The swing against ‘Europe’ reflects a wider swing against the concept of any community wider than a gated one, writes Alan Shipman.
While the EU’s opponents say that leaving it would boost our national solidarity and sense of community, the policies built around the new Euro-scepticism suggest something else.
It’s more than likely that the United Kingdom Independence Party’s (UKIP) remarkable 26% vote share in May’s local elections reflected a traditional mid-term protest. The Liberal Democrats, now in government, were no longer a viable vehicle for followers of the two big parties to signal impatience with their leaders. UKIP stood out as an especially alluring alternative: the only party capable of reducing taxes while raising public spending, improving the NHS and public transport while turning away the immigrants who’ve helped to keep them running, removing red tape while intervening to stop ‘unwanted’ buildings and retail developments, and making home-owners better off while reducing housing demand.
But as well as viewing UKIP as a serious threat, some big-party strategists are assuming that its appeal derives from its central manifesto commitment: withdrawal from the European Union. That’s why certain ministers have taken the extraordinary step of suggesting they would vote to leave the EU if a referendum were held now, and might see little disadvantage in doing so even after David Cameron has renegotiated its terms (see this article). It even led some to reject resistance to a Queen’s Speech amendment designed to force the prime minister’s hand over a referendum date.
These may be clever tactics to ensure the success of Cameron’s renegotiation. Germany and other large member states might concede more if (as Euro-sceptics argue) the EU needs Britain more than Britain needs the EU, and can be convinced that even the once firmly pro-European Conservatives are in danger of slipping away. But they run the risk of creating a national presumption in favour of withdrawal, unless the benefits of membership can be proven. And that’s an impossible task.
A cost-benefit analysis of joining the European Economic Community (as it then was) could have been attempted in 1973, because the UK’s situation was known and its trajectories with or without accession could be sensibly projected. After 40 years of membership, it’s very hard to stage the exercise in reverse, and decide if the UK would get richer by withdrawing. On the positive side, it’s estimated that 3 million of the UK’s 29.7m jobs are directly supported by the EU’s single market. But that doesn’t mean that leaving the EU would put 3 million jobs at risk (see this article), since the rest of Europe would still be open to UK exports, though we don’t know on what terms.
On the negative side, EU directives are now the main source of regulation that continues to grow, despite successive government's business secretaries’ promises to reduce it. But regulation can be an enabler as well as a constrainer of free enterprise; and it’s likely that governments of a non-EU Britain would have introduced many of the same rules.
While former chancellor Lord Lawson argues that the EU will intentionally undermine the UK’s financial service sector (over 10% of its national output) with new rules if it stays in, the mayor who presides over most of it is dubious about leaving. Boris Johnson realises that Eurozone business could then drift to financial centres – Luxembourg and Malta, as well as Paris and Frankfurt – whose governments are unequivocal about staying in the EU’s inner core. And although this should be an easy time to condemn Brussels technocrats for persisting with economic policies that are amplifying the deficits (and re-awakening the national animosities) they were meant to eliminate (see this article), the UK’s pursuit of a parallel austerity programme makes that harder to do.
A much broader narrowing
What is clear – and increasingly challenging for those who want to continue UK membership – is that this country pays more into the EU than it directly gets out. The UK contributed EUR 11.3bn, and received EUR 6.6bn, in the most recently accounted year. No amount of renegotiation or agricultural policy reform will change this, since the UK (even after its long recession) is among the bloc’s richest economies, part of a better-off ‘north’ that will always be a net payer while the disadvantaged ‘east’ and ‘south’ are net payees. The case for staying in is based on indirect economic benefits – freedom to trade with, move between and migrate to 26 (soon to be 27) other countries, playing by the same rules – and non-economic gains, of which the bloc’s internal peace and external strength are the most obvious but least quantifiable.
But the inclination of a quarter of the electorate to assess the EU on a straightforward money in/money out basis – and of major parties to be pulled in the same direction – confirms a seismic political shift over the past 40 years. The welfare state, and Britain’s wider tax arrangements, have been re-appraised on the same basis. People now expect to get out at least what they have paid in, and to scrap the system if they do not. The days of looking beyond money as a measure of benefit, and of expecting those with more to pay more, are long gone.
It’s a world away from the generation of politicians (led by Edward Heath and Harold Wilson) who brought Britain into Europe and fended off the earlier demands for renegotiation or withdrawal. They had lived through a world war which not only underlined the need to build a European community, but also brought a sense of community broad enough (and of fluctuations in fortune sharp enough) for the advantaged to accept some ongoing obligation to the less advantaged. The swing against ‘Europe’ is, when viewed more carefully, a swing against any community wider than a gated one. UKIP is adamant that scaling-down the UK’s international obligations would enable it to rediscover and enhance its intra-national solidarity. Other parties should be wary of imitating a challenger whose detailed commitments actually suggest the reverse.
Alan Shipman 21 May 2013
Alan Shipman is a lecturer in Economics at the Open University. He is responsible for the modules You and your money:personal finance in context and Personal investment in an uncertain world, part of the foundation degree in Financial Services.
The views expressed in this post, as in all posts on Society Matters, are the views of the author, not The Open University.
Cartoon by Catherine Pain