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It now seems to me better to make a decision, rather than let many years of uncertainty over the UK’s future place in Europe blight the country. Yet what should that place be? Lord Lawson insists it should be outside the EU. The UK, he argues, does not share the rest of Europe’s ambitions. He adds that the EU’s net economic impact is negative: the UK’s net annual contribution of £8 billion and the regulatory burden, particularly on finance, outweigh gains from the single market. It would be better for the UK to embrace global openness, he says.
On the politics, Lord Lawson is right. The UK has seen membership more as a matter of interests than of identity or destiny. Some argue that, outside the EU, the UK would have no global influence. This is not a compelling point. The US has far more influence than Canada. But this does not mean Canadians want to become Americans for the sake of greater influence. The British may also reasonably choose to sacrifice the influence of being part of a bigger whole because they simply do not feel European. Furthermore, the indifference to democracy in the emerging eurozone is worrying: it looks far more like a machine for imposing the will of strong countries than a democratic federation.
On the economics, Lord Lawson is right to insist that the plausible alternative is to be outside the EU and the European Economic Area. Being only part of the latter is the worst of almost all worlds: it would mean accepting the rules of the single market without having a voice in determining them.
Yet his assumption that the World Trade Organisation offers adequate safeguards is unconvincing. The WTO does not offer free trade and does not cover services as fully as the single market of the EU. Above all, its survival cannot be assumed to be secure. Since the UK still sends 46 per cent of its exports of goods and services to the EU, exit would surely put a large proportion of its trade at risk. People focus on what they view as costly immigration. But membership also allows British people to travel, live and work in the EU, freely. That is a huge asset.
Would foreign investors still be as interested in the UK if they knew it could not offer access to the European market on the same terms as other European countries and had given up all influence on future European regulations? I doubt it.
Today, London is Europe’s New York. But would the ambitions of European policy makers and the self-interest of large financial companies let it remain so? London can be an offshore centre. But could it remain Europe’s financial capital if the UK had decided to leave the EU? Lord Lawson suggests it could. I doubt it.
Yes, the UK would save about half a per cent of gross domestic product in fees. But that is not very much. As for burdensome EU regulations, these have not prevented Germany from being a successful global exporter. The UK ranks seventh in the World Bank’s Doing Business survey. This hardly suggests that membership imposes prohibitive regulatory costs. The principal determinants of a country’s prosperity are its policies and resources. But the idea that exiting the EU would secure substantial net economic gains is implausible.
The case for exit is not close to proven. This being so, the option of departure should remain unexercised. It would have been better to have avoided a referendum. But that is no longer possible. The time has come to make a decision. Let the debate begin. But the wise outcome would be to remain semi-attached. It is not a bold choice, but it is the sane one.
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