When it comes to Britain’s EU membership, it really is the economy, stupid

by Callum Anderson

In less than a couple of months, UK voters will go to the polls to elect their representatives in Brussels. In the event of a strong UKIP performance, it is likely to put yet more emphasis on the potential referendum on Britain’s EU membership.

And that’s in addition to the exposure the issue has received as a result of the debates between Nick Clegg and Nigel Farage.

As I have already argued, it is my strong belief that the UK needs to play at the heart of a reformed EU and resist the temptation to ‘pull up the draw bridge’.  As was teed up by the Budget a couple of weeks ago, the economy is the issue that concerns the vast majority of voters: jobs, real terms wages and taxes will be the particular battlegrounds. Like it or not, Britain’s ability to build a strong and resilient economy lies in its ability to form and maintain relationships with other nations. None of this is more evident than the relationship with the EU.

Now, I know Nigel Farage and his fellow Eurosceptics can sometimes be a little short on facts, but let me shed some light.

Let me start off with trade.

Business for New Europe recently found that the growth in free trade within the EU has generated as much as 6 per cent for every British household, equivalent to £3,500 every year. A not too insignificant figure. This is clearly because UK businesses have access to the richest and biggest single market in the world. And it’s not just that. The UK benefits from the EU conducting free trade deals on its behalf, and undoubtedly obtaining deals on better terms than if it negotiated alone.

For instance, the EU-South Korea Free Trade Agreement has benefitted UK businesses to the tune of £500 million a year. The Centre for Economic Policy Research (CEPR) has also found that a EU-US Transatlantic Trade and Investment Partnership (TTIP) could boost UK national income by up to £10 billion a year, with our automotive industry benefiting most, thus creating the manufacturing jobs that Britain has needed for a generation.

So, what effect does this have on jobs?

In the last few days, the Centre for Economic and Business Research (CEBR) released a report that showed 3.1 million UK jobs were directly supported by exports to the European Union and an additional 1.1 million jobs were indirectly supported. That is through spending income earned from exporting. This represents a rise of 13 per cent since 1997.

And it isn’t just London that gets all the spoils. The North West has over 500,000 jobs associated with EU exports, whilst the West Midlands has nearly 400,000.

Moreover, UK firms will be able to profit from the increasing jobs that will be created from a digital economy. However, we can only create that market if we are at the top table making the rules.

The UK also hugely profits from foreign direct investment (FDI). A Department for Business, Innovation and Skills report stated that the UK attracted £365 billion of investment from other EU member states – 48 per cent of total FDI. At the same time, EU membership also enables Britain to benefit from investment from non-EU countries. For instance, more than 1,300 Japanese companies, such as Nissan and Toyota, have invested in the UK, creating 130,000 jobs, more than anywhere else in Europe.

Do you really think that if Britain left the EU, it would enjoy the same level of investment?

Without EU membership, Britain would see investment being diverted away to other countries, heavily restricting to economic growth and job creation. Foreign-owned businesses would be more likely to relocate activity if they felt that Britain was electing to isolate itself. Leaving the EU would make the UK a less attractive investment location for firms intending to sell to other EU markets from their UK facilities.

And, on top of all this, an EU departure would also harm the opportunities of British exporters, 74 per cent of whom operate in other EU markets. Now, why would we want to restrict UK firms from selling to a group of countries that we’ve already seen invests in us, and enables so many of us to have jobs?

It’s not as if UK firms have offered signs of hostility to the EU; just a couple of years ago, the House of Lords EU Committee found that from 300,000 UK companies 78 per cent of their leaders stated their belief that the Single Market was helpful to their business and the economy.

All of which, of course, would only serve to expand our export market. UK businesses export goods worth £150 billion to the UK economy to EU markets. Why would we want to put that at risk by leaving the EU? Whilst Britain should seek to expand the number of markets it exports to (the BRICS and the MINT countries being particular targets), it can do this without sacrificing its position in EU markets. And, as already mentioned, EU free trade deals the world over are beginning to open markets like India and South Africa to British firms.

This is just some of the evidence available, but what is clear to me, is that progressives must unite and continue to make the positive case for Britain’s EU membership, because, to paraphrase President Clinton, it really is the economy, stupid.

Callum Anderson works at a national charity


Tags: , , , , ,


8 Responses to “When it comes to Britain’s EU membership, it really is the economy, stupid”

  1. sceptic says:

    So long as it is reformed the way the British people want and the reforms are in place before the 2017 Tory referendum then fair enough. But if it ends up being reformed to suit politicians or eurocrats, or the reforms are just promises of what they will do in the future then no, time to walk away.

    This is boiling down now to a massive issue of trust – in the institution of the EU and also the politicians and at the moment it’s a fail/fail.

    I work for a major European company that employs over 10,000 people here in the UK and the UK isn’t even a big part of its business – it employs far far more in Germany, Holland, Sweden, Denmark, Belgium, France, Norway, Latvia, Lithuania, Estonia and that’s just in the EU. It’s also very big in Russia, Japan, Korea, Vietnam and is looking to break into the Americas – north, centre and south.

    It doesn’t like the EU and is quite outspoken about it.

  2. Steve says:

    No advantage will be provided by the (possible) economic benefits you outline if the world is destabilised by the sort of expansionist nonsense the EU perpetrated in Ukraine.

    Farage was right. The EU is a threat to peace. We already have an EU Defence Agency, an EU Battle Group and an EU Foreign Policy Chief in the form of the unelected Baroness Ashton. The direction of travel is obvious.

    We should derail the EU project before it is too late.

  3. swatantra says:

    Its NATO that is a threat to peace, not the EU.

  4. Robert says:

    It is obvious that we should stay in the EU but it is equally obvious that we were right to stay out of the Euro. British people and politicians are basically pragmatic on the EU, so people that are strongly for or against the EU are wasting their time.

  5. Mike Stallard says:

    “progressives must unite and continue to make the positive case for Britain’s EU membership,”

    Actually the EU is a 20th century idea, hatched in the wake of two 20th century wars. It was first thought up between the wars and then instituted, by stealth, after the second world war, by Monnet, when Europe was still the centre of almost everything.

    The problem is that we have now left the 20th century. Europe is becoming a backwater now – ask the French, Spanish, Italians and Greeks. Ask President Obama.
    It is the people who want to stay in Europe, restricted by the straitjacket of rules and bureaucracy that is the single market that are onto a loser. It is the ones looking outside Europe that are the true progressives.

    Join us in the 21st century!

  6. Fred says:

    I sincerely hope you read this baby boy. It is your strong belief that the UK needs to play at the heart of a reformed EU. But that’s a belief and nothing more. You are not qualified to have anything other than an opinion. I work in the real world, I trade internationally every day, in Europe and globally. I am not some young opinionated inexperienced yoof with a strong belief. I’m telling you the EU gives us nowt. People like to trade and we can do it without EU red tape.

    All people like you have is soundbites:
    “Now, I know Nigel Farage and his fellow Eurosceptics can sometimes be a little short on facts, but let me shed some light.”

    What light do you have? You haven’t got the experience oh “Aspiring public servant.”. Presenting information from a PRO EU PRESSURE GROUP and other pro EU sources as gospel is a little pathetic. The rest of the world trade with us anyway and that wont change if we leave, it’s the nature of a globalised world. The sad thing is you labourites have no clue when it comes to business. You hang your hat on the things that you believe in and write poor articles such as this as a vanity exercise.

    The CEBR are talking absolute rubbish. Anyone with a brain (you can do this Callum) knows that we are a NET importer from Europe. Do you understand what this means? They need us more than we need them. We buy more expensive cares from them, cheese and wine etc.. Only an IDIOT would think that by leaving there is risk.

    When you are writing an article using throw away lines such as “Moreover, UK firms will be able to profit from the increasing jobs that will be created from a digital economy. However, we can only create that market if we are at the top table making the rules.” Makes you look shallow, its BS. WTF is a digital economy?

    We want a common market, exactly what existed when Nissan and Toyota came here.

    “Do you really think that if Britain left the EU, it would enjoy the same level of investment?” Yes it would because without EU bureaucracy it would be seen as a good place to do business.

    What is clear to me, is that people who call themselves “progressives” are the types who are full of their own self-importance.

    You should have ended your piece with:
    Callum Anderson works at a national charity, knows nothing of business and writes articles that are easily debunked. Just poor.

  7. BenM says:

    ““Do you really think that if Britain left the EU, it would enjoy the same level of investment?” Yes it would because without EU bureaucracy it would be seen as a good place to do business.”

    Nope. That’s not what those businesses are saying right now.

    Moreover it should strike you – as someone who pompously defines themself as trading internationally every day – as a striking failing of eurosceptics that they cannot muster business support if the case for Out was so compelling.

    “we are a NET importer from Europe. Do you understand what this means? They need us more than we need them.”

    No, that’s not what it means at all.

    It means we’d be mad to leave the single market (paying for access to it like Norway and Switzerland but having no control) where the bext chance of boosting our overseas trade lies. Unless you honestly believe we already have 100% trade penetration there?

    I will only cede one point to Europhobes and that is this incessant use by some pro Europeans that 3/4m jobs being reliant on EU membership. No doubt terms of trade will be worse should we leave the EU, but trade would still continue so impact would be marginal.

  8. Callum Anderson says:

    @Sceptic – I certainly agree re: reforms to the EU and trust in the EU institutions. Articles such as the one by William Foxton in the Telegraph regarding MEP expenses probably sums up your point best.

    @Robert – Agree you with you regarding British pragmatism towards the EU (especially our membership of the Euro). I would like to clarify that I do not think that the EU is perfect (CAP, the democratic deficit et al.)

    @Mike Stallard – I also agree with you somewhat – which is why I want it reformed to fit the century we are in!

    @Fred – Thank you for your eloquent reply to my article. My only issue is that it was somewhat more entertaining than my blog piece. Anyway, I will go back to wallowing in my inexperienced and youthful idiocy. Stupidly yours, Baby Boy.

Leave a Reply