June 7, 2016 by Paul Goldsmith
The key principle for many in the Vote Leave campaign is that of ‘sovereignty’, which is the right of a state to govern itself without interference from from outside bodies. The European Union, goes the argument starting with Enoch Powell and Tony Benn and running through to Michael Gove, infringes our right (and therefore sovereignty) to choose the people who make our laws, and to remove them if we don’t like our laws. Thus, leaving the EU means we can ‘take back control’ of our country. On a superficial, theoretical level, they are correct. On a practical, realistic level, they are out of date, because having the type of sovereignty the Leave campaign talks about simply no longer means taking back control.
The reason for this is globalisation. Globalisation – the deeper economic integration between countries and regions of the world – has meant that national Governments have lost control of many aspects of the nation state. Globalisation, for example, makes the type of control of production needed for true socialism to be implemented impossible. Globalisation, for example, makes it extremely difficult to manage an economy to help achieve full employment. Globalisation, for example, means that jobs and people come to us from outside the UK and leave the UK to go elsewhere.
Now there are some politicians, and I would count UKIP and now Donald Trump amongst these, who have decided that the answer to globalisation is to say “stop the world, I want to get off”. Some politicians try to tell voters it is possible to ‘take back control’ and regain sovereignty if we leave the EU, or if we build a wall between USA and Mexico and fine companies who taking jobs offshore. Yet, as those voters will find is the reality should they choose to agree with those politicians, the EU as it stands actually HELPS sovereignty in the face of globalisation, because it allows the Continent to govern itself and protect itself against the worst excesses of the capitalist model that has attached itself to that globalisation.
Example 1: The EU has made rules on workers rights and social protections so that none of its 28 members can join a ‘race to the bottom’ to attract firms to locate in their country to avoid giving their workers those rights and social protections. True, those rights and protections were originally granted by the member states (e.g. 1975 Equal Pay Act and 1997 Minimum Wage in the UK) but they are protected in the EU.
Example 2: The EU has made rules on environmental regulations which again avoids a race to the bottom in terms of pollution and emissions that might encourage firms to locate in the country that regulates them the least on pollution. This would not be possible without the concept of ‘pooled sovereignty’ that the EU provides.
Now, a separate argument to have is whether these rules are ones that we agree with. But I use them as examples of how, yes, Britain does lose some sovereignty to the EU by being a member of it, but not everything the EU with that snaffled sovereignty is necessarily ‘bad’.
Let’s also take tax avoidance. Globalisation allows companies to locate their profits in the lowest tax environments whilst making their losses in their highest tax environments through a concept called ‘transfer pricing’. This means for instance that I can buy an Amazon product in the UK, which is dispatched from a UK factory on UK roads to be delivered by a UK postman and Amazon can use the UK law system to sue me if I tried to defraud them – but my money goes to Luxembourg. This is within the law, but not quite within the principles of tax, but my point is that this problem could only be solved using pooled sovereignty, in that at some point all the countries of the EU would have to get together and agree to stop a race to the bottom on tax rules. You may agree with that happening or not, but you can ONLY achieve it through an organisation like the EU.
David Cameron has, as he has been wont to do during the campaign, taken this too far, by saying that pooled EU sovereignty helps us combat terrorism as countries share information with us within the EU. I very much doubt countries would stop that happening if we left the EU, as we can protect them from terrorism too. But he does have a point that the European Arrest Warrant has allowed us to repatriate criminals who escape to any of the other 28 countries, and if we had to leave that it could cause problems.
My point is not to dismiss the importance of the sovereignty of the nation state. I do have a problem with our inability to dismiss any EU ‘Government’ whose laws we don’t like. I do have a problem that sometimes we have regulations and laws imposed on us from afar too. BUT I don’t think all these laws and regulations are automatically bad and I don’t think they are automatically disadvantageous to our country and I recognize that in many ways there are things we simply cannot do effectively in the face of the forces of globalization unless we are part of the EU.