There is nothing splendid about isolation. We should “Remain” in the EUby George Osborne / June 9, 2016 / Leave a comment
Published in July 2016 issue of Prospect Magazine
The decision facing Britain on 23rd June is the most fundamental for a generation. The referendum on whether we remain in or leave the European Union is more important than any general election. It’s true that the choice between our two main political parties is more stark than at any time since I was a child. But our political system means that every five years, voters know they will have the opportunity either to endorse the party of government or remove it from office. The decision on whether we remain members of the EU and the single market or quit both, by contrast, will determine our country’s fortunes and its place in the world for decades to come.
Let’s be clear: there will not be another chance to settle this question, no coming back for a second go. Do we “Remain” or do we “Leave” the EU? The most important thing to consider for me is what the referendum means for Britain’s economy.
As the country’s Chancellor for the last six years, I feel keenly my responsibility to say it as I see it. Doing all I can to safeguard and promote jobs, livelihoods and aspiration has been my driving motivation. Difficult and sometimes unpopular decisions have been made—always in the interests of the working people of this country. Britain has made great strides since the financial crash. We’ve helped businesses create over two million new private sector jobs, cut the deficit we inherited by two-thirds and led the developed world when it comes to economic growth. It’s clear that all of this is on the ballot paper on 23rd June.
It is beyond any doubt that there would be a profound economic shock across the UK if we vote to “Leave.” It’s totally disingenuous to claim we could negotiate some other deal, where we have some sort of access to the EU’s single market but don’t have to accept any of the costs and obligations of EU membership, including free movement of people. My French and German counterparts have made it absolutely clear in recent weeks that is not on offer—and how could it be?
How could other European countries give us a better deal than they have given themselves? We may be the world’s fifth largest economy, but it is a hard fact that while 44 per cent of our exports go to the rest of the EU, less than 8 per cent of their exports come to us. No trading relationship we might negotiate could be better than membership of the single market—the world’s biggest free trade area, allowing both consumers and traders to access a market of 500m people. There would be less trade, less investment, fewer jobs, higher prices and lower wages. This is just common sense, and supported by all credible economic opinion.
We know that higher living standards are ultimately driven by long term improvements in productivity: in other words, increasing the value of what British workers produce per hour. It is a tenet of British economic thinking over centuries that economic openness helps raise productivity. That’s because greater openness to trade and investment increases competition, enhances incentives for firms to innovate, and gives them access to finance. All this means they are better able to invest and employ people, and it gives consumers greater choice and lower prices.
Of course there are a few who advocate a completely different economic approach—a closed, command economy, and no free trade or competition or private business. But that has never been the consensus in Britain, or the rest of the world for several decades.
So aside from the economic shock that would engulf our economy in the immediate aftermath of a vote to leave, this means we would be permanently poorer. Even some of those in the “Leave” campaign admit it. Some actually argue a hit to people’s jobs and livelihoods is a price worth paying—something I profoundly disagree with. It is painfully apparent that the “Leave” campaign has no economic plan and is instead making it up as it goes along. In the course of this campaign, they have suggested that they expect Britain would still be negotiating an EU exit in 2020—meaning years and years of damaging uncertainty, all in order to end up with a worse deal than we have now.
Of course, there are other questions than economic ones to consider when voting on 23rd June. We have heard much from the “Leave” campaign about immigration, but the system they propose would mean no access to the single market and has actually encouraged higher levels of migrant workers in Australia then we have in the UK. The way to control immigration is surely not to crash our economy, but to ensure, as we will, that those coming to this country are in work and pay in to the system before they are able to take out in terms of benefits and tax credits.
Another question I would urge Prospect readers to consider is Britain’s place in the world, and its history. Why are we Great Britain, and not little England? I would argue that it is because for centuries we have faced out to the world, engaged in its institutions, worked with international allies and been confident in making our arguments. There is nothing splendid about the isolation we would risk by ignoring this heritage, as well as the lessons of British and European history, and voting to “Leave.”
Quitting is simply not the British way. For all these reasons, I hope people will vote to “Remain” on 23rd June.