Tuesday, 16 July 2013

€100,000 prize to find the best blueprint for a Britain outside the EU

By Philip Booth  
  
Why we've launched a prize to find a blueprint for Britain outside the EU

Within two years of entering the European Economic Community (EEC) in 1973, there was strong public support for Britain’s membership. In the 1975 referendum on the issue, 67 per cent voted to remain inside the organisation that would one day become the EU.

There were good reasons. Most people believed that we were in Europe for trade. British self-esteem was so low that the EEC was seen as the future. But neither is relevant today. While the UK has serious economic problems, the EU is clearly not the solution. And not only that, but the dream of free trade has been replaced by the nightmare of the unaccountable regulatory superstate.

Regulation produced by Brussels affects the City as much as any other sector of the UK economy. The EU has decided that the promotion of trade requires the creation of a level regulatory playing field and the centralisation of regulation in Brussels. This is flawed reasoning. Trade is based on consumers having different preferences, and different countries having different relative costs and advantages. A level playing field does not always promote trade.

The price is also high. Solvency II is likely to cost customers of UK insurers at least £3bn. Over two-thirds of respondents to a survey by Deloitte believed the Alternative Investment Fund Managers Directive would reduce the competitiveness of the EU fund management industry – when many are already concerned that fund management charges are eating into pensioners’ incomes. EU regulations on bankers seem designed to make the banking system more fragile.

Not only is Brussels strangling the financial sector, and sectors like food and energy, it is hard to see how the process can be reversed. The power of the European Commission means that it is easy for new regulation to be created. But the qualified majority voting system means that it is necessary to gather support from a huge number of countries to roll it back again.

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