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Tuesday, March 1, 2016

Cameron Calls EU Referendum on June 23rd

This month I dedicate my blog to just one subject.

Let’s not be under any illusions as to how massively important this EU referendum is to the UK, the EU and the World.

It will impact on the lives of everyone now living in the United Kingdom in both the short and longer term. The EU was created after the Second World War by Germany, France and four other countries to bring them closer to avoid any more wars. The EU now has 28 member countries and has been totally successful at avoiding conflict. In fact this has been the longest period in history that none of these 28 countries has been at war with another. 

Since the UK joined the EU on January 1st 1973, our economic growth has on average surpassed that of France and Germany every decade. Before that our growth was lower. 

Personally, I am still struggling to see any clear benefits that we will definitely derive from departing the EU other than pleasing Nigel Farage and Boris Johnson. There are lots of possible benefits but none of them is for sure. Not one of them. Here is my list of arguments for staying or leaving as I see them:

Remain in The EU

  • Continued peace not war, with cross-border co-operation to stop terrorism and enhance security
  • Part of the world’s largest free trade zone. By staying in we guarantee we can continue to sell 45% of our exports into the EU with no trade tariffs. Leaving would jeopardise this. No one knows for sure how many years it would take to re-negotiate and what terms we would get.
  • Negotiate changes at the heart of the organisation to make the EU a better place
  • Retain many businesses in the UK who would otherwise leave (e.g. HSBC and may others)
  • Prevent the break-up of the United Kingdom (if we leave Scotland - and perhaps Wales and Northern Ireland - will leave the Union and join the EU).
  • Keep the doors open to EU citizens who wish to re-locate to the UK and help fill jobs vacancies and fuel the economy
  • Ensure the 2.2 million British citizens who live in other EU countries can continue to live there
  • Follow the advice of many big businesses, the G20, Barak Obama, Angela Merkel, Wang Jianling (China’s wealthiest man) and many other sensible people who say leaving would be economic madness
  • Avoid a collapse of the pound (HSBC and others forecast £1=€1 if we leave) and a major likely collapse of stock exchanges if we vote to leave
  • Provide a healthy supply of qualified EU citizens who are helping to fill vacancies at firms across the country (note that UK unemployment is still falling despite the 'deluge' of immigrants) which helps to keep our economy growing

Leave the EU

  • Please Nigel Farage
  • Theoretic benefits such as saving money on EU membership (in reality this may not happen as we may chose to pay to access EU like Norway and Switzerland), less red tape (although if we wish to continue to trade with the EU we will need to adhere to EU standards for our exports)
  • Shut the door to many EU citizens who come over here to work
  • Many talk about regaining our 'sovereignty'. This is disingenuous for two reasons: firstly, the majority of our rules and regulations are determined right here in the UK and don't touch Brussels; secondly, if we still want to trade with the EU post Brexit, we will have to conform to many of those rules anyway!
  • Possible collapse of the EU following a British Exit
The Graph shows how much of UK trade by region is dependant on the EU.

I remain absolutely convinced that the journey to a nation's wealth and its ability to look after its less able citizens, is economic success. Getting people in work keeps them off the streets and generates income for the state through taxes that can then be spent on helping those who are unable to help themselves. Our economic growth has outstripped most other developed countries for some time and we should not now seek a risky and enormous change of direction into the unknown.

We no longer live in a world where an isolationist little englander outlook will lead to success. I am not saying we would wither completely, but in today's interconnected, interdependent world, friendly relationships and strong agreements with other nations will lead to continued peace, growth and financial stability.

Ripping it all up and starting again would most definitely be the wrong thing to do. At best, after years of uncertainty, re-negotiation, and financial market mayhem, we would gradually make new agreements with many countries. But it would take a very long time and it is unlikely that they would be as advantageous as the 80+ country agreements that we have via the EU. To a country like China, the EU and its 500 millions citizens is a far more attractive proposition that little england, however great we might think we are.

The UK is part of the world's largest and most prosperous Economic Union

Cameron has done well to get a few concessions out of his EU colleagues. Let's stay in, and get a lot more reforms through. This will help the UK, the other EU countries and set a great example to the World.

"After the Berlin Wall came down I visited that city and I will never forget it. The abandoned checkpoints. The sense of excitement about the future. The knowledge that a great continent was coming together. Healing those wounds of our history is the central story of the European Union. What Churchill described as the twin marauders of war and tyranny have been almost entirely banished from our continent. Today, hundreds of millions dwell in freedom, from the Baltic to the Adriatic, from the Western Approaches to the Aegean."

David Cameron 2013 speech on the EU.

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