2 March 2016

The dodgy dossier on the EU


The UK government is to publish a report on what Britain’s post-EU options would look like. Here are few problems with the dodgy dossier.

1. Until three weeks ago, David Cameron was threatening to leave the EU over a trivial tweak to our welfare rules. Now we’re supposed to believe that it’s the gamble of the century? He surely can’t actually think that.

2. No two non-EU states in Europe have identical deals: Monaco, Montenegro, Isle of Man – they’re all slightly different (though all in a pan-European free trade zone). It’s absurd to expect the UK precisely to mimic anyone else’s arrangements. Obviously, our deal would be tailored to our own conditions, and wouldn’t replicate anyone else’s.

3. That said, the countries mentioned in the government’s dossier are doing pretty well. According to the Legatum Prosperity Index, Norway and Switzerland are the wealthiest and second-wealthiest states on Earth. According to the UN Human Development Index, Norway has the best quality of life on the planet, with Australia in second place and Switzerland in third.

4. The people of the EFTA countries oppose membership by vast majorities. In Iceland, which formally withdrew its application in 2015, voters oppose joining by 50.1 per cent to 34.2 per cent (Morgunblaðið 17-08-2015). In Norway, the feeling is even more emphatic: 72.0 per cent to 18.1 per cent, a balance that has changed little in over a decade (Nationen 29-12-2015). In Switzerland, opinion polls on the EU are rarer, because membership was widely seen to have been killed off when a referendum in 2001 resulted in a massive 76.8 per cent against reopening accession talks. Still, for what it’s worth, the latest survey shows that 82 per cent of Swiss citizens support their current bilateral arrangements (Sicherheit 2015, ETH Zürich).

5. The dossier asserts that Norway has to apply “75 per cent of all EU legislation”. That claim is a lie. According to the EFTA Secretariat, the EU generated 52,183 legal instruments between 2000 and 2013, of which Norway adopted 4,724 – 9 per cent. Many of these rules were minor technical standards: fewer than 100 of those 4,724 legal instruments required primary legislation in the Storting. A written answer to a parliamentary question in Iceland found a similar proportion: 6,326 out of 62,809 EU legal acts between 1994 and 2014. Yet, rather than use the official statistics, the compilers of this dossier have seized on a stray remark by a Eurofanatical Norwegian minister to the effect that “three quarters of our laws” come from Brussels, and have solemnly translated that throwaway line into an official-sounding “75 per cent”.

6. In Switzerland, there is no ambiguity: the figure is 0 per cent. The Swiss sometimes copy EU regulations for reasons of economy of scale, though more often both Switzerland and the EU are adopting global rules. But, though Swiss exporters must meet EU standards when selling to the EU (just as they must meet Japanese standards when selling to Japan) they generally don’t apply those standards to their domestic economy. Britain, by contrast, must apply 100 per cent of EU regulations to 100 per cent of its economy.

7. The dossier claims that Norway “contributes significantly to EU spending”. It contributes a lot less than Britain, but it’s true that it pays more than the other EFTA states. This is because Norwegian ministers like to opt into as many common EU projects as possible, on everything from research and development to foreign aid. They are under no treaty obligation to participate in these projects: Iceland joined the EEA on the same terms, but declines to join in. According to Professor Herman Matthijs of Brussels Free University, who has produced the only like-with-like comparator, Iceland’s annual per capita contribution is 50 euros, Switzerland’s 68 and Norway’s 107. These figures include a contribution to the running of the Schengen Area, which no one is suggesting that Britain join. The United Kingdom’s current per capita annual payment, by the same methodology, is 229 euros.

8. It’s true, as the dossier says, that Switzerland is not a full participant in the single market in services. This doesn’t mean, obviously, that UBS can’t operate in Frankfurt, but it does mean that Swiss financial institutions are not part of the same regulatory structure as those in the EU. If they want to trade there, they must adopt different rules. The flip-side, of course, is that Zurich doesn’t need to worry about the expensive and sometimes downright malicious EU regulations that menace London: the Alternative Investment Fund Managers Directive, the short-selling ban, the Financial Transactions Tax.

9. What would be the WTO rules if, as the dossier slightly luridly suggests, we failed to agree anything at all with our partners on departure? Well, we’d start from the current position: no trade barriers. WTO rules make it difficult to impose a tariff where none previously applied. But this assumes that the EU would want to apply tariffs to the UK, when the UK runs a big trade deficit with the EU (though a surplus with the rest of the world). The only geographically European states that don’t trade freely with the EU are Belarus and Russia. The rest of the continent, from non-EU Iceland to non-EU Turkey, is a tariff-free zone. No one in Brussels has ever suggested excluding Britain from it following Brexit.

10. Yes, it took the EU 7 years to negotiate an FTA with Canada. Surely this is yet another argument for Britain to get out.

Daniel Hannan is a Conservative Member of the European Parliament and blogs at www.hannan.co.uk.