Category Archives: Politics

In, out, in, out and shake it all about!

Lies, more lies and a referendum

In just over two weeks those of us that care will cast our votes in the referendum. The question; ‘should the UK remain a member of the European Union?’. It is billed as the biggest political question for a generation and, depending on who you believe, the consequences could be immense. Then considering the undoubted importance of this generational moment and the potential seismic shifts it could bring about, it is very worrying that even now many of us have no idea what the actual considerations are. Why is this? Because the one group of people who’s job it is to give us the considered arguments is the same group of people who seem more interested in lying, cheating and generally acting like playground morons than actually doing what they are paid and morally obliged to do.

The last few months in politics has, quite frankly, been nothing short of farcical. Barmy Boris and Dodgy Dave seem to be using their relative campaigns as opportunities to score points rather than thinking about their obligation to the general public to actually discuss both sides of the argument evenly. Claims from David Cameron that an ‘out’ vote could lead to a political and financial apocalypse aren’t worthy of air time. They are apocryphal at best and only the tip of the iceberg in terms of a misleading campaign based on half-truths, supposition and sometimes out and out lies. Whilst the ‘out’ campaign have harmed themselves significantly by not producing actual forecasts of their own and instead relied on winding up the working classes with talk of immigrants left right and centre.

It is no wonder that the general public are largely confused or left indifferent to this big question when the politicians behave in such a pathetic manner. They have an obligation to present a level argument, not to mislead the public for their own ends. Unfortunately it doesn’t look like that is going to happen any time soon, so instead lets dispel a few potential myths and then pose the actual question that you need to be aware of on 23rd June. Because, for me at least, the question we’re answering on 23rd of June is not simply should we stay in the EU.

Risks

There are risks with any change. That is the nature of change. But with any risk there is also the possibility that the opposite will occur – the possible benefit. The major disservice that has been done so far in both campaigns is a lack of transparency on the potential positives of a Brexit, of which there are many.

The ‘remain’ campaign have produced, from many sources, claims of financial ruin with numbers to back up these claims. Some have even gone as far as putting actual financial costs for each households loss on paper. But it is important that we understand where these have come from. These are forecasts, yes, but what are they based on? Well the reality is they’re based on supposed scenarios that have then been run through a load of calculations. And all of these scenarios have focussed on the worst possible outcomes in every factor. In short, they are a set of predictions for what could go wrong. But none of them take into account what could (and very likely would) go right.

Don’t kid yourself into thinking that just because you’ve only heard the doom and gloom forecasts that they are the only possibilities.  They are produced by a campaign that wants us to stay in the EU and so will paint a grey picture. And those institutions who have also produced forecasts? They are the establishment and so it is in their interests to produce statistics that support the ‘remain’ campaign. But they are all based on supposition and hypothetical scenarios. It is also worth noting that they all have quite an established history of being wrong!

There are just as many independent business who have contradicted these forecasts. British Airways CEO Willie Walsh has previously stated that BA’s own risk analysis suggested they didn’t think they would lose out at all. And that is just one such large company.

And one last point on the risks. Many investment managers have publically stated that they believe not only would it not be a negative, but it could in fact have a long term positive effect on the UK economy. Now who are you going to take more notice of? A bias government, a bunch of institutions who have a history of inaccurate forecasts or investment professionals who are only in the position they are in because they accurately assess risk in the markets on a daily basis and have consistently got it right more often than not?

The point is it is risky, precisely because the answers aren’t clear. But you don’t gain anything if you don’t take risks, and suggesting that the only outcome is negative is not just misleading; it is naïve and plain wrong.

The numbers

So what do we need to know about the numbers? First that they are all models, not fact. So put it out of your mind that anything they are saying is set in stone and fated. It simply isn’t. Here is the reality of the situation;

  • The EU is the largest economic trading area, but largely because the UK (the fifth largest economy in the world) is a part of it (Germany is the fourth largest economy)
  • The EU have to trade with us as well as us with them, so any trade agreement needs to be mutually beneficial. There is simply not a negotiating power imbalance in the EU’s favour here.
  • There is no existing model for non-EU countries negotiating to be part of the single trade agreement that we can compare to (Norway and Switzerland have done this in the past, but their trade levels are a fraction of ours)
  • Europe relies on trade with the UK. There would be political and civil unrest if there was not a good trade agreement put in place. It is simply misleading to suggest the UK would be affected but Europe would not.
  • The three biggest economies in the world (USA, China and Japan) are not members of the EU and yet have very good trade arrangements and flourish.
  • The most significant future market for growth, and one we need to have the ability to negotiate with, is China.

The ‘remain’ campaign’s major criticism of the ‘leave’ campaign is that they haven’t been able to produce a model for what the future would look like. But how can they? The nature of this is that until negotiations start we won’t know what it looks like. But we can be sure that as the fifth biggest economy in the world we do have a huge amount of sway and our economy is very influential and our skills and products sought after. Supply and demand do win out.

So what do we do if we don’t know what the options are? Well we can be assured that other countries fair rather well and so the UK simply isn’t going to disappear into the abyss and be plunged back into the dark ages. Instead we can look at other countries and what they have got. Take Switzerland, a country that isn’t comparable in the scale of trade but does demonstrate some of the options that an arguable less influential country can achieve;

  • They are not in the EU, but are still in Europe, and have a tailored EU deal
  • They have free trade deals with the EU, China and Japan
  • They adopt 0% of the EU rules
  • Have the highest wages in Europe
  • They are the second richest country in the world by nominal GDP per head
  • They are top of the Global Innovation Index

Put simply, there are options and these options can be rather good!

Human rights and work rights

There seems to be a rather odd line of argument that staying in the EU protects workers rights, that we are tied into the human rights act and that the working time directives and other working guidelines will protect the workers. The odd thing about this line of argument is that they suggest leaving the EU will change this.

Let’s get one thing clear. The EU do not have some sort of copyright or patent on laws to protect civil liberties and the rights of people. Anyone using this line of argument as a reason to stay in the EU really shouldn’t be allowed out of the house. It is patronising. If this was the case then the EU would be some sort of garden of Eden and every other country in the world would be a cesspool of depravity, exploitation and suffering.

The idea that leaving the EU would suddenly mean the UK doesn’t retain these rights is ludicrous. These are laws upheld in the UK and they will continue to be. But leaving the EU means that we have the power to add and amend laws to make sure they are suited to our country and not a catch all for every country in the EU. Making laws that suit countries in the east of Europe and forcing the UK to have them means we end up with laws that are out of context with the UK and simply not suited.

Europe and reform

Many of the ‘remain’ camp will say that staying in Europe means that we are “at the table” in terms of negotiating a reform of Europe. The problem with this is that it assumes Europe wants to and believes it needs to reform, for which there is much scepticism. Whilst David Cameron will suggest he achieved great things with his pre-referendum negotiations, a closer look shows that they really haven’t given us much. It is unlikely Europe will reform because there is simply no driving force to do so at the moment.

On the flip side, we do have veto rights on a number of controversial items. But how do we get things changed in Europe when we need the agreement of so many countries, many of whom have conflicting motivations to us? Many of whom benefit greatly from being in an economy where the UK and Germany contribute so much and their own country contributes so little?

Anyone who has tried to chair a committee and actually achieve anything when that committee have a lot of members all of whom have competing motivations will know exactly what the challenge is here. And it doesn’t often change.

Migration

So to the big one. Migration is a problem in Europe, due to the free movement agreement. And whilst we have more migrants coming to the UK from outside the EU than within, the amount coming from the EU is increasing and without check.

The key thing to remember is that we do get a huge amount of value from skilled people coming to the UK to live. A vast amount of our doctors are not native to the UK, for example. And I don’t think any right minded person would argue that it is a bad thing for people who actively contribute to society to come to this country. But the problem is that the free movement agreement also means many people can come to the UK who don’t contribute and this puts a strain on many areas of an already strained economy.

It seems logical to be able to control who can come and live in the UK. It seems to me that making sure we welcome those who have skills that can improve our country is a good thing. But we are not a charity. We have a responsibility to make our country the best and most opportunity rich place it can be for all our citizens, especially our young graduates keen to make their mark. Having an open door to people who will come and compete with those already here with the same skills, drive or aptitude doesn’t seem to be a logical way to do that.

Let’s cut to the chase

At the end of the day the arguments can be tossed and turned in all sorts of ways. And it is up to each of us to look at the truth and not just listen to the rhetoric. It is safe to say that you cannot trust the politicians on either side of the argument in to give you a balanced view.

But for me it boils down to a slightly different question. For me this referendum is not about whether the UK should stay in the EU or not. No, instead it is about what the EU is clearly aiming to become and whether we want to be a part of that or not.

Europe is increasingly moving towards a single state. It is very obvious that they have been moving that way for a very long time and at some point in the future it is likely this will become much closer than it is now.

I am proud to be British. I do not consider myself European, I consider myself to be British. I think that the UK is a vibrant place to live and work with many of our skills being the envy of the world. Certainly we are world leaders in digital, where I work, and also in media. So for me the question is ‘do I want to be a citizen of the UK, or of Europe?’ And that is what we should all ask ourselves. Not now, but in the future, which country do we want to live in? The country of the UK, or the country of Europe? Because a vote to stay in the EU is very possibly a vote to one day be a part of a country called Europe.

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