“Europe” doesn’t Work

Tim Congdon is one of the UK’s most distinguished economists, and we are privileged to have him on the UKIP team.  I have written about Tim before.

He’s had good things to say on banking regulation, and he’s previously written on how the EU costs Britain 150 billion a year. Now he’s back with a new booklet: “Europe” doesn’t work – a title reminiscent of that famous Saatchi poster “Labour isn’t working”.  

In it, he tackles the “Three million jobs at risk” lie that you so often hear Nick Clegg and others talking about. That claim is based on a study by NIESR, which said that the jobs depended on trade with (not membership of) the EU.  Martin Weale, then Director of NIESR, described the spin put on his statistic by euro-apologists as “Pure Goebbels”.

When Europhiles talk about the ”benefits” of the EU, Tim writes, there are three central myths: job creation, trade expansion and the protection of our interests worldwide. But the EU does not fulfil any of these promises.  Membership has actually led to job destruction, and made the UK increasingly uncompetitive thanks to restrictive EU employment and labour market regulations.

The EU’s labour market is highly inefficient, mainly because of excessive regulation; and in terms of employment and trade.  In employment terms the EU is falling behind other high income countries like the United States, Australia, Canada and Japan — not to mention Norway and Switzerland.  He quotes OECD employment ratios (percentage of people 15 to 64 in employment) to show the EU below other major economies, and the €urozone lower still.  Of course not all countries in the €urozone are doing as badly as each other.  But if the UK “harmonised” to the €urozone average, we could see the loss of around 6% of UK jobs– meaning jobs for 1.8 million people could go.  More “Europe” means fewer jobs.

He clearly shows how over the years UK-born employment decreases as foreign born employment increases, set against a general decline in the employment of UK born men over the past 15 years– of which the unimpeded influx of EU workers must take some blame. The figures speak for themselves:

He estimates that the 588,000 EU immigrants entering the UK from 2004 to 2011 probably cost around 135,000 jobs for UK-born workers.

Looking broadly at employment trends the EU, Congdon concludes that membership has done nothing to improve employment in the UK.  “EU membership has destroyed jobs, and done nothing to boost the productive efficiency and export competitiveness of our economy” p.24-5.

UKIP is the only political party which has repeatedly and systematically refuted that “three and a half million jobs” claim.  The fact is that outside the EU Britain would continue to trade with the EU, because they need us more than we need them.  Other countries around the world (USA, China, Japan and so on) trade with the EU without being members of it.  Britain is nothing if not a global trading nation.  Leaving the EU is not about splendid isolation.  It’s about re-joining the rest of the world. 

“Europe doesn’t work” is published by the Hampden Trust, in association with The Freedom Association http://www.tfa.net/