The EU Referendum, how is NewsThump going to vote?
NEWSTHUMP·MONDAY, 20 JUNE 2016
Before we start, its worth pointing out that this piece isnt going to have a lot of jokes in it (So how is that different to what you normally write? I hear you cry). Secondly, the title is a bit misleading, because NewsThump doesnt get a vote - but the people who write it do, and as the Managing Editor, Im one of those people.
This is being written in my personal capacity. My views dont represent all of the writers and contributors to the site, but as editor I do have influence over what does, and does not get published on the site, so its fair to say my views have influenced the sites tone and content over the last few months.
This is something Ive wanted to write for a while now, because weve written a lot of stories about the referendum, mocking the major players, and the tactics employed by both sides - but weve never actually said what our official position is. And thats because we dont have one. We still dont. Well, NewsThump doesnt, but I - the Managing Editor - do have a view, so Im going to share that with you.
The first thing I would say is that this whole referendum debate is not one of right vs wrong. There is no definitive answer where one side is absolutely correct, and the other is absolutely wrong. The debate is far too nuanced for that. The fact is that if we leave the EU, things wont be as bad as the Remain side would have you believe, whereas staying isnt as bad for us as the Leave side would like you to believe. And thats a shame, because ultimately the feudal nature of this referendum campaign has left very little space for a balanced view.
From a personal perspective, I genuinely believe both sides have made some reasonable arguments - but - theyve also made some extremely spurious and misleading claims. The difficulty has been identifying them in all the rhetoric, and knowing when to call bullshit. The purpose of this article is to try and explain my personal thinking on a number of these major issues and the claims made by both sides, and how Ive come to my own personal decision - whether that influences you, one way or the other, is entirely up to you. Obviously.
Im not trying to win your vote, I am just offering my own thoughts based on the last few months where Ive read, watched and listened to an awful lot of experts claiming to know what will happen next.
There is no particular order to the claims Ive written about, other than the order in which they occurred to me as I write this....
The EU is undemocratic, and reduces the sovereignty of our nation
One of the most common criticisms of the EU is that its undemocratic, and run by people you didnt vote for, and cant remove. But what does that actually mean in reality? Undemocratic immediately conjures images of violent dictatorships, which it clearly isnt, but I also didnt get a chance to vote for European Commission President Jean-Claude Juncker, so who did, if anyone?
One point to remember here is that democracy does not equal always getting your own way. I have seen many times the claim that the UK can be outvoted and therefore the EU is undemocratic. No, thats not what democracy means. 65% of people who voted in the general election voted for someone other than the Conservatives - they didnt get their own way, but it doesnt make our process undemocratic.
You have to realise that the EU is a very different organisation to our own government, where we vote for our local MP whose party may or may not make a government, and who can be voted out every five years. In Europe, you dont vote in a ruling group for a period of time, you vote for people to take part in the process for their term in office. So what does this process look like, and who is making the decisions?
Within the EU there is the European Council, the European Commission, the European Parliament, and the European Courts.
Simply put, the European Council sets the priorities for the EU as whole, the European Commission suggests laws, European Parliament debates and votes on those laws, and the member state governments review and ratify those laws. Sounds simple, but obviously it isnt.
Is this process as democratic as our own system, probably not, no. European Commissioners dont get elected by the people of Europe, and ultimately you and I as UK residents (assuming youre reading in the UK) have no say on who is appointed to the European Commission. But we do elect the people who appoint the Commissioners, which is no different to our elected Prime Minister deciding who should be Chancellor.
Could the EU governing process be simpler? Yes, of course it could - but a process like this means that there are sufficient checks and balances to ensure bad legislation doesnt make it into law. Bear in mind the EU has a remit to look after European interests as a whole - and not all legislation affects all member states equally, so something that is good for Europe might not be great for the UK, and vice versa.
This process of priorities > suggested legislation > reviews/vote can go round and round trying to make a law, but ultimately if the three groups dont agree, no law is passed - and at each stage, we have elected officials reviewing and debating it. See below:
Ultimately, any new law has to be approved by all groups. Is it complicated? Definitely. Is it perfectly efficient? Absolutely not. Is it undemocratic? Definitely not.
Yes, but what about national sovereignty?
There is no doubt whatsoever that the UK is a sovereign state, as defined by international law. The parliament in Westminster is our supreme law making authority - about this there is no debate. If the UK courts sometimes give priority to EU law over domestic law in the event that the two are in conflict, it is only done at the express instruction of our parliament to do so. To clarify, if EU law ever takes precedence against UK law, its only because our elected officials have chosen for that to happen in our own legislation. Nothing is forced upon us. See this presentation for a fuller explanation of the law making process from a law professor who specialises in EU law.
Leaving the EU will mean well all be worse off financially
The Remain campaign have been quick to point out that leaving the EU will hit you and I in the pocket ever since the referendum was announced. But will it? Again, there is no way to know for sure, so the only thing you can do is critically assess the evidence and expert opinion that has been presented and make up your own mind.
George Osborne might claim that leaving could cause a recession, but hes yet to get an economic forecast right in six years as chancellor. However, the overwhelming majority of economic and financial experts say that leaving will have an overall negative effect, at least in the short to medium term. If 80% of experts are saying one thing, and 20% are saying something different - then you should probably go with the 80%, unless your decision isnt an economic one.
But lets be clear, nobody knows, with 100% certainty what will happen - and if they tell you they do, theyre either lying, or seriously misguided.
The EU costs us £350m a week, we could spend that elsewhere
To be part of the EU, you have to pay a levy. Britains levy is £18bn a year, or £350m a week - BUT this doesnt count the rebate we get (which brings it down to £13bn immediately, as the other £5bn never leaves our bank account), and the money which is spent by the EU in the UK on things like helping farmers and regeneration projects in deprived areas.
First, the rebate [negotiated by Margaret Thatcher] on Britains contributions means the annual contribution is expected to be £13bn in 2015. Of that money, another £4.5bn comes back to the UK as farming subsidies and regional development funds. Another £1.4bn comes back in grants to the private sector. These adjustments reduce the £350m a week to £136m (Financial Times, 1 April 2016).
So firstly, the £350m figure is misleading at best, and a bit of a fib at worst. But lets be honest, £136m is STILL a lot of money to be sending to the EU every week, lets not lose sight of that. In real terms that you and I can understand, that £136m a week is about 30p each, per day. By no means a small amount, but also not life changing either.
Another important point about this £136m is the perception that we could spend it elsewhere if we leave the EU, completely ignoring the fact that leaving might mean the government has less money to spend overall. The total amount of money the government gets in taxable revenue is about 35% of GDP, since about 2000. As the economy grows, the government has more money, when it shrinks, it has less. Thats pretty obvious, right? Sometimes its a little more than 35%, sometimes a little less, depending on who is in power, but that figure will do for the maths here.
The main point to consider is that if leaving the EU meant the UK economy is just ONE PERCENT smaller (not necessarily put into recession, just one percent smaller than it would otherwise have been), that would cost the government £9.8bn in tax revenue*. Almost TEN BILLION. To be clear, it costs us £7bn to be in the EU, so we could lose more than that from just a one percent effect on the size of the economy. Some pessimistic forecasts have this effect at over 3%.
* Current GDP approximately £2.8 trillion, one percent of this is £28 billion, and 35% of that figure is just under £10 billion - the revenue the government would lose from a 1% impact on the economy.
The point being, £350m a week (or the £136m a week figure they should have been quoting) is a LOT of money, but it is an absolute pittance compared to the amounts we could lose if leaving the EU has an economic impact of even one percent.
So what will the impact be? Well, predictions are mixed, as youd imagine. In an IPSO MORI poll of 632 leading economists, (those who responded when asked), 88% said leaving the EU would have a negative impact on the economy, at least in the short-term over the next five years. 72% said it would have a negative effect over 10-20 years. How much effect, well, they just dont agree - anything from half a percent to three percent. Optimistically, some said that by 2030 leaving the EU could actually mean the economy is BIGGER (assuming we negotiate a really good trade deal with the EU and the rest of the world).
So we dont know what the economic effect will be, not with any certainty, anyway. What we do know is that there is a general consensus amongst economists that there will be a negative impact in the short term, but not by how much. And if theyre right, any saving we make from not contributing to the EU is eaten up immediately.
One other thing, the Leave campaign bus has a slogan which says £350m - lets spend the money on the NHS instead. Now, I dont know about you, but I can only look at the people involved in that Leave campaign and wonder what makes people think any extra pound they saved would go to the NHS instead of a tax cut for their friends?
If we Leave well be able to trade with whoever we like, however we like
Taking back control of our trade agreements is a big part of the Leave campaign, but what does that actually mean, and can we do what they say we can?
As part of the EU we have negotiated trade deals with large parts of the world, with many other negotiations well underway.
If we leave, we walk away from ALL of those agreements. Those countries and trade groups negotiated a trade deal with the EU, not with the UK. Sure, we could try and negotiate our own deals with them directly, but were starting from scratch. This takes time, and that time that is measured in years - many, many years.
On the plus side, would it be easier, for example, to negotiate a trade deal with China negotiating as the UK alone, without having to take into account the concerns of all 28 EU member states? Yes, it definitely would. Im sure the list of things we want from such a deal is smaller than the list of things the EU as a whole wants, so in theory it would be easier.
But, the list of things we can offer them is equally smaller - were a smaller market thats already quite open, so we dont have a lot of bargaining chips. Negotiating a deal more quickly does not mean negotiating a better deal. The negotiating power of the EU is greater than that of the UK alone, there is no disputing that. Sure, deals take a while, but when theyre done they tend to be on better terms than the deals we could probably do on our own.
What about trade with the EU?
Leaving the EU means leaving the free trade area. This does NOT mean we stop trading with the EU, it just means its a bit more difficult, and likely to be subject to tariffs. This makes imports more expensive, and our exports more expensive, too. This is a bad thing, obviously. Free trade is best for everyone, and we would prefer to keep a free trade agreement in place with the EU, but not pay into the EU budget, not abide by any laws, and not give freedom of movement - and thats simply not going to happen.
So if we leave, were either going to continue trading with some tariffs, or well trade freely, but have to accept paying into the EU budget, abiding by their rules, and potentially have to allow freedom of movement.
Also, I hear a lot about we have two years to negotiate the new deal with the EU, so the uncertainty isnt as bad as people say. This is incorrect, that two year period is to negotiate the divorce, i.e. how do we de-couple ourselves, how do we deal with the EU citizens living in the UK, the UK citizens living in the EU, and so on. Once thats done, we negotiate a trade deal separately - and that will take far longer than two years.
** Update 21st June 8:30am - quite a few people in the comments have pointed out that we could go for a Norway or Swiss style free-trade agreement with the EU and avoid all this uncertainty (and the associated economic problems that uncertainty brings), so I wanted to address this directly. The short answer is yes, we could do a deal with the EU to access to the free market like either Norway or Switzerland, and avoid a lot of the uncertainty above. BUT (and its a big but), the cost to Norway and Switzerland for this access is a combination of paying into the EU budget, adopting EU laws, and allowing freedom of movement - the three things Vote Leave has said it wants to get rid of. Norway, for example, pays a levy to the EU that is about 70% of the UK levy, per person - and its border with Europe is more open than our own inside the EU. It would be a strange situation indeed if we leave the EU, only to opt for a free-trade agreement that means the UK still has to adopt all the things we were told were bad about the EU. Worse still, wed no longer have a seat at the EU table or any influence over the future direction of the organisation or the rules that get made.
70% of our laws are made in Europe and we have no say in how theyre made
Barely a Question Time goes by where this claim isnt made, either by a panellist or an audience member, but what does it mean? What counts as a law?
Mostly, theyre talking about European Standards. Without these EU-wide standards, selling into each country would be a nightmare as they could have their own different product standards, and the concept of a free-trading areas wouldnt work. You would have to potentially change your product to sell it in Spain, or France, or Germany - common standards make free trade easier. So yes, were subject to those laws, but without them wed find it harder to trade in Europe.
When people hear the EU is making our laws, they hear the EU is telling us how to deal with rapists, not The EU is telling us what chemicals you can use when making pillows.
Have these numerous EU standards made our lives worse? Well, if you dont trade with European partners, or sell to European customers, then it might be that those standards have cost you money in adopting them, and you get no benefit. So yes, it would potentially negatively affect you. If you trade with Europe, youre going to have to abide by these standards if you want to continue selling there, so leaving isnt going to magically remove all this legislation, unless youve decided Europe isnt an important market for you.
On aggregate, and looking at the amount of trade we have with Europe, on balance I would say it hasnt had a negative effect.
When asked how an EU law has made our lives worse I tend to hear about straight bananas or something silly about kettles. Ive yet to hear of one EU law we are subject to that has made our lives demonstrably worse, or sufficient to justify us leaving.
The question of immigration - the good, the bad, and the ugly
Immigration has been the hot topic since before the last general election, thanks to UKIP. Theyve been pretty much a one-issue party since inception, and the constant barrage of problems they claim are caused by immigrants has obviously put the issue front and centre for a lot of voters.
Independent economic assessment shows that immigrants contribute to our society, and help us grow. As a whole, the immigrant community put more into our society than they take out. They pay more in taxes, than they cost us in benefits. That said, are there immigrants who have come over here to exploit our benefits system, almost certainly - thats why you cant assess immigration on individual cases, you have to look at it as an aggregate.
Then we have the issue of services being stretched. This is a good point, but has been argued badly. If youre waiting five hours at A&E to see a doctor about your sprained ankle, its not because of immigration - its because not enough is being spent on A&E services.
Let me give you a hypothetical. If the UK birth rate doubled overnight, and this time next year the papers are full of stories about people struggling to get midwife support, or nursery spaces, or cant see a paediatrician without waiting days, or cant get on the waitlist for their preferred primary schools - would you be sat there blaming people for having too much sex? Or would you be saying the government should be spending more on these services?
Remember, immigrants more than pay their way in the economy as a whole, so if the services they use are stretched its because the people collecting their taxes arent spending it on the right things.
The future of the EU - what will it mean for us?
So, all that said, what do we think? First of all, I want to return to what I wrote early in the piece - this is not a black and white situation. There is no definitive right or wrong answer. Personally, I think the chances of us being better off inside the EU are about 65/35 in favour. This doesnt make me a Europhile, this doesnt mean I think the EU is perfect, this doesnt mean I want unlimited immigration and Turkey to join the EU. It just means that, on balance, and after listening to a range of expert opinion and reading the evidence presented, I think wed better off in, than out.
The worst part of this entire process is that well never actually know - for certain - who was right. If we leave, well never know how the economy would have done if wed stayed in, and if we remain well never know what it would have done if wed left. What this means is that we have to prepare for years - and years - of political I told you sos when anything bad happens. If you think its tedious listening to the government blame the decisions of the last Labour government six years after they left power - you havent seen anything yet.
The Government misses economic target? That wouldnt have happened if wed left/remained (delete as appropriate).
Interest rates are going up? That wouldnt have happened if wed left/remained (delete as appropriate).
Theres been a terrorist attack in the UK? That wouldnt have happened if wed left/remained (delete as appropriate).
This entire referendum debate has fucked political discourse until at least the next general election.
Conclusion
How to vote on Thursday is entirely your decision, and you should do what you think is best for you and yours. Personally, I think leaving the EU would be like getting a divorce because your partner has a haircut you dont like and insists you have dinner with the in-laws once a week. Sure, its a pain sometimes and there are a few things you really dont like about it - but on balance its a relationship that you benefit from.
Whatever happens on Thursday, well be here on Friday morning taking the piss out of whoever has won...
