One year before the 2016 EU referendum I was Pro EU and would have voted Remain without hesitation. 3 months before the vote I was a Brexit supporter and voted Leave and don’t regret it.
I’ve been interested in politics for well over a decade, like many I spend a lot of time following politics and in 2009 I even built a website in anticipation of the 2010 general election. The site generated millions of visitors and was one of the top sites in Google for General Election UK searches.
I was very pro EU, the very first comment I made on the new site was defending the EU, I wrote:
I don’t want us to leave the EU, financially speaking we are much better off in than out. August 29th, 2009: David Law
If you read my UK Local and European Election Results article you will see I was concerned at BNP MEPs, it was why I started a politics site.
This result concerned me: “British National Party : 943,598 votes 6.2% (+1.3%) 2 seats” felt wrong!
I saw the EU as the future, it was obvious as time passed we’d transfer more power to the EU and eventually the EU politicians and bureaucrats would be as and then more important to our day to day lives than politicians in London. I wasn’t concerned at this, I don’t have a problem in principle with the EURO, an EU army, sharing resources, all the sort of stuff Euroskeptics supposedly worry about: I’m not a Euroskeptic, I like the EU.
Low EU Election Voter Turnout
However I was concerned UK politicians and the media use the EU as an excuse for UK problems and more importantly the British electorate cared so little about European Parliament elections we’ve never even had 40% turnout during the 8 EU elections (June 2019 update: 9 EU elections) we’ve participated in! As a believer in democracy that worries me a LOT!
Almost a decade later I know a lot more about the EU and though I’m still Pro EU (I love the concept) I no longer see the EU as the UK’s best future, I see major risks in remaining and as a country which hasn’t embraced the EU project I couldn’t justify voting Remain.
Also very happy about the demise of the BNP as a political party, it’s pretty much dead and I hope it stays that way.
Few people believe the EU is perfect and many (including myself) believe the EU requires serious reform to thrive long-term. A year before the referendum vote I believed the EU would eventually reform for the better, I had hope.
In the final 6 months before the referendum vote I watched how dismissive the EU was of David Cameron asking for concessions to in effect placate enough UK voters to vote Remain and sadly this killed any hope I had of future EU reform!
How Important UK Membership is to the EU
Consider these facts indicating just how important UK membership is to the EU project:
- The UK is the 6th largest economy on the planet.
- 2nd largest European economy.
- 2nd largest EU net contributor to the EU budget, only Germany contributes more.
- In GDP terms the UK economy is the same size as the 18 smallest EU economies.
Below is all 28 EU member states, the UK economy is equal to these 18 EU countries economies: Ireland, Denmark, Finland, Czech Republic, Romania, Portugal, Greece, Hungary, Slovakia, Luxembourg, Bulgaria, Croatia, Slovenia, Lithuania, Latvia, Estonia, Cyprus and Malta.
|Rank||Country||2018 GDP $|
Will the EU Ever Reform?
If the risk of the UK leaving the EU isn’t a good reason to at least offer to talk about EU reform! What the hell will it take?
This put me on a path to do far more detailed research and I wasn’t happy with what I found.
I’d assumed being in the EU was awesome for the UK economically etc… that’s the Pro EU/Remain narrative. We joined the EU in the 70s when the UK economically was a basket case and joining fixed all our economic problems!
Interesting UK Economic Facts
UK was the 6th largest economy when the UK joined the EU. UK’s placing has moved around the 5th/6th place over the past 4 decades, but overall not a lot changed: sometimes the UK is the 5th and other times it’s France, in GDP terms the two economies over time are equal.
This suggests the UK hasn’t suffered or performed exceptionally well economically, basically it’s done OK. That being said the UK (and France) have underperformed economically when compared to Germany, the German economy has performed exceptionally well as an EU member.
Since joining the EEC/EU in 1973 the UK has suffered FOUR periods in recession totaling 20 quarters or 5 years of economic decline.
- Mid-1970s Recessions – 5 quarters in recession
- Early 1980s Recession – 5 quarters in recession
- Early 1990s Recession – 5 quarters in recession
- Great Recession – 5 quarters in recession
In the 40 years before joining the EEC/EU in 1973 the UK has suffered TWO periods in recession. Expand the period to 46 years and it’s THREE periods in recession and that includes the great depression and a world war!
- 1956 Recession – 2 quarters in recession
- 1961 Recession – 2 quarters in recession
- Great Depression – 6 quarters in recession
I’m not blaming the EU for UK recessions, just showing the narrative EU membership is awesome for the UK economically isn’t straightforward.
UK vs EU Exports of Goods & Services as a Percentage Share of GDP
Interestingly the UK has the lowest exports as a % share of GDP in the EU, France comes a very close second worst. This statistic surprised me a lot, I’d assumed the UK exported a lot, but relative to most EU countries we are the worst!
The EU average is around 45% (Germany 47%), whilst the UK and France are around 30% of their GDP is due to exports.
UK vs German Exports of Goods & Services as a Percentage of GDP
Germany (~47%) as a % share of GDP basically exports 50% more than the UK (~30%) and France (~30%) export.
The Maths: The German GDP is 47% due to exports. The UK & French GDP is 30% due to exports. 47% is roughly 50% bigger than 30%.
The Remain narrative is the UK economy thrives due to EU membership, the EU facilitates an awesome UK export market. Clearly this isn’t the case otherwise the UK’s GDP would be comprised of a much higher percentage of exports like we see with Germany (47%) or the EU average (~45%).
We do OK economically, but it’s not due to exports to either the EU or rest of the world! The UK economic success (6th largest economy as of June 2019 is a success by any measure) is the home/domestic market (generates 70% of the UK’s GDP), in particular in services which the EU in trade agreement terms hasn’t done a particularly good job promoting.
Consider most EU FTAs barely touch services, EU FTAs are goods focused which is only 20% of the UK and France’s economies!
If this were just a UK problem we could blame the UK (successive governments messing up), but this also impacts France. Both the UK and France have mostly services based economies, both economies are pretty much 80% services and where the UK exports the least in the EU, France exports the second least (it’s pretty much the same amount: UK 30.5%, France 30.9% : 2017 data)!
The EU appears rubbish at promoting the export of services and as service based economies both France and the UK can’t take full advantage of the EU trade agreements like Germany can: the German economy is close to 70% services, relative to the UK/France the German economy has a huge exportable goods market (basically 50% bigger) which takes advantage of EU trade agreements.
The UK and France could change their economies to be more goods based, but as a successful services based economy that doesn’t make sense. Makes more sense to negotiate trade agreements which focus more on services (what the UK does well) rather than change the economy to be more like Germany.
Project Fear Pushed Me Towards Leave!
The OTT Project Fear campaign orchestrated by the Remain side didn’t do the Remain side any favours! For those interested in politics the result of misleading the electorate means we don’t trust you. If you tell us there’s risks with Leaving the EU we’d be fools not to listen, but when the warnings are obviously OTT scaremongering we are now in the territory of having to mistrust EVERYTHING you say!
You can only get away with crying wolf so many times before we tell you to piss off!
Take the May 2016 HM Treasury analysis: the immediate economic impact of leaving the EU signed off by and promoted by George Osborne (Chancellor of the Exchequer at the time). Below is the Forward of the document:
The decision that the British people will make in exactly one month’s time – whether to remain in the European Union or to leave it – will affect families, jobs and the future of our country for decades to come.
I promised to set out a serious and sober assessment of the economic facts, to inform this vital decision for our country.
The Treasury document published five weeks ago set out a rigorous analysis of the long-term impact of leaving. It showed that under any alternative relationship with Europe, we would trade less, do less business and receive less investment. Its central estimate was that Britain would be permanently poorer by the equivalent of £4,300 per household by 2030 and every year thereafter. Depending on the new relationship with the EU, these long-term costs could be even larger.
This paper focuses on the immediate economic impact of a vote to leave and the two years that follow. Such a vote would change fundamentally not just the UK’s relationship with the EU, our largest trading partner, but also our relationship with the rest of the world. The instability and uncertainty that would trigger is assessed.
The Treasury analysis in this document uses a widely-accepted modelling approach that looks at the impact of this uncertainty and instability on financial markets, households and businesses, as our economy transitions to a worse trading arrangement with the EU.
I am grateful to Professor Sir Charles Bean, one of our country’s foremost economists and a former Deputy Governor of the Bank of England, who has reviewed this analysis and says that it “provides reasonable estimates of the likely size of the short-term impact of a vote to leave on the UK economy”.
The analysis in this document comes to a clear central conclusion: a vote to leave would represent an immediate and profound shock to our economy. That shock would push our economy into a recession and lead to an increase in unemployment of around 500,000, GDP would be 3.6% smaller, average real wages would be lower, inflation higher, sterling weaker, house prices would be hit and public borrowing would rise compared with a vote to remain.
These findings sit within the range of what is now an overwhelming weight of published estimates for this short-term impact, which all find that UK GDP would be lower following a vote to leave.
The analysis also presents a downside scenario, finding that the shock could be much more profound, meaning the effect on the economy would be worse still. The rise in uncertainty could be amplified, the volatility in financial markets more tumultuous, and the extent of the impact to living standards more acute. In this severe scenario, GDP would be 6% smaller, there would be a deeper recession, and the number of people made unemployed would rise by around 800,000 compared with a vote to remain. The hit to wages, inflation, house prices and borrowing would be larger. There is a credible risk that this more acute scenario could materialise.
My first duty as Chancellor is to seek to deliver economic security and higher living standards for the people of Britain. We already know the long-term effects of a vote to leave: Britain would be permanently poorer. Now we know the short-term shock too: an economy in recession, major job losses and a self-inflicted blow to living standards and aspirations of the British people.
A vote to remain in the EU, however, would be the best way to ensure continued growth and safeguard jobs, providing security for working people now and opportunity for the next generation.
This document provides the facts that I hope the people of Britain will consider when they make this historic decision one month from today.
Chancellor of the Exchequer
This is in relation to a 2 year economic forecast, what the Treasury believed would happen if we voted Leave in June 2016 up until June 2018 (2 years).
That period has long past and the predictions were OTT Unicorn bullshit!
Out of the 8 main data points they got ONE right (CPI inflation) and the depreciation of Sterling in the right direction (was still OTT). The other 6 data points were not only wrong, but in the wrong direction!
Where they predicted unemployment would rise, it fell!
Where they forecast GDP would decline (a recession by Christmas 2016), GDP grew!
3 years later (as I update this article) and we’ve not had a single quarter with negative growth, while Germany, France and Italy (plus other EU countries) have had at least one quarter with negative growth.
The May 2016 Treasury forecast was OTT Project Fear rubbish, it was all lies or if you want to be generous, misleading…
Yet we are now supposed to trust the same and similar economists who haven’t stopped warning us the economic sky is about to fall, but here’s our excuses why it didn’t happen last month or the month before… We didn’t consider the BoE might issue quantitative easing or ALL the growth we didn’t predict is stockpiling or my favorite “WE HAVEN’T LEFT YET”. We were told the economy would crumble immediately after VOTING Leave, NOT AFTER we Leave, stop moving the goalposts.
Did they ever consider UK business might just decided to for the most part get on with what they do best, BUSINESS and that’s why the economy is still growing?