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Single Market etc, some thoughts


Dave225

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The Single Market and Free Movement of people appear to be the 2 main planks on which the arguments both for and against staying in the EU rest. In order to have access to the former all countries must allow the latter to be operable. These are the arguments used by those who wish us to remain in the EU and warn that losing them will be a disaster for the UK. However, as with many things these arguments are not as clear cut as they first seem.

 

At first glance having free access to a single market comprising 450 million people seems like a good thing and I am sure a number of our industries benefit from it. But we do not actually market our goods to 450 million people as we export things that not everybody needs or can afford. I suspect we have within that market core countries where our goods and services are in demand and others where we export probably very little. For example I lived in Hungary for a good number of years and you do indeed see Tesco supermarkets in all the major towns. However, do not expect to see the whole range of goods that you see here, on sale. The majority of goods are locally supplied with just a small area devoted to ‘British’ goods, so although I do not doubt Tesco makes money, it is not being mirrored in exports from the UK. I would estimate that if we looked at our actual markets then our ‘single market’ probably accounts for about 200 million people. Still sizeable but if we compare that to the overseas markets that have already offered us trade, then not quite so significant. Those who wish us to remain in the EU also argue that if we are not in this Single Market then we will be hit with tariffs. As the trade balance between the UK and the EU is approximately 60/40 in favour of the EU it would seem strange for them to wish to go that route as this would result in many people in the EU being made unemployed. Now maybe Brussels is stupid enough to do this but I suspect the backlash would be rather fierce. The UK is Germany’s 3rd largest export market but UK imports to Germany only account for 4% of the total so for them to pursue trade tariffs does seem rather foolish. The nature of the goods the EU exports to us is also important as it encompasses large quantities of foodstuffs. These can be obtained elsewhere relatively easily so again the pain will be on the EU side primarily. The other factor of being in the Single Market is that we are not allowed to make trade deals with countries outside except with EU approval and the costs they impose usually make any such deal uneconomic. So the Single Market is actually strangling our ability to trade. The other argument is that the Single Market allows free movement of business. But again is that really true? For example many of the UK rail operating companies are owned by French and German state bodies, but no UK company has access to these markets as 'obtructions' are always placed before us. Spanish and French Companies own parts of our energy networks, but 'national interets' prevent us being involved with theirs. To me it seems a one way Single Market. Financial Services is an aera where we do well but even here the doom mongers of massive job losses seem to have been dropped by the banks and financial institutions themselves. Yes, some movement may occur but you need trained people to make it work and they are here in the UK.

 

 

The free movement of people is the other main plank of the argument and is in fact probably the main cause of the vote in favour of leaving the EU. However, in or out of the EU the free movement of people will not stop. In fact contrarily if you look more closely we at this point in time do not have free movement. If we travel to the EU mainland we are checked in with our passports and when we leave we are checked out again. It is only within Schengen that there are no checks. If some of the EU countries in the east have their way then this free movement will cease whether we are in the EU or not, so preserving that seems to be unlikely anyway. I lived and worked in Holland in the 80’s and although we were both EU members I still had to get a residence permit and work permit. Not that big a deal but the Dutch insisted on knowing all about me and whether I would be a drain on their system or not. Re-introducing that to the UK does not seem to me to be that big a deal. It would certainly allow us to filter out those who would be of benefit to the UK and those who would not. It would certainly not stop travellers in either direction who are moving as tourists Those of us old enough to know life before the EU certainly had no problems travelling the world, but if it were to reduce the arrival of beggar gangs to the UK , for example, would that be a problem?

 

So, my conclusion is that looking at these 2 tenets of the arguments being vociferously made for us to stay in the EU, I am at a loss to see the where and why of that argument. What is it they are so scared of losing that they would do anything to keep us in the EU? One must of course exclude Nick Clegg and all other ex EU employees from that discussion as it is well known that they have a vested financial interest in staying in the EU.

 

By the way just to add a final thought. We are often accused of not being good Europeans. Maybe I am wrong but in my mind we are probably the best Europeans of the lot. We are the only EU nation who has actually gone to the defence of other EU nations and made big sacrifices in that regard. I do not recall Sweden/Spain and Portugal for example doing very much in the 1940's. If being full of jiggerypokery and back stabbing is a the definiton of being a good European, then I am quite happy not to be one.

 

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Some interesting points raised Dave.

 

My perception is that it is UK consumers that are obsessed with German consumer goods - VW/Audi group cars and Bosch electrics/eleetronics being just two major players we seem convinced are better than all others?

 

I get the feeling that the EU is less enamoured with UK consumer products and 'Which' reports on quality and durabilty, and in some cases attitude towards customer care, leave much to be accomplihed? Vauxhall cars and the Whirlpool tumble drier fire risk fiasco being just two examples.

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Hello Rich. Hope you're OK?

 

I'm inclined to agree - I think Dave is rehearsing his objections while attributing the blame to the wrong quarter in a number of cases.

 

If we import engineered goods from Germany, why do we do that? Why don't we buy what we make instead? How many washing machines, cars etc do we actually produce? Actually make in the UK, for UK based companies, rather than bashing out for a foreign owned company, or importing from China with a UK company logo stuck on? We used to have enough home grown manufacturers, so what happened to them, and why?

 

If our public utilities are foreign owned, who decided to sell them off? Why was that, and who benefited?

 

Ditto our public transport companies? We could have done as others did, and declared them vital industries or whatever, but we didn't. Why?

 

The Germans (and others) export all over the world, and do so within the same export rules as apply to the UK. So, why do these rules seem to be so restrictive for the UK? Do we just not try hard enough, are we insufficiently educated compared to the Germans, or do we have little to export because we produce so little in our own right (most of our production being foreign owned, as Dave points out)?

 

Teresa May is off to India for trade talks on Sunday. What might we sell to India, and what might we buy from India? I would expect this to be another one way street, with goods coming in, and only jobs going out, as with China. Is that so smart a move? Our merchant venturer tradition tends to work against our (the man in the street's) interests, IMO. We buy cheap, and consequently lose jobs, so our industrial economy shrinks, instead of growing. The money is all in the City of London, in services - mainly financial - and it largely stays there. Why?

 

Half our immigrants come from outside the EU. Why haven't we reduced that? Why did we take in so many from the eastern block, when other EU states rationed access? As Dave says, he had to register in Holland, so why wouldn't the Dutch have to register to work here? Is there actually a difference, and if so how has it come about? As Dave also says, we have retained our frontier, of which I assume he approves, and there seems to be mounting pressure from other EU states to do the same, or to redefine who qualifies for free movement, and when. So, if that were done, I assume he would be happier.

 

Good Europeans? Those wars were what gave birth to the EU, and were before the EU was "invented", so whereas we were deeply involved, it was not as "Europeans", it was as allies (of some) and enemies (of others). By that analogy, the Americans are the biggest Europeans of all! :-)

 

But look back at all those EU inspired problems Dave correctly lists above, and pose yourself the answers to the above questions. Then consider: might it just be that we have actually imposed most of those problems on ourselves, by failing to run our industries better, by failing to develop and expand them, by failing to safeguard our once proud reputation for quality, and by the actions, frequently on grounds of political ideology, of our governments?

 

And then ask, why was that, and how will that suddenly change to allow us to sell to the world what we don't make, and we don't want to buy from ourselves? I don't see the dead hand of the EU in any of that, rather the hand of successive UK governments and industrialists who have, in effect, sold their own country short for silver.

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The last paragraph of Brian's post sums the situation up perfectly. .

 

Dave's Dutch experience is very interesting. I wonder how they implemented the freedom of movement rules into their domestic law and why they appear to be able to enforce the rules better?

 

There is a very readable paper on the freedom of movement rules and the current challenges, particularly in relation to the migrant crisis and recent acts of terrorism on European soil which can be found here-

 

http://www.europarl.europa.eu/atyourservice/en/displayFtu.html?ftuId=FTU_2.1.3.html

 

Veronica

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