124 billion reasons why it's time we brought the curtain down on this tragic EU pantomime
Now that our magnificent Olympic games are over, politics is returning to normal and the harsh reality of the problems we face are coming back into focus. The problems of economic debt and worries about global security have made headlines in recent days – but the issue of Europe is again rapidly rising up the political agenda.
There are two separate but related issues for Britain’s politicians to deal with – the self-created crisis of the eurozone and the vexed question of Britain’s long-term relationship with the European Union itself.
It is very clear that a number of EU countries intend to move much closer to political and economic union. Only last week, European Commission president Jose Manuel Barroso tried to use the euro crisis to justify a new push to what he called ‘a federation of nation states’.
He said ‘pooled sovereignty means more power not less’.
My response to that is, yes, more power to the very people in Brussels who got us into this mess. When will Mr Barroso and Co learn? The answer is not more Europe, but less.
But all this should come as no surprise to us.
The very first line in the Treaty of Rome talks about ‘ever closer union’. This was not, of course, what the British people were sold in the referendum of 1975, but it is nonetheless what we were buying and history has shown that the Eurocrats and the European political class have continued without deviation down this path.
This latest chapter is simply a continuation of the ratchet process applied treaty by treaty to achieve the ambition of a federal European state by stealth.
The latest developments represent a historic milestone in the development of the EU and we had better understand their importance. Frankly, if the sign on the front of the bus says ‘ever closer union’ and that is not the destination we want, then the logical thing to do is to get off the bus. We may not be alone in seeking a different direction. In Finland, the Netherlands and the Czech Republic, public opinion seems to be moving away from the assumption that ever closer integration is desirable.
In any case, the eurozone represents only 17 out of 27 European countries and that number is likely to shrink as the full horror of the eurozone disaster begins to sink in. How wise John Major’s Government looks in retrospect to have kept Britain out of the euro at a time when Tony Blair’s Labour Party, the BBC and the Guardian were telling us that we would be economically doomed if we stayed out of the project. It is impossible to say exactly when the euro project will start to fall apart but the contradictions within it make it inevitable.
How will the Eurocrats in Brussels react to events? History suggests that they will try to do nothing and hope they can continue their project encompassing as many countries as possible. They will throw European taxpayers’ money at the problem for as long as they can – after all, they are not accountable to those who pay the taxes.
When that is exhausted as an option they will probably try to do the minimum damage to their political ambition and that is most likely to mean a Greek exit from the euro. This could be the worst possible option. Once the markets recognise that the principle of membership can be breached, it will be a one-way bet forcing one country after another to leave under constant market bombardment. It will be the ERM writ large. There is a strong body of opinion, which I share, that suggests if a number of countries leave simultaneously that will at least send a signal to the markets that the remnant currency has a real prospect of maintaining its value.
Throughout this tragic pantomime, Britain will be largely a spectator waiting to see how much damage will be done to our collective economic prospects, before an inevitable economic reality sets in.
Beyond the Eurozone crisis, there is still a much wider issue of Britain’s relationship with the European Union. The British people have never given their agreement to political union. They voted in 1975 for an economic and trade relationship. I believe it is time to keep faith with the British people. It is time to get back to a common market. Let’s just look at the financial and legal implications of our current position.
The think-tank, Open Europe, has estimated that the total cost of new regulations on the UK economy as a whole in the decade up to 2010 was £176 billion and of this £124 billion, or 71 per cent, had its origin in the EU.
When people say that we should not talk about Europe and focus on the economy, they are missing the point that a great deal of the cost and regulation of our economy comes from Europe. The issues are indivisible.
To get an idea of where this burden has fallen on Britain we need only look at three individual EU regulations.
The Working Time Regulations have cost Britain £17.8 billion to date, the Vehicle Excise Duty Regulations – implementing the EU pollution directive – have cost British motorists £10.4 billion and the Data Protection Bill, implementing the data protection directive, has cost British taxpayers more than £8 billion.
These costs are on top of Britain’s contributions to the bloated EU budget – a budget that its own auditors refuse to sign off. This has continued to rise despite the austerity programmes being imposed by national parliaments on their own people. It is a disgrace that spending will rise by 6.8 per cent this year while only six out of 41,000 Eurocrats will have their posts cut.
Against the clear mood of the British electorate, the UK is the third highest contributor to the EU and our cheque to Brussels this year will be a cool £6.9 billion net.
The Common Agricultural Policy (CAP) and the EU Structural Funds are particularly iniquitous. While the UK will have contributed £33.7 billion to the CAP between 2007 and 2013, we will receive only £26.6 billion back. Per hectare, France and Germany will receive £236 and £251 respectively while Britain will get only £188.
The EU Structural Funds are supposed to provide investment across the whole of the EU but there are only two regions in the UK that are net recipients.
If you are reading this in the West Midlands, you pay £3.55 to the fund for every £1 you receive. This whole sorry picture is a far cry from what the British people thought they were signing up to in 1975.
What should be done? I believe that the best way forward is for Britain to renegotiate a new relationship with the European Union – one based on an economic partnership involving a customs union and a single market in goods and services.
This would be, in effect, a common market without the political interference that the British people have found it increasingly difficult to tolerate and which politicians of both parties have discovered makes governing our own country increasingly difficult.
We should work with our European partners where it is in our mutual interest to do so. But we must keep separate the levers that enable us to act as a sovereign and independent country where necessary. When we have determined the relationship we seek we must set a negotiating timetable with a referendum at the end.
We must be willing to trust the judgment and wisdom of the British people. Our destiny should be decided on our own shores and nowhere else.