The EU Referendum - Why stay on the Titanic?-A ready Reckoner

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Lord Pearson of Rannoch

A Ready Reckoner           4th June, 2016

The EU Referendum - Why stay on the Titanic?

“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 irreversibly lead to federation." Attributed to Jean Monnet, 1956. 

A  “Shared Sovereignty?” How the EU actually works:

You can’t see where the EU is going unless you look back at why it was launched after the last War. Its founding idea was that European nations had caused so much bloodshed that their democracies had to be gradually replaced by a new form of central Government, run by bureaucrats. Hence the EU’s claim to have brought peace to Europe since 1945, which was in truth secured by NATO. The EU’s only attempt at peacekeeping, in the Bosnian war, was an abject failure and NATO had to be called in. But the 56,000 Eurocrats still justify their expensive existence by claiming to bring peace to ‘Europe’. 

Hence also the powers of the unelected EU Commission and the EU’s law making system, which hardly anyone understands: 

A1 The Commission enjoys the monopoly to propose, in secret, all EU legislation, and thus most of our UK laws. Its members swear sole allegiance to the EU. 

A2 The Commission’s proposals go for still-secret discussion in COREPER, the Committee of Permanent Representatives, often described as ‘EU ambassadors’, i.e. bureaucrats representing the Member States, who negotiate their own countries’ interests.   

A3 When the proposals emerge from COREPER as pretty much a done deal, they go for ratification to the Council of Ministers from the Member States, in largely private discussion and voting, and to the EU Parliament, which only has powers of ‘co-decision’ and delay, and where our MEP’s are consistently outvoted. These are the EU’s two democratic fig leaves.   

A4 The British Government has only 12% of the votes in the Council of Ministers, where it has been defeated on every one of the 77 new laws it has opposed since 1996. 

A5 Our own Parliament in Westminster “scrutinises” a tiny amount of the flood of EU legislation, but cannot change any of it. That’s the big idea, after all. 

A6 The Commission then becomes the executive of all EU law and imposes heavy fines, subject only to the Luxembourg Court of Justice, against which there is no appeal. The EU Treaties require the Court to find in favour of “the ever closer union of the peoples of Europe”.

A7 The Commission manages the EU budget, so badly that its accounts have not been signed off by its internal auditors for 21 years. There is no external auditor, and billions go walkabout. 

A8 The Commission also negotiates all our Foreign Trade Agreements, very badly. (See B7 below). 

Question: Do we want to go on being ruled by this anti-democratic system, or shall we go back to electing and dismissing those who make our laws? 

B The scare that 3m jobs would be lost if we left the EU: 

(The Briefing Notes give the unanswerable economic case for the UK to leave the EU, and dispel the “3m jobs” fear. They are very short and use official statistics.)

B1.Some 10% of our GDP goes in trade with clients in the EU, (declining and in deficit); another 10% goes to the rest of the world (rising and in surplus) and 80% stays in our domestic economy. So only 1 in 10 of our jobs exports to the EU. But EU over-regulation strangles all 100% of our economy.  (see Global Britain Briefing Notes Nos 67 and 115)

B2.The Government’s ONS Pink Book reveals that the growing trade deficit with the EU reached £85billion in 2015. ie they sold us £85 billion-worth of goods more than we sold them. 

B3.So the EU has some 5.5 million jobs selling things to us, and we have some 3 million jobs selling things to them. It will therefore be in their interest to continue our free trade together after we leave the EU, or they will lose a great many jobs. 

B4.Europhiles say our car industry would suffer a 10% tariff on exports to the EU if we left. But that is nonsense because we import twice as many cars from the EU as we export to it; 1.7m in and 0.7m out, and EU manufacturers have 64% of our domestic car market. So any tariff would hit them much harder than us (See Global Britain Briefing Note No. 114). 

B5.We are in fact the EU’s largest client; bigger even than the USA. (GB Briefing Note No108)

B6.The EU has some 58 Free Trade Agreements worldwide, so why not one with us, its largest client, on terms which suit us both? ie the status quo. The Single Market doesn’t matter. 

B7.In the EU our FTA’s with the rest of the world are negotiated by the Commission on our behalf.

It has so far failed to sign an agreement with the USA, Brazil, India, China, Russia or Japan, etc. Yet four much smaller economies, (Chile, South Korea, Singapore and Switzerland) have all signed FTA’s with most of those countries, for an average of 6 times the GDPs achieved by Brussels (See Civitas: The Myth of the Single Market).  So much for the EU’s ‘clout’.  As the world’s 5th largest economy, we could negotiate more by ourselves, and on better terms.

B8.Europhiles say that if we left the EU we would be subject to its Single Market rules, without influencing their making. Answer: only for what we export to it. We could make our own rules for our domestic economy, meet the requirements of our other export markets in the normal way, and continue in free trade with the Single Market.   

B9.We would take back our seat in the World Trade Organisation which we gave up when we joined the EU, and trade under its auspices, as do most other countries. So our trade and jobs would actually increase as we expand into the markets of the future in the Commonwealth and the Anglosphere, which share our language, legal system etc. 

B10.The EU Single Market is a Customs Union, not a Free Trade Area. See Global Britain Briefing Note No 101 for why Customs Unions are an expensive relic of the 1950’s. 

B11.Some 80% of world trade circulates through Global Supply Chains, which take a long time to set up, and cannot be easily dismantled, however much the politicians may want to interfere. (See Global Britain Briefing Notes Nos. 90 and 92)

B12.And the EU’s share of world trade is shrinking fast. According to the IMF, the EU produced 30% of world GDP in 1985, but this will have fallen to 15% by 2020. In 2006 the EU took 65% of our exports but by 2012 it took only 45%. So do we want to go on being tied to this failing enterprise or, as the world’s 5th largest economy, have we the courage and common sense to join all the other 160 countries on the planet which haven’t made the mistake of being in the EU? They happily export to the Single Market, without the cost of EU membership. 

B13.Idea: Since custom duties now cost more to collect than they yield, why don’t we copy Singapore, abolish them on all our imports, and invite the rest of the world to do the same? 

C  What about the cash cost of our EU membership?: 

C1. The Government’s latest ONS Pink Book gives our gross cash contribution in 2014 as £20bn. £7.5bn came back for our farmers, regional aid etc., leaving a net outward payment of £12.5bn. Even if this net figure comes down to £10bn per annum in future, that pays for 1000 nurses every day, at £27,500 per nurse per annum. 

C2. So there is no such thing as EU aid to us. For every £1 they sent us in 2014, we gave them £2.60. 

C3. 10 respectable Cost-Benefit Analyses over recent years have put the annual cost of our EU membership from over-regulation etc., at between  4% and 10%of GDP (4% of £1.8trillion = £72billion pa; so £2,666 for each of our 27 million households) (See GB Briefing Note No 98). 

C4. Any tariffs which our exporters to non-EU countries might face would be minimal, and far lower than our net contribution in C1, let alone the savings under C3, so they could be compensated through an Export Growth Fund, or tax relief. But why would anyone want to change existing arrangements? 

C5. Food could be cheaper outside the Common Agricultural Policy, especially milk, bread and sugar, which would benefit our poorer people most.  C6. And there’s the decimation of our fishing industry… C7. And our financial sector is under threat….

D  The Euro was planned as the cement to hold the emerging mega-state together, but has been responsible for massive unemployment and civil unrest. It is unlikely to survive.

E  Immigration

Outside the EU our elected Government could control our borders, accepting those people we want, and not those we don’t. We could change that Government if they get it wrong. 

F   A Leap in the Dark?

The Prime Minister’s pathetic ‘deal’ is not legally binding, because the Luxembourg Court does not have to respect it until the Treaties are changed to reflect it. All 28 Member States will have to agree, some by referendum, and it won’t happen for years. So staying in is the real leap into certain darkness; more of the same, but worse. 

The EU’s founding idea has failed. Instead of peace and prosperity, it is causing poverty and civil unrest. We should take the Brexit lifeboat. 

          Malcolm Pearson. 4th June, 2016

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