The Spectator

Continental drift | 2 June 2016

That Britain is outperforming its neighbours can be linked to the many times we have fought EU directives

Continental drift | 2 June 2016
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It is a long time since the term ‘sick man of Europe’ could be applied to Britain. France is now a worthier candidate for the accolade — it -increasingly resembles a tribute act to 1970s Britain. A package of modest labour-market reforms presented by a socialist president has provoked national strikes on the railways and Air France. This week, the streets of Paris resembled one big Grunwick or Saltley Gate — the trials of strength between employer and union in which so many of Britain’s most bolshy trade unionists cut their teeth. This week is not a one-off: in recent years France has had a strike rate more than twice that of Denmark, its nearest European competitor.

Britain now looks a paradigm of -industrial virtue by comparison. We have far fewer strikes and on many other economic measures — with the disturbing exception of the public deficit — Britain consistently performs among the best EU nations. Our economic growth is set to be the best in -western Europe; our unemployment rate is half that of France and Italy and a quarter of that in Spain.

It is remarkable that Britain’s relative economic performance has not featured more in the EU referendum debate. In 1975, when we last had such a referendum, the Remain campaign (or Yes campaign as it then was, owing to the different wording of the question) could make a powerful case that Britain had much to learn from its European neighbours when it came to running a modern economy. Many Tories agreed, and Margaret Thatcher famously pulled on a sweater showing the flags of Common Market countries. A vote for Europe was a vote to discard the broken British economic model and join the powerhouses of the Continent.

Now the tables have turned, and it is pertinent to ask: why do we set so much store by selling to the stagnant economies of mainland Europe? Is such parochialism appropriate in an era of global free trade? If we want to learn anything now, we should be looking to the US, Canada and Singapore. Yet the Leave campaign has been remarkably coy in making this argument. Instead, it has concentrated on migration, bent bananas and how much we might save if we were no longer sending an annual subscription to the EU’s coffers: populist causes which have proved rather easy for the Remain side to attack.

That Britain is doing well is not -simply good luck, or the result of our country being at a different stage in the economic cycle. The blame for the sluggishness of our neighbours’ economies can be laid firmly at the door of the EU. And that Britain is outperforming them can be linked to the many times we have fought to escape EU -directives. The euro continues to hamper the recovery of southern European countries, leaving Greece, Italy and Spain unable to devalue in order to make their exports more attractive.

In many EU countries, unemployment is high because the social chapter has led to inflexible labour markets. As Tony Blair rightly said 20 years ago, there is -nothing ‘social’ about an economic model that excludes so many from employment. The EU’s regulatory instinct is always to dream up ways of preserving existing jobs, building a wall around the world of work. This creates a dichotomy between the protected and the unprotected. A truly social approach to economic prosperity would ask (as Britain does): how can we foster an environment in which new jobs are created?

Tony Blair now claims that in all his time as prime minister there was nothing that the EU prevented him from doing. But then he inherited — and enjoyed — several opt-outs which were denied to the 13 countries that have joined the EU since Blair entered No. 10. At every turn, Britain’s relative success can be traced to the times it broke free from disastrous EU schemes, from the Schengen project to abolish border controls to the single currency itself. Every time -Britain has placed more confidence in itself, and less in Brussels, we have reaped the dividends.

There is an argument that Britain should remain in the EU precisely in order to promote our successful economic philosophy — that it would be better for us in the long run if the likes of France, Italy and Spain were encouraged to create flexible labour markets, and that our influence would be better for them. But while officials at the Foreign Office will always fantasise about governing on behalf of other EU nations, it’s really not in their remit. If the French and Italians wanted a more liberal British-style approach, they’d vote for it.

It’s hard to think of a time when a British voter, looking at the Continent, has had less to envy. At least in part this explains why the polls remain close. In spite of the government’s increasingly shrill warnings, -voters are not persuaded that Britain owes her prosperity to a visibly crisis-struck Europe. It seems that the difficult but successful economic decisions taken by the Prime Minister and his Chancellor have fostered this confidence. It won’t be much consolation to either of them, but if we do end up voting to leave, they may have themselves to blame.