With all the arguments about £8bn pounds net going to the EU each year, which is even less when about £1.5bn of EU grants to the private sector are taken into account, nobody is talking about a much bigger number that affects how well off we in Britain are. In 2014 we received over £1,000 billion pounds in investment from overseas. Half of it came from other EU countries. Companies and countries invest in Britain because:
The Single Market is the biggie, because while we are in the EU, businesses here have lower costs to trade with the largest economic group in the world. We can buy and sell the same goods under the same rules in any of 28 countries, and as one of the big three countries in the EU we have a big say in shaping the rules. The same applies to trade in services, which is bigger for the UK than goods. If our financial services take a dive, the value of the pound drops, and we have seen this in reaction to the polls in recent days.
If we lose just 1% of that £1tn, the £10bn lost would set us back more than the cost of our EU membership. If we lose 20% of it, the hit to our economy would be bigger than the banking crash in 2008.
Nobody is saying companies will pull out of the UK immediately. But if a big company is deciding which of its factories to put a new production line into, Britain out of the EU will be at a disadvantage compared to countries still in the EU. Because business and trading costs will go up if we are not in the Single Market. Of course, to sell into the EU we will still need to stick to EU rules, but we will no longer have any say in them. They will not be our rules. Added to that, EU Regional Funding helps with investment in some of the poorer regions. That would dry up making it a bit less attractive to invest there.
More than anything else, businesses hate uncertainty. Because nobody can say what will happen if we leave, businesses will see Britain as riskier than in the EU and investment will fall. If we vote Remain, businesses will be reassured that they know what the future of investing in Britain will bring.
When I started work, my employer had four factories, employing hundreds of people. The first one I worked at had many problems and the company was reluctant to invest there. I moved to the shining example where most of the investment was going, and a few years later the old one was closed. Literally demolished, throwing hundreds of people out of work.
Years later, they bought a competitor's factory, and the once favoured factory lost its shine. Investment stopped, and in time it closed. Now instead of a factory employing hundreds of people, there is a cluster of car showrooms and self-storage warehouses, employing a small fraction of the people who used to work there.
I worry that the same will happen to Britain if we leave the EU. If foreign investors can get a better return on investment in another country, because it costs more to do business here, why wouldn't they?
That is why I campaign so passionately to try and persuade people that we are better off staying in. The arguments to stay can be more complicated than the arguments to Leave, but they are stronger.
William Vine 14th June 2016
Did a Government Minister just lie to the nation on the BBC? Penny Mordaunt said that Turkey would soon join the EU and the Referendum was our last chance to stop it. In this she reveals either a disgraceful disregard for honesty or an ignorance of EU law that makes her unfit for her position.
The 2015 EU Commission working document on Turkish accession begins:
Turkey has been linked to the EU by an Association Agreement since 1964 and a customs union was established in 1995. The European Council granted the status of candidate country to Turkey in December 1999 and accession negotiations were opened in October 2005.
The lengthy document runs to 33 chapters listing all the areas under discussion where Turkey has to meet EU criteria to join. There is a long way to go, and many of the chapters have not even been opened yet, despite the application beginning in 1995. An additional hurdle is that all member states have to ratify the accession treaty for a new country to join. That includes the UK. It also includes Cyprus.
Cyprus has been an EU member state since 2004. Turkey invaded and has continued to occupy 36% of Cyprus territory since 1974. Turkey continues to veto Cyprus joining such organisations as the OECD.
Now tell me again, Minister, how soon will Turkey be joining the EU?
William Vine 22nd May 2016
1-2 of 2