Sunday, 13 November 2011

Cost/Benefit Analysis of EU Membership


Dear Bob,

You will no doubt remember that on 24th March I emailed you suggesting that it was most important and overdue that our government undertook a Cost/Benefit Analysis of our membership of the EU. You acknowledged this on the 28th March saying you had passed my request to David Lidington.

You received and passed on to me an anodyne reply of the 19th April from David Lidington on behalf of the Foreign and Commonwealth Office admitting they "do not systematically assess the disadvantages of EU Membership.' But went on to say, "In return for our EU membership the UK enjoys a wide range of benefits." David then lists a range of contentious claims in which he trots out the old canard, "approximately 3.5 million jobs, 10% of the UK workforce, reliant on exports to EU member states."

The final paragraph reads:- "The Government remains committed to playing a strong, positive and active role in the EU. We want an open external market and we support the negotiation of EU new Free Trade Agreements. We want to expand the Single Market including the energy market, in order to deliver growth and we want to promote a resource-efficient, low carbon, EU economy, as well as working through the EU to achieve the UK's international objectives."

Civitas have now done what I had hoped our government would do. Under the authorship of Ian Milne they have produced a comprehensive Cost/Benefit analysis which is essential reading for all in government and policy makers. This review by a distinguished Conservative MEP follows:-


I do hope you and all your colleagues will read this important book and be properly informed, for the first time, regarding this important issue.


With kindest regards, xxxxxxxxxxxxxxxxxx bw

Civitas has produced absolutely the best and clearest case for British withdrawal from the EU that I have ever seen. It is astonishingly credible and concise. You can read the main body of it in a quarter of an hour, though the appendices would take longer. The appendices themselves, packed with statistics, are a vital resource for all involved in the great EU debate. The paper is written by Ian Milne, who has a distinguished track record as a commentator on EU affairs.

Milne presents trade statistics that clearly show the declining relevance of the EU to Britain’s position in the world. He points out that the EU’s share of global GDP and world trade is set to halve by 2050 while the rest of the world will grow. Much of that growth, fortuitously, will come in the Commonwealth, which we have shamefully ignored since our accession to Europe.

Some say that the costs of EU membership are worth it for access to the Single Market. Milne retorts that credible estimates of the cost of membership (including regulatory costs) actually exceed the value of our UK exports to the EU 26 (EU minus the UK). He notes that the EU structure (a Customs Union with a Single Market bolted on) has not been emulated anywhere else in the world. In fact Customs Unions are an idea whose time has come and gone. Milne says that the costs of collecting duties under the Common External Tariff exceed the amount of duty collected. It is a pointless exercise.

The paper summarises the likely impact on key economic sectors of leaving the EU, and concludes that most would benefit and none would be significantly harmed. He points out that just about all credible Cost/Benefit analyses of EU membership show that costs outweigh benefits as did the Swiss government study in their case. Our government refuses a formal Cost/Benefit analysis, presumably because it knows what the answer would be. The paper goes on to analyse the post-EU options, which loosely speaking are European Economic Area (EEA); EFTA (like Norway and Switzerland); or leaving altogether.

I have always argued that on leaving the EU, the UK would certainly be able to negotiate a free trade deal with the rump-EU. It turns out that we don’t even need to do that. As signatories of the EEA Treaty, we would remain at least to start with in the EEA, and therefore in a free trade deal with the EU, automatically. We may decide not to remain permanently in the EEA Milne makes a strong case that leaving altogether is the best option but at least on leaving the EU we should have a free trade deal in place pro tem, without having to negotiate it.

Milne’s last section “The Road to Self-Government” is a sheer delight. It consists of a draft letter to be sent jointly by the British Prime Minister and the Leader of Her Majesty’s loyal opposition, to EU heads of state and others, in the aftermath of a NO vote in an EU Referendum, informing them of the nation’s decision and setting out the steps we propose to take to facilitate the transfer to full independence. He refers to the effective date when the transition is completed as “I-Day”.

If I could suggest just one slight improvement, I’d go the whole hog and call it what it will be: “Independence Day”. If you care about the prosperity of our country and the survival of British democracy, please read this paper.

By Roger Helmer MEP