Euroscepticism: the spectre that compromises the UK’s economy

If there is one thing that stands out as extraordinary in this debate, it is the assertions put forward by the UK’s Chancellor George Osborne. He constantly claims that the recent crisis was caused completely by the irresponsibility of the Brown government, and uses this as his primary line of defence when tackling the popular backlash against austerity. He refuses to acknowledge that, since he has focused considerably on the more short-term cuts in public investment and quick-fix cuts on welfare, anything other than his austerity measures have caused the recovery in growth rate.

It is telling that I find myself congratulating John Major for pointing out that many of the more vulnerable Brits will have to choose between heating and eating in the coming winter.

The shocking truth is that many observers have completely believed in Osborne’s crusade against Labour’s former profligacy, and three years on, he still seems oblivious to the real cause of the financial meltdown – banks and financial institutions, rather than loosely monitored public spending. This is what caused the swollen public debt that only now seems to be subsiding somewhat. Moreover, the recovery was already imminent in May 2010, before Osborne’s tampering with the UK’s public purse-strings prolonged the fallout of the crisis.

And now the Tory-led attack on the EU, sparked by UKIP’s growth in popular support to at least 11% on a regular basis, has left some commentators transferring their attention to the fact that the GDP has increased by 3.3% in the third quarter (in real terms). However, this welcome news is not set to be a complete consolation for the apparently dwindling number of pro-EU believers in the UK.

It is right-wing populists who seem to be promoting this message of prejudice and EU-antipathy, that seems to be catching on, despite having very limited substance. Consider that the CBI indicated that around 80% of firms support and appreciate the UK’s EU membership. Consider also that Nissan is threatening to pull its business out of Britain because of Cameron’s empty threat and his agreement to a referendum. Another startling fact is that EU membership contributes £3000 a year to each British household, compared to the annual net contribution per person of just over £110 to the EU budget.

Vince Cable recently wrote in the Guardian that “the EU serves to anchor the UK’s global trade. By being part of a group that is pursuing an outward-looking approach to trade, it is easier for British firms to export and invest internationally”. Here he conveys a salient point – though I am  no die-hard neo-liberal,  the UK will be more likely to compete at the level required if its works in solidarity with other EU countries as a trading partner. Alongside the trade and investment deal the Government has agreed on with the USA (which will apparently pump £10bn into the UK economy) and additional trade agreements with Japan and India, it seems that limiting the UK’s potential for trading links seems both counter-intuitive and pointless.

The EU is an importer and investor to be reckoned with, and it seems foolish to sacrifice this long-established, obviously lucrative, and economically beneficial relationship with the European mainland to maintain an abstract sense of ‘national pride’ by being an ‘independent’ nation.

There is no denying that EU regulation presents a challenge to British trade, both within the EU and internationally. However, this is not a valid excuse to forsake important environment, worker and consumer protections. There is a requirement to reform Britain’s relationship, but for practical purposes rather than a farcical and meaningless sense of pride. To see the practical benefits of maintaining the same relationship with the EU (if with a little bit of procedural tweaking), take a look at the CBI report of a business-based argument for the UK remaining an member of the EU.

It is both unsettling and telling that a populist, nationalist party such as UKIP is on the rise, and it goes to show what the real problem is (as Russell Brand has famously pointed out in recent times). The real problem is widespread disillusionment with the everlasting, looming governments  who don’t focus on substantial, long-term change. So it is a rational, even-headed approach to reform that is necessary, not a drastic jolt that could threaten to capsize the economic ship. Whether or not popular opinion will reach an epiphany and realise where true benefit lies is a question that can only be answered when (and if) a referendum occurs.

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Categories: International politics, Opinion

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