Friday, 17 June 2016

“False weights and measures”? -the EU referendum- weighing up the arguments- full version

“The Lord detests dishonest scales, but accurate weights are his delight.” (Proverbs 11:1)

I write this article as a Christian and a democratic socialist. I am well aware there is more than one Christian and socialist view over the EU referendum. However, as a Christian I do believe biblical principles should inform the way we decide our vote.

According to some recent opinion polls the country will be voting to leave the EU on Thursday. However, if so I believe they would be doing so based on myth rather than fact. It's a classic case of adding 2 and 2 and making 5. People see more migrants. At the same time they see their pay stagnating, public services over-stretched and struggling and a housing crisis with rents and prices out of the reach of so many. They understandably assume these problems must all be linked to excessive immigration. But an examination of the actual facts shows that these problems all have entirely different causes and whilst immigration makes some of these issues more challenging it actually offers us the means to tackle some of those problems.

Unfortunately our own Prime Minister's actions have only added fuel to the Brexit fire and if we vote to leave on Thursday this will be his lasting legacy. Brendan Cox, the widower of the tragically murdered MP Jo Cox has said his government's migration policy is "a masterclass in how to get the crisis wrong; set an unrealistic target [keep immigration below 100,000], miss it, report on it quarterly and in doing so show a complete lack of control heightening concern and fanning the flames of resentment." At the same time his government's policies have only exacerbated the economic problems that have understandably got people so incensed in the first place; austerity-driven cuts to our public services, further reducing our affordable housing stock, cutting benefits to the working poor and doing nothing effective to deal with issues like zero hour contracts. Is it any surprise that so many people have only become reinforced in their beliefs that the country can't cope with all these migrants who, even if they didn't cause these problems, are only making matters worse? And is it any surprise that they want to give him and all our establishment politicians a bloody nose in the referendum by voting out? It's the one thing they feel they can do to control their own future and improve their lot. Sadly in doing so they are only likely to make their lives a whole lot worse. It's almost as if David Cameron was cleverly engineering the whole thing so that we leave the EU.  Yet remaining in the EU is one of the few things he passionately believes in! Sadly we have a Prime Minister who is brilliant at presentation but very lacking in the more important qualities of judgment and wisdom. Yet he has those in spades compared to the man who will very probably replace him if we vote to leave on Thursday.

It does not help that so much of the referendum debate has been based on spin and distortion of the available evidence; “false weights and measures, causing many to vote completely disregarding any evidence and just go with their “gut” and vote out. People are understandably sceptical of relying on any of the so called evidence, with most of it channelled through partisan politicians and papers. Consequently, many will vote completely disregarding any evidence and just go with their “gut.” But in such complex decisions like this “gut instinct” is a very poor guide. This is not some form of higher wisdom. (And for Christians should not be confused with the promptings of the Holy Spirit!) Instead, it is nearly always determined by irrational thought processes, arising from one’s own limited direct experience and the subconscious influence of media messages and views of family and friends. As a guide to making the right decision you might as well just toss a coin.

God has given us all an amazing gift- our reason- and we should use that gift responsibly. Properly using any gift requires some effort. And that is certainly true of using the gift of reason when deciding how we vote. This should involve looking at and weighing up the evidence.

Some might moan that politics isn’t really their “thing.” Some are into politics, some are into football, some gaming, etc, etc. Well yes of course we all have different interests, but considering how we vote is not a hobby. It is a gift for which our ancestors fought and died. As citizens of this country we have a duty to exercise that gift responsibly. To do that we do need to make an effort, at least at election times, to explore the issues on which we are called to vote. This is especially so in the context of a referendum which could determine the direction of our country not just for five years but for generations.

I myself struggled at one point to decide whether it would be better if the UK was in or out of the EU. I therefore (somewhat obsessively my wife will tell you!) spend a lot of time looking at the evidence surrounding the issues, particularly from independent sources. This article is the fruit of my rather amateurish research!

 In looking at the evidence concerning the EU referendum as a Christian (and consequently a democratic socialist) I would suggest we should be asking the following key questions:

·         Will Britain remaining in or leaving the EU be more likely to extend Kingdom values (not United Kingdom values but Jesus Kingdom values!) both here and in the wider world, i.e. what will most likely best promote peace and justice, especially for the poor?

·         Will Britain remaining in or leaving the EU be more likely to bring prosperity to people generally here (and again especially the poorest) and in the wider world?


“Blessed are the peacemakers.” (Matthew 5:9)
 “If it is possible as far as it depends on you live at peace with everyone.” (Romans 12:18)

For 70 years Western Europe has enjoyed something it had never experienced before. Peace. Or at least the absence of war. (If we ignore our three Cod Wars with Iceland, all of which we lost!)  For my generation war is something that only happens elsewhere in the world. But for hundreds of years it was part of the natural state of things in Europe. Most historians would agree that one of the key changes in Europe that has ensured that lasting peace is the major European nations all working and freely trading together through the European Union and its predecessors. Agreeing the rules by which we work together can be messy and difficult and requires compromises. But it is far better to be exchanging angry words with each other than exchanging bombs and bullets. If we leave the EU we risk the domino effect of other countries following and then the collapse of the whole European project. This is something that other European leaders are petrified could happen, given the growing nationalist sentiment in so many European countries. It is also something that campaigners like Nigel Farage are actually aiming to bring about. But be careful of what you wish for, because if the European Union fell apart what would fill the vacuum it leaves? The risk is that once the European nations were no longer working together the natural order of things would be restored; division and war. Indeed looking back at history the last time Western Europe was infected by a virus of nationalism it did not end too well.

Many also believe that leaving the EU could cause further threats to peace even closer to home. Although Britain has been free from military war on its shores over the past 70 years, long before Islamic terrorism we had known sectarian violence and killings through “the troubles” of Northern Ireland. Particularly through the efforts of our then Prime Ministers John Major and Tony Blair a cross-community peace agreement was reached which has so far spared my own children’ generation from the fear of Irish terrorism that clouded my youth. Those two Prime Ministers have recently warned us of the threat to that peace that Brexit would pose. Part of the more benign environment in Northern Ireland is the free flow between and lack of borders with Southern Ireland. Brexit would mean the South inside the EU and the North outside. The genuine fear is that Brexit would inevitably lead to a re-imposition of Irish border controls since it would be the UK’s only land border with the EU. This would be a worrying sign and reminder of the sectarian tensions that still bubble under the surface in Northern Ireland, an opportunity the die-hard remnant of terrorists would be only too keen to exploit. This is one of the reasons why the people of Northern Ireland are predominantly in favour of remaining in the EU.

I wouldn’t claim that leaving the EU would risk a return to England’s wars with its auld enemy the Scots. However, it is likely to bring division with and divorce from Scotland. The UK leaving the EU is very likely to prompt a new Scottish referendum (The effective position of the dominant party of Scotland, the SNP). With the Scots overwhelmingly in favour of membership of the EU the UK leaving is likely to tip the balance in favour of independence and bring the end of the United Kingdom.


“Woe to those who make unjust laws, to those who issue oppressive decrees, to deprive the poor of their rights and withhold justice from the oppressed of my people…” Isaiah 10:1-2
“This is what the Lord Almighty said: “Administer true justice; show mercy and compassion to one another. Do not oppress the widow or the fatherless, the foreigner of the poor.” Zechariah 7:9-10

One of the main arguments put forward for Brexit is the way unelected officials of EU undemocratically impose oppressive laws on the UK, tying us up in its sticky red tape. How can we ensure our laws are just and appropriate for the people of the UK when 75% of our laws are imposed on us in that way?

But does this argument stand up to the evidence? Does the EU control that much of our laws? And does the EU instead tend to encourage just or unjust laws?

       The way the EU makes laws, although complicated, is not as undemocratic as is widely thought, certainly compared to UK’s own law making process. Yes EU laws are proposed by unelected Commissioners, but they are reviewed and changed by a democratically elected EU Parliament who in fact appoint the Commissioners. The ultimate decisions on the main EU laws to be implemented are made by the EU’s Counsel of Ministers, made up of the elected leaders of the EU nation states. The fine detail of those regulations are then drafted by EU civil servants just as UK civil servants do for most UK laws. Bear in mind that the UK’s own law-making process is hardly a paragon of democracy. Our laws are currently being made by the leaders of a party who received only 37% of the popular vote, bankrolled into office by rich individuals and corporations and their legislation is then reviewed by an entirely unelected second chamber.

2     We have far more control over EU laws than is recognised. We do lose some control over the areas of law covered by the EU. We are only one of 28 EU states in the EU so we do not always get our way. However,  since 1999 the UK government only lost the vote on 3% of EU laws passed. In some areas of EU law we have our own veto and we have opted out. For example, the disastrous Euro and the completely open borders of the "Shenghem” agreement. The latter means we are able to prevent illegal immigrants through patrolling our borders from France and we can even check the credentials of  EU citizens seeking to enter Britain.  In other areas it is true we have no veto. In those areas the EU law does take precedence over any inconsistent UK law and can then be enforced by both our own courts and the European Court of Justice. However, I would suggest the control we give to the EU over a limited range of our laws should be more accurately seen as a pooling of sovereignty with other European nations. Through our own elected Ministers and MEPs we do have influence over those laws and in many cases in fact they have been able to drive forward rules and standards that have benefited the whole of Europe on issues like climate change and trade conditions. Contrast this with Switzerland, Norway and Iceland who are not EU members but to get access to the valuable single market have to abide EU rules over which they have no control whatsoever. Vote for Brexit and this could be our own fate. If we want some sort of access to the free single market we too would have to accept many of the EU’s laws yet have no control over them. So in terms of control and democracy by leaving we could actually find ourselves in our worse position.

3    Through EU legislation we can act much more effectively to tackle important global issues. The areas of law where we pool our sovereignty with other European nations are overwhelmingly those where it is in our national interests to work together with other nations to tackle issues that cross borders and where a co-ordinated wider approach is needed. These include climate change, international tax evasion, terrorism and other international crime and of course fair trading conditions across the whole of the single market. The latter includes issue of basic employment rights and consumer protection and wider global trading conditions. Pollution and international crime recognise no borders and by working with other European nations we can tackle them more effectively. Furthermore, by pooling our sovereignty with other EU nations in tackling international issues like international trade and climate trade we have a much stronger voice and clout than if we were to speak alone. 500 million speak louder than 65 million. An irony of the damage done to our own steel industry by cheap Chinese imports was that through the EU we could have done much more to put up tariffs on these imports if it hadn’t been for our own UK government blocking such measures. There will be other major global issues and threats in the future which we can tackle far more effectively by working together across Europe through the EU. Then through the louder voice of the EU we can seek to influence the whole world. The most obvious such issue in the foreseeable future will be tackling the rise of the robots that within the next generation could destroy most of our jobs.

       The vast majority of our laws are made here in the UK and not by the EU. Nothing like 75% of our laws are made in Brussels. How much is very difficult to work out. According to the House of Commons library about 15 to 50% of our laws have been influenced in some way by EU law. However, not all laws are equal in their impact on our everyday lives. Much of the EU’s laws are very specific in regulating terms of trade in a myriad of different industries. This is to try to make the single market operate in a fair way, to ensure a level playing field for producers, transparency and safety for the consumer and public. Some of these rules may seem annoyingly pedantic and unnecessary to producers, e.g. how particular products have to be packaged or described. However, many EU rules have no real impact on the wider public. Of those that do have a wider impact many of the EU’s laws are actually beneficial and make life better and fairer, often protecting ordinary folk from injustice and exploitation by the rich and powerful. For example, it is EU law we have to thank for the first serious health warnings on cigarette packets (against which tobacco companies lobbied hard). In fact, much of the rules that improve the safety of our environment and consumer products come from the EU. Indeed, at this very moment the Supreme Court are forcing our government to comply with EU law by taking action to reduce our air pollution (which kills thousands of innocent victims every year). And through the European Arrest Warrant the EU improves access to criminal justice, allowing us to quickly grab and return to the UK criminals absconding prosecution here. (Note by the way if you don’t like some of the decisions of the European Court of Human Rights, eg over prisoner’s voting rights, that has nothing at all to do with the EU, whose supreme court is the entirely separate European Court of Justice).

5     Virtually all the unjust laws imposed on us in reality come not from the EU but our own UK government. The EU actually has no or virtually no power over most areas of law making that effect our everyday lives (as long as we treat EU nationals equally). Our health service. Our education system. Our welfare state. Our housing policy. Our taxation policy (save for VAT). Our armed forces and when and whether we go to war. The sort of laws that God sees as unjust are not the petty fogging red tape that the EU sometimes produces but rules that oppress ordinary folk and especially the poor, depriving them of justice, a roof over their heads and decent standard of living, rules that allow ordinary folk to be exploited by the rich and powerful. Draw up a list of the recent laws and decisions by government that you find most unjust. My own list would include; the illegal invasion of Iraq, the bedroom tax, selling off large parts of our public services to be run by private companies leaching billions in profits out of public funds, the growing destruction of our social and affordable housing, oppressive and arbitrary welfare benefit sanctions, reductions in welfare benefits causing poverty and homelessness, massive restriction of legal aid and access to civil justice, letting the rich get away with widespread tax evasion and avoidance,  increasing taxes the poor cannot avoid whilst reducing wealth/income tax for the rich. One thing all these have in common apart from their injustice is their origin; our UK government, because that is where the vast majority of the laws that affect our every lives are made. (In fact I wonder if the EU really did have as much control over our own laws as some people think whether we might have avoided some of these injustices!)

6     In employment law the EU provide foundational underpinnings which our own government cannot remove even if it wanted to. These include minimum paid holiday and maternity/paternity leave, rights of agency workers and maximum working hours. If you don’t think these would be threatened if we left the EU, then look no further than our current employment minister and Brexit supporter Priti Patel. She has advocated a bonfire of EU imposed employment rules under the guise of freeing us from expensive “red tape.”

7     We would not help put right any injustices done to poorer nations by leaving the EU. Yes the EU itself certainly can be criticised for causing injustice and oppression of the poor. Many rightly have been appalled with the treatment of Greece and other poorer Southern European countries over the Euro bail out forcing extreme austerity on them.Yes that was very bad but not being a member of the Euro this has no impact on the UK and we have no influence over it. And whether we leave or remain it will alleviate none of the pressures on these countries. In fact, most economists would say it would only make them worse because of the potential economic downturn that our leaving could trigger throughout the EU and even the global economy. (Fears of the effect of a potential Brexit on the world economy have already been seen in the global stock markets in response to polls putting to Brexit). The EU could also be criticised in its response to the migrant crisis from the Middle East. However, it did not cause the migrant crisis which would be just as bad if not worse if the EU did not exist. (The open borders of the rest of the EU did at least enable Germany for example to give sanctuary to over a million refugees). It would certainly make no positive difference to them if we weren’t a member of the EU.

      The threat from something like TTIP would be greater if we left the EU.  Many on the left (like myself) have been quite exercised by TTIP. This is the proposed trade deal between the USA and the EU. As currently drafted it could allow multi-national countries who have bought into government contracts, eg with the NHS, to sue our government if the government tried to end those contracts. If this happened this would be a most alarming and undemocratic loss of control to private interests. However, many European countries including France have voiced strong objecting to these provisions. The reality is TTIP as currently drafted is virtually dead in the water. A greater fear I would suggest is of something similar happening if we left the EU, (as John McDonnell has recently pointed out). On that scenario a right wing government here (probably headed by Boris Johnson) would be so desperate to do trade deals with anyone that whatever objections Europe has to such empowerment of the multinationals he would happily sign up to whatever terms the USA wanted to impose as long as it gave us “free” trade. He has after all said that he himself has no objections whatsoever to TTIP (and ditto our current Prime Minister).

We have to ask what is democracy? Democracy by definition surely always involves surrendering some control over our lives to some political authority for the greater good of the community. On the lowest level our borough council has control over certain matters, meaning that eg we can’t just park anywhere we like in our town centres without incurring a fine or paying a parking charge. At another level our county council controls certain things, meaning that eg we can’t just lower the pavement outside our house to create a driveway for our car without getting their permission. Above that our national government controls other matters, meaning that eg we can’t drive down a motorway at 120 mph without getting banned from driving. The EU then is a fourth level of government (or fifth if you are Scottish or Welsh) which has control over certain other things, meaning eg that if we’re a car manufacturer we can’t make cars that don’t comply with certain emission standards (as ultimately VW found out!)


“So God created mankind in his own image…male and female He created them. God blessed them and said, “Be fruitful and increase in number; fill the earth and subdue it.”” (Genesis 1:27)

“…there need be no poor people among you, for in the land your Lord your God is giving you to possess as your inheritance, he will richly bless you.” (Deuteronomy 15:4)

God wants mankind to be blessed by and be fruitful in the world He has given us. In other words He wants us to be prosperous. He also wants the fruits of prosperity to be shared fairly so that the poor are provided for.

Are we as a nation and as individuals likely to be better off or worse off by remaining in or leaving the EU? And how particularly will this this impact the poorer parts of our communities?

Cost of contribution to the EU

Our contribution to the EU costs us “£350 million a week”. Or at least that’s the Leave campaign’s slogan painted across their buses. That would be the equivalent of £18 billion a year, money the Brexiters say we could invest instead in our struggling NHS. The UK Statistics Authority has however told them that this is a misleading statement. In other words, it is a lie. According to the Institute of Fiscal Studies when you take into account our rebate and other monies coming back to us the true cost is about £100 million a week or about £6 billion a year. That’s a not insignificant sum but it's only about 0.3% of government annual expenditure. So the real question is whether we get value for money for our £6 billion annual fee? I would suggest we get excellent value.

Cost/benefit of immigration in or out of EU 

The alleged cost and burden of immigration on the face of it is a strong argument in favour of leaving the EU. In 2015 net immigration into the UK was 1/3rd of a million, about half of which came from the EU. That is the equivalent of a medium sized city like Leicester. At this rate within 10 years the UK’s population would have increased by over 3 million.  And this figure would further escalate when the likes of 76 million Turks join the EU. 20 years ago before the accession of the Eastern European EU countries net immigration was well below 100,000 a year. And this remains David Cameron’s stated goal for immigration levels. It is argued that the current high levels of immigration place a huge demand on our already overstretched NHS, education system and housing stock. It is further argued that such high numbers of immigrants competing with us for jobs creates unemployment and depresses wages, particularly for the poorest. Because of the EU’s free movement rules the government has no control whatsoever of immigration from the EU and therefore effectively cannot control immigration overall or plan for its demands.

But is EU immigration actually a burden on the UK?

It depends on how you look at it. In economic terms actually EU immigrants through their taxes put more into the UK government coffers than they take out in terms of benefits they receive or services they use. They are a £2.5 billion a year net contributor. This is because most EU migrants are younger, fitter, better educated and more economically active than the average UK citizen. They nearly all just come here to work.

Furthermore, most EU migrants come to the UK already trained and geared up for work. This saves the UK billions in education and training, especially in specialist fields like medicine, science and engineering. At the lower end of the spectrum EU migrants also come prepared to do essential jobs that UK citizens are often reluctant to do, such as care workers or farm labourers.

In terms of our NHS and care services per person EU immigrants actually place less demand than the rest of us because they are young and fitter than the average UK citizen. In fact, you are far more likely to find EU immigrants caring for you or your family in hospitals and care homes than being cared for. Although they make up 4.7% of the UK population they account for 5% or our nurses, 10% of our doctors (already trained of course) and about 13% of our care workers. Again they contribute more than they take out.

Where EU immigrants do however increase the burdens are in our schools and housing. Interestingly recent research has shown that on average areas with higher immigrant populations actually tend to have slightly better educational attainment. However, it is undoubtedly the case that in many areas high numbers of children from EU immigrants have placed great strain on class sizes and some of our schools are struggling to cope. Also it is undeniable that in higher areas of immigration EU and other immigration has only increased demand for housing thereby further exacerbating the level of rents and property prices and stretching even more thinly our now quite meagre stock of affordable social housing. Note however that they actually take up slightly less public/social housing per person than average UK citizen- about 3% less.

However, the question must be asked since the government is £2.5 billion a year better off from the taxes of EU immigrants why is it not re-investing that revenue to support those areas bearing this burden by increasing expenditure on schools and public housing to meet the increased demand? That is a fault of our UK government not the EU and not the migrants. Since 1979 successive governments have recklessly allowed our affordable public housing stock to dwindle and since school rolls started picking up government has also failed to invest in our primary and secondary education services. We are currently suffering from a very unfortunate combination; demands of a growing population fuelled by immigration and a right wing government that just leaves everything to the markets without sensible planning and investment. We have the means to meet the demands of immigration on our services and housing but the government are failing to use them.

Does EU immigration actually create unemployment or reduce wages?

Inevitably there are winners and losers here. There are instances where EU immigrants deprive UK citizens of jobs or undercut their wages or  self-employed earnings. However, there are also instances where EU immigrants’ activities have actually created jobs for UK citizens or increased their wages. EU immigrants for example are on average better educated and significantly more likely than UK citizens to start businesses employing others. The overall picture therefore is actually neutral. Unemployment has fallen and employment has risen since the recent increases in EU immigration. In the boom times of 2003 just before the start of significant EU immigration our unemployment rate was 5% and the numbers in work 28 million. In 2015 after the EU immigration surges our unemployment rate was still at 5% and the numbers in work had increased to 31.5 million. There is therefore no evidence that in net terms EU immigration has increased unemployment. Wages continued to increase at a very healthy rate during the original spike in EU immigration from 2004. It is true that in recent years wages in real terms have remained much lower than they were before the crash. However, the increase in EU immigration since 2013 has not seen wages fall further. In fact, wages have gone up slightly. Recent research has shown that as an average across all income groups including the very poorest in net terms recent EU immigration has very slightly depressed wages but by the equivalent of 1% over 8 years. For a low paid worker earning say £8 per hour this is the equivalent of 1p per hour. In other words, in reality overall EU immigration has had no effect on wages one way or another. What however has been a drag on wages is the post-crash slump in wages that has still not recovered. But this has been an almost global experience.

Leaving the EU, will solve our immigration problems won’t it?

No. Even if we left the EU this would not magically cure any problems we have with immigration Whilst leaving the EU’s free movement zone would probably reduce net immigration, but probably not  by that much, probably by a few 10,000s. Immigration to the UK would still almost certainly remain high by historical standards for the following reasons:

  1. Even now most of our immigration comes from outside the EU. Until 2013 net immigration from outside the EU was double or treble that from the EU. Even now more migration comes from outside the EU. We could control and reduce this in theory but the government chooses not to for a number of reasons, including that many of those coming here are actually needed to do jobs here in our public services and private industries. 
  1. We have an ageing natural population and a reducing natural workforce to sustain them. We need a significant supply of labour from overseas to help care for our elderly and do other jobs which not enough of the natural population either want to do (eg farm labourers) or have enough right skills to do (eg certain scientific/engineering jobs).

  1. The end of free movement would be a two way street. 1.3 million Britons currently live in the EU taking advantage of free movement rules and giving them equal access to healthcare and benefits overseas, eg older folk enjoying their retirement in the Spanish sun. Our exit from the EU is likely to mean many of them returning here when they lose their own benefits of free movement and equal benefits. By definition many of these returning ex-pats are going to be economically quite inactive and likely to be heavier consumers of health and care services. (Contrast this with the Eu immigrants we are likely to be turning away who by and large are younger, healthier and working).

  1. There is likely to be a significant increase in illegal immigration. Currently with the assistance of the French authorities we are able to police our border from abroad in Calais. French ministers have already warned us that once we leave the EU they are unlikely to continue to maintain our policed border in France.

But won’t the immigration levels just increase if we remain, especially when Turkey joins?

Turkey and other new countries are not going to be joining the EU any time soon. They have numerous conditions that they have yet to fulfil before they could even be considered and even then it’s within our control. We have a veto over them joining.

Immigration levels from the EU may well reduce in the near future for a number of reasons. Most who have studied their trends believe they will. There was an initial spike in immigration from Poland and other new joiners in 2004 which gradually reduced and the same may be true of the more recent joiners which prompted the spike since 2013. The wider EU economy held back by the problems with the Euro may well yet start growing more so that EU migrants may become more evenly distributed. David Cameron’s deal to restrict access to welfare benefits for new immigrants should also help reduce numbers. It is therefore unlikely that EU immigration will continue at current rates, let alone increase further.

Cost/benefit from international trade in or out of EU

The EU gives us free access without trade tariffs to the biggest single market in the world of over 500 million people. It is the only market right in our doorstep and 44% of our current trade is with the EU. 3 million UK jobs are directly linked to it and many more jobs indirectly supported by those jobs. Even if your job apparently has nothing to do with it you’re effected by our EU trade because money coming into the UK through trade with the EU circulates around the economy like oxygen carried in our blood. It also affects the price we pay for goods and services we buy from Europe. Just as an example car manufacturers from outside of the EU single market typically pay tariffs of at least 10% to export to the EU (and that’s before the additional red tape that outside exporters have to get through to enter the EU.)

Every single serious economic organisation who has looked into has advised that if we leave the EU the negative effects on international traditional would make both the government and most of us significantly worse off than if we remained. The list of the organisations giving these warnings is as lengthy as it is impressive, including: the Treasury, the Bank of England, the Institute for Fiscal Studies, the London School of Economics, the National Institute for Economic and Social Research, the OECD and the IMF.

In fact, 90% of economists who have analysed the data and projected the likely outcomes have all come to the same conclusion. The outcome will be either fairly or very bad for our national and individual incomes. This is expected to result in an eventual overall fall in the income the UK generates each (Gross Domestic Product) of £26 to £55 billion a year. These losses are expected due to a combination of factors resulting from leaving the EU single market, including increased costs of imports, big reductions in foreign direct investment, reduced productivity and reduced exports. Note the implications for international trade go beyond the EU as the EU has trade agreements with 50 other countries from which we would no longer benefit if we left the EU.

Likewise the vast majority of larger businesses and employers have warned that leaving the single market would be damaging to business and jobs and many like Airbus, Siemens and Nissan and numerous finance houses have warned they expect to reduce investment in the UK if we left the EU.

 As a knock-on effect the IFS also estimates that the UK government itself will lose tax revenues of £20 to £40 billion every year. Our current government in contemplating how it might meet that shortfall is already having to consider significant reductions to some of the biggest areas of government expenditure; the NHS and state pensions, or significant tax increases.

An additional loss which may be even harder to quantify is the expected damage to our scientific research. This is expected to suffer significantly from leaving the EU because of the loss of substantial direct EU investment in science (about £8 billion over 6 years, far more than our own government invests) and the reduction in invaluable knowledge collaboration with leading scientists throughout Europe. The losses resulting from this go beyond the economic and for example could hamper the development of or our access to new drugs which could relieve suffering and save lives. It is not surprising therefore that 83% of research scientists oppose Brexit (and only 6% support it).

But won’t the costs just be borne by the elite? Won’t most of the country,
especially the poorest, be better off?

No. The consensus is that the economic cost of Brexit would not be just born by the rich. The pain would be evenly shared across the income distribution – every group would lose by
broadly similar proportions including the poorest. Those in the middle would lose slightly more than others.
The projections vary depending on the trade deals reached by the UK post Brexit. However, the average forecast is that the average household by 2030 would be about £4,300 a year worse off than if we had remained in the EU. Many economists are concerned that the negative economic effects of Brexit could well lead to another recession. Recent experience tells us that in a recession it is always the poorest who suffer most for two reasons; they have very little “fat” that can be trimmed and they rely most heavily on state support which is likely to be significantly reduced because of falling government revenues. We thought our welfare state and public services were already suffering badly enough under our government’s austerity cuts. It hardly bears thinking about just what state they will be in after a further £30 billion of post Brexit cuts.

Don’t the EU need us more than we need them?
So surely the EU will just do a trade deal with us?

No and no.
It is quite true that we import more from the EU than we export but that does not mean they need us more than we need them. This is one of the common false weights and measues of the Leave campaign. You need to look at it on a country by country basis. 44% of our exports go to the EU. But no other EU country exports more than about 10% of their exports to us. As a country therefore we have more to lose than they do.  In addition, French car makers for example would no doubt be very happy to take a share of our current car exports to Germany and both those countries will keenly look for their financial services to remove ours from its current pole position. Let’s be clear no one is suggesting we won’t still be exporting goods and services to the EU it’s just that it will become harder and more expensive and therefore less successful and less profitable with all that entails for jobs and incomes here.

There is not a single country in Europe that has secured a free trade deal with the EU that has not had to accept free movement of people and the uncontrollable immigration this can bring and other key single market rules and also pay a significant contribution to EU funds. This is a fundamental principle of the European single market. This is exactly the situations that Norway and Iceland finds themselves in, whilst at the same time having no say at all over the single market’s rules. Switzerland, which has a partial free trade deal with the EU, recently attempted to test the EU’s resolve on free movement by proposing to restrict EU immigration. It was told that it would lose access to the single market and has had access to the EU scientific community revoked (still only partially restored). If we wanted to do a free trade deal we would have to accept free movement and since this is the very reason we would have left the EU that is just not an option.
Importantly, the EU will inevitably feel it has to punish us for leaving it if it is to try to halt a domino effect of other countries following suit and the whole union falling apart. We would get no preferential treatment. In fact the opposite would be true.

But who cares about trade with Europe anyway as we can just do our own trade deals with the rest of the world can’t we?

We should care because the European single market is the only market right on our doorstep. Other major markets- USA, India, China, Southeast Asia- are much further away and depending on the industry can involve significant additional travel and logistical issues. Our Chancellor has tried to cosy up to China and look where that’s got us? Cheap Chinese steel dumped to the ruin of our own steel industry. If we leave the EU undoubtedly new Prime Minister Boris will be desperate to deal whatever deals he can with other countries. However, he will be starting two goals down. First, the EU already has trade deals with 50 other countries. By leaving the EU we will automatically lose the benefit of those trade deals which initially will mean a reduction in our trade with and increased costs of imports from many other countries. Second, once it’s eventually agreed them (and these trade deals usually take many years to negotiate) it is unlikely that the UK will get as good a deal as the EU (let alone a better one) for the simple reason that we will only be speaking with the voice of 65 million rather than 500 million. We would therefore be a much smaller market for other countries than the EU is. This is also a reason why in countries where the EU doesn’t have a trade deal like the USA we are going to be very much behind the EU in the queue .

But if we leave won’t reduced red tape mean a big economic benefit?

An economic benefit to whom? Be vey wary of rich right wing politicians who cite the cutting of red tape as an economic benefit. Much of the so-called EU red tape are rules and restrictions that actually benefit and protect the ordinary citizen of this country; a whole raft of employment, consumer and environment protections. No doubt there are a few rich unscrupulous businessmen who would find themselves better off if they were freed from such “red tape”. However, most of us would be rather worse off for this. Other rules and restrictions are things we would have to comply with anyway if we wanted to do any trade with the EU (even with tariffs) and others still are the sort of rules and regulations that we would devise for ourselves anyway. There really is very little saving to be had from reducing EU red tape.

… but what else has the EU ever done for us?
Oh nothing apart from:

·         cleaner beaches and rivers
·         cleaner air
·         lead free petrol
·         restrictions on landfill dumping
·         a recycling culture
·         cheaper mobile phone charges (including now no roaming charges)
·         cheaper air travel
·         improved consumer protection and food labelling
·         a ban on growth hormones and other harmful food additives
·         better product safety
·         single market competition bringing quality improvements and better industrial performance
·          break up of monopolies;
·         Europe-wide patent and copyright protection
·         no paperwork or customs for exports throughout the single market
·         price transparency and removal of commission on currency exchanges across the eurozone
·         funding to areas hit by industrial decline
·         freedom to travel, live and work across Europe
·         funded opportunities for young people to undertake study or work placements abroad
·         free access to European health services
·         labour protection and enhanced social welfare
·         smoke-free workplaces
·          equal pay legislation
·          statutory holiday entitlement
·          the right not to work more than a 48-hour week without paid overtime
·          strongest wildlife protection in the world
·          improved animal welfare in food production
·          EU-funded research and industrial collaboration
·          EU representation in international forums
·          bloc EEA negotiation at the WTO
·          EU diplomatic efforts to uphold the nuclear non-proliferation treaty
·         the European arrest warrant
·         cross border policing to combat human trafficking, arms and drug smuggling
·         EU-wide counter terrorism intelligence.

 But can we trust economists?

Didn’t they say similar things about the dire consequences for the UK if we didn’t join the Euro? Look what a mess that’s turned out to be so thank God we didn’t listen to these so-called experts then.  No they didn’t all say we should join the Euro and few said there would be dire consequences if we didn’t. Economic opinion was very much divided over whether joining the Euro would be good or bad for the UK, which is why Gordon Brown wisely took the decision, supported by many leading economists, not to join the Euro. This in fact has left us in the ideal economic situation in a very much less than ideal Europe; we benefit from full access to the single market without being dragged down by the disastrous Euro.

But didn’t they didn’t predict the crash so why should we listen to their predictions now? No they didn’t the economic crash but this is another false weight and measure. With Brexit the economists are trying to predict the outcome of a known event ie the UK leaving the EU. With the crash the economists did not know about the events that caused the crash ie banks overextending themselves through subprime mortgage lending. These were like millions of little micro events happening under the radar. Very few people were conscious of this on a broader level (therefore the few who were aware made an economic killing out of it- see the film “The Short”) Economists were not aware of these micro events going on and were not paid by anyone to advise about what the effects of them. If economists had been told about what was going on with subprime mortgages then no doubt many of them would have predicted the banking crash and economic recession that followed.

But isn’t all too speculative? No one really knows what will happen next year, let alone in 10 years

Yes it is speculative. All forecasting, whether it’s the economy, sports results or the weather is speculative, but expert professional forecasting takes all the known data about past performance and conditions and then makes reasonable assumptions to predict what will happen. Now it is true that no one last season would have predicted that Leicester City would have won the Premiership, having so narrowly escaped relegation the previous season and having so little financial muscles compared to the big boys. However, this is very much the exception that proves the rule. Since the start of the Premier League 23 years ago there have been only two seasons when teams outside the London and Manchester “big boys” have won it.

Take e.g. the Treasury’s long-term economic analysis of Brexit from the EU. It arrives at a central estimate that it would ultimately lower UK economic output 6.2 per cent, amounting to an average annual cost to British households of £4,300 a year compared to if we remained in the EU. This central estimate is based on the UK securing a free-trade-in-goods relationship with the EU such as the one that has almost been agreed with Canada. It is extremely unlikely that the UK would do any better than that unless (like Norway & Switzerland) it were prepared to accept free movement, which is unthinkable currently.

It is quite true to say that no one can be confident that we will lose out by precisely £4,300 a year. Almost certainly that figure will be wrong because yes of course there are lots of variables which are likely to alter the eventual outcome. It could be rather less. But equally it could be rather more. The figure calculated and quoted really is just a gage, an indicator that things are likely to be seriously worse rather than an expectation that it will be exactly that number.

This is why you need to take a broad range of economic opinion rather than just one. However, with Brexit pretty much whichever serious economist or economic organisation you go to (the LSE, the IFS, the IMF etc etc) all say more or less the same thing. The likely longer term consequences of Brexit are going to be somewhere between fairly or seriously bad for the health of the UK economy, for the UK government revenues and for our own individual pockets.

To argue that you can’t listen to the economists’ predictions because they can’t be at all certain about the precise number is like a man ignoring his doctor’s advice to lay off the hamburgers and fizzy drinks, because he can’t tell him how heavy you will be in 10 years’ time or whether and when he will have a heart attack. No he can’t precisely predict those things but he can be pretty sure that if you keep up the hamburgers and fizzy drinks you will be rather fatter in 10 years’ time and at serious risk of a heart attack or other health problems.

Some will say instead of listening to these so called clever experts they base themselves instead on their own individual experiences (and their gut instincts). However, the problem with that is that each of our own individual experiences are very limited. We have too narrow a picture. We cannot see what is happening beyond our own individual little hills. And this is partly why our gut instincts in complex matters like this are an extremely poor guide.

The data that the economists base build their predictions on is data from real life, real life people and their economic experience. We might not like the idea but our own individual financial circumstances is part of the data they are looking at. They get a much broader picture than anyone can just based on their own direct experience.

When virtually all serious economists are giving similar predictions about the economic damage Brexit will do it would be rather foolish to ignore them. Imagine you were planning a summer party for tomorrow. You need to try to predict what the weather will be like so that you can decide whether to have it in the garden or the house. To make that judgment do you just rely on your gut instinct about what the weather will do? What happened when you arranged the same party this time last year? Do you perhaps just look up at the sky the day before and say yes blue sky the weather looks fine now so should be OK tomorrow ? Perhaps you just listen to what tour mates “reckon” the weather will be like tomorrow? May be you follow the old adage “red sky at night Shepherd’s delight, red sky in the morning Shepherd’s warning”? What then do you do if it’s red sky night and morning? Or do you do what most people would and consult experts by getting weather forecasts prepared by professional meteorologists. Predicting the weather is very difficult, because there are so many variables, but what we can say is that we are far more likely to get it right if we follow expert evidence than just go on gut instincts, our own limited experience or popular opinion.

Perception versus reality 

If the opinion polls are to be believed the country in a few days is going to vote to leave the EU and it seems to me that most of those voting leave would do so based on popular myths rather than facts. South Wales is a case in point. That region is expected to vote overwhelmingly to leave the UK. The reason people give? Because immigrants are taking too many of their jobs, undercutting their wages, overstretching our public services and taking all the benefits. Yet the reality is there is actually only quite low level EU immigration into South Wales. (Cardiff and Newport's immigrant population is about the national average but the rest is well below.) And South Wales is a net recipient of EU funds! Their problems are far more longstanding than EU immigration. Their real problems are that they have never recovered from a 1980s post-industrial decline that has left them behind. Their sense of being given a raw deal is exacerbated by post-recession austerity cuts to services and welfare and not EU immigration which has hardly touched them. The stagnation of ordinary people's wages there is a virtually global experience of recent years caused by technology and other factors that have nothing to do with immigration. But none of these facts have dispelled the widespread myth they share with much of the country that EU immigration and loss of control to the EU is the cause of most of our ills.

The bible advises us that when we make major decisions we should not just rely on our own instincts or the loudest voices but should seek advice from wise advisers.

“The way of a fool is right in his own eyes, but a wise man listens to advice.” Proverbs 12: 15

“For lack of guidance nation fails, but a victory is won through many advisers.” Proverbs 11: 14

When I say advisors I do not mean listen to the politicians on either side. They are advocates for their causes not advisers. I mean taking advice from the leading experts in their field on their areas of expertise. It is they that we should be listening to. When 90% of leading economists tell us that leaving the EU is likely to be significantly damaging to our economy or 83% of research scientists warn us that it would be equally damaging to scientific research we should be listening.

Of course we may decide that the predicted damage that leaving the EU risks may be worth it for what we gain; greater control over our immigration and our laws. But again we need to examine the actual facts behind the myths. If we do we should find that the problems resulting from EU immigration or EU laws are rather less than is often thought and the benefits rather greater.

We need to deal with the Europe and the world as it actually is not as we would want it to be. In a fallen broken world we need to accept the EU is not and never will be perfect. However we need to recognise the reality that in an increasingly smaller world on our own we are only a fairly small nation that simply cannot have the power and influence we once had in the days of our empire. Working together with our European neighbours we will trade more successfully in a joint single market 8 times the size of our own and speaking with the voice of 500 rather than 65 million we have a much better chance of influencing the rest of the world and of meeting the major challenges of the future, such as terrorism, climate change and the rise of the robots. 

Together we are stronger and richer. Apart we are weaker and poorer

I believe the biblical priorities that should dictate how we vote in the referendum are peace, justice and prosperity for all. I consider that when we fairly examine the actual evidence and listen to the real experts in all those areas we should find we are likely to risk losing much more than we gain if we leave the European Union.

“A man who isolates himself seeks his own desires; He rages against all wise judgment.” (Proverbs 18:1)

No comments:

Post a Comment