The debate has reopened some of the schisms in the Conservative ranks with Boris Johnson becoming the face of the ‘Leave’ campaign. Johnson has made a career of playing the jovial buffoon but beneath the bumbling exterior, is a man with the fierce ambition to ascend to the highest office in the land. Some commentators have questioned if his campaign for Brexit is a calculated gamble to position himself for a quick transition to 10 Downing Street considering David Cameron’s position would be untenable in the event of a vote to leave.
There has been many spurious claims made from both sides. A poster featuring Nigel Farage in front of hundreds of migrants with the slogan ‘Breaking Point’ caused controversy, especially since the photo was taken in Eastern Europe and none of the migrants came to the UK. The NHS has also become a political football, with both sides suggesting different effects on an organisation that has become a national religion. One of the rare funny and typically British moments in the debate came on the 15th June when a ‘Brexit’ flotilla was intercepted by those supporting the campaign to stay in the EU.
If there is a political slogan that sums up the core of what the debate should be, it would be “It’s the economy, stupid”. We have just came through the largest economic shock since The Great Depression and markets do not like sudden change. Since early June, the value of Sterling has fallen in the markets compared to where it was in the previous month and has recently rallied in the wake of favourable polling news. In the event of a ‘Leave’ vote being returned, it is likely that the trend of a falling currency could continue. A falling currency would mean that our goods and services would be cheaper to export abroad but would mean that the cost of imported products would be higher and potentially lead to inflation. The Bank of England Governor, Mark Carney, has also suggested that a move away from the EU could lead to the economic recovery stalling and a potential recession taking place.
Those who favour the Brexit can point to sleaze at the heart of the EU. There have been many reports of cronyism, fraud and MEPs claiming large amounts of expenses over the last 20 years. There have also been cases where small business has complained about being hampered by unnecessary red tape by EU regulations. There have also been reports the Common Agricultural Policy creating mountains of food and drink produce that goes unused, this is quite shocking when there are nations where people starve. This demonstrates that there is the need for reform within the corridors of power at Brussels.
Leaving the EU could open up political unrest in our own nation as Nicola Sturgeon, leader of the SNP, has not ruled out requesting a second independence referendum if a Brexit takes place. There are some SNP figures such as their former deputy leader, Jim Sillars, who does not think that Scotland should vote to stay in the EU since the organisation was less than accommodating during the 2014 independence campaign. Sillars is now on the fringes of the Nationalist movement and his view may garner some sympathy but most SNP supporters would see the opportunity for a re-run of the 2014 independence contest. It would be a tragedy if we left one alliance and couldn’t hold together the alliance that has held our nation together for over 300 years.
The issue of immigration has become a political football in the course of the EU debate. Sadly, this has not been very well handled by either side, it is not uncommon to find the lines blurred when discussing migration of EU citizens and those migrants coming from international conflict zones fleeing persecution. The Office of National Statistics point out that the latest unemployment rate in the UK has fallen to 5% and the number of people in employment has gone up to 31.6 million, over 460,000 more people than in early 2015. This suggests that there is enough work for everyone and we aren’t seeing our own citizens pushed out in favour of migrants.
Many of the EU migrants are young, have come from Eastern Europe and can be seen often in lower paid service industry, trades and retail jobs. There are also many who stay for a shorter time and go back to their own countries, a decision that is understandable when we see hi-tech automotive industry manufacturing and supply chain jobs having been created in Slovakia by VW, Peugeot-Citroen and Kia. They will be joined by the British icon, Jaguar Land Rover, who are making a £1bn investment in a factory which opens in 2018.
Citizens of our country have also taken advantage of the freedom of movement laws through buying a second home in some of the sunnier parts of Europe. Arguably, some of our citizens moving abroad have been less good at integrating than those EU migrants coming to our own nation.
The UK is the world’s 5th largest economy and a country which has been a major influence in the world. Our collection of islands sitting on the fringes of the Atlantic Ocean has achieved its status in the world by forming alliances with other countries rather than aiming for isolation. We are a member of all the top clubs such as NATO, G8, G20, the cornerstone of the Commonwealth, a major pillar of the European Union and possess special status as a permanent member of the United Nations Security Council. We are involved in all of these organisations because we are a nation that matters, always at the forefront of international diplomacy, talking quietly but wielding a big stick.
Critics of the EU have pointed out that Norway and Switzerland have their own trading arrangements to gain access to the Single Market without being members. What is often forgotten is that Norway is paying a substantial price for this privilege and doesn’t have a say in how the organisation is run. We can’t expect reform if we want to leave the club. It would also be naïve to assume that we would avoid contributing a nominal amount to any future bailout of Greece if we do achieve a competitive trade deal in a post-Brexit world as we can’t expect to take all the benefits from the relationship and not be expected to give something back. Ultimately, with previous Greek bailouts, the German taxpayers and other larger Eurozone nations did the heavy lifting in comparison to ourselves.
It is unlikely that the EU will be overly accommodating in helping us to achieve trade terms as favourable as those offered to other nations who haven’t been members as there would be concerns that the entire institution could unravel as other nations follow our lead. This would be quite concerning as we have had over 70 years of peace with former enemies now standing together as partners. In order to counter the prospect of an EU breakup, the remaining nations could also try and seek closer union much more quickly, which could destabilise the organisation.
The News International publication, The Sun, has come out in favour of Brexit. They point out the dangers of the UK becoming engulfed by a German dominated federal state. This does not seem likely as we have a two speed EU, with some states being part of the Eurozone and Schengen agreement and others, like the UK, who are not part of these treaties but still a full member of the European Economic Area and contributor to Defence.
There was a greater chance of the UK signing up for the Euro project back in the days of New Labour when figures like Peter Mandelson were close to the levers of power. Gordon Brown, then Chancellor of the Exchequer, famously introduced 5 economic tests for adopting the Euro:
1. Economic Harmonisation
2. Flexibility
3. Effect on Investment
4. Effect on Financial Services
5. Effect on growth and jobs
The first of these tests would require the UK economy to be moving in harmony with the Eurozone and economic cycles to follow a very close pattern. Scrapping Sterling would be a major blow for UK sovereignty and since the days of the New Labour project, the ship appears to have sailed on the issue of the UK adopting the Euro, especially in light of the recent global financial crisis. Maintaining the status quo of EU membership and our own currency has also encouraged inward investment and our Financial Services industry is still a major motor of our economy.
It is fair to say that the European Union is not a universally popular institution in the UK. For many of us, we would only ever identify ourselves as European whenever the Ryder Cup is being contested and do not feel the same pride at seeing the European Union flag. During the debate, neither side can claim to have covered themselves in glory, with many scare stories drowning out positivity. The UK leaving the EU and a subsequent weakening or crumbling of the organisation would be greeted with glee in Russia, as the Kremlin would view it as an opportunity to exploit divisions among each nation state and seek to regain influence in their “near abroad”.
There seems to be an unnerving push to leave the EU without a real understanding of the implications, almost as if there is a determination to deliver a vote that says “a plague on all of your houses”. Perhaps it would’ve been easier to have phrased the question as whether we should break our ties to our largest trading partner where there is freedom of movement of people, goods and capital. Our status as a major world economy affords us the opportunity to help shape this organisation in a better direction for the future. The EU is not what makes Britain great, but it is a major contributing factor to our global standing, leaving is likely to make us look more diminished in the eyes of other global trading partners.
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