The next two posts – today and tomorrow – will look at the key arguments being put forward by both sides of the EU referendum debate and deciding for myself how well those arguments stand up.
Today, I start with the Remain side. Red means it’s a load of bollocks, orange means dubious, grey is neutral, light green means leaning towards correct with a few reservations and dark green means a sound argument.
The EU is the Wales’ single largest export market. It’s in our best interests to remain part of a single market that buys our goods:
Verdict : True. In 2015 (xls), Wales sent 41% of our exports in goods to the EU (though the latest figures show its slipped to under 40%). This is compared to 25% to North America and 14% to the Middle East and North Africa. In fact, trade with the latter two as a proportion of exports has increased consistently over the last few years despite our membership of the EU. The EU does little harm when it comes to “trading with the rest of the world” and isn’t a closed shop as it has trade agreements with many other nations.
Wales is a net-recipient of EU funding. We could lose that if we voted to leave:
Verdict : True. The Wales Governance Centre research paper from May (pdf), estimates that between 2010 and 2014, Wales received £941million more back from the EU than our share of the UK’s contribution to the EU’s budget. In 2014 alone, the EU paid Wales somewhere between £180million-£245million more. Whether that money has been well spent is certainly up for debate and there’s no reason to suggest these schemes couldn’t be replaced by the UK Government post-Brexit – but there’s no guarantee of that.
The EU is worth £3,000 per year, per household, in economic benefits, compared to the £340 annual cost of EU membership:
Verdict : Hard to tell, but it looks as though the £3,000 a year figure is exaggerated. It’s undoubtedly true the EU provides economic benefits in excess of the UK’s annual contribution to its budget, but exact figures have been hard to pin down. £3,000 per year, per household, would work out at £79.4billion, or 4% of GVA. Most estimates put the figure at around 2% of GVA, or £1,500 per household. Compared to the net UK contribution to the EU budget, either way it’s a snip.
A Brexit would spark a recession and would cost the Welsh economy £2billion by 2018 as a result of the “shock” :
Verdict : Certainly possible. Unless the UK is able to immediately access the single market (minus EU membership, such as by joining the EFTA or EEA) there would be a hit, but it’s likely to stabilise once the dust settles. In fact, some shock and turbulence is actually good for free market economies (more from Borthlas – it’s similar to the concept of “creative destruction”). It’s usually places like Wales that get hit the hardest in these “shocks” though. The particular risks to Wales are (temporary or permanent) tarrifs on exports, cancellations or delays to major infrastructure projects like the South Wales Metro due to a loss of EU structural funds and cuts to research (Welsh universities do well from EU funding).
100,000-200,000 Welsh jobs/3 million UK jobs are provided by companies from other EU member states and/or reliant on EU membership. Up to 820,000 UK jobs/20,000 Welsh jobs would be at risk if the UK voted to leave:
Verdict : Maybe in the longer-term as trading conditions change, but the suggestion jobs would be lost en masse immediately (apart from those directly-relating to the EU itself, like WEFO) – I don’t buy it. It’s not as if the likes of Airbus would shut their wing factories overnight or foreign banks would pull out of London overnight either – though the signs of “capital flight” (people taking money out of London) are already there; that’s usually a prelude to something worse. The real problem arises when these companies decide where to invest post-Brexit. The UK would certainly be at a disadvantage in some respects, maybe advantaged in others.
It’s better for the UK to remain at the top tables in the EU helping to make the rules instead of them being applied here without us having a say:
Verdict : True. If you’re going to have rules applied to you (assuming the UK would still remain part of the free trade area/EEA post-Brexit) it better to have at least some input into how those rules are drafted instead of having them imposed on you regardless. The question is whether these rules, regulations and directives – which are often onerous and put pressure on small businesses in particular – are a price worth paying to access the EU market itself.
Farming in Wales would collapse without EU payments and subsidies:
Verdict : There would be tough times certainly, but farming would survive in some form. Farming existed before the EU and would exist after it too, perhaps even thrive if more markets are opened up….but it could be a very painful transition that would require some sort of interim funding arrangement from the UK and Welsh governments – something the Leave campaign have neither outlined nor guaranteed.
Leaving could result in conflict because the EU has ensured peace and stability across Western Europe since the Second World War:
Verdict : An exaggeration of the truth. NATO has probably played as big, if not bigger, role in European stability than the EU, but there’s no doubt that free movement of people and money has knocked down cultural and political barriers. It doesn’t make much economic sense to bomb your key trading partners and disputes that, in the 19th and 20thcenturies, would’ve once resulted in conflict are now dealt with peacefully via the EU and its institutions.
We’re Europeans; if you support Brexit, you must hate Europe/be xenophobic/hate foreigners:
Verdict : False. The Swiss and Norwegians aren’t in the EU, enjoy good relations with their neighbours and are heavily multi-cultural. There’s nothing contradictory about opposing a political or economic union whilst remaining cosmopolitan : it’s a bit like accusing Welsh nationalists who support independence of hating England – it’s equally untrue. However, some senior personalities arguing for Brexit are hardcore British nationalists who are at least mildly xenophobic (i.e. right-wing tabloids) and that doesn’t really help their defence here.
Leaving the EU would diminish the UK’s standing and influence in the world:
Verdict : In economic terms it would; in geopolitical terms not so much. The EU is the world’s largest economy and leaving it would certainly put the UK in a corner. The UK isn’t a global power anymore and wouldn’t have the same influence as the United States or China through a Brexit; it would be no better than a more powerful version of Australia, Japan or Canada – particularly when it came to trade and the economy. The UK still has an independent foreign policy and has used its soft and hard power effectively despite being an EU member and that wouldn’t change with a Brexit.
Free movement works both ways. The status of up to 2 million UK citizens living in the EU (benefiting from free movement rules) would be questioned and could make their lives more difficult:
Verdict : True. There’ll be an impact on UK citizens who live and work in the EU – they might need work or residency permits for example (as EU citizens do to live and work in Switzerland). The elderly and retired could also face problems as, with some inevitability, their health declines. At the moment the health systems in Spain (predominantly) are picking up the slack and they’re entitled to free or reduced cost treatment. If, as a result of Brexit, they had to pay full cost for treatment due to the UK being outside the EU, they might decide to cut their losses and return – which would put more pressure on the NHS and social services than young, healthy immigrants ever would.
Workers rights could be eroded with a Brexit. EU regulations and directives currently guarantee maximum working hours (Working Time Directive), rights to unpaid parental leave, health and safety and equal treatment for part-time and agency workers:
Verdict : Not necessarily, but it would make it easier for a UK Government to scrap certain rights that are currently guaranteed by EU membership. Think about who the main cheerleaders of Brexit are, then think about what they might do if powers over employment law were repatriated. I’d hardly have the libertarians in UKIP or people like Michael Gove and Liam Fox down as friends of the ordinary worker. However, some on the far-left believe the EU is a project to benefit the wealthy as well as multi-national corporations and actually hinders workers rights.