea are useful anti-tank ditches, but the insular mentality of Brexit is no defence against 21st century threats. The threat is “out there”, and we should go out to meet it with all our allies.

The strategic risk to the defence of the UK from Brexit is crystal clear as far as I am concerned. We are a European power whether we like it or not. Our ability to exercise power outside Europe depends on stability in Europe. But we have the capacity to take the lead in Europe, and in my view we have a duty to work with our partners to the fullest possible extent. That means being in the EU as well as NATO.

The Economic

We have seen the turmoil on the world’s markets every time a poll encouraging to the Brexiteers has come out. Sterling has taken a battering, which has important long-term implications post-Brexit.

The economics of Brexit are fairly straightforward. We can forecast clearly that the Pound will slump again, and that will lead to a rise in import prices (and we import massively more goods than we export), it will lead to inflation, and it will eventually lead to higher interest rates. The implications of those things are a recession. What could be stranger than someone who sells imported cars taking out a two-page advert in today’s paper begging voters to cause an import price-spike and a credit crunch? It actually happened.

Osborne has had harsh criticism for saying that post-Brexit there would need to be an “emergency Budget”. But if you look at the long, mistake-repeating history of post-1945 Sterling crises something of that sort will be a bare minimum to reassure the markets. We are the world’s fifth-biggest economy, and to the markets we are accordingly a major source of economic risk. You can’t blame the markets for being jittery, and you sure as hell can’t “buck” them. The history and outcome of Sterling crises in the modern era is very well established.

The economic debate also focusses on our ability to trade post-Brexit. Brexiteers aren’t clear on whether they want to leave the European Single Market, or what other arrangements they want to see. Be clear: “leaving the EU” means leaving the Single Market. It means negotiating a new trade deal with the EU, and whatever model you look at, it will still mean the UK pays into the EU without having the benefit of deciding what the rules are. Norway and Switzerland both pay and both have no say at the EU table.

The rest of the world will want to see what trade deal we negotiate with the EU before they commit to anything with us. For instance, whether or not we have an EU deal which keeps any of the “passporting rights” which multinationals based in the UK enjoy across the EU. Many firms are looking at the possibility they will have to decamp to within the EU to trade freely across it post-Brexit, and they have not been slow to point it out to their employees.

Access to the single market is a key driver of British growth and prosperity. Jobs in Portsmouth depend on it. Airbus is a major employer, and has written to tell its employees about the risks of Brexit. Brittany Ferries – a major operator out of our International Port – has done the same.

But there are a lot of myths about the EU. One I am keen to debunk arises out of the City Council’s motion urging Portmuthians to vote against the EU. It claimed that UK firms cannot sell financial services in Germany. In fact the UK’s biggest EU export market for financial services is…..Germany. The German export market is one of our key service-sector opportunities. The financial services sector operates across the UK, and not just in London; not everyone in it is a City wide-boy or a millionaire like Farage. But it will face challenges post-Brexit.

Trade deals are slow to work out, in goods and in services, and every concession and gain are carefully looked at. As soon as we leave the EU, nearly all our current deals with our trading partners around the world will need to be renegotiated because the deals are between them and the European Union. That is where the potential for a decade of uncertainty comes from. It will take at least two years for us to leave the EU and maybe more to decide what our trading relationship with it is. It is only at that point that other trade deals are likely to progress, and the average inter-country trade deal takes around five years to negotiate.

Nigel Lawson, who was the man really responsible for our disastrous dalliance with fixed exchange rates in the late 80s and early 90s, has popped up as a Brexiteer now. It was his ideology which the Major government was following in its membership of the ERM. The man who showed up the flaws in Lawson’s dogma then was George Soros. It is one of the ironies of politics that Lawson now rejects European cooperation while Soros tells us it would be madness to leave the EU.

The Political

As a key member of the EU, we enjoy a number of opt-outs from some of its more questionable activities, like the Schengen unrestricted travel area. We have a rebate on our contribution to the EU coffers – a contribution which the Leave campaign lies repeatedly about and exaggerates. We have won these concessions because we have influence in the EU. If we leave the EU, we have no say over the everyday running of the organisation and have no seat at the table when rules are made.

We will still be bound by rules of some sort or another whatever deals we strike with other countries. “Free trade” does not mean “no rules”. Quite the reverse – in any trade deal, you pool your sovereignty and make common rules which bind countries together. Being outside the EU will make our trading arrangements more complex and less certain. That applies to our future relationship with non-EU states and the EU. There will still be quite a lot of the “red tape” Brexit are always moaning about. What they call “red tape” the rest of us call “consumer protection”, “employment rights”, “frameworks for legal redress of grievances”. The right sort of red tape is one of the hallmarks of civilised society, in or out of the EU.

The key objection many Brexiteers have is on sovereignty. It is still the case that the UK Parliament is sovereign – this referendum is only an advisory one in law. The EU is not stopping the British people making a decision now through our Parliament. It cannot stop it in future. You have a vote, and you have power of decision – use it wisely.

The EU is run by a Council of Ministers, all democratically elected people, and a Parliament which everyone in the UK had a vote on the year before last. We have “not got our way” on fewer than a hundred occasions out of the last few thousand when issues have been decided at the EU political level.

We have a veto on so many things in the EU it would be tedious to list them all, but we do have a veto on Turkish accession to the EU. So do all the other EU states, including such long-term opponents as Greece and Cyprus. There is no Turkish accession on the horizon.

Perhaps the surest way to throw open our borders would be to leave the EU and then be required by the EU to accept Schengen arrangements in return for a trade deal. After all, other non-EU states who have deals have had to accept Schengen.  Brexiteers have got no idea what uncertainties they might be about to inflict on you. There is no alternative government, no manifesto of policies.

I mentioned the Commonwealth earlier. These days, Commonwealth countries value the UK for its access to the EU. They can have one office in London which is their contact point for the entire continent for trade and diplomacy. If we leave the EU, and they still want access to the 500 million across the channel, they will have to talk a lot more to Berlin, Paris, and Brussels and a bit less to London. The loss of influence in the Commonwealth to our economic competitors would be felt fairly quickly.

All sovereignty these days is founded in economics. If you don’t have a strong economy, you are at the mercy of the markets. You cannot afford to defend yourself. You are the butt of other peoples’ jokes (as we were in the 60s and 70s) and eventually you are the prey of your enemies. We have become stronger economically and politically through being in the EU and we stand to be a lot less so should we leave.

The Social

We have always been a leader of Europe, even if we don’t think of ourselves as being in Europe. When we look at the world around us, who are our friends? Our Commonwealth cousins, who want us to remain in the EU? Our American allies, who are telling us our influence depends on remaining in the EU? Or our European neighbours who want us to stay and help reform the EU, because they increasingly think and feel the way we do?

There is a clear generational divide in this referendum. New generations have grown up with “the idea of Europe”. The free flow of ideas has always carried on despite war and barriers to trade; we have had a shared cultural identity for centuries even if sometimes political forces attempt to disrupt it. That feeling of identity has never been deeper. The breaking down of barriers and the arrival of the EU has given us enormous new influence as the English language and our popular culture has taken a stronger hold on the continent. We should be playing our part in every political forum we can get entry to, to maintain and strengthen our position.

Our future depends on a stable Europe, for everything from cheap holidays to the security of the UK, and indeed to the survival of the UK. Be in no doubt that the UK itself is in danger of a leave vote, because it will trigger further unrest in Scotland and massive uncertainty in our domestic as well as our international affairs.

When Eastern Europe escaped Communism, it was to our model that its leaders looked, not that of anybody else in Europe, and they are worried that we may now be about to abandon them to Comrade Putin. There is nothing Great or British about running away from our responsibilities and it has been one of the shameful hallmarks of the Leave campaign that they have denigrated the patriotism of Remainers with the suggestion that we think our country weak.

Some of these people evidently think that Dad’s Army was a documentary and not a satire. We have had appeals to the “Dunkirk spirit”, as if being chased out of Europe by the Wehrmacht was a great example to future generations. The answer to the foreign policy challenges of the 1930s and 40s was more effectual collective security, not less. It is still true now.

There is nothing wrong with saying “The EU needs reform, but I am going to vote to stay in”. I want us to stay in the EU and I want us to run the show. There is no fundamental risk of us losing sovereignty through continued membership, which is a red-line issue for me. There is no risk to the integrity of the UK through the EU. There is every encouragement to our competitors and our enemies in every sphere of activity if we leave. You call that “Project Fear” if you like; I hope I never get the chance to turn round to critics and point out that it was really “Project Fact” all along. Vote Remain!

 

 

 

 

 

 

 

 

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