The real reason we should fight for a Brexit

With the launch of the main pro and anti campaigns for the British referendum on European Union (EU) membership, we can be sure of seeing lots of figures bandied about on the supposed costs and benefits of either staying or leaving. So, in the past couple of weeks, businessman Stuart Rose’s campaign, Britain Stronger in Europe, claimed that leaving the EU would cost every British family £3,000. The Vote Leave campaign countered with the claim that Britain could save £350million per week with an EU exit (although it seemed to be basing this on Britain’s gross rather than its net payments to the EU budget). No doubt there will be many more financial estimates promoted in the months ahead.

The good news is that you don’t need to spend much time on the financial aspect of the debate. For a start, there are much bigger issues at stake than whether an exit would make us a little bit better or worse off. On top of that, most of the calculations from both sides are inherently flawed and meaningless.

Historic estimates of how much Britain has gained or lost economically and financially from EU membership cannot be definitive because we don’t know what would have happened if we hadn’t joined in the first place. The so-called counterfactual is unknowable. For instance, it may seem reasonable to assert that British trade with EU countries would have been less if the UK had remained outside the EU and its single market. Though by how much is impossible to say, not least because British exports to the EU were already growing well before Britain joined the European Economic Community in 1973. Who is to say that this earlier expansion in British trade to bloc members would not have continued? This makes it impossible to say how much post-1973 trade growth can be attributed to membership per se.

Moreover, we don’t know how Britain’s trading relations would otherwise have evolved had it not joined. Maybe even more lucrative trade relationships would have built up either with other advanced economies, such as the US, Canada, Australia and New Zealand, or with emerging markets, such as India and China — all of which could have been damaged by protectionist EU policy. It is worth noting that, today, British trade is in deficit with the other EU countries, while it is in surplus with the US. So there is also no determinate relationship between a net trade position — positive or negative — and membership of a trade area.

Similarly indeterminate are the gross and, even more so, the net estimates for the future financial and economic effects of leaving or staying. The true costs and benefits arising from alternative referendum outcomes are unquantifiable today, because they are contingent on what happens after the result. The economics of either situation — being in or out — is not static or pre-determined; it depends, in particular, on the policies the British government pursues now and after the EU referendum.

This is not just to do with how the British government handles the exit negotiations and the new trade agreements, or the challenges from continued membership, if that were to be the unfortunate decision. More broadly, the future health of the British economy is much more dependent on what sort of economic and industrial policies the government implements, rather than if Britain is in or out of any particular economic or trade grouping.

A country can have free-trade relationships with areas and countries all around the world, the gains will be much less when the country’s level of productivity is low and stagnating, as has been the case in Britain in recent years. Given that Britain’s goods and services currently lack international competitiveness, government actions to help fix inadequate productivity will do much more for prosperity than securing particular free-trade agreements.

Democracy trumps the cost-benefit approach

It is precisely because it is so important that a nation is able to pursue appropriate economic and industrial policies that Britain ought to leave the EU. It is only outside the structures of the EU that economic policies are subject to democratic accountability. There are many different views on what those economic policies should be — I’ve argued on spiked that Britain needs a radically transformative set of economic and industrial policies in order to renew the economy. But for any policies to be effective, they will require open and extensive public discussion and engagement, alongside full political accountability. Unfortunately, democracy and accountability are precisely what EU membership curtails.

EU member countries have ceded sovereign control over a wide range of areas to appointed elites. So, for example, the European Court of Justice recently ruled that time spent travelling to and from home by employees without a fixed workplace should count towards time worked, and therefore should be paid. Now, we might think that’s a good or a bad ruling, fair or unfair. But the core political point is that, as national citizens, there is nothing we can do to reverse this decision – we can’t enforce policy accountability by replacing the politicians involved.

The democratic argument for an exit is therefore not based on the assessment of particular EU policies or regulation. Rather, it is based on the need to restore public accountability for the decisions the EU currently makes for us. If economic policies are decided by national, elected governments, we can assess these policies, and we can hold governments to account for them through national elections.

Although we can also assess EU policies as agreed by the European Commission or the increasingly political European Court of Justice, there is little we can do as national electorates to change them. And there is no meaningful pan-European demos — as evidenced by the steady decline in electoral turnout at European elections. Sixty-two per cent of EU citizens voted in the first parliamentary election in 1979, but turnout fell in each of the subsequent elections. Since 1999, it has been hovering below 50 per cent.

Being part of the EU undermines the prospects for securing the sort of economic policies that Britain, and other mature industrialised countries, so desperately need. Quite simply, for as long as we remain in the EU there will be less public accountability for our policies and less scope for changing them.

The EU: both hindrance and alibi

Even for Britain, which, being outside the Eurozone, is not directly affected by the most invasive forms of Brussels intervention, the EU already influences regional funding, state aid for industry, employment rights and laws, and financial regulation, as well as policies for transport, the environment, energy, agriculture and fisheries. Not having national accountability over policymaking is a problem today because economic policy sorely needs to be changed. Economic policy has become far too concerned with propping up the status quo and getting in the way of the sort of extensive economic restructuring and renewal of productive capacities that Britain and other European countries greatly need.

EU membership has become a barrier to such changes in policy; more importantly, it has become a means for national politicians to evade their own policy responsibilities. For example, the existence of EU state-aid rules can get in the way of revitalising the economy. Take the recent shutting down of the SSI steelworks in Teesside, with the direct loss of about 2,200 jobs and possibly thousands more at suppliers and in local businesses. SSI’s closure and the subsequent announcements of more possible plant closings from Caparo Industries and Tata Steel reinforce the need for substantial, sustained and active economic and industrial policies. These are required to help create the new industries and jobs for the millions of people who have lost, and are still losing, their jobs from Britain’s old industries of steelmaking, shipbuilding, textiles, cars, coalmining, and North Sea oil and gas production.

Yet the official government response to this devastating news for people in Redcar, Scunthorpe, Motherwell and Clydebridge was to claim that it was limited in what it could do because of the EU’s state-aid rules. The core point is not that British ministers’ hands were necessarily tied by the EU rules — there are always ways around any set of rules. No, it’s that ministers used the EU-imposed rules to absolve themselves of responsibility for economic renewal. The existence of the EU’s rules-based technocracy reinforces the anti-democratic depoliticisation of national economic life. It masks politicians’ own evasion of responsibility for helping to create the new industries, sectors and jobs that all those redundant steel workers need.

Leaving the EU would not by itself be an economic game-changer, but by removing one block to a national debate on, and public accountability for, economic and industrial policy, an EU exit would make a long overdue restructuring more feasible. Getting out of the EU will not automatically repoliticise economic policy. But it would remove the alibi used by national politicians who are refusing to engage in discussion about restoring productive dynamism.

Fundamentally, the political problem we face here is a domestic one, but it takes an external form in the European Union. This is not a case of nasty Brussels technocrats set against saintly British democrats. On the contrary, this anti-democratic sentiment flows from London, Berlin, Paris and other national capitals, not the EU headquarters in Brussels. But the EU as an institution does sharply express the anti-democratic trend of Europe’s national elites. The EU is more a symptom, than the cause, of depoliticisation.

Time after time, the EU has shown contempt for public participation and has quashed accountability and democratic decision-making. We have seen this most blatantly when the EU elite has ignored or bludgeoned national electorates who voted against its initiatives, as the French and Dutch did in their 2005 referenda, as the Irish people did in 2008, and as the Greeks did this year. We’ve seen it, too, in the EU’s imposition of unelected technocratic governments on the peoples of Italy and Greece in 2011. As an institution, then, the EU epitomises the contemporary political elite’s denial of democracy, its political estrangement from the demos and its rejection of popular sovereignty.

The EU’s ascendancy as a bureaucratic technocracy is enabled by the decay of democratic politics in nation states. And that decay is the responsibility of various national elites, not least the British. So when national European politicians hide behind the EU to disguise their own disdain for public politics, they further degrade democracy.

For another illustration that the biggest problem we have is at home, look no further than prime minister David Cameron’s secrecy over his EU-reform wishlist. This secrecy and opaqueness, this refusal to allow the wishlist to be part of the referendum debate, exemplifies the undemocratic and anti-political tendencies at work in Britain today. To add insult to injury, Cameron is now saying he will publish his demands in November… because other national elites told him to.

Sovereignty and internationalism

Getting out of the EU because it denies democracy is not an argument for Britain to pull up the metaphorical drawbridge. Leaving the EU is not the same as cutting Britain off from Europe, or indeed the rest of the world. Asserting national sovereignty is about a people being able to determine their own future and not have it determined for them. This applies both to purely domestic matters, such as national employment or financial rules, and to its relations with the rest of the world. Advocating the importance of sovereignty is not counterposed to being open to the world, as some EU opponents often present it.

Promoting the free movement of people, goods, services and capital across borders – not just in Europe but throughout the rest of the world, too – is a positive, internationalist perspective. The problem with EU membership today is that the rules for cross-border movement are being set and imposed in a way that is not accountable to national electorates. ‘Ever closer union’ is admirable as an internationalist aspiration, but it denies democracy when it is being imposed by unaccountable elites. It is this external imposition of policies – this usurpation of sovereignty – that is fuelling the national sense of grievance and resentment towards others.

This shows that the ideal of internationalism is better served, not sacrificed, by leaving the EU. To vote against the EU is not a vote against the peoples, the cultures and even the markets of Europe. On the contrary, it is the EU that has become one of the biggest enemies of ‘one Europe’ and internationalism. It is the main force dividing and disuniting the people of Europe today. Any presumption that the EU operates in the interests of the European people is flawed. It has become a self-serving oligarchic political institution that actively negates a pro-European outlook.

For example, during the Eurozone crisis, the EU has divided the peoples of the north from those of the south. German and other northern taxpayers are understandably reluctant to bail out southern countries — that is not something they have ever had the democratic opportunity to vote for. And Greek and other southern peoples don’t welcome the external imposition of austere national budget measures that they have had no say in.

Similarly, over the migrant crisis, people are being divided, with a supposedly progressive West pitched against a supposedly backward East. The EU once again denied national sovereignty when it used its majority-voting system to force through a mandatory migrant-quota programme that meant Romania, the Czech Republic, Slovakia and Hungary had to accept a certain number of migrants. We should not expect the peoples in these countries to welcome the decision when they have had no say in it.

So the EU political regime, far from furthering the goal of a closer European people, has become the biggest source of European division and national resentment. Arguing against the EU in the referendum is therefore also an argument against the main driver of European disunity. It is consistent with the promotion of a truly internationalist perspective.

Regardless of whether the EU is the culprit or the scapegoat, British people should vote to leave the EU in the upcoming referendum. This decision would not in itself resolve all the problems of national democratic accountability. But it could be a big step towards regaining national control and accountability for the policies being pursued on our behalf, not least in the sphere of economic and industrial policymaking.

Fighting for democracy and accountability is a neverending struggle, so an EU exit won’t automatically solve everything. However, the potential benefits to leaving will provide the answer to the scaremongering ‘stay’ campaigners, with their financial prophecies of rack and ruin. Leaving the EU presents Britain with an opportunity for real democratic, economic renewal, which could strengthen engagement with Europe and the wider world.

Phil Mullan is the author of The Imaginary Time Bomb: Why an Ageing Population Is Not a Social Problem, IB Tauris, 2000. (Buy this book from Amazon (UK) or Amazon (USA).), and is currently researching economic trends in the Western world for a new book Getting Back Our Mojo.