Should I stay or should I go?

The huge uncertainty that has cost business billions will hopefully end shortly around the vexed question of should the UK remain in Europe or not. It is said that you should never discuss politics, sex or religion in business, but I feel I must break some of those rules here ...

Firstly, I humbly suggest that we have been presented with the wrong question by our politicians who think that the general public cannot cope with anything more than a bipolar choice. Our position in Europe is indeed a complex question that does not reduce to a digital IN or OUT decision. We should have been trusted to answer at least a three part question :

IN

OUT

SHAKE IT ALL ABOUT

From my travels in Europe, it seems that many Europeans would also like some fundamental reforms of the EU (aka shake it all about), as there has been significant "mission creep" from the original purpose of the EU. Whenever I ask "OUT" voters to explain their reasons to leave, I am either met with silence, hysterical rants over "millions of immigrants invading the UK", the cost of membership, talk of a European superstate, disruption of a mythical "Dad's Army" Britain with tea shoppes and so on, or ludicrous laws on the shape of bananas etc., which are symbolic of the feeling that we are being controlled by faceless bureaucrats. Yet, when I ask these people to point to examples of this control in daily life, silence generally prevails.

Just one of the spurious talking points that drive people's decisions over more important matters - The EU's "straight banana" legislation

That said, I'm a realist and we now have a bipolar decision for what amounts to a "Wicked Problem". I want to stay in the European Union so that we can continue to "shake it all about", in common with many of our European cousins.

Wicked problems - World Peace, Seating plans for weddings and ... er The EU referendum - they don't lend themselves to digital solutions

Answering the sceptics

I was in conversation with some OUT voters the other day. Here are some of their main arguments for leaving and my responses:

The UK pays for the rest

One person pointed out that the UK pays disproportionately high amounts of money to be in the "club", citing a graph from the Sunday Express to support her argument.

The problem with this graph is that it lists the share of total contributions rather than the contributions per head of the population. Once you work this out the graph flattens out for the vast majority of the countries:

For example - The UK has 60 Million population and pays 12% - Finland has 6 Million population and pays just over 1%, in other words about the same. 

In fact Germany pays disproportionately more than the UK for their 80 Million population as do The Netherlands, Sweden etc. Less developed countries pay proportionately less, which is fine if you accept the argument that the strong should support the weak.  The Economist summarises the UK's contribution per head versus the other major players. This shows that we really pay less than many EU members.

I don't really think we're going to get our ￡350 million a week back for the NHS either as the pundits say:

But, of course, what we pay out is only half the equation. One has to also ask what do we get for our club membership?

What Do I Get? 

Estimates vary, but it costs each of us around 30 pence per day to belong to the EU club. That's less than the price of a Mars Bar! So what do we get for this?

No major wars in 70 years for 30 pence a day

Free movement and relatively simple border controls when compared with other parts of the world

The ability to trade and work in Europe freely

Investment in large infrastructure and academic research projects that are otherwise hard to finance e.g. The Sage Gateshead and The Millennium Bridge

Is it worth half a Mars Bar a day to live in peace, with free movement and trading with Europe?

"The European Union has avoided any wars within the bloc since the Second World War. There are so many benefits and I just hope sense will prevail when it comes to having the vote on it." 

Sir Richard Branson

To get some idea of a comparison, I have just returned from the USA, where I experienced complex entry procedures, the need for a Visa / letter of invite and was advised to take out insurance up to $100 000 in case I had a fairly simple illness - that's the world we potentially enter if we leave the EU, making us a much easier target for TTIP and the completion of a fully privatised NHS. 

The BBC offers a comparison of a range of issues at BBC EU comparison.

Space Invaders

I've become very disappointed to see so many people blaming the EU for a variety of UK's misfortunes that have nothing to do with EU membership. For example, one woman wrote: 

Although Norma is firmly in the OUT camp, she appears to justify staying IN and adopting some of the better social policies that Germany and France have as minimum standards for humane living. Indeed this also points out that individual countries have their own approaches inside the so-called European Superstate.

Others point to being "over-run by immigrants" when all the figures point out that our migrant population are net contributors to the UK economy and not a drain on our resources. A very good friend of mine illustrates the "Little England" perspective rather well:

If people don't like foreigners then they should be honest and say so but they should not blame them for what they are not responsible for. In my humble opinion laziness, moral hazard and stupidity are equally distributed across the human race and we'd do well to look at ourselves first before pointing fingers elsewhere. The idea that we can control our borders is not likely to change if we leave Europe. It is a UK Government problem. When people point to benefit scroungers, it is the UK Government that sets out the details of what we offer people who claim benefits. 

Brussels Sprouts

An argument I come across all the time is the "European Superstate" argument. This effectively says that we are being controlled every day by the "hidden hands of grey politicians in Brussels" and that the character of our villages and society are being ruined by Eurocrats. I do agree that the EU has gone way past its original brief, but struggle to find examples of how we are being controlled in our everyday lives by Euro MP's that we elected. I also fail to understand how the streets of Harrogate, Durham, Tenterden, Llandrindrod Wells, Wantage, Helston, Dunoon, Londonderry, Buxton etc. are being made to sell Gauloise cigarettes, Bratwurst sausages and Belgian Trappist beer by "secret committees in Brussels". If everything were controlled by Europe, there would be no bullfighting (a good thing), no Cornish Pasties (not so good imho) and no fox hunting (a good thing).

The Hounds of Love? The EU does not control things which are rightly the cultural prerogative of national Governments. This is why fox hunting prevails in the UK, like it or not

I do think however that a vote to leave will not be met passively by the EU as it threatens the break up of the European Union in the longer term and politics dictate that the UK are likely to be blamed and punished for pushing this over the tipping point. I can foresee each of us having to buy new passports, to stand for hours in the "alien" queues at border control like we do in the USA. I also believe that we'll have to renegotiate trading relationships with countries around the world, face taxes for goods and export barriers for certain commodities, based on "localism" from the EU once we are not in the club. Economics is a rational science and suggests that if there is trade to be done, it will be done regardless. However, politics is not a rational affair and this issue is intensely political, which means that, just because there is a case for trade on paper, it does not necessarily mean it will take place in practice.

Brexit may also herald the end of low cost travel from UK to Europe and reciprocal health arrangements via the EHIC card. Last year my wife fell ill in Amsterdam - we went to a local hospital, were seen without fuss or form filling within 30 minutes on presentation of our EHIC card. In sad contrast our NHS asked my son to present his passport and a utilities bill for a doctor's appointment at his old surgery recently, "in case he was a migrant", requiring him to make three visits to the surgery for a simple matter. When people tell me that migrants make it impossible to get a doctor's appointment, I'm afraid I must point to the incredible inefficiencies in our beloved NHS.

Brussels Sprouts - you can have too many, but in moderation they are delicious

The Day After ...

The Brexiteers play down the impact of what happens on June 24, the day after the referendum, but several credible assessments point to the fact that we will likely extend our austerity by at least two years, with several assessments suggesting that Brexit will throw the UK back into recession with longer term problems in terms of prosperity. Read this article from The London School of Economics for more detail.

There is little dispute that leaving would create short-term losses.  A Treasury report (BBC 23 May 2016) on the short-run effects suggests a recession, a view confirmed by the respected independent Institute for Fiscal Studies who point to the resulting increase in the budget deficit and argue that ‘It is unlikely that government would respond with bigger spending cuts and tax rises in the short run. More likely “austerity” would be extended by another year (optimistic scenario) or another two years'.

Nicholas Barr, LSE

Let's Stay Together

It's a complex decision. Question everything and cross check feelings with facts. Far too many people I've met are making their minds up on one narrow issue which is dangerous and unintelligent. I'm in and feel that we stand a much better chance of "shaking it all about" from "inside the EU tent" than from outside.

Our children and their children will inherit the consequences. Here are my hopes for their future, in the form of a "Song for Europe":

p.s. We may lose the Eurovision Song Contest - some good news then! :-)

Apologies to Lulu !! 

***************************

Peter Cook leads Human Dynamics and The Academy of Rock. Check his new book "Leading Innovation, Creativity and Enterprise" out. Available in Europe without additional taxes for the next month or so ...