Saturday, 30 April 2016

Brexit - The Truth

With both sides of the argument employing the same tactics of presenting opinion as fact and supporting this with spurious statistics, The Truth is difficult to locate. I do not claim to be impartial - in 1975 I read the Treaty of Rome and voted against remaining in what was then the Common Market because it is clear that the ultimate aim is a political union which I do not support. I think this must be the only point on which I have agreed with Jeremy Corbyn.  So I offer the following biased points for your consideration.

It is obvious that we cannot trust any statement made by
  • a politician
  • someone employed by or benefiting from the EU       
Parliament designated a ten week campaign period and allocated £7m to an approved campaign group on each side in the interest of equality. A week before this period commenced the government spent £9m on a leaflet supporting the campaign to remain in the EU. The government should be giving us the clear facts for both sides of the argument so we can cut through the campaign spin.
Let's take a brief look at the main points made by the government leaflet
  • An important decision for the UK - True
  • A stronger economy in the EU - Opinion not supported by trade statistics
  • Improving our lives - Very subjective and individual opinion
  • Uncertainty if we leave - True
  • Controlling our borders - Will not be made more difficult by leaving EU
  • Benefits of EU membership - Do we want to be a super-power?
  • Once in a generation decision - Probably true
In all it doesn't add up to a bag of beans so why was the government so keen to compromise its integrity by publishing such a partisan document?

Can we afford to leave?
We currently pay £350m per week into the EU but we receive benefits of £190m per week including Farm Payments and regional support. So our net contribution to the EU is £160m per week. Any claims that we could not afford to support agriculture or the steel industry or the NHS were we to leave the EU does not, therefore stand up. This net contribution equates to about £3/week for every adult in the country. The government's offer to support the steel industry may be scrutinized by the EU, and could be stopped as unfair competition. If we leave it would be solely our decision. (EDF the French power company is 85% owned by the French government: is that fair competition?)

No-one will trade with us
Consider these figures which I gleaned from the ONS:
  • Our largest export market is USA.
  • Export to USA increased 55% from June 2014 to June 2015, 
  • We have no special trade agreement with USA at present. Neither does the EU.
  • In the same period exports to China (No 3 export customer) rose 37%.  
  • About 44% of our exports currently go to the EU which means that 56% go to other countries.
  • Exports to EU fell 4.2% in this period whilst imports from EU rose 10%
  • Non-EU exports rose 12% and imports from these countries rose 2.8%. 
If we look at the trends it is clear that the EU is becoming less important to UK whilst UK is becoming more important to the EU. Is this influencing anyone's stance on our possible exit?
Forecast growth from now to 2020 made by OECD shows the EU as a group declining in GDP whilst USA, Russia, Brazil and many other non-EU are expected to grow. Should we tie ourselves to the slowest growing economies in the world or the most dynamic? 

What  about Obama?
If the Special Relationship puts us at the back of the queue then it's about time we relinquished it.
Let's consider the attitude of USA to EU.  The population of most countries in EU  can visit USA on their Visa Waiver Program (sic) . However citizens of Poland, Croatia, Bulgaria and Romania require a visa. The EU gave USA two years to rectify this which they have not done and so EU is now considering a retaliatory regulation requiring USA citizens to provide additional documentation.  And Mr. Obama wants us to believe that a trade agreement with EU as a whole is imminent? Pull the other one chappie. Of course he may be banking on the EU ability to fudge issues when they become problematic.  I worked in international trade all my life and one thing learned very early on is tat there is one law for USA and another for the rest of the world. They do not conform to international standards in documentation and they apply US laws to activities in other countries.

Difficulty and uncertainty of leaving
In the 1970s following our joining the Common Market there was considerable uncertainty about the future and considerably  more  work. Before then we imported sugar cane,meat and cheese amongst other things from our  former colonies under preferential trade terms.  Harmonisation of import duties took about ten years. During that time the business I was in had to accommodate not only ad valorem duties which increased  each year but also a levy based on the net weight of product which changed unpredictably every quarter. Try managing a business in that climate:  I think we are capable of managing anything the EU exit would involve.
There have been scare stories about what would happen when we leave. Under  Article 50 of the EU any country leaving the EU has a grace period of 2 years during which nothing changes.

Reduction of roaming charges in Europe
This has been all over the papers and radio news today hailed as a great  benefit  of EU. membership.
This applies to the EEA (European Economic Area) also, except Switzerland, so is not exclusive to EU members.

Make up your own mind about EU membership but do not take anything at face value: check the credentials of anyone giving advice  and bear in mind that the internet is probably the least reliable source of  independent information. The truth is out there somewhere but it may take some finding.

Good luck  

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