16 June 2016

Don’t be fooled by the “sovereignty” delusion – the EU makes us richer, safer and freer


If membership of the European Union has deprived Britain of its sovereignty and gutted our democracy, how come we, the British people, are having a referendum on whether to leave? The truth is Britain remains free to withdraw from the EU not just on 23 June, but whenever Parliament decides. But Britons should vote to Remain, because cooperating with our neighbours make us richer, safer and freer.

Unless we want to live like Robinson Crusoe, poor and alone on our small island, we need to engage with the outside word. One way Britain does so is through international treaties which the government signs and Parliament ratifies on our behalf. While Parliament retains the right to revoke them, these treaties commit us to do certain things in order to achieve aims that make us better off. Thus because the government thinks NATO membership makes Britain safer, we are committed to sending British soldiers to fight to defend a whole host of countries, including Turkey.

The government has signed more than 14,000 international treaties. So the notion that Britain is not sovereign because of the EU treaties, but would become so if we left the EU is nonsense. And if a post-Brexit Britain tried to avoid all international legal commitments, we would be much worse off.

Take trade. Shockingly, leading Brexiteers seem to have no clue about how international trade is now conducted. Freeing trade is no longer simply a matter of slashing import duties – something Britain could do unilaterally. Especially in services, in which Britain specialises, but also in manufacturing, trade requires agreement on standards and regulations. That requires negotiation with, and commitments to, other governments. Do we accept foreign cars as safe, and likewise do they accept British ones? Are we satisfied that your financial institutions are appropriately regulated? What recourse do consumers have when they buy off a foreign company? And much, much else besides.

If we leave the EU and want to continue trading with it and all the other countries that comply with EU standards and regulations, we would have to comply with them too – without having any say in setting them. How does that make us more “sovereign”?

If we decided to trade with the EU and the rest of the world on the basis of World Trade Organisation rules and commitments, we would have to comply with those or be taken to the WTO’s dispute-settlement mechanism. Short of becoming North Korea, there is no escaping this. Even the mighty United States complies with WTO rules. So the notion that Britain would “take control” if it left the EU is an illusion.

Therein lies the positive case for the EU. In some areas, we can achieve better outcomes for the British people – higher living standards, enhanced national and personal security, greater freedom – by cooperating with our neighbours and main trading partners, including through legally binding treaties.

It’s about the immense benefits of the freest trade that exists between any countries on earth within the £11 trillion EU single market of 500 million consumers – and all the foreign investment and well-paid jobs tied to it.

It’s about having more influence over the terms on which we engage with the world – at the WTO, in negotiations with the US and China, in climate-change talks – by acting together with our EU partners. To see how unbalanced bilateral deals between Britain and the US are, just look at the extradition treaty that Prime Minister Tony Blair negotiated with President George W. Bush: this gives the US much more power to demand the extradition of UK citizens than vice-versa.

It’s about the freedom to take a cheap flight for a stag-do or family trip in Europe, using your mobile phone without punitive roaming charges abroad, the opportunity to study and work elsewhere in the EU and the freedom to retire in sunny Spain with free healthcare.

It’s about collaborating in the fight against terrorism, standing up together to Vladimir Putin’s aggression by imposing collective sanctions on Russia, and working together to ensure energy security as North Sea oil and gas run dry.

And yes, it’s about the benefits of hard-working, taxpaying EU migrants who do jobs that Britons spurn, care for elderly Brits and help pay for the pension triple-lock they enjoy.

Pointing out that we would lose these benefits and incur other costs if we left the EU is not Project Fear, it’s being honest with the British people, unlike the lies peddled by Vote Leave.

It’s astonishing that a former education secretary is so scornful of academic and professional expertise. But even if you truly believe that the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the WTO, the Bank of England, the Treasury, the London School of Economics, Barack Obama, Angela Merkel, all living former UK prime ministers, 13 former US Secretaries of State and Defence and eight former US Treasury Secretaries are all misguided and/or lying, why are financial markets, whose only agenda is profit, plunging in anticipation of a Brexit vote?

Because investors are anticipating many years of financial volatility, political instability and economic uncertainty and disruption if we leave the EU. All that would stifle investment, jobs and growth and depress wages and productivity. Ultimately, Brexit would leave us with worse access to both EU and global markets, less competition in domestic markets, and hence lower living standards, as I have explained at length for CapX.

When casting a ballot on 23 June, remember that you are choosing between plausible alternatives, not between everything you dislike about modern Britain and some fantasy post-Brexit Utopia.

Beware, would-be Brexiteers. Those who believe in free markets: Vote Leave has campaigned for all manner of statist interventions such as massive duties on imports from China, more bureaucratic curbs on both EU and non-EU migration and a bigger role for the state.

Nationalists: far from a Global Britain ruling the waves, Brexit is likely to result in a Little England, shorn of an independent Scotland and with Northern Ireland’s precarious peace in the balance.

Anglosphere advocates: outside the EU, we will matter less to America, whose special relationship in Europe will be with Berlin instead. And it’s not just the current leaders of the US, Canada, Australia and New Zealand who want Britain to stay in the EU. Even Tony Abbott – the conservative former prime minister of Australia so nostalgic about his country’s historic ties with Britain that he restored knighthoods and gave Prince Philip one – is against Brexit. If you want a special relationship with Donald Trump, good luck to you.

Disenchanted Labour supporters: there won’t be more money for the NHS if Britain votes for Brexit. Britain’s net contribution to the EU budget last year was £120 million a week – or 26 pence a day per person. Any savings that could be reallocated to the NHS – but which Vote Leave have also promised to countless other causes – would be dwarfed by the black hole that would open up in public finances as the economic growth slumps, as I have explained for CapX.

Socialists: Comrade Corbyn will not be in power after 23 June, the nationalist populist wing of the Conservative Party will be.

Patriots: for centuries British statesmen – including Margaret Thatcher – have believed that our national interest lies in continental engagement, as Bill Emmott has pointed out for CapX. And now we would voluntarily exclude ourselves from the European club on our doorstep, leaving it dominated by Germany?

UKIP Brexiteers: even you would be disappointed by Brexit. Yes, you’d get tougher immigration controls, but Brexit won’t make England white again, it won’t bring back the Empire, it won’t crank up mothballed industries and it won’t make you young again.

Anti-establishment Brexiteers are perhaps the most deluded of all. What is Boris Johnson, if not a member of the establishment? If you have no trust in the establishment now, just wait till the cynical promises of the Brexiteer establishment prove worthless.

Last but not least, opportunist Brexiteers: hello Boris Johnson. How much damage to your country are you willing to do for your personal ambition? If you seize the crown, your manner of wresting it will destroy any chances of achieving anything meaningful. And it may yet slip through your hands. Since many Remainers think you are a traitor and many Leavers an opportunist, you may have sold out your country for nothing more than an ignoble footnote in history.

Some Brexiteers will dismiss my arguments because I used to be economic adviser to the President of the European Commission. Yes, and I no longer am – and as an independent thinker I am often very critical of the EU, as other articles for CapX show. Indeed, from a narrow financial viewpoint, I’d probably do quite well from a decade of Brexit uncertainty. As an EU expert who also knows a lot about trade and migration, there would be lots of demand for my services as a consultant and speaker if Britain votes to leave. But unlike some, I won’t sell my country down the river for personal gain.

We should all want a more successful Britain – and we can achieve it in the EU. We can build on the success of London’s Tech City, capitalising on the combination of risk capital, English law, creative thinking and – yes – foreign entrepreneurs. We can invest more in infrastructure – including with co-financing from the European Investment Bank – to build a Northern Powerhouse, revitalise depressed regions and boost growth. We can do more to upgrade the skills and education of British children – and provide life-time learning for adults – instead of blaming immigrants for our failings.

We can loosen our stifling Soviet-style planning restrictions, building affordable housing and new developments that boost growth. We can wean the economy off its addiction to debt, by removing the tax subsidy for interest payments, as George Osborne proposed while in opposition. We could emulate Hong Kong by slashing taxes on hard work and enterprise and replace the revenues with a tax on land values, creating jobs, boosting wages and growth. We could leverage the negotiating clout of the EU to prise open foreign services markets to UK exports. That is a positive agenda for a more dynamic Britain within the EU. Isn’t it a better use of our energies over the next decade than desperately scrambling to limit the damage of Brexit?

The safe option of sticking with the status quo is just a starting point. Remain in the EU and Britain can be even greater.

Philippe Legrain, who was economic adviser to the President of the European Commission from 2011 to 2014, is a visiting senior fellow at the London School of Economics’ European Institute and the author of European Spring: Why Our Economies and Politics Are in a Mess — and How to Put Them Right.