This article is from the latest e-publication “Remain for Change: Building European solidarity for a democratic economic alternative” from EREP, the network of Economists for Rational Economic Policies.
The Chancellor’s Dubious Defence
As a committed supporter of EU membership I watched with some dismay Chancellor George Osborne’s high-profile defence on 18th April of British membership in the European Union. The alleged crushing monetary cost of Brexit constituted the central message delivered in his performance in Bristol at the National Composite Centre. For progressives – and any open-minded voter - the problems with Mr Osborne’s championing of the EU cause were 1) the Treasury cost estimates are dubious to the point of absurd, 2) the Osborne argument seeks to inspire fear by appealing to narrow self-interest, and 3) for reactionary political reasons, the central benefits of the EU were ignored.
The Treasury’s Futurology
Several times during his speech, and in the party-line presentations by Cabinet colleagues Elizabeth Truss and Stephen Crabb, we heard that after Brexit “in the long run GDP would be over 6% smaller and Britain would be worse off by £4,300 per household”. Obviously intended to scare the UK population, his cost estimate suffers from myriad failings that place it in the same category as tooth fairies, worldly visitations of Christian saints and compassionate Conservatism.
First and foremost, the Treasury’s Brexit estimation qualifies as an exercise in the impossible. The Treasury uses an econometric model to generate the cost estimates through 2030. By necessity this means using past data to generate parameters that the modellers then employ to crunch out projections over the coming fourteen years. No competent statistician believes that parameters based on historic data would remain stable over a decade and a half even in the absence of political, institutional and policy changes.
Attempting to make projections through 2030 when the exercise itself investigates the impact of an event certain to dramatically alter the context of Britain’s external economic relations goes beyond absurd, to politically-motivated foolishness. There can be little doubt that exiting the European Union would involve a short term cost to the UK economy, which the Treasury model does not attempt to estimate [a later report purports to address this]. Whether that short-term cost would be small, medium, large or catastrophic is impossible to assess rigorously. As for the long-term impact, that is unknowable.
Estimates for fear & loathing
Public debate should have as its purpose to aid people to make an informed decision. Yet the political purpose of these estimates of the cost of leaving the European Union is to frighten the electorate, not to inform.
This technique has served the Conservative Party well, invoked for the independence referendum in Scotland and the UK general election of 2015. In both cases the central message of from the Tories was a negative one – voting for Scottish independence and the Labour Party would have disastrous consequences on individual finances. This crass appeal to personal self-interest in itself narrows and degrades political debate.
Even worse is its effect when purely negative and designed to instil fear and anxiety. The ‘personal economic disaster’ argument is the Remain equivalent of the anti-immigrant xenophobia of the Leavers. Each plays on fear – “stay in the EU or disaster will strike you and your family” say the Remainers; “leave the EU or disaster will strike you and your family” say the Leavers.
The voter is left to decide which he or she fears more, and assess the likelihood of each occurring. Since none can provide a reliable probability for either outcome, the referendum debate becomes a propaganda contest in which each side seeks to generate the greater fear among the public. That is no way to run a democratic election in a country of educated voters.
Barriers to Waging a Positive Campaign
People do have self-interests but they are not slaves to them. It is quite reasonable for voters to reflect on the likely impact on their material welfare of leaving the EU. It is also relevant for them to consider the effect of immigration on pay, housing and public services. The degradation of public discussion and the democratic process itself results when short term self-interest crowds out all other issues.
Assessing one’s self-interest should be derivative from first considering the central issue – should the people of Britain be part of a project of trans-European cooperation and solidarity? Or, does a better future lie in leaving a project so flawed in its present form? Answering this question requires Remainers, myself included, making a positive case for membership in the European Union.
Once we consider positive arguments, the question immediately presents itself – why do David Cameron and his Chancellor focus relentlessly on fear and negativity? The answer is quite simple. The Conservative Party and especially its leadership oppose all the aspects of the European Union that serve the interests of the 99%.
At the Bristol event the supporting comments by the Secretary of State for Work and Pensions (Stephen Crabb) showed clearly the class interests of the government’s defence of EU membership. The literally-minded might expect Mr Crabb to speak on his putative speciality, work and pensions. Instead, he began this talk by telling his audience “I want to talk to you about global trade” and never deviated from that pledge.
At no point did he make any reference to the most important EU measures affecting “work and pensions”, the Social Chapter, that guarantees the basic rights of the working people in all member countries. There is an obvious reason that no Tory politician would cite the Social Chapter as a reason for the British electorate to vote to remain in the EU.
The Conservative government would dump it if it could, evidenced by David Cameron in July 2015 demanding (unsuccessfully) the right to “opt-out” from the Chapter as part of his faux renegotiation of UK membership. It is the TUC that makes the “stay in” case on the basis of protection of worker rights, never the Conservative government (nor to my knowledge any Conservative MP).
Accounting for Nonsense
Given a free hand, the Conservative government would remain in the European Union and declare the Social Chapter null-and-void. The original, shockingly authoritarian version of the Trade Union Bill was a major step in that direction, clearly violating the EU’s Charter of Fundamental Rights and the Council of Europe’s Social Charter, as well as ILO Conventions, while the revised version (now an Act) still retains infringements (listen to my radio interview with Matt Wrack head of the Fire Brigades Union, and also with Silkie Cragg of the TUC).
We should have no illusions about the current political ideology of the European Union itself, as evidenced in the work of its executive the European Commission. Today, that ideology is no less flagrantly pro-business than the Tory government. Given their unstinting support for sustained eurozone austerity, despite its economic failure, it would seem that the Commission and perhaps a majority of the member governments would be happy to roll back these long-standing legal bulwarks against the suppression of worker rights if they could. This is a case in which the Byzantine labyrinth of EU Treaties serves the interest of the majority of Europeans.
Why did Mr Osborne stand before a gathering of knowledgeable people and talk nonsense, peddling statistical snake oil that he could never hope to defend for its technical credibility? He did so to send a clear message, that his government would faithfully serve the interests of business and especially finance capital, in its support of EU membership and its opposition to the rights of labour. The Tory government seeks an EU in which capital dominates and protection of worker rights is non-existent.
If export markets are the most important issue facing the British population in the Brexit debate, then the referendum degenerates into a bicker among various factions of the UK business elite. Arguments over individual self-interest obscure the true interests involved, the interests of capital.
There are positive arguments in the interest of the 99% for membership, protection of human rights, support for the rights of working people, and, most important, reconstructing a social democratic solidarity in Europe that can confront xenophobia, revanchism and racism.
John Weeks is Professor Emeritus, School of Oriental & African Studies, University of London. An earlier version of this contribution appeared in OpenDemocracy (25th April 2016)