This EU Won't Work

Lord Heseltine, former Deputy Prime Minister and fanatical Remainer, says of Brexit (Daily Telegraph, 20 June 2017): “… the younger generation [is] bemused that an older generation could wilfully undermine their future.” His comment isn’t really about youth at all, it’s an indirect assertion that Britain will be much poorer outside the EU. This is a regular canard but framing it like this makes him seem virtuous and his elderly peers seem uncaring. Yet EU policies have already seriously compromised the futures of millions of under-25s in Europe who have no jobs due to bad, ideologically-driven EU policies. 

The European Union might not be such a bad idea in principle but it’s a shockingly bad implementation. It was sold as leading to convergence of the nations – social, cultural and, above all, economic – so that there would be no need to go to war ever again. That’s not what has happened; economies are diverging and there is severe unemployment, especially amongst the young, whose future is so often portrayed as being at the heart of the EU’s mission, making the EU vital to their future. Whilst there has not been a third outbreak of war between the major EU countries it is a matter of opinion whether this has anything to do with the EU itself, the only evidence being correlation. However there is a causal link between youth unemployment and EU regulation. 

The political Left in Britain was once against the Common Market, believing it to be a conspiracy mainly serving big business. Jeremy Corbyn is widely thought to be (privately) sticking to his principles on this as on many other things; he had (and has) a point. Now the Left has largely swung behind the EU because of its support for workers’ rights and job security. In economics a balance is always needed, in this case too much interference may deny fair opportunities for all. Over-regulation protects those already in work against those without jobs because an inflexible labour market makes employers reluctant to engage new staff or replace their least productive workers. It may also lead to the stockpiling of labour where it isn’t needed leading to a shortage where it is, damaging overall growth and innovation in the economy. 

These effects especially limit the opportunities for new entrants to the workplace i.e. young people. A decade on from the financial crisis youth unemployment is double that of the general population, 40% or more in some cases. The future prospects for these citizens has been permanently harmed by missing out at the vital early-career stage to extend and consolidate what they have learnt, perhaps at great cost in university. Meanwhile their street life will have affected their view of society with unknown but worrying consequences for future strife. This is another example where a seeming good has an unintended and unwanted side effect that may overwhelm the presumed benefit.

So what’s in store for the younger generation, whose future the oldies (many of them parents) are genuinely concerned about despite Heseltine’s slight? Their pensions are not comparable with those of ‘baby boomers’, who enjoyed long-term employment with good company pensions, and their chances of owning their own homes are far lower. This has to do with low-interest rates and ‘quantitative easing’, which have boosted the value of assets already owned and reduced the chances of saving enough to get started (without Mum’s and Dad’s help). Meanwhile, if they do find jobs they will have to pay more to support the old because of demographic change. The ECB is in the vanguard of creating money from nothing and sets interest rates that do not suit all its member nations equally well. How is this helping Continental youth better than Britain’s?

Perhaps our leaving will help precipitate a break-up of the EU. Might this lead to the return of old quarrels so that young soldiers will again perish in bloody, futile wars? The world has changed greatly since 1945 and its centre is certainly not Europe any longer. Yet the principles on which the EU was founded have not changed; its strategy is dogmatically adhered to in spite of clear evidence of failure. The answer is always that we need “more Europe”, which echoes the tyrannies of other ideologically-driven regimes – democracy (or populism) is seen as the obstacle; a vision, a plan and the rule of experts are the solution. Such an ideology cannot adapt to circumstances. 

In their hearts many Remainers know this but their instinct is that international cooperation must lead to harmony so we should stick with it and argue for change from within. We’ve been trying that for 44 years without much progress. In the meantime the madness of monetary union has impoverished millions but given Germany the sway nobody would have wanted (perhaps even the Germans). Remainers should also consider whether the EU is really a protectionist block, a hindrance to others seeking to develop their own societies and help themselves towards a brighter future (for example, some African nations locked out by CAP and the Customs Union (see Virtue is its own reward, but for whom? and Alternative Market Models). Not only does the EU not look after the future of its own youth very well, it restricts opportunities for those in today’s underdeveloped countries. 

Nine out of 10 MPs have just been elected to the UK Parliament on manifesto pledges to leave the Single Market and the Customs Union (Conservative, Labour and DUP), yet already many are trying to ignore their promises. Let them not pretend that concern for our youngsters is their motivation.