Michael Burnett: It's time to take UKIP seriously - and attack their core idea that Britain should leave the EU
When David Cameron came to Burton-on-Trent a few days before polling day in the 2009 European elections, he asked me, as a candidate, what I thought he should do over the remaining part of the campaign.
I used my “elevator moment” to suggest that he should attack and keep attacking UKIP, who had come from fourth place in April 2009 polls to be, as they had in 2004, our most serious opponent. In doing so I reflected what a number of others in the candidate and wider campaign team felt i.e. that - rightly or wrongly - the Party had failed to take the UKIP threat sufficiently seriously.
While not all Liberal Democrat votes will drift to Labour and not all UKIP voters are former Conservatives, UKIP - splitting the right of centre vote - are nevertheless the main threat to Project Blueprint for a Conservative majority. So with UKIP presenting as third in a number of recent polls – in one case on 16% - we can’t afford to repeat that mistake in the 2014 European elections or the 2015 General Election.
So why should Conservatives not even think seriously about voting for a party in favour of EU exit?
One good reason for not voting for UKIP in national or European elections is that it cannot achieve the effect intended - i.e: UK withdrawal from the EU. UKIP can’t form a government in the UK - they can only divide the right-of-centre vote and allow Labour to win. UKIP argues that it makes no difference who governs Britain while the UK is in the EU. This is patently not the case, as is clear, for example, from Labour’s record on surrendering EU vetoes and the sacrifice of part of the UK budget rebate for very little in return, and Liberal Democrat opposition to the UK exercising its opt-out in 2014 from a range of EU Justice and Home Affairs measures - compared to the “double lock” agreement on European banking regulation negotiated last month by the Government.
And even if you believe that Britain should leave the EU, voting UKIP in a European election will contribute nothing to this aim. MEPs have no power to determine whether or not the UK remains in the EU or not. But, since the idea that a UKIP vote is a wasted vote argument is not going to be sufficiently persuasive for some, here’s ten more reasons why Conservatives should not risk voting for UKIP’s policy of EU exit.
- The argument that, because of the cost of EU regulation, the cost of membership of the EU Single Market exceeds the benefits is not proven. Open Europe, not known, to say the least, for its uncritical support of the EU, estimated in 2010 in any case that the benefit-cost ratio of EU regulations in the UK has been 1.02 over time - that is, for every £1 of costs that EU regulations have imposed since 1998, they delivered £1.02 of benefits. Open Europe go on to argue that, since domestic regulation has a benefit-cost ratio of 2.35, it is significantly more effective to regulate at national level. But this depends on future domestic decisions in fields such as product safety, health and safety, protection of animal welfare, employment rights, consumer protection and environmental protection legislation. The Taxpayers Alliance has argued that UK is at least as responsible for what it regards as the over-regulatory effect of legislation originating at EU level as the original EU legislation itself - i.e: by so-called “gold-plating” by UK civil servants, or interpretation of EU Directives in a way not specifically intended and not required for the necessary transposition of those Directives. And while domestic regulation in an individual EU Member State might have a higher benefit-cost ratio, what matters for friction-free access to the Single Market is a common set of EU-wide regulations, so that an exporter doesn’t have to understand and comply with different regulations in different countries.
- Whatever the actual cost of EU regulation, it doesn’t stop Germany (or for that matter the UK) from having a trade surplus with the rest of the world (in Germany’s case, a significant one).
- Various analyses have been published about the precise impact of the Single Market on foreign direct investment (FDI) in the UK. They are hard to interpret conclusively, often because they lack an objective counter-factual case, though around 50% of UK FDI comes from other EU Member States and in 2010/11, for example, 134 third country companies chose the UK as their European base. But is hard to argue that the UK would attract more FDI because it was not in the EU or that Single Market access deters FDI in the UK, given its access to 500 million customers and a GDP of some £10 trillion.
- UKIP’s claim about the reducing significance of access to the EU Single Market, estimated by them at “now only” 35%-40% of UK exports is, even if true, a high risk approach to the UK’s main export market. The UK exports more to the Irish Republic than to China and India combined. Does UKIP really imagine that it would be easy and costless to realign our export effort? And is UKIP suggesting that EU and non-EU exports are mutually exclusive i.e. one can only be pursued at the expense of the other.
- UKIP’s argument that there would be no problem negotiating access to the Single Market because the EU has a trade surplus with the UK can only be tested if or when it happens. But does UKIP really imagine that the UK’s exit from the EU will be without acrimony? Does it really think that it will be easy to negotiate reciprocal Single Market access in this environment or that the UK will be, and can remain over time, the stronger partner in the negotiation?
- UKIP’s argument that access to the EU Single Market could be gained even if the UK were not in the EU ignores the fact that, even if negotiated, it would come at a significant price. Norway makes a contribution to the EU budget, in effect for Single Market access. In 2013-14 this is expected to be around €550m, which, if scaled up for the relative population of Britain and Norway, is equivalent to around €6.8bn. And Britain would no longer have the power to influence the shape of Single Market legislation in the legislative process - i.e: it would, in practice, to facilitate access to the Single Market, like non-EU EEA members at present, have to accept it as passed down - the so-called "fax democracy".
- UKIP’s argument that, if UK access to the EU Single Market were blocked by trade barriers, it could be gained via action taken through the WTO dispute resolution procedures overlooks the fact that WTO disputes often take at least one year to resolve, are often contentious and are difficult to enforce against an unwilling party. And it would in practice be impractical for the UK to attempt to enforce every trade barrier via the WTO dispute resolution procedures.
- UKIP’s argument that the UK is forbidden by EU membership from entering into bilateral trade deals with other countries is misleading. In a world tending increasingly towards trading blocs Britain benefits, by conducting trade negotiations at EU level, from the power to open third country markets to its goods and services derived from the value of reciprocal access to 500 million consumers in EU markets and not merely from the value of reciprocal access to the British market of around 62 million consumers. Though Open Europe cite two examples of where UK interests have not been able to be fully pursued because of the need to compromise with other EU Member States, this does not undermine the balance of the commercial logic of the bargaining strength of the EU market.
- UKIP’s argument that the UK would not have to adopt all EU laws and regulations in order to gain access to the Single Market misses the point. The EU doesn’t have to mirror all aspects of third country law to export to those third countries. But the UK does need the strength of the value of reciprocal access to EU markets to act against third countries when they use regulatory non-tariff barriers to block access to UK exports.
- UKIP’s arguments fail to address the reality of the “day after” UK leaves the EU. The UK would still trade significantly with the EU; would still have some 3.5 million jobs linked to access to the Single Market; would still share a land border with an EU Member State with which it has very close trading links and cultural ties: would remain a co-partner with many EU Member States in NATO, and would still want to co-operate as neighbours with the EU on important criminal justice issues - such as money laundering, anti-terrorism, drug trafficking or people trafficking. Put simply, the UK and the EU would still have and need to have a close relationship with each other irrespective of whether or not the UK was an EU Member State. And between the decision to leave and actual exit, the UK would probably have created a regime of agricultural and regional subsidies, with lobbying shifting from Brussels to Westminster.
But you don’t have to take my word for it. Open Europe has recently concluded that in trade terms the UK gains more from EU membership than it would from the possible alternatives which it analyses - such as the Norway, Switzerland or Turkey options (even if they were on offer) or the “clean break” (WTO) option.
None of this means that the Single Market works perfectly. The House of Lords European Union Committee report in April 2011 “Re-launching the Single Market” made it clear that there is much more to do to improve its operation. The digital Single Market, energy markets and European level enforcement of public procurement infringements are particular examples.
Nor does it mean that we don’t have to fight hard for the UK’s interests in the EU. I set out last month what I thought our red lines should be, what would be “nice to have” in a negotiation and where we might have to make compromises to secure this deal. UKIP’s argument that we never achieve our negotiating objectives in the EU misses the point that, often in the past, we have failed to understand how EU decision-making functions and, in particular, alliance-building is the way to achieve results in the EU. David Cameron has shown more understanding than many of his predecessors, as evidenced by the formation of the coalition for the Growth Pact and for the freeze on the EU budget and in hosting the Nordic-Baltic summit in 2011.
To adapt a well-known slogan, leaving the EU is for ever, not just for Christmas.
It’s time now for all Conservatives to put, and keep putting, the positive case for EU membership, and expose UKIP’s campaign for EU exit what it is - plausible-sounding, but frankly dangerous and wrong.