Conservatives

Should the United Kingdom leave the European Union?: Challenging Eurosceptics on the British economy

On 23rd June 2016, the United Kingdom will vote to decide whether the country is to remain or leave the European Union. For the first time in a generation, the general public will have the opportunity to formally declare their position on the U.K.’s membership in the EU, a declaration that could potentially transform not only the country’s political, social and economic landscape, but the landscape of its European and international neighbours. In the lead up to the EU referendum, the main political parties have announced their allegiances to the opposing campaigns, which have either defended the U.K.’s commitment to the EU, or have argued for the country’s abandonment of the European politico-economic project. Within the Conservative Party, the EU referendum has reignited the historic divisions concerning the U.K.’s membership, creating a schism among the Tory leadership.

It is true that both the ‘In’ and ‘Out’ campaign groups have displayed instances of unsavoury scaremongering to encourage support for their respective causes. However, the fear-inciting tactics used in the defence of Brexit are in my view particularly concerning. Proponents of the Leave campaign, such as Nigel Farage, Michael Gove and Boris Johnson, have used the EU referendum to propagate misconceptions regarding the ailing state of the British economy, and promote an aura of hate towards immigrants across the country. The vile effect of the claims made by the ‘Out’ campaign have been exemplified by the brutal murder of Jo Cox MP by far-right activist Thomas Mair, who had previously links to neo-Nazi and pro-Aparthied organisations. But are ‘Brexiters’ correct in suggesting that the U.K. will be able to  improve the economy and control immigration if the country leaves the EU?

One of the central arguments advanced by the ‘Out’ campaign is that a Brexit would allow the U.K. to negotiate its own trade deals with other countries independent of existing EU trade agreements. There are currently no tariff barriers to trade for countries within the EU, creating a single market of goods and services (though non-tariff barriers such as product standards produce limitations on trade). However, EU member states (including the U.K.) are also subject to the trade agreements made with non-EU countries by the European Commission.

The EU trade agreements prevent the U.K. from negotiating separate trade deals with the rest of the world – which may appear suffocating given the rise in economic growth in the developing world, and the ever-increasing U.K. trade surplus with non-EU countries. In comparison, the U.K. has a trade deficit of £61 billion with the EU, with domestic consumer demand outweighing the value of our exports to the continent. In fact, U.K. exports have made a gradual shift from the EU to non-EU countries, with a decline in the EU share of total exports from 54.8 percent to 44.6 percent from 1999 to 2014. For Brexit campaigners, this illustrates the potential of the U.K.’s economic growth in the rest of the world, which could be maximised as a result of leaving the EU.

While it may be advantageous for the ‘Out’ campaign to postulate positive economic outcomes if the U.K. was to abandon the EU, we are simply unable to predict what kind of trading relationship the U.K. will be able to negotiate with the EU, or with the rest of the world. Eurosceptics have argued that the U.K. could negotiate a trade deal with the EU similar to that of Norway and Switzerland. Both countries are not members of the EU, but have access to the single market and can negotiate trade deals with non-EU countries independently. However, Norway and Switzerland are subject to EU rules and policies with limited or no influence, and make budget contributions to the union. Moreover, both countries must abide to the free movement of good, services and most importantly peoples.

On the other hand, Canada has also negotiated tariff free access to the EU, without making any budgetary contributions or the free movement of peoples. Though, the trade agreement took an incredible five years to complete, and is difficult to compare to a potential U.K. model as the EU’s share of Canada’s total exports was less than 10% – significantly less than the U.K’s. In the worst case scenario where the U.K. is unable to make any sort of trade agreement with the EU, the country would be subject to World Trade Organisation (WTO) rules. This would prevent access to the free trade agreements for goods or services with the EU, and the U.K. could face EU and non-EU external tariffs and no access to the single market. This uncertainty over what kind of trade deal can be arranged would heavily impact on the productivity of the U.K.’s economy in the interim, as the EU is the country’s main trading partner, evidently making Brexit a risky, uncalculated gamble.

Another important argument put forward by Eurosceptics regarding the economy is the view that the U.K. could save an estimated “£350 million a week” by leaving the EU – as quoted by Boris johnson in a recent television debate, as the country would no longer have to make a financial contribution to the union. It has been suggested that the £18 billion saved could instead be invested into public services, such as education or health care. However, as the Institute for Fiscal Studies noted, the figure of “£350 million a week” is absurd as it ignores the rebate the U.K. receives from the European Union. If the rebate is included the figure actually stands at £14.4 billion or 0.8% of GDP in 2014 (around £275 million a week).

The EU also spends £4.5 billion on the U.K. in areas such as agriculture and research, thus the U.K. only provides approximately £8 billion a year to the EU budget. Moreover, though the U.K. receive per-capita the lowest spend from the EU of any member state, EU spending is only 1 per cent of our GDP – lower than the EU average, and is a relatively small amount in comparison to the £169 billion spent on health and education alone by the government. It is also important to note that the membership fee also brings with it increased trade, investment and jobs, which the U.K. would lose if it is unable to negotiate a trade deal with the EU. In fact, many economists have revealed that lower economic growth as a result of leaving the EU will negate any savings made from EU contributions anyway.

Arguably the most distinguishable argument of the ‘Out’ campaign is the impact of EU immigration on the U.K. economy. UKIP leader Nigel Farage in particular has been defiant in his attempts to reduce immigration from the EU into the U.K., most demonstrable by the party’s  recent “breaking point” campaign poster. Nigel-Farage-UKIP-436573However there is no conclusive evidence to suggest that EU immigrants cause a strain on the British economy, with most studies suggesting that their impact is relatively small, costing or contributing less than 1% of  the U.K.’s GDP. Rather, a recent UCL report stated that since 2000, immigrants have made a more positive fiscal contribution than longer-established migrants – £5 billion from immigrants who entered the U.K. from countries that joined the EU in 2004. There is also evidence to suggest that EU immigrants pay more in tax than they gain in welfare or public services, and they have a higher net fiscal impact than non-EU migrants.

In any case, leaving the EU may not lead to a significant reduction in immigration. As alluded to above, the kind of trade deal the U.K. is able to negotiate with the EU after “Brexit” is pivotal to controlling immigration, as access to the EU single market is also likely to allow for the free movement of people. Therefore, it may require the U.K to leave the single market altogether in order to effectively control immigration, which could neverthless have a negative impact on the economy. In my view, the argument relating to the impact of immigrants is largely cultural; as Nigel Farage proclaimed “the country has become unrecognisable.” However, while the cultural impact of EU immigration is questionable, there is enough evidence to suggest that the economic value of EU immigration is likely to be beneficial to the U.K., counterpoising any superficial arguments that a Brexit will conclusively have a positive impact on the U.K. economy.

Finally, let us not forget the overwhelming consensus of economic institutions and researchers and businesses (according to the British Chambers of Commerce) that argue that the U.K. must remain in the EU in order to preserve economic stability and continued growth. There is one notable exception to this trend – the suitably named Economists for Brexit.  Supported by Patrick Minford and Roger Bootle, Economists for Brexit have predicted a net benefit to the U.K. economy. However, even the most comprehensive analysis on Brexit by independent think tank Open Europe has predicted that even if the U.K. is able to negotiate a trade deal GDP  could increase by 1.6% by 2030. However, if a trade deal is not negotiated GDP could be lower than 2.2% in the same period.

The argument against Eurosceptics is clear. I plead with the people of this great land, do not put our country at economic risk.

Should we question the integrity of the Conservatives victory in the 2015 General Election?

On Friday 8th May 2015, David Cameron stood victorious in front of the British media after witnessing the Conservative Party defy the polls and sweep to an unexpected triumph in the general election. In what was one of the most anticipated elections in recent history, the Tories would defeat their election opponents across the country and collect an unprecedented 331 seats. This would ultimately be enough to form an outright majority and eradicate the prospect of a successive coalition government. No longer bound by the chains of the Liberal Democrats – soundly beaten during the general election, and with Labour and UKIP also left with some ‘soul-searching’ to do, Cameron gleefully returns to 10 Downing Street with the future of the United Kingdom in his hands.

Despite David Cameron’s now infamous victory, a burning question remains of great interest to political commentators and the public as a whole; did the Conservative Party actually deserve to win the general election? Yes – if the result of the general election is taken at face value. The Tories won five more than the 326 seats required to form the slender majority administration, with the Party seizing 24 seats from its political rivals and surprisingly increasing its percentage of the vote.

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However, if we are to assess the Conservative Party’s share of the vote, and more importantly the often disputed ‘First-Past-The-Post’ voting system, there is an argument that challenges the Tory supremacy over the House of Commons. The Conservative’s did muster an impressive 36.8% of the public vote, but if this percentage is calculated under a system that adheres to proportional representation, the Tories would not have reached the impressive number of seats it tallied at the end of the election.

Arguably as telling was the detrimental effect of ‘First-Past-The-Post’ on the other political parties. Although Labour’s share of seats would have only seen a minimal decrease if it was reflective of the public vote, UKIP and the Liberal Democrats suffered immensely as a result of FPTP. Despite gaining 12.6% and 7.9% of the vote respectively, only 9 seats were gained between UKIP and the Liberal Democrats. Conversely, the SNP – widely applauded for their success in the general election, gained 56 seats despite only obtaining 4.7% of the vote. Whilst the Conservatives would have remained the largest party under a proportional representative voting system, they would have certainly been forced into forming another coalition government and contend with a greater number of diversely affiliated MPs in Parliament. Unfortunately however, the Conservatives can expect a somewhat ‘muzzled’ resistance against their governance over the next five years as a result of the flawed FPTP system.

Another arguement that questions the integrity of the Conservative victory was the indecisive nature of the British electorate and the increased use of ‘scare tactics’ within right-wing politics. The opinion polls right up to the general election suggested that the final result would be too close to call, with Labour fighting tooth and nail with the Conservatives for the right to be in power. However the exit poll would paint an entirely different picture, teasing a Tory victory by implying that they were inches away from the majority they required to govern solitarily.

The ‘Shy Tory Factor’ has been used to theorise the disparity between the opinion polls and the outcome of the general election. Seemingly like in the 1992 general election, a large portion of the British public ‘disguised’ their support for the Conservatives until poling day as a result of their ‘shame’ towards their inclinations to the blue corner of british politics. However, whilst this theory may be true for a portion of the ‘silent’ Tory vote, it appears that many balloters were simply undecided as to who to vote for and made the decision to vote Conservative without having a clear and definitive allegiance to the party on (or days before) polling day.

The decision-making of the ‘undecided voter’ during the election was a reflection of how the right had instilled fear into the electorate. The Conservatives – and more profoundly UKIP, flooded the British public with misconceptions over Labour’s destruction of the economy and immigration, whilst also igniting the subject of Britain’s exclusion from the European Union. This ultimately proved to be a successful tool in dramatically increasing the share of the vote for the Right and consequently destroyed the possibility of the Labour Party gaining a majority in Parliament. Roy Greenslade expressed the view that in the five years leading up to the election, the right-wing press continually propagated the views of the Conservatives and UKIP and gave ‘disproportionately favourable coverage to Nigel Farage and his party.’

Building from this fact, the role of the media cannot be underestimated in swaying public opinion, and fundamentally providing the Conservatives with the platform to win the general election. The Conservatives were backed by six major newspapers – The Sun, The Telegraph, Financial Times, Daily Mail, The Independent and the Times, all of which bombarded its readers with Tory propaganda and anti-Labour hyperbole in attempt to maximise the Conservative vote. The Sun’s insistent character assassination of Ed Miliband was particularly noteworthy in the lead up to the election, damaging the reputation of the former Labour leader and his credentials as the future Prime Minister. The newspaper’s ‘Save Our Bacon’ headline a day before the elections was decisive in sealing the fate of Miliband’s election campaign and was arguably the pinnacle of the Sun’s attempts to persuade its 5 million-plus readership to support David Cameron.

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Broadcasters also appeared to be pro-Conservative; Sky News – another media organisation that Rupert Murdorch has vested interest in, unsurprisingly reproduced the favouritism it showed towards the Tories in the 2010 general election. This was evident during the first televised election debates, where there was no question that Ed Miliband received a far stringent assault against his character from Jeremy Paxman and Kay Burley than his Conservative adversary, including personal jibes at his relationship with his brother.

Contrary to popular belief, The BBC have also been noted for their bias towards the Tories. As Phil Harrison eloquently put it in his article ‘Keeping An Eye On Auntie: The BBC & Pro-Tory Bias,’ the BBC lent increasingly towards the right in order to appease the ‘status quo’ of capitalist realism that has been promoted by the Conservatives. The lack of media attention across all of the major broadcasting organisations following the recent protests against the government only days after the election only perpetuates the overwhelming media disposition towards the Tories.

Now that the dust has settled from an extraordinary general election, the Conservatives will go down in folklore as the ‘conquerers of coalition politics’ despite the universal expectation of a hung parliament. However as this article indicates, the Tory victory seeps of unworthiness, not least due to a widely criticised voting system, an electorate with ambiguous political affiliations and a media environment that showed considerable support towards David Cameron and his party – as well as the Right in general. Of course it would be wrong to deny the deficiencies in the Labour election campaign, though there is sufficient evidence to suggest that the Conservatives were given more than a helping hand towards their election achievements. Nevertheless, be sure to expect the Conservative’s austerity programme go into full swing and the continual vilification of Labour’s ability to govern the country again by a pro-Conservative press. Oh the despair of another five years with Mr Cameron at the helm of this wonderful country.