Rip-off Europe

Foreign Affairs & Security
Wednesday, August 31, 2016
Rory Broomfield


It interferes with your daily life much more than you think, explains Rory Broomfield. Britain must get out.

The EU has a bad reputation at the international level. It is often thought of as a set of institutions based in Brussels and Strasbourg that are run by dull men in grey suits. It is somewhere or something that only deals in the abstract: this trade deal, that conference, this event. This is all true, but the net result of all EU activity is a set of personal restrictions on those who live and work within the EU as well, in terms of both their incomes and their choices.

First, EU regulations and directives put UK jobs at risk. Whether in banking or manufacturing, the impact of regulation is felt by businesses and employers throughout the UK. Recent research by The Freedom Association found that between 150,000 and 200,000 jobs within the financial districts of London are currently at risk by new financial regulations from the EU (see our report ‘Freedom to Attract Trade and Investment’ , published by The Hampden Trust in association with TFA).

Further research by The CityUK in March 2014 complemented this finding and confirmed the figure of 200,000 jobs. In the manufacturing sector, Business for Britain, in its ‘Energy Policy and the EU’ report, found that 1.5 million jobs across the country have been put at risk by EU energy directives. The Better Off Out campaign has evidence that the employees in power plants were particularly under threat from Brussels, due to similar pieces of regulation.

However, EU red tape also means that jobs are sometimes not created in the first place. John Redwood MP explained this earlier this year when he argued on his blog that at least 500,000 jobs have not been created in this country, simply because of EU regulations. He estimates that there could be around 450,000 more jobs in manufacturing, 50,000 in the energy sector and 30,000 in farming if the UK had a different relationship with the EU. Regulation does not just put jobs at risk: it destroys any prospect of them being created – on Redwood’s estimate, over half a million Britons are potentially out of work due to the stranglehold of the Eurocrats.

These figures show that, even if the EU creates employment (which rarely it does), it kills potential vacancies too. The vast majority of jobs are, of course, created by businesses that are free and able to trade and create opportunities. The UK now sells more to the rest of the world than it does to the EU, and non-EU countries like Switzerland sell roughly 4.5 times more to the EU than the UK. In other words, EU membership is not a prerequisite for trade to take place and jobs to be created.

The EU’s impact goes further, as it pervades our lives even deeper. Energy directives do not just apply to power stations, but also have the effects of limiting the supply of vacuum cleaners (and potentially other household products), reducing consumer choice, and forcing ever-higher costs onto buyers and sellers alike. Higher costs are also a result of the EU’s Customs Union, which places a tariff on products coming into the UK from outside the EU. As Professor Patrick Minford CBE argued in a further paper published by The Hampden Trust and TFA, this tariff costs the UK 3% of GDP per year and, along with the effects of other policies such as the Common Agriculture Policy and Common Fisheries Policy, causes household bills to be pushed up.

Taxes like the EU’s minimum VAT tariff (at 15%), which Member States are obliged to enact, mean that the UK Government, even if it wished to reduce the VAT rate, has considerably less room for manoeuvre in reducing the cost burdens on everyday items from petrol to groceries.

So the EU’s competences, regulations and policies cost the UK money. In energy, in food and in household products generally (to name just a few areas), these costs are invariably passed down to the consumer - i.e., you. This is, of course, before including the costs of the EU membership fee and other associated costs.

However, there are alternatives to the status quo. Other countries have formed a different relationship with EU – states such as Australia, Canada, Norway and Switzerland – and in such a way that benefits both the state and the citizen. These different relationships have proven to be ever-stronger, lessening costs and increasing opportunities. They demonstrate that full EU membership does not cut off a country from trading with businesses within the EU: people in Australia or Norway benefit from stronger trade links and fewer barriers, without the banning of products and the lessening of choice. This has not led only to Canadians and Swiss being some of the wealthiest people in the world today, but has also led to them being some of the happiest.

We do not have to be a Member State of the EU to have a positive relationship with the EU, one where Britons have more opportunity, greater freedom of choice and increased wealth. As these examples show, both the UK and its citizens would be better off out the EU.

Rory Broomfield is Director of The Freedom Association

This article was originally published in Crossbow, the Bow Group Magazine - Conference 2014 on 27/09/2014. Published online 31/08/2016