Time for us to pull out
Andrew Alexander
In the main leader of the Daily Mail on 9th December 2000 Andrew Alexander argued why he believes it is inevitable that Britain will withdraw from the EU
Britain will one day leave the EU. The timing may be hard to predict, but not the inevitability of our eventual departure. The Nice summit is merely serving to underline our incompatibility with the structure and the aims of the Union, with the certainty of more differences to come.
I say that our departure has become inevitable with some regret. Being against the Common Market in the first place is not the same thing as looking forward to our leaving, since the process will be drawn out and sure to produce much ill-temper both here and abroad. Among our EU partners, France and Germany will be particularly annoyed - two countries with whom we should always aim to have the most amicable relations.
But we cannot allow this to stand between us and our own well-being. It is a consoling thought that, in the much longer run, our relations with these two countries would improve.
Outside the EU, we would have far less to quarrel about. Even that leading Europhile Lord (Roy) Jenkins has conceded that. We shall depart because the balance of advantage, both politically and economically, already so plainly in favour of leaving, will become overwhelming. The narrow majority which said in a recent Mori poll that it would vote to leave the EU, will grow steadily.
No hope can any longer be pinned on the doctrine of 'subsidiarity' - individual nations deciding more for themselves and Brussels deciding less. The opposite has happened. And the Nice proposals involved even more power going to the centre.
Even if we managed to stop most or all of those plans, it would be only a matter of time before they resurfaced. And the plans for a federal superstate have, of course, a ratchet affect. There is no going back. The powers being taken now go miles beyond those once excused as necessary for the functioning of the single market. For instance, aims for a uniform legal system have nothing to do with economics.
And so to that balance sheet.....
There is a popular belief, eagerly fed by EU-enthusiasts with confusing statistics, that we are massively dependent economically on Continental Europe and that leaving would risk millions of jobs.
It simply isn't true. Sales of British exports to Europe comprise just 40% of our total worldwide exports of goods and services. But, in fact, exports make up a minor part of our total production. Those to the EU account for little more than 10% of our annual national output.
Ironically the absurdity of the threat-to-jobs claim was shown up earlier this year in a study commissioned by Britain In Europe, the Blair-backed organisation charged with glorifying the single currency. Martin Weale, the Euro-inclined head of the National Institute for Economic and Social Research, concluded that 175,000 jobs - out of a total work force of 27 million - would be lost within three years of leaving the EU. But that was only if the Government did not take any remedial steps.
In any case, the EU nations sell more to us than we do to them (our trade balance with the rest of the world is, by contrast, favourable). We are the EU's biggest single export market, bigger even than the US. So Continental nations have a powerful interest in maintaining the flow. You can imagine the alarm there would be among such firms as Mercedes and BMW if anyone suggested curbing their lucrative markets here.
But there is no danger of our trade being 'cut off'. When we joined the Common Market, tariffs between nations were high. These days they are very low, averaging around 4%. And the World Trade Organisation has the aim - endorsed by the EU - to get them down to zero. We would be in an immensely powerful position to insist on a Free Trade agreement with zero tariffs such as Norway and Switzerland have with the EU. Besides, British businesses would benefit directly from leaving the EU because they would no longer be subject to the cramping rules and red tape which have flowed - and are likely to flow on an increasing scale - from the Social Chapter and other Brussels schemes. The threat of trades unions being involved in business decisions would vanish, as would a host of other supposed 'reforms'. We would be left with a significant competitive advantage.
It is no good to say that the EU would, in some way, not 'allow' us that advantage. As a genuinely independent nation we would be entirely at liberty to make up our own rules. Some people seem to have forgotten, sadly, what it means to be free.
On the direct contributions side we would no longer be paying a net £5.5 billion a year to Brussels, most of which goes on the monstrous Common Agricultural Policy (CAP) - for whose radical reform we are still waiting after 30 years of promises. It remains a scheme devised essentially for the benefit of French farmers and keeps food prices high with little benefit to British farmers. Being outside the CAP would allow the annual cost of food to fall by about £250 a head. At the same time we could go back to an agricultural policy (perhaps following the successful New Zealand model) designed to suit ourselves. For instance, the Brussels rule which forbids us producing all our own milk would immediately go.
Outside the EU we could at once reclaim our fishing grounds so disgracefully given away by the Heath government in its supine pleading for Common Market membership. It would transform the outlook for our fishermen at a stroke. We could return to our own conservation policies, those which made the acquisition of rights in British waters a gift to Continental fishermen who had bothered so little about stocks.
The economic advantages of being outside the EU would march hand in hand with the political advantages.
Over the past 30 years, Brussels has produced a staggering 25,000 regulations and directives - on matters ranging from cheese-making and hedgerows to the insistance that we accept giant goods vehicles and strengthen our bridges. Very few have even come before Parliament for debate, let alone a vote.
We rarely know how ministers or Brussels civil servants arrive at their decisions, or which national representative voted for what. Outside the EU any rules made would be our own and they could be reversed through a change of government.
Outside the EU we would no longer have to fear demands that we should harmonise direct or indirect tax rates or rules on immigration, police, competition, regional policy and all the rest.
There would be no question of being subject to a community rule about minimum VAT. Indeed, we could abandon the costly VAT system with all its red tape. We adopted it in place of our previous indirect taxes only in order to join the Common Market. On our own we could go over to simple sales taxes, such as operate in the US.
We would certainly not need to contribute to any rescue scheme for the huge deficits in EU countries' pension schemes - few of them having our own system of properly funded company schemes.
Such an expensive menace has regularly been dismissed as unreal. But the idea floated in Nice that all member nations could be called upon to help individual countries in trouble indicates that the pensions menace should be taken seriously.
So far, so good - and simple too. But what about what about the direct investment from countries like the US and Japan which has flowed into Britain in recent years, often because we offer a sound base for trading with the rest of the EU?
Here, I admit, there is a difficulty, though only a temporary one. Certainly, in the period running up to an exit from the EU, foreign investors would become nervous and the size of the flow would decline.However, once it became clear that we could and would negotiate good trading arrangements, the flow would resume. The attractions of Britain as a commercial base would actually increase as it became clear that we would have access to EU markets without being bound by its sclerotic regulations.
On the legal side, on our own we would no longer be threatened by an EU Charter of Fundamental Rights - how innocuous it sounds - which endangers our own legal system and practices.
The only real barrier to our leaving the EU, apart from some hard bargaining, is psychological. Many people worry how we could survive 'on our own'. It is an odd question to ask about the world's fourth largest economy and a country which has a larger network of diplomatic and trade relationships than any other EU nation and, incidentally, the EU's largest and most effective military forces too.
The question should really be stood on its head. We should ask how could the country survive as a recognisable independent nation within the EU.
For those who think it important to 'belong' to some international group, there is the North Atlantic Free Trade Agreement (NAFTA) which includes the US, Canada and Mexico. It is a proper free trade area which leaves member nations free to make all their own laws. We would be welcome as members.
But membership of Nafta is not essential. It is an optional add-on.The balance of advantage in leaving the EU is so striking - and threatens to become more so as the European political concept is developed - that some may be puzzled that neither of the main parties advocates departure. (What politicians on both sides say off the record is another matter).
So what would we lose? Very simply Britain would no longer play a role in forging what EU politicians see so excitedly as a potential superpower, able to challenge the US in size and influence. To which the appropriate answer is "So What?".
Remember the purpose of the whole European venture. First it was to prevent France and Germany ever going to war again. Second, it was a vehicle for France's grand ambition to lead a Europe which could openly challenge American power and influence. Third, it would offer a way to safeguard European agriculture. Fourth, it would demonstrate that the Anglo-Saxon free market economic model was not the best path to prosperity.
The first aim would seem to have been met - and never needed us anyway. The second may be achievable but amounts to a dangerous power game. The agriculture plan has pushed up food prices and driven down farm incomes. The fourth aim has been disproved by events - see French and German unemployment levels for example.
The fierce national debate about Europe will continue. But it will shift gradually and remorselessly from the terms on which we stay, to the terms on which we leave. Hard facts will prevail over political nonsense.
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