David Cameron came to Burton-on-Trent a few days before polling day in the 2009
European elections, he asked me, as a candidate, what I thought he should do
over the remaining part of the campaign.
used my “elevator moment” to suggest that he should attack and keep attacking
UKIP, who had come from fourth place in April 2009 polls to be, as they had in
2004, our most serious opponent. In doing so I reflected what a number of
others in the candidate and wider campaign team felt i.e. that – rightly or
wrongly – the Party had failed to take the UKIP threat sufficiently seriously.
not all Liberal Democrat votes will drift to Labour and not all UKIP voters are
former Conservatives, UKIP – splitting the right of centre vote – are nevertheless
the main threat to Project Blueprint for a Conservative majority. So
with UKIP presenting as third in a number of recent polls – in one case on 16%
– we can’t afford to repeat that mistake in the 2014 European elections or the
2015 General Election.
time now to take them seriously and counter their arguments on the EU even
though, as Tim Montgomerie, Lord Ashcroft and Paul Goodman have all pointed out, UKIP’s appeal is broader than being anti-UK membership of the EU, and that
it embraces an element of the anti-politics vote. Put
simply, UKIP’s core reason for existing – and without which it would not have
first attracted its supporters and come to the attention those considering
supporting it – is its advocacy of British withdrawal from the EU.
why should Conservatives not even think seriously about voting for a party in
favour of EU exit?
good reason for not voting for UKIP in national or European elections is that
it cannot achieve the effect intended – i.e: UK withdrawal from the EU. UKIP
can’t form a government in the UK – they can only divide the right-of-centre
vote and allow Labour to win. UKIP argues that it makes no difference who
governs Britain while the UK is in the EU. This is patently not the case, as is
clear, for example, from Labour’s record on surrendering EU vetoes and the
sacrifice of part of the UK budget rebate for very little in return, and Liberal
Democrat opposition to the UK exercising its opt-out in 2014 from a range of EU
Justice and Home Affairs measures – compared to the “double lock” agreement on European
banking regulation negotiated last month by the Government.
even if you believe that Britain should leave the EU, voting UKIP in a European
election will contribute nothing to this aim. MEPs have no power to determine
whether or not the UK remains in the EU or not. But,
since the idea that a UKIP vote is a wasted vote argument is not going to be sufficiently
persuasive for some, here’s ten more reasons why Conservatives should not risk
voting for UKIP’s policy of EU exit.
- The argument that, because of the cost of EU
regulation, the cost of membership of the EU Single Market exceeds the benefits
is not proven. Open Europe, not known, to say the least, for its uncritical
support of the EU, estimated in 2010 in any case that the benefit-cost ratio of
EU regulations in the UK has been 1.02 over time – that is, for every £1 of
costs that EU regulations have imposed since 1998, they delivered £1.02 of
benefits. Open Europe go on to argue that, since domestic regulation has a
benefit-cost ratio of 2.35, it is significantly more effective to regulate at
national level. But this depends on future domestic decisions in fields such as
product safety, health and safety, protection of animal welfare, employment rights,
consumer protection and environmental protection legislation. The Taxpayers
Alliance has argued that UK is at least as responsible for what it regards as
the over-regulatory effect of legislation originating at EU level as the
original EU legislation itself – i.e: by so-called “gold-plating” by UK civil
servants, or interpretation of EU Directives in a way not specifically intended
and not required for the necessary transposition of those Directives. And while
domestic regulation in an individual EU Member State might have a higher
benefit-cost ratio, what matters for friction-free access to the Single Market
is a common set of EU-wide regulations, so that an exporter doesn’t have to understand
and comply with different regulations in different countries.
- Whatever the actual cost of EU regulation, it doesn’t stop Germany (or for that matter the UK) from having a trade
surplus with the rest of the world (in Germany’s case, a significant one).
- Various analyses have been published about
the precise impact of the Single Market on foreign direct investment (FDI) in
the UK. They are hard to interpret conclusively, often because they lack an
objective counter-factual case, though around 50% of UK FDI comes from other EU
Member States and in 2010/11, for example, 134 third country companies chose
the UK as their European base. But is hard to argue that the UK would attract more FDI because it was not in the EU or that Single Market access deters FDI in the UK, given its access
to 500 million customers and a GDP of some £10 trillion.
- UKIP’s claim about the reducing significance
of access to the EU Single Market, estimated by them at “now only” 35%-40% of
UK exports is, even if true, a high risk approach to the UK’s main export
market. The UK exports more to the Irish Republic than to China and India
combined. Does UKIP really imagine that it would be easy and costless to realign
our export effort? And is UKIP
suggesting that EU and non-EU exports are mutually exclusive i.e. one can only
be pursued at the expense of the other.
- UKIP’s argument that there would be no
problem negotiating access to the Single Market because the EU has a trade
surplus with the UK can only be tested if or when it happens. But does UKIP really
imagine that the UK’s exit from the EU will be without acrimony? Does it really
think that it will be easy to negotiate reciprocal Single Market access in this
environment or that the UK will be, and can remain over time, the stronger
partner in the negotiation?
- UKIP’s argument that access to the EU Single
Market could be gained even if the UK were not in the EU ignores the fact that,
even if negotiated, it would come at a significant price. Norway makes a
contribution to the EU budget, in effect for Single Market access. In 2013-14
this is expected to be around €550m, which, if scaled up for the relative population
of Britain and Norway, is equivalent to around €6.8bn. And Britain would no
longer have the power to influence the shape of Single Market legislation in
the legislative process – i.e: it would, in practice, to facilitate access to the
Single Market, like non-EU EEA members at present, have to accept it as passed
down – the so-called "fax democracy".
- UKIP’s argument that, if UK access to the EU
Single Market were blocked by trade barriers, it could be gained via action
taken through the WTO dispute resolution procedures overlooks the fact that WTO
disputes often take at least one year to resolve, are often contentious and are
difficult to enforce against an unwilling party. And it would in practice be
impractical for the UK to attempt to enforce every trade barrier via the WTO dispute
- UKIP’s argument that the UK is forbidden by
EU membership from entering into bilateral trade deals with other countries is misleading.
In a world tending increasingly towards trading blocs Britain benefits, by conducting trade
negotiations at EU level, from the power to open third country
markets to its goods and services derived from the value of reciprocal access
to 500 million consumers in EU markets and not merely from the value of
reciprocal access to the British market of around 62 million consumers. Though
Open Europe cite two examples of where UK interests have not been able to be fully
pursued because of the need to compromise with other EU Member States, this
does not undermine the balance of the commercial logic of the bargaining
strength of the EU market.
- UKIP’s argument that the UK would not have to
adopt all EU laws and regulations in order to gain access to the Single Market
misses the point. The EU doesn’t have to mirror all aspects of third country law
to export to those third countries. But the UK does need the strength of the
value of reciprocal access to EU markets to act against third countries when
they use regulatory non-tariff barriers to block access to UK exports.
- UKIP’s arguments fail to address the reality
of the “day after” UK leaves the EU. The UK would still trade
significantly with the EU; would still have some 3.5 million jobs
linked to access to the Single Market; would still share a land border
with an EU Member State with which it has very close trading links and cultural
ties: would remain a co-partner with many EU Member States in NATO, and would
still want to co-operate as neighbours with the EU on important criminal
justice issues - such as money laundering, anti-terrorism, drug trafficking or
people trafficking. Put simply, the UK and the EU would still have and need to
have a close relationship with each other irrespective of whether or not the UK
was an EU Member State. And between the decision to leave and actual exit, the
UK would probably have created a regime of agricultural and regional subsidies,
with lobbying shifting from Brussels to Westminster.
you don’t have to take my word for it. Open Europe has recently concluded that in
trade terms the UK gains more from EU membership than it would from the
possible alternatives which it analyses – such as the Norway, Switzerland or Turkey
options (even if they were on offer) or the “clean break” (WTO) option.
of this means that the Single Market works perfectly. The House of Lords European
Union Committee report in April 2011 “Re-launching the Single Market” made it
clear that there is much more to do to improve its operation. The digital
Single Market, energy markets and European level enforcement of public
procurement infringements are particular examples.
Nor does it mean that we don’t have to fight
hard for the UK’s interests in the EU. I set out last month what I thought our
red lines should be, what would be “nice to have” in a negotiation and where we
might have to make compromises to secure this deal. UKIP’s argument that we never achieve our
negotiating objectives in the EU misses the point that, often in the past, we
have failed to understand how EU decision-making functions and, in particular, alliance-building is the way to achieve results in the EU. David Cameron has shown more understanding
than many of his predecessors, as evidenced by the formation of the coalition
for the Growth Pact and for the freeze on the EU budget and in hosting the
Nordic-Baltic summit in 2011.
adapt a well-known slogan, leaving the EU is for ever, not just for Christmas.
time now for all Conservatives to put, and keep putting, the positive case for
EU membership, and expose UKIP’s campaign for EU exit what it is – plausible-sounding, but frankly dangerous and wrong.