EU referendum purely about internal Conservative Party politics

A poll published by Comres today had 58% of respondants answering ‘yes’ to the EU referendum question. This is before Cameron has ‘renegotiated’ anything. The result already looks like a foregone conclusion.

Cameron’s strategy has been clear from the start. Step 1. Pretend you are ‘fed up with the EU’ and want change or you’ll back a ‘no’ vote. Step 2. Come up with some piffling ‘reforms’ that will do nothing to address the concerns people have, but strenuously argue they do. Step 3. Get some politicians from other EU nations to pretend the negotiations have been tough and they are grudgingly accepting Cameron’s changes. Step 4. Pretend you have secured everything you wanted and begin the yes campaign. It’s simple, but it will probably work. (This is a firm prediction from me. My general election predictions were dreadful, so hopefully I’ll be wrong again.)

This is not Cameron’s problem though, and it’s not what the referendum is really about. It’s really about internal politics within Cameron’s own party. His problem at the moment is all his Eurosceptic colleagues are perfectly aware of his fake negotiations and they are probably not going to stand for it. Conservative MEP Daniel Hannan calls out Cameron today in a column in the Telegraph, and up to 50 Tory MPs have already formed a ‘Conservatives for Britain’ campaign group to argue for nothing less than full sovereignty for Britain, something Cameron has no intention of trying to achieve (and almost certainly couldn’t even if he wanted to).

There are alos a number of avowed Eurosceptics in Cameron’s cabinet like Iain Duncan Smith and Michael Gove. Cameron at first tried to enforce discipline on his Cabinet by saying they would need to campaign for a yes vote or resign, but this tactic lasted less than a day, and he now seems to have u-turned. In the 1975 referendum, cabinet members like Tony Benn were allowed to camapign to leave the common market without resigning, but Cameron has made this such a personal mission with his hyping up of his renegotiation strategy, I can’t see how cabinet members could play active roles in any no campaign without resigning.

Cameron decided to push through with this referendum over two years ago to shut up his backbenchers. Now he actually has to deliver it though, but his aims are a million miles away from those of a lot of his Parliamentary colleagues. Cameron seems to me to be as pro-EU are anyone in the last Labour Government. The referendum is supposed to settle the question of Britain in the EU. No chance! If the yes campaign is fought dishonestly (as it will be), I would think a lot of Conservative will not forget it.

I’m a bit young to remember the Tory Party tearing itself apart over Maastrict in the early 90s, but hopefully the second time around will be just as fun to watch!

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Tory plans to limit free movement will do nothing of the sort

The Conservative Party have been making a lot of noise about free movement of labour recently, saying they want to reform the rules in the face of ‘public concern’ (i.e. increased support for UKIP). Nigel Farage, champion of the ‘People’s Army’ says the Tories will just look to tinker around the edges, but will not be able to alter the fundamental principal of free movement. I agree with Nigel!

I saw Iain Duncan Smith quoted today as saying there was consensus within Europe to limit access to benefits for EU migrants. This is where I suspect the tinkering will be focused. They will make a big deal out of this and come back from the negotiations with the EU triumphant about the concessions they have secured. The thing is though, if they do manage to tighten up access to benefits, nothing will really have changed.

Moving to a new country for the purposes of claiming benefits has been labelled ‘benefit tourism’. But does it actually exist? This article from last year concludes there is very little evidence for it, and that the primary reasons for moving are for work or family reasons. The benefits that EU migrants would be eligible for are anyway extremely limited and it the person is not working, they probably won’t be eligible to benefits either. If they can’t or won;t find a job, they could even be legally removed under EU law. This blog gives quite a good summary of the situation.

So it seems likely, the Tories are looking to achieve only as much as they think they can spin into a victory, which may be little more than applying existing EU law more rigidly. Not sure that is going to convince the Kippers to come home.

What is the real issue with free movement then? It’s the ‘unlimited’ part that’s the problem. Within the restriction that people coming here must be looking to work, there is no limit on the number of people from the EU who can come here. If we were in a situation where every economy in Europe was booming, this may not be an issue as most people will be able to find work in their home country. Sadly this has not been the case in Europe for some time, and leads to a situation where people seek to move from the austerity-ravaged economies of the Eurozone, to the less ravaged (and now growing) UK.

This is not to say immigration is bad. It’s not. Allowing unlimited numbers of EU migrants to come here for work just doesn’t seem sensible. What’s wrong with using a similar system to Australia or Canada, or indeed the system we have for non-EU migrants? The Tories will never make this demand of the EU. I don’t think that’s even what they want. To get some control back would mean leaving the EU, or coming up with some clever ruse to achieve the same result.

Options for Britain in Europe

I’ve written a series of posts on the EU in recent weeks, where I’ve tried to show the confidence of the pro-Europe argument is not backed by good evidence. There are downsides to Britain’s membership of the EU, free movement of labour is not necessarily a good thing, and the EU is not very democratic. Many people struggle to see an alternative to EU membership, but there are actually a number of alternatives to the current status quo that Britain could adopt. In their book “Moored to the Continent“, Baimbridge et al, discuss some of the following options that could be considered:

1. Renegotiation of EU membership obligations. This is the Conservative Party’s stated position, although it is not currently known what they want to renegotiate. Baimbridge et al suggest possible areas could be the reconstitution of the Common Agricultural and Fisheries Policies, Britain’s contribution to the EU budget and it’s involvement in EU foreign and defence policy. There is some skepticism as to what could be achieved through renegotiation, as each nation would probably desire to change different aspects of the rules, but such is the importance of Britain’s market for EU exports, the could be some scope for renegotiation if the alternative was full withdrawal.

2. Creation of an Associated European Area (AEA). This arrangement would create a kind of two-tier Europe, with one group of countries continuing the path towards further integration, and a second group continuing to cooperate on areas like trade and the environment, while keeping control of other areas like economic policy, currency and social and labour market policies. This option could be facilitated by an amendment to the Amsterdam Treaty, and would allow those countries who wish to integrate further to do so, while  allowing others favourable terms while maintaining a looser association. Win win?

3. Membership of the single market through EFTA and the EEA. This option would mean the UK would formally leave the EU and rejoin the European Free Trade Association (EFTA), that it was a founding member of over 40 years ago. That would make the UK eligible to join the European Economic Area (EEA). This would give the UK some of the benefits of full EU membership (but also some of the downsides), while allowing it autonomy over areas like agriculture and fisheries, and allowing it to trade frrely with nations outside the EU. As an EEA member, they could also veto EU law if they think it goes against their national interest. This is a similar situation to that of Norway.

4. Bilateral free-trade agreement between the UK and EU. This one means full UK withdrawal followed by a negotiation of a bilateral trade deal. The UK would retain greater freedom than under option 3 and create a relationship similar to that between the EU and Switzerland. The UK is such an important market for other EU states, it is highly likely that such an agreement could be negotiated without the EU engaging in discriminatory practises – they would have more to lose.

There are advantages and disadvantages to all these options, but all involve the UK maintaining some kind of relationship with the EU, while regaining certain powers it has given away. I favour option 4, but can see some advantages of option 2. There is scope for cooperation on areas like environmental protection and scientific research that could cross national boundaries. Most people agree the EU will need to change, but while some feel this change should be closer integration, others are less enthused. We already have something of a two-tier Europe with those within the Eurozone and those without. Something more formal could be an option worthy of consideration.

The consequences of EU membership

This is the second in a series of posts on Britain’s membership of the EU. The first is here. As a companion to these posts, I’ll be referencing the book “Moored to the Continent” (MTTC) by Baimbridge, Burkitt and Wyman. This post will draw on chapter 4 of that book entitled “Consequences of EU Membership”. The authors write that:

“Successive governments claimed that the benefits of EU membership are ‘self-evident’, so that the UK must remain at the heart of Europe; otherwise it would lose crucial political influence and millions of jobs… Furthermore, the claim is repeatedly made that even a slight weakening in the trend towards greater unification would cost the UK jobs and influence, never mind what would occur if the UK voted to withdraw from EU membership. Yet, governments of all colours have been remarkably reticent to undertake an independent cost-benefit analysis of EU membership.

The reason for this apparent conundrum is that at least in purely economic terms, it is doubtful that the UK has received a net benefit from EU membership.”

So what are the consequences of Britain’s EU membership? MTTC outlines a number of consequences including:

Trade with the EU – It’s often said that the UK benefits massively from free trade with the EU, which might be lost were we to leave, but it’s a two way relationship. The UK has rather a large trade deficit with the rest of the EU, so all those countries desiring to sell their wares to the UK would probably suffer a lot more should a British withdrawal result in new trade barriers being thrown up. So the consequence of EU membership that we all benefit massively from preferential trade is somewhat overblown.

The Common Agricultural Policy (CAP) – In protecting EU agriculture by imposing an external tariff on food imports from outside the EU, consumers within the EU pay higher prices for foodstuffs. This exacerbates the ‘cost of living crisis’, but also encourages an inefficient transfer of resources into agriculture and away from manufacturing and services.

Single Internal Market (SIM) – The single internal market within the EU removes all trade barriers and allow free movement of capital, people, goods and services between members. Before it’s introduction it was claimed it would allow consumers to buy cheaper goods due to increased competition and the existence of greater economies of scale, creating 5 million jobs across the EU. The authors of MTTC argue however that although the removal of trade barriers between member states would have been attractive in the more protectionist 60s and 70s, by today, successive rounds of global trade talks have already drastically cut tariffs, and so the benefits of the SIM are now less clear cut.

MTTC makes a number of other arguments on the consequences of EU membership regarding the common fisheries policy, the historical costs of our membership of the ERM, and the consequences of the EU budget. Some of their arguments I find less convincing, but overall, I think they make the case rather well that the economic case for staying in the EU is anything but ‘self-evident’. At best there may be a neutral economic impact from being in the EU. At worst, EU membership is probably weakly negative. In economic terms, we are alright in and we’d be alright out. In my next post on this subject, I’ll look at some microeconomic and non-economic consequences of EU membership.

How strong is the case for staying in the EU?

As we approach the EU elections on 22nd May, I’m planning to do a couple of posts over the next few weeks on the topic of the EU. As a good leftie, I should be wholeheartedly in favour of Britain’s membership of the EU right? Well not really. Being anti-EU or eurosceptic is seen as very much the preserve of the right in Britain. We like to think of those holding anti-EU views as being either UKIP ‘little Englanders’ or ‘rabid right’ Tories, but I want to set out some good reasons why those of us on the left should also have some pretty significant issues with the EU, at least as it is currently operating.

To kick off then, I’m not going to lay out my argument straight away, but just simply make an observation about the style of argument those on the pro-EU side often make. It’s a style that I find somewhat irritating. I’m going to use Nick Clegg as an example because he’s been in the news recently making the case for the EU (and in a pretty annoying way too). Below are Clegg’s opening speeches from his recent TV debates with Nigel Farage of UKIP. I often feel as though Nick Clegg is insulting my intelligence and these clips are no exception. He basically has two arguments:

1. Trade with EU means jobs.

2. By being part of the EU, Britain has more ‘clout’ in the world.

That’s pretty much it. In the debates he didn’t really expand much beyond this. It seems to me Clegg thinks the case for staying in the EU is so self-evident, he can’t actually bring himself to rise above the level of mouthing simplistic platitudes. This style is typical among those who are pro-EU. They sort of think you are a bit strange if you express doubts, but often can’t raise their game above the level of “of course we’re better off in the EU”. In subsequent posts I will take a look at some of the pro-EU camp’s arguments and see if they actually stack up. First though, here’s the promised vids. Each speech lasts for about a minute. The first one starts around 2m13s, and the second around 2m51s.

Why we should leave the EU

This is a quick post on the issue of the EU, which has been claimed by the right wing as their noble cause, as popularised by UKIP and Tory MPs like Peter Bone. Today former Tory Chancellor Nigel Lawson has called for the UK to leave the EU. I suspect his motives for doing so are questionable, but does he have a point?

The prevailing view on the left seems to be strongly in favour of the UK’s EU membership, with the feeling that leaving would be unthinkable. These seem to be the common arguments in favour of staying in, and why I think they are misguided:

1) EU regulations on employment rights, environmental protections etc would be torn up if we left and it’d be like Victorian Britain all over again. This seems a strange sort of argument to me. Of course, there are a lot of people who would love to tear up a lot of these regulations, but we should have more confidence in our ability to win the argument about the importance of retaining these protections whether inside or outside of the EU. We shouldn’t need an external body to protect us from the more extreme elements on the right.

2) Around 3m jobs would be put at risk if we left the EU. I’ve seen this claim a lot, and I’m not sure where it comes from. Obviously, a lot of people work for companies that trade with the EU, but I think people over estimate the impact on trade our leaving the EU would have. The UK is a huge economy. The idea that the remaining EU nations would not want to trade with us on favourable terms seems unlikely to me.

3) British workers wouldn’t be able to go and work in Europe any more and millions of Brits would have to come home. Again, I don’t think this is as big an issue as it is made out to be. It’s likely there would be new restrictions on labour movements, but skilled workers would always be welcome to work in other countries, as we welcome skilled workers from outside the EU today. People that have retired to Spain are not going to be sent home, as their spending power is a great benefit to the Spanish economy.

Here are some other reasons why our EU membership does not benefit us.

• There are a lot of things in the various treaties we are signatories to which tie the hands of our government. Deficit limits and the prohibition of using the full power of the central bank severely limit the ability of government to react economic crises. You can argue (maybe rightly) that in a crisis, these rules are routinely ignored, but moves are afoot to make these rules even more binding on nations.
• State aid rules mean it’s very difficult to implement an active industrial policy, which I would argue is vital for long run growth. Government needs to be able to ‘pick winners’ and nurture their growth. State aid rules don’t allow this.
• Immigration. Most of the evidence on immigration shows it has a strongly positive impact on the UK economy. This post makes that case well. But does this mean we should be banned from imposing any limits on immigration from the EU? I don’t think so. It may be that we decide it’s in our interest to let anyone who wants to come here to work do so, but it should be a decision for the national government to make, and they should be free to impose limits if that’s in the best interests of the nation.

Above then are just a few quick points by way of suggesting that although one’s position on the EU seems to have been reduced to a split between left (pro) and right (anti), it shouldn’t be. There are strong arguments against our membership of the EU, and they shouldn’t be dismissed out of hand. As ever, feel free to disagree, or suggest things I’ve missed in the above.