The UK and the EU: the case for Out

Jon Moynihan, co-principal and chair of Ipex Capital and a board member for Vote Leave, lays out the argument to leave the EU ahead of the UK referendum at the end of this month.

Let’s review four diverse but generally acknowledged truths about the EU and our membership in it.

First: The EU is the major low-growth zone in the world – its economy is still about the same size as before the crash in 2008.

Second: The EU is the global specialist in youth unemployment – twice as high as in the average OECD country.

Third: The EU prevents innovative companies from succeeding. For example, the major successful digital companies – Google, Facebook, Instagram, Twitter, Apple, Microsoft, etc – have emerged consistently from the US, not from the EU. The EU’s response to such innovative success is to go after these US companies with allegations of anti-trust and with large multi-billion Euro fines, rather than working to encourage innovation from Europe. This is typical across industries: the innovative companies crushed, the incumbents happily lobbying Brussels to tilt the rules in their favour.

Last: Our own membership of the EU has seen multiple different industry sectors in the UK collapse and disappear, ranging from the eradication of the clinical trials industry in the UK, where we used to be a world leader; to closure of many energy-intensive companies; to the migration of the art auction business, again where we used to be a world leader; to the loss of many tens of thousands of jobs associated with our fisheries industry. This last example additionally saw the collapse in fishing stocks around our coasts.

I hope you agree that it’s important, as a UK voter, to form a view as to what these outcomes mean about the EU project; what they mean about the UK’s future in the EU.

An informed voter should reflect on the lives, particularly the young lives across the EU, not just in the UK, blighted by low growth and high unemployment; should reflect on the lack of innovation and thus the lack of job creation; on the hostility to challenger companies with breakthrough technologies, indeed, on the hostility to science itself; on the casual wrecking of industries through the imposition, by Brussels, on us, of directives, rules and laws that were the result of lobbying by large companies and governments from other countries in the EU.

If you, as I do, see these factors as important to your vote, then I would argue that you quickly see the EU has an economy that is designed to make economic stagnation almost inevitable. The EU mandates an economic system with high government spending, major disincentives against hiring young people, an anti-science and anti-innovation bias, and detailed prescriptive rules made by Eurocrats who think: “we know best”, rather than governing through laws made by democratically elected and answerable parliaments.

Remainians are operating a form of conjurer’s distraction on voters by talking exclusively and excessively about trade with the EU, as though that is what will drive success in the UK’s economy in the coming years.

Apart from the fact that little will change in the UK trade with the EU trade if it leaves – the rising surplus in trade with the EU guarantees that – trade with the EU is actually the smallest and least important part of the three pillars of our economy when compared with trade with the rest of the world and and trade within the UK itself. As a share of our overall GDP, trade with the EU is rapidly shrinking. By 2020, only 10 percent of our GDP will be from trade with the EU. Trade with the rest of the world will be 20 percent of GDP – twice as much.

If we left the EU, we would finally be allowed to negotiate our own trade deals, ones that are in our interests and allow us to sell our products and services to those non-EU countries. Even more important, if we leave the EU, we need no longer accept every EU rule on our own economy. Some rules we will keep, but the more absurd we can remove, thus liberating our own economy to grow better and faster.

The claim by Remainians that the EU is “the largest market in the world” relies, again, on a conjurer’s trick: it is only true if you include the UK! From the point of view of exports, we are only interested in the rest of the EU, which is a smaller market than the US, smaller than China, smaller even than the Commonwealth. And the EU is growing so much less than any of those markets. Its importance to us as a market become increasingly insignificant.

We need to avoid the UK being dragged further down the EU road of lower growth, higher unemployment, minimal innovation, high tariff barriers to the rest of the world.

I invite readers to ponder the four points I listed; decide for yourselves what are their causes, and come to the conclusion – I don’t think any other is possible – that to resolve them, we need to vote to leave the European Union.

Jon Moynihan is co-principal and chair of Ipex Capital and a board member for Vote Leave.