The bill for an EU referendum in 2017 has now passed its second reading in the Commons but the way in which it was passed suggests that our political elite is out of touch when it comes to Britain and the EU: out of touch with the people, out of touch with the country’s economic needs and out of touch with the constitutional vandalism that the European Union has wreaked on English democracy. The bill itself is the result of chance, its sponsor won the MPs’ ‘lottery’ to bring a ‘private member’s’ bill; only a handful of Labour and Liberal Democrat MPs were present having been told to stay away from what Nick Clegg described as a political ‘stunt’.
While the support of the Conservative Party and the Labour Eurosceptics for this private members bill is welcome, the Commons debate showed that this country’s problem is not so much with Europe, as with many of its own elected politicians, who have yet to grasp the nature of damage done by the EU both to Britain’s and many other member states’ economic well-being. William Hague rightly warned of the constitutional difficulty with which he and we must grapple. In a language evocative of the world he now inhabits as foreign secretary, he announced that no institution can govern without the support of the people; and that four major EU treaties had been passed in the last quarter of a century without any referendum. It was, he said, time to give the people a vote. But instead of ramming the message home about the practical consequences for peoples’ lives in this country, he turned on his opponents.
One need not look as far even as Egypt or Syria, but to the streets of Europe, from Athens to Madrid, to see just how the absence of constitutional legitimacy and the support of the people for the institutions which govern them matters. Nowhere is it more evident in the economic life of Britain and many of her European neighbours. The tsunami of Euroscepticism running across this island, moderate by comparison with that of some European counterparts, is the response to those bad laws stemming from EU dominance. This country has been fast forwarded from the 1970s free trade bloc to near complete European integration, and because of the absence of democratic accountability by ‘Europe’ to the people of this island, there has been not just bad, but damaging, law.
For us, no less than for our European neighbours, the EU no longer appears to stand for policies to promote prosperity through free trade and the economic successes this brings. Rather, it has become obvious that the competitive edge Britain and other economies need to fight and win in the world’s markets against other advanced and newer, dynamic economies, is being blunted by the inexorable trend of legislation which weakens entrepreneurial muscle, adds costs to production and limits the fair competition on which societies, their economies and their peoples thrive.
Take one example. Britain’s financial sector is now seriously at risk from the EU’s often ill-informed, unnecessary and damaging regulation, developed by officials out of their depth in the principles and practice of the industry, and far less sensitive to the needs of competition than our own. The estimated cost to the UK financial services of just one new measure, the Alternative Investment Fund Managers Directive (which aims to add EU regulation to our own far better regulation of the Asset Management Industry) for annual compliance cost alone will be from $4-$6 billion. The total cost to the EU financial services sector of complying will therefore run into tens of billions. (These points will be considered in Politeia’s forthcoming volume by Scott Cochrane of Herbert Smith Freehills, to whom I owe thanks for his discussion of this point and estimated costs.) The knock-on effect on investment and jobs across the whole economy from this and other similar measures is impossible to quantify. Savings, investments and retirement pensions will be worth less; the industry itself will be less competitive in world markets; and as costs rise, it will be less able to survive than other financial hubs. From New York to Singapore, Tokyo to Geneva, the rivals to displace London are already waiting in the wings.
Across the country people have woken up to the threat to our very economic survival by the EU legislation, whether the heavy handed regulation of specific industries, the utopian employment laws – which push EU unit costs of production up against those of other western and emerging economies – and immigration. Laws which are pushed through without scrutiny and the consent of the voters are normally bad and damaging laws. That is why Britain is not alone in its battles over repatriating essential powers, over the economy, over its borders, over its employment.
The UK will be closely watched by the growing number of Eurosceptics elsewhere in the EU. They will be interested in both the events in Parliament and outside when it comes to renegotiating in Brussels. From right, left and centre, that movement is growing – especially in Europe’s founding troika, France, Italy and Germany. Many people in these countries will have more in common with voters in Carlisle or Cambridgeshire, than with their own leaders’ scaremongering about fundamental change when it comes to Europe. For those working today but worried about tomorrow, and for the millions of under 25s – the ‘generation jobless’ – across the continent of Europe, governments in general, and the European Union in particular, with its leviathan of controls, are now being perceived as the problem not the solution.