The cases for leaving or staying the EU were put forward by former British Chamber of Commerce director general John Longworth and Lord William Hague at the VitalityLife Leadership Summit 2016 on Tuesday.
Longworth claimed leaving the EU would save the UK money and prevent corruption from the EU spreading here. He blamed youth unemployment on migration to the UK and he claimed that Scotland would stay in the UK in the event of a Brexit.
Hague said the UK is already in a good position within the EU, having opted out of negative aspects of the union like joining the euro. He claimed immigration wouldn’t be any different if the UK left, a vote for a Brexit could break up the United Kingdom and Europe would be more splintered and divided if we left, helping to strengthen global threats from the likes of Russia.
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Longworth claimed GDP growth would increase by 1.1% per annum if the UK voted to leave the European Union because of the money saved from membership.
He said: “If we leave the EU and don’t get a deal on trade so what? We get an additional 1.1% of GDP growth.
“That’s one of the fallacies of leaving the EU; that we cannot benefit economically. On the contrary we can.”
He also questioned the value of being in the single European market which he felt blocks the UK from trading with developing parts of the world such as Africa.
He claimed the single market isn’t designed for the UK, adding: “90% of the private sector UK economy is services. There is no single market in services other than wholesale banking so the single market doesn’t exist for the vast majority of our economy.”
The Vote Leave campaign put the cost of being in the EU at £350m a week, although once the UK’s rebate is included – which was negotiated by Margaret Thatcher in 1984 – the actual contribution is around £248m a week.
However Longworth suggested the UK could lose this rebate in a few years’ time.
He said: “[The] rebate will be renegotiated in 2020 and it’s highly likely that if we remain in the EU it will be removed from us because it’s a voluntary rebate that the EU decides whether we receive or not.”
As it stands Longworth felt European migration into the UK is creating a low wage, low productivity and low skilled economy.
He said: “There is no incentive for companies to raise wages when they have a supply of cheap labour.
“That’s bad for the economy overall because wage growth leads to consumer spending and it produces perverse government policies like an inflated minimum wage which is a one-size-fits-all approach.
“It disincentives businesses investing in skills training because if you can get a supply of cheap labour you don’t need to.
“Therefore we have over half a million unemployed under-25s in the UK which is a national scandal.”
Longworth attacked the EU for being “undemocratic, corrupt and corrupting”.
He said: “It is an organisation that has a huge democratic deficit. 60% of the UK law coming from parliament according to the House of Commons library now comes from Brussels if you were to include the regulations and we should because regulations are directly applicable.
“They never touch a democratic process whatsoever. They are produced by committees of technocrats – It’s fundamentally undemocratic.”
He said the EU is corrupt as accounts aren’t signed off and he didn’t want the UK to be tarred by the same brush.
He added: “People say to us ‘Well you should behave like they [the EU] do; you should ignore regulations like the French or the Spanish do’.
“The reason people invest in the UK besides the language, time zone and capital markets is the fact that we have rule of law and we abide by the rule of law.
“If we don’t behave like we do and start to behave like they do we will be a much less attractive place for investment.”
He also blamed the EU for preventing the UK from supporting its own industries such as steel, ceramics, metals, basic chemicals, wooden products, adding: “They are all at risk and will disappear but we can’t do anything because the EU won’t let us.”
With the Scottish National Party supporting EU membership there is the suggestion that a Brexit would result in the breakup of the European Union.
But Longworth claimed that the SNP doesn’t have the necessary power in Scotland as it stands while he added that if the UK votes to leave the UK the power to call another referendum will reside in Westminster.
He said: “It’s highly unlikely now that the SNP hasn’t got a majority in the Scottish parliament that there will be the onus to call another referendum right now.
“The referendum in any event would be a decision for Westminster on whether a referendum on Scotland is held.
“If the UK is not in the EU it is much harder for Scotland to decide to have a referendum and withdraw from the union.”
William Hague said the UK has the best of both worlds in the EU after winning a number of political battles.
It has already opted out of joining the euro, opted out of a number of European criminal justice operations and David Cameron received assurances that the UK will not be part of ‘ever-closer union’.
Hague said: “By a series of negotiations and compromises over a 20-year period we have a uniquely advantageous situation compared to other countries.
“We have unrestricted access to the whole of the European single market but we haven’t had to give up the border controls.”
He rubbished any suggestion that Turkey would join Europe, saying it could take decades for such a thing to even be considered, while he also ruled out the creation of a common European army.
Hague said: “The idea we could be brought into further European integration and centralisation is now out of date.
“As foreign secretary I never found it so difficult to get my way in the European Union on foreign affairs and on relations with the rest of the world like imposing sanctions on Iran for example.
“We do gain a lot of influence from being in the EU in my personal experience.”
Hague felt immigration is valuable for the UK economy and didn’t think leaving the EU would reduce the numbers of people coming to the UK anyway.
He said: “They predominantly come here for work and they add to our tax receipts rather than reduct from our expenditure and wealth in this country.
“The level of immigration is set by the economy, not by the European Union.
“It happens because there are jobs to fill and I honestly don’t think the level of immigration wouldn’t be much different if we left the European Union.”
He laughed off suggestions from the Leave campaign that the UK should adopt an Australian-style policy on immigration, as he added that the levels of immigration ‘down under’ are twice as high as the UK’s in proportion to the population.
According to Hague most businesses want to stay in the EU because of the uncertainty leaving would bring, especially since few have been put in place regarding where the UK goes from here if it leaves. He said: “Economics is an art rather than a science – it’s based on confidence.”
Hague told the crowd that leaving the EU would create “the messiest divorce in history”, as it took Greenland three years to withdraw and the only major topic to debate was fishing.
And this is at a time when free trade agreements are harder to put in place, as Hague added: “We would be trying to replace our entire trading arrangements with the European Union and 58 countries around the world at the time when free trade is falling out of favour.
“That is like saying a storm is coming – let’s learn to sail.”
Scotland and Northern Ireland
Hague said Scotland would likely break away from England in the event of Brexit, while Northern Ireland would suffer by having to introduce a hard border with the Republic of Ireland.
Hague said: “If you are a Scottish nationalist imagine if Scotland votes to remain in the EU.
“You can now make a really good plan of how you are going to exploit this and tear the United Kingdom apart.
“The stage would be set in four or five years which would be the best chance they would ever get to become independent.”
He added: “Where is the UK in the world if we leave the EU and they leave us? We would start to look a bit silly – we would be an object of pity in the world.
“It would be much more complex in Northern Ireland where the peace process has been predicated on common membership of the European Union.
“An open border would suddenly become a hard border.”
He said: “These are not little details; they would become massive crises after departing from the European Union.
“I know a lot of people voting to leave think of themselves as patriotic and so on but if the risk is that our own country disintegrates beneath our feet and the people of Northern Ireland are placed in a difficult position… I don’t find it very patriotic.”
Unity against greater threats
Hague said the world is becoming more volatile and unstable and therefore the UK should continue to have an internationalist approach to keep things stable.
He said being in the EU unifies Europe in the face of global threats from the likes of Russia and so-called Islamic State, while the UK also binds the EU with America.
As it stands Hague reckons being in the EU gives the UK a global influence which would be irrevocably damaged by the UK losing its seat at the table.
He used the example of Russia’s ongoing military intervention in the Ukraine as a demonstration of threats which demand unity.
He said: “The great danger is having a preoccupied, splintered and divided Western World.
“We have relied since the Second World War on America having a generous internationalist policy.
“It’s partly the UK being in the EU that binds together America and Europe. Together we brought sanctions on Iran that brought them to the negotiating table. It was the UK sitting at the table in Brussels that helped America and Europe act together.
“When we put sanctions on Putin and his cronies 18 months or so ago that probably couldn’t have happened without Britain sitting at the table in Brussels, otherwise America and Europe would have had a different position.
“The UK is a strong force where it is sitting now for the effectiveness of Western Alliance – and there is a need for that in the years ahead.
“The UK is a country that can really move the dial in world affairs because it is a member or nearly everything.”
No turning back
Hague warned that if the UK votes for Brexit there is no going back.
He said: “If we vote to leave we’re leaving – there wouldn’t be a renegotiation.
“There will be democratic legitimacy in the result even if it’s close.”