'Yes' or 'No'? ......It's the economy, stoopid!

If you thought that the General Election campaign was over-long, tedious and boring, you ain’t seen nothing yet. Cameron has decided to run the Referendum next year instead of 2017, so we can expect both ‘Yes’ and ‘No’ camps to start bombarding us with their propaganda very soon.

 

Both sides want it over as quickly as possible, the ‘Yes’ side in anticipation that he will come back from Brussels with a bag of sweeteners, the ‘No’ for the opposite reason. It is predictable that there will be just enough on offer to bamboozle the pubic a la Harold Wilson.

 

It is just as predictable that big business will try to make our flesh creep with lurid warnings about the economic disasters that will befall Britain that will turn it into a third-world country.

 

So maybe it’s time to let some hard economic facts balance the CBI’s posturing.

 

The starting point is that the UK has run a balance-of-trade deficit ever since joining the EU. It is risible to argue that European business will give up its lucrative British market out of pique. In contrast to the £50 billion+ current account shortfall with Europe, Britain has a surplus with non-EU counties of more than £16 billion. It is still the fifth largest trading nation and sixth largest exporter.

 

Meanwhile, the proportion of exports to the EU continues to fall as Europe’s economies ossify and the Euro weakens. The official figure is 48% but if the effect of transhipments via Rotterdam and Antwerp is taken into account that figure falls to a maximum of 45%. And it is worth noting that whilst the whole UK economy  is subject to regulation from Brussels, trade with the EU accounts for less than 15% of GDP.

 

The EU is in decline in terms of its global output. The demographics are startling: Italy ranks as 212 in the birth-rate league table; Greece 213; Austria 214; and Germany at 219. None of these countries reaches the replacement rate of 2.2 children per family. Europe is wasting away. Over the next 30 years, Germany’s working population will fall by 25%, Italy’s by 21% and Spain’s by 14%.

 

Much of the future growth will be in  Commonwealth countries. Britain has much in common with them, not least language and the  common law. But it can’t take advantage of this because trade agreements are the exclusive preserve of Brussels. Outside, a Commonwealth FTA beckons And the suggestion that the UK is too small to go it alone is ludicrous. There is no correlation between size and economic strength. The two most successful economies are amongst the smallest – Singapore and Switzerland.

 

Europe has a great future behind it. If Britain’s future is outside this fading monolith, then so be it!