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Confused about which way to vote? Take a look at the facts Brexiteers promised you then failed to deliver

Why a 'Norway model', an 'Albania model', and the idea of free trade without open borders is unworkable

Peter Wakeham
Wednesday 22 June 2016 15:02 BST
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(AFP/Getty Images)

Winston Churchill’s delightful quote, “the best argument against democracy is a five minute conversation with the average voter” could never be more apposite when it comes to the EU referendum. Moreover, the average voter could be forgiven for replying, “The best argument against democracy is a five-minute conversation with the average politician.” What should have been an intelligent debate on the pros and cons of remaining in Europe has been dumbed down to a shouting match and desperate confirmation bias – the search and use of data to prove the point one believes in, coupled with an infinite capacity to ignore or refuse to listen to any counter arguments.

John Major came closest to presenting an honest case when he said that he was “no starry eyed Europe enthusiast but had no doubt that the UK should remain in the EU”. The decision whether or not to remain hinges on making a large number of often complex trade-offs, ideally based on facts. I too have ended up firmly in favour of remaining.

Put simply, the Leave campaign has failed completely to convince me that the balance of advantage lies in quitting. No positive case has been made and no substantive counter arguments to the risks and uncertainties of leaving have been provided. Dismissing alternative points of view from credible independent experts as Cameron-sponsored collusion is schoolboy stuff and insulting to the average voter.

The Leave campaign now seems to be focusing on two issues: firstly, immigration - “We need to control our borders” - and secondly, sovereignty – “We need to control our own laws”. They have lost the economic argument (more on that later). Moreover, their logic on immigration and sovereignty is fatally flawed and misleading.

Contrary to voter expectations, at no time has the Leave campaign argued that Brexit will result in lower immigration from the EU. Their rhetoric suggests they favour the prospect of an Australian-style points system to decide whom we would allow to enter the country. This is a seductive proposition but dangerously misleading when viewed in isolation or out of context. First, the statistical truth: 27.3 per cent of Australia’s population is foreign born compared to 12.3 per cent in the UK. So what Leave is really saying is that the number of EU immigrants coming to the UK might not change with Brexit but that labour markets are inefficient and that Government is better placed to decide what skills we need and do not need. Putting aside my cynicism that Government knows better than employers with free access to EU labour skills, the facts do not support this case.

Employers thus far have done an excellent job at taking advantage of access to EU skills – and the UK as a country has benefited. 78 per cent of EU immigrants are in work in the UK compared to 73 per cent of the rest of the population. Moreover, the value of these immigrants to the UK economy is well documented by detailed research by Christian Dustmann, University College London (born in Herford, Germany) and Tomas Frattini, University of Milan (born in Bergamo, Italy), neither of whom can be dismissed as “Remain stooges”. Their study showed that between 1995 and 2011, migrants made a positive contribution of more than £4bn to Britain. Between 2001 and 2011, the net fiscal contribution of recent arrivals from the eastern European countries that have joined the EU since 2004 has amounted to almost £5bn. Even during the worst years of the financial crisis, in 2007-11, they made a net contribution of almost £2bn to British public finances. Migrants from other European countries chipped in £8.6bn.

In short, most EU migrants come here to work and add value to the UK economy. So what about the 22 per cent not working? Well, the UK government has already reached an agreement with the EU on out-of-work benefits. Newly arrived EU migrants are banned from claiming jobseekers’ allowance for three months. If they have not found a job within six months they will be required to leave. EU migrant workers in the UK who lose their job, through no fault of their own, are entitled to the same benefits as UK citizens, including jobseekers’ allowance and housing benefit, for six months. And by way of reminder, David Cameron secured concessions from the EU in his negotiations whereby access of newly arriving EU workers to non-contributory in-work benefits is limited for a total period of up to four years from the commencement of employment. David Cameron may have failed in his original demand to ban migrant workers from sending child benefit money back home but he successfully gained agreement that payments will instead be linked to the cost of living in the countries where the children live. The new rules will apply immediately for new arrivals, and for existing claimants from 2020.

Leave campaigners also point to the impact of immigrants on wages and employment. First, let’s dispel the argument often made that EU workers are low-skilled. EU employees in the UK are on average more highly educated than their UK peers. Only 15 per cent of EU employees left formal education before the age of 17 against 44 per cent of UK-born employees. More than 40 per cent of EU workers were educated beyond the age of 21 compared with less than a quarter of UK-born workers.

Law school professor's takedown of the Brexit argument goes viral

Moreover, there is little evidence that more migrants push wages down or unemployment up. Economists from the Centre for Economic Performance in School of Economics (also not Government lackeys) say that when they look at the areas with the largest increase in EU immigration, these have not seen the sharpest falls in employment or wages since 2008. Research published last year by the Office for Budget Responsibility suggested there was a small negative effect of migration on the wages of locals in the semi-skilled and unskilled service sector, such as care workers, shop assistants, restaurant and bar workers but the impact of migration on the wages of the UK-born in this sector since 2004 has been no more than 1 per cent over a period of eight years.

Finally, immigration is not a single issue debate. Significant economic issues are linked. If the UK wants future access to the EU Single Market, we will not be able to “control our borders”. Free movement of people lies at the core of EU values alongside free access to EU markets. The Leave campaign has shifted its viewpoint from wanting to negotiate access to the Single Market to seeking alternative models in order to keep the focus on immigration, not economics.

Norway and Switzerland are quoted as potential role models – but they are not. Both Norway and Switzerland have accepted the free movement of EU citizens as part of their trade agreements with the EU. According to the OECD (an organisation that is also not a UK Government lackey), Switzerland is the country with the largest number of permanent immigrants per capita - followed by Norway and Australia. 27.3 per cent of Australia’s population is foreign born, Switzerland 28.3 per cent, Norway 13.9 per cent – and the UK 12.3 per cent. The top four country sources of immigrants into Switzerland are Germany, Italy, Portugal and France; the top four for Norway are Poland, Sweden, Lithuania and Germany; the top four for the UK are India, Poland, Pakistan and Ireland.

Michael Gove has pointed to the Albania-Ukraine model as the way forward. Putting aside that Albania accounts for 0.1 per cent of European trade and half the population live below the global poverty line of $5 per day, Michael Gove clearly does not understand the Stabilisation and Association Agreements in the Western Balkans. These arrangements were designed as support at the start of a journey towards EU membership and integration for relatively small, troubled economies, rather than a separation settlement for a big, successful one. Olli Rehn, who negotiated such pacts as EU enlargement commissioner, said he was “surprised” the Leave side would want an agreement that would put the UK “permanently on the substitutes bench”.

Boris Johnson has a vision of the UK undertaking trade negotiations with every country and regional organisation in the world from scratch. EU trade agreements apply in the territory of its member states but if we leave the EU, we will no longer benefit from those agreements, including the 22 the EU has made with the UK’s Commonwealth partners. We would no longer be covered by the negotiations with the US, Japan and other leaders in world trade now heading towards conclusion. Boris Johnson argues that the UK could quickly negotiate its own set of trade agreements to compensate. I defer to the view of Peter Sutherland, first Director General of the World Trade Organisation: “This, judging from my long experience of trade negotiations, is highly unlikely. The trends are towards bloc-to-bloc negotiations. The US has confirmed that it would prefer to negotiate with the EU (with the UK in the EU, by the way).

“The last in this catalogue of claims is that, if all else failed, the UK could rapidly negotiate its own trade agreement with the EU and somehow thereby replicate all the benefits of the single market. This would include “passporting” in financial services — the system, crucial to the City of London, by which a company based in one-member state can trade throughout the single market. Never mind that even the recently agreed EU-Canada trade deal, the most comprehensive the union has ever agreed (and seven years in the making), does not give the Canadians passporting rights. And all of this, the Leavers claim, without having to contribute anything to the EU budget or accept free movement of people.”

Clarkson and Cameron on Brexit

In short, the Leave campaign has provided no substance as to how, or indeed why, “we need to control our borders” and has completely failed to explain how the economic consequences of border control will be managed.

The Leave campaign arguments for regaining our “sovereignty” are equally without substance. The idea that we should take greater control of our own destiny is a powerful one. I was expecting to be told what EU laws they would repeal or, better still, what laws the EU has inflicted on us against our will. I would expect them to be advising what EU laws we can ignore or disobey if we want to trade with the 27 EU countries. Not a word. So I went searching for a few facts myself.

First, the most startling fact is that the House of Commons has undertaken a significant study on this but failed to (successfully at least) publish it. One has to resort to an independent and comprehensive report from the Centre for European Policy Studies to find the outcome of the House of Commons analysis: 6.8 per cent of primary UK legislation and 13.8 per cent of UK secondary legislation had a role in implementing EU law - 20.6 per cent of legislation in total compared to the 75 per cent that we hear from prominent Leave campaigners.

Turning to the content of these EU driven laws: how do they affect our lives and would we repeal them? Most of the areas where EU laws take precedence set the business norms and standards that all nations must observe in a global economy. Some establish levels of protection for workers; others, environmental controls. In short, most of these laws we should welcome or at least accept are necessary to trade in the Single Market. They will continue to apply if we leave and want to continue to trade with Europe. I was surprised recently when Sir James Dyson and Sir Anthony Bamford - both founders and leaders of extraordinarily successful global businesses - came out in favour of Brexit. Both believe they have axes to grind on EU laws. Dyson has failed in an EU legal challenge to competitor labelling practices; Bamford has lost a six-year battle against a €39 million fine by the Commission for anti-trust breaches. Whatever the merits or not of their cases, these laws will not go away if we exit and still want to continue to trade with Europe.

On many other policies the UK has opted out - the euro, Schengen (open borders) and some elements of legal and judicial affairs, for example. And on the legislation that really affects our daily lives, for instance taxes, welfare, war and peace, and national security, policy has been set by Westminster politicians. We may agree or disagree with these laws but we cannot claim they are EU driven and that we have surrendered democracy or self-government.

It is also wrong to argue, as Nigel Farage does frequently, that EU laws are imposed by unelected bureaucrats in the European Commission. The commission only proposes draft legislation. It is then adopted by the Council of Ministers, consisting of elected national governments, and the elected European Parliament. The harsh reality - an irony here for the Brexiteers – is that the House of Commons is poor when it comes to overseeing our EU policies. The unelected House of Lords actually does a much better job, as do the national parliaments in Denmark, Sweden and the Netherlands for example.

Finally, sovereignty of which nation are we demanding: England and Wales? Let’s be absolutely clear – a vote to leave the EU will ultimately mean a vote for Scotland to leave the UK and hence the break-up of the UK as we know it today. Both Yes and No voters in the Scottish referendum favoured EU membership. A Brexit will trigger a new Scottish referendum. Imagine Anglo-Scottish border controls along the 100 miles between Berwick or Gretna. And imagine border controls between Ireland and Northern Ireland along the 500 miles between Lough Foyle and Carlingford Lough. This used to be one of the most politically contentious borders in the world with customs posts turned into military check points. Ireland did not sign up to Schengen, preferring instead to opt for its current passport free status (shared with the Channel Islands and Isle of Man) as part of the Common Travel Area. The Leave camp say that the border will remain “open” under Brexit – but it cannot if they want “to control our borders”. Ryanair Flight 8012 from Nowy Dwor Mazowiecki Airport (near Warsaw) to Dublin would become extremely popular, as would the Translink bus services from Dublin Airport to Belfast from where the passengers would fly to the UK unless border controls were also in place in Belfast.

The Brexit campaign has tried to get us to see immigration and sovereignty as powerful “take control” reasons to leave. The control logic is illusory and completely ignores the knock-on consequences to the economy. In reality, the Brexit campaign knows there are significant risks to the UK economy if we exit the EU. They have tried to dramatise the cost of membership by using a dishonest statistic of a weekly outflow of £350m while ignoring all the direct and indirect inflows. The true figure is closer to £120m per week – or 26p per person per day, half the price of a Mars bar. This represents 0.5 per cent of GDP and would of course be wiped out by a 0.5 per cent reduction in GDP as a result of Brexit.

The Remain campaign got it wrong by publishing Brexit forecasts that gave the Leave campaign the ammunition to accuse them of scaremongering and hence diverted discussion from the case for staying in the EU; the Leave campaign has failed to substantiate the case for Brexit. Their campaign has been emotive but it does not stand up to proper scrutiny. If there is no demonstrable advantage, why would I take such an enormous risk when such an extremely small economic downside can completely wipe out the £120m per week cost saving?

And finally, a plea to anyone (like me) aged 70 or over: however, you choose to vote, do so for your children and grandchildren. Ignore your rear view mirror vision for the UK and vote for their future.

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