Devil's Kitchen Comment

The less sweary writings of The Devil's Kitchen

Friday, June 16, 2006

The EU: what's it worth?

It is strange, but as the EU's influence over our country increases, people appear to be less and less inclined to talk about it; but it is a hugely powerful organisation, whose potential grows almost daily. So, what is it actually worth to Britain?

The first thing that I find extremely annoying is the constant lies and evasions about the impact that this pernicious organisation has on our lives. Our politicians seem incredibly reluctant to admit how much of our government is now conducted in Brussels, and the Press, ridiculously and irresponsibly, seem utterly uninterested in the affair (even the Telegraph prefers, instead, to print pictures of pretty, busty female students celebrating whatever it is that they are celebrating this week).

Another thing that perplexes me is why our politicians seem intent on carrying on with this farce; why do they continue to give away their powers and accept foreign rule in this manner? Are they perhaps trying to secure their place in the history books? Surely not. Are they simply bored of making decisions and are more happy to let others do it for them? Then they should step down: in the majority of cases, we would be happy to see the back of them.

The third thing that I find more than irritating is the attitude that people seem to have—even those who are against it—that there is no alternative to the EU, that economically and politically we are reliant on it. I shall investigate the political ramifications at a later date, but for the moment let us examine the economic consequences of withdrawing from the EU.

A little while ago, the think-tank Civitas published a paper on this very subject, presenting the summary as a series of rebuttals to a number of myths.

The first myth is that 60% of our trade is done with the EU. This is not the case, for the figure assumes that we are counting 'good' and not 'goods' and 'services', and it also assumes that the EU is the end point for those goods when, in fact, they may be simply in transit through Antwerp and Rotterdam. So how much of our trade is, in fact, done with the EU?

After adjustment, 48 per cent of UK exports of goods and services go to the EU.

And, of course, our economy is very far from dependent on the European Union.
The second misconception is that 60 per cent of our economy depends on the EU, whereas the true figure is more like ten per cent. Exports of goods and services only account for 21 per cent of ‘final demand’... 79 per cent of our economy is the result of domestic activity, involving buying from and selling to each other, and exports of goods and services to the rest of the world account for another 11 per cent.

So, a mere 10% of our economy is dependent on the EU. Still, it may be pointed out that 10% of our economy still amounts to a good few billion quid (about £18 – £20 billion); money which, currently, we can ill afford to lose.

But why should we assume that the EU's market's would be closed to us on withdrawal? Or even that we would be unable to trade freely, i.e. unhampered by tariffs and quotas, with EU countries?

In particular, if the UK left the EU, it is unlikely that UK companies would be denied access to other EU markets. The latest figures are for the period before enlargement and show that the other 14 members exported more to the UK than they imported from us. It might be said that they need the UK more than the UK needs them. Moreover, about twenty countries as diverse as Switzerland, Gambia and Mexico have free trade agreements with the EU (with another sixty holding discussions), and it would be extraordinary if the UK could not negotiate a similar deal.

So, should we leave, any threat to our economy would be negligable; this is obviously a very good thing. But, surely the benefits of membership are considerable?

The author concludes that, if the UK were to leave the EU, there would be no net loss of jobs or trade... Overall, the net cost of remaining in the EU ranges from the ‘rock-bottom’ estimate of £17.6 billion to the ‘most likely’ of £40 billion.

So, in fact, the lowest net gain upon leaving is almost as large as the maximum that we might, given appalling negotiators, lose. But actually, the probable gain is considerably higher: double the possible loss, in fact. And this does not even take into consideration the fact that we would be able to negotiate favourable trade deals with other global nations, most notably the US and India.

But what of the future? Surely the whole point of belonging to a large trading block is that we will have economic and political clout? Well, according to the European Commission's own figures, there will be "a 44 per cent decline in the EU-15 share of global GDP from 18 per cent in 2000 to ten per cent in 2050". And, of course, with dwindling economic clout comes the atrophy of political muscle.

By shackling ourselves to this organisation, we are making a mistake of truly, terrifyingly massive proportions. The red tape is stifling our businesses and our economic growth; the endless bickering and squabbling delays negotiations for years (and that is just on matters currently within the EU's area of competence). Or, of course, destroys them completely as, sadly, it appears may happen to the Doha round.

It is time for Britain to stand on its own two feet, to wean herself off the EU comfort blanket, and leave the old, crippled relatives to fight over the remaining scraps. Either they will realise that those crumbs are not worth fighting over and join our way of thinking, or they will die.

Whatever happens, there is no reason—political or economic—why Britain, having made this assessment, should even attempt to change the EU edifice. We should get out now, while the going is good, and leave the assorted EU countries to sort out their own problems.

6 Comments:

At 2:51 pm, Blogger Mr. Folts said...

Is there enough popular support in Britain for pulling out of the E.U. to be likely in the near future? I remember reading, when it was formed, that most Germans by populat poll did not want to join, but I saw no figures for the U.K....

 
At 3:22 pm, Blogger Devil's Kitchen said...

Well, I don't know. Britain has never had a referendum on joining the EU; only the referendum to remain in the EEC (in 1973, I think). I don't think that there is any great love for the EU in Britain.

DK

 
At 9:51 am, Anonymous Anonymous said...

Very good post- we have to debunk these myths about catastrophe if we leave. The other thing we need to do is show the great economic advantages of trading and looking outwards globally- the EU is trying insulate itself from the economic future and in doing so it will beggar all of us and continue starving the world's poor at the same time!
Methinks you should lend your support to www.betteroffout.co.uk

 
At 6:15 am, Blogger james higham said...

This is the new UKIP DK, yes? And you still haven't answered the question whether you're standing or nay. [Thanks, Prodicus, for this tip]. DK, we'll sniff you out wherever you hide.

 
At 9:29 am, Blogger james higham said...

More seriously, DK, the single greatest travesty, as far as I can see is the CAP, designed solely to get other countries to bale out inefficient farmers. But we know that already.

 
At 10:49 pm, Blogger Devil's Kitchen said...

James,

Sorry, haven't checked here for a while: the answer is that I am not (as far as I know) standing for UKIP. In a few years' time, who knows?

DK

 

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