EU “BrExit” considerations

Why should we remain in the EU? There are many reasons: some are economic (and most cost/benefit analyses are primarily economic); others idealistic (the route to a putative United States of Europe). There is a long list here. The primary reason, in my view, is geo-strategic (which actually is for ensuring our economic security). For over three centuries, Britain’s foreign policy goals have been to provide security so as to ensure Britain’s economic well being (which in the 19C as it does now, impacts the “price of bread”). In the 18C “mercantilist” era, this led to quite a few  wars both to protect Britain’s back door in Europe as well as its trading interests overseas. In the 19C, as mercantilism led to free (or at least more open) trade as Europe and the USA industrialised, whilst we intervened militarily much less, we still had strategic interests in stabilising Europe as it went through the turmoils of nation building (primarily Italy and Germany), the growing hegemony of Russia, and imperial decline of Austria/Hungary and the Ottomans. Canning, Palmerston and Disraeli were exponents of manipulating the concert of Europe to achieve strategic goals mainly diplomatically. The period of so-called “splendid isolation” was actually quite brief and not, as many Eurosceptics characterise, the long standing normality rudely interrupted in August 1914 and again in 1939 for Britain  to “save Europe from itself”.

After WW2 and the belligerents in Western Europe concluding there must be a “better way”, the EEC developed out of the original collaboration in coal, iron and steel and by the 1960s Britain (whose growth and general prosperity was then not as great as the EEC six) concluded it should join. The goal of the Treaty of Rome was “ever closer union”, something that Eurosceptic mythology overlooks, especially in the context of the 1975 referendum. Macmillan, Heath and Wilson certainly viewed it in geo-political terms and not “just about trade”. Of course, free trade underpins economic prosperity (and democracy) but that trade was to be underpinned by institutions facilitating broader collaboration. To do this requires the pooling (not surrender) of sovereignty in some defined areas but the result is actually to achieve goals where largely national sovereignty is irrelevant, unhelpful or even obstructive and hence is largely abstract and hypothetical.

Agreeing standards and rules for trade is one example (there is no point in 28 states each having their own standards for car safety, for example: it keeps prices higher and cars actually less safe – manufacturers being able to apply a “divide and rule” approach –  than agreeing a common set; alleged monopolists and cartels can more easily shrug off threats of actions from individual states, but not one representing 28 states and  500 million consumers). But in environmental matter, the problems are regional and global. One state acting in its selfish interests to (say) burn coal that the leads to acid rain across the North Sea and sea level rises in the Pacific islands, will result in consequences, so decisions have to be made in agreement with our neighbours and with states large and small on what actions to take.  The EU provides the regional basis for addressing this and many other problems (collaborating in scientific research, regional economic development, crime, security etc). The BrExit arguments revolve around these being “zero sum games” where benefits to one member are at the cost of other members, rather than a positive sum game of reciprocal benefits. Similarly sovereignty pooling is not a zero sum game where by our global standing is diminished because some decisions are taken at an EU level.

The idea that we’re isolated in a group of 28 but wouldn’t be in groupings of 100-200 sovereign states is bizarre. By using our influence to agree EU action, that influence is leveraged and amplified in global forums. In the 21st Century this gives us the ability to punch above our weight. That then ensures the “price of bread” does not become more expensive than it would otherwise become.

Global political considerations

Since 1688, Britain’s national interest has been advanced by ensuring there was a balance of power in Europe: making sure no nation or alliance dominated the continent and curtail Britain’s actions globally. Much blood and treasure have been spent in the pursuit of that foreign strategy objective and engagement in at least 12 Great Power continental and global conflicts, plus innumerable proxy conflicts. Since WW2 ( in which time there have been no great power conflicts for 70 years – longer than any time in modern history), it has been in Britain’s interests to pursue these goals via European cooperation and not through disengagement. The EU was established as a core vehicle for facilitating cooperation in several areas. Whilst Britain’s historical experience of devastating invasions and totalitarian government is fundamentally different to most European states (leading to claims we treat the EU “transactionally”), nonetheless it is in our interests to be influencing its development at its core, not in a detached manner. Past British leaders of European and Global coalitions [Marlborough, the Pitts, Wellington, Palmerston, Lloyd George, Churchill, even Thatcher] would surely be turning in their graves at the strategic failure of recent British leadership.

Once the EU became one of (not the only) bases of peace and economic power in Europe, it has clearly been in Britain’s national interest to be in and remain in it so no nation or alliance dominated the continent. If we were outside or marginalised in the EU we would not be able to influence the power structures of the continent which would be to our longer term national disadvantage. If as many BrExiters claim “our parents and grandparents didn’t fight two world wars to allow Germany to dominate Europe”, then leaving the EU would, in fact, allow Germany to dominate the EU without a shot being fired [though most sane people would agree that a continent “dominated” by a peaceful, democratic Germany is far preferable to one dominated by either the Kaiser’s Germany or Hitler’s and it is hyperbole to compare Germany today with either. Nonetheless the EU as a Nazi grand plan has gained some currency in Europhobic circles.]! The primary reason for BrExit would seem to be that it’s tiresome and frustrating negotiating with other countries: why can’t they let us get our way rather than having to do all this interminable horse trading? Apparently outside the EU, in international forums with many more members it’ll become a lot easier!

Bear in mind that ANY international treaty makes concessions on national sovereignty: as UN members we have constraints on our ability to wage wars [surely the greatest manifestation of a truly sovereign state], how we treat refugees and what rights we afford our citizens (further codified in the ECHR of which the UK was a founding member); as NATO members we have commitments to wage war against aggressors towards other members whether we are threatened or not [and most recently in determining the amount of GDP we spend on Defence]; as members of WTO we have constraints on trading practices; as CERN and ESA members we have obligations to collaborate with other states in the conduct of “big science”. Increasingly we must adhere to global agreements on pollution: No nation can pollute its neighbours without consequences. Name any treaty signed by the UK that is still in force and any international organisation we are members of and I can show you “outrageous” infringements of our national sovereignty, in return for benefits that are intended to outweigh those infringements. The logical destination of those arguing we must leave the EU to “restore our national sovereignty” is we must leave the UN, NATO, WTO, CERN, ESA etc and abrogate every international treaty we have, turning us into a rogue state.

In fact, of all these constraints on our national sovereignty, only the EU received a mandate from the electorate via a referendum. And that referendum was more than about trade: I voted and the goal of “ever closer union” was clearly part of the deal we voted for, despite Eurosceptic mythology that we were deceived ever since.

In the 21st Century there are a huge range of problems that cannot be dealt with unilaterally but by collaboration with other nations and geographies. The EU provides a regional bloc of free trading liberal democracies to address problems such as climate change (and let’s face it it really is not coincidental that so many Eurosceptics are also climate change deniers), terrorism, trade, security, crime, refugees, etc etc. never mind whether we are potentially a few quid a week better or worse off in or out,  if we don’t solve these problems properly and sustainably it really won’t make  much difference. That requires sovereignty pooling to collaborate.

What is meant by “Leave” the EU?

One thing that the various Leave campaigners need to be honest about is what do they mean by “leave the EU” as they aren’t at all clear. Voters need to know before we go to the polls, not after and then discover they “got what they wished for” but really don’t like it.

Let me put some of the options:

1) Repeal every piece of legislation since the European Communities Act and abrogate every treaty with the EU. If that’s what they mean, then they need to be honest and say that immediately the legal basis for our trade with the EU and all the countries it has free trade agreements with vanishes overnight. Sure, they can be renegotiated but that will take some time and with indeterminate outcomes. Hardly a new nirvana of trade! I’m sure most reasonable BrExiters don’t plan this, but this needs to be included as a baseline for other options.

2) WTO rules only. Well, that means the EU is able to (in fact must) impose tariffs and other barriers on many classes of export (as we must on them). It clearly isn’t in anyone’s interests to do that, but that would happen unless one negotiated a different outcome.

3) Agree some FTA with the EU. Well, at the point of a referendum we won’t know what the terms of such an FTA might be so we won’t know whether we’re likely to be better or worse off. The experience of EU FTAs with other countries is they remove tariffs on manufactured goods and ease non-tariff barriers but do little or nothing for Service industries.

4) Some deal like Switzerland. Well, the Swiss (having decided to impose immigration caps) are about to find out that they can’t have their cake and eat it. They’ve already been told they won’t qualify for Horizon 2020 funding (something, in its previous forms, the UK has done very well out of).

5) A deal like Norway. Well, this really is obey almost all EU rules but have no say in setting them. Hardly an outcome that will satisfy those who don’t want ” pointless rules and decisions” imposed on them. Indeed, it ensures ” pointless rules and decisions ” are imposed on them without their consent. Norway is also in Schengen so has less control over its borders than we do. Those advocating “Norway” need to explain how they will resolve the “freedom of movement” dilemma. Norway has full access to the EU Single Market (and be subject to its rules) but has to satisfy EU “Rules of Origin” regulations to ensure exports don’t contain components from third party states without an FTA. That’s ok for Norway’s main exports of oil, gas and fish but isn’t for manufactured goods like cars. 

Only options 1 and 2 can be taken unilaterally. Any other outcome requires negotiation so we won’t know what we’re voting for. Many in UKIP and the Tory right don’t care about that as they seem prepared to materially harm living standards so they can return to some fictitious nirvana of abstract national sovereignty [in a 21st century globalised world, the idea that any one country can do what it likes without consequences is absurd: every treaty we sign or international body we join concedes some national sovereignty in return for some tangible or intangible benefits]. They should at least be honest and admit it. But promises of some unalloyed nirvana of freedom and sovereignty outside the EU leading to great economic prosperity have no foundation without knowing what the “deal” on offer will be.

Some Leave campaigners argue we can “do better” than Norway or Switzerland. They haven’t explained what “better” means nor how they would go about negotiating it. What the EU will also want to avoid is conceding something to Britain that they must then offer to Norway, Switzerland and anyone else with an FTA. The Leave campaign has no consensus on the alternative. Some in the Leave campaign appear to be endorsing the Norway option as a means of claiming formal exit from the EU whilst minimising the economic harm. Some regard this as a staging point on the way to the new nirvana, highlighting the disunity within the various Leave groupings.

All need to explain what would happen if the EU imposes disadvantageous or humiliating terms on the UK. After all, the UK would have voluntarily decided to leave without having agreed exit terms in advance. So, our negotiating position is totally undermined. Telling the EU that the balance of trade is in their favour so they’d be stupid to impose a bad deal is bad negotiations. You should never assume you know what’s best for the other party in a negotiation. It’s like going into a car dealer and presuming their desire to make a sale is greater than their desire to make a profit. It’s no good  expecting to get a better price for cash, if their incentive is to sell finance, insurance and maintenance. Post BrExit, the EU’s priority will be maintaining the cohesion and integrity of the remaining members, not protecting a former member from the consequences of their voluntary choice. France won’t care too much about protecting German car exports from British tariffs because they can be sure Brits will still want to buy those cars and won’t take very kindly to their government making it harder and more  expensive to do so. But France (and quite a few other EU states) won’t care  too much about making Hondas, Toyotas and Nissans more expensive for their citizens, especially if it incents those car makers to relocate to the EU. A work to rule by French customs staff (checking for example the “rules of origin” documentation of UK assembled cars on car transporters at Calais) will make “operation stack” look a walk in the park. 

So, the bottom line is there is no “we can have our cake and eat it” option. Anything that doesn’t harm trade and national interest needs negotiating. Once you’ve declared you want to leave, the UK negotiators are at a disadvantage (as we will by then have played the “leave” card) and could be forced to agree humiliating and disadvantageous terms. Those saying the EU wouldn’t do that sound like someone about to divorce his wife and expects her to be reasonable when he walks out on her after 40 years as it’s “clearly in her self interest”. What happens is trivial issues, such as who gets the CD collection, quickly escalate  into acrimony on the substantial matters such as who gets the house.

Analyses of BrExit options

Here is some reading matter on the pros and cons of various options for leaving the EU. What we need is for the Brexiters to settle on one and argue the case for it rather than on the one hand claim they want a deal like the EEA (but don’t when the problems are pointed out) and on the other say “it’ll be fine don’t worry” but won’t be specific. Without knowing what they mean by “out” we have no idea what we’d be voting for. 

The CBI view:

It’s ridiculous to claim the CBI is funded by The EU (hardly to a level that would sway its members) or that it represents “big business” who would say that. Big businesses buy stuff from and sell stuff to small businesses, and their employees spend money at small businesses, so if “big business” is materially impacted by EU exit, then there will be consequences elsewhere in the economy, including SMEs who don’t knowingly trade outside the UK or even their local area. These big businesses have a duty to their shareholders, employees, customers, suppliers and the country to say so. Voters need to know this. They can decide that they don’t care, that they don’t trust them or their motives, or that other benefits will offset the consequences. But what they don’t want is to be told “we could have told you that” after they find those consequences but were not warned about them. This applies to individual companies and their officers: they have a fiduciary duty to call out risks to their companies so their shareholders, customers, employees and suppliers understand them. It is unacceptable for Leave campaigners to deny busineses and their representative bodies like the CBI the right to express these concerns or accuse them of subverting democracy by doing so. The best protection for democracy is to have an informed electorate not, as Leave would like, an ill-informed one.

Moreover, making comparisons with what some companies and groups said about UK Euro membership back in the 1990s is also ridiculous. Euro membership (or not) did not affect the Single Market rules (and one of Cameron’s renegotiation goals is aimed at reinforcing that). EU Exit DOES affect the UK’s position and rights within the single market.

In fact, it’s ridiculous that the various Leave groups and individuals make accusations of malicious or pecuniary motivations. Accusations of treason are outrageous. Those advocating remaining in the EU, and maximising our engagement with it, are not people with nefarious, malicious, pecuniary or any other ulterior motives. They happen to have an honestly held belief that limited pooling of sovereignty is a better way of pursuing our national interest in a globalised economy than retreating into splendid isolation. We must assume that the Leave campaigners also have honestly held belief to the contrary. But since many of them also claim that we and they will be “better off” if we left the EU, then they surely also have a “pecuniary” motivation. The debate does need to focus on whether the costs of being a member outweigh the benefits, but that debate is being had whilst UKIP drown out the rational arguments with their rhetoric of fallacies, lies and myths. What’s worse is the cowardice of the other parties in responding to it.

Universities UK

UK universities punch above their weight in EU Research funding and believe BrExit would be a severe impact to their research endeavours and international standing. See more here:

Again, the Leave campaign either characterise their motives as pecuniary (“they would say that, they get paid to”) or that they are only getting back some of the money the UK put in in the first place. Leave have not explained how, if at all, universities would be compensated for loss of this research money other than refer, yet again, to the “Norway” option. They show a complete ignorance of how research gets funded, how internationally excellent research collaborations are now the norm these days, and how the EU facilitates both. They sometime point to CERN (especially given its headquarters in non-EU Switzerland) as evidence that outside the EU international research is still possible. But CERN actually proves the reverse: that collaboration via pooled sovereignty is necessary to achieve what no single state can do.

It is a reasonable assumption that university Vice-Chancellors have a pretty good idea of the benefits of EU membership both to their institutions and the Higher Education sector in the UK.  Moreover they have a very good idea of the medium and long term impact these benefits have to the broader UK economy and can make reasonably objective assessments of the consequences to UK research, to the HE sector and the general economy from withdrawing from the EU and closing off the funding and the international collaborations it is provided for. As they are now currently finding it much harder to bring non-EU academic talent into their universities due to new visa and NHS costs, they have a pretty good idea what the imposition of such requirements on EU skills would bring (and the reciprocal barriers to UK talent and students obtaining international experience). Like the CBI, they have a duty to inform their stakeholders of their concerns on BrExit.
Rather than questioning the motives of University Vice-Chancellors in launching the initiative, Leave should attempt to understand their reasons for doing so and their concerns on the consequences to their world rankings, funding, employment and the economy from EU exit. The employees and students of these universities, the towns and cities they are located in and the broader British public have the right to know as part of the process of forming an informed opinion so they can participate properly in the EU referendum. An administrator at a university and shopkeepers located near to universities need to know, rather than finding themselves out of a job or out of business after BrExit complaining they didn’t know their job security depended on EU membership.
Universities are only part of the argument for remaining in the EU. It is perfectly valid to argue that if one accepts the arguments from Universities UK, that the benefits to them are more than offset by costs elsewhere and so BrExit is economically still worth doing. But instead we hear from the BrExiters that these concerns are invalid and that the research funding will be more than offset by overall savings from withdrawal.

Economic Impact of various exit options:

Various reports that weigh up various BrExit options and the pros and cons of each:

For completeness, there is a “BrExit” report with a blueprint and roadmap for BrExit. It does not seem to be the “settled position” for any of the Leave groups, let alone for all of them. It confirms the above reports on the various problems with each option (indeed believes the WTO option will be economically very harmful). The roadmap is long, complex, disruptive and risky with a very uncertain outcome.  What may be of great concern (and perplexing) to many Brits wanting to be relieved of the alleged “jackboot” of EU laws is that step one (of a six step process) is to immediately incorporate all EU law directly onto the UK statute books!  Why do that if the whole point is to restore UK sovereignty?

It is ridiculous to portray these as “threats”: that the EU will threaten us with dire consequences if we leave. If you resign from a golf club, do you still expect to be able to play golf there and use the bar? If you break your obligations in any contract (and that’s what we would be doing) you lose the rights the contract gave you. That’s not a “threat”, that’s contract law!

However, rather than discuss “threats” let’s also look at the positives of EU membership: 

Instead we hear politicians toying with the notion of BrExit. Boris Johnson claims that London could “thrive” outside the EU (in stark contrast to economists and businesses based there); Savid Javid, believing that [a severely reduced] BIS  can quickly renegotiate FTAs with both the EU and all others states the EU has FTAs with; Theresa Villiers undermining the core foundations of her job as Northern Ireland Secretary.

“Pointless Rules and Regulations”

Those who think the EU is about ” pointless rules and decisions” might like to read this: to get a better understanding of what the EU does and doesn’t do.

It is often claimed we have no influence in The EU and are often (even always” outvoted in EU decisions. This claims otherwise and that the UK has a good track record of getting what it wants in EU decision making. What the “Leave” campaigners are essentially saying is that of the votes the UK “loses”, it loses 100% of them – a not very useful analysis. It only makes sense if we know how many we “won” (we won 100% of those too), how many we “blocked” in concert with others, how this compares with other large EU states, whether the matters were of national importance and even whether the UK voted against something it either favoured or knew it had to accept simply to say “it wasn’t our decision – the EU forced it on us”.

The Leave campaigners also in pursuing this “we’re always isolated” argument have to explain why we would be any less isolated in international forums of 100 to 200 countries, when we’re “isolated” in one of reasonably like minded countries of 28, where we have the ability to exercise formal and informal power. The “but we’ll be on the ‘top table'” argument doesn’t stand up to serious scrutiny. In most forums, no-one has a veto (which is a pretty undemocratic instrument anyway): most deals are done by consensus which means negotiating. Other great, and most not so great, powers will negotiate more seriously with a grouping of 28 states and 600 million citizens than one nation of 60 millions.

As for the “70% of our laws are made by Brussels” nonsense, the facts are here:   EU legislation is decided by the Member States, including the UK, and by the directly-elected European Parliament, who can reject or amend proposals by the Commission. So EU laws are made IN Brussels, but not “BY” Brussels. The UK parliament has no problem of sovereignty when it comes to matters such as tripling student fees (to become the highest anywhere in the EU), to the 3000 pages of legislation to reform the NHS, to introduce “free schools”, to cap benefits, to reduce police levels, to intervene in Iraq, Afghanistan, Libya and Syria, to introduce the “bedroom tax”, subsidised home loans and a whole host of high impact legislative acts that the EU has no say in whatsoever. Which has by far the greater impact on the UK and its citizens: tripling of student fees or common processes for importing ferrets? Which has greatest impact on UK citizens: the “bedroom tax” or being forced to accept common rules on olive and tobacco cultivation? Those are rhetorical questions, by the way.

The idea that the UK parliament is totally powerless and an unwilling participant to legislation imposed by the EU is absolute nonsense.

Another argument used by BrExiters is that the EU is actually a middleman between us and global standard setting bodies and most of its “rules” are enacting these. In that case, the argument the “EU makes most of our laws” is without foundation. The British Standards Institute and affiliated bodies was therefore the largest law-maker in the UK before the EU, and that has much less democratic accountability than the EU. More importantly, the EU ensures a consistency of approach in implementing such standards rather than each state interpreting standards in their own way, to the detriment of the single market. BrExiters claim outside the EU we’d be at “the top table” in these standards bodies, but that won’t work if we isolate ourselves in the way BrExiters claim the UK is isolated inside the EU [a claim that hasn’t been substantiated].

Another argument used is that the EU delays implementation of standards (by ensuring a common implementation within the EU) and uses this as a “protectionist” policy (by ensuing a common implementation within the EU). Anyone that has ever actually delivered products to new standards (as I have in software, where the benefits of “first mover advantage” are often overstated) knows that being first is not necessarily a good thing. As different interpretations hit the market, the market eventually consolidates around one (or sometimes two) interpretation that has most critical mass. Those not conforming to this interpretation then have to undertake costly re-implementation to meet the accepted standard. What is clear is that for many standards (eg in car and product safety) manufacturers will wait for the agreed standard from the largest markets. In the case of the UK that would still be the EU whether we were in it or not. Car makers (for example) will not implement UK specific standards (which could also be viewed as protectionist) ahead of those being drafted by the EU and if they do will most likely charge more for them (as the unit costs go up due to the smaller market). There won’t be many manufacturers wanting a “GB” mark that is different to the “CE” mark for product safety. Indeed, the idea that a more demanding “GB” mark reduces “pointless rules and regulation” is nonsensical and the idea of having a less stringent “GB” mark is hardly going to go down well with consumers concerned with safety.

A complaint of many BrExiters is that EU membership means we can’t be members of the WTO or bodies such as UNECE. By leaving we would join the “top table” on these and other international bodies. However, in checking the WTO and UNECE websites they state that the UK is a full member (indeed a founding member) and there is no mention of a “top table” within these organisations that the UK could be part of were it to “rejoin” these bodies.

What “Leave” seem to want is the sovereignty to agree to important stuff we’d have to agree to anyway and to reject stuff that isn’t important and doesn’t matter!

We’re we to leave, what rules and regulations do they think we will we abolish? Will cars and consumer products be less safe? Will employees really sign up to having less, or even no, paid vacation and sick leave? These are inconceivable and business does not seem to be asking for these.

Threat to the integrity of the UK

Lastly, there is the concern to the integrity of the UK if we left the EU, especially if an English majority vote to leave but Scotland, Northern Ireland and Wales vote to remain in. Scotland almost certainly would demand another Independence referendum in such circumstances and it would be foolish to predict a vote to remain in the UK. The Northern Ireland peace process is founded on some assumptions about both the UK and RoI being members of the EU and supported by European institutions (the EU itself as well as the Council of Europe). If these assumptions are no longer in place, who knows what might happen.

Does the Leave campaign care about such concerns? On Channel 4 News recently, Owen Paterson was asked if the breakup of the UK was worth it to leave the EU. He wouldn’t answer. Doubtless some true “little Englanders” genuinely don’t care. But the various Leave groups claim to have nobler vision and aspirations than little Englanders.


There appear to be (at least) two contrasting visions of a post BrExit relationship with the EU. One (which appears to be favoured by UKIP leadership and related groups) postulates a global free trading nirvana outside the EU. Most commentators (including the “Flexcit” roadmap) reject this as economically damaging.

The favoured alternative seems to be settling on a variant of the “Norway” scenario. This would include maintaining freedom of movement (which won’t satisfy the many who want to control EU immigration), a subscription little smaller than the current net contribution (so  peanuts in savings, which won’t satisfy those looking to save money), and the EU continues to set lots of rules and regulations (which doesn’t restore much in the way of sovereignty). On the plus side we get our places back at non-existent “top tables” in international bodies that we never lost in the first place.

The public have a right to ask “why bother?”. We will have gone through five years of self-indulgent re-negotiations of our already special place in the EU at a time when we and the EU had plenty of other concerns to deal with, only to get a deal that isn’t that much different to what we have now, but with less influence. If, as some in Leave assert, this is just a “staging post” to full BrExit, then they are saying we have another 10 years or so of further  disruptive and self-indulgent renegotiations to achieve an end that many will question why we bothered and with uncertain outcome. Furthermore, they assume the EU will continue to indulge Britain’s behaviour. Far more likely, they’ll say “you made your bed, now lie in it”.