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The EU is Destroying British Jobs

The old claim that three million British jobs depend on Britain’s EU membership was spun by “Britain in Europe” from a 2000 NIESR report (1). This calculated that 3.5 million jobs don’t depend on EU membership, but on trade with Europe. Dr Martin Weale, NIESR director, outraged by this misuse of the study, called it "pure Goebbels …. in many years of academic research I cannot recall such a wilful distortion of the facts."(2)

Trade with the EU would not stop if we left. Outside the EU, we could negotiate a free trade agreement with them. Why should they refuse? We buy more goods from them than they buy from us – our trade deficit with the EU is over £3bn every month (3). Economist Ruth Lea has calculated that, using the same methodology, 6.5 million EU jobs depend on trade with Britain. (4)

The EU has free trade agreements with 53 countries (5) - as diverse as Switzerland and Mexico – why not with us? World Trade Organisation rules make it illegal to discriminate against any country.

The European Union destroys British jobs with the burden of excessive regulation, and by its attempts to protect outdated industries.

We cannot negotiate trade deals for ourselves - we have to leave it to the EU. The EU is big enough to have negotiating clout, but it focuses on French and German objectives, not British ones. We have only 8% of the votes that decide EU trade policy. Most EU trade deals focus on manufacturing, but our strength lies in services. World markets in services are very restricted and little progress had been made in freeing them. That is why we export so little to the growth areas of the world.


We Need to Refocus our Trade towards Growing Regions

Our exports of services and high-end manufacturing tend to go to developed countries. The developing world is starting to reach the stage where its demand for these exports can grow rapidly. But world markets in services are very restricted, and free trade negotiations, led by the EU, have not focused on services and will not in future, because Continental Europe is more oriented towards manufacturing. Outside the EU, we could make our own deals with growing countries, and obtain free trade for our service industries.

Jo Johnson MP has shown in an article for the Centre for Policy Studies how Britain has been losing export market share. Our failure to grow exports to India, a fast-growing BRIC country with which we have long-standing ties, is because no serious attempt has been made to open up closed Indian markets for our services. (6)

 

The Coming Collapse of the Eurozone

When the Euro collapses, it will hit us hard - it is our biggest export market. The Euro always was a political project - their folly will cost us jobs and growth. We are over-dependent on trade with Europe.

The Burden of EU Regulations

The much-vaunted single market in effect amounts to harmonising a heavy burden of regulation right across the EU, so that all EU businesses are equally handicapped.

The EU Commission itself (7) has estimated that EU regulation costs businesses 600 billion Euros a year, while the savings from the free market amount to only 180 billion Euros. Our competitors have no such burden.

These costs handicap British businesses in creating jobs. Moreover, only 15% of our economy exports to the EU, but all of our businesses, however small and local, have to bear the burden of EU regulation. The City, our most successful exporter, is now feeling the heavy hand of EU interference. More and more industries are similarly affected - see News of the European Union.

The Eurozone has consistently underperformed most of the rest of the world. The reasons are:

  • Excessive regulation - created by Brussels bureaucrats who have never had real jobs

  • Interference in the labour market, which protects unemployment, not jobs

  • Excessively generous social security programmes which they can't afford

  • Too high and badly structured tax rates

  • More recently, congenital over-saving by its largest economy and

  • The uncompetitiveness of a third of its membership

Our North American and Far Eastern competitors are not weighed down by EU bureaucracy, and can develop in the way that suits them best. Unhindered by the EU, our economy would grow much faster.

 

Free Trade Creates Jobs

Britain's export businesses would thrive by focusing on the growth markets of the world, not declining and troubled regions like the EU. Their growth would create the new jobs we need, and keep on creating them, year after year. We built our prosperity on free trade.

Economies like the UK and the US that open themselves up to international competition benefit from it. They specialise in the things that they do best, and their industries are forced to innovate in order to survive. The EU has never understood this. France in particular tries to protect every industry threatened with international competition.

Outside the EU, we could negotiate our own trade arrangements with other countries like India, China, Japan, the US, Brazil and Australia. As a member of the EU, we cannot negotiate with these growing countries for ourselves - the EU does it for us. Size may give the Eu negotiating clout, but the objectives of the negotiation are French and German, not British. We could make much better deals for ourselves, deals that suit British trade, not EU trade. We urgently need fewer barriers to our trade in services - Continental Europe does not.


The EU Admits it Faces Economic Decline


Eu Future is BleakAll forecasts predict economic decline for the EU - this chart is from the European Commission itself.  The single market and the euro have failed to boost EU trade, jobs and economic growth, according to a devastating report from an official French think-tank, which includes 40 of France's best-known economists.   "Economic Policy and Growth in Europe"* was published in 2006 by the Conseil d'Analyse Economique, chaired by Prime Minister de Villepin.  It says:
"economic integration has stagnated and no longer promotes growth. The Euro's creation has not produced the knock-on benefits expected...  The inability of the EU to revive the economy turns investment away”

This damning verdict comes from the most ardent pro-EU country, which has imposed its will in countless EU negotiations.

The EU share of world GDP is expected to decrease from 35% in 2002 to 15% in 2050. Its share of world trade is expected to decrease from 18% in 2002 to 10% in 2050 (8) . Under one-sixth of our GDP is involved with EU trade; by 2020 only one third of our exports will be to the EU – only 10% of our economy will be involved with EU trade; the rest just carries the burden.

By contrast the UK has been one of the world's most successful trading nations since global trade began. Our exports outside the EU grew 45% faster than exports to the EU in 1999-2005.   Other parts of the world are growing faster and will cope with the future far better. The sooner we leave, the quicker we will recover. We must not be dragged down by the world's fastest declining block. Try to find evidence of any net economic benefit in remaining in the European Union. There is none.

The EU was devised in the Fifties to solve the problems of the Forties.   It has no relevance to the twenty-first century.  Its reliance on Big Government, restrictive labour markets, state subsidy and ever-increasing regulation is outdated and counter-productive in a modern world of global competition, consumer choice and innovation.

 

Notes
1 National Institute for Economic and Social Research - "UK Jobs Dependent on the EU" 2000 by Brian Ardy, Iain Begg and Dermot Hodson.
2
Global Vision Perspective 9.4.08 - “UK-EU trade creates far fewer jobs in the UK than in the rest of the EU”, by Ruth Lea
3 Dr Martin Weale, quoted in The Times
4 ONS: UK Trade December 2010
5 Wikipedia
6 “Growth, Growth, Growth”, Centre for Policy Studies, Nov 11
7 Gunter Verheugen, EU Enterprise and Industry Commissioner, in 2006

8 OECD Economic Outlook, Real GDP Growth 1993-2003, indexed on 1993=100: Eurozone Average - 123; UK - 133; USA - 138; Canada - 141; ;Australia - 145.
9 UK Balance of Payments "Pink Book" statistics

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