The Corner

Eyeing the Exit

As this week draws to a close we now ‘know’ four things that, in reality, we already knew very well: 1. Britain’s euroskeptics can sink David Cameron’s hopes of re-election; 2. They have not been swayed by his talk of an in/out referendum in—when was it—2017; 3. The EU ‘s hierarchy has not the slightest interest  in renegotiating the terms of Britain’s EU membership; and 4. That, by deploying weapons such as its attack on the UK’s financial sector, the EU’s political class is determined to ensure that Britain is brought to heel.

It’s time now for Cameron to do what he should have done before. Pass a bill now providing for an in/out referendum to be held on the same day as the next election.  Opposing such a bill would be very dangerous territory for his opposition. Best guess is that it would pass. The stage would then be set for a showdown.  Euroskeptics may very well not win such a referendum, but at least they would be in with the best chance they are ever–absent spectacular continental turbulence– likely to get. And if Cameron plays it smartly (clue: that means opting for ‘out’, David) so might he. As his humiliation in the Eastleigh special election reminds us, he has nothing to lose.

Euroskeptics will need to make a case that can convince. This new article by Terry Smith, a prominent figure in London’s financial community, ought to give them a few clues as to how to go about it:

…A trading bloc is advantageous if it enables us to access a larger free market for our goods and services. Economic theory from Adam Smith to David Ricardo shows that our prosperity is enhanced when we are able to focus on those goods and services that we are best at, and trade them with others who have different skills. How is that going with our EU partners? Not very well judging by last year’s Office for National Statistics figures. We have a negative balance of trade of £55.7bn with our EU partners: they sold us far more than we sold them. And it is clear from their actions in terms of regulation that they would like to snaffle and/or stifle our biggest industry – financial services…

…And if we are part of a trading bloc, shouldn’t we want to be part of a thriving trading bloc? The EU is hardly thriving. Leaving aside the obvious and overwhelming anecdotal evidence, the fact is the EU is the least competitive trading bloc in the world. If you look at the World Economic Forum’s global competitiveness report for 2012-13 for labour market efficiency you see the following rankings out of 144 countries surveyed: UK, 5th; Netherlands, 17th; Germany, 53rd; France, 66th; Spain, 108th; Italy, 127th; Greece, 133rd. You get similar results for other measures, such as pay and productivity, in which the UK is ranked 13th; Germany 41st; Italy 128th; and so on. The impact of the EU’s dire performance shows in the fact that in 1980 it represented 31% of world GDP but in 2012 it was down to 19%, and by 2017 is forecast to fall to 17%.

Binding ourselves to the EU is like trying to run a race with a ball and chain as we are forced to import the labour practices and business regulation of countries that are the losers in global competitiveness….

You will of course hear from the pro- EU lobby that we cannot separate from the EU as it will then cease to trade with us on favourable terms. Remember that our EU partners sell us £56bn more than we sell them. Will they risk losing this? The prominent members of this lobby, such as Ken Clarke, Peter Mandelson and Richard Branson, are the same cast of characters who campaigned for the UK to join the euro and who forecast disaster for the UK in general and the City in particular if we did not. How do their predictions look now?

Perhaps we should ask the people of Greece, Ireland, Italy, Portugal, Spain and soon France what they think of the merits of euro membership as they struggle with unemployment of over 25% in some cases and youth unemployment of over 50%. In fact, the Italian electorate was asked last weekend and the EU appointee Mario Monti came fourth behind a retired comedian and Silvio Berlusconi, which takes some doing. In any other walk of life, anyone with the pro-euro lobby’s abysmal record of forecasting would be ignored – or be so ashamed that they would withdraw from the debate.

Sadly, they are shameless.

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