The UK is in the lucky position of having our cake and eating it. Photo: Alexander Klein/AFP/Getty
Show Hide image

An EU explainer for the easily bored: where does the UK stand?

Frances Robinson continues her series on what we really need to know about the EU. This week: should the UK stay or should it go?

Age: We’ve been in since 1973. So, getting to that stage where it’s a little rude to ask.

Why did we join? All kinds of reasons, but the main one was being in a free trade bloc, coupled with a recognition that economic and political cooperation would maintain peace and prosperity.

Was there a party? The 1974 Tour de France came over for a stage on the newly-opened Plympton bypass. Grumpy customs officials held up cyclists before what one rider called “the most boring stage I’ve ever, ever ridden”.

Haven’t times changed! Yes, totally. The 2014 Grand Départ in Yorkshire was such a roaring success, the region is having its own standalone cycling extravaganza this summer. Bradley Wiggins and Chris Froome are cycling legends.

I mean the EU. A referendum would be unprecedented! Except for the precedent of the 1975 referendum, when 67 per cent voted to stay in.

Oh. What happened next? Gradually, over decades, it became a single market, an idea championed by the UK. This now consists of the free movement of goods, services, capital and people between member states. More countries joined. Some aspects of the single market got completed, others still need a lot of work. We got plenty of special treatment by carefully negotiating a series of carve-outs and exceptions. For some countries, it became an even closer union with the launch of the single currency.

What, like the rebate? Yes. In 1984, after epic negotiations, Margaret Thatcher won back part of our contribution, because we don’t benefit as much as other members from the Common Agricultural Policy (them there farm subsidies) – which still absorb a large chunk of EU spending. It’s based on a calculation which is very roughly two thirds of the difference between the UK’s contribution and what it receives back from the EU budget. The French don’t like it. Bof.

What else? We’re not in the euro, and we never have to be. We’re not in the Schengen* passport-free travel zone. While other countries can be fined for not complying with certain aspects of the stability and growth pact, we can’t. So basically, we get as close as any country to having its cake and eating it. Still, as EU legislation has expanded over the last four decades, we have had to apply an every-growing menu of laws.

Is that how it’s seen in Brussels? Put it this way. If the EU is a birthday party, we’re not asking for more cake from a position of being sat in the corner eating stale twiglets. We’ve eaten a massive pile of cake, nibbled the icing on France’s, and now we’re asking for more. And we don’t know what sort of cake we actually want, and we won’t say until after the next game of musical chairs.

Mmm, cake. Nom nom nom. The other guests still want us to stay. We’re not the only ones with a desire for reform. But we are the only ones saying we’ll leave if we don’t get what we want – and in life as at children’s birthday parties, threatening to take your toys and go home doesn’t make one tremendously popular.

Alright, let’s play nicely and renegotiate. OK, but be aware we’re talking about a renegotiation of rules affecting 28 countries, at a time of political turmoil, economic uncertainty and global instability. And there’s only a certain amount that can be achieved without changing the basic EU treaty law. And that, to use a technical term from diplomatic circles, is a massive ball-ache. Those in favour of the government’s approach say change has been talked about for a long time and the threat of leaving is the only way to jolt them into action.

That’s not what I heard. It’s understandable. At the moment, the EU is easily used as a “dog ate my homework” style excuse by British politicians for anything unpopular. As an aside, the education system barely explains British politics, let alone how the EU works, which would help.

LOL remember general studies A-level!!! Who does? As explained last week, British civil servants, MEPs and diplomats can continue to reform the EU... from within. That’s how we got so much cake in the first place.

Enough with the cake. OK. Everyone knows it’s serious: the President of the European Council, Donald Tusk, said he will “personally will take on the concerns voiced by the UK… no reasonable person can imagine the EU without the UK”, and various world leaders have urged us to stay in. Other EU leaders have made encouraging noises about flexibility – but not to the extent they end the free movement of goods, services, capital and people.

Well, look, all this depends on Dave and the election. Boris for PM! Boris knows a lot more about Europe than he lets on with his mop-haired buffoon act. His father worked for the commission, he went to the European School, and he was previously a reporter in Brussels. He says the Commission is expansionist, and that if that could be fixed, it would make most sense to stay in.

He’s probably just thinking about London. That’s kind of his job. According to CityUK, which lobbies for the banking industry, the EU is the biggest single market for UK exports of financial services, generating a trade surplus of £15.2bn in 2012 – that’s a lot of cash. The Lord Mayor of London (the fancy hat one, not Boris) has said if Britain leaves the EU a lot of banks could leave London.

I hate bankers.  OK, think about all the Minis made in Swindon and the Nissans from Sunderland... who buys them? Half of UK vehicle exports are to EU consumers and the sector employs over 700,000 people, according to a KPMG report for the industry. If we left the EU, there’d likely be an tarrif on exporting those cars to Europe. The report concludes that “continued EU membership is vital to this £60 billion industry and its long-term prosperity.”

I hate cars. Fine. Next week, we’ll talk about wine, cheese and cheap flights.

*Named after the village in Luxembourg where the agreement was signed.

 

Frances Robinson has been covering the EU since 2006. Previously a staffer at the Wall Street Journal, she returned to the UK after a decade abroad to talk and write about the UK-EU relationship. 

Getty Images.
Show Hide image

Theresa May gambles that the EU will blink first

In her Brexit speech, the Prime Minister raised the stakes by declaring that "no deal for Britain is better than a bad deal for Britain". 

It was at Lancaster House in 1988 that Margaret Thatcher delivered a speech heralding British membership of the single market. Twenty eight years later, at the same venue, Theresa May confirmed the UK’s retreat.

As had been clear ever since her Brexit speech in October, May recognises that her primary objective of controlling immigration is incompatible with continued membership. Inside the single market, she noted, the UK would still have to accept free movement and the rulings of the European Court of Justice (ECJ). “It would to all intents and purposes mean not leaving the EU at all,” May surmised.

The Prime Minister also confirmed, as anticipated, that the UK would no longer remain a full member of the Customs Union. “We want to get out into the wider world, to trade and do business all around the globe,” May declared.

But she also recognises that a substantial proportion of this will continue to be with Europe (the destination for half of current UK exports). Her ambition, she declared, was “a new, comprehensive, bold and ambitious Free Trade Agreement”. May added that she wanted either “a completely new customs agreement” or associate membership of the Customs Union.

Though the Prime Minister has long ruled out free movement and the acceptance of ECJ jurisdiction, she has not pledged to end budget contributions. But in her speech she diminished this potential concession, warning that the days when the UK provided “vast” amounts were over.

Having signalled what she wanted to take from the EU, what did May have to give? She struck a notably more conciliatory tone, emphasising that it was “overwhelmingly and compellingly in Britain’s national interest that the EU should succeed”. The day after Donald Trump gleefully predicted the institution’s demise, her words were in marked contrast to those of the president-elect.

In an age of Isis and Russian revanchism, May also emphasised the UK’s “unique intelligence capabilities” which would help to keep “people in Europe safe from terrorism”. She added: “At a time when there is growing concern about European security, Britain’s servicemen and women, based in European countries including Estonia, Poland and Romania, will continue to do their duty. We are leaving the European Union, but we are not leaving Europe.”

The EU’s defining political objective is to ensure that others do not follow the UK out of the club. The rise of nationalists such as Marine Le Pen, Alternative für Deutschland and the Dutch Partij voor de Vrijheid (Party for Freedom) has made Europe less, rather than more, amenable to British demands. In this hazardous climate, the UK cannot be seen to enjoy a cost-free Brexit.

May’s wager is that the price will not be excessive. She warned that a “punitive deal that punishes Britain” would be “an act of calamitous self-harm”. But as Greece can testify, economic self-interest does not always trump politics.

Unlike David Cameron, however, who merely stated that he “ruled nothing out” during his EU renegotiation, May signalled that she was prepared to walk away. “No deal for Britain is better than a bad deal for Britain,” she declared. Such an outcome would prove economically calamitous for the UK, forcing it to accept punitively high tariffs. But in this face-off, May’s gamble is that Brussels will blink first.

George Eaton is political editor of the New Statesman.