Brixit: the ins and outs of 'in or out?'

There is no doubt about it.

 

We are living through what promises to be one of the most momentous events of the 21^st Century; Brixit is gathering an unstoppable momentum, and hopefully Dave is sufficiently shrewd to realise that he can either go with it or be crushed by it.

 

The change in the weather has been breath-taking. Until very recently, Europhobia was the ‘crime that dare not speak its name’. An ambitious Tory MP would not dare to express other than undiluted admiration for all that Brussels stands for. After tearing itself apart over Europe post-Thatcher, the Tory party expunged it from the agenda.

 

All that has been turned upside down. If a Tory MP so much as hints that he is all in favour of Brussels, not only will he commit himself to a life on the back-benches but his constituency members will turn him into hamburger, such is the level of antipathy.

 

It is said that over 260 Tory MPs are for total withdrawal. There must be others who are for renegotiation.

 

Out there in the real world, the latest YouGov poll gives 49% in favour of ‘out’ and 32% in favour of ‘in’.

 

So what’s it all about? Tricky, because it is vastly more complex than the Daily Wail would have you believe.

 

For starters, I reckon that there are three options, not two, which are ‘in’, ‘out’, and ‘renegotiate’, but a referendum will almost certainly not introduce the third  and if it did it would be read as ‘stay’. But there is a place for the third option, which I will set out later. And at this point let’s dismiss Cameron’s cynical outpourings about being ‘no better than Norway or Switzerland’. He is again showing his patrician contempt for the ordinary voter.

 

These have the highest GDP per person  in the whole of Europe, and both export proportionally more to the EU than does the UK. And in terms of quality of life the UN reckons that Norway is #1 in the world.

 

So let’s examine the pros and cons of each of the options.

 

In.

British farmers would lose £27 billion in CAP subsidy.

 

The motor industry could be seriously affected. Component manufactures and supply chains could be affected in both directions. Ford and GM might be at risk because both supply components for assembly in Germany (this might kill off GM in Germany because it is the sick man of the company). JLR would be little affected as it has only a small EU market share.

 

Most of the Japanese cars made in England are exported to the EU.

 

British Aerospace, the world’s second largest outside the US, might lose business to France.

 

Labour mobility might suffer, upon which our high-tech business is very dependent.

 

The financial services industry could be badly affected if access to Europe became more difficult.

 

Out.

First up is cost. It is said that our gross contribution to the EU budget is above £14,000,000, but I believe that the net cost is in the region of £8 million*, still higher than Osborne’s first round of cuts. That would be a total saving in the event of withdrawal.

 

The annual cost of EU regulations is more than the benefits of the single market by perhaps £1 billion.

 

By not having the Common Agricultural Policy, surely the first amongst EU money-wasting  scams, there would be a very large reduction in our food bills.

 

We would no longer have the obscenity of dead fish being thrown overboard to suit EU quotas that are routinely ignored by other countries – have you seen the price of fish lately? We would resume authority over fishing up to the 200 mile limit or the median, which would give us a majority stake in the North Sea. And we would be in total command of our own agricultural policies.

 

The Working Time Directive, which limits work to48 hours a week and has caused chaos in the NHS and elsewhere, would be one of the first regulations to go.

 

The UK could set less onerous ‘green power’ targets, leading to cheaper power.

 

The regulation on the insurance industry, which will cost women up to 30% on their car insurance and increase their annuity premiums, all in the name of misplaced ‘equality’, would be scrapped.

 

We would be100% empowered to pass our own laws without EU meddling. We don’t actually know how much of our legislation emanates from Brussels but in Germany it is over 80%. Neither would we suffer interference from the ECJ. We would no longer be subject to the appalling European Arrest Warrant and the risk of being hauled off to some corrupt Eastern European  hell-hole at the behest of a bent magistrate.

 

We would be free to negotiate our own trade agreements with other countries. As Cameron is belatedly beginning to recognise, much of our economic destiny lies with the Commonwealth, as if history is beginning to re-wind.

 

My take.

The ‘out’ case is based on reasonable certainties. The ‘in’ case is largely based on possibilities, not probabilities. It is too much ‘might’ and not enough ‘will’. Much of it is speculative and based on a rather incoherent fear of ‘isolation’.

 

I am unconvinced by the supposed impact on manufacturing industry. It is correct that Honda, Nissan and Toyota came to England as a springboard into the EU. They are not going to decamp suddenly to France or Germany. If there is any major shift at all, which I doubt, it will take decades for any real effect to be felt. In any case, I believe import duties are only 4%, hardly cataclysmic.

 

I doubt whether the EU would be able to impose punitive tariffs on the UK partly because such issues are subject to global conventions through the WTO, and partly because two can play at that game.

 

I set little store on the BAe argument. GKN is the only firm in the world capable of the high tech manufacture of carbon fibre wing spars, and the outcome of severing of ties with Aerospatiale would likely to be the revival of the Boeing tie-up, blocked because of US mistrust of France.

 

Continuation of the single market would be in the interests of Europe as a whole. The UK has run a balance of trade deficit since joining the ECM. The Europeans are not about to sacrifice that lucrative trading position out of pique. It is said – by Dave amongst others – that Europe takes 50% of our exports. This is not true. We export more to non-EU countries; this is not necessarily because they have increased but more because our exports to EU have fallen off due to the dire state of the Euroland economies.

 

Currently, we are tied to a moribund, over-regulated and stagnant European economy.

 

Renegotiation.

I would keep this off the agenda at this time for tactical reasons.

 

Here is how it might play.

 

When (not if - he has a tiger by the tail now) Dave holds the referendum and there is an ‘in’ majority, that would be the end of the uncertainty, but Dave would still be expected to negotiate on issues such as the repatriation of 100 crime and policing laws before the opt-out closes, the exemption from new  financial regulation as the EU progresses towards banking union, and limiting UK financial support to the poorer states only.

 

If there is a Brixit majority, it  will take a period of maybe three years to completely effect withdrawal; it’s not just a case of ‘flag down and cheerio’, because the whole wretched edifice must be dismantled brick-by-brick.

 

During this time the UK  will have the opportunity to negotiate from a position of strength, because if the EU does not concede our reasonable demands, such as a reversion to the status quo ante Maastricht then its ‘goodbye’.

 

There would then be a second referendum to accept or reject the deal.

 

Reversion to a ‘Common Market’ would be heavily supported by the British people. Only 26% would favour ‘out’ if this were to happen.

 

But an ‘out’ decision would have a consequence that to many people might outweigh the financial and economic considerations.

 

We would no longer be shackled to an anti-democratic, bureaucratic, meddling and corrupt monster.

 

*I have scoured the EU financial reports for up-to-date figures. It’s a hopeless task. Transparency is unknown in Brussels.