The British relationship with the EU could never be described as trouble free. Since 1973 groups within Britain have been critical of the UK’s role within the European Union. The last 10 years has seen “Anti EU sentiment (grow) in many member states” (Baker,2001), Britain has often spearheaded EU criticism: with a nationwide perception that the organisation is both overly-bureaucratic and biased against the wishes of the UK. This debate is reaching a feverous heat that will culminate in the referendum of June 23rd. I will highlight the key reasons why membership is ultimately preferable for Britain whilst identifying the adverse political effects the organisation has had on the ability of Westminster to govern with absolute sovereignty. Moreover, I shall determine whether EU membership has been beneficial to the British economy, with analytical emphasis on (1)Trade, (2) Investment and (3)Agricultural Policy. Furthermore, it is vital to situate the current crisis within the history of EU integration and particualrly Britain’s relationship with the community over the last 60 years.
Before British membership of the EEC was cemented in 1973, the 6 primary nations of the EEC followed policies that attempted to collectively undermine British industry. There was a perception on the continent that the British were not European, or rather that they would not fit into the collective European system. French president Charles De Gaulle’s refusal to approve British membership in 1963 & 1967 (BBC,1967) highlights the early collective mistrust of British commitment to the EEC. Originally there was a belief that Britain would represent American interests in Europe whilst remaining sceptical towards the European project(Haughton,2015), as they had been in the 1950s. It has been suggested that De Gaulle was simply using the membership process to “reassert French greatness” (Haughton, 2015), however some of his scepticism was not unfounded. While membership of the EEC in 1973 changed the technicality of Anglo/European relations, many of the policies remained disadvantageous towards Britain, most importantly the Common Agricultural Policy (CAP). As a result, British commitment did not increase dramatically, as Dinan highlights; “The difficulties of dealing with Britain in the EC, not only under Margaret Thatcher in the 1980s but also under previous and succeeding governments, seem to bear out de Gaulle’s point.”(Dinan, 2004). The imperfect early history of Anglo/European relations and lack of British commitment are contextually vital when understanding the mentality of Britain in dealing with modern European problems and potential ‘Brexit’.
A persistent problem regarding the British-EU relationship has been the Common Agricultural Policy. It is important to note that the CAP was originally created to ensure food security among member states whilst providing farmers with adequate prices. Traditionally CAP has been the EU’s largest expenditure and it continues to absorb “€57 billion per year, that is, more than 40% of the EU budget” (Zarhnt,pg.2). Unfortunately, Britain joined the EEC in the “crisis years” (Cini et Borragan, 2016 p.310) of the Common Agricultural Policy and it has typically not reaped the benefits of farming subsidies in the same way France did and Eastern European countries do presently. In fact, De Gaulle’s view that Britain would oppose many of the principles of CAP was a factor when he vetoed the UK in the 1960s, as Dinan states “allowing Britain to join in the early 1960s would in all likelihood have thwarted the CAP” (Dinan,2004). This is due to the structuring of the agricultural industry within Britain being vastly different from the less efficient farms typical of other member states(formerly France). By the time Britain joined the EEC, the community was “experiencing problems of overproduction, caused when supply of agricultural produce outstrips demand” (Cini and Borragan,2016 p.310). These problems increased throughout the 80’s, with the EU accumulating “notional butter mountains and wine lakes” (Politics,2011). The reforms of ’92,’99 and 2003 helped to reduce these problems, replacing farm subsidies with direct payments. However, Britain remains a net contributor to this policy, receiving “relatively little money from the CAP, because of its smaller agricultural sector” (Politics,2011). Due to disproportionate allocation of annual funds to this policy, the failings of CAP in securing British farmers subsidies and payments is one of the strongest arguments for a British exit.
While there are certainly disadvantages of the CAP, Boel argues that CAP brings valuable benefits in an uncertain global market, stating ; “In the face of climate change, global political and food insecurity, the volatility of global market prices and the resurgence of health crises, only an ambitious, continent-wide policy can safeguard Europe’s independence” (Boel cited in Zarhnt,2011 pg.4) . EU membership is vital to ensure that supply levels remain consistent to meet demands, ensuring that agriculture is not left exposed to potential crisis. Boel believes that CAP is the correct safeguard needed by European farmers as she maintains ; “if we leave agriculture too exposed, we’re gambling with the security of our food supply” (Zarhnt,2011 pg.4). If Britain left the EU, it would not have the same insurance over its agricultural industry as it now does within Europe. Furthermore, the price support system remains a positive; allowing a target price to be reached by British farmers, who would typically receive pittance for their produce. While it is certain Britain does not directly benefit from CAP’s farming subsidies in the way other members do, the standardisation and market security provided by a continental agricultural policy helps keep the British farming industry secure and food production constant.
Europe’s maintenance of policies that do not necessarily favour the UK, such as CAP or bloc trade deals, help to fuel one of the most repeated criticisms of the EU. National Sovereignty is a value that is often emphasised by those who wish to be rid of the European community, there is a “strong belief across the political spectrum that parliamentary sovereignty is a symbol of liberty and ‘Britishness’” (Baker,2001 p.277). British membership of the EU forces the UK to conform to Brussels’ regulations and policies despite the interest of national politicians. Gifford believes that “British national sovereignty is the key to understanding the problematic aspects of the UK’s relationship with the European Union” (Gifford,2010 p.322). Indeed, Eurosceptic’s have used the argument to accuse Brussels of being undemocratic and bureaucratic. While the organization may be bureaucratic, many EU scholars believe that this idea of national sovereignty is an outdated notion. Britain will never have national sovereignty as it did in the early 20th century. This is due to the changing nature of global politics, hyper-globalization that has been accentuated by capitalism and post cold war power structures. While it is comforting for politicians to talk in patriotic platitudes regarding ‘parliamentary sovereignty’ and ‘power to the people’ , in reality Brussels has played an important role in forcing British governmental conformity on issues of human rights and environmental policy(Golub,1996). While there are examples of the ECJ ruling against Britain, notably the Factortame cases, the notion of ‘regaining sovereignty’ is false, “with the core executive securing most of the de facto sovereignty by the end of the nineteenth century” (Baker,2001 p.277). It is vital to understand that the public perception of an overly bureaucratic Europe that fights against patriotic British politicians is far from the truth. Removing Britain from Europe would remove many regulations on working conditions, such as the Working Time Regulations 1998 (HSE,2016) and would likely be detrimental for the majority of citizens.
In regards to sovereignty, the perception of what the government can do in response to European legislation is again far from reality. The Subsidiarity principle (Article 5(3) of the Treaty on European Union (TEU) (Europa,2016) allows member states to protect their right to legislate over areas that they deem separate from EU jurisdiction. Originally enshrined in the Maastricht treaty, subsidiarity; “makes clear that national policy choice should be constrained only when EU action is clearly better and more efficient” (Golub,1996 p.691). Clauses such as this allow for freedom of interpretation within the organisation, whilst ensuring conformity when necessary. Reform within the EU is something that could be beneficial to the UK and using such clauses would allow Britain to reap increased benefits from the community. Unfortunately, an exit from the community would completely remove any possibility of benefits for the UK. Regarding the issue of sovereignty, it seems that the ‘exit’ campaign uses the concept of ‘loss of sovereignty’ as a scare tactic, ensuring that the EU remains vilified. In actuality, while there are areas of legislative clash, the EU forces moderation, on a nation whose core executive continues to gain more de facto power over a parliamentary system that has lost the ability to check the power of the cabinet.
There are undoubtedly significant economic benefits of British European Union membership, namely the amount of Foreign Direct Investment that the UK receives due to its status as an EU member. The Treasury believes that the EU contributed directly to FDI by “reducing access costs to a larger market, enabling greater economies of scale and returns on investment” (Gov,2004 p.1). With this in mind, it would prudent to assume that the EU acts as a fiscal incentive to foreign investors looking to move into the UK market. Importantly ,“economic literature suggests that market size is strongest driver of FDI” (Gov,2004 p.3), this would suggest that Britain receives increased FDI due to its ability to act as an “export platform”(Gov,2004 p.3) to European markets that would be less accessible to Foreign investors due to higher tariffs on goods. If Britain decided to remove itself from the EU, it would be reducing the size of the host market, therefore reducing the incentives for potential investors. Moreover, since 1999, “The EU has been the UK’s most important FDI relationship” (Gov,2004 p.1) and it is likely that this investment would not remain at 46% of total FDI (Gov,2004) if the UK took the decision to leave the union. The basic economic premise of the EU, a common market of free trade, allows member states to benefit from investment in fellow member states. Leaving the EU reduces the benefit to EU countries investing in Britain; probably leading to a decline in EU investment. To ensure that horizontal FDI remains high, Britain must remain in an open European market. In counter, Eurosceptic’s often talk of commonwealth trade replacing EU trade , however it is unlikely that such trade would reach the same level (mainly due to the geographical location of many commonwealth countries); Europe’s proximity to the UK make them our obvious trading partners and therefore it is evident that the maintenance of a healthy financial relationship is vital for British growth.
Increased Foreign Direct investment is just one way in which the common market has helped the British economy. The standardisation of prices, negotiating of trade deals and free movement of people are all advantages of EU membership. The EU has 50 free trade agreements or equivalents working in force today (Europa,2016). A Brexit would force Britain to renegotiate existing free trade agreements independently. This would likely result in deals that are less beneficial due to the size of the British economy being significantly smaller than its European counterpart. Moreover, rewriting numerous trade deals would not only take time, but resources in a move full of unnecessary economic risk.
Exit from the common market would also reduce the skilled workforce available to British companies, potentially reducing growth further. Mobility of labour has been described as “one of the key drivers of GDP growth”(Glennie et al, 2014 p.3) by The IPPR and LSE analyst Adrian Favell believes that Britain is “one of the main beneficiaries from the free movement of labour” (Favell,2014). The anti-immigration sentiment that has risen since the 2004 EU enlargement is totally misplaced. Losing the mobility of labour would be disastrous for the 1.26 million Brits living in the EU (Croucher,2015) as well as reducing potential productivity. While jobs that may have gone to British workers are lost to their European counterparts, this is simply due to levels of productivity; it is natural that the worker who can bring specialised skills to the workplace “might push out existing employees who are less productive”(Radcliffe, N/A). From an economic perspective, the mobility of labour allows for faster, more effective national growth; whilst allowing British workers to seek employment in countries where there is a deficit of skilled labour.
EU membership remains vital in the modern world, It is easy to overlook many of the benefits reaped by the UK simply because they do not directly correlate to EU membership. Specifically, it is difficult to measure foreign direct investment in a way that predicts the impact a British exit would have on the national market. I maintain that the benefits received from the organisation, whether they are economic (such as the common market) or political (such as the moderating of national policy), far outweigh the negatives. In essence, Britain cannot afford to leave the EU, it will result in reduced economic growth, an increase in overbearing executive power and isolation from the continent we are inexorably part of.
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