THE EUROPEAN SINGLE MARKET AND AN INCONVENIENT TRUTH

BILL JAMIESON

Just nine days – and counting – till the EU referendum and the Remain campaign Project Fear bombardment is over.

Two weeks ago it was the slump in household wealth; then it was rising unemployment; then it was the end of the UK as we know it. Now it’s pensions that will be diminished if we Vote Leave.

What’s left? A slump in house prices? Oops, we’ve already had that. How about the blocking of the internet? Or the end of motorised transport? Or should we just skip to slaughter of the first born?

I’m grateful to my ScotBuzz pro-Remain sparring partner Peter Jones for not descending to these levels. What a pity he’s not a top adviser to the Remain campaign. It’s been an assault on the intelligence that has greatly deepened public distrust of politicians and David Cameron and his chancellor George Osborne in particular.

Even if the Remain camp succeeds on June 23, the credibility and standing of the Prime Minister has been greatly weakened.

By proclaiming day after day that some terrible economic fate has been avoided by virtue of our EU membership and the all-wise, all-seeing European Commission, it sets at nought the claims of Cameron and Osborne that their policies have secured the modest recovery we’ve experienced. It’s not Osborne and the Treasury – it’s Brussels!

Why has the Remain campaign been unable to mount a positive campaign for the EU?

Throughout all this, you may have noticed how the Remain camp has avoided any discussion on why the EU has been such a poorly performing economic bloc or why unemployment in the Euro zone particularly is so scandalously high.

Nor has it made much reference to the growing mood of Euro scepticism right across the EU and the rise of populist, anti-establishment parties in France, Spain, Italy, Greece, Denmark and the Netherlands.

Analysis by the respected American think-tank the Pew Research Centre records a marked drop in support for the EU across seven major European countries.

Over 60% of French voters now have an unfavourable view of the EU, while almost half the electorate in Germany, Spain and the Netherlands have also become Eurosceptic.

In 2004, 69 per cent of French voters and 58 per cent of German voters backed the EU – while not a single country reported a net negative rating.

But today opposition to the EU now runs at 60 per cent in France, 71 per cent in Greece, both higher than the 48 per cent opposition in the UK.

The Remain camp has sought to lay heavy punches on the fate that would befall us if we sought to renegotiate our access to the Single Market or indeed withdrew from it altogether. Does it not secure our prosperity through growth in our EU trade and exports? Is this not a critical artery for our economy and prosperity?

But a new commentary by the analyst Michael Burrage provides objective facts concerning the growth of exports to the EU of 40 economies since the inception of the Single Market in 1993 up until 2015.

It is a abundantly clear from this research, highlighted on the Civitas web site last week, that the UK’s compound annual growth rate of 3.44% over the period is woeful compared with that of a large number of countries who are not even members of the Single Market.

Burrage writes: “The economic argument for remaining in the EU pivots on the supposed benefits to members of the Single Market.

“It is because the UK must keep access to this market that it must put up with all the other costs, obligations and inconveniences of membership. And since non-members only have access to this market, while accepting many of these costs, obligations and inconveniences, non-membership is not thought to be a sensible option.

“Curiously, none of those who use this argument, including David Cameron, ever refer to the published and readily accessible record, showing the impact of membership on UK trade or exports. The Prime Minister prefers to cite highly speculative forecasts of what might happen in 10 or 15 years’ time, as if what has happened over the past 23 years is not important.

“Christine Lagarde, managing director of the IMF, might have directed him to the comprehensive database of her organization but she preferred to tell him and the British people of her ‘hunch’ that the consequences of Brexit would all be negative.

”

Shortly before her UK visit, the IMF Direction of Trade Statistics database was updated with the figures from 2015. They are set out in a table on the Civitas website.

“This shows the growth in the value of the exports of goods to the EU since the formal inauguration of the Single Market in 1993 to 2015 of 40 countries, all of which have been exporting to the EU under WTO rules – “the one, according to Messrs Cameron and Osborne that would be ‘the worst possible post-Brexit option’”.

“They have not played any part in setting EU rules, have not concluded any trade agreements with the EU, and have not paid a penny for access to the Single Market. The UK meanwhile has been enjoying all the benefits of membership.”

The table shows that exports from Canada to the EU since 1993 have grown at a compound annual rate of 5.9 per cent; exports from Ghana by 7.1 per cent; from India by 9.6 per cent, from Russia by 8.4 per cent and China by 16.3 per cent.

In this table of 40 countries, the UK comes a lowly 34th with a compound growth rate of just 3.4 per cent.

Why have we not heard more of this?

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  Comments: 2

  1. Robert Thomas


    Agreed; and the case of Christine Lagarde is a powerful illustration of why the public is right to be sceptical of supposedly impartial institutions such as the IMF. Lagarde ‘s pronouncements about the apocalyptic future of the UK post Brexit are in no way supported by the statistics provided by her own institution. The case of the UK Treasury is similar; their dire forecasts rest on the assumptions their economists were instructed to work from i.e. tariff barriers to be imposed by the E.U. , time taken to reach trade agreements etc. If the assumptions are wrong the forecasts will be wrong. Clearly their crucial assumptions are liable to political influence.

    Robert Thomas

  2. Robert Thomas


    Agreed; and the case of Christine Lagarde is a powerful illustration of why the public is right to be sceptical of supposedly impartial institutions such as the IMF. Lagarde ‘s pronouncements about the apocalyptic future of the UK post Brexit are in no way supported by the statistics provided by her own institution. The case of the UK Treasury is similar; their dire forecasts rest on the assumptions their economists were instructed to work from i.e. tariff barriers to be imposed by the E.U. , time taken to reach trade agreements etc. If the assumptions are wrong the forecasts will be wrong. Clearly their crucial assumptions are liable to political influence.

    Robert Thomas

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