Should I Stay or Should I Go Now?

Erm, Stay. Thanks.

There’s a referendum. You may have noticed. And I’m going to vote to remain, because the EU is the most awesomest thing evah!!!!!

Erm—no. Not, no that I’m not going to vote to remain but, rather, no I don’t think that the EU is the most awesomest thing evah!!!!! Indeed, I once started a petition to try and point out the ridiculousness of the EU Parliament piling in a bunch of trucks and Audis every few weeks to move from Brussels to Strasbourg every few weeks to discuss Climate Change (at this point a huge Shout-Out to the whole four people that signed my petition…).

Of course, it’s worse than than that. The position of the Mediterranean states varies from abjectly grim to absolutely horrendous. In Cyprus Youth Unemployment is over 30%—a statistic that should make anyone stop and pause.

Except that that’s actually one of the better positions—in Italy it’s nearly 40%. In Spain it’s over 45%. And in Greece nearly every other person under the age of 25% is unemployed.[1] The comparative figure for the UK is around 13%.

This is a statistic that should be front and centre of every single session of the European Parliament. That should occupy the front pages across Europe. It’s worth repeating. In Greece, half—HALF—of all young people are unemployed. This is a generation that can’t engage in the workforce—a generation that can’t plan for the future, that can’t move out, that can’t develop their skills.

The answer to this is not more Mass [2]. It’s not more of the same, but moar painful. No-one in the history of humankind has deflated their way to growth. And yet the EU seems to think that this is the answer.

So, it’s flawed. It’s flawed with some really basic concepts. There is a tension between politicians who claim to be trying to achieve “ever deeper union”—whilst pushing to get the best deal for their country. For their electorate. This dichotomy is conveniently ignored, brushed under the same carpet as Greek Youth Unemployment and Volkswagen’s approach to emissions.

And this is just part of the issue with the EU. In the face of existential challenges (e.g. Syria, Putin’s increasingly nationalistic approach to Life, the Universe, & Everything), it has resembled, at best, a rabbit caught in headlights. It has a common travel area that has new fences at many of the borders.

So—why the hell vote for Remain? Surely to God we’re better out. Better away from meaningless platitudes like “Ever Deeper Union”. Better away from a dysfunctional organisation that views the supremacy of a currency union as far more important than a Youth Unemployment rate of 50%. That mandates banana standards?

Yep. Remain has challenges. But there are positive reasons to stay. But before looking at those, what of the reasons to Leave?

The Economy Will Be Better Off Without the Shackles of the EU

There are two distinct phases to the economic argument—short-term and long-term. Short-term the answer’s clear…

Short-term a vote to Leave is going to be painful. Why should it be, and what does that pain look like? The reason for the pain is two-fold—uncertainty and bets. Markets dislike uncertainty—look at what happens to markets near to an election if the result isn’t clear-cut. And in the event of a Leave vote—there’s going to be a huge amount of uncertainty.

We’re not even going to know who’s going to be Prime Minister in a few weeks time (other than it’s pretty unlikely to be Cameron, D). Gove, Grayling, Johnson are all going to be jockeying for position—whilst the markets are trying to get a steer on how the Hell the process of Brexit is actually going to work.

How will that uncertainty manifest itself? In a number of ways—mostly involving currency, investment, and borrowing. The impact on Sterling will be dramatic—a move out of Sterling as a reserve currency whilst the process plays out. And that means that the value of Sterling will fall. Which is awesome for exporters. Except for those exporters who import part of their BoM (Bill of Materials) from abroad. Which is an awful lot of them. For them, currency volatility will have an impact—not least that it will make it difficult to plan…

… and that feeds through even more into the investment decisions of many companies. At the moment the UK commands a high proportion of inward investment into the EU [3] — there are advantages of language, of business focus. But in the event of a vote to Leave—there’s that uncertainty again. So there will be an impact on investment. At least in the short-term (several years).

And borrowing? The Government borrows. It borrows a lot. In and of itself, this isn’t as bad as certain politicians like to make out. Particularly where that borrowing is used for investment (e.g. Crossrail). There’s an intrinsic link between risk and the cost of capital, though—and the perception of risk—at the very least—will increase dramatically in the event of a Leave vote.

And in the Long-Term? Who knows. Listen to Remain and it’s essentially akin to a Zombie Apocolypse. With added rain. Listen to Leave and we’ll become Switzerland. With more sheep. And less snow.

One thing is known, though. It took Greenland (population approx. Melton Mowbray) three years to negotiate their exit from the EU. The UK is of a different magnitude to this. Squared. And whilst we will have the benefit of a structural and systemic trade deficit to help our negotiating position (if people are flogging you more stuff than you’re flogging them then it’s going to focus their minds somewhat!)—trade deals are complex things.

And Frankfurt, Paris, New York. Shanghai, and Tokyo will all be eying the ultimate prize—to usurp London as the world’s financial capital. Whilst some of the more overt moves to take London’s place won’t succeed, there will be a whole bunch of more intangible barriers to London erected.

There’s Too Much Red Tape From the EU—It’s Strangling Business

Ah-ha, the European pillow regulations [4]. Too much regulation! Too much interference! Sack the EU off, and British Business will thrive, able to crack on with lead-lined food tins, death-trap cars, and arsenic laded children’s toys. Hurrah!

Except, of course, that we’re not going to let companies do any of the above. We’ll need to guarantee that they won’t. So we’ll replace those pesky EU regulations—with new regulations.

And then there’s the Acronym Alphabet of International Agreements. The WTO. The FAO. ICES. NASCO. UNEP. UNECE. And many, many, many more. Many of those mandate what companies can do. And often for good reason—we only have one planet, and it has finite resources. We either cooperate to maximise those resources, or we compete in other ways (the British Empire says Hi! at this point). And if we opt out of all those agreements we become North Korea. With Michael Gove as Kim Jong-un. Which is somewhat terrifying.

So—leaving the EU won’t suddenly mean that a whole bunch of regulations go away. But it will mean that it’s suddenly a whole lot harder to influence those regulations in the market that means the most to British companies—Europe. We’ll go from a position where we don’t always get our own way—to one where we never do. Of course, we’ll always have the option to not sell into Europe; to not sell into our biggest market.

That doesn’t seem to be particularly sensible.

We Want Our Country Back

What does this even mean? I voted Liberal Democrat at the last election—and my constituency returned a Tory MP. And the country elected a Tory Government. A high proportion of the population of Northern Ireland and Scotland don’t even want to be in the UK. So compromise is everywhere—that’s the nature of democracy.

Except there appears to be a cadre of people that seem to think that they have some inalienable right to only be represented by people they agree with; that they choose. And that those that aren’t chosen by them—be they in the UK, in the EU, wherever—those people are invalid. Have no right to make laws and regulations that impact them.

Even though the rest of us have to accept that. It’s the nature of democracy. But it’s also the nature of democracy that your complaint isn’t any more valid than mine about the Tory Government, the SNP member’s complaint about rule from London. It’s no more “Your” Country than it’s “My” Country.

There Are Too Many Immigrants

At this point Japan says hi. Which seems a tad left field for a discussion around the EU. But Japan is an excellent—and salutary—example of what happens in the absence of immigration. The debate in Japan is now about whether they’ve left it too late to start accepting immigrants—not if they are a good thing [5]. So immigration isn’t necessarily a bad thing.

At this stage it’s worth reiterating the differences between the different types of immigration, as certain politicians have had a vested interest in conflating them. There are three broad groups:

a. EU Immigrants

b. Non-EU Immigrants

c. Asylum Seekers / Refugees

Of these groups, Non-EU Immigrants are the most strictly controlled. Whether they are family members from South Asia, or Economic migrants from Africa—there are strict rules in place as to who can come in; and who cannot.

Asylum Seekers / Refugees are the group that are most visible in the media. These are those that are fleeing conflict in Syria, oppression in Eritrea, homicidal homophobic policies in Uganda. Those that had two choices—leave or die.

Of course, many in the former group would like to appear to be in the latter group, as there is a legal—and moral—obligation to help them. What’s needed is robust investment to ensure that, if we’re serious about ensuring that non-EU immigration is properly controlled, we can do so.

Consequently, as this is priority area for many, the Government has cut funding for this by a quarter since 2011 [6].

Which then leaves EU Immigrants. And there are many of them. But the number arriving in the last year is remaining roughly steady:

And this migration doesn’t cost the country. Far from it. Between 2001 and 2011 EU Immigrants contributed 64% more in taxes than they received in benefits [7]. So, yes—there are a lot of EU Immigrants.

And they’re stopping us becoming Japan.

Of course, that doesn’t mean that the inexorable rise in housing costs in many parts of the country can just be ignored. But, in many cases, this reflects (especially in London) the conversion of housing from somewhere-to-live to somewhere-to-store value; particularly for those that live abroad. The rise of empty housing serving only to store wealth for Russian billionaires, for the Malaysian middle-class helps to ensure that we can continue to run a balance of payments deficit—but it has a real impact on people wanting to have somewhere decent, and affordable, to live.

This isn’t a question of immigration policy though—rather, it’s housing policy.

What’s the Positive About Europe?

And that’s a prize that everyone should be wary about giving up easily. Of course, it could just be coincidence.

Or it might not be.


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