The EU and the economy: part of the same debate


John Cridland, CBI Director General

John Cridland, CBI Director General

I always thought that John Cridland, Director General of the CBI, was a pretty sensible sort of chap.  I wouldn’t say I know him well, though I’ve met him a couple of times over the years.  But what I’ve seen and heard suggested he was a sound if unspectacular voice for a common-sense approach to industry and the British economy.

So I was sorry to see (DT, May 17th) that Mr. Cridland fears talk of an EU referendum is stealing focus from what should be the government’s key priorities — jobs and growth.  This is a common canard, and rather too many commentators have made the same spurious point.  They’re treating it as “either/or”.  You can devote time and effort to something they see as marginal — EU membership, an obsession of some in the political classes which means little (they say) to the average voter.  Or we could — and should — use that time and effort to focus laser-like on the top priority for both voters and industry.  Growth and jobs.

This is an appalling fallacy, and shows a deep ignorance of the malign impact which the EU has on the British economy.  So let’s say it loud and clear: one of the two key reasons we want an EU referendum, one of the two key reasons why we should be Better Off Out, is precisely because EU membership damages growth and jobs.  We’re concerned about EU membership not instead of concern for growth and jobs.  We’re concerned about it because of growth and jobs.

The EU is the only major economic area in the world in long-term relative economic decline.  Close to 30% of global GDP in 1980, it’s now around 19%, and could be 10% by 2040.  We are shackled to a sinking ship.  Meantime the costs to the UK of our EU membership are estimated by Tim Congdon to be around £150 bn, or close to 10% of GDP.  This is an enormous burden on our economy.

Mr. Cridland says “British companies may struggle to survive without access to our primary market”.  Why does he imagine that on leaving the EU we should cease to have access to European markets?  Is the USA, or China, or Canada excluded from European markets?  When we leave, the UK will be the EU’s largest export market.  Are they going to put that at risk?  Does Mr. Cridland know that over recent decades, EU imports from non-EU countries have grown faster than continental imports from the UK?  On this basis, membership seems more like a barrier to trade than an advantage.

Then he trots out the inevitable comparison with Norway and Switzerland — two small countries on the margin of Europe.  Like them (he says) we should be subject to EU rules but have no voice in making them (though we have precious little voice now).  But the UK economy, in terms of size, is somewhere between those of Canada and the USA.  Are they subject to EU rules with no say in making them?  Do they have problems with access to the Single Market?  No.  And nor shall we.

In the same paper, we have good old Peter Mandelson, “Cameron must not cave in to the UKIP threat”. His piece might justify a thorough deconstruction, but I’ll highlight only one point: his repeated references to UKIP’s “isolationist” position.  Why on earth does he think that national independence and self-determination are “isolationist”?  Just for the record, in life before politics I worked for decades in multinational companies, including more than a decade resident in Asia.  I see Britain as a great global trading nation.  I see leaving the inward-looking, protectionist EU as rejoining the rest of the world — not embracing isolation.

Britain has a permanent seat on the UN Security Council.  We are part of NATO, the OECD, the World Bank, the G8/20.  We are the leading country of the Commonwealth (whose GDP has recently overtaken the eurozone).  Out of the EU, we’d re-join the WTO in our own right.  Undoubtedly we’d have a free trade deal with Europe — as so many others have.  Far from isolationist, the UK is one of the most globally-connected countries in the world.  The idea that to avoid isolation we have to be governed from Brussels is both wrong and offensive.

Earlier I said that the economy was one of the two reasons we’d be Better Off Out.  And the other?  It’s a little matter of freedom, independence and democracy.

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8 Responses to The EU and the economy: part of the same debate

  1. Linda Hudson says:

    cannot argue with the obvious!

  2. If Cridland really believed it was a distraction he would be campaigning all out for a referendum now, to get the matter sorted one way or another.

    The fact he does not shows he has ulterior motives.

  3. grumpydenier says:

    There seems to be a Common Purpose in the approach of these people. I agree with Paul; if their argument is so strong why be afraid of having a Referendum?

  4. Chris says:

    Guido Fawkes on Peter Mandelson’s article in the Daily Telegraph:

    “Definitely nothing to do with EU rules dictating that the former commissioner must maintain a “duty of loyalty” or be stripped of his £31,000-a-year index-linked pension worth over half a million pounds. As ever with Mandy, just follow the money…

  5. Nice point, Chris. I wouldn’t for a moment accuse Mandy of trimming his views just to preserve his pension. But I wouldn’t say that you and Guido were necessarily wrong!

  6. David says:

    Nice one Roger, keep em coming.

  7. manicbeancounter says:

    You are right about EU membership damaging growth and jobs in this country. But there is something potentially much worse. I had a read of Gerad Batten’s report on the cost of the EU. On Page 19 is “Table 3. Who pays most: Budget 2000-2006”. Being someone who likes to understand figures I tried to put the figures in context of some data from the World Bank website.
    Britain was the second highest net contributor, but the figures were about 0.25% of GDP. Much more concerning is the countries at the other end of the list. Those who are the biggest beneficiaries of EU largesse. From the bottom up, these are the recipients, with net contributions as a percentage of cumulative GDP in 2000-2006.
    Spain -1.0%
    Greece -2.7%
    Portugal -2.1%
    Ireland -1.3%
    I am all for helping the poor countries to develop, and before EU enlargement these were some of the poorest countries in Europe. But they are also currently the economic basket cases of Europe. Most of the problems they are experiencing is due to membership of the Euro, but it should be investigated if EU “aid” is of a positive help or net harm to these countries.
    The most morally indefensible position is of little Luxembourg. Its net contribution was -4.3% of GDP in this period. Per capita income is over 60% higher than Britain and over 2.5 times higher than Greece.

  8. neilfutureboy says:

    Unarguably right on all points. Choosing whether to be in the EU zone in recession or the rest of the world growing at 6% is, by definition, about growth and jobs.

    We should publicly challenge Mandy and the CBI to engage in a formal debate about EU membership and the BBC & other organs that give them space to broadcast/publish the debate in full. The greatest risk for the EU referendum is that the state broadcaster will censor any debate and continue propagandising and we should challenge them on it.

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