Tuesday 21 June 2016

Why I'm voting REMAIN?

Before I start I want to say that I do not think the EU is a perfect body and it needs to change and if the Leave/Remain Campaigns had been run well I think we would all being going to the polls feeling some reservations about how we are voting. However I also definitely do not think Westminster is a perfect governmental system. Recognising that a system has flaws and needs changing is not a reason to abandon it, particularly when we will still be affected by that institution even if we leave it. The difference is we simply will have no voice to change it and will have damaged the relationships with our neighbours in a great divorce. 

I was a very small child when we voted to join what was then, I believe, the Common Market. Compared to a great many parts of the world I have had a good life in the UK as part of the EU, as have the rest of my compatriots. Therefore I feel there needs to be a very good reason to leave the EU and, to date, I feel I have not been offered any honest and compelling arguments to Leave.

There seems to be four principal pillars to the Leave argument:
  • Controlling Immigration.
  •  Getting UK Sovereignty back from the undemocratic EU.
  • Allowing the UK more freedom to organise trade agreements with non-EU nations.
  • Save money which will transform our public services.

Immigration
Perhaps I need to start by saying the obvious: immigration is NOT in any way the cause of the recession and subsequent years of austerity. The cause was greed, extended living beyond our means and mismanagement of the banking system. However those in the financial sector have power and influence so after the initial out-pouring of wrath on them by the public, it hasn’t taken long for influential figures with strong links to that sector to start vilifying migrants as the cause of our national woes. The EU in fact is one of the bodies that enforced constraints on the banking sector subsequently.

It is true that we can only limit EU migration by leaving the EU. Although we are likely to have to accept it anyway as part of trading with the EU and even the most optimistic Leave campaigner wouldn’t propose a bright future for the UK if we decided to stop trading with the EU altogether. So for those voting Leave simply because they do not like foreigners and do not want them to live in this country there is going to be huge disappointment.

Even Nigel Farage has admitted we will need net migration over the coming years it’s just he wants it to come from Commonwealth countries – the same countries that provided migrants over the post-war years and who also often received a less than hospitable welcome. The NHS which is highly stretched would almost collapse if we were to lose all our foreign born workers, and so would agriculture and social care.

Many people concerned about immigration do not live in areas of high European migration and have simply been worn down by the almost daily headlines in some of our newspapers over the years into believing this is the cause of our problems. Other people do live in certain areas where European migration is higher and there are some real concerns. 

Most European migrants are generally young and of student or working age. This means they generally have less NHS costs are contributing to the tax system which helps given our ageing population. However they do often have children or will have children in the future, for children born here of EU parents there is no difference in terms of the education system having time to respond to the change in birth rate to children born of UK nationals. For children of school age who arrive with EU parents there can be areas which struggle to cope with a sudden influx of children, but this could also happen if there were a sudden movement of UK nationals due to varying regional job opportunities. I accept it is likely that extra English classes may be needed for new EU migrant children but I do not believe this is an unmanageable situation, which should precipitate us to leave the EU.

Shortage of affordable/social housing is due to not building enough houses and years of UK government policy. It’s not down to the EU or migration.

A lot of retired UK nationals live in Europe and the health costs for the older generations are almost always significantly greater.

So if EU migration largely contributes to supplying required skills of working age people who contribute to the tax base of the country in a country which the native born population is ageing, why is it a problem?
I do think as a nation we need to rethink eligibility for some benefits and as many other countries do they should be earned based on at least having worked a minimum number of years. This would apply to UK nationals and well as migrants and care would have to be done in how this applied to people who were truly unable to work.

On reflection it’s not strictly true that we can’t reduce net migration from the EU unless we leave. We could encourage business development in our European neighbours so the young preferred to stay at home or we could orchestrate a huge recession in the UK which caused British nationals once again to take work in continental Europe thus changing the figures. Neither option I think is likely to happen and in the case of the latter is highly inadvisable at least as an active UK government policy!

Sovereignty
This is largely a myth, but like with any myth if it’s repeated often enough it gains an illusion of truth. Even if we leave the EU, we will need to comply with most of its laws in order to trade with its members. Many of the problems in the UK could be resolved by laws in Westminster or devolved bodies, but they aren’t – so getting sovereignty back won’t solve the real problems which worry most people. (Immigration is largely a scapegoat and distraction from the real problems we could demand the government fix)

We will still have to comply with laws of other international bodies.

And then there’s the “issue” of how undemocratic the EU is. Just because we don’t get our own way all the time doesn’t mean it’s “undemocratic”, it’s a little like a small child bemoaning “it’s not fair” because he/she doesn’t get their own way.

Firstly the bureaucrats/technocrats don’t approve laws in the EU. They generate the laws meaning they work trying to gain understanding and consensus of all the member states and their interests to draft a law, these then are sent to the MEPs to vote on. Yes, I accept that there are regulations which do not need MEP approval but it’s not a case of a few people just coming up with what they fancy. When we look at the regulations that hit the news (how bent a cucumber or banana can be for example) you have to come to the conclusion there aren’t a lot of terrible regulations being made, just a few that have some content that from time to time can seem over-vigilant or amusing. If there was really awful regulations that removed so many good choices from us we’d hear about it in far more detail. The fact we don’t means the hype is just that hype! I think certain areas of of national government, such as education policy, would benefit from being run by highly experienced technocrats.

In every general election I have been in the UK I have voted. On no occasion has the candidate I voted for got into power (and I vote for mainstream parties), since we operate a first past the post system. So my vote was effectively wasted. So for more than 25 years I can easily argue I have been disenfranchised in the UK system. It is a poor form of democracy.

On the other hand the MEPs in all member states are voted for by proportional representation in one form or another. Therefore, when I vote for an MEP my individual vote counts. How can this be seen as undemocratic?

The problem with the EU is that as British voters we largely treat it as irrelevant or as a way to give a “protest vote” to the current UK government. In the last EU elections less than 36% of people voted as the biggest vote share went to UKIP. This means we have more UKIP MEPs than of any other party. So we send to Brussels people who don’t even want the EU institution to exist and wonder why we aren’t taken as seriously as we’d perhaps like.

I have been guilty of seeing the EU as irrelevant, despite my dad’s claims it was a lot more accessible than Westminster. It wasn’t until I was in DR Congo last year seeing a small water project they’d funded in poor town and a German colleague said to me we should contact our MEPs and get some information we needed on it, as they are our elected representatives and answerable to us that I realised how detached I felt from the EU. Sure enough once I worked out which of my MEPs to contact because I can contact any of the Yorkshire and Humber ones, she was very helpful and I got a glimpse of the good we are more able to do together.

The EU is no less democratic than Westminster, it’s just our national voice is smaller. But I guess for me I can influence the EU more than the Houses of Parliament with my vote.

Trade
If we leave we have no guarantees of what the new trade agreements would look like with the EU, when they would come into place, what we will have pay for access to their markets both in terms of fees and accepting free movement etc. Clearly, as will any great divorce, there is likely to be several years of pain and the EU as the stronger partner has less reason to agree as solution that is more attractive to the UK than the current agreement.

Uncertainty will affect the nation for several years and companies and the people who lead them don’t like to invest in uncertain times if they can help it. Short term as least leaving will have a negative effect on our economy. However longer term I think it is difficult to accurately predict as so many global factors are outside the EU and the UK’s control.

I suspect in the best scenario 10 years from now we’d be at the same place as if we had remained. In the worst case in 10 years the UK struggles to recover from the shocks and uncertainty of the early years of the Brexit, the likely disintegration of the UK and the impact on the European economy so the continent including the UK is worse off financially and socially, but I’m not an economist. If the EU is very harsh as I suspect it may be as it too will feel like it’s fighting for its existence, maybe much of the banking services provided in London moves to another city in the EU. Whilst I do not think it is healthy for the UK economy to be so heavily dependent on financial services it is.

We know we currently have high energy prices and an energy deficit so we have to import energy at peak times from France and the Netherlands, this is going to continue and perhaps worsen in the coming years as we have not been pro-active enough in building new power stations which take several years to go from order to design, build and commission.

Leave often disparage the role of the EU in our trade saying it is an old economy and it has slow growth. When a country in developed and has a reduced birth rate as is the case in much of Europe there is no need for a fast growing economy, it is an illusion that we only need to deal with more risky but faster growing economies. If your GDP is small/person and you have a high birth rate you need a higher growth rate just to stay still.

We also lack sufficient highly trained trade negotiators and diplomats for the UK negotiations that will need to start almost immediately. Also for many nations trading with a block as large as the EU is far more attractive than trading with the UK alone, so we need to be sure we are going to get these deals and not end up compromising on the quality of the deal in order to get a quick agreement. These negotiations are costly so at least some of the savings we make on the payments to the EU will go on this.

Sometimes it feels like the easy free trade proposed by Leave is like the cold calls pensioners get suggesting they invest most of their pension in a wonderful scheme which will give them 10% interest (or you could lose the capital in small print and we are not protected by the FSA). We are being asked to leave on a promise of a possibility.

Save Money
Yes of course we would save the £350M we give to the EU each week (£18B/year). Except, no matter how many times it’s been said Leave won’t admit we don’t give £350M to the EU each week.  We actually give £13B/year as there is a £5B rebate and then we get £4.5B pounds back for specific projects and support so last year we gave £8.5B to the EU. This is £164M per week, less than half of what Leave keep endlessly repeating, but it’s still quite a lot of money for a membership fee and I’d be quite happy to even just get an hour’s worth of that fee!

Obviously I know that as well as contributing to the running costs of the EU, some of this money helps poorer areas in the EU and a very little bit helps try to bring water to people in far worse situations in DR Congo!

As a percentage of our GNI after the rebate the UK pays the lowest percentage of GNI of any of the member states into the EU partly because we have one of the larger economies. As a total amount both France and Germany pay more than the UK and occasionally Italy has paid more.

So to put it in context: How does £8.5B compare with other UK government expenditure and what could we do with it if we left the EU?

Well Leave tells us leaving the EU will transform the NHS. We currently spend £141B a year on the NHS so even if it were possible to use the full £8.5B on the NHS this would be a budget increase of only 6%. It’s not nothing, but it’s not transformational.

In 2015-6 we spent £45B on defence, £99B on education, £258B on welfare and even £36B on interest on debt. Compared to those number £8.5B no longer looks quite as big.

We also have to remember that we will still have to pay for access to the EU Single Market. Switzerland pays about 41% of what the UK pays per head and Norway pays 84%/head of what the UK pays net just to have access to the EU single market not to be a member. So even if we were to assume we could negotiate well and get Switzerland’s rate 41% of the £8.5B is already heading back to the EU leaving us a saving of £5B.

By the time we pay for the extra trade negotiation staff, offices, diplomats and embassies there won’t be a lot of the saving left. Then if the economy does worse as is likely even for the first few years and we have less taxes and a bigger deficit, the interest payments on debt will go up and all of a sudden we’ll have saved nothing.


So, as I said in the beginning I needed a strong reason to leave. The four main reasons I have been provided with by Leave can all easily be shown to be flawed: Lies at worst, wishful and nostalgic thinking at best. So with no strong reason to leave I am definitely voting REMAIN.