The focus of Westminster and almost the entire political media yesterday was on David Nuttall’s motion for a referendum on Britain’s membership of the European Union, which was rejected last night by 483 votes to 111. Also published yesterday was an Economist/Ipsos Mori issues index which shows that almost 7 in 10 (68%) of people rank the economy as the issue that currently most concerns them, the highest level since the Coalition came to power. The simple fact is that yesterday’s EU debate has been a sideshow from the real issue at hand: Britain’s stuttering economy. Nevertheless, two primary arguments are consistently put forward in defence of the significant amount of column inches, intellectual capital, not to mention parliamentary time, which has been invested in debating the issue of EU membership over the last week. I will address them in turn.
The first, and most common cited by the predominantly Conservative pro-referendum camp is that their cause is supported by public opinion. Indeed, a Guardian/ICM poll this week would go a long way to support this view, asserting that some 70% of voters want a vote on Britain’s EU membership, and 49% would vote for us to leave. While significant, this poll is misleading. Unlike the Economist/Ipsos Mori poll the Guardian’s poll simply asks people their views on Europe. The significance of the Economist/Ipsos Mori issue index is that it ranks Britain’s membership of the EU alongside other issues. As aforementioned the economy is the first issue that is of concern to people, and in second place are unemployment figures. The EU ranks 17th, behind inflation/ prices, poverty, public services and fair pay. What most people want right now are a job and a wage from which they can sustain themselves in an economy that isn’t growing.
The second argument advanced this week has been more nuanced however, and does go some way forward toward addressing some of the above criticism. This argument is that the EU itself is a significant drain on our ability to grow our economy. Hence it is the crippling regulation and centralised control of large parts of our economy from Brussels which strangles innovation, and ties us in to a faltering eurozone crisis. As it happens, I am sympathetic to much of this view. The problem is I don’t think it’s a debate that we should be having right now.
At present the British economy has is a demand problem, and no amount of supply-side tinkering will address that. As Jeremy Warner forcefully argued in the Sunday Telegraph, “in conditions where external demand is plummeting, no amount of supply-side reform, investment-friendly tax cuts, employment incentives or removal of red tape is going to prevent the economy sliding back into recession.” Yes, The EU is often bureaucratic and lacks accountability, and yes, there is no doubt a business case for repatriating employment rights to address problems with legislation such as the temporary workers directive. The problem is that the Tory right is picking the fight at the wrong time. David Cameron is correct; this fight should be fought at a different time and in a more nuanced manner. The upcoming ‘limited changes’ to the Lisbon Treaty will provide one such opportunity.
It is clearly better to be at the table and try to negotiate a plan to resolve the eurozone crisis in a manner which suits Britain’s trading interests rather than acting like spoilt children and demanding to leave the club altogether. With Conservatives MPs, members and voters unwilling to countenance more quantitative easing, or direct infrastructure spending, it seems puzzling that what is of primary importance at present is to debate membership of an organisation which constitutes our largest trading partner. Perhaps the Government’s confrontational tactics have been slightly clumsy, but Cameron’s determination to face down those in his party in favour of the wider national and economic interest should be commended.