The EU referendum: the arguments that count

Britain’s vote on EU membership tomorrow (23 June) has produced a lot of emotional polemic, and very little dispassionate analysis. I was persuaded yesterday to click through to this article by Professor Alan Johnson (not to be confused with his namesake, the Labour politician) on the basis that “it was the most compelling case for Leave that I have read”, to find that it was anything but compelling, as it jumped off from premises that are highly flawed in my eyes. And it made no real attempt to persuade people of an alternative view either. Of course, I am guilty of polemicism too, for Remain. But I try to stand above such things, as well. So on the eve of the vote I will assess the arguments that I think hold water.

I will do this based on the three substantive arguments for Leave: that the EU project is fatally flawed; that free movement of people within the union is too high a price to pay; and that rejecting the EU would give a needed shock to the country’s political and economic system. I will then say something about the benefits of EU membership.

A flawed project?

First is the flawed nature of the EU project; this lies at the heart of Professor Johnson’s case. What is the EU? It is an association of sovereign states that have agreed to bind themselves by treaty to hold to common standards in a wide variety of areas, to act jointly in others (most importantly in trade negotiations), and hold the whole thing together with a system for developing common policy and resolving disputes. Some of the Union’s founders saw this as an intermediate stage towards a United States of Europe, on a similar basis to the USA, and some of the language of the treaties (“ever closer union” ) was drafted with that aim in mind. But it lacks the wherewithal to make such a transition without the consent of the peoples of the member states. Unlike the early USA, there is no federal army to bring dissenting states to heel. Nor can there ever be.

But that leaves the project with some serious problems. Staying within the Union binds member states to a whole series of standards on a take it or leave it basis. Individual countries have little ability to opt out of the bits not to their taste – just opting out of the whole shebang, as Britain now contemplates. That is because it is a carefully balanced whole, and opt outs would be seen by other member states as trying to gain an unfair advantage. But it isn’t very democratic. Much ire is raised by, for example, the way Irish voters have been bullied into accepting treaty changes in spite of initial rejection (Professor Johnson aerates about this). But neither is it democratic for Irish voters to impose their will on all the other member states.

This leaves a dilemma at the heart of the project. If you want to make the EU more democratic and accountable, you have to make it look like a more conventional state, taking decisions as a whole union, reducing the autonomy of individual states. If you allow member states to vary treaty terms at a whim, then the whole project collapses.

This dilemma is at its most acute with the imposition of a common currency – which, of course, does not include Britain. Its implementation has been flawed, leading to ugly disputes between debtor and creditor nations. Many say that the only way to make the currency workable is to promote political integration. I don’t happen to agree with this, but further integration of the Eurozone could make Britain’s status within the union untenable – but we haven’t got there yet, and can act accordingly if we do.

There is really no easy answer here. You have to weigh the benefits of joint action against the losses to autonomy. I will come back to those benefits, but there is one clear area of lost autonomy that upsets a lot of people: free movement of people.

Free movement: too high a price to pay?

Our rights within the union to travel to and work in other member states mean that member states have little control over immigration from other member states. Very large numbers have come to Britain from other EU countries, especially the new states of eastern Europe. This is not Britain’s biggest immigration issue – which comes from other migrants, who are more numerous and who integrate less easily – but there is a feeling among many that Britain is “full”, with excessive stress on housing and public services. Many Britons, especially less educated ones, sometimes feel like foreigners in their own land as they pass through districts settled by people of foreign origin. There is little evidence that European immigration has caused pay levels to fall, but it may have stopped wage rates in some jobs from rising.

Leaving the EU, and its single market, would allow Britain to put quotas on migrants from all sources. This would be popular amongst most of the population. It is Leave’s most powerful argument.

The main counterargument is that this would either make less difference to migration than most people suppose, or cause even more stress to services than it saves. Unemployment in Britain is low. Jobs are being created as fast as migrants come in to take them up. Our workforce is shrinking as more of us retire.  So if those migrants did not come, who how would be find people to do the jobs that need doing? The government would be under huge pressure to let the migrants keep coming. We can see that this has happened for migration from non-EU countries – which the government has tried to limit, but which remains high.

There are other arguments. The rights of Britons living in other EU countries (and there are many) would be endangered; the system for administering immigration (an Australian-style points system has been suggested) would be a bureaucratic nightmare; there may be an intractable problem on the border between the Irish Republic and Northern Ireland. And would the politics of immigration controls make the country a less tolerant and open-minded place?

It’s messy, and it comes back to the same balance between the benefits of autonomy over the benefits of being part of the union.

A shock to the system

There is also an angry argument. This says that Britain’s governing institutions have become complacent and need to be shaken up. There are two groups of complaints, which are not necessarily consistent with each other. One is that the “elite” ignore the social and economic tensions in communities outside the metropolitan South East of England (or devolved Scotland). A second, from businessmen, is that they are overregulating the way we live and work,  and holding back creativity; nothing much is being done to rectify a large trade deficit. There is substance behind both of these complaints. And a vote to leave the EU would constitute a massive institutional shock.

The trouble is that the results of that shock are incalculable. The British trade and government deficits leave the country vulnerable. A prolonged period of political and economic uncertainty would be extremely damaging.; it is not inconceivable that the country would have to call in the IMF, and face economic conditions much more severe than anything the EU imposes.  And who would take political control in the wake of a Brexit vote?

It really depends on how much risk you are prepared to run, and how likely you think that what emerged on the other side would be better than what we have now.

So what are the benefits of the Union

A decision on which way to vote may be affected by a worries about the short-term chaos that may or may not arise from a vote to leave. But the main factor behind any decision must be a view on the longer term benefits of the union – to weigh against the loss of national autonomy. There are three important ones: the single market, extended personal rights, and the Union’s political project.

The single market is the most talked about of these, and the most important – it was why, after all, that Margaret Thatcher was initially happy with the trade-off, though she changed her mind later. The important point here is that in order to have a true single market, in which businesses can sell to each other across the union on a playing field that is rather more level than otherwise, you have to go way beyond the absence of tariffs – which is implied by the idea of a “free” trade area. Barriers to trade  are about much, much more than this. It is about standards, regulations and subsidies. Is it fair that one country can undercut another through lower environmental standards, inhuman working conditions, or state subsidies? But addressing these issues is intrusive. Most of the power of the US federal government arises from its constitutional power to regulate interstate trade.

The EU single market is an imperfect compromise, inevitably, but it has taken the idea much further than any other association of sovereign states. The economic studies I have seen have shown that it has largely worked. Trade between the EU states has increased massively since the single market was developed (and not by diverting it from the rest of the world) – it has been much more effective in this that the single currency, which has had little measurable impact. There is bound to be a significant economic cost to withdrawing from it. It makes Britain a much riskier place to build a car factory, for example. This is why economists and businessmen so overwhelmingly support staying in.  The Leave campaign have resorted to quoting the same two: Andrew Bamford and James Dyson over and again; Remain can call on hundreds.

A second benefit is extended personal rights. We get these when we travel abroad, and, especially, when Britons live or work abroad. These are imperfect, of course, but life is much easier for us than, for example, for Australians. This will be irrelevant for those that don’t travel – but many of us do, if only to holiday in other EU countries.

A third benefit, on the other hand, is very indirect: the EU’s political project. This has been to spread the standards of democracy, the rule of law and good governance across the continent of Europe – to say nothing of making warfare amongst the nations unthinkable. From its initial core of countries the union has been the leading force in democratising first southern Europe, and then post-communist central and east Europe. This is reaching its limits. New members may be brought in from the former Yugoslavia and Albania, but Turkey and Ukraine look like steps too far. More important, there is much work to do to consolidate democratic standards in the post-communist members, especially in Romania and Bulgaria, but in most of the others too. This worthy project would be weakened if Britain left, even if we individually feel little impact. Closer to home the EU has also a vital part of the fudge required for the Northern Ireland peace settlement to stick; leaving would add to the already big headaches there.

In conclusion

I was going to mention the host of spurious arguments that have been put up in the campaign, mostly be the leave side (such as the one about the EU’s economy being weak, as if that would not be just as much a problem if Britain was out of the EU), but I’ve been going on for long enough.

It will be clear from the above that deciding the best way to vote means making some tricky judgement calls, balancing the costs and risks either way. This does not mean that the choice is marginal or unimportant – it would make a big difference to what this country becomes. In these tricky circumstances we are guided by value judgements.

If you are angry about the restrictions European treaties place on our politicians, that will point you towards Leave. If you are reasonably happy with the status quo, and want any change to be gradual, that points to Remain. If you feel that in order to make our way in an interconnected world the countries of Europe need to take joint decisions; if you are happy with the idea of Europe as an extension of “home”; if you don’t mind that so many of your neighbours are from other European countries; then that points to Remain also. Which doesn’t mean that you should be happy with the way things are, but that Britain leaving the EU would be a step backwards, not forwards.

And me? I was just to young to vote in the 1974 referendum – but I was a very keen supporter of Britain’s membership at the time. It has been a defining part of my political outlook ever since. I wanted to be part of something bigger than Britain, much though I love it. I still do, though I have fewer illusions about what is going to be possible. So for me voting Remain was an easy decision. For most of my compatriots it may not be.

 

 

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