Monday, 22 February 2016

Politics has got interesting

I've always been interested in politics and take the opportunity to bore friends on the subject on a regular basis in revenge for them boring me with sport. But it takes a particularly inward-looking person not to think that politics has got interesting (sadly sport never will achieve this).

It started with the Scottish referendum, took on speed with the potential US presidential candidates and is now back with us over here for a potential Brexit.

Underlying all these events is a dissatisfaction with the status quo and the political establishment - and it really is about time. I'm not going to comment on the US situation as its not my country (though a Trump / Sanders or even a Trump / Clinton election would be fascinating), but I can certainly reflect on the possibility of a British exit from the EU, where I'm a floating voter, currently leaning slightly towards the out side.

I am opened to be swayed, but please don't try using ad-hominem attacks on individuals, on either side of the debate. I find it amusing that those who deride the Out camp for including the likes of Nigel Farage and George Galloway are usually the same people who want bank bosses hung from the lampposts... while apparently failing to spot that said bosses are firmly in the In camp. So for once, try to make a political argument without simply calling people names. If you arguing for In, remember you are in bed with David Cameron and George Osborne.

Here's my starting point. There are clearly pros and cons of In and Out. (Sadly, Dave's option of 'shake it all about' didn't deliver much.) But there is no doubt that EU regulations put significant difficulties in the way of our deciding our own fate, and the UK is a very different beast to most of Europe. Companies moan that leaving the EU will be bad for trade. Personally, though, as a small business owner, I find it much easier to sell to the US or Australia than the EU. In fact I've had to give up selling ebooks directly to the  EU altogether because of their ridiculous regulation that EU businesses have to pay VAT on e-goods at the level that applies in the buyer's country to that country.

Against leaving, I can certainly see that Brexit would cause an upheaval, and it seems very likely that EU countries would punish us by taking it out on us any way they can. But rather than put up a straw man, I thought I'd use a well-reasoned 'why stay' argument from this article in The Guardian by Timothy Garton Ash.

Before we hit any sensible arguments, let's take on Ash's bizarre moan that non-British EU citizens who live in the UK won't be able to vote in the referendum. That's surely less of an issue than the way non-Scottish British citizens weren't allowed to vote in the referendum to split up the UK - yet (and I may be maligning him, as I certainly didn't read everything) I don't remember Ash complaining about this. Whatever, this is an irrelevancy.

So what are Ash's arguments, and do they sway me? In summary they appear to be:

  • It would be madness to allow Britain's membership of the EU rest on how effective Cameron's emergency brake was.
  • Out is riskier than In. We know what In is like, but not Out.
  • The negotiation will be painful.
  • It's cold outside - Norway and Switzerland don't have fun.
  • The EU helps keep us safe from terrorism.
  • It would be hard on Ireland.
  • Scotland would leave the UK.
At first sight, an impressive bunch of arguments, but to be honest, they're mostly unfounded rhetoric. The first is true, but irrelevant. It isn't a major reason for wanting to leave. The second is almost true. But 'riskier' is the wrong word. Far better is 'more uncertain.' Because the 'riskier' argument only applies if being In isn't bad. To take an extreme example, if you were faced with a choice of being executed or attempting to escape, the escape is more uncertain, but staying is riskier. If you believe staying is bad for Britain, Ash is using a pointless argument. If you believe it's good, then it's self sustaining. In effect it's a concealed circular argument.

The negotiation will be painful? Absolutely. No argument about that. If you get yourself into a mess it usually is painful to get out of it. But that doesn't mean you shouldn't try. This is probably my strongest wavering point because I believe some countries, notably France and the Eastern Europeans, will be as bloody minded as they can and make it as painful as possible. So definitely a consideration, but not an argument for not doing the right thing, should Out be the right thing.

It's cold outside. Possibly. But, leaving aside Switzerland seems to do quite nicely, these are both far too small a country to make a realistic comparison. Canada might be better. But to think that other countries, especially the US and the Commonwealth countries, won't do a trade deal with as big a market as the UK is ludicrous. Some businesses will end up worse off. Others will thrive from losing EU red tape. It's nuanced and certainly not a deal breaker.

The EU helps keep us safe from terrorism. Really? Evidence? Certainly sharing intelligence helps, but do you think EU countries will stop sharing intelligence and risk their own security just to spite us. Whereas having full control of borders can, in principle, have a positive effect on reducing the terrorist threat.

It would be hard on Ireland. So? Much as Ireland thought about the UK when it set corporation tax so low that all those nasty multinationals based their HQs there rather than the UK? I don't remember all those Irish politicians saying 'What about the negative impact on the UK?' And as for Irish workers in the UK, this hardly started with the EU and it wouldn't stop without it. We won't stop having a special relationship with Ireland just because we leave the EU.

Oh, yes. And the clincher. Scotland would leave the UK. Firstly this isn't a fact, it's a hypothesis. The i newspaper today suggested that it's one thing for Nicola Sturgeon to make the threat and it's another for a referendum-weary electorate, knowing that Scotland can no longer rely on oil revenues, to back her. But even if it were the case, as I mentioned at the time, I'm all in favour of Scottish independence. I think it would be a large benefit for the rest of the UK. So this isn't an anti-argument for me.

There we have it then - Mr Ash has failed to persuade me. But I am genuinely unsure which way to vote and would love some more effective arguments. Tell me why I'm wrong...

UPDATE - A couple of early contributions to help persuade me otherwise.

Mark Fielder on Facebook suggests that:
One is the lack of any coherent plans should there be an exit from the EU.
Second is that an out vote triggers a bloodbath in the Tory party that allows a much harsher group of politicians to take over.
Thirdly, if we don't like it and want back in, it'll be on "their" terms, including the Euro. Right now, we're in the EU largely on our terms.

Some fair points. There has been some work done, I believe on wargaming the impact of exit and how to deal with it, but I don't know what the plans are. Some would argue that your second point would be good, as it means they're less likely to get re-elected. And I'd have thought the obvious outcome would be Boris taking over, which I'm not sure would be a huge shift to the right. And thirdly - I don't think we're likely to want back in any time soon if we leave. And that scenario assumes the Euro doesn't collapse entirely - too speculative to be helpful.

Alexander Armbruster on Twitter points me to this article by Anatole Kaletsky.
The main arguments seem to be:

  • It won't happen anyway because the Out camp will be split and the public won't go that way.
  • There will be huge economic costs because of our dependence on services.
  • There will be no political benefits.
The first argument isn't argument to change the mind, just a prediction, so irrelevant for my purposes.

The second argument may have an element of truth, but makes use of the weak Norway/Switzerland model. The UK is a much bigger market for European goods and services than these countries, and European countries would have a lot to lose if their actions produced a trade embargo. I'm really not convinced that the only way they would tolerate our service sector is if it were neutered. 

The third point is just a statement - no argument is provided.

Sara Crowe on Facebook points to this pro-Brexit article which points out it is possible to be anti-EU without being anti-Europe or a 'little Englander'.


5 comments:

  1. I do not see you making a positive case for leaving the EU. It almost appears to ybe your default position.

    What I think I shall do in this debate is ask those who thing we should leave to describe what sort of country the UK should be post-EU. In particular, how it should structure its trade with the world.

    In particular, should we be like:

    1) Norway - in the EEA
    2) Switzerland - bilateral EU model
    3) 1960's Iceland - join the defunct EFTA
    4) Canada/Mexico - WTO backed agreements

    Or is there some other credible model?

    Details can be found in this LSE paper for all these models.

    http://cep.lse.ac.uk/pubs/download/brexit01.pdf

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    1. I think if one is to compare what the EU - UK relationship would be like, it's better to look to Norway rather than Switzerland. The Swiss economy is less similar to the UK than Norway's, although the Norwegians rely more on their natural resources for their wealth than perhaps the UK does. Here is an interesting report published by the Norwegian government (in English) looking at the pros and cons of Norway being on the outside of the EU.

      https://www.regjeringen.no/globalassets/upload/ud/vedlegg/eu/nou2012_2_chapter27.pdf

      There is the argument that the UK would be better served by being outside the EU in terms of what it would mean for London as a financial hub. It is, perhaps, true that London and the UK would have more freedom to set their finance rules and attract global capital by being outside the EU, but I suspect the opposite might be true. By not being in the EU, financial service companies might decide to move their operations to Frankfurt or somewhere that is tied to the common market. The UK might be able to combat this through compensation schemes, tax breaks, looser regulations, or other such means. However, if there was anger at the banks for the damage caused during the 2008 crash, the legal and tax changes necessary to keep them in the UK might exacerbate the problem rather than allowing the UK to regulate their practices more efficiently. It could also cause a heavier dependence on the financial sector if it becomes an even more important part of the UK economy. I'm not saying this will happen, but there is no guarantee that freedom from EU regulations necessarily brings only good things.

      On the topic of separate agreements on trade and finance with other parts of the world, I think there is a real danger that the UK will be more of hostage in negotiations than a partner. Certainly negotiating a trade agreement with the US bilaterally will be a faster process, but one should be under no illusions who the stronger partner in those negotiations will be, based on the size of the respective markets, and who will then set the terms for an agreement. The same is true for a re-negotiated agreement with the EU, which would be likely to take the form of the old EFTA framework, the need for access for exports will be much greater for the UK than for the EU and this will be apparent to all.

      The UK is already exempt from any of the most onerous parts of the EU: the Euro, Schengen, immigration laws, etc. The UK already has a sizeable rebate in its fees, far greater than any other EU nation. As a citizen of Sweden, that also enjoys exemptions and has a large EU skeptic population, it is hard to understand what the UK is complaining about. As one of the largest, most influential and, yet, least affected by EU regulations, the UK seems to already have the best of both worlds; a seat at the decision-making table, access to the world's largest single market, the largest and most important financial center of the EU, unrestrained mobility for its citizens, no requirement to take part in the ECB, Euro, Schengen or Dublin agreements and pays less than any comparable country its size and, for that matter, less per capita than many smaller countries, such as Sweden.

      I have wondered what the dream scenario for the UK would be under the circumstances. It would seem that the UK already has the lion's share of benefits and a very small amount of drawbacks with the agreements already in place, but perhaps I have missed some critical parts of the EU experience that weigh particularly heavily on the UK.

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    2. I wasn't, in all fairness, attempting to present a case for leaving - I was saying that my starting point was to be marginally in favour of leaving, but I could be persuaded otherwise if someone could produce a good argument.

      Personally, I'd think more Canada that Norway or Switzerland - but it's difficult to provide a total comparator model as none of the examples have an equivalent size of economy. Norway, for instance, is only around 1/6th the size, and even Canada is around half the size.

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  2. Boris Johnson makes a very informed and reasoned case for Brexit here: http://www.telegraph.co.uk/news/newstopics/eureferendum/12167643/Boris-Johnson-there-is-only-one-way-to-get-the-change-we-want-vote-to-leave-the-EU.html

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  3. I don't see Norway or Switzerland being particularly badly off.

    Myself, I'm torn in two: I'm not British, but our country is in the EU, and my main goal is similar to the British conservative position: don't allow EU develop into a federalist superstate as the leaders in Brussels are hopelessly disconnected from reality as well as voters.

    But which will help me more? Britain remaining in EU as an ally that votes in a sane way, or Britain leaving the EU to really teach a lesson to Brussels and rein it in and force it to back off? I don't know.

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