The strange economic arguments behind the EU referendum calls
As I write MPs are debating a call – mainly from the Eurosceptic right – for a referendum on EU membership.
Of course there are many arguments that can be put for a referendum (you can read here for one Labour MP’s take) but the clearest new argument that seems to be coming from the right was put by Bernard Jenkin on the Today programme this morning . This is that EU rules are preventing us from taking the measures that we need if we want to restore growth.
But there’s a fallacy here.
These are rules that apply across the whole of the EU. That does not stop many EU members having a much stronger economy than that of the UK.
The Eurosceptics must therefore tell us why it is that the UK economy cannot do as well as these other countries under the same rules. They are basically arguing that there is something special about the UK that makes it less able to grow than many other economies with the same basic set of minimum regulations.
Given that there is precious little evidence that so-called “red tape” holds back economies, anyone thinking logically might want to first ask what the UK’s particular problems are and secondly how best to deal with them.
I would suggest starting with asking whether the deepest and quickest spending cuts of any country without a sovereign debt crisis might be just such a problem. Unlike the Eurosceps I rarely think that policy can be reduced to simple yes-no choices and straightforward causations. There are many long-running structural problems in the UK, but the biggest issue is a straightforward lack of demand.