By John Holloway
In my opinion, arguments for leaving the EU are basically emotional appeals, rather than based in factual reality. Soundbite phrases such as “taking back our power” (What power? Over what?); “controlling immigration” (We already have the right to exclude criminals and to limit the availability of social security benefits to incomers, and migrants provide a massive amount of cheap seasonal labour in our agricultural industry, such as picking daffodils in Cornwall. Not being part of Schengen has given us control of our borders which has enabled us to avoid the worst of the migrant crisis which has affected the rest of Europe); “making our own laws” (which is what the Westminster Parliament does now. In addition, we have seats in the European Parliament, and because of our strong allies there, the votes often go our way, a classic example being the fundamental changes to the CAP in the days of Margaret Thatcher).
At the moment, the UK is part of the biggest free market in the world, with unfettered tariff-free access to around 450 million people. 44% of British exports go to the EU, but only 8% of the EU’s exports come to us. Add to that the invisible exports of my own industry which brings many millions of pounds into the UK every year, and it’s clear that the UK’s membership of the EU is an invaluable asset. If we vote to leave, then to remain in a position where we could continue to export tariff-free to that market, the UK would have to pay subscriptions, accept freedom of movement, and follow EU laws (with no power over the making of those laws) or even a combination of all three. Losing access to that market would have a disastrous impact on our balance of payments, but it would be merely inconvenient to the EU. I feel sure that our EU membership contributes positively to the international standing of the UK stock market, and that withdrawal would have a negative impact on share values, and consequently on the FT index. This would also impact the value of the pound. Six months ago, the exchange rate stood at around €1.40/£1. Already, with the false promises being put about by Boris Johnson and Nigel Farage, the markets are jittery and the pound has dropped to €1.26, losing ten percent of its value, causing a corresponding increase in the price of imported goods from tomatoes to oil.
I cannot see how increased exports to China and developing economies could make up for losing the EU market. Historically, countries do the greater part of their trade with their neighbours, because of the cost of transporting goods, so Australia has substantial trade with Far East countries, and the UK trades with Europe because many destinations can be reached in a matter of hours by a lorry which can cross borders with few (or no) customs checks. On the other hand, China has significant protectionist measures to control their imports, and to give a measure of the scale of increase in exports which would be needed to these developing economies, the UK exports more to Ireland (another EU country, so tariff-free) than it does to China. We export twice as much to Belgium as we do to India, and three times as much to Sweden as we do to Brazil.
If we leave, in order to sell our products in the EU, we will have to follow EU rules, rules over which we will no longer have a say. For example, a substantial amount of English lamb is exported to France. To continue to do so, we would have either to guarantee that we followed EU standards on meat (including refusing non-conforming imports from non-EU countries, such as the US) or by having detailed veterinary (and other) certification and documentation for each consignment. This would have a prohibitively expensive impact on niche market products such as mature Cheddar, Stilton, and Shropshire Blue cheeses (which are sold in specialist fromageries in France).
Although a small part of our overall economy, the fishing industry is very reliant on exports to Europe, because we tend not to eat the fish caught in our waters, so a substantial part of the catch is exported to the EU. Delays in processing import documentation (assuming that the rules allowed such imports – imports of unprocessed shellfish to the EU are banned from third countries) would risk lorryloads of expensive premium produce not meeting the required standards on arrival.
A significant proportion of British exports to the EU are from relatively small companies which fulfil orders to individual clients in the EU, or to small enterprises. Examples of this are traditional British products (such as Bisto, Oxo, Birds custard, cream crackers and water biscuits, Christmas puddings, and Cadbury’s chocolate) which are either delivered through specialist merchants (such as The British Corner Shop) or direct to the many tens of thousands of expats who enjoy a taste of home. If we were to leave the single market and customs union (which were negotiated under Margaret Thatcher in alliance with Germany), these exports would become prohibitively expensive, resulting in significant job losses in the UK.
A larger proportion of exports from the UK to the EU are from non-EU companies (Honda and Nissan, for example), which have historically made massive investments in the UK because manufacturing here gets them tariff-free entry to the EU – and in the process creating hundreds of thousands of jobs in their factories and supply chains. It seems to me that if they lose their tariff-free access to the EU, they would have a strong incentive to downsize (or close entirely) their UK operations and transfer the manufacturing to other countries, such as the former Eastern bloc.
Another significant part of our exports – invisible and therefore not included in the official balance of payments statistics – is my own industry, EFL teaching. I teach specialist English language to overseas students who come to the UK under freedom of movement to learn English. Students pay significant amounts of money for the teaching (I personally receive about £10 per day per student) plus they pay for B&B plus evening meal with a host family, plus the school’s admin, plus what they spend on trips to see the sights in London, Oxford and Cambridge, and their coffee and drinks in pubs and cafes. Other teachers work on short contracts in other EU countries bringing their salaries back to the UK. Leaving the EU would risk the loss of this massive invisible export.
In my view it’s inconceivable that the EU would give us better terms outside than we currently have inside, because, quite apart from anything else, that would encourage separatist parties in Cataluna and France, and would result in popular votes to leave. Why would EU countries offer a better deal to a leaver than they themselves already have?
Our membership of the EU has also given us greater security through the sharing of intelligence between police forces. Leaving the EU could well impact on this.
We should not forget the reason the EU was created. In the seventy years prior to 1945, there were three catastrophic wars (principally between France and Germany) in Europe, costing millions of lives. In the seventy years since 1945, there has been sustained peace within the community, with arguments being thrashed out and settled in the European Parliament. This was the real reason for the creation of the EU, and was the vision of Winston Churchill in his “United States of Europe”.
One final thought, which I freely admit is an emotional response which has more to do with my gut feeling than hard evidence: Vladimir Putin has indicated that he is in favour of the UK leaving the EU. Why that should be, I have no idea, unless he imagines that it would weaken the unity of the EU and NATO, which might be to his advantage in the future, perhaps enabling him to extend his influence further West than Crimea. Unlike Mr Putin, I am no strategist, and I cannot imagine what opportunities he might be envisaging, but for me at least, if he is in favour of the UK leaving the EU, then I feel that is a good reason to build even stronger links with our neighbours.
