The economic damage done by our membership of the EU

Too many in the media just accept the assumption that we have done well out of being in the EU and will lose when we leave. There is little  evidence to support either of these contentions.

We joined in 1972. We were made to remove all tariffs on products the rest of the EU was good at, whilst they maintained many barriers to service exports which we were good at. As a result there was a predictable deterioration in our goods trade balance with the EU, and closure or slimming of many of our factories. Our car industry suffered heavily from the tariff free competition of VW, BMW, Mercedes, Renault, Fiat and the others. BLMC in particular had to slim and close plants. Our Lancashire cotton industry and Yorkshire woollen industry was hit by Italian and German textiles. Our ceramic tile industry was damaged by Italian competition and later by Spanish. In the 1970s we lost a lot of manufacturing capacity. The nationalised steel industry had to start closing its five new large scale plants for lack of demand as steel using industries fell away in the EEC.

We also saw a further deterioration in our balance of  payments as a result of high financial contributions we  had to make to the EEC, as all those charges were negative flows across the exchanges. Soon after we joined there was a deep western slump which hit the UK particularly badly. Whilst this was not mainly the result of EEC membership, it exacerbated the bad trends EEC membership was causing.

In the late 1980s and early 1990s we saw another recession brought on by the UK’s membership of the European Exchange Rate Mechanism. These job losses and factory closures were entirely the result of EU membership, and very damaging.

More recently we have seen a lot of factories shift elsewhere in Europe thanks in part to EU grants tempting businesses away. When I was a business Minister one of the regular complaints from UK companies was unfair competition from the rest of the EU where companies in favoured locations got special EU grants and financial assistance on favourable terms or free.

The UK growth rate has been slower since 1972 than it was 1945 to 1972. Some try to say the war disrupts the picture,  but it is difficult to see why. Whilst the war was a terrible thing, it gave us very full employment with the diversion of many people into the armed services. All their efforts did under standard accounting count as national output. There were also big increases in manufacturing output domestically as we had to produce most of our planes, vehicles and bombs nationally. There was a also a surge in home food production. Of course there was also a fall in non military output as factories were diverted to war work.  Imports from the continent obviously stopped as it was under German control, and imports from the rest of the world were restrained by German military action to prevent or destroy them.

An EU study has showed practically no gain from EU membership for the UK economy, but it is on optimistic assumptions. To me there has clearly been a modest net overall loss of output compared to what would have happened if we had stayed out, though of course output is up over our time in the EU as you would expect. The headwind of big financial contributions  to the EU has been damaging. Margaret Thatcher’s renegotiation helped a bit  by cutting the burden.




Grazeley

The government has offered some money to 3 local Councils to carry out a feasibility study into placing a settlement of 15000 homes at Grazeley.

I am in favour of Wokingham Borough seeking a local plan revision for the future with a considerably lower housebuilding rate than our present one. I have not supported any place for additional homes in the next phase of our local plan so far and would need to be satisfied about the scale, pace of development, adequacy of local roads and facilities and impact on the present communities. Were the Councils to recommend Grazeley after study they should answer these and related points about how such a development would fit in, what compensation there would  be for people living there, what investment would  be needed, and what protection there would  be against development elsewhere at the same time.




Who can delay our exit

This  week I am told the government may ask Parliament to debate and approve a Statutory Instrument under the EU Withdrawal Act to delay the date it comes into effect. The government also says Brexit will be delayed by the EU  Council offer to delay made to Mrs May. Some say EU law is still superior to UK law before the EU Withdrawal Act comes into effect and we therefore have to obey the Council offer.

I will oppose and vote against a delay SI. It also implies the UK government is not sure of its legal ground that it rightly wants Parliament to decide to delay. It clearly does not want to rely on the Council decision. There would at least be a conflict of laws if the UK Statute repealing all EU power on 29 March comes into effect whilst the Council assumes the delay is in force. Some will argue the whole point of the EU Withdrawal Act is to repeal The European Communities Act 1972 which is the foundation of all EU power over UK courts and government. What an irony if the EU tried  to assert its own  law over our very act of throwing off its powers.

To avoid legal doubt Eurosceptics advised the UK government to proceed to get us out under Treaty law by Article 50 and in domestic law by the EU Withdrawal Act. This latest ploy by Mrs May to sort of agree a delay runs the danger of muddling legal clarity. Parliament being full of Remain MPs may vote for delay to avoid testing this legal issue. It will only do so if Mrs May insists on   this unpopular  move against her own party, with many of us declining to support. She will need Labour votes to get it through. To be sure of delay the government will have to change UK law to do this.




We’ve had enough indicative votes

Some MPs claim Parliament has been prevented from expressing a view on Brexit and needs a series of indicative votes on different options. Where have they been these last two years? Parliament has talked about almost nothing other than Brexit. The  pro Remain MPs  told us for years before the vote the EU had little power, it was not very important,  there was no need to go “banging on” about it and  the electors were not interested in it. Now these same MPs  claim it is critical to our economic survival, that the EU has tentacles into so many things that matter  and bang on about it to the exclusion of all else.

Parliament has had endless debates rerunning the referendum. In the referendum itself and since we have discussed the Norway model, the Swiss model, EEA membership, EFTA membership, Customs union membership, single market membership, and some combination of all the above memberships. We have had debates and votes on staying in the single market, staying in the customs union, and  having a second referendum. Each of these proposals has been defeated. Why do we have to do all that again?

If Parliament has more debates and more votes they would only be indicative. The government need not accept them. The EU/EEA/EFTA etc may not wish to negotiate the answer Parliament wants should Parliament suddenly back one of these proposals above the others. The government may not agree with the proposal. A large number of Conservative and DUP MPs may not agree with the proposal. Parliament cannot make the government adopt a particular policy. All it could do is to vote no confidence in a government which refused to take its advice. It has tried that recently and the government won the vote. Why would the government wish to proceed with the least unpopular proposal, if that entailed continuous backbench rebellions on its own side in large numbers? Why would the Opposition MPs who favoured a different approach to Brexit then behave responsibly and help the government get it through against the wishes of many Conservative MPs? Wouldn’t they see opportunity in  defeating a government trying to implement their chosen policy against the wishes of many of its own backbenchers?

There is a reason why Parliament in our system lets government get on and govern, defining its task as stopping decisions and laws which it thinks are wrong but not as dictating to government what laws and decisions are right. That latter way anarchy lies. Parliament either has to put up with the government or sack the whole government. It cannot run it from the backbenches. The government’s idea that it needs to appeal to Parliament generally for  support means it has given up on finding a Conservative answer that the governing MPs will vote for.  That is a strange conclusion for a PM whose job depends on being the Leader of the Conservative party.




Let me remind Mrs May of the Conservative Manifesto in 2017 – I want her to implement it

On the EU the Manifesto made a lot of sense. It said“As we leave the EU we will no longer be members of the single market or customs union
“We believe it is necessary to agree the terms of our future partnership alongside our withdrawal, reaching agreement on both within the 2 years allowed by Article 50 of the Treaty of European Union.
“We will not bring the EU Charter of Fundamental Rights into UK law.
“We continue to believe that No deal is better than a bad deal for the UK.”

It also confirmed that we will take back “control of our laws” and “We will control immigration”. “We will pursue free trade with European markets, and secure new free trade agreements with other countries”

It is difficult to see how an MP who supported this Manifesto can support the current Withdrawal Agreement.

All MPs should remember the words of the government leaflet to all households before the referendum:

“This is your decision. We will implement what you decide”