In today’s Daily Telegraph, Boris Johnson points out that the so called rock solid case for the Remain economy is not really rock solid at all. He begins: “Yes indeed, let us talk about economics. Let’s look at the real economic impact of the European Union on Britain and Europe.We can dismiss most of the claims for the “single market” – too often an excuse for a morass of politically driven legislation that costs UK business about £600 million a week. In the 20 years since the dawn of the 1992 Single Market programme, there were many countries that did far better than the UK at exporting to the EU; 27 non-EU countries did better at increasing their exports of goods, and 21 did better at ramping up their exports of services. Of course they did: American and other non-EU businesses have excellent “access” to the EU, but aren’t wrapped in EU red tape, whereas we have only 6 per cent of companies trading with the rest of the EU – yet 100 per cent of them have to comply with EU law.
And is the EU booming, thanks to the “single market”? Of course not. Since 2008 the US has seen gross domestic product go up by about 13 per cent; the EU’s has gone up by 3 per cent. The EU is a graveyard of low growth; the only continent with lower growth is currently Antarctica. That is partly because of the sclerotic one-size-fits-all Brussels approach to regulation; but, worse, in the last decade the EU has been suffering from a self-inflicted economic disaster – the euro.
We get inured to some of the figures – the 50 per cent youth unemployment in Greece and Spain – without stopping to think of the individual tragedies; the suicide rates; the inability to get medical treatments; the blighting of young lives. It is a moral outrage; and the search for a safety valve is continuous.
On our doorstep we have a vast and developing tragedy – caused by the folly of trying to impose a single currency on an area with different labour markets and different rates of productivity. Take away their ability to devalue – with their own independent currencies – and many parts of the EU have found it impossible to compete.
What can they do? There are broadly three responses. The first is for the battered southern Mediterranean states to obey the diktat of the European Central Bank and the International Monetary Fund. They can cut costs. They can punish workers. They can cut pensions and holidays and benefits and hope that they can somehow bring their unit labour costs in line with Germany. The resulting austerity has taken a vicious toll, demand has fallen, confidence is shot to hell, and the suffering continues. The riots have now spread to France.
Alternatively, they can be treated as the poor and backward parts of a single political unit – like the south of the US, or the Mezzogiorno of Italy. They can beg for cash subsidies to keep them going.
The trouble with this approach is that it requires the German taxpayer to be extremely generous to non-Germans – and as the programme develops, the Germans are inevitably demanding restraint on the fiscal policies of their clients, since he who pays the piper calls the tune. That is why the next step – post the UK referendum – is to try full-bore to create an “economic government of Europe”, using the single-market institutions, in a way that will inevitably drag us in – and for which the UK taxpayer will end up paying. This “political union” will be both horrifically anti-democratic and expensive; for us, too.
Then, of course, there is a third way in which people can respond to the disaster of being locked in a suboptimal currency zone, when their own region is unable to compete. They can simply move. That is what is happening now – on a scale never seen before in our lives. People are leaving the areas of Europe that are being hit by the euro crisis, and they are moving in search of work – above all to Britain. Last week we saw some astonishing figures: 270,000 immigrants from the EU – and 184,000 net. That is the same as a city the size of Oxford. We are in the throes of the fastest demographic change for 1,000 years.
I have always championed the benefits of immigration, and the ability of talented people from around the world to contribute to the life of this country. But how can anyone claim that this is not an economic phenomenon? Immigration is now the single biggest driver of our population – set to soar to 70 or 80 million. It is this surge in demand that is largely causing the housing crisis, and the almost overwhelming pressure to destroy the green belt. It is immigration that has been relentlessly helping to compress the wages of the low-paid while the FTSE-100 chiefs (many lobbying for Remain) have seen their pay go up to 150 times that of their average worker.
Priti Patel was absolutely right to point out yesterday that such executives – nice and well-meaning though they may be – are insulated from the impacts of these inflows on GP surgeries and school places. And the flows will get much, much bigger as the new Living Wage takes effect. The UK minimum wage is already the equivalent of €1,529 a month – compared with €215 in Bulgaria and €233 in Romania. Think of that magnetic effect – if we continue, as now, with no way of moderating the tide.
There may be a case to be made for this influx. Perhaps the public could be persuaded. But that is emphatically not what the Government has chosen to do. Year after year we have been told that immigration can be cut to the “tens of thousands” – a claim that now looks demonstrably hollow as long as we are in the EU.
People do not necessarily object to immigration, and certainly not to the immigrants themselves. They object to the absence of democratic consent. There is no balance or discretion in the policy, because we do not control it – and the only way to take back control is to vote Leave on June 23.”