Tag Archives: EU

Why British exporters love the EU


The Economist tweeted this graph this afternoon showing that the UK now sends the majority of its exports outside the EU. It offers an accompanying editorial comment that this chart will please eurosceptics. At first glance, you would think that it supports the ‘Leave’ campaign’s assertion that the UK can thrive as an exporting nation outside the EU, focusing on trade with the rest of the world. Actually, the graph shows quite the opposite.

Firstly, as @Shivoa points out, the UK benefits from many trade deals which the EU has negotiated with other countries in order to sell its products overseas. Outside the EU, the UK would no longer be party to those agreements and would have to renegotiate them on far from preferential terms, without the muscle which the EU has as the world’s largest trade bloc. Rather than accelerate the trend which this chart illustrates, Brexit would put it at risk.

Secondly, as this article on Conservative Home demonstrates, we are not talking about a zero sum game here. British exporters do not choose between the EU and the rest of the world. If exports to the EU fall, they do not automatically rise elsewhere. The Economist’s graph in fact illustrates (but also masks) a serious deterioration in the UK’s balance of trade over the same period. A fall in the UK’s exports to its primary, high value markets in the EU is a bad thing, even though it can be made to look like a shift towards non-EU markets if we ignore volume and look purely at percentages.


The ‘Singapore’ argument for Brexit is fallacious. Brexit would only harm British exporters, and that is why they overwhelmingly want the UK to remain in the EU.

Follow-up: I have to add this graph which was posted by @NauroCampos (Professor of Economics at Brunel University). It speaks, literally, volumes.


“Small government”

Something I often hear from people who don’t like the EU is that they favour “small government”.  The following tweet is from just such an exchange that I had last night with someone who didn’t like my post about UK v. EU democracy:


As I said in my reply, I think the people who make this point are confusing ‘small government’ with ‘local government’.  International, or supranational, governance need not necessarily be ‘big’ – in fact, it usually isn’t.

The ‘big government’ to which so many self-styled libertarians object is the kind of government which taxes a lot and spends a lot and regulates a lot.  The European Union is very far from being that kind of ‘big government’ – its footprint is tiny compared to national and local governments.  The EU’s budget for 2012 was €147 billion, or 1.12% of GNI; the UK budget for 2012 was £682 billion, or 45% of GDP!  The European Commission employs 32,666 civil servants (serving a population of 503 million); Whitehall employs 498,433 (for a population of 63 million); Glasgow City Council employs around 20,000 (serving a population of 600,000).

One of the reasons that the EU exists, and makes sense, is because doing some things at the European level can reduce the footprint of government. Imagine 28 regulatory regimes for food safety, or car type approvals!  Far from embodying ‘big government’, the European Union – with its Treaty enshrining the principle of subsidiarity – is a continent-wide experiment in smaller, efficient government.

This is especially true under the current, neo-liberal Commission.  But even if we had an interventionist Commission which favoured big spending and heavy regulation, European government would still have a far smaller footprint than national or local governments in Member States, for structural reasons to do with money-raising powers, administrative resources, and legal competences.

So we’ll file ‘big government’ along with the other Euromyths.  But what can we expect from people who think they’re libertarian while advocating heavy-handed state regulation of all aspects of citizens’ personal lives from recreational drug use to free movement?