The dominant fact is that we have a large and consistent trade deficit with the EU 26 countries. The EU exports £28bn more in goods and services to us than we export to them. Our current account deficit on all transactions was over £46bn in 2011 – with the rest of the world we showed a surplus of £17bn in 2011. Our most successful trade is with the USA, Australia and Switzerland – each show weighty surpluses.
Our trade with the EU is in decline. Exports of tangible goods have fallen in the 10 years from 2000 by no less than 12% while goods and services together declined by over 11%. Total exports of goods and services to the EU have fallen to 45% adjusting for the effect of goods shipped to Holland for re-export outside the EU. Nor is this surprising. From over 30% in 1980 the EU27 share of global GDP will fall to 17% by 2017. Economic growth of the 6 EU founding members is almost at a standstill. Far from being the “future” the EU is in major relative decline. Our own annual GDP growth exceeds France, Germany and Italy with Australia and Canada having even higher growth rates and China and India showing phenomenal rises.
To compound this decline the EU is condemned to steep decline in numbers of those able to work. Unless compensated for by increases in productivity economic growth declines with falls in working population. By 2050 Germany’s working population will have fallen by 25%, Italy’s by 21% and Spain’s by 14% – with the UK showing an increase of 5%.
So far from being an engine of prosperity the Single Market has constricted business and inflicted costs far exceeding the benefits of the opening up of EU markets. The latest study puts the annual cost of Single Market regulations at 5% of GDP or £75bn. The EU Commission itself estimates that the costs exceed the perceived benefits by a factor of 2.5 or 3% of GDP – a net cost of £30bn. The burden of regulation to prevent “unfair” competition has created a closely regulated market with employment and social legislation in line with the high tax and social welfare spending of EU economies without parallel in the rest of the trading world which does not have to bear its cost.
So severe is the burden of regulation that few can comply and remain competitive. Here in the UK over 85% of our national wealth comes from our home markets and trade with the rest of the world yet EU regulation applies to 100% of our economy. Now the EU is moving inexorably to take control over tax and spending so signalling the end of democratic autonomy.
We are witnessing the creation of a new country in Europe. Our hope for prosperity and opportunity for all cannot any longer be entrusted to it.
1 Office of National Statistics Pink Book 2012 edn Ch 9 Table 9.1
2 Office of National Statistics Pink Book 2012 edn Ch 9 Table 9.1 Balances Current Account
3 Office of National Statistics Pink Book 2012 edn Ch 9 Table 9.1
4 Office of National Statistics Pink Book 2012 edn Ch 9 Table 9.1
5 IMF World Economic Outlook Database April 2012
6 IMF World Economic Outlook Database April 2012
7 UN World Population Prospects medium variant 2010 revision
8 Open Europe Still out of control Measuring eleven years of EU regulation 2nd edition June 2010
9 Professor Tim Congdon CBE How much does the European Union Cost Britain? September 2012
10 Statement by EU Commissioner for Enterprise and Industry 2006: HM Treasury and DTI The Single Market: a vision for the 21st Century January 2007