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Why are there so few EU Rejoiners?

The case to re-join the EU is today much weaker than the case to remain once was

Tim Congdon

This article is taken from the March 2022 issue of The Critic. To get the full magazine why not subscribe? Right now we’re offering five issue for just £10.

Why have the Remainers not re-invented themselves as the Rejoiners? Why have the tens of thousands of clever people who were passionate about the imperative for the United Kingdom to stay in the European Union not become the tens of thousands of clever people who are passionate about the consequent need that the UK resume its EU membership?

Project Fear’s dire forecasts discredited the Remainer/Rejoiner position

It is now more than five years since the Brexit referendum on 23 June 2016; it is also more than two years since the UK formally left the EU at 11pm on 31 January 2020; and it is more than a year from the end of the transition period when many (although not all) practical details were resolved. Before the referendum a conventional wisdom was shared among global policy-making elites and the policy-influencing media. This was that Brexit was a kind of herd populist madness, a mistake that would lead in short order to recession, impoverishment and geopolitical marginalisation.

The International Monetary Fund (IMF) in Washington and the Paris-based Organisation for Economic Cooperation and Development (OECD) articulated the warnings, in much the same terms as the BBC and the Financial Times. The barrage of words had its effects. The 48.1 per cent Remain minority in the referendum contained more than 60 per cent of the UK’s university graduates. Given that the consensus of the educated and well-informed was that leaving the EU was a mistake, a surely reasonable expectation is that a formidable body of opinion should by now have formed to argue for renewed membership.

But that is not the case. If Brexit were the folly that the Remainers said it would be, the evidence ought — almost six years after the key event — to be clear-cut. Instead, references to Brexit have largely disappeared from the political debate. Most notably, Keir Starmer has said that — if successful at the next general election — his party will not start negotiations to return to the EU.

What has happened to the heavyweight, decades-old and highly influential strand of UK public argument in favour of participation in European integration? Why is there no meaningful platform for Rejoining? There is a puzzle at the heart of British politics.

Part of the explanation is Project Fear. Backed by Treasury forecasts, the then Chancellor of the Exchequer, George Osborne, said in May 2016 that a vote to leave would be an economic shock so severe that it would cause immediate recession. In his view, the housing market would be hammered. Osborne referred to “Treasury analysis” which showed that “there would be a hit to the value of people’s homes by at least 10 per cent and up to 18 per cent” within two years of a vote to leave.

Project Fear was wrong, and not just a little bit so. No recession occurred in the quarters following the referendum’s supposedly calamitous and recession-causing result. According to the Nationwide Building Society, the average house price in the second quarter of 2016 was £204,238 and two years later it was 5.1 per cent higher at £214,578. It continued to advance in 2019, 2020 and 2021, and in early 2022 is over a quarter up on June 2016.

Project Fear was a fiasco for the Europhiles. It was misjudged in the political sense, in that it did not persuade enough undecided voters to side with Remain. But its forecasts also discredited the Remainer/Rejoiner position. The vote was to leave and Brexit has unquestionably happened, but no large financial setback has materialised. The Remainers know that in this respect they have lost the debate, at least for some years to come. If they urged that substantial economic gains would accrue to the UK from returning to the EU and cited “Treasury analysis” as their authority, they would be met with laughter and derision. Memories fade, and a future generation may find “Treasury forecasts” and IMF experts persuasive. But for the cynical and suspicious voters of today, Project Fear is too recent.

The EU did not fulfil its promise to evolve into the world’s economic powerhouse

But Project Fear is not the only reason for Europhile silence. The yet more serious difficulty for prospective Rejoiners is to identify a politically viable path to resumed EU membership. As in the early 1970s, a series of negotiations would have to be held, and the negotiations would involve give and take.

Back in the early 1970s the negotiations were about joining a group of nations that had collaborated in an economic venture called “the Common Market”. The crux of the case for entry was that these nations — more formally, members of “the European Economic Community” — had enjoyed faster output growth than both the UK and the world as a whole since the EEC’s formation in 1958. With the UK inside, the EEC would represent over a quarter of world output, while the recent record suggested that the bloc’s importance would continue to increase.

So, joining the EEC was, above all, about the UK gaining improved access to the world’s largest and most dynamic economic association. The Common Market would compensate for the loss of the British Empire, various constituents of which often went protectionist after independence. Further, the rationale for the EEC was widely taken to be economic success, not political union.

The present situation is utterly different. The passage of events — over which the UK had no control — showed that the motive for European integration had been, from the very start in the 1950s, “ever-closer union” in a political or even a geopolitical sense. The EEC became “the European Union” from 1993, while a succession of treaties between the member states envisaged a shared foreign policy and, ultimately, a unified military command and capability. EU membership was very much a threat to sovereignty.

Perhaps still more fundamental was that the EU did not fulfil its promise to evolve into the world’s economic powerhouse. Considered as an entity with its current membership plus the UK, its share of world output was more than 30 per cent in the late 1970s. Now the comparable ratio is about 17½ per cent. With the UK outside, the figure drops again to under 15 per cent.

Demographic projections imply that the pattern of decline will persist over the next 50 years. Assume that the rate of decline is the same as in the four decades from 1980. On that basis, by 2075 a European “super-state” would account for barely more than seven per cent of world output.

What, then, could the EU offer — in, say, the late 2020s or 2030s — as bait for the UK to rejoin “Europe”? In return for slightly closer trade links with the EU, Britain would have to throw away the ability to negotiate trade relations with nations in the rest of the world that were, by then, producing over 90 per cent of global output.

Economic benefits from membership are less compelling in the early 21st century

In this context, Boris Johnson’s government has taken one step of huge potential significance. In February 2020 it started the application process for joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The Trans-Pacific Partnership has 11 members that represent 13 per cent of world output, much the same as the EU. Of these 11, over half — Australia, Brunei, Canada, Malaysia, New Zealand and Singapore — are Commonwealth members. Some of these countries pursued the protectionist mistake after independence, but they have put that blunder behind them.

The TTP is sometimes dismissed as another EU, only further away. But it is not at all the same. TTP members have no intention of harmonising laws and regulations in the same way as the EU, they have not proclaimed the notion of an “ever-closer union” that culminates in a federal super-state, and they have no plans to establish a single, shared currency (there was at one time an arrangement called “the sterling area”, to which all the TPP’s Commonwealth members belonged. Currencies were pegged to the pound sterling, while the area enforced exchange controls against the rest of the world. Mercifully, no one has suggested it be revived.)

The 300 million words of regulation in the EU’s acquis communautaire increases by millions more each year. They are not the favourite reading matter of entrepreneurs in small- and medium-sized British businesses. Nevertheless, in the last 15 years of UK membership these businesses did gain from the EU in one way. Freedom of movement across the EU’s borders brought low-paid workers to the UK, holding down labour costs and widening profit margins.

According to figures prepared by the Office for National Statistics, at the start of the twenty-first century the number of UK workers born in the EU was under half a million. By the time of the referendum the number had climbed to almost 2¼ million. During the Great Recession and its immediate aftermath the UK-born saw almost a million of their jobs disappear, while EU-born employment rose strongly.

Could the UK re-join the EU and remain outside its open and unified labour market? It is difficult — perhaps impossible — to see how the EU could grant the UK any special status in this area of public policy.

Indeed, the dangers of freedom of movement were highlighted by Keir Starmer in January 2021 when he said — in an interview with Andrew Marr on the BBC — that a newly-elected Labour government would not seek to re-join the EU. In Starmer’s words, “I don’t think that there’s scope for major renegotiation. We’ve just had four years of negotiation. We’ve arrived at a treaty and now we’ve got to make that treaty work.”

It is surely clear that the economic benefits from membership are less compelling in the early twenty-first century than they were in the late twentieth century. What, then, would the EU require from us as the price of re-joining? What would it expect to take?

Would we have the divorce bill back, or would there be a new entry fee?

Apart from the very first year of membership, the UK was a net contributor to the EU budget. The EU’s expenditure was largely for agriculture and the UK was not a major agricultural producer. If we applied to re-join, there can be little doubt that a substantial net contribution would again be demanded. In the early 1970s Britain was so eager to belong to the rapidly expanding and successful Common Market that it was willing to pay a membership fee. Today, by contrast, many people would wonder why we have to pay anything.

They might also ask questions about the divorce bill of £39 billion. Much of that was incurred before we left in January 2020, but over £20 billion remains due for various purposes until, believe it or not, 2057. If we re-join, is that cancelled and do we get our money back? Also can we have a guarantee that nothing of the sort would be payable if — having re-joined — we again decided to leave? No wonder that, in his January 2021 about-turn on the EU, Starmer said he would not be interested in “major renegotiation”.

Astonishingly, a small item in the continuing divorce settlement is £50 million owed to the European Central Bank. Britain apparently must pay this sum, even though it was never keen on the single currency and obtained a protocol exempting us from it back in 1992. Here too is a vast imponderable. If the UK wanted to re-join, would the EU insist that we give up the pound? The EU did insist that, when eight Eastern European nations, Cyprus and Malta acceded to the bloc in 2004, they should all adopt the euro, and most have done so. How could the same provision not also be included for the UK?

The majority for Brexit was small, but it was clear. The 51.9 per cent majority who voted to leave had fewer academic credentials than the 48.1 per cent minority, and in that sense had less intellectual weight. But they have not just won the argument: they have done so for good. Even if a future government, of whatever political stripe, wanted the UK to re-join the EU, so many awkward questions would arise that even a preliminary agenda for negotiations would be difficult to prepare. A European army for Britain? Freedom of movement? Replacing the pound by the euro? Would we have the divorce bill back or would there be a new entry fee?

And for what? There may be politicians in the 2030s and 2040s willing to run the risks and uncertainties of pro-EU advocacy. They would be doing so in order that the UK strengthens its relationship with a bloc of countries that represented, prospectively, less than 10 per cent of world output. Britain must of course remain friends with its European neighbours. But it is out of the EU, and it will stay out.

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