Letter: The EU Debate – Some Economic Facts

Published on: 14 Mar, 2016
Updated on: 14 Mar, 2016

From Gordon Bridger

It has been suggested that we need more factual information in the debate on the EU, so here are a few economic facts.

According the Office of National Statistics (ONS) our trade deficit with the EU has increased from £11 billion in 1995 to £62 billion in 2014. Our yearly trade with the EU has increased by 3.5 per cent while our trade with countries outside the EU has increased by 6-5 per cent a year.

We have a trade surplus with non EU countries, a surplus largely due to exports of services – which have not been liberalised in Europe.

Claims that EU countries will discriminate against us would only be likely if they had taken leave of their senses. Is it credible that their exporters would allow this to happen?

The extraordinary statements that there would be a relocation of UK based enterprises to mainland Europe is difficult to understand.

Serious studies optimistically suggest an increase in income of around 2 per cent, pessimistic ones a similar loss if we leave.

Mr Carney of the Bank of England forecasts considerable instability if we leave. Almost all his forecasts have proven to be unfounded and if this instability is reflected in devalued £ it would, paradoxically be a good thing, economically, as it is the only way were likely to solve our worryingly high 5.6 per cent trade deficit. We actually need a devalued £.

It is claimed that new trade arrangements would take years to negotiate and the implication is that trade would somehow stop. This is ridiculous. We all have a mutual interest in continued trade.

Foreign investors might be put off but Aston Martin’s decision to build a new car factory in Wales suggest that some have not been. Frankly, if I were asked whether where was likely to be greater instability – Britain or the EU, the EU would be clear winner.

The argument that we would lose subsidies for agriculture, universities etc. is also flawed. As we currently pay in more to the EU than we get back – there is an obvious answer.

A stronger argument against exit is that we would have more influence in than out. Against this is the fact that we now only have a 8 per cent vote within the European parliament – so it does not count for much.

And while I believe immigrants have made a great economic contribution to our economy, and indeed our culture, the scale of it is now so great that social tensions are a real danger.

Angela Merkel’s irresponsible invitation to immigrants has led to the greatest challenge Western Europe has faced in most of our lifetimes and it is one which we cannot easily solve.

I am much more alarmed by instability in the EU than of of the UK and fear more for its future.

Gordon Bridger is an hon alderman and former Mayor of Guildford.

What do you think? Do you agree with Gordon Bridger’s analysis? What impact would remaining in, or leaving, the EU have on Guildford?

Responses to Letter: The EU Debate – Some Economic Facts

George Potter Reply

March 14, 2016 at 1:57 pm

What Mr Bridger neglects to mention is that around 10% of exports from the rest of the EU are to the UK while around 50% of our exports are to the rest of the EU.

Anyone who thinks we will have a strong hand in negotiations when we depend on trade with the rest of Europe more than the rest of Europe depends on trade with us is, quite frankly, being a little delusional.
Gordon Bridger Reply

March 14, 2016 at 6:19 pm

Delusional? I don’t think so.

No country has an interest in a trade war – Germany exports twice as much to us as we do to them, so they would lose more than we would – and, incidentally, our trade with the EU has fallen, we have a deficit with them but a surplus with the rest of the world.

No, it is in no one’s interest to start a trade war – and how long will the Euro survive or Angel Merkel. The instability is in the EU.
John Armstrong Reply

March 14, 2016 at 7:00 pm

I must say that I agree largely with Mr Bridger. There is no financial case to be made for staying in. Quite apart from the money we pay in fees, there is the cost of the implementation of EU regulations that beset every firm in the country, big or small, whether or not they do business in the EU.

The EU is not about money. It is a political project for a Federal Europe. That is the direction of travel; it has been from the start. All the politicians know it; they just won’t say it. It all depends on who’s union flag you want to see over the Palace of Westminster; your own; or someone else’s.
Stuart Barnes Reply

March 15, 2016 at 9:29 am

I think that by the time that the referendum actually takes place most people will be bored out of their skulls.

Mr Bridger is right about nearly all of his points although I dispute that immigration has had any positive effects on our country and has cost us billions but the main thing is that we want our country back.

The arguments and swapping of statistics will continue but it will come down to those of us who will vote. There is absolutely no doubt in my mind and from my discussions that the people who want our country back are passionate about it and will vote to get out of the corrupt and undemocratic EU whereas those who are listening to “Project Fear” from David Cameron and his mates, and thus inclined towards the status quo, are much less likely to do so. I see that the Daily Telegraph makes a similar point today.

We hope that most people will not be bored out of their skulls, certainly the subject continues to attract comment for and against. That is good. The decision whether or not to remain in the EU is one of the most important we will be taking as a country for many years and a high level of engagement is welcome. We will continue to cover the debate, as much as possible from a local angle as the decision will affect life in Guildford as well as every other part of the country. Ed
Philip Jones Reply

March 16, 2016 at 1:02 pm

I think that Mr. Bridger is misguided. His opinion seems to be born from a bias against the UK being a member of the biggest economic market in the world. For example the current trade deficit with the EU is excellent in comparative terms, but Mr. Bridger ignores this. The UK GDP is 1.8 trillion pounds, 50 per cent of which is derived from trade with the EU. Do we really want to jeopardise this fantastic relationship?

There are problems with any economic union, it is not a perfect world, so we must stay IN to maintain some influence from within the EU.

If the UK leaves the EU, UK trading costs and bureaucracy will increase enormously and the UK will lose its position as the financial centre of the world. This is quite simply because foreign investment of billions of pounds will go to Germany, to gain a foothold within the EU.

If we leave we will continue to trade with the EU according to terms in which we will have no say and our trading power will reduce significantly. This will create unemployment and a reduced standard of living for the UK.

The people of the UK should remember the dark days before the UK joined the EU, a trading community that has made us incredibly wealthy.

The problems that exist within the UK economy, such as the difficulties with the NHS and over complicated taxation are born from poor internal management by the UK government which is clearly more interested in spin and referendums when they should be addressing real problems at home.

Housing problems could be alleviated by the development of brown field sites for example. More apprenticeships for the youth would help enormously. Another positive move could be the provision of state child care to get people, who can’t afford it, back into work. Another could be a revision of the incredibly costly imposition of administration in the NHS. A review could allow doctors to spend more time with patients, rather than 50 per cent of their time spent on filling in forms. If that were reduced the NHS would be able to cope far more easily and at less cost.

To provide a relative thought, if an engine is running badly, you don’t just put more petrol in it, you investigate the problem, and if that doesn’t work you scrap it. The government fails in this regard.

I have noticed that the government only seems to understand monetarism and adopt 1980’s economics to the 21st Century. It is about time the Government learned to operate with greater efficiency and address the real problems at home.
- John Perkins Reply
  
  March 19, 2016 at 10:34 am
  
  I challenge Philip Jones to substantiate any of the claims that he makes above.
  
  The EU is only the “biggest economic market” if it is compared with individual countries rather than other trading blocs or the world as a whole.
  
  50% of UK GDP is not derived from trade with the EU. Less than half of UK GDP is derived from trade with other countries, according to figures provided by the World Bank, and less than half of that is with the EU. So less than 25% can be said to be derived from trade with the EU. In any case, the implication that leaving the EU would somehow “jeopardise” that trade is not supportable.
  
  Many people consider that the UK would have more influence if it were outside the EU and it is certainly true of influence in the rest of the world wherever the EU determines the UK position.
  
  The UK share of the votes in the European Council is only just over 8%. That is slightly less than the seven smallest members combined, with a total population of less than one sixth of the UK. The fifteen smallest countries have a combined population roughly the same as the UK, but have more than three times as many votes.
  
  The seven countries with lowest GDP have considerably more votes than the UK and those 18 countries whose combined GDP roughly equals that of the UK have more than four times as many. Also, click here to see a statistical analysis of UK ‘success’ in the EU Parliament (itself less important than the European Council).
  
  The claim that, “If the UK leaves the EU, UK trading costs and bureaucracy will increase enormously,” is pure speculation and not supported by any facts. The same is true of the claims that, “The UK will lose its position as the financial centre of the world,” and “Foreign investment of billions of pounds will go to Germany”. The same also goes again for the claims that “Our trading power will reduce significantly. This will create unemployment and a reduced standard of living for the UK”. None of these claims can be substantiated.
  
  As for, “…the dark days before the UK joined the EU,” to what period does it refer? The sixties seemed a happy and prosperous period to me. After joining the Common Market in the seventies, the UK was treated to the three-day week, wage constraint and the ‘Winter of Discontent’.
  
  Later the Common Market became the EEC, then the EC and finally the EU in 1993. Again, the country seemed reasonably prosperous in the 80s, though perhaps less so in the 90s, and the illusion of prosperity after 2000 was thoroughly dispelled by the crisis of 2008. It might be more correct to talk of the “dark days” after the UK joined the EU.
  
  The claim that “…the EU, a trading community that has made us incredibly wealthy,” does not stand up to scrutiny. The UK is a relatively wealthy country and there is no evidence that the EU has increased that wealth.
  
  On the contrary, the gross cost of UK membership is about £20 billion per year and the hidden costs (for example: compliance with regulations that are more suited to other countries and the value of the fishing rights that have been given away) must be added to that. If it can be shown that the financial benefits of membership exceed those costs then the claim might be true in a very small way. Otherwise it has to be regarded as incredible.
  
  I accept that many of the problems that exist within the UK are down to mismanagement by the UK government, but where is the evidence that the EU has made any positive contribution to them?
  - Stuart Barnes Reply
    
    March 21, 2016 at 8:54 am
    
    In reply to John Perkins.
    
    Excellent stuff! Let us hope that the dreadful and cheating Heath will be turning in his grave after 23/6 and we vote to get out of the EU corrupt shambles.
Jim Allen Reply

March 16, 2016 at 1:50 pm

Here are some of my reasons for leaving the EU:

1. 1.3 million, UK born unemployed. 2 million non-UK born residents taking their jobs

2. EU accounts not audited for over 20 years

3. Limited control over our borders because of free movement of EU nationals

4. We pay more into the EU than we receive back

They say that if we leave:

1. We might lose trade

2. We might loose our banks] (no great loss. They charge over 10% interest on ‘loans’ but when I ‘lend’ my savings to them they pay me less than 1%. We can do without such ‘monetary help’

3. We might have to train our own people to do the jobs we have vacant – but we should be doing that already

I am still not convinced that the possible positives of remaining outweigh the advantages of leaving. We should take control of our country’s future outside the EU.