Does our voice in the EU make us stronger?
We joined in 1973 when we were just one of 9 with a veto on most issues. Now we have just 8.4% of the
votes in the Council of Ministers with 26% needed to block legislation. On trade and business regulation we have lost our veto entirely. In economic matters only a few areas such as tax now need unanimity. We have lost the power to protect our industries. The City contributes £80bn, over 5%, of our GDP, but we could not protect it from EU directives1 undermining its global pre-eminence or prevent control of its markets being removed to the EU in Paris2. The British Government acknowledges that the EU imposes 50% of legislation in the UK having “significant economic impact”3. We can do nothing about this. Yet the cost of EU regulation approaches £75bn a year.4
Only the EU Trade Commissioner can negotiate trade deals for all EU members. We now have no voice in the WTO. But EU protectionism conflicts with our interests especially on food imports. For the poorest food producing countries with a GDP per capita of under £5,000 a year, the average EU tariff is 6% with the UK having to impose EU tariffs on food from the rest of the world of over 8%5. Such tariffs severely distort the market and prevent efficient allocation of the economy’s resources.
But are we not too small to prosper on our own through global trade?
Of the 14 countries with the highest GDP per capita6 11 are also in the top 14 of purchasing power parity per capita7. But of these 11 states only two (USA and Canada) are among the 50 of the world’s most populous nations. The four very small states of EFTA have a GDP per capita 210% greater than the EU. Nor are the USA and Canada exceptions since in reality they are confederations of much smaller autonomous states and counties.
But would we have leverage in international dealings?
Far from being “Little Englanders” we are the world’s 5th largest trading nation and 2nd largest earner for overseas services and investment income8. Even as an exporter of goods we rank 9th in the world with the 7th largest economy. We are the sole oil exporting European nation9. In our own right we are members of the G20 accounting for 80% of world trade and 84% of world GDP. London is the world’s financial centre for international transactions. Above all we have our historic links with the expanding economies of the Commonwealth in five continents and the vast market of the USA. Our trade with the rest of the world has grown by over 12% since 2000 while EU trade has fallen also by 12%10.
The EU treaties require the EU to conclude agreement with countries that decide to withdraw from the EU and place it under a duty to contribute to free and fair trade.
All these facts afford solid grounds for confidence in our future outside its control. Relieved of the heavy cost and burdens of the EU regime the sunlit uplands do indeed beckon for Britain.
1 Alternative Investment Fund Management Directive 2009/0064 (COD).
2 European Securities and Markets Authority Regulation (EU) No 1095/2010.
3 House of Commons Library Research Paper 10/62 October 2010 Statements by Lord Triesman Minister of State FCO.
4 Professor Tim Congdon CBE Professor Tim Congdon CBE “How much does the European Union Cost Britain” September 2012.
5 Global Britain Briefing Note no 81 September 2012.
6 International Monetary Fund Statistics.
7 International Monetary Fund Statistics – Luxembourg, Norway, Singapore, Switzerland, USA, Australia, Sweden, Netherlands, Austria and Canada and excluding 3 Middle East Oil economies.
8 IMF Balance of Payments Yearbook 2011 Committee on Balance of Payments Statistics.
9 CIA World Factbook January 2012 – UK exports of over 1.3m bbl/day.
10 Office of National Statistics Pink Book 2012 Ch 9 Table 9.3.