Welcome back to Moraymint Chatter (especially readers of The Northern Scot newspaper)! Post # 2-of-4 on the subject of the EU Referendum: how will you decide which way to vote? A Punter’s Guide.
‘Europe’s nations should be guided towards the superstate without their people understanding what is happening. This can be accomplished by successive steps, each disguised as having an economic purpose, but which will eventually and irreversibly lead to federation.’
Jean Monnet, Founding Father of the European Union
‘The European Union must take a decisive step towards a federal economic government.’
Andrew Duff, British Member of the European Parliament 1999 – 2014
The Culture of the European Union
In my first post last week I invited you to bear in mind when contemplating the merits of Remaining in, or Leaving the EU, the culture of that organisation and, by association, the behaviour of our own Political Class. I pointed out that the history of the EU shows quite categorically that the organisation was founded upon, and operates to this day on the basis of deceit; ‘The Great Deception’ as Booker & North call it in their book of the same name. You will of course decide for yourself whether the EU is indeed a Great Deception, or a paragon of political virtue. In any case, for this and subsequent posts we should consider some of the hard factors affecting how to vote in the EU Referendum on 23 June 2016. This week we’ll look at the economics of EU membership and the pros and cons of Remaining in, or Leaving the EU.
It’s the Economy, Stupid
If you look at the debate thus far (if you can call it a debate), the Remain campaign, led by The Political Class is a one-trick pony: the economy is all that matters when making your decision in June. Or as an American President once said, ‘It’s the economy, stupid.’ Now, if you bear in mind the overall strategy of the European and British political elites it is indeed to keep us plebeians focused on economic matters. Glance back to the top of this post at Jean Monnet’s words and you’ll realise that disguising everything with an economic purpose is precisely what the European project is all about. After all, it’s human nature to concern oneself with life’s basics, not least matters of employment and financial security. The Euro-elites play on this base human instinct.
The Remain campaign asserts, for example, that if the UK left the EU it would trigger an immediate recession; adversely affect UK output to the tune of more than 1% per year for the next decade; put millions of jobs at risk; provoke a balance of payments crisis with sterling plunging 20% or more; raise inflation; erode real incomes and poleaxe Britain’s credit rating. Ergo, you would be mad to vote Leave. QED.
‘Thus [on 18 May 1955, through the Benelux Memorandum] did the central deception of the whole story become established. From now on, the real agenda, political integration, was to be deliberately concealed under the guise of economic integration. Building ‘Europe’ was to be a matter of trade and jobs.’
‘The Great Deception’, Booker & North, Bloomsbury, 2005
Use Your Common-Sense
In fact, nobody really knows what would happen economically if the UK left the EU. The key to understanding the economic impact of a British exit (Brexit) from the EU is to look at the facts as we know them today and make reasonable, common-sense assumptions about the likelihood of one scenario or another. Trust your judgement. At root you have to ask yourself whether it could possibly be the case that the UK – the 5th largest economy in the world and a nation with a global trading history stretching back centuries – would really disintegrate overnight if it left a sclerotic trading bloc? Over 60% of the UK’s export trade is not with the European Union, but with the rest of the world. More EU countries sell their goods and services to the UK than vice versa. The UK’s combined trade and current account deficits with the EU amount to some £150 billion per year. Why would other EU countries commit economic suicide by refusing to trade with the UK were we to be outside of the Union? Do you think other EU politicians believe there to be votes in their own countries by crippling their trading relationships with the UK purely out of spite for Brexit? How could they do that anyway when the Lisbon Treaty stipulates that the EU must make a trade agreement with a country which leaves the EU? Use your common-sense.
Powerful Inside The EU – Weak Outside The EU
Look at this another way. The Eurocrats tell us that if the UK pulled out of The Lisbon Treaty, it would be curtains for the European Union. The UK is such a significant player in Europe, the second largest contributor to the EU budget, that if we left the EU there’d be economic and political mayhem on the continent. Deutsche Bank’s Chief Economist said recently, ‘If Brexit were to occur, continental Europe would be relegated to second-rank status.’ On the other hand, the Remainians tell us that if the UK pulled out of The Lisbon Treaty then, er, we’re such an economic and political minnow we’d be ruined. Both arguments can’t be right.
It Makes No Difference Either Way
Capital Economics, one of the world’s leading independent economic research companies prepared a report recently for a UK Fund Manager (Neil Woodford) who concluded that ‘it’s really hard to see any significant credibility in any argument to stay or leave that’s constructed around economics. We think it’s a zero-sum game … if we stay or leave, the fundamentals of the economy will be relatively unmoved.’ This is at odds with The Political Class who would see us all having a fit of the vapours over the UK’s economic prospects on leaving the EU (some people are calling this ‘Project Fear’).
‘[The UK’s exports] will go down to almost absolutely zero if we come out of the EU.’
Anna Soubry, Conservative Minister for Small Business
Are you surprised at this fear-mongering, bearing in mind that The Great Deception is predicated on always playing on the economic fears of you and me? Fear not. When it comes to the referendum on 23 June, you can safely assume that if you vote for Brexit the world will carry on much as before as far as the UK economy is concerned. Indeed, shorn of the bureaucratic trading strictures of the European Commission, the chances are that the UK will not only survive but thrive as the global trading nation that we’ve always been. Use your common-sense.
Is There an Economic Upside to Brexit?
Graham Richings of Guildford, Surrey wrote the following letter to The Daily Telegraph recently:
‘George Osborne, the Chancellor of the Exchequer, is prophesying doom and gloom in Wednesday’s Budget with cuts in spending because of a black hole in our finances and outside factors. Yet Britain pays some £55 million per day to the EU, of which we only ever get back about £22 million. This is a net loss of £33 million per day. Where is the logic in this when we could vote Leave, save that amount of money and spend it on our sovereign nation?’
Mr Richings has a point. According to Full Fact (an independent, non-partisan fact checking charity), the EU costs the UK some £9 billion net per year in membership fees. This is a staggering amount of taxpayers’ money to subsidise a trading bloc where 94% of British businesses have no trading relationship whatsoever with the EU – but who have to bear the burden of the suffocating red tape that comes with EU membership. Over 70% of the UK’s GDP is generated within the UK – but is nonetheless subject to EU law. According to Open Europe, an independent, non-partisan, think-tank, the annual cost to the UK economy of EU red tape is over £33 billion. So, yes there is an economic upside to Brexit: it adds up to around £42 billion per year before we get out of bed in the morning.
Any More Where That Came From?
As Capital Economics has pointed out, recent growth in UK exports has come largely from non-EU countries. Also, the rest of the world is forecast to grow more rapidly than the EU in the coming years, not least because of a combination of the dead hand of EU bureaucracy, the growing pressure to integrate the EU into a superstate (‘ever closer union’) and the hugely damaging effects of the euro currency on many of the countries which are forced to use it. Andrew Lilico, Managing Director of Europe Economics, an economics consultancy, makes the point that ‘if the eurozone is to continue to work, then the economic logic demands that there will have to be a political union among the eurozone members.’ The European Union is heading in the wrong direction economically; the EU’s share of world GDP is forecast to decline to 22% by 2025, down from 37% in 1973. At the same time, Europe itself is fading in relative importance in the world.
There are many other reasons to think that the UK would be able to prosper outside of the European Union – this list is most certainly not exhaustive:
Other major economies, not least Japan, are not in trading blocs.
Norway and Switzerland are not in the EU, yet they export far more per capita to the EU than does the UK. EU membership is not a prerequisite for a healthy trading relationship.
The UK’s best trading relationships are with countries outside of the EU, eg with the USA and Switzerland. The largest investor in the UK is not an EU country – it’s the USA.
Research by the consultancy Ernst & Young concluded that the UK remains the number one Foreign Direct Investment (FDI) destination in Europe owing primarily to the City of London and the UK’s close corporate relationship with the USA. EU membership was not mentioned at all in their table of key factors affecting the investment decisions of those surveyed; the UK’s culture was the most important decision-making factor.
The Business Community View: Blue Chip Man
By and large the business community – ‘big business’ in particular – argues in favour of Remain. Why? Well, because the guys you hear on the radio and see on the TV exhorting you and me to vote Remain have a duty to their shareholders: that duty is to maximise profits. Blue Chip Man has no significant public interest in the political and social dimensions of EU membership. As far as Blue Chip Man is concerned, unfettered immigration to the UK is a godsend. Usually the greatest cost on a business’s profit-and-loss account is the cost of labour. Blue Chip Man cherishes the prospect of tens if not hundreds of thousands of, for example, relatively poor East Europeans arriving on our shores seeking work. It means that Blue Chip Man can hire labour cheaply, constrain his costs and maximise profits. When Blue Chip Man maximises profits he secures his own employment and share options. When it comes to arguing for or against membership of the EU, Blue Chip Man has a conflict of interest.
Lord Stuart Rose is a fine example of Blue Chip Man: he’s the former head of Marks & Spencer and now Chairman of ‘Britain in Europe’. Recently, Lord Rose was asked by a Parliamentary Select Committee ‘if [the] free movement [of labour] were to end following Brexit, is it not reasonable to suppose that we could see increases in wages for low-skilled workers in the UK?’. Lord Rose replied by saying that ‘if you’re short of labour, the price of labour would go up. So, yes. But that’s not necessarily a good thing.’ Blue Chip Man says that low-skilled workers earning more money is not a good thing. Better to have 335,000 immigrants arriving in our society every year and workers earning less, than it is to recover our sovereignty, control our borders, ease the pressure on our public services, housing and so on, and generally govern our society ourselves. You get the idea about Blue Chip Man?
Who Speaks for Business?
The mouthpiece of Blue Chip Man tends to be the Confederation of British Industry (CBI). The CBI has declared that ‘it will not align itself with one side or the other in the Referendum debate.’, whilst in the same breath announced recently that it ‘would now set out the economic case for the UK remaining in Europe ahead of the referendum on 23 June.’ The CBI also said, ‘it is not our place to tell people how to vote.’ In the period 2007 to 2013 the CBI received €1,153,931 of EU funds. The EU is one of the largest contributors to the CBI’s coffers.
The bosses of 36 FTSE 100 companies wrote to The Times newspaper recently urging voters to support EU membership. Between them those 36 companies spent €21 million lobbying Brussels institutions – and received in return some €121 million in EU grants; that’s a pretty impressive payback.
You make up your own mind about the relationship between big business-related organisations and the European Union.
It’s Not The Economy, Stupid
As voters in the EU Referendum, what we have to remember is this. The deciding factor in whether to vote Remain, or Leave is not purely economic; that’s precisely what The Political Class and the business community want you and I to think and where they play on our (unjustified) fears. We are supposed and, indeed, are directed by The Political Class to think that all that matters about membership of the European Union is this: if we Remain we’re safe financially; if we Leave, we’re doomed. Economics is the be-all and end-all of the UK’s membership of the EU. It’s hysterical nonsense of course. The Political Class’s argument for the UK Remaining in the EU is a deliberate combination of extreme risk aversion, fear-mongering, talking down our great nation and, most important of all, compliance with The Great Deception.
No, the deciding factors for you and me in the Referendum should be largely political and social. These are the areas which – precisely because The Political Class doesn’t want us to go there – we should investigate in some detail. These are the factors affecting our way of life which The Political Class is reluctant, if not terrified of us investigating and taking into account when we vote on 23 June.
We should finish with the words of Andrew Lilico who argues that outside of the EU the UK has ‘new possibilities out in the wider world. We could form new deep alliances with Canada and Australia. Or we could play the Great Game with China, India and Brazil. Or we could do something else entirely unforeseeable. The future is an undiscovered country. Of course we can’t know what we might do after Brexit, but that doesn’t mean we can’t be reasonably sure whatever it is that we do could be turned into something good.’
When it comes to the economics of EU membership, don’t succumb to Project Fear. Use your common-sense. Trust your great British judgement.
In the next post we’ll look at the politics of the European Union. Please comment on this post, challenging my own views if you wish. Indeed, why not link this post to your MP, your MSP, your MEP and your local councillor? Ask them for their views. Share it with your family and friends. Share it on Twitter. Share it on your Facebook page. Get the word out. Show The Political Class that they don’t have a monopoly on this debate. Remember that despite the best efforts of the Prime Minister (who is at the vanguard of The Political Class) to dictate a single view, you and I have a choice here. Don’t be intimated; trust your great British judgement.
Look to the right of this web page and you’ll see a section ‘FOLLOW BLOG VIA EMAIL’. Enter your email address in the box, click on the ‘Follow’ button, follow the on-screen instructions and you’ll be alerted to the next post in this series. All the best for now and many thanks for taking the trouble to visit Moraymint Chatter. Remember, the future of our country is at stake.
Finally, please take a moment to watch this brief video. The economist Professor Patrick Minford explains what life could be like for the UK outside of the EU
A friend of mine asked me recently, ‘How do you fit blogging in with your day job?’ I replied, ‘I get up at 5.00 am most days. By 5.30 am I’m at my desk with a mug of strong breakfast leaf tea. At about 8.30 am I start my day job. I finish work most days at 5.30 pm. In the evenings, I don’t watch TV. Mrs Moraymint and I sit together, she doing her cross-stitch, or similar, and me indulging my journalistic pursuits.’ OK with that?