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Scott’s Blog

Brexit Myth Two: Millions of jobs and trade will be lost

Friday, January 22, 2016

 

It’s often argued that millions of jobs will be lost and trade will decrease between the UK and the EU if we were to leave. And the evidence for this? Mostly, because Nick Clegg says so. Remember him? 

The former Deputy Prime Minister, and Leader of the Liberal Democrats made numerous statements with the myth that three million jobs will be lost if we left the EU. This is absolute rubbish of course. I would even go so far as to say that jobs and trade are in no way linked to our membership of the EU. 

If they freeze us out; European industries will suffer


The countries of the EU enjoy an annual trade surplus (meaning that we buy more of their stuff that they do of ours) with the UK. It is in excess of £72 billion and rising. These are figures independently verified by both the Office of National Statistics and Euro Stat the statistical arm of the European Commission.

The idea that in the event of Brexit the EU would want to deny the UK a free trade agreement and access to the single market is absurd and complete fantasy economics advanced by those who argue differently. Can you imagine the EU denying the UK access to European markets and the UK denying the EU access to our markets? Would we see the bosses of Mercedes Benz, VW, Audi, BMW, BASF, Siemens, Saab, Seat, Renault, Citroen, Peugeot, Bosch and many others agreeing to potentially lose their market share in the UK and the job losses that would follow just so that the European Commission can spitefully punish the UK for daring to leave the club? Not likely.

In fact, these industries would be the least of EU leaders problems, for while they might want to risk ‘outside’ companies gaining an advantage in the UK car and technology markets, the French, Italian, Spanish, German and Danish wine and beer industry that sell over 2 billion bottles of wine and beer to the UK consumer each year would not stand for a loss of market share. Can you imagine if French farmers and Spanish fruit producers cannot sell their products competitively in the UK; they would start burning the place down. 

So, the reality is, it is not in the EU’s interest to impose penalties, sanctions or trade tariffs on the UK consumer because they choose to leave the EU. Moreover, World Trade Organisation (WTO) rules are such that there is very limited scope for sanctions and penalties if the European Commission decided on such a suicidal course of action.

We'll have huge savings from membership fees and economic freedom


Outside of the EU, evidence suggests that UK trade would boom with the freedom to conduct our own free trade agreements with the rest of the world without interference from the EU. The huge savings from our membership fees and being free from cumbersome regulations and directives would give an added boost to the British economy. 

The trade figures are really quite interesting when you look deeper into them. The British economy actually is around 80% domestic, or the level that it trades with itself. Only about 20% of the British economy actually trades its good and services across the world. Of that 20%, some 44% (and falling) of our trade is registered with the EU. 

But that headline figure is not all that it seems. For example, goods transferred through EU ports which include, Belfast, Liverpool, Rotterdam and Antwerp are classed as imports into the EU even if they are then re-exported to other markets around the world. Massaging the figures is nothing new to the EU, who of course has not had their accounts certified for twenty years, but those campaigning for us to stay in the EU would never tell you that. The actual figure of our goods and services traded annually with the EU is more like 33% and falling.

So the jobs and trade argument is completely bogus. Brexit is more likely to bring additional prosperity, trade and jobs rather than the other way around. On this point, the Pro-EU camp is becoming increasingly desperate. But their campaign of the politics of fear was aided and abetted this week in Davos. We were treated to the spectacle of a British Prime Minister, who pretends to be on a renegotiation mission, on his knees begging the bankers who crashed the world economy and fat cat businesses that pay very little tax, to support his campaign to remain in the EU. With friends like that Prime Minister, who needs enemies! 

Next time I'll look at the impact on our national security.



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