Thursday, June 23, 2016

EU truths and untruths

With the UK now voting as to whether it remains in the EU or stirs up what has been described as "the biggest change in European politics since the fall of the Berlin Wall" (although the war in Yugoslavia and the first genocide since the Nazis ought to come close), I thought I'd run through some of the claims of both sides that are intellectually dishonest.

Remain

3 million jobs are linked to trade with the EU: Well yes, but then nobody is saying trade with the EU will end and nobody campaigning to leave wants inferior trading conditions.  The European Free Trade Association provides free trade with the EU, with Switzerland, Norway and Iceland all members.  The idea that leaving the EU means 3 millions jobs are at risk is a gross exaggeration.   However, if the EU is bloody minded and puts up tariff barriers equivalent to what it does for the rest of the world. it is a 4% average tariff on UK trade to the EU, which is negative for jobs, but hardly a huge risk. 

If the UK leaves the EU, you might need a visa to visit the EU: Nonsense.  You don't need a visa to visit the EU from the US, Canada, Australia, NZ or any of the EFTA member states.  What would change is having the right to live there.  Given those wanting to leave mostly want to end the free movement of people, that could be a concern for some. 

Leaving the EU will create a recession: No it wont.  The worst estimates are a small reduction in economic growth, but the long run estimates are a 6% long term slowing of growth if the UK gets the most inferior trading conditions likely with the EU (and assuming the UK has no free trade agreements with any other countries, like the US, Japan and China).  It also assumes the UK does not cut any EU regulation out at all.  In short, the Treasury estimates used by the Government of a recession are based on leaving the EU, and not taking advantage of the new freedom to trade and freedom to relieve the economy of EU Directives that impose costs on growth.

The EU means food, petrol, flights, energy and mobile phone charges are lower: Unmitigated rubbish, quite the opposite.  The EU Common Agricultural Policy inflates the price of food in the EU by 17% over market prices.  The EU legally requires all Member States to tax petrol by at least around 32p/l (but the UK government taxes it at 80% more than that).  The Single Aviation Market goes beyond the EU, with many non-EU countries as participants.  Norwegian Airlines has grown rapidly in the past couple of years, expanding long haul flights between the UK and US.  Norway is not in the EU. The EU inflates energy prices, by requiring minimum levels of taxation on gas and electricity bills, and imposing renewable energy obligations on member states.  Yes mobile roaming in the EU is lower than it would have been had the EU not enforced it, but it's clear EU protectionism and "normalisation" of regulations imposes costs on consumers. 

The £10 billion paid into the EU is "returned' many times over: No it's not.  What is returned is free trade, which should never be at the cost of paying for farming subsidies or infrastructure investment in other countries.  Leaving the EU doesn't mean an end to trading with the EU. 

The EU has 50 trade agreements we lose access to:  Many of which are with micro-states/territories, like San Marino, Andorra, Liechtenstein, Faroe Islands, Guernsey.  The only significant economies with deals are Mexico, South Africa and South Korea.  The UK could readily negotiate during the transition deals easily as good or better, as the main forces for protectionism in trade are the likes of France.

Staying in means reform:  That's highly unlikely.  David Cameron couldn't even get all the reforms he asked for with a threat of Brexit (which clearly the EU saw through as being unlikely), why would it happen after a vote to Remain?  The UK holds 9% of the MEP seats in the European Parliament, and although it is a significant contributor, reform is sclerotic.  The EU hasn't significantly cut back any of its activities and always finds new ones.  It is a political project of integration, and shows little sign of ever caring what is thought of it.

David Cameron's deal means unemployed EU migrants can be deported:  No, they can't. EU citizens can't be deported from Member States unless they are a threat to national security or criminals.  

Leave

Leaving the EU will fix the immigration "problem":  Assuming the problem is too many immigrant, and the failure of the Government to cut annual immigration to less than 100,000 people, leaving the EU will enable the UK to ration EU immigration like it does for non-EU.  However, non- EU immigration is already over 150,000 per annum.  Nobody is saying Brexit means deporting immigrants (thankfully).  Most concerns over immigration are perceptions about access to taxpayer provided services, and more often than not reflect the bankruptcy of the world's biggest health bureaucracy, which is treated as a religion never to be reformed (NHS), the bizarre legal obligation of all local authorities to ensure anyone who lives in the UK has housing (including rooms in hotels paid for by taxpayers), the open access to compulsory education and the sclerotic way the UK restrains supply of housing and roads.   Leaving the EU wont solve any of that, but then those wanting to stay in the EU are also devoid of responses to what are more fundamental problems.  

Turkey is joining soon: No it's not.  Notwithstanding David Cameron's hypocrisy over the issue, it is difficult to see Cyprus accepting Turkey until there is settlement over northern Cyprus, or Greece accepting Turkey until Turkey secures its southern borders with Syria and Iraq.  However, Serbia, Montenegro, FYR Macedonia and Albania will all likely be members within 10 years.

Money saved will be spent on the NHS:  Well the half that is a rebate and is current subsidies wont change, although there is a chance to make some serious saving there.  The rest?  Well it can go on many things, but there is a case for simply cutting the deficit by £10 billion a year.  After all, despite George Osborne's platitudes, the UK government is still overspending.  What happens with the money is up to the government.  The Leave campaign is not the government.  Yes leaving the EU wont save £350 million a week, more like half that, but the rebate is not set in a treaty, and the spending 

UK will be drawn into the Euro and ever closer union: The UK has a treaty opt-out of the Euro and has to agree to treaties for ever closer union, but it wont mean it doesn't face the costs of ever closer union.  That will depend on future negotiations.

The UK can get trade access as good as the Single Market without free movement of people:  This is unlikely, simply because it would mean the Single Market is undermined and would be a massive backtracking of the principles of the EU.  Signing up to EFTA or the EEA will mean some compromise on this.

3 comments:

Angry Tory said...

UK INDEPENDENCE DAY IS TODAY

A victory for real people, for DECENT PEOPLE for free and independent people against bureaucrats, socialists, and communists. The UK Labour party is looking irredeemably broken, as more than half of their voters are now UKIP voters (Hurrah!! Farage!! )

And no, the UK won't go into the EFTA - not without real reform of the EFTA? Why - because the EFTA yes including Norway includes the EU Socialist Chapter, EU court of "Socialist Rights", and EU "Free movement of Turkish Bludgers to anywhere".

Much more likely is that Norway will leave the EFTA for a real free market with Britain & the US & NAFTA.
Much more likely is that the EU - buy this time next year - will no longer exist. Netherlands, Austria, Poland, perhaps France under Le Pen all want to EXIT too.

Angry Tory said...

Why do you think England wants to go into the EFTA?

the EFTA means "free movement of people" (aka unbridled immigration and benefits), keeping every single EU regulation, and paying just as much as they do now into the EU budget.

Ask Nigel Fawage: Out means Out.

Libertyscott said...

No, EFTA doesn't mean every single EU regulation or paying as much. Norway has adopted 17% of Directives and Norway doesn't contribute anywhere near as much. Retainers claimed Norway's own fund for supporting eastern European's restructuring was an EU contribution, but it doesn't go to the EU.

Free movement is an issue. but the Swiss issue residency permits, it isn't a right to turn up and stay and claim anything.