Wednesday 18 May 2016

Brexit reflections #4 - anger and complacency

Having started the EU referendum campaign with an open mind, I've finally come down on the side of Brexit.

Please don't stop reading.

Why? On the principle that it's better to govern your own affairs, unless there are overwhelming reasons why you shouldn't (this seems obvious to me, but I'll enlarge on it below).

What might those overwhelming reasons be?

The two most commonly put forward are security and the economy.

It's said that our security depends on the EU.  I don't think there's much evidence for this.  Our security surely depends on NATO.  The EU has actually very little to say about foreign policy - it has no foreign minister, still less a common security force. Its bungling over Ukraine and hand-wringing over Syria demonstrate how things might play out if our security really did depend on the EU.

But, I hear you say, hasn't the EU helped to keep the peace within Europe generally? Maybe. I find it rather more plausible that because people want peace they look for ways of co-operating with each other; the EU is a consequence of that desire rather than its cause. The real reason people want peace is because they remember the devastation caused by war. If another Hitler should appear, does anyone really think that membership of the EU would deter him? And if so, do they remember how the League of Nations got on?

It strikes me that the biggest threat to intra-European peace has come from the zealots of ever closer union themselves. The Schengen agreement and the wrecking ball that is the Euro are the causes of the immense dissatisfaction which has fuelled the rise of the hard Left in Greece and the hard Right just about everywhere else. Leaving would not free the UK from the consequences of that extremism, but it might make it less likely to happen here. It might also give the Euro zealots pause for thought.

When I read the letters of hundreds of economists urging Remain, I'm reminded of the even larger number of their colleagues who wrote to the Times protesting about the Thatcher government's economic policy in the early 80s. They were wrong - inflation was curbed and the economy began to grow again. I'm also reminded of the profession's woeful failure to predict the 2008 financial crisis. Of its urging the UK to join the ERM, and, 20 years later, the Euro.

Look how those have turned out. That doesn't mean the economists are wrong this time, of course. It just means that their assurances are scarcely the great clunking fist that sinks the Brexit campaign. When the Treasury and the IMF issue dire forecasts telling us how much poorer we'll be in fifteen years, I'm reminded that these are people who can't even tell us what's going to happen in fifteen months.

What would the economic consequences of Brexit actually be? I have a secret to impart: no one knows. We know that we'd face single market tariffs until we were able to do a trade deal. We also know that rEU would make it as difficult as they possibly could for the City of London to carry on doing EU business, which might put at risk some of the many billions the City raises in tax revenue for the Treasury.

However EU tariffs are set at only 4%. And anyway there never has been a single market in services (something we're actually good at), only in manufacturing (something that's less and less important to us). There are able and well-informed City pundits - Roger Bootle, David Buik and Merryn Somerset-Webb for example - who think the Square Mile would thrive after Brexit. We also know that we'd save hundreds of millions of pounds in EU membership fees. Moreover, the value of the pound would probably sink (although the fact that no-one knows how much utterly undermines the bleak economic forecasters), providing a welcome boost to British manufacturing competitiveness, hurting imports and helping our rather parlous balance of payments situation.

But let's say the Cassandras are right.  Let's say the economy would grow more slowly (which is the worst the forecasters can come up with). If a rising tide does not benefit everyone equally, the same must be true when the tide is falling. If things got worse economically in Britain because of Brexit, might there be a strata of society which would benefit?

The short answer is yes.  The long answer is that anyone who can't afford housing, anyone who can't get their kids into their local school, who has to queue for NHS treatment, who is in a low paid job or can't get a job at all would probably benefit. In other words the Britons at the bottom end. These are the people who, funnily enough, you don't see campaigning to Remain, because they know being in Europe doesn't benefit them.

I haven't heard anyone suggest that post-Brexit there would be no migration at all, but if we did leave Governments of both Left and Right would seek to get a tighter grip on numbers. The immediate effect of that would be to stop the crisis in housing, the NHS and school places getting worse so quickly. It would also mean that employers have to start competing for unskilled staff by raising wages.

(I have heard so many half-wits bleating that the living wage would accomplish this that I need hardly say how bitterly funny I found it that within weeks of the announcement employers began to change terms and conditions for staff so that, for example, they were not paid during their lunch breaks; so much for government intervention).

The outcome of the referendum won't affect me very much, but there are millions of people with fairly dismal life chances in Britain who I believe it would help a good deal.

There's a lot to dislike about the Brexit campaigners, amongst other things their predominant psycological state (angry).  But those arguing for Remain present an even sorrier spectacle. Leaving aside the politicians, whose dishonesty, though considerable, has been no worse than expected, and the business elites, whose desire for the endless supply of cheap labour to continue unabated is at least transparently self-interested, the section of Remain supporters I find least appealing is the smug liberal middle-class.

These are the people who do well out of EU. They like the easy travel arrangements. They enjoy the cheap access to the service industries ("such a charming Polish nanny/plumber/barista!"). They enjoy the feeling of cosmopolitanism being on the side of Europe entails. They're in a position to pay their way past the obstacles that uncontrolled migration throws up for the poor (health/education). Above all, it really hasn't occurred to them that the people who do worst out of the EU tend to be people at the bottom end (people, incidentally, many of whom have brown or black skins - British-born descendants of former migrant generations). They are alright, Jack.

If anger is the keynote characterisation of Brexiteers, for the Remainers it is complacency.

As for the Left, with a few honourable exceptions (notably Frank Field) they abandoned the idea of helping the worst off as soon as they realised that doing so might make them look hostile to Johnny Foreigner.  They'll do anything to keep on virtue signalling.

I said I would enlarge on the proposition that it's better to govern your own affairs. The most obvious reason is that if you don't like the laws your government passes, you can boot them out of office. What happens though if some laws persist because your Government doesn't have control over them any more?

The fact that we were committed to free movement of people by a British electorate more than forty years ago, and the absurdity of the proposition that we must, apparently, stick with this arrangement until the rocks melt with the sun, are merely peripheral inanities compared to the central steaming pile of stupidity around which they orbit. That stupidity being that although excessive migration is, according to polls, one of the two principal concerns of the British electorate (the other being the economy), our politicians are powerless to do anything about it.

For that really is the case. If a British government wanted to reduce net migration to the low tens of thousands (and as I said above, Governments of both Left and Right would almost certainly reduce migration if they could), there is no law it could pass to bring that about which would not be struck down by the European Court. Even an attempt to do that obliquely, for example by restricting benefits to migrants, would fall foul of the Court. East European migrants who have never paid into the British system can start claiming tax credits from their first day at work. They can have Child Benefit paid to their children who may have never been here. There is nothing our politicians can do about it.

Now consider the effect of this on the British political process. The issue that apparently concerns us more than any other is one which our politicians cannot fix. This reduces our system to a pretendy-democracy where politicians strut up and down making promises (reducing migration to the low tens of thousands, for example) which we and they know they cannot possibly keep.

Incidentally, although Remainers talk of awful damage the economy if migration were stopped, they forget that if restricted migration weren't working for the UK, we could simply change policy and start allowing more of it again.  Running your own affairs is quite handy like that.

The present situation is a sham which in the long run will do much more damage to the British political process than expenses claims for a duck house. How long before we get our own Donald Trump? In the 2015 general election UKIP won nearly four million votes. I'd be very surprised if, with Labour in navel-gazing disarray, their share of the vote didn't increase in 2020.

To be clear, there would be drawbacks and risks to leaving. This isn't a choice between something self-evidently good and something self-evidently bad. It's a choice between two almost equally unsatisfactory and even dangerous things.

Nevertheless I think that the EU referendum offers an opportunity to reverse two decades of growing inequality.  Even if you don't agree with me, I think you'd have to concede that, in the absence of overwhelming reasons to the contrary, it's worth restoring accountability to the heart of the relationship between people and government.

That's why I'll vote for Brexit.  Go on, hate me if you like.