Vote Leave FACTS: How the EU Has Increased Consumer Prices

If we leave the EU consumer prices will drop drastically as Britain will be free to create its own trade deals that favour the British consumer.

The EU has been very bad at negotiating free trade deals hurting jobs and the economy. That’s why it’s safer for Britain to take back control of negotiating its trade deals so it can prosper outside of the EU.

1. The EU-funded Centre for Economic Performance study

The report only implies that prices could increase if third country trade deals fall through after we Vote Leave but – as the Executive Director of the IN campaign has admitted – these trade agreements could well continue.

• The Executive Director of the IN campaign, Will Straw, has accepted  that free trade agreements with third countries could continue, stating: ‘either eventuality could come to pass’.

• The UK is the fifth largest economy in the world. There is no reason why third countries would want to cut off access to the UK market.

• As the Prime Minister of New Zealand, John Key, has said: ‘we would want to preserve both our existing position with Great Britain and continue to grow that relationship. We would need to find a way through that. The reality is there are a number of mechanisms where that would be possible’.

• The European Commission has accepted it would be in the EU’s interests for third country trade agreement to continue. Ahead of Greenland’s withdrawal from the then European Economic Community, the European Commission stated that if third country trade agreements ceased to apply to Greenland on its withdrawal, it was an open ‘question whether the Community would have to negotiate with its partners compensation for the rights and benefits which those countries would lose as a result of the “shrinking” of the Community’.

• This means consumer benefits of third country trade agreements could continue if we Vote Leave.

Independent studies have shown that remaining in the EU has increased prices for consumers.

• The independent House of Commons Library has concluded that EU membership actually increases the costs of consumer goods, stating that the EU’s Common Agricultural Policy ‘artificially inflates food prices’ and that ‘consumer prices across a range of other goods imported from outside the EU are raised as a result of the common external tariff and non-tariff barriers to trade imposed by the EU. These include footwear (a 17% tariff), bicycles (15% tariff) and a range of clothing (12% tariff)’.

This report does not look at the effect of the European Union’s deal on exports, only on imports. EU trade deals have failed British exporters.

• ‘Analysis of the growth of UK exports of goods before and after EC agreements have come into force, for at least five years, shows that in most cases (10 out of 15) the post-agreement growth of UK exports has fallen’.

• ‘By contrast most of Switzerland’s agreements (11 out of 15), most of Singapore’s (eight out of 12) and most of Korea’s (four out of five) have been followed by an increase in the rate of growth of their exports to the partner countries’.

The EU has been very bad at negotiating free trade deals with third countries. There is nothing to suggest the EU will actually conclude any of the agreements currently being negotiated.

• The EU has concluded 37 trade agreements with 54 countries since 1970. In 2015, the aggregate GDP of all the countries with which the EU had a trade agreement in force was $7.7 trillion.

• By contrast, the aggregate GDP of all countries with which Chile had trade agreements was $58.3 trillion. The figure for South Korea was $40.8 trillion and that for Switzerland was $39.8 trillion (albeit these all include the EU with a GDP of $16.7 trillion).

• The EU has failed to negotiate a free trade agreement with China. By contrast, both Iceland (which has a population of less than half a million) and Switzerland have negotiated free trade agreements with China.

The safer option, supported by the majority of British businesses, is to take back control of the power to make trade agreements from the European Commission.

• At present, the UK is precluded from making its own free trade agreements as a result of the EU’s common commercial policy. Instead, it has to rely on the European Commission.

• Polling by Perspective Research Services in August 2015 found that by 74% to 22%, SMEs want the UK Government, not the European Commission, in charge of negotiating free trade agreements.

• This has been clear for over a decade. In 2004, ICM found that an overwhelming majority of British businesses wanted the UK Government to take back control of trade.

The Centre for Economic Performance is funded by the European Commission and in 2000 published research calling for ‘immediate UK membership’ of the euro. They were wrong then and they are wrong now.

• The Centre admits receiving funding from the European Commission.

• The London School for Economics received €1,993,154 from the European Commission in 2014 alone.

• In 2000, the Centre for Economic Performance argued that: ‘The economic arguments for immediate UK membership in EMU… are overwhelming… The UK is too small and too open to be an optimal currency area’.

2. BSE’s application for designation

The Prime Minister today endorses a campaign which said his renegotiation didn’t matter.

• The Chairman of the IN campaign, Lord Rose of Monewden, has said the UK should remain in the EU even if the renegotiation failed.

• The Head of the Labour IN campaign, Alan Johnson, who is endorsing the BSE campaign for designation, has said the renegotiation is a ‘sham‘.

The Prime Minister makes a number of claims he knows to be false or have been said to be false by the BSE campaign.

• Today, the Prime Minister says leaving the EU would be a ‘leap into the dark’. The Chairman of the BSE campaign, Lord Rose of Monewden, has admitted that there are no short-term risks: ‘Nothing is going to happen if we come out of Europe in the first five years … There will be absolutely no change … It’s not going to be a step change or somebody’s going to turn the lights out and we’re all suddenly going to find that we can’t go to France, it’s going to be a gentle process’.

• The Prime Minister says that those campaigning for leave cannot ‘answer reasonable questions about what would happen to jobs, prices or our country’s security’. The Prime Minister has previously said: ‘If we were outside the EU altogether… Of course the trading would go on … There’s a lot of scaremongering on all sides of this debate. Of course the trading would go on’. He has also admitted that: ‘Of course Britain could make her own way in the world, outside the EU, if we chose to do so’.

• Today, the Prime Minister claims that: ‘We are stronger, safer and better off in Europe’. In his Bloomberg speech of 2013 which began the renegotiation, the Prime Minister said: ‘If we leave the EU, we cannot of course leave Europe‘.

BSE has received support from groups that previously supported the euro and/or receive funding from the EU. It is worrying that BSE is supported by groups that were so wrong in the past – we cannot trust their judgement now.

• The European Movement is legally committed to promoting European Commission propaganda. The European Movement’s memorandum of incorporation states (in clause 3, section 4) that one of the objectives of the company is ‘to undertake educational and social and propaganda and other activities.’ This has never been altered – the same phrase was included in the European Movement’s new memorandum of association which was passed on 23 April 2015.

• Between 2007 and 2014 the European Movement received €4.5m from the European Commission. In 2013 the UK branch of the European Movement received two grants of €18,750 and €14,447 from the European Commission.

• The European Movement was at the forefront of the campaign for Britain to join the euro – its then Chairman Ian Taylor claimed in 2001 that ‘Britain’s current stand-off position is increasingly untenable’.

• London First claims that it is a ‘business membership organisation’. However many of its members are not in fact businesses. 20 are universities, colleges or NHS trusts.

• In 2014:

  • Birkbeck received €768,000.

  • Imperial College received €30.3 million.

  • King’s College London received €9.3 million.

  • Kingston University received €718,000.

  • London Metropolitan University received €257,000.

  • The London School of Economics received €4.1 million.

  • Middlesex University received €3.0 million.

  • SOAS received €2.2 million.

  • UCL received €37.1 million.

  • The University of East London received €49,442.

  • Royal Brompton Health Service Trust received €526,044.

• In 2000, London First stated ‘membership of the euro is an opportunity, while not joining is not perceived as a threat” (Evening Standard, 13 July 2000).

• Between 2007 and 2014 Friends of the Earth received €12,137,169 from the European Commission.

• In 2014 the National Union of Students received €767,196 from the European Commission.

The BSE campaign are the same people who campaigned for the euro.

• Roland Rudd, Co-Treasurer of the BSE campaign, sat on the Board of the Britain in Europe campaign: ‘Would we be worse off now, had we joined in 1999? I don’t believe we would have been… The euro has provided its members with a measure of stability and insulation from the volatility of the financial markets. It has reduced the cost of doing business and increased capital flows across member states’ borders. On the other hand, the pound and its flexibility has been found lacking… So how would the UK have fared had it been a member of the euro since 1999? First, it would have kept us honest… Secondly, by removing exchange rate uncertainty and transaction costs, joining the euro would have boosted trade… Thirdly, there would have been indirect benefits. As a major player within the eurozone, we would have been central in shaping forthcoming EU financial regulation, which is going to have a significant impact on the City’.

• Alan Johnson, Head of the Labour IN campaign: ‘we recognise the potential benefits of euro membership for our manufacturing exporters, which is why we support the single currency in principle’.

• Lord Mandelson, Board Member of the BSE campaign: ‘If business takes seriously the belief of no single currency for Britain before 2010 at the earliest, then the loss of confidence will be severe. And it will be investment, jobs, growth and productivity in Britain that will suffer’.

• Trevor Phillips, Board Member of the BSE campaign, sat on the Council of the Britain in Europe campaign.

• Sir Brendan Barber, Board Member of the BSE campaign: ‘Delay in joining the euro is costing jobs and investment; manufacturing needs the stability and certainty that the euro will bring’.

• Damian Green MP, Board Member of the BSE campaign: [on joining the euro] ‘I very very rarely say never and not on this issue’.

• Lord Wallace of Tankerness, Board Member of the BSE campaign: ‘We have a job to do to explain to the public at large and to our own members that this will be the best course. This is what we did in the devolution referendum when we also had a poll finding among our members which was similar to this. But we got the message across then and we shall do the same again for the Euro’ (The Herald, 10 November 1997, p.1).

• Lord Wigley, Board Member of the BSE campaign: ‘we in Plaid Cymru see considerable benefit from being in the single currency for industry, agriculture and home owners’.

• Sir Danny Alexander, former Board Member of the BSE campaign was Director of Communications at Britain in Europe and claimed: ‘There are substantial and rising economic costs to be outside the euro zone’.

The BSE campaign is the admitted successor to the pro-euro campaign.

• Following the rejection of the European Constitution in referendums in France and the Netherlands in 2005, the Britain in Europe campaign wound up. It was superseded by ‘Business for New Europe’ (BNE), chaired by Roland Rudd, who had been a Board Member of the Britain in Europe campaign.

• On BNE‘s launch in 2005, Rudd said: ‘It is essential, therefore, that the campaign group Britain in Europe, which would have fronted the Yes campaign, is succeeded by an organisation that will continue to put the case for Britain’s active engagement in Europe’.

• The BSE campaign grew out of BNE, with key personnel, including Roland Rudd and Lucy Thomas transferring to the new organisation. BSE can therefore properly be described as the successor to the pro-euro campaign.