In a speech in his old Sedgefield constituency, former Prime Minister Tony Blair, a known pro-European suggested that it would be too risky to trust the British people to make a ‘sensible choice’ when it comes to matters over the UK’s EU membership (7th April 2015). This statement was seen by many observers to be patronising, particularly in light of Mr. Blair’s obstinate stance on Europe. An alternative approach may have been to signal a sentiment which indicated that a greater and more solid knowledge base is required by UK citizens on European issues taking into account the outdated laws, practices and policies. Voters must also consider the current economic and political climate and the current UK budgetary requirement to the EU together with the power sharing ratios which could favour the EU should the UK choose to remain if improper re-negotiations are agreed in a hastened early referendum.
At the election, the United Kingdom Independence Party (UKIP) secured a position as the third largest political party, mainly motivated by the increasing numbers of migrant workers in the UK and the will to cease the UK’s existence within the EU. In the current economic climate, many businesses have sought to recruit foreign workers at low pay in order to remain competitive - this being an example of a factor driving down real wages. Therefore, with this given information, what proportion of the ‘no’ vote on EU membership would be driven by raw emotion and what proportion would be driven by knowledge of social, economic and political facts?
There have been calls for an early EU decision, possibly in 2016. An early call may be too soon for voters to really understand what the real issues are. If David Cameron renegotiates a ‘better deal’ for the UK, we need to understand the terms of this deal and its implications, however, an early call to vote may not leave enough time for these renegotiations. So, what do the voters really know about the EU and how successful has it been?
Between 1958 and 1973, the EU growth rate was 5 per cent. Importantly, the UK growth rate was 2.8 per cent, indicating that the UK may be losing out on European economic success but it is important to remember that the UK was largely inefficient with poor management, high levels of taxation and prominent trade union activity during that time. Therefore, governance is a key issue in any political and economic assessment and the EU has not escaped accusations of poor governance, for example, the common agricultural policy of wasteful billions to protect French farmers. How much of the UKs budgetary requirement contributes to poor governance such as this? Regulatory impact assessments are important measurements as a standard of good governance and also a legal standard which imposes constraints on administrative, legislative or regulatory actions. What is the current format of this and is there an argument for greater centralisation?
Claims of corruption have been incremental particularly in light of the financial crisis which has not been accidental but systematic. The advent of the euro has been catastrophic – an idea seen by many that would contribute to major economic benefits including price transparency and reduce costs for all participants, but has culminated in one that is rigid and inflexible in the absence of autonomous policy. During periods of economic success, countries ride on the back of prosperity, however, when economic shocks occur, the impact of these shocks is much greater and the duration is much longer lasting owing to central policy not being flexible enough to adjust to economic shocks before requiring more unpopular measures such as unemployment to play a part in the adjustment process. Indeed, aftershocks arising from EU countries’ debt sovereignty have acted as economic aftershocks rendering these countries persistent in their economic state – persistence being the measure of the extent to which countries remain in the same state for prolonged periods. In the context of the EU, British voters do understand that the geographical landscape has not changed, but what has changed is the economic and political landscape, one which is vastly different from our joining the EU, therefore, are the current membership parameters still applicable today?
Other facts come to light in the understanding of the EU. Much of the EU is run by lawyers who may have little understanding of economies. Also, how much of the EU working directives and employment laws are applicable to UK businesses and how closely should we follow them, in light of the fact that they do restrict businesses and induce unnecessary pressures on them? With the small business making up a large per cent of UK trade and also acting as the main driver of employment, it is important to understand the extent to which EU directives restrict progress and if a ‘better deal’ was struck by the Prime Minister, would this induce an increase in productivity – this being a current issue in the UK?
As the sixth largest country, is the UK in a good position to induce trade agreements? There is a common perception that if the UK left the EU, trade tariffs would automatically be implemented overnight, terms of trade will change and the UK would be isolated. EU countries need to trade with the UK, principally in light of their economic positions, therefore any impediments to UK trade would be detrimental to EU countries.
Long term Foreign Direct Investment (FDI) has been an important feature for UK businesses and the implications of the UK leaving the EU need to be made clear, especially taking into account the endeavour that the UK government in conjunction with businesses undertake to attract investment and hence employment.
It is clear that the UK’s position in the EU is outdated and is in need of renegotiation. In a democracy where choice matters, the UK citizens have the upper hand, but choices must be made sensibly with the full facts to hand and emotional sentiments towards uncontrollable influences must be left at home and not play any part in the choice we make on referendum day.
Dr. Victor Chukwuemeka
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