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THE INVESTOR
M
any people whose
spouses divorce them
say they never saw it
coming.And so it may be
with Britain and the
European Union. John Major, the former
prime minister, puts the chance of a split at
50/50.Many British businesses have not
woken up to the danger.
To many business people, the advantages of
sticking together are obvious.The European
Union (EU) is the world’s largest economy
and British rms enjoy easy access to its
biggest market – and to a colossal pool of
talent. Granted, some European regulations
are cumbersome and foolish, but divorce
would make us poorer – just as it tends to
impoverish families.
If the Conservatives win the election, David
Cameron has promised a referendum on
whether or not Britain should remain within
the EU.My best guess is that British voters –
like Scottish voters last year – will avoid taking
a huge leap into the unknown. But there is a
serious chance that they will risk it, out of
sheer disgruntlement with the status quo.
As in many rich countries, defenders of
open borders and free trade are struggling to
make themselves heard.The other side has
better sound bites. UKIP may have no
coherent plan for governing but its leader,
Nigel Farage, strikes many Brits as a man who
understands their anguish.
Although he blames the EU and
immigration for the stagnation of middle-class
living standards, far more disruption has been
caused by advances in technology, which
bene t consumers but have shaken up industry
after industry and destroyed the old notion of
a job for life. Politicians know it would sound
ridiculous to be against technology, so instead
they bash the banana-regulating bureaucrats
of Brussels and the immigrants who are
supposedly stealing British jobs.
Both EUmembership and immigration make
Britain richer. Let’s start with Europe. Fully
half of our trade is with other EUmembers.
Britain’s attractiveness as a destination for
foreign investment, and London’s role as the
world’s leading nancial centre,would be
drastically diminished if we were to drop out of
the EU.Without a voice in Brussels,we would
nd it harder to push for the liberalisation of the
trade in services, fromwhich Britain stands to
gain more than any other nation.
The EU rests on three planks: the free
movement of labour, the free movement of
goods and services, and the single currency.
The rst two have been huge successes.The
last one has been a wretched failure. Britain
gets the bene ts of the rst two but has opted
out of the euro.What’s not to like?The debate
about immigration is, if anything, even more
worrying. British people say they trust Farage
more than any other leader on this subject.
TheTories echo his rhetoric about immigrants
imposing a burden on British taxpayers, yet
they put in far more than they take out.
Between 2001 and 2011, immigrants from
the 14 pre-2004 members of the EU
contributed 64%more in taxes than they
received in bene ts, according to Christian
Dustmann andTommaso Frattini of University
College, London. Newcomers from the
10 newmember states contributed 12%
more than they took out. Immigrants are
younger, better educated and much less likely
to receive state bene ts than the native-born.
Indeed, it is the locals who take out more
than they put in: to the tune of a massive
£617 billion over a decade.
One of my colleagues at
The Economist
wrote a tongue-in-cheek manifesto for
an immigrants’ party that declared:‘I’m
not against Britons. Some of my best
friends are British…But for too long the
establishment has closed down a debate
about the e ects of Britons on Britain…
The burden of the native population on this
country is simply insupportable.’
OPINION
ANALYSIS
OPINION
The rise of UKIP may be making the headlines, but what’s really not to like
about Europe and the free movement of labour that enriches the UK?
The Economist’sAmerican editor shares his views
By Robert Guest
