Fact: Almost certainly untrue. It is highly likely that the UK and its citizens are richer as a result of EU membership. The net cost of membership of the EU to Britain is around £7bn per annum, but (and estimates very) the gains from our membership of the EU are estimated at between £26bn and £55bn (CEP/LSE study 2016). An IEA prize study judged by Lord Lawson estimated a narrow gain from Brexit, in a spread from a ‘best case’ BREXIT gain of £16bn pa; and ‘worst case’ BREXIT cost of £40 bn – a much greater possible downside. In particular, the claim that “EU membership costs £350m a week” is false Because of the Thatcher Rebate, the gross cost is around £250m a week before taking account of monies that are paid back to Britain in grants etc
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Those who argue for the UK to quit the EU claim that this would bring substantial economic benefits: higher GDP, lower prices, lower public spending, lower taxes, etc. The claim is often based on the supposed effects of less regulation and the ending of our net payments into the EU Budget (although some payments would continue if the UK decided to remain in the Single Market via the European Economic Area or some similar arrangement).
However research has been carried out into the possible economic effect of BREXIT by bodies not necessarily in favour of staying in. One such study 1 was carried out by the winner of a competition run by the Institute of Economic Affairs to find the best blueprint for the UK outside the EU. The panel of judges was chaired by Nigel Lawson (Lord Lawson of Blaby); the winner a former civil servant, Iain Mansfield. The study observed that the economic effects of BREXIT would largely depend upon the – currently unknowable – results of the exit negotiations and the steps taken to adapt to the new situation in the world. If everything went well (“best case scenario”) the UK could expect a resulting increase of 1.1% in GDP, or some £16 billion. If, however, it did not – either because the negotiations turned sour, or because the hoped-for increase in trade with the rest of the world did not occur (“worst-case scenario”) – we could expect GDP to fall by 2.6%, a loss of some £40 billion. In other words, the downside risks were more than twice as great as the possible upside gains.
1 See BREXIT: Directions for Britain outside the EU (IEA, 2015, £12.50).
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Facts: at least a grossly misleading exaggeration. It was estimated that 7-15% of legislation had a role in implementing EU regulations. (House of Commons Library Report, 2010)
“If you were told that 80% of our laws were imposed upon us by an unelected foreign bureaucracy, you would of course consider it to be a democratic outrage. If, on top of that, you heard that it cost us millions of pounds per day for the privilege, you would probably be apoplectic. Yet this is exactly what certain politicians and several newspapers repeat again and again to the British people. And it is a load of nonsense.” Richard Corbett MEP
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Discussion: First, EU laws are made by the elected European Parliament and the Council of Ministers from elected EU governments. They are democratically made. Second, a House of Commons Library Research Paper: 2010 reported that 7-15% of legislation had a role in implementing EU regulations.
“In the UK, data suggest that from 1997 to 2009 6.8% of primary legislation (Statutes) and 14.1% of secondary legislation (Statutory Instruments) had a role in implementing EU obligations, although the degree of involvement varied from passing reference to explicit implementation. Estimates of the proportion of national laws based on EU laws in other EU Member States vary widely, ranging from around 6% to 84%.”
A House of Commons Library Blog more recently considered solely UK EU- based Statutory Instruments and EU Regulations and the proportion they form of all UK Statutory Instrument and concluded it is “impossible to achieve an accurate measure”:
All measurements have their problems and it is possible to justify any measure between 15% and 55% or thereabouts, depending on what is included in or excluded from the calculation. To exclude EU regulations from the calculation is likely to give an underestimate (see table on page 20 of research paper), while to include all EU regulations will probably give an overestimate (see table above).
The answer in numerical terms lies somewhere in between the two approaches, but the limitations of data make it impossible to achieve an accurate measure. We do not know, for example, how many regulations have direct application in the UK – olive and tobacco growing regulations are unlikely to have much impact here, but the UK implements such regulations along with olive and tobacco-growing Member States. The possibility of this happening increases as the EU expands to include more, and more diverse, Member States.”
There are Lies, Damned Lies, and Statistics! To add to the confusion the UK publishes around 15000 pages of legislation a year, of which 3000 pages are Acts of Parliament – not included in the statistics above.
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Facts: Dubious. While the Prime Minister by no means got all he asked for, and certainly not what Sceptics wanted, he achieved a good deal on: benefits, ever-closer union, on Eurozone laws, and child benefits. On its own, this improves Britain’s position. The deal described below does not in itself give additional justification to LEAVE.
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The key results of the negotiation are:
– Britain now has the right – for seven years – to withhold benefits from new Immigrants from the EU if they would place ‘too much burden on the social services’. This will deter EU citizens without jobs from coming to Britain.
– Britain got a bankable statement that “the United Kingdom … is not committed to further political integration in the European Union … References to ever-closer union do not apply to the United Kingdom.”
– Any country not in the Eurozone like Britain, can show a ‘red flag’ to regulations proposed by those inside the Eurozone group that could disadvantage it. This red flag will trigger reconsideration by EU leaders. This protection will also be written into EU treaties, so Britain could use the European Court to challenge a final decision if it feels that it is discriminatory.
– Child benefits paid to EU immigrants children elsewhere in the EU will not rising automatically with UK benefits but be indexed to the standard of living in the country where the offspring are based.
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Facts: This is a persistent untruth peddled by LEAVE. The UK is not in the Schengen control free area. We have full sovereignty of our borders for citizens of third countries. Turks will require Visas to come to the UK. Turkish EU membership would require unanimous assent by all 28 EU Member States and the European Parliament. If ever agreed, it lies many years in the future. For all new entries to the EU, the UK has learnt the lesson that lengthy transitional arrangements are required.
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Because the UK is not part of the Schengen agreement among some EU Member States it is not included in the agreement contained in the statement of the Heads of State or Government of the EU issued on 7 March to “accelerate the implementation of the visa liberalisation roadmap with all member states with a view to lifting the visa requirements of Turkish citizens at the latest by the end of June 2016”.
A government statement on 16 March 2016 confirmed this as follows: The UK Government cannot be obliged by the EU to lift visa requirements. Visa liberalisation for Turkish citizens as referred to in the Statement of 7 March is in respect of the Schengen area only. In accordance with the Schengen Protocol (No.19), the UK does not participate in the Schengen acquis concerning visas. The UK is free to request to participate in some or all of the provisions of the Schengen acquis which it does not already participate in, but is explicitly not obliged to do so. Nor is the UK bound by any Justice and Home Affairs measures in the area of EU visa policy unless the UK explicitly chooses to opt in, in accordance with the UK and Ireland’s JHA Protocol (No 21).”
Full EU membership for Turkey is not on the cards for many years, and may never happen. While Turkey is an important ally, trade partner and member of NATO, and the EU has agreed to re-energise the Turkish application for EU membership, there is a long way to go. A decision to allow a new member to join the EU has to be agreed unanimously by all 28 member states and the European Parliament too – and we know that some States, such as France, are strongly opposed to Turkish accession. It is more likely that some form of association short of membership would be found in the medium term. In addition, the UK has learnt from its action allowing Eastern European citizens in, earlier than did other EU states, and could insist on lengthy transitional periods were Turkey to join the EU.
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Facts: Totally untrue. Each year since 2007 the Court of Auditors has declared the EU’s accounts are ‘sound’. Such ‘material errors’ as are noted (4%) arise predominantly from national administrations (indeed, the UK was identified in 2012 as one of the worst performers in terms of errors). 80% of the EU budget is spent in the Member States, and the cost of poor administration in the EU’s accounts is far less than that in the UK’s national spending. The UK’s Auditor General confirmed in 2006 that if the UK had the same system, he would have had to qualify all 500 UK expenditure accounts! The persistent myth that the European Court of Auditors has refused to sign off the EU’s accounts, is entirely false. In the most recent audit year (2013), the Court gave a clean bill of health to the accounts for the seventh time in a row. The European Parliament signs off the accounts. This means every euro spent from the EU budget was duly recorded in the books and accounted for. According to the European Court of Auditors, around 0.2% of the EU budget may have been subject to fraud. Any amount of possible fraud is unacceptable and needs challenging. But it’s worth noting that the figure of 0.2% is much lower than in most national budgets!
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Discussion: As anyone who bothers to read the all annual reports of the EU Court of Auditors will know, both of these statements are untrue. Yet they are widely used to condemn the EU. Opinion polls also find that people wildly overestimate the amounts of money involved, both the size of the Budget as a whole and that of the UK’s net contribution. For example, UKIP’s 2014 European Election manifesto stated that “the EU costs the UK Government £55m a day”, implying an annual payment of over £20 billion. The net figure was actually around £8.4 billion. The LEAVE Campaign claims that we send £350m a week to the EU. This has been widely condemned as false and ‘highly misleading’ because before any money is paid the Thatcher rebate (of nearly £100m) is deducted. This is reviewed every seven years in a process that gives the UK an effective veto over changes.
Since 2007 the Court has declared all the EU’s annual accounts ‘sound’. In addition, the defects that have been noted (‘material errors’ in about 4% of the accounts) are almost entirely the result of mistakes, not by the EU institutions, but by national administrations. As a result, it can indeed be argued that if the maligned Common Agricultural Policy, for example, were no longer to be funded out of the EU Budget, but were to be replaced by national systems of support (like the taxpayer-funded deficiency payments system that previously existed in the UK) the losses to EU taxpayers would not be reduced – in fact, would probably be larger.
In any case, granting the final “discharge” on the annual accounts is not the job of the Court, but of the European Parliament. In some years Parliament has withheld or postponed discharge in order to force reforms in the administration of the Budget – most notably in 1999, when the whole Commission was, as a result, forced to resign. Even budgetary scandals like that which brought this resignation are nevertheless insignificant when compared to the waste of billions by national governments on such projects as the British Health Service database (abandoned after expenditure of some £10 billion) or aborted defence procurement contracts.
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Facts: The population of the UK is growing as a result of several factors, including: improved healthcare bringing more older people; a UK birth rate greater than the death rate; an unknown amount of illegal immigration; net immigration from non-EU countries (last year 188,000); immigration from EU member states (last year 184,000). The problem is that a larger population puts pressure on services such as health, housing, roads, and schools. Funding and action on this is solely within the authority of the UK government. It is notable that non-EU immigration, which is fully controlled by visas and a points system, is larger than EU immigration. From an economic point of view, children and old people are a cost to the economy, while immigrants of working age bring a large economic benefit.
The UK has already full control over immigration from 3rd countries, though obviously not of illegal immigration. And the advantages of free movement in the EU are by no means one way, as 1.2m British citizens have taken advantage of the freedom to live elsewhere in the EU, mainly in Spain. Some of the many who think there is too much immigration into the UK, say it should be limited to those “having the skills we need”. Some think the rest are possibly here to scrounge off the welfare state. However there is another side. Several studies show that inward migrants, including students, contribute 10 times more in taxes than they take out in benefits – and, of course, also contribute significantly to national GDP. Immigration thus brings great economic benefits. However, overload on services and housing, and in some cases reluctance to integrate, is a serious challenge the response to which is in the hands of the UK government. Thanks to the Prime Minister’s renegotiation there will in future be no attraction for EU immigrants to come to the UK – without benefits – unless they have a job. Even so the Leave campaign asserts that it will be better to leave the EU and scrap free movement.
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Free movement within the Schengen area is under threat because of the refugee crisis, and while action is being taken to deal with this, it remains to be seen how well it will succeed. Interestingly, some estimates indicate that getting rid of Schengen would have substantial economic cost in terms of trade disruption.
“Immigration” combines a complex of separate issues. To begin with, the figures for net and gross immigration are often confused. Official figures are usually net (that is, immigrants less emigrants); and this is clearly the most relevant figure when discussing such issues as the overall housing shortage. In the year to June 2014, the net figure was 260,000, rising to nearly 400,000 in 2015. In the case of most objections to immigration, however, the numbers leaving the country are relevant only in so far as those concerned are former immigrants returning home, rather than British nationals emigrating. The main complaints concern the concentration of new arrivals in particular communities; the fact that they – and their children in the schools – do not speak English; their race; their colour; in sum, that they are foreign. Gross immigration in the year to June 2014 was some 580,000.
Secondly, there is frequent confusion between different categories of those coming to the UK: EU nationals coming to work; third country nationals also seeking work, families re-joining established former immigrants, largely from Commonwealth countries; those seeking political asylum, particularly at present coming from Africa and the Middle East; students; and, of course, an unknown number entering the country illegally. All these tend to get lumped together as being the fault of the EU.
However, the most recent figures from the Office for National Statistics show that net immigration from outside the EU is higher than from other EU countries. One indication of the relative social impact of EU and non-EU immigrants are figures for the granting of UK citizenship. In 2012 the total was 193,800; and of these 183,000 came from outside the EU. Only 10,500 from within.
All political parties have pledged to stop “benefit tourism” – that is, the supposition that nationals of other EU countries come to the UK to claim various welfare payments. We are supposed to be a “soft touch”.
But, apart from the anecdotal, all the evidence shows that such “benefit tourism” hardly exists. The UK has attracted immigrants from other Member States simply because of the employment situation: labour will naturally flow from areas of relatively high unemployment to those of relatively low unemployment. Overwhelmingly, EU immigrants come to the UK to work; and do so. Moreover, in the case of some occupations – for example, agriculture, the NHS and local authority care in the community – they are desperately needed.
But an alternative argument to that of “benefit tourism” is that EU migrants are taking jobs from British nationals, and doing so as “cheap labour”, so exerting a downward pressure on wage rates. Until recently the statistics certainly showed that wage rates were static despite large increases in numbers employed; and it is now estimated that some ten million EU nationals are resident in the UK. There is, however, no firm evidence that the positions filled by EU migrants would otherwise have been taken by equally well-qualified UK nationals. Indeed, even recruitment in other EU countries has failed to meet shortages of skilled labour in, for example, the construction industry. Moreover, the number of nationals from other EU countries resident in the UK is more than matched by the ten-and-a-half million UK nationals living in other EU Member States – so much for a policy of sending everyone home!
There is a strong argument for excluding bona fide university students from immigration figures. They bring fees to the universities; they gain an understanding of Britain and its way of life which they take back to their home countries; and those that stay on to work generally have high levels of qualification. It is not the case that immigrants who arrive in this country immediately become entitled to all social benefits. The Treaty and EU legislation, recently interpreted by the CJEU2, allow for a period of residence to be laid down before benefits such as accommodation subsidies are payable. Most Member States do so. It is arguable that child benefits should not be payable if the family remains in the country of origin – although this might, paradoxically, lead to an increase in immigration. Finally, the most contentious of the Government’s initial objectives in the negotiations was that in-work benefits for immigrants should be restricted. Yet it has been estimated that this would save only the modest sum (in the context of total public expenditure) of £15 million a year, and would, in any case, have little effect on immigrant numbers.
UKIP is correct in arguing that curbing the free movement of labour within the Single Market is incompatible with EU membership. They are wrong, however, in arguing that leaving the EU would resolve the matter – or rather, would make it possible to do so and yet remain within the Single Market. Norway, often cited as a model for the UK to follow, is required to allow entry to those from EU countries seeking work. Only if the UK removes itself entirely from not just the EU, but the Single Market as well, could full control over EU immigrants be legally ended – and it is highly probable that, given the economic pressures, those who are now legal immigrants would merely find another way to enter the country. The growing numbers of asylum-seekers would continue to arrive. In sum, “regaining control of our borders” would solve very little.
Finally, it is worth considering more long-term aspects. According to a MigrationWatch study, 84 per cent of the UK’s population growth between 2001 and 2012 ‒ or 3.8 million – was due to migration, once births by foreign-born mothers were factored in. There is an implication that this has been unwelcome. However, most European countries (and also Japan and China) are facing a “demographic time-bomb”: the proportion of the population of working age is steadily falling as compared to the proportion in retirement. This deteriorating dependency ratio raises the question: how will future pensions be funded? Though it seems reasonable to think that the answer lies in greater saving for old age, this is in fact an illusion: whether the pensions bill at any one time is paid out of taxation or out of returns to savings and investments, it is funded by then current production. Fortunately, the UK is in a better position that most countries; and this is precisely because immigrants tend to be young, hard-working and child-bearing. The effect of the population growth recorded by MigrationWatch has been a significant improvement in the projected UK dependency ratio.
2 Dane and Another v Jobcenter Leipzig (Case C-333/13), published November 18, 2014.
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The Claim that “The UK government answers to the elected House of Commons, but the decision-taking structure of the EU is less democratic” is not sustainable. A counter argument is that because of the UK’s unelected House of Lords, containing both political appointees, and hereditary peers, the EU with its elected Parliament and Council of Government (elected) Ministers is more democratic than the UK! The truth is that both systems are democratic, but different.
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Discussion: In the UK primary legislation (law) is proposed by the Government and has to be passed or rejected by the elected House of Commons but (with the exception of budget related bills) also by the unelected House of Lords composed mainly of appointed Life Peers and some hereditary Peers. Both houses have certain powers of amendment.
EU Laws are proposed by the European Commission (which is appointed by governments), then amended, passed or rejected by the elected European Parliament and the Council (comprising Ministers from the elected governments of Member States). No Member State and no Party has an overall majority either in Parliament or the Council. All can be outvoted, and there is great pressure to find acceptable compromises.
Some point to the declining % participation in the European elections as a democratic flaw. Certainly the move by the Blair government, at LibDem behest to replace ‘first past the post’ election of MEPs in single member constituencies with regional lists and proportional representation, disrupted the link between UK MEPs and those who vote.
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Facts: As a currency the Euro is doing well, but the Euro Zone is another matter. The Euro area did rather well in combatting the financial Crisis – better than if it had not existed; and had the UK joined it is likely that the Euro Area would have been differently set up and better governed. The jury is out on whether the Euro area will in the end succeed.
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EU leaders were warned by economists that a “one size fits all” monetary policy would not work; and that forcing together countries with very different economies would eventually lead to a crisis. Yet the project went ahead, for political reasons. The result has been catastrophe in Greece and massive unemployment, particularly youth unemployment, in other southern countries.
Faced with warnings by the CBI and other business leaders that leaving the EU would be an economic disaster, Eurosceptics believe they have a clinching rebuttal. “That was what they said about Britain not joining the Euro Area; and look what a shambles that has turned out to be! And the City is doing as well as ever.”
In response the Remain side says: a Euro Area incorporating the UK and the Pound Sterling would have been significantly different from the present one: the influence of the Bundesbank would have been counterbalanced by that of the Bank of England, and the UK Chancellor of the Exchequer would have been an influential member of the Eurogroup. The initial response of the Area to the recent financial crisis would probably have resembled more closely that which actually occurred in the UK and in the US.
A stronger argument is to recall why the Euro Area was created in the first place. What would the situation have been if all the original independent currencies had still been in place? As the “Black Wednesday” events in 1992 and after demonstrated, attempts to prevent large fluctuations in the parities of independent currencies can fall victim to speculative movements, unrelated to economic fundamentals; and the resulting volatility can unacceptably distort markets and trade patterns within an open, free-trading area. This can lead to the re-imposition of exchange controls – does anyone remember the days, not so long ago, when you were allowed to take only £27 10s. or so with you when you went on holiday abroad, listed at the back of your passport? Or, worse, as in the 1930s, to “beggar-thy-neighbour” policies of protection and currency manipulation. The slogan “A Single Market requires a Single Currency” was justified. If the Euro Area had not come into existence, the Single Market itself might have collapsed during the financial crisis, as all the major currencies – as in 1992/3 – came under speculative attack. This explains why the Treaty requires any EU Member State which meets the convergence criteria laid down (apart from the UK and Denmark, which have derogations) to adopt the Euro automatically.
However the UK’s exclusion from the Euro Area has not, after all, led to a flight of financial institutions to Frankfurt or the collapse of the Pound. Certainly it is clear that the City of London does not appear to have suffered – and is now a major centre for Euro-related operations.
The principal drawback of the UK’s exclusion from the Euro Area is the way the EU is run and Britain’s influence on it. From the moment that the then Chancellor the Exchequer, Gordon Brown, was asked to leave a meeting of ECOFIN as soon as the discussions turned to Euro Area matters it became clear that there was a danger of a two-tier EU developing: the countries using the Euro might become an inner caucus, taking decisions among themselves and then pushing them through the full Council. The “outs” have, of course, obtained guarantees that their interests will be fully respected, and a guarantee that this will continue is one of the four UK points of the UK’s renegotiation agenda. However, as the Euro Area expands, the remaining “outs” could become increasingly isolated. This is perhaps why there is a strand of British opinion, and not just Eurosceptics, which looks hopefully for the Euro Area to collapse.
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False: This is untrue both as to the proportion of UK primary law deriving from the EU and the method of decision. 1. The House of Commons Library estimated that under 7% of UK primary legislation, and under 15% of secondary legislation is a consequence of our EU membership. 2. EU primary legislation has to be agreed, amended or rejected) by the European Parliament and the Council together. The latter represents the elected governments of Member States, and the former is directly elected by EU citizens. However, as in the UK/ Whitehall, changes to some secondary legislation/ regulations may be decided by officials.
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Eurosceptics assert that EU membership has meant a loss of both national and parliamentary sovereignty; and they cite as evidence the proportion of UK laws coming from the EU, with figures of 70%, 75%. or even 80% being regularly quoted. Even David Cameron has referred to a figure of “about 50%”. All this is incorrect. The most authoritative figures come from a detailed House of Commons Library report 3, which has put the real figures at no more than 6.8% for primary legislation, and 14.1% for secondary legislation. However, depending on other assumptions a wider range of figures has also been calculated.
Even if EU Management Committee decisions on, for example, agricultural prices, and rulings by the European Court of Justice, are added in, the figures quoted by Eurosceptics are wild exaggerations and grossly misleading..
Eurosceptics also try to create the impression that most EU legislation is undemocratically imposed on Britain against its will. In fact, British Ministers have seldom been outvoted in Council. The most that can be said, perhaps, is that the House of Commons, (unlike, for example the Danish Folketing) has been lax in ensuring that British Ministers – and, through them, British civil servants – are fully accountable. But this is hardly the fault of the EU.
Democratic control over the EU also, of course, takes place through the directly-elected European Parliament, which now has full power to amend, and if necessary block, proposed legislation. Eurosceptics object that the EP “is not a real parliament” and cite the low turnout in European elections. Yet Eurosceptics then create a paradox for themselves. If, as they assert, 70-80% of our laws come from Brussels, and therefore only 20-30% from Westminster, why is there a higher turnout in General Elections than in European Elections? In any case, the logical answer to any “democratic deficit” is not to leave the EU, but to improve and publicise the democratic controls that exist.
3 Research Paper 10/62, updated 2012.
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Facts: Largely true, though some representatives of businesses, large and small, wish to Leave. As Channel Four’s FactCheck stated “..there is a broad spectrum of opinion in the business world, often linked to company size, but a clear majority overall for staying in the EU.”
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In March 2016 the CBI stated: “Our members have given us a strong mandate to make the economic case for the UK to remain in the European Union….. a clear majority of businesses taking part in the 24 committees and councils that make up our governance structure want the UK to remain in the EU. Our survey revealed that 80% of our members want to remain in the EU, with 15% unsure and 5% wanting to leave.” FactCheck reported as follows: “A snap poll carried out by the Institute of Directors immediately after David Cameron announced his reform deal in February showed that 60 per cent of 672 members would vote to stay, 31 per cent would leave and 9 per cent didn’t know. The latest British Chambers of Commerce survey of more than 2,000 senior businesspeople got a very similar result: 60/30/9 in favour of remaining in the EU. Again, it makes a difference how big the company is. But even among the smallest businesses, who employ fewer than 10 people, it was 54 per cent stay, 34 per cent leave, 11 per cent unsure. The last time the Federation of Small Businesses asked the in-or-out question was September 2015. The polling (of more than 6,000 respondents) was much closer: 47 per cent would vote to remain, against 41 per cent would leave and 11 per cent unsure.”
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Facts: The evidence is that most British businesses favour our EU membership. But there are exceptions. ‘Red Tape’ is often an irritant and can be a problem for business, whether it emanates from local government, the UK government/ Whitehall, or the EU. Also some EU laws (and of course UK laws too) affect some businesses more than others (for example rules on Genetic modifications GM – an EU rule – and high pricing of energy – a UK decision – come to mind). There has also been evidence of EU regulations being ‘gold plated’ by UK civil servants at national and local level, making them more onerous in Britain than in other countries. The President of the European Commission has said recently that the EU has intervened too much in matters that could be left to Member States, a sentiment that appears to open the door to further reform.
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The idea that the EU legislates on matters which should properly be left to the Member States has been around for a long time. In 1991 the then Foreign Secretary Douglas Hurd spoke of the EU interfering in the “nooks and crannies of everyday life”. Small businesses regularly complain of labour, health and safety and VAT rules which, they are told, are down to the EU, though it has been shown that often UK civil servants have tacked items onto the underlying EU legislation.
To understand why many of these rules have come into existence it helps to re-read the documents that led to the Single Market – in particular the Cockfield White Paper of 1985.4 This listed some 300 measures needed to remove trade barriers between the Member States, programmed to come into effect by the end of 1992. Lord Cockfield’s initial instinct had to been to avoid detailed legislation. Instead of harmonising technical, health and other standards, he proposed the mutual recognition of national standards. But it soon became clear that there was a lack of mutual trust. In addition, governments and businesses spoke with a forked tongue: they simultaneously called for measures to end “unfair competition” from countries with perceived lower standards (“there must be a level playing field”); but rejected measures which introduced such measures in their own countries (“no interference from Brussels”). Cockfield was obliged to propose EU-wide rules, the adoption of which was made possible by the coming into force of the Single European Act (SEA).
Six points need to be made about the result.
1. Much of this harmonisation has been of enormous benefit, particularly in the sphere of environmental protection ‒ e.g, EU-wide standards on emissions from motor vehicles.
2. Those who complain about interference from Brussels ignore the fact that, in the absence of common standards, each country would have needed their own. For traders, the resulting costs would have been far greater: they would now be dealing with up to twenty-eight, possibly incompatible, sets of rules rather than just one.
3. There is substantial evidence of what has been called “gold plating”: national administrations adding provisions not required by EU legislation, but putting the blame for the costs on “Brussels”.
4. The high-point of EU legislation was implementing the Single Market programme. Since then the amount of such legislation has fallen steadily. In its first annual work programme for 2015, the Commission has announced just 23 new proposals and the removal of 80 more languishing on the negotiating table.
5. A large proportion of the complaints about “Brussels red tape” concerns labour market laws. Most of these have their origin, not in the Single Market programme itself, but in the subsequent policy to create a “social dimension”.5 Largely – but not entirely – of Socialist inspiration, this was designed to prevent “social dumping”: a competitive advantage obtained through lower wages, looser health and safety requirements and other reduced labour costs. Conservative, Liberals and most Christian Democrats in the European Parliament opposed the programme; but the results of European and national elections meant that there was a majority for their introduction. That, as one-time Labour Foreign Secretary George Brown once remarked, is how democracy democs. It was not the fault of the EU itself.
6. In an economic system based on competition, there will always be a need to strike a balance between two objectives. On the one hand, each country or enterprise should be free to make the most of any competitive advantage. On the other, the playing field must, to some extent, be level. The political dilemma is well illustrated in the field of corporate taxation. Should countries be free to attract inward investment through low rates of tax (general considered good)? But at what stage does this result in the encouragement of tax avoidance and evasion (generally considered bad)?
4 Completing the Internal Market: White Paper from the Commission to the European Council (COM(85)310 final, 14 June 1985).
5 See Social Dimension of the Internal Market (Commission Working Paper SEC(88)1148 final, 14 Sept. 1988).
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Facts: Trade between us would certainly continue, but the terms of that trade are uncertain. France and Germany and Ireland export hugely to the UK, but we export much more to the other 24 than they do to us. If we arranged (like Norway) to remain with access to the Single Market, we would have to accept all the EU Single Market laws, including free movement, without having a say in them. We would also have to pay a substantial contribution to the EU. Were we to revert to World trade terms, tariffs would be imposed. Estimates of the economic cost of BREXIT vary widely from modest gain to substantial loss.
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It is certainly true that, if the UK were outside the EU, trade between us would not cease. Much would, however, depend on the arrangements made in any succession negotiations.
The UK could, for example, join Norway, Iceland and Liechtenstein in the EEA – an outcome which has commended itself to some Eurosceptics, because it would apparently give us access to the Single Market without any “political” involvement. However, as has often been noted, including by other Eurosceptics, this would in fact produce something like the worst of all worlds: in order to access the Single Market, our exports would have to conform to EU standards, but without the UK government having had much say in their adoption (“government by fax” as it was once called). In addition, we should continue to pay substantial sums into the EU Budget: Norway, for example, pays about £78 per head (as compared to the UK’s net £135) but with no MEPs able to vote on the Budget and little say on how it is spent. Finally, we should still have to accept the “four freedoms” embodied in the Treaties, including the freedom to live, work and study anywhere in the Area. These were the main reasons why Sweden, Finland and Austria opted for full EU membership.
Alternatively, we might join Switzerland in a rump EFTA, or having negotiated special association or other arrangements. This also appeals to some Eurosceptics, because it would apparently allow us to pick and choose which parts of the EU acquis to accept. As Swiss banking has recently discovered, however, this is also an illusion: the relative bargaining power of the EU as a whole and that of a single small country is massively asymmetric. It is also important to note that the service sector, which is of huge importance to the UK economy and on which the UK has a trade surplus with the rest of the EU, is outside the Swiss-EU agreement. A Swiss company which wishes to sell services in within the EU must first establish a subsidiary there (or, to be precise, within the EEA) – a particularly burdensome requirement for smaller companies, even given close Swiss relations with Liechtenstein. An arrangement of this kind would clearly not suit the UK.
The UK is, of course, not a small country; but our negotiating position would still be relatively weak. This becomes clear when one considers relative market size. For UK industry and commerce, access to a twenty-seven-country Single Market of some 400-500 million, accounting for nearly 20% of world trade, would be vital. For industry and commerce in the remaining EU, access to a UK market of only 64 million would not.
Eurosceptics are generally right to argue that the re-imposition of tariffs on some UK exports by the EU would be of only marginal significance. But, as the Cockfield paper of 1985 noted, tariff barriers are no longer the most significant obstacles to free trade in the world: disparate industrial standards, health and safety and environmental regulations, etc. are more important, either inadvertently or deliberately. Outside the EU, even outside the EEA, the UK would face growing difficulties in trading unless we accepted EU legislation on industrial standards, health and safety and so on. Recapturing “sovereignty” in these matters would be an illusion.
Finally, there is the role UK membership of the Single Market plays in generating inward investment. At present, the UK has proved an ideal location for international companies like Nissan to access the EU market. In the 2013/14 financial year some 20% of all Foreign Direct Investment (FDI) projects in the EU came to the UK, and FDI contributed over 111,000 jobs to the UK economy. As several of the international investors concerned have already pointed out, this would not necessarily continue if the UK were to leave the EU.
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Facts: Partly true. Outside the EU, the UK could make bilateral deals with any other country that wishes to reciprocate, or revert to a general Third Country Tariff. The real issue is whether we would be better off doing this. Could we return to the days when the Empire/Commonwealth was Britain’s most important market and when Sterling was still a world currency? This, alas, is only nostalgia – a vision which died in the late 1950s. More serious is the argument that the European market is no longer as dynamic as it once was (though even the Eurozone grew by 1.5% in 2015), and that the growth markets of the future are to be found in the wider world. At one time these were thought to be the BRICs (Brazil, Russia, India and China). Recent economic developments, however, have rather undermined this argument. In 2015 the Brazilian economy shrank by 3.1%, and its debt has been reduced to “junk” status. The Russian economy also shrank by 3.8% in 2015; and the Chinese economy is facing increasing problems. This is probably why Eurosceptics now only mention India as an alternative trading partner. It is true that the US economy appears healthy. For this reason, it is important to highlight the project of an EU/US Transatlantic Trade and Investment Partnership (TTIP).
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Eurosceptics have long complained that, as an EU Member State, the UK no longer has the power to negotiate international trade agreements: the Treaties have transferred this competence to the EU Commission. This situation is not, however, merely a legal development: it reflects the reality of international economic life. In trade negotiations, where the main issue is reciprocal access to markets, the relative size of those markets matters (as in the case of the UK and the EU). As an integrated and rich market of over 500 million people, the EU has a great deal more to offer than any one Member State on its own. The idea that Britain could obtain better access to markets through bilateral trade deals is therefore an illusion.
One final argument for going-it-alone sometimes advanced: that opening up markets would be best achieved on a global scale through the World Trade Organisation (WTO). As the recent CBI paper6 notes, however, the reality of the 21st century global economy is that trade links within regions and between them are increasingly important. Whether the UK is within or outside, the EU will inevitably be a key player in opening up world trade; and the UK as a Member State will be in a much better position to ensure that it does so than as a bit-player nagging from outside.
6 Our Global Future: the business vision for a reformed EU.
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Fact: The EU is not a federal state, nor is there any provision for it to become one. As the late Geoffrey Howe remarked the EU is ‘sui generis’, unique. The EU is always limited to acts permitted by the EU Treaties. It has three sets of characteristics in its operation and decision making: 1) intergovernmental, in which each member state has a right of veto 2) confederal, in which member states may decide to act together through the EU; and quasi-federal, in which member states have agreed to share sovereignty, decide (generally) by a majority of Parliament and Council.
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The Treaties are overseen by the Commission and for legal decisions, by the CJEU (The Court of Justice of the EU). However, the UK and all other Member States retain essential sovereignty because they have the absolute right to leave and do whatever they wish: which is why we are having this Referendum.
A federal state is one where the ‘sovereign entity’ internationally is the federation, which exercises defined powers according to a constitution. The constituent members/ states however have powers and rights reserved to themselves which cannot be taken away by the Federal state. Many countries such as the USA, Germany, Australia etc are federal states. In most cases there is no provision for states to withdraw from the Federation.
The word “federalism” has effectively ceased to have any clear meaning in England – it has become sort of contranym – implying overall central control. The defining characteristic of a federal constitution is that powers over certain matters are not exercised by the central government, but are “reserved” and belong to the constituent states, regions or Länder. These reservations are normally “entrenched”: that is, they cannot be transferred to the centre without full agreement (often by a prescribed procedure, such as a referendum requiring a special majority and/or majorities) of all the constituent parts.
As Geoffrey Howe said, the EU is ‘sui generis’ – unique in that it operates in a way that is partly intergovernmental, partly confederal, and partly federal. Foreign Policy is operated intergovernmentally; Schengen and the Euro could be said to be confederal contstructs; and the Single Market operates in a manner which is federal. The EU Treaties define the competences of “Brussels”, the rest remaining with the Member States (this is itself more confederal than federal. Any change requires a Treaty amendment, which has to be separately ratified, sometimes by referendum, in each one of the twenty-eight states.
Rather than arguing whether the EU is becoming “a federal super-state” or not, a more fruitful issue is the balance between “Community” and “inter-governmental” decision-taking. In Eurosceptic demonology, all the decisions in the EU are taken by an “unelected” Commission, which also has the sole right of initiative. This view is wrong in every respect. Legislative decisions are taken jointly by the Council of Ministers and the European Parliament. Most day-to-day decisions are taken by various committees, many manned by national civil servants. The President of the Commission is now the nominee of the European Party group winning the European Elections, and the rest are subject to approval by the elected European Parliament. It is even untrue that the Commission has the sole right of initiative: Parliament’s Rules of Procedure provide for one exception and in practice many measures originate in resolutions or decisions by the European Council or by one of the Councils of Ministers (especially ECOFIN and the Eurogroup).
In addition, procedures laid down by the “Community” pillar of the Treaties are only part of the EU’s decision-taking apparatus. There is the foreign and security pillar, largely in the hands of the European Council (i.e. wholly intergovernmental); and justice and home affairs, now partly intergovernmental, partly Community method. The system is, indeed, now so complicated that Eurosceptics can sell the image of an undemocratic, centralised, secretive conspiracy. In fact the EU is a body with so many checks and balances, so many disparate decision-taking locations, and so open to hostile scrutiny, as to make action slow. On occasions it is a pity that the Eurosceptics are not right!
In any case, the real political question is the extent to which the absolute sovereignty of the individual nation state is still a sustainable concept. Federalism, as properly defined – or the idea, incorporated in the Treaties, of subsidiarity – envisages practical sovereignty existing at different levels: local, regional, national and international. Moreover, it is perfectly possible for people to feel a sense of belonging and loyalty simultaneously at all levels: family, community, town or city, region, country, EU and human civilisation as a whole. Finally, of course, sovereignty rests with the UK. The Treaties provide for withdrawal from the EU which is certainly not a feature of any Federation. The Queen in Parliament can take us out according to the Treaty procedure, whenever they wish. The UK is indeed sovereign – but for now chooses to share its sovereignty.
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Facts: We certainly did not vote for a Super-State, and the claim that 1975 vote to stay in the EC was obtained on a fraudulent prospectus – we were only committed to a “Common Market” – demonstrably untrue. “Ever-closer union” was in the preamble to the Treaties from the start. Ted Heath, consistently argued in favour of the political implications of membership.7 Most tellingly, leaders of the “No” campaign like Enoch Powell and Wedgwood Benn based their opposition almost entirely on the issues of parliamentary and national sovereignty, and this featured prominently in Enoch Powell’s books and speeches before the 1975 Referendum.
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Quite a few prominent Conservatives who then campaigned for continued membership now seem to accept that the 1975 vote to stay in the EC was obtained on a fraudulent prospectus. The evidence, however, shows it to be rubbish. “Ever-closer union”, which Eurosceptics seem only recently to have discovered, was in the Treaties from the start. Ted Heath, far from concealing the political implications of membership, consistently argued in favour of them.8 More significantly, leaders of the “No” campaign like Enoch Powell and Wedgwood Benn based their opposition almost entirely on the issues of parliamentary and national sovereignty. These, indeed, had already been endlessly debated within the Conservative Party since the late 1950s.
Eurosceptics nevertheless go on to argue that we should now return to what they believe was the original purpose of Community membership: that is, free trade with Europe (the difference between a Free Trade Area and a Common Market is usually glossed over). This was, it is true, the initial objective of the Macmillan Government at the end of the 1950s, when Reginald Maudling was given the job of negotiating an FTA. But he failed, for the simple reason that it was never on offer. Despite the creation of EFTA, the crucial decision was taken not long after to apply for full EEC/ECSC/EURATOM membership. It was acknowledged that the “political” implications – which were enthusiastically supported by many younger people – were of great importance.
7 See Old World, New Horizons (OUP 1970).
8 See Old World, New Horizons (OUP 1970).
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Facts: Mainly untrue. Few people understand the difference between The Court of Justice of the European Union (CJEU or ECJ, the former title having replaced the latter), established in 1952 and based in Luxembourg, and The European Court of Human Rights (ECtHR), based in Strasbourg, which is not part of the EU. It is the ECtHR that deals with the contentious Human Rights cases – and it has nothing to do with the EU.
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Most concerns relate to this non-EU Court, the ECtHR. From early days, when birching in the Isle of Man was found illegal, to recent rulings on, for example, votes for prisoners, such “unacceptable interference by foreign judges” has been used to attack EU membership. Most of such rulings objected to by Eurosceptics have, however, been made by the Human Rights Court, and not the CJEU. One notorious example was the case, cited in her speech by the Home Secretary at the 2012 Conservative Party Conference, of the South American who couldn’t be deported because of his cat. This became a stock-in-trade of attacks on “Europe”.
The Council of Europe, an entirely separate body from the EU, was founded in 1949, largely on the initiative of Winston Churchill, and has 47 member states, including Russia and Turkey. The jurisdiction of its Court covers application of the European Convention on Human Rights, to which the UK is a signatory, and which became directly enforceable in British Courts in 2000.
In so far as they have correctly identified the target, Eurosceptic objections to the CJEU have been more diffuse, largely being complaints about “legal activism”. The Court has been accused of directly interpreting the Treaties in a manner which pre-empts legislative action, so acting undemocratically. In fact, the Court has usually been upholding the fundamental principles embodied in the Treaties, notably those concerning open competition and open markets – principles which the UK, and most UK Eurosceptics, claim to support. More generally, the Court has been upholding the principle of the rule of law both EU laws, duly adopted by Council and Parliament, and international law (pacta servanda sunt).9
The ECtHR, established in 1959 pursuant to the 1950 European Convention on Human Rights (ECtHR), deals with Human Rights issues for the 47 members of the Council of Europe including Russia and the Ukraine. Rulings of ECtHR, e.g. concerning the right of foreign prisoners to remain in Britain, not infrequently cause a fuss in the British press. Leaving the EU would not result in Britain leaving the Council of Europe and nor the ECtHR. However the Lisbon Treaty of 2009 included a Charter of Human Rights which reiterates and extends it consistent with the European Convention on Human Rights adopted in the framework of the Council of Europe. When the Charter contains rights that stem from this Convention, their meaning and scope are the same.
The Court of Justice of the European Union ensures that the law is observed in the interpretation and application of the Treaties. It has three main tasks: to review the legality of the acts of the institutions of the European Union; to ensure that Member States comply with obligations under the Treaties; and to interpret European Union law at the request of the national courts and tribunals. In doing the latter, it seeks to interpret the letter and spirit of the Treaties.
Its 28 judges, one per member state, and 11 advocates-general are chosen from among individuals whose independence is beyond doubt and who possess the qualifications required for appointment, in their respective countries, to the highest judicial offices, or who are of recognised competence. The CJEU works differently according to the case. One judge or an advocate general assesses the case concerned. If it is relatively simple, it may be considered by 3 or 5 of the 28 judges, or if it is more complex by 15 judges. Very rarely, if the case is thought to present particular difficulty or to be particularly sensitive, it is considered by the whole court of 28 judges.
Only one decision is given in each case and the court tries to reach agreement on this. Where this cannot be achieved the decision is taken in accordance with the opinion of the majority, rather like the Supreme Court of the United States. On occasion, the Court has made judgements which were in part Delphic or unclear. This can be deliberate where the issue is particularly complex or sensitive, and the Court feels that room should be left for further interpretation at a later date.
The CJEU is fundamental to the operation of the European Union and the Single Market because the European component of the law must be the same in each country. Who else should ensure that the rules are obeyed, or how laws or the Treaties should be interpreted in case of disagreement?
Some people have proposed that the House of Commons could choose whether or not a particular European law should apply to Britain. However if such a notion were applied, the EU could not function for the simple reason that all other member states would do the same and the entire EU legal framework would collapse.
While not linked in any way to the ECtHR, the CJEU has in effect accepted and enforced human rights since the 1960s as part of the common constitutional traditions of member states. Its decisions however could differ from those of the ECtHR. The rights announced in the Charter overlap but go beyond those enforced by the ECtHR under the ECtHR. They are enforced by the CJEU.
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Discussion: There is no evidence that stands up for this argument. It is, however, a view widely expressed both by the extreme left and the extreme right – echoing similar attacks on free markets and “big business” in the 1930s by Communists and Fascists. It was the core of Labour Party opposition to European Community membership in the early 1970s and the 1980s. Eurosceptics more to the political centre tend to argue that EU legislation may help large companies that operate across national borders, but imposes costs and unacceptable red tape on smaller firms. If this were so, it is surprising that 77% of the Small and Medium-sized Enterprises (SMEs) affiliated to the CBI said that they would vote for the UK to remain in the EU, even if a referendum were held tomorrow – i.e. before any renegotiation. The reason is not difficult to work out. Large firms, faced with production and marketing problems caused by a multitude of differing national regulations and standards are able to mitigate them to some extent – for example, by setting up subsidiaries – in ways that are not open to small firms. The Single Market is therefore of even greater potential benefit to smaller firms involved in exporting, than to larger ones.
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It is also important to recognise that the standards set by the EU do not merely provide a Single Market of twenty-eight countries or even thirty-two plus when the EEA/EFTA and the European Union Customs Union (EUCU), to which Turkey belongs, are added in. The norms set by the EU are also widely accepted in the rest of the world, opening up markets for firms of every size. If the EU/US TTIP negotiations successfully agree on common regulatory systems, these will effectively become international standards; and a UK outside the EU, hoping to trade with “the rest of the world”, would have to apply them anyway.
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Discussion: The EU, so the more sophisticated Eurosceptics argue,10 is inherently undemocratic because there is no true European demos – that sense of identity which makes separate geographical or social minorities accept the will of the majority, as is (usually) the case within nation states. European Elections are accordingly seen as a number of unconnected domestic elections. Detailed analysis, however, shows that this is not quite true. In the 1989 European elections, for example, there was an upsurge of support for Green parties throughout the then twelve Member States (in the UK the Greens won no seats, but took 15% of the vote). Most recently, and paradoxically, there was an even stronger pan-European movement in the 2014 elections, this time towards nationalist or Eurosceptic parties.
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The mistake made by those who deny that these elections reflected an EU-wide demos is to see the results only in terms of a traditional left/right spectrum. It is true that the Parliament’s main political groups are the roughly centre-right EPP and centre-left Socialists. It can be argued, however, that real political debate increasingly takes place along different axes: between those who concentrate on economic growth and those who emphasise the environmental consequences; or between “federalists” or integrationists and those who support – in terms which have traditionally applied in the US – “state’s rights”. These divisions of opinion were accurately reflected in the 1989 and 2014 European Election results.
More generally, there is clearly a difference in attitude towards political identity between generations. Broadly, older generations appear to adhere closely to traditional national identities, looking to national parliaments as the main expression of democratic control. Younger generations, however, seem less committed in this way: they can see themselves belonging to a demos other than the existing nation states (as, perhaps, in Scotland); can have limited faith in national parliaments and parties (resulting in a low turnout); and combine a sense of belonging to communities at different levels. In such circumstances, the idea that democracy can only exist on the basis of a single, exclusive (and national) demos is outdated.
Interestingly, when the news stories have all been about the rise of nationalist parties, the opinion polls 11 have been showing a rise in support for the EU. Over 60% now have a “positive view” of the project, up from only 50% two years ago. Even more important, perhaps, there has been a similar rise in the numbers who feel that “at least part of their identity is shared with others beyond national borders”.
Finally, there is widespread ignorance about the role and powers of the European Parliament, which is still often referred to as a “mere talking shop”. Even respected figures like the economist Roger Bootle can make howlers, like asserting that the Parliament “cannot propose…amendments” 12. This, of course, is partly the fault of the Members (and ex-Members) themselves. But there is more than a suspicion that national governments and parliamentarians have an interest in downplaying the role of the European Parliament. If the truth were known, it could reflect badly on their claim to be the sole guardians of democratic legitimacy.
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It is disingenuous to make a sharp distinction between “Europe” and “the European Union”. As the history of European integration since the Second World War shows, the EU has come into existence as much for cultural and political reasons as for economic ones; moreover it is, demonstrably, “the biggest show in town”.
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As the referendum campaign gets going, Eurosceptics target the use of the term “Europe” by supporters of EU membership. Boris Johnson is quoted in Der Spiegel as observing that “We can’t leave Europe, we’re part of the European continent“; and this has prompted demands that the “Yes” campaign be required to use the term “pro-EU” rather than “pro-European”.
It may therefore be necessary to answer the on-the-face-of-it abstruse question: what is Europe? For example, Boris Johnson’s remark appears to be a purely factual one. Yet geographical “Europe” is an arbitrary concept, as de Gaulle’s definition, “from the Atlantic to the Urals” – or the fact that Caucasus Republics are in Europe, but not the bulk of Turkey – make clear. In sum, even the basic, geographical definition is largely a matter of historical tradition, and to some extent of politics.
Answering the question: what is Europe? must therefore take account of both these factors; and most people instinctively do so. They use the term to include the legacy of Rome, of Christendom, of the Enlightenment, of classical music, of European contributions to science, literature and philosophy, and so on. They see “Europe” as being as much a cultural as a geographical term, and Britain as a constituent part of it. Much as Eurosceptics try to emphasize the “open seas” dimension of British history, the record over the centuries shows that we have always been Europeans, and have always, voluntarily or through force majeure, played a full part in European cultural and political events.
This is why it is disingenuous to make a sharp distinction between “Europe” and “the European Union”. As the history of European integration since the Second World War shows, the EU has come into existence as much for cultural and political reasons as for economic ones; moreover it is, demonstrably, “the biggest show in town”. As successive governments of all parties have therefore concluded, British participation is clearly in the national interest, and also in line with historical tradition. One might even argue that “opting out” of the most important economic, political and cultural development in Europe of recent years makes as little sense as it would have been to try “opting out” of the Concert of Europe (or the Romantic Movement, for that matter) in the 19th century.
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Facts: .. and now we do not have to. This was part of David Cameron’s negotiations with the other Member States, many of whom agreed. It is included in the agreement.
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This, strangely, became one of the Government’s four key objectives in the negotiations on UK membership. Strangely, because until recently not even hardened Eurosceptics paid the phrase much attention. It has become part of the debate, however, because it has increasingly been interpreted to mean “ever closer political union”.
But this is not what the Treaty says. The relevant paragraph of the preamble reads:
“RESOLVED to continue the process of creating an ever closer union among the peoples of Europe, in which decisions are taken as closely as possible to the citizens in accordance with the principle of subsidiarity.” Far from implying a centralisation of power in a political union, this phrase could also be interpreted as a call for the union between peoples (not States) to be implemented mostly through the exercise of political power at national – or, better still, regional and local – levels.
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The assertion that three million jobs are at stake if we leave the EU is often used by supporters of continued membership. Interestingly, it was already being quoted during the 1975 referendum, over forty years ago! The figure appears to be based on the statistics for employment in industries involved in trade with the EU, and for employment in foreign firms which have established themselves in the UK. So, for the figure to be correct, all trade with rest of the EU would have to cease, and all US, Japanese and other foreign businesses established here would have to shut down.
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In the case of EU trade, there is every reason to believe that it would continue much as at present. We have atrade deficit of some £50 billion a year with the other EU countries. It is therefore in their interests to continue trading with us. At the same time, we should be free to conclude trade agreements with other countries in the world, which we are not allowed to do from inside the EU. We might, in fact, gain economically by switching from the declining EU market to faster-growing economies. Last year the US economy grew by +2.4%; that of China by +6.9%; and that of India by +7.2%, with similar healthy growth rates in SE Asian countries like Indonesia, Malaysia and the Philippines. The EU managed a miserable 1.5%.
In the case of foreign firms established in the UK, there is no evidence that any would leave. Some businesses in the City of London have announced that they might move some staff from London to Paris or Frankfurt; but whole companies are unlikely to abandon one of the most important financial centres in the world. Car manufacturers like Nissan and BMW have expressed some disquiet about the possibility of BREXIT, but have not actually planned to move production elsewhere. It can also be argued that the UK attracts inward investment from around the world not so much because we are in the EU as because we are part of the English-speaking world, and are advantageously situated geographically in relation to financial markets.
Finally, if we left the EU we should no longer be subjected to red tape imposed by Brussels. Employment could rise rather than fall.
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Discussion: Not true so far as the USSR and Russia are concerned. Supporters of remaining in the EU often claim that the EU has been responsible for preserving peace in Europe since the end of the Second World War in 1945. They quote the then French foreign minister, Robert Schuman, who suggested that pooling coal and steel production – the resulting European Coal and Steel Community (ECSC) was the first step towards what is now the European Union – would make war between historic rivals France and Germany “not merely unthinkable, but materially impossible”.
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Europe’s history is a history of wars between the countries now in the EU. What the EU can justifiably claim, so far, is that it has made war between its Member States vanishingly unlikely.
But neither the ECSC, nor the subsequent EEC, Euratom and now the EU, have played much of a part in securing peace in Europe against adversaries. This has been achieved through the creation of the North Atlantic Treaty Organisation (NATO), and more specifically by the military commitment of the United States to the defence of Europe and the deployment of the US “nuclear umbrella”. Even in 1945, in any case, the possibility of a new war between France and Germany was remote. The real threat came from the Soviet Union, which NATO successfully deterred for forty-five years.
It is also worth remembering that the EU did not prevent conflict in the Balkans following the break-up of Yugoslavia in 1991; nor that peace was eventually restored there as a result of intervention by the United States.
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Discussion: So he did. But he never envisaged that Britain would be part of it. Churchill’s great Zurich speech in 1948 referred to “Great Britain, the British Commonwealth of Nations”, together with “mighty America, and Soviet Russia” acting only as “the friends and sponsors of the new Europe”. In 1953 he described Britain’s position as being “with Europe, but not of it. We are linked but not comprised”. And in vetoing Britain’s first application to join what was then the EEC in 1963 General de Gaulle remembered only too well Churchill’s remark to him in 1944 that “each time we have to choose between Europe and the open sea, we shall always choose the open sea”.
Supporters of EU membership often refer to the UK’s payments into the EU’s Budget as a “membership subscription”, worth paying in return for access to the Single Market and other supposed benefits. They add that the Budget as a whole amounts to only 1% of EU GDP; and that, in any case, Britain gets back considerable sums in payments to farmers, support for regional development and other grants.
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It remains the fact that the UK is one of the few net contributors, paying in about £7 billion more each year than it gets back. And it would be more without a rebate of about £3 billion, the result of the budgetary agreement negotiated by Margaret Thatcher in the early 1980s. Part of the negotiated rebate was sacrificed by the subsequent Labour Government, and the rest is under constant threat.
Those opposed point out that while some of the money we pay in comes back, paying money in and then getting it back in the form of EU finance may well be considered wasteful, only creating administrative costs. Moreover, how this money is spent is decided on the basis of priorities established at EU level, not by us.
Finally, reports of the EU’s own Court of Auditors show that EU Budget, over the years, has involved considerable misallocation of funds. The administration of the Budget is the responsibility of the EU Commission; and in the past there have been spectacular examples of corruption – notably in 1999, when, following an investigation, the whole Commission was obliged to resign.
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Discussion: The Treaty does indeed demand that the EU should not decide on matters that can as well, or more effectively, be decided at Member State level. However, subsidiarity is thought to be less successful in practice than in theory.
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Refuting the charge that EU membership means increasing centralisation of power in Brussels, supporters of membership place great emphasis on the principle of ‘subsidiarity’, and the linked principle of ‘proportionality’. ‘Subsidiarity’ – a term borrowed from Roman Catholic theology and now incorporated in the EU Treaties – means that problems should be dealt with at the most local level consistent with their effective solution: i.e. at a level “as close as possible” to those affected. ‘Proportionality’ adds that, if decisions are to be delegated upwards, the degree of centralisation should be proportional to the real gains in efficiency.
These principles are to be applied when any new EU measure is proposed. Although all draft EU legislation is supposed to include an analysis of conformity, those carrying out the analysis have not necessarily been entirely unbiased. There is also the actual historical record. Certainly, however, there is pressure for less legislation, and the record shows that increasing numbers of proposed measures are scrapped.
It is worth noting that the massive study by the British Government of the ‘Balance of Competences’ between the EU and the UK leads to the conclusion that the Balance of Competences/Powers is broadly correct in terms of the Treaties agreed unanimously by all Member States.
Since its formation as the “Common Market” in the 1960s, the EU’s sphere of activity has steadily expanded. The abolition of tariffs and quotas on internal trade was followed by the alignment of all tariffs on trade from outside, and the handing over of the responsibility to negotiate trade deals with third countries to the Commission. National agricultural and fisheries policies were replaced by the CAP and the CFP. National sales and purchase taxes were replaced by VAT, the coverage and rates of which are governed by EU Directives. The Single Market programme brought a huge increase in harmonising legislation, made possible by the Single European Act and the expansion of majority voting in the Council of Ministers. Added to this was the “social dimension”, which brought central regulation of employment and health and safety laws. The EU then moved into the fields of justice and home affairs, and even those of foreign policyand defence. Finally, the creation of the Euro brought into being a central core of countries which is not only on course to full economic integration, but will encompass more and more EU Member States as they meet the criteria for membership.
As against this, it is also worth bearing in mind the opinion of the British Commissioner responsible for the Single Market programme, Lord Cockfield, who attacked “subsidiarity” as a fraud. He argued in the House of Lords that it would merely be used as an excuse for cheating in the context of the Single Market. This, though, appears not to be the case.
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Fact: The leader of the Scottish National Party, Nicola Sturgeon, has indicated that if there were a “Leave” vote, the SNP might call for a new referendum on Scottish independence.
Discussion: A UK vote to leave the EU if followed by a vote by Scotland to leave the UK, would indeed break-up the United Kingdom. This possibility has been raised by prominent members of the Remain campaign, and is a risk. However, such a scenario could arise following a number of far from inevitable circumstances. The call for independence would only be credible if the UK as a whole voted “Leave”, while a significant majority in Scotland voted “Remain”. While opinion in Scotland is certainly more pro-EU than it is in England, the difference is not so great as to make such an outcome certain. Even if it occurred, there is little appetite for a second independence referendum in Scotland unless an SNP win was likely, and the economic circumstances were favourable. Indeed, economic developments, in particular the fall in the price of oil, have made Scottish independence a far less attractive proposition. A second referendum, even based on a desire to remain in the EU, might therefore not produce a majority for a break with the UK.
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Even if Scotland voted for independence, there would need to be a significant period of negotiation before the break with the UK could come into force. It is also by no means certain that Scottish EU membership would then take place, though this might be possible under one, very optimistic interpretation of international law on successor states. It is much more likely that an independent Scotland would need to apply for EU membership on much the same terms as any other candidate country, and that some other Member States who wish to discourage secessionist minorities could be awkward.
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