Wednesday, 20 January 2016

Is the UK going to stay in the EU?

Yes. Regardless of whether there is a Yes or a No vote (or Cameron bottles it and claims enough of a victory with his renegotiation).

Okay so, admittedly Douglas Carswell has a great sci fi vision vision of a beefed up Singapore and at least he's honest on migration:


“Our grandparents’ generation had to get to grips with the idea of importing strawberries from Spain and mangetout from Kenya. Today we live in a world where labour mobility is inevitable, and unless you want to become like North Korea you need to accept it. You can no more ban labour mobility than food imports.”

And diet Trump (Nigel Farage, obvs) has a slightly more scary vision of a little England (and to a Scot it sounds very England centric, odd that to a Scot he seems to want his own mini EU) that restricts migration and withdraws from the common market to regain control of "sovereignty". I get that there are people left behind by globalisation. I just don't have a lot of sympathy. Across my facebook these seem to be mostly the idiots who dicked around and thought that leaving School in the 90s at 16 and going to work in the box folding factory was a job for life. Under the UKIP migration plan the UK population would shrink by hundreds of thousands of people a year. And a falling population would mean a downsized economy. Which will probably bite all the UKIP voting pensioners who didn't save for their retirement (and sure as buggery didn't pay tax for things like free bus passes and TV tax exemption but somehow this is fairer than not forcing kids into brain mortgages). 


And of course Corbyn was quite anti EU until recently. I would imagine a Leftxit would involve a lot of doomed industrial activism and rapid nationalisations and probably some sort of nightmarish. beardy, geography teacher looking revolutionary guard. 

And while all that sounds great, if you are pitching something to Netflix to take on Amzon's the Man in the High Castle, it's probably not what is actually going to happen. Or at least not what is actually contingency planned to happen. 

The most likely outcomes are; 
1. Can we be Switzerland?
2. No? Okay we'll be Turkey then. 

Switzerland first. Switzerland is a Schengen signatory and accepts free movement (though they have some restrictions on new entrants). Switzerland signs up to almost all EU law, and pays almost as much into the EU as the UK does. Being outside the EU it can choose not to apply EU regulations but in practical terms, i.e. because it would lose access to the EU market in those areas, it has have never actually done this. The big disadvantages here are no voice in EU decision-making and no access to the EU's international trade deals.

Turkey next. Turkey has a customs union with the EU. It neither benefits from nor offers free movement to the EU, and doesn’t need to apply all EU law. However, it doesn’t get access to the single market or EU global trade but is still forced to open its market to everyone the EU strikes a deal with. 

The idea that the UK is going to become some isolationist bastion in the Atlantic and somehow ignore the huge trading block 20 miles as the celeb swims off the south east coast is just delusional madness. 

So Turkey or Switzerland (Switzerland is proxying for the whole EFTA). For me, Switzerland is the most likely outcome of a no vote but it is also the version that will feel identical to a Yes. 

31 comments:

John Rotherham said...

Please look at 'Flexcit'(if you have not already done so).
http://www.eureferendum.com/documents/flexcit.pdf

lostleonardo said...

I echo John above (there's also a short version here: http://www.eureferendum.com/documents/flexcitlite.pdf)

I won't do the "vision thing" as I sense it's not of much interest, but here are a few facts to ponder.

In terms of the fundamentals your analysis is about right. But it is not correct to call continuing Single Market access and participation "remaining" in the EU. The EU is first of all a political not a economic institution.

The actual process of withdrawal must be done in stages --- there are 40 years of integration to "unpick", although, having said that, much of it we will keep, transposing that which we need into British law and only altering it as appropriate --- so, yes, there would be very little short-term impact, as you describe.

However, the British government would immediately become much more directly accountable to the British electorate. Lines of accountability would be shorter and large swathes of policy currently administered at EU level would become matters for national democratic debate. I would conjecture that that can only lead to a better political settlement between governors and the governed.

In terms of the type of relationship Britain would have post exit, at least initially the deal would be akin to that of Norway (there is insufficient time during the Art 50 negotiation to go down the Swiss bi-lateral route), i.e. outside of political union and the ever integrating eurozone but with full access to the Single Market.

The EFTA/EEA states currently apply 21 percent of "EU law" and the EFTA estimates that at least 80 percent of that is international standards, which signatories to the WTO Agreement on Technical Barriers to Trade, such as Britain and the EU, are obliged to implement. It is not correct to say that Britain would have to implement a lot of "EU law" with "no say". Cameron having a "senior moment", perhaps?

To pick on one more (important area), an independent trade policy --- currently an exclusive EU "competency" --- would give Britain an independent voice and right of reservation on the global bodies where trading standards are negotiated and agreed (by consensus not QMV) before being handed down to the EU and the nation-states (Australia, Suriname, Kenya, etc.) for implementation.

Mark Wadsworth said...

Oh ye of little faith.

Just do a thought experiment - imagine the UK had voted not back in 1975 and we had never joined. Would we be worse or better of today?

L fairfax said...

@"Oh ye of little faith.

Just do a thought experiment - imagine the UK had voted not back in 1975 and we had never joined. Would we be worse or better of today?"
As the Swiss per capita gdp has grown more than ours I would say better off.
With regards to immigration.
A) Japan has very little mobility of labour (although personally I don't mind people coming here to work) so it is possible
B)What many people object to is mobility of parasites. I know people who have got off the plane from Spain and demanded a flat (and got it)

SumoKing said...

Actually the swiss economy suffered quite badly when switzerland voted no to the EU and it's the reason they got together and agreed all the bilateral agreements

If the UK had stayed EFTA, then I doubt it would look much different, probably a bit more expensive.

@lostleonardo

The idea that the government is going to become more accountable is just ridiculous under the half elected by FTP Westminster parliament. Picking a king twice a decade is not really an accountable government. The EU currently accommodates socialist France and flat tax small gov Slovakia and internet democracy Estonia.

The UK gov works the way it does because UK citizens have no appetite for radical change.

blissex said...

Most of the public discussions like this seem to me to be based on amusing fantasies. One shared by both camps is that the EU matters: instead it takes less than 1% of the GDP of the members.

Plus EU laws and regulations are broadly the same as what member states would have adopted anyhow. Living in any EU member state or Switzerland is not that different in practice. After the UK kept sabotaging the European Union the core members not being stupid have clearly decided on a two-layer structure, with the eurozone being the "political" layer and the rest of the members the "EFTA reborn" layer.

Then there is the emotive (delusional?) aspect. That translates to nostalgia for the British Empire and spite for the useless frogs and the dastardly krauts and very little else.

The real issue as our blogger points out is what to do outside the EU, that is outside even the "EFTA reborn" periphery of the EU. The plan is transparently, B Johnson like others is fairly clear about it, when he talks about Athens and metics, to turn London into a western Dubai including disposable serf workers; with even less regulation of the City and unlimited immigration of indentured wallahs from Burma or Bangladesh or Kenya, while the City elites live in stunning luxury hiding (and pilfering) the dirty money of rich international criminals.

But can that model work for the whole of the UK as well as it works for Dubai or Singapore or Hong Kong or various Caribbean islands? Obviously not.

It can work at most for (central) London. The expectation of our elites seems that, now the Scottish oil money is over, the South will go the way of the North and implode after another round (or two) of debt led house speculation, becoming another reservoir of cheap servants for the elites in the Dubai-on-Thames, only a step above the indentured wallahs from Bangladesh.

What the London elites want is to go back to the 50s, more precisely the 1750s, ending the industrial and social democratic experiments, and going back to an easy and luxurious life of rent. The UK middle classes dream delusionally of joining them from their micro-manors in the pleasant southern countryside.

A relevant quote from H MacMillan's diary:

«As a kind of tranquiliser I am taking a course of Henry James! What a world – how quiet and peaceful and happy it was for the “upper and upper-middle classes”. Now it’s a nightmare. Happily, it’s a much better world for the masses, as has been brought home to me most forcibly in writing the history of the inter-war years.»

Bayard said...

"The UK middle classes dream delusionally of joining them from their micro-manors in the pleasant southern countryside."

Indeed, the cornerstone of the FBRI is that the FBRIer has the social status of the landed gentry, not the landless labourer.

Lola said...

There is another core difference between the UK and the EU. The Roman Code v The Common Law.

I think that this is critical to success and development. Essentially the European tradition is dirigiste. There is a list of the things that you can do and everything else you cannot. (Of course, because that's unworkable the people's tradition in Europe is to game the law and the rules). And there are some very strange views on property rights - to British eyes.

OTH in the UK we have the Common Law tradition. Don't kill people and don't steal their stuff, now off you go. And traditionally we have a high regard for the few simple rules that we had have developed through precedent.

This difference has, in my view led to the appalling growth in bureaucratic regulationism in the UK. Which without any doubt needs largely dismantling, and that right sharpish.

The democratic accountability bit mentioned above is also a major factor that ought to drive the out vote, but...mmmm?? I think that the whole nationalised education system has been so traduced that many voters are ill equipped to make an informed decision. (I also that the rotting out has been deliberately engineered.)

As a businessman I really don't care who buys my stuff. If one market closes I'll go and find another or start making something different. I'm too small to benefit from the EU's corporate cronyism.

Overall, I am unconcerned about the costs of 'out', because I know that when you are in a club or business where you cannot agree, getting out is always better.

Derek said...

Perhaps, true in England, Wales and NI, Lola, but not in Scotland. Scots law is based on the Roman Code albeit with a good deal of Common Law influence since 1707.

Lola said...

D I was actually writing 'England' and changed it to 'Britain', as I know of what you speak.
That may be why the Scots are seemingly more pro EU?
Or perhaps Scots Law has been infected enough by the Common Law that they too are now a bit fed up?

Mark Wadsworth said...

Blissex, nonsense.

You are just writing down a long list of things you don't want to happen (and which I wouldn't want to happen) and saying "that's what will happen if we leave the EU".

You're as bad as the rabid Ukippers who create their own 'dystopian futures' and say "That's what will happen if we don't leave the EU".

L, I have been at the receiving end of English law and of German law. The latter is quicker, cheaper and fairer and appears to be run for the benefit of society as a whole. The former is slow, expensive and arbitrary and appears to be runs for the benefit of lawyers and barristers.

Lola said...

MW Have you now. Do tell?

The Roman code has its attractions. But that does not alter the point I was making that a set of exclusive rules as to what you can do - and anything not in those rules you can't do - is an extreme inhibitor of innovation.

Personally I like the constant testing by argument in the English system. I think it is ultimately 'fairer'.

Mark Wadsworth said...

L, nothing exciting, bits and pieces of business related alleged unpaid invoice stuff, a personal injury claim and getting divorced.

In Germany, the rules are clear, the judges apply common sense and the solicitors aren't all incompetent self serving thieving bastards like over here. In Germany, only an idiot starts a hopeless court case on the off chance he wins. In the UK, the system is so shit that everybody has a 50/50 chance of winning, no matter how feeble his case.

This idea that on the Continent you are only allowed to do what the law says you can do but in England you can do what you like as long as it is not prohibited is a load of nonsense if you ask me. In practice it is exactly the same and the rules are pretty similar. All the fancy legal speak and jargon is of zero interest to the man in the street.

There is no 'testing by argument' in the UK, this is something which some corrupt twat made up as a cover story.

What it means is that judges could't give a shit about any sort of fairness and always have an excuse for a bad decision, which of course generates another £100,000 in legal costs when the wronged party goes to the next level of appeal.

So, having seen both in practice, the German system wins hands down on any level.

I strongly assume that the comparison between German and UK criminal law is much the same as between German and UK civil law.

L fairfax said...

@"In Germany, the rules are clear, the judges apply common sense and the solicitors aren't all incompetent self serving thieving bastards like over here."
Does that make it cheaper than in the UK?

Lola said...

Serendipity strikes again. Here http://www.adamsmith.org/blog/regulation-industry/as-weve-been-known-to-say-before-lets-stop-government-doing-some-things/#comments

I quote: "...It is, perhaps, to argue for the common law approach to regulation: anything we’ve not said you may not do you can. Rather than the Roman Law approach,..."

Mark Wadsworth said...

LF, yes of course, did I not make that clear?

The court fees are a tenth as much, solicitors have similar ridiculous hourly rates like £100s an hour, but they don't maliciously clock up as many hours as possible on hopeless cases, they just do what's needed or tell you that you've got no chance and leave it at that.

Everybody knows that the judge will make probably the right decision, the party in the wrong doesn't bother fighting a case (or bringing a spurious one) in the first place.

To my mind, that is how things should be and in comparison the UK system is the biggest corrupt pile of shit you can imagine.

L fairfax said...

@"LF, yes of course, did I not make that clear? "
It was but I wanted to check. Apart from buying a house I have never had any contact with lawyers although I know people who have for child contact/divorce etc and I am very glad that I haven't the same experience.

Mark Wadsworth said...

L, that is different. they are saying "less regulation is good" which is quite true in most cases.

But Regulations are not the same as The Law, which regulates dealings between ordinary individuals and businesses. Regulation is a special kind of pseudo-legal wank fest which regulates dealings between ordinary people and regulators.

To illustrate the difference:

The Law says "If one of your employees is injured on a building site where he has been sent to work, you are liable to pay him for injuries he was deliberately endangering himself and ignoring normal practice or guidelines". Fair enough.

The Regulations say "Every construction site operator must have written policies and procedures which are registered and agreed in advance with the local council building department before construction work can proceed. The policies and procedures must be in compliance with EU safety standard guidelines EU/2009/9837" Dude WTF.

Lola said...

Can I just go back to this 'gaming' thing? Speaking to an undertaker who had been on a fact finding trip to Europe. She asked at one Belgian crematorium why they didn't have dioxin scrubbers on their chimneys as required by the EU. 'Oh, we don't do that here. It's too expensive'. That is the rules are just ignored. Or when I raced at the Nurburgring. The scrutineering was a joke - very officious and lots of forms, but no common sense at all. As long as the boxes were ticked - off you, and I could see things on competitors cars that I wasn't happy about at all. IMHO all these continentals do is just ignore the rules they don't like which then brings the whole rule of law into disrepute.

Lola said...

MW. Whoa. What I am saying is that the Roman law approach reflects into regulation, which become 'laws'. The FSA Chairman actually said 'we make law', and immediately got beaten up about it. But it is true, they do. And this leads to chaos like excessive TLs.

Mark Wadsworth said...

L, everybody has their own examples of this. If true, then the UK is the only government stupid enough (or sadistic enough) to actually enforce anything.

L, yes I know that Regulation is legally binding upon the poor ordinary businesses subject to it. So in that sense it is 'the law', but it is not The Law as defined by me, above. "Regualtions" are there purely for the sadistic enjoyment and empire building of the regulators and do not benefit the man in the street or the ordinary business one iota.

Blaming all the bloody regulations and bansturbation on "Roman law" is missing the target completely. It is the people who are imposing the bloody regulations and banning stuff left right and centre who are the problem, you can't put it down to the supposed jingoistic superiority of the British Legal System over ghastly foreign ones.

In practice, our system is far worse. I have given examples and you have given examples. Basically I think we are agreed on what we don't like and why. Let's not make it more complicated than it is.

Lola said...

MW. The point I am making, and you to a degree are reinforcing - is that the Roman Law mindset encourages regulationism. Whereas Common Law does not. This is the point made by Timmy and many others. And I hold that this is a fundamental incompatibility between the EU and the UK (England especially).

Mark Wadsworth said...

L that's your theory, in which case how do you explain that the UK has the worst system of regulation and regulators? You are all missing the point completely.

Lola said...

MW We have the worst system of regulation because of this difference.

Traditionally, over about 250 years the UK has a high regard for the Rule of Law. A much higher regard on average than pretty well every European state. We had a few simple rules - don't kill people, don't steal their stuff - which we enforced. Our civil servants weren't 'bureaucrats. Our government became our servant not our master. These factors are the antithesis of the European tradition, based on the Roman Code and the Napoleonic code (which specified society very particularly). And then we joined the EU.

Our civil servants, used to doing things thoroughly and well, got properly stuck in to what they regard as Law. By habit they could do nothing else.

Over time all the good old traditional civil servants retired/died out and the the appalling self interested opportunistic functionaries got in. Gradually they morphed the whole structure into regulationism. This does not sit well with the British concept of liberty, small government and personal responsibility. There are tensions.

Then in 1991 the soviet empire collapses, proving once and for all that the central planned socialist economy - the classic top down 'Roman code' (if you will) bureaucratic state.

This all comes to a head in the UK in 1997, when Blair's appalling .new labour' achieves power. Pretty well all the regulators we have now stem from the Fabian Gradualism agenda of NL.

So now we have a bastardised system of regulators run by frustrated socialists who cannot accept the evidence of the failure of the Soviet Union but are still determined to force it on us (through regulationism), egged on by the dirigiste Brussels bureaucrats, all staffed by a whole load of useful idiots with entirely distorted incentives and a penchant for prodnosery. The EU gives all this licence.

Meanwhile the likes of you and I still work on the basis that we are self starting personally responsible adults capable of running our own lives, which is entirely incompatible with the purpose of the functionaries.

The whole thing is a God awful mess created by fundamentally incompatible systems.

And ours works. Theirs doesn't.

Mark Wadsworth said...

L, as a historical summary, that's probably accurate.

But you are still focusing mainly on "regulations" which are entirely superfluous. Regulations are there to enable bureaucrats to torture real people.

What I am talking about is "law" which are the rules about real people interacting with each other, with the courts etc acting as referee. You need "law" so that people know what the rules are. What any individual law says is secondary to the fact that the people know what it is and if they break it they can easily be sued.

And from personal experience, the "law" in Germany works much better than in the UK. I am not commenting on their system of "regulations" which might be better or might be worse than here (I suspect better).

DBC Reed said...

Rather than nonsense Blissex's suggestion that the London elites want to return to the easy and luxurious life of rent circa 1750's is in line with Piketty's comments about Jane Austen's novels and our whole political message.

Lola said...

MW. I bow to your experience of the two systems.

(However many international commercial agreements between businesses not domiciled in the UK use English Law in their contract terms.)

I really do understand your point. My point is the Continental system of law leads to regulationism. And from my (admittedly limited) experience of Continentals they 'game' their Laws more than we do.

Mark Wadsworth said...

DBC, of course that is what they want. Nobody disputes that. And being in the EU makes it much easier for them, hence and why the big banks are dead keen for us to stay in the EU and are funding all this propaganda.

You might as well argue "The EU has laws against slavery. If we left the EU, the ruling elite in the UK would re-introduce it." That is nonsense. The EU rules encourage rent seeking, Home-Owner-Ism, high taxes on output, employment and real profits etc.

L, yes they use English law because they speak English. But that is contract law, and we need rules on contracts because they govern how people and businesses interact.

DBC Reed said...

So the ruling class is, in the EU, enjoying Homeownerism, rent- seeking and living the life of rent and out of the EU will immediately change their ways and listen to the mighty LVT legions , is that it?

Mark Wadsworth said...

DBC, it is a necessary but not sufficient condition, I am afraid.

DBC Reed said...

Are you saying that adopting LVT and not electing governments on class war lines with a majority of voters bribed by tax free capital gains in housing is conditional on leaving the EU? (You cannot be saying that leaving the EU is conditional on LVT and a totally unbribed electorate.) I cannot see that there is really any conditionality about Brexit and LVT -in either direction.
STOP WAFFLING!