Britain's relationship to the European Union is the most important issue facing the British people today. Yet all too often the issues are obscured by half-truths and misinformation. This FAQ puts the record straight. At this site you can get the facts about the impact of EU membership on

...our democracy......our industry......our culture...

...all supported by authoritative references, many from the UK Government or the EU itself.

• General facts and dates
  
  How did the European Union come into being? 8
  Which countries are members of the European Union? 8
  Have any countries ever left the European Union? 8
  When did Britain sign the Treaty of Rome? 8
  How have subsequent treaties modified the Treaty of Rome? 8
  
  
• Federalism, sovereignty and basic freedoms
  
  What is meant by 'federalism'? 8
  What's wrong with federalism? 8
  What does 'loss of sovereignty' mean? 8
  Isn't 'sovereignty' just an abstract term? 8
  What does this mean in practice? 8
  Why was the 'Metric Martyr' case so important? 8
  
  
• Euromyths
  
  But surely all these stories about the EU insisting on straight bananas and banning curly cucumbers are just tabloid myths? 8
  
  
• Taxation and lawmaking
  
  Can the European Union overturn laws made in this country? 8
  Is it true that the EU plans to abolish Trials by Jury? 8
  So are the powers of the European Union increasing? 8
  Is the European Union planning to extend the range of good subject to Value Added Tax (VAT)? 8
  Can the European Union alter other aspects of Britain's tax laws? 8
  
  
• The EU constitution and the denial of democracy
  
  What is the European constitution? 8
  What will be the consequences of the 'No' votes in France and the Netherlands? 8
  What will happen to the EU now that the constitution has been defeated? 8
  
  
• Corruption in the EU
  
  How serious is the problem of corruption in the European Union? 8
  
  
• Trade and investment with the EU
  
  Doesn't the Single Market benefit our trade with Europe? 8
  But isn't most of our trade with Europe? 8
  What about all our investments in Europe? 8
  
  
• The costs of membership
  
  Doesn't the European Union guarantee lower food prices? 8
  What about all the grants we get from the EU? 8
  What is the price of EU membership in practical terms? 8
  
  
• The EU single currency - the euro
  
  What would be the consequences of Britain joining the single European currency (the 'euro')? 8
  Are foreign investors going elsewhere because Britain is outside the single currency? 8
  What has happened in the countries which joined the single currency? 8
  Why is the euro proving such an economic failure? 8
  
  
• EU control over Britain's assets
  
  Is it really true that Britain's gold reserves would be transferred to Germany in the event of monetary union? 8
  Is it true the EU can take control of our North Sea oil reserves? 8
  Don't EU laws apply equally to all members? 8
  Couldn't we just bend the rules? 8
  
  
• The EU on the world stage
  
  Hasn't the European Union helped to keep the peace in Europe? 8
  Does the European Union have a military or foreign affairs role? 8
  Surely a big, united EU is necessary to compete with the US and China? 8
  
  
• The EU and the politics of deception
  
  Is it true that a majority in the UK favours remaining in the EU? 8
  If the people are against it, why do so many politicians back the EU? 8
  Well, we voted to stay in the European 'club' at the 1975 referendum, so shouldn't we play by its rules? 8
  So we have all been conned? 8
  Supporters of the European Union say there will be mass unemployment if we left. Is this true? 8
  
  
• Better off out?
  
  Is there no way of leaving the European Union? 8
  But if we left, we'd lose the ability to influence EU decisions at all. 8
  Can the EU not be reformed by working inside it? 8
  Won't enlargement of the European Union - so called 'widening' - result in a looser arrangement between member states? 8
  
  
• Britain's alternative
  
  Is there a realistic alternative to EU membership? 8
  What about Britain's standing in the wider world? Will that be damaged by being 'outside' Europe? 8
  But could Britain - a small island - really survive on its own? 8
  "But I'm for Europe!" 8

The European Union traces its immediate history to the 1957 Treaty of Rome which created the Common Market for the original "six" - Germany, France, Italy, Belgium, Luxembourg and the Netherlands. The Treaty's explicitly declared objectives are "to lay the foundations of an ever closer union among the peoples of Europe ... the constant improvement of the living and working conditions of the people, the reduction of differences in wealth between regions."

5

Following the accession of Bulgaria and Romania on 1 January 2007, the EU has 27 member states

They are:

• Austria (joined in 1995)
• Belgium (1956)
• Bulgaria (2007)
• Czech Republic (2004)
• Cyprus (2004) *
• Denmark (1973)
• Estonia (2004)
• Finland (1995)
• France (1956)
• Germany (1956)
• Greece (1981)
• Hungary (2004)
• Ireland (1973)
• Italy (1956)
• Latvia (2004)
• Lithuania (2004)
• Luxembourg (1956)
• Malta (2004)
• The Netherlands (1956)
• Poland (2004)
• Portugal (1986)
• Romania (2007)
• Slovakia (2004)
• Slovenia (2004)
• Spain (1986)
• Sweden (1995)
• United Kingdom (1973)

[* Cypriot membership extends only to the Republic of Cyprus and excludes the Turkish Republic of Northern Cyprus, which is not internationally recognized.}

5

As an overseas territory of Denmark, Greenland was obliged to join the then Common Market in 1973, despite a 1972 referendum showing 70% opposition. Following a further referendum on 23 February 1982, Greenland left the European Community.

Greenlander opposition to the imposition of the Common Fisheries Policy, coupled with a general rise in support for home rule, were the main factors in Greenland's decision to withdraw. Interestingly, one of the budding politicians who welcomed Greenland's decision was one Robin Cook, later the UK Foreign Secretary, who commented that "this shows it is politically and diplomatically possible to negotiate withdrawal." [Quoted in the Sun, 14 November 2000.]

5

Britain became a member of the Common Market on 1 January 1973. Section 2 of the enabling legislation, the European Communities Act, 1972, established the principle that European Law would always prevail over British Law in the event of a clash, thereby overthrowing the supremacy of the British Parliament.

5

The Single European Act 1986, which facilitated the creation of the so-called 'Single Market' in 1992, reduced Britain's independent decision-making powers further by extending majority voting in certain areas of policy making.

The 1992 Maastricht Treaty greatly enhanced the powers of the European institutions. As the former Secretary General of the Council of Europe, Sir Peter Smithers, puts it: "When the Maastricht Treaty was before Parliament John Major forced it through by ruthless whipping and unacceptable personal pressures. It surrendered sovereign powers of the Queen in Parliament to an unelected body in Europe without a clear mandate from the electorate." [Letter in Daily Telegraph, 4 January 2000.] Maastricht established the concept of European citizenship and laid down the agenda for the creation of the single European currency (the euro).

Under the 1998 Amsterdam Treaty, the European Union, instead of being a community of nation states, became a "legal personality" in its own right, capable of acting as a single entity in international affairs; able, for example, to sign treaties binding on all its constituent member states. The competence of the European Court of Justice was extended and the Council of Ministers given powers to impose penalties on any member state found "in persistent breach of the Treaty".

The 2000 Treaty of Nice took further steps towards the creation of a centralized European state. Britain surrendered its right of veto in thirty additional areas of policy setting. In not a single area did the Treaty of Nice return power to the member states, or reverse the process of further centralization and control from Brussels.

5

As used in the European context, 'federalism' is a political model involving the effective abolition of the independent nation states of Europe in favour of a single central government enjoying legislative and executive powers." [ A dictionary of political thought Roger Scruton, Pan Reference, 1982/] Supporters of federalism maintain that the end result would be the evolution of the current European Union into a 'United States of Europe.' German Chancellor Schràèder believes that "a federal order in Europe seems the best guarantee for solidarity and prosperity. With us in Germany the federal system has proved itself." (In other words, the German political model should be imposed on the rest of Europe.)

5

Opponents of the European Union usually divide their arguments into two categories, those relating to loss of sovereignty, and those relating to economics, although there are inevitably overlaps between the two issues. It is also worth testing the validity of some of the arguments put forward in favour of the EU.

5

This is the view that by allowing a supranational body to override the powers of the domestic Parliament, legislature and judiciary, Britain has ceased to be an independent nation (or at the very least is in danger of doing so).

5

So are concepts like 'freedom' and 'democracy'. Basically, 'sovereignty' means retaining the right to govern ourselves, a right we have largely lost since joining the EU. It is arguable that any binding international treaty limits sovereignty. However, as the former Master of the Rolls Lord Denning pointed out in 1990 (ie even before the Maastricht and subsequent treaties) EU interference in all aspects of British commercial, judicial and cultural life has become "a tidal wave bringing down our sea walls and flowing inland over our fields and houses."

5

EU membership entails an intolerable interference in the decision-making powers of the British Parliament, and, by extension, of the British people. These range from the absurd (such as the regulations on the size and straightness of cucumbers and bananas) to wide ranging interference in the economic and judicial independence of the United Kingdom.

5

The prosecution, in April 2001, of a Sunderland greengrocer for selling a customer a pound of bananas very publicly demonstrated the extent to which European regulations supersede British law.

Commenting on what he called a "test case of national importance", the presiding judge, District Judge Bruce Morgan, said that we now operate under a "new legal order" in that the 1972 European Communities Act intentionally surrendered Parliament's sovereignty to the primacy of European law and the European courts.

Gerald Bartling QC, a leading European law specialist, made clear the consequences of this decision - as well as its remedy - when he said that "the short answer is that unless and until Parliament repeals the European Communities Act 1972, then European law takes precedence."

The case demolishes the claim of supporters of the European Union that the EU does not interfere in British culture and way of life. What could be more intrusive than legislating to prevent one Briton selling another Briton a pound of fruit?

The Weights and Measures (Metrication Amendments) Regulations 2001 (S.I., 2001, No. 85) originally proposed to make it a criminal offence to even mention imperial measurements in trade, public health, public safety and administrative purposes. Following public protests, this legislation was withdrawn, but the enforced primacy of metric measures in traded goods remains.

[It should be stressed that the merits of the metric system over imperial (or vis-versa) is not the key issue. That being said, it is clear from numerous opinion polls that Britons of all ages have a preference for the traditional imperial system. See the British Weights and Measures Association for more information on this subject.]

5

Mr Blair's favourite 'Euromyth' - that the EU wants to impose straight bananas on consumers - does actually have a basis in fact. Commission Regulation Number 2257/94 details the regulations covering the quality standards for bananas, including the requirement that they be at least 5.5 inches long and 1 inch wide. The regulation includes the provision that they be free from "abnormal curvature".

Similarly, European legislation lays down standards for the straightness of cucumbers. Interviewed on the BBC Today programme on 12 March 1996, Jacques Santer, then President of the EU, said "You know we hear so many of these stories in Brussels, sometimes I do not know whether to laugh or cry... We have a name for them, of course, Euromyths." When specifically asked whether the EU had legislation about the shape of cucumbers he replied: "No, no, not at this moment. I don't hope (sic) that we would have any regulation in the future." This was, quite simply, untrue. There has been European legislation since 1988 entitled "laying down quality standards for cucumbers" which includes rules for the straightness of cucumbers.

[Commission Regulation (EEC) No. 1677/88 of 15 June 1988 states (article 2B) that 'Extra' and Class 1 cucumbers must "be well shaped and practically straight (maximum height of the arc: 10 mm per 10 cm of length of the cucumber).}

Obsessing over the straightness of our fruit and vegetables is is, of course, just one area of EU regulatory lunacy. What often happens to 'euromyths' is that the EU will propose a measure which, thanks to the vigilance of our media, is exposed as costly or absurd. The proposal is then hastily withdrawn, and the EU bureaucrats pretend that it was just a 'myth' in the first place. [For an analysis of the process of deception used in dealing with 'Euromyths' see The European Community: Facts and Fairy Tales - A Review.]

5

Yes. A specific example was the legislation by the UK Parliament to prevent Spanish fishermen sailing under the British flag and so taking a quota of fishing rights allocated to the UK by the EU. The Fisheries Act passed both the House of Commons and House of Lords and was signed into law by the Queen in person. But, as the late Lord Tonypandy recalled "The politically motivated European Court of Justice instructed us that our Fisheries Act was illegal. They defined limits on what our Parliament could legislate. Our Westminster Parliament was humiliatingly put behind the European Union. As a further measure of contempt for Westminster, Europe proceeded to give the bullying Spanish fishermen authority to demand compensation for the period that our Privy Council, and our Parliament, by our legislation, kept them out of our waters."

[ Lord Tonypandy of Rhondda, Speaker of the House of Commons 1976-1983, Video address to the Referendum Party Conference, Brighton, 19 October 1996.]

This direct interference in British law making is wholly contrary to the British constitution, under which it is understood that "Parliament ... has ... the right to make or unmake any law whatever; and, further, that no person or body is recognized by the law of England as having a right to override or set aside the legislation of Parliament."

[This commonly accepted definition of the Doctrine of Parliamentary Sovereignty is that given by Professor A.V. Dicey in 1885. See Dicey, The Law of the Constitution, 10th ed.(1959) at 67-8. In Scotland, constitutionalists point out that the 1320 Declaration of Arbroath vests sovereignty in "the people." While there is a valid debate over whether the English concept of Parliamentary Sovereignty is applicable in Scotland, it is clear that neither the Scots nor the English constitutional tradition allows for the transfer of sovereignty to a supranational body such as the EU.]

5

Perhaps the most disturbing part of the Amsterdam Treaty was its provisions for the legal system known as Corpus Juris to be introduced throughout the EU. (Corpus Juris can be introduced by Qualified Majority Voting, so the EU can introduce it even if we were to refuse it by a 100% majority in Westminster.)

[Section II, Chapter 8, heading (d): "Measures for countering fraud against the financial interests of the Community"]

Corpus Juris will set up a European Public Prosecutor with over-riding criminal law jurisdiction throughout Europe, initially on matters of fraud against the EU budget, later to be extended to all criminal activities, which will thus come within the EU purview. Habeas Corpus and Trial by Jury - rights enjoyed by Britons since Magna Carta - are explicitly to be abolished under these proposals.

[ The proposals are being drawn up by EU Commission (XX DG) which details an EU criminal code and code of procedure. Article 26.1 explicitly provides for cases (where the sentence can be up to seven years) to be heard by Courts "consisting of professional judges, excluding simple jurors and lay magistrates."]

The implications of this proposal cannot be overemphasized. As Churchill wrote "...the great principle of Habeas Corpus and Trial by Jury ... are the supreme protection invented by the British people for ordinary individuals against the state. The power of the executive to cast a man into prison without formulating any charge known to the law, and particularly to deny him judgment by his peers for an indefinite period, is in the highest degree odious, and is the foundation of all totalitarian governments."

[ Winston Churchill, minute to the Home Secretary, 21 November 1943]

The obligation to conform to the requirements of the Amsterdam Treaty explains the Government's determination to press ahead with the abolition of the right to Trial by Jury for certain offences, despite defeat in the House of Lords and widespread opposition from lawyers and civil rights groups.

5

Yes. In a statement to the Bundestag on 29 April 2005 the German Government admitted that 80% of German legislation since 1998 has its origin in Brussels directives. The British government has consistently refused to reveal the figure for the UK, which is presumably similar.

Furthermore, the European Union operates under the doctrine of acquis communautaire which declares that once the EU has determined it has the right to legislate in a new area, its authority in that area is guaranteed in perpetuity. This is a one-way street to centralization.

5

The growth of EU authority over indirect taxation (VAT) illustrates the danger with EU law - a self-driven and continuous accumulation of power.

Article 99 of the Treaty of Rome called for the harmonization of indirect taxation to ensure "the proper functioning of the internal market" and in 1967 two directives required the adoption of VAT by all member states. The UK joined the Common Market on 1 January 1973 and VAT was introduced in Britain from April 1973.

In May 1977 and again in June 1978 the European Court forced Britain to end exemption and zero rating in several areas including construction of buildings, commercial fuel and power and news services.

The draft of the proposed European Constitution confirms the EU's rights and intentions in this field. Article III, 62 states that "European Law shall lay down measures for the harmonization of legislation concerning turnover taxes, excise duties and other forms of indirect taxation."

In short, Britain is obliged to harmonize VAT with Europe and will be obliged to charge VAT children's clothes, food, public transport, new houses, newspapers and books.

The European Commission also intends to enforce the existing VAT system on Internet transactions, imposing a requirement on ecommerce firms to register, collect and account for VAT in the appropriate jurisdiction, even though there is no international agreement or consensus on this issue. (Outside the EU such transactions are free of VAT.) [Source: Ernst & Young press release, 30 June 1999]

5

Yes. In fact, Article 192 of the Treaty on European Union contains a reserve power to impose individual taxation on everyone in the EU. It states: "Decisions of the Council or of the Commission which impose pecuniary obligation on persons other than States shall be enforceable."

The European Commission now is beginning to implement its powers of control over the member states' direct corporate taxation. [Code of Practice adopted on 1 December 1997 to counter 'harmful tax competition' between the member states. Reported in Taxation 19 November 1998, p.189] Under the Treaty of Rome, [Treaty of Rome Articles 87 and 88 (new numbering; Arts. 92 and 93 old numbering)] the Commission can direct a member state to withdraw any 'offending' tax schemes or face being taken to the European Court of Justice.

Gordon Brown, at the March 1998 ECOFIN held in York, claimed that the UK's independence and autonomy in its tax affairs was unaffected. He has now been proved to have grossly misled the country on this essential point of British fiscal sovereignty. For example, the Inland Revenue confirmed that the plans announced in the 1999 Budget for extending Capital Allowances in Northern Ireland (a measure planned to boost business investment in the Province following the Good Friday Agreement) fell foul of EU competition law. ['Tax harmonisation causes more headaches for Treasury' AccountingWeb, 17 June 1999.]

5

A proposed EU constitution was agreed by the EU's heads of government, including Tony Blair, on 18 June 2004. It represents an ambitious attempt both to consolidate the existing Treaties and greatly expand the formal competence of the Union. The constitution would give the EU a legal personality comparable under international law to its Member States and is a further step towards turning the EU into a centralized federal style state. Such an EU constitution would override national constitutions and Parliaments in any case of conflict. Yet, as EU research itself concedes, there is no EU community of people, no European "demos", to give it democratic legitimacy. [ Only 3% of EU citizens feel that they are European solely, 7% feel that they are primarily Europeans, while 47% feel they are firstly citizens of their own country and only then citizens of Europe. Eurobarometer No. 60, 2004]

In summary, the new powers the EU constitution would give the EU are:

• The abolition of the remaining national veto in almost all areas, meaning that Britain could be out-voted by other countries on new EU laws on most issues;
• The creation of a permanent EU President and an EU Foreign Minister;
• The suspension of British (and, presumably French) membership as a Permanent Member of the UN Security Council, should the EU require it;
• The establishment of an EU criminal justice system - Corpus Juris - on the continental model, without juries or habeas corpus;
• The creation of new EU new powers to harmonize employment and social policies;
• Inclusion of the EU's 'Charter of Fundamental Rights' into the treaty giving it full legal force. This would extend the competence of the EU Court of Justice into virtually every area of citizens' lives and make national Supreme Courts and the Court of Human Rights in Strasbourg subject to the EU in politically highly sensitive areas;
• The creation of an EU diplomatic service to harmonize the representation of EU member states in other countries;
• The creation of a European Armaments Agency to harmonize military spending;
• The creation of an open-ended "division of powers" meaning that, in many areas, EU member states will only be able to act if the EU has chosen not to. Britain will able to legislate in the fields of agriculture, fishing, justice, transport, energy, social policy and the environment only if the EU choses "not to exercise its competence."
• Article I-10 gives the constitution and EU law "primacy over the law of member states."
• Confirmation that all Britons (and nationals of other EU states) are citizens of the EU. (The duties of citizens are not defined.)

The Government has said that the EU constitution, along with all other EU laws, is to be part of UK law. They will be superior both to our own Constitution and our own law. For the first time this country is thus to have a written constitution and one whose interpretation will be solely in the hands of the European Court of Justice. Its judgments will therefore be superior to anything decided by the Crown in Parliament.

Despite the Prime Minister's claim that "we (Britain) have won every single thing we wanted to secure," [ Statement to House of Commons, 21st June 2004] only 27 of the 275 proposed British amendments to the Constitution were accepted.

The EU constitution proposes to merge the intergovernmental and supranational areas of the Treaties under a single institutional structure. This would strengthen EU powers and competence over Member States in new and important ways. The proposals represent a further stage in the assault on the nation states of Europe and the national democracies that underpin them, by the powerful political, bureaucratic and economic elites that are pushing the EU integration project.

5

The EU constitution required approval by all 25 member states. Its rejection by France on 29 May 2005 by a vote of 55% to 45%, and by the in Dutch by an overwhelming 62%-38% vote on 1 June 2005, should, therefore, mean that the constitution is dead.

In attempting unsuccessfully to sway French voters, President Jacques Chirac argued that there is no 'Plan B' in the event of the French rejecting the constitution - a tacit admission that, legally, the 'no' vote kills the treaty.

5

The rejection, by voters in two of the largest and previously most EU-enthusiastic founder members of the EU, is undoubtedly a great psychological blow to proponents of European integration. However, there is no likelihood at all of them readily accepting the message of the voters. Previous 'no' votes - in Denmark in 2002 over the Maastricht Treaty and Ireland's 2001 rejection of the Nice Treaty - were simply subjected to cosmetic changes and re-submitted to the electorate until the 'correct' vote was obtained. Interviewed in the Belgian newspaper Le Soir in the week before the French referendum, Jean-Claude Juncker (Prime Minister of Luxembourg, which holds the EU Presidency) left open the possibility that similar tactics might be employed in the case of the constitution when he said "the countries that have said 'no' will have to ask themselves the question again."

Even though the scale of the rejection of the constitution may make its formal resuscitation impossible, there is clear evidence that the EU is simply ignoring the verdict of the voters, and is pressing ahead with European integration anyway. The EU is proceeding on a comprehensive range of issues, including an EU diplomatic service, integration of defence and harmonization of elements of criminal law, which were supposedly dependent on the adoption of the constitution.

The calculated disregard for democratic niceties is, sadly, an established and proven feature of the way the architects of the European Union do business. Lamenting the Dutch referendum the day before the vote, the Netherlands' own Foreign Minister, Bernard Bot, quite literally insulted the intelligence of his countrymen when he commented "we were always opposed to it [the poll]... we always said this subject was far too complex to be the subject of a referendum." Claude Cheysson, the former French Foreign Secretary who subsequently became one of France's European Commissioners, famously observed that the Maastricht Treaty could only have been constructed "in the absence of democracy." He went on to conclude that the problems faced by the EU were the result of the "open debate" permitted during the Maastricht referendum in France. [Interview in Le Figaro, 7 May 1994.]

Similarly, despite - or perhaps because of - the euro's unpopularity, most European electors were denied the chance to vote on its introduction. In Germany, polls showed that over 60% of the population opposed scrapping the Deutschmark - yet no referendum was held on the subject. [ In view of the euro's weakness, Germans unsurprisingly continue to be highly sceptical about the currency. A poll conducted by Stern magazine in June 2005 showed that 56% of Germans wished to see the return of the Deutschmark. Former German Chancellor, Helmut Kohl believes his support for the abolishing the Mark cost him the 1998 election. It was, he recalls an 'unreasonable demand' upon the electorate: "At no time ... was a common European currency a popular project." Helmut Kohl, My Diary 1998-2000.] Challenged on this by a Dutch newspaper, which pointed out that most Dutch people wanted to keep the Guilder, the German Foreign Minister Klaus Kinkel made the extraordinary claim that "politicians should have the courage to take decisions ... against the will of the people." [Interview in NRC Handelsblad, 31 January 1998]

Clearly, what the French and Dutch referendums do indicate that the EU can no longer rely on the uncritical endorsement, or at best the apathy, of the European electorate. It is not now possible is for the European 'project' to claim any democratic mandate.

As the senior Labour MP Frank Fields has put it, "Do we vote for an essentially backward looking view, which the constitution offers, with yet more powers concentrated in Brussels? Or do we want that Europe develops together a different future where as much political and economic power as possible is exercised at a local level? That is the real choice." [ Interview in the Daily Telegraph, 26 April 2004]

It is also important to note that not a single one of the existing powers already lost to the EU will be returned to member states in the event of the constitutional process collapsing.

5

No one can seriously have much faith in the EU's probity following the Spring 1999 forced resignation of the entire European Commission on corruption charges - particularly as most of those who 'resigned' simply carried on as normal. The House of Commons' own Public Accounts Committee shares the general view that corruption in the EU is endemic and unreformable. The committee condemned the EU's "staggering complacency" in the face of fraud and waste and warned that reform would be a "monumental task". [ House of Commons Public Accounts Committee report issued 25 August 1999.]

Since 1995, the EU's own auditors have refused to sign off its accounts, citing rampant corruption as the main reason. The fomer Chief Accountant for the EU Commission, Marta Andreasen, claims the EU budget is "massively open to fraud" because it lacks even Enron's accountancy safeguards, saying: "Unlike the issues surrounding Enron and WorldCom, where you can at least trace transactions and accounts, you cannot do so within the EU accounts as there is no system in place for tracing adjustments and changes to figures presented. Fraud can, therefore, lie hidden within the system, undetected and untraced." [ Westminster press conference organized by Conservative MEPs, 3 August 2002.] She told The Times of 6 December 2004: "Opportunities for fraud are open and they are taken advantage of. The most basic elementary precautions are neither taken nor even contemplated." The European Commissioner Neil Kinnock fired Ms Andreassen for making these and other remarks, claiming it had been a 'mistake' to employ her in the first place. [ Reported in the Guardian, 3 August 2002.]

In what has become a predictable annual event, the EU Court of Auditors, once again refusing to certify the EU accounts as legal and reliable, listed a catalogue of institutional problems in its report of 24th October 2006.

The Court found "weak internal controls for the majority (our emphasis) of EU expenditure”, The Court also reported a "high incidence of errors in the underlying transactions" and that "overdeclarations and ineligible expenditure [ie fraud] continue to go undetected within the majority of EU expenditure areas".

5

Britain's trade with the European Union is in long-term decline. British exports to the North American Free Trade Area (NAFTA) have been growing at 9.2% a year since 1992, while exports to the rest of the world have been growing at 8.5%. Exports to the EU, however, have been growing at just 7.1%. This is despite the claimed 'benefits' of the Single Market to trade within the EU.

[Based on figures from the International Monetary Fund]

According to a report commissioned by the pro-EU Bruegel think-tank the countries of the EU buy only 10% of their products from other EU countries. 4% comes from outside the EU and the vast majority - 86% - is spent on national trade. If the Single Market theory had any validity, this figure would be nearer 50%.

[Bruegel, Brussels, October 2006.]

All the Single Market has really achieved is a greatly strengthened Brussels bureaucracy regulating and limiting virtually every aspect of business activity. In a survey of 1,000 Chief Executives, more than half (54%) said they felt EU over-regulation outweighs the benefit of the Single Market.

Interviewed in the Financial Times of 10 October 2006, the EU's Enterprise Commissioner Gunther Verheugen admitted that EU legislation costs European business £405 billion a year. This represents 5.5% of the total EU GDP and is roughly the same as the entire output of a medium sized European economy such as the Netherlands. The Commission's own claim for the benefits of the Single Market are that is has added £110 billion to EU GDP. So on the EU's own figures, the Single Market costs three times as much as the benefits.

[ICM poll, September 2006. The added bureaucracy entailed by the Single Market is described in The Castle of Lies, Christopher Booker and Richard North, Duckworth, 1997. ISBN 0 7156 2693 0.]

5

No. According to Government figures, the value of exports of goods and services to the European Union accounts for approximately 16% of UK gross domestic product (GDP).

Furthermore, our balance of trade with EU countries is massively in deficit. In 2003, Britain's current account deficit with the European Union reached a record £22.7 billion. This compares with a deficit of £3.1 billion in trade with Japan, and a healthy record surplus, of £18.6 billion, in Britain's trade with the United States.

In the 23 years up to 1995 Britain accumulated a trade deficit with the EU in manufactures of £116,600 million (about £220,000 million in today's money). This colossal deficit compares with a substantial surplus with the same countries in the 23 years preceding our joining the EU.

[Source: HM Government, Central Statistics Office - The Pink Book 2005, United Kingdom Balance of Payments]

5

Only one third of Britain's investments overseas go to EU countries. In 1997 alone Britain invested as much in the United States (£12.4 billion) as in the whole of the European Union (£12.6 billion).

[Source: Eurostat (the European Commission's statistical office) 1998]

[Both investment and trade figures with the EU are distorted by the 'Rotterdam effect' whereby goods passing through Dutch ports en route to world destinations are classed as exports to the Netherlands and thus to the EU. Similarly, many multinational corporations are headquartered in Amsterdam. Investment into the Netherlands accounts for 49% of our investments into the EU. (Source: Office for National Statistics, December 1997)]

56.7% of the book value of Britain's overseas assets is invested in countries outside the EU. 60% of Britain's investment income is derived from outside the European Union.

[Source: HM Government, Central Statistics Office - Annual Abstract of Statistics, 1999]

5

On the contrary, the Common Agricultural Policy (CAP) is specifically designed to keep food prices artificially high. CAP subsidies and destruction of fresh fruit and vegetables keeps European prices at levels well above those on the world market. This affects Britain, which traditionally imported much of its food from Commonwealth partners such as Australia and New Zealand, particularly badly. The Organization for Economic Cooperation and Development (OECD) concluded that "an average family of four in Britain pays approximately an extra £940 a year as a result of artificially high agricultural prices." [1993 OECD report Agricultural Policies, Markets and Trade]

This works out at £18 a week per family.

5

Well, the first point to make is that these 'grants' are our own money to begin with! In fact, Britain pays much more to the EU budget than we get back. Between 1973, when we joined the EU, and 2003, Britain made net payments to the EU of £51.0 billion. In 2005 alone Britain handed over £15.0 billion, and received back only £8.9 billion - a net deficit of £6.1 billion. [Office of National Statistics, October 2006.] Britain's annual payments to the EU will increase to even higher levels now that the UK's rebate, originally negotiated by Margaret Thatcher, has been lost.

5

The Institute of Directors has estimated that EU membership overall costs the UK between £15-25 billion each year - equivalent to £1000 per household. [Daily Telegraph, 7 February 2001]. A more recent study [Bruges Group, 1 September 2006] puts the total direct and indirect costs of EU membership at close to £100,000 per minute, or £873 for every man, woman and child in the UK.

(The Treasury - which choses to omit the indirect costs - disputes these figures, pointing out that Britain's net subsidy to the EU was 'only' £6.1 billion in 2005, according to figures released by the Office of National Statistics in October 2006.)

Far from being financially sound, Britain's membership of the EU has been an economic and social disaster. It is in this context that further moves to economic integration, most notably the single currency, need to be measured.

Perhaps unsurprisingly, the British Government has consistently refused to carry out a cost benefit analysis into continuing EU membership. The financially prudent Swiss have, however, carried out such an exercise. The Swiss examined three alternatives: to continue the current set of bilateral sector-specific arrangements, to join the European Economic Area, or to become a full member of the EU. The Swiss calculated that full EU membership would cost between six and nine times as much as the current system of bilateral trading arrangements. They also concluded that the resulting loss of sovereignty and freedom of action and the negative economic effects would far outweigh any supposed benefits.

[Europe 2006, Federal Government of Switzerland]

5

It is important to remember that the process of joining the single currency - EMU - stands for Economic and Monetary Union and not, as is often mis-stated, 'European' Monetary Union.

Should Britain join EMU it will surrender all powers to determine interest rates, the rate of inflation, the levels of unemployment and the rate of growth. As Professor Sir Alan Walters notes: "This is no theoretical abstraction, as we saw in the late and unlamented European Exchange Rate Mechanism (ERM), which was - indeed still is - a trial canter at monetary union. [Speech to the Referendum Party conference, 19 October 1996]

During the period of Britain's membership of the European Exchange Rate Mechanism (ERM), from 8 October 1990-16 September 1992, the British economy shrank by the equivalent of 3.9% GDP, and unemployment rose by 1.2 million. [Source: Burkitt, Baimbridge & Whyman; the European Economies Research Unit at the University of Bradford.] The damage inflicted on the UK economy through the loss of sovereignty over interest rate decisions should Britain join the euro has been estimated as potentially the equivalent of more than 1% of national income, or £9 billion every year. [Source: Andrew Brigden (Bank of England's monetary analysis unit), and Charles Nolan (University of Reading), Bank of England Working Paper, November 1999]

In making a decision on the euro, voters should also consider the political realities of EMU membership. Dr Itmar Issing, one of the executive board members of the European Central Bank has spelled out exactly what these are. The countries whose currencies have been replaced by the euro, he told a meeting in the House of Commons, have ceased to exist as separate territories. There is no more Germany, no more France, no more Belgium. There is simply 'Europe', (or 'Euroland' as he also called it). [ Addressing the European-Atlantic Group in the House of Commons and later at the St. Ermin's Hotel, St James, London, 28 January 1999]

5

The facts suggest exactly the opposite. According to the Government's own figures, Britain in 2001 attracted 20% of all foreign investment into the EU, far more than any other EU member. Germany attracted only 8% and France 13%. In 1997 alone, the United States invested nearly twice as much in Britain as in the rest of the EU (£9.4 billion versus £5.1 billion). [Invest UK, Department of Trade and Industry, September 2002]

In 2005, Britain attracted world record inward investments totalling £122 billion - more than three times the foreign investment earned by Germany, France and Italy combined. [United Nations, 23 January 2006]

According to the EU's statistical office, "both for 1996 and 1997 inward [investment] flows, the UK stood out with the strongest absolute increases and the highest amounts." In 1997 alone, the United States invested nearly twice as much in Britain as in the rest of the EU (£9.4 billion versus £5.1 billion). [ Eurostat (the European Commission's statistical office) 1998]

During the same period, foreign disinvestment from Germany was $2.38 billion. In other words, investment poured in the UK during the very period when Britain was making it clear that it would not be joining EMU - while money was simultaneously being taken out of EMU's most important member country.

The reality is that claims that major companies are preparing to leave Britain unless the UK adopts the euro have been proven to be deliberately misleading. In its lead story of 28 January 1999, the Daily Express ran an article claiming that Bank of America Corporation was abandoning the City of London because of uncertainty over the euro. The bank emphatically denied the story. On 24 November 1999 the Daily Telegraph ran a story based on information from the 'Britain in Europe' group claiming that Rover, Fiat and Nissan were threatening to quit Britain unless the UK joined the euro. All three companies immediately repudiated the suggestion; Fiat stating it to be a 'total fabrication'. Confronted with these denials, 'Britain in Europe' claimed that "there may have been a genuine error". [Daily Mail 25 November, 1999.]

5

Eleven members of the EU have abandoned their own currencies in favour of the EU single currency, the euro. They are:

• Austria
• Belgium
• Finland
• France
• Germany
• Ireland
• Italy
• Luxembourg
• The Netherlands
• Portugal
• Spain

Using unusually strong language, the Organization for Economic Cooperation and Development has warned of "serious turbulences" which could result from the continuing failure of the eurozone.

In its twice-yearly World Economic Outlook, published 24 May 2005, the OECD states that "What is badly lacking is sustained momentum in the eurozone... As a result, and looking ahead, growth prospects seem to differ widely across the OECD and the world economy, ranging from solid in Asia to back on trend in the United States, and weak and uncertain in Europe."

In stark contrast, the United Kingdom, outside the eurozone, has higher economic growth, lower unemployment, and lower public debt than any major eurozone country:

[Source: Daily Telegraph 3 June 2005.]

This is because the European Union is not an optimal currency area. The countries within the euro zone are too diverse in their economic structures and demographies to allow pain-free adjustment to differences in national economic performance. As was noted by 160 German and Austrian economists, prior to the euro's launch labour markets within the euro zone are too rigid to ensure smooth economic adjustment. In the absence of flexible labour markets or massive centralized fiscal stimulus, member states will be forced to adapt to changing economic circumstances by adjustments to the price of key factors of production, transmitted through differing rates of inflation and unemployment.

[ The economists published their manifesto for delaying the introduction of the euro in February 1998. An open letter was published simultaneously in the Financial Times and the Frankfurter Allgemeine Zeitung.]

The inappropriateness of the euro zone interest rate for individual members admitted by Dr Itmar Issing, one of the executive board members of the European Central Bank, at a meeting held in the House of Commons. [Addressing the European-Atlantic Group, 28 January 1999.]

5

Because, as the former Bank of England Governor Eddie George put it, "monetary union is fundamentally a political project rather than an economic issue." [Speaking at the British-Swiss Chamber of Commerce in Basel, Switzerland, 12 September 2000.] Its main objective, freely admitted by its key architects, is a political one - the further integration of the EU into a federal state. [See Report of The Commission on the £ Sterling, September 1999, 'The politics of EMU']

Willem Duisenberg, President of the European Central Bank, said that "The introduction of the euro is neither an isolated nor a purely economic event. It is another, yet very important, step in the process of European integration. ... The creation of the euro is not the end of that process either," adding that "economists all too often assess the costs and benefits of European integration in purely economic terms". (sic) [Dr. Willem F. Duisenberg 'The Past and Future of European Integration: A Central Banker's Perspective' The 1999 Per Jacobsson Lecture, Washington 26 September 1999.]

In fact, the long-term prospects for a sustainable single currency are not promising. As Lord Owen noted in a major article for the Economist:

"For continental European policians a single currency is above all a political not an economic issue ... In the 19th century there were three failed attempts in parts of Europe to create monetary unions. The German monetary union was fully fledged by the 1870s but it began some 40 years before, initially as a customs union. The Prussian Thaler - as the currency was called - held sway while Bismarck dominated. The French attempt at a Latin Monetary Union started in 1865 and included Belgium, Italy, Greece and Switzerland, and at the time Walter Bagehot warned that if Britain did nothing we would be left out in the cold. We wisely declined to join and never regretted it. In 1873, Sweden, Denmark and Norway started a monetary union which was dissolved in 1924. This albeit limited history shows that monetary unions fail ...".

[Economist, 24 January 1998]

The political dogma of 'further European integration' is the explanation for the willingness of European leaders to press ahead with the euro, regardless of the economic consequences to millions of Europeans. The economic failure of this dangerous politically-driven experiment may have negative consequences not just for the EU but for the world economy.

Unsurprisingly, the possibility of individual eurozone countries re-adopting their own currency is beginning to be taken seriously, particularly following the collapse of the over-ambitious EU constitution project.

5

The arrangements for Economic and Monetary Union are set out in a Protocol annexed to the Maastricht Treaty signed by the British Government in 1992. Article 30 of the Protocol would require Britain, on joining EMU, to transfer around £8,000 million of our gold and dollar reserves irrevocably to the European Central Bank in Frankfurt, Germany.

Article 42 provides that more of our remaining reserves could be transferred to the European Central Bank if a majority of the other EMU countries required it.

Britain would not be able to veto this process.

5

Potentially, yes. Article III-157 of the proposed EU constitution permits the EU to take action to "ensure the security of energy supply." Britain's North Sea oil accounts for 90% of EU reserves. Article III-157 was reinstated into the draft constitution at the last minute, having been previously removed. This tactic has been likened to the method used by the EU to seize control of another British maritime resource, fishing. The Common Fisheries Policy, which has proven disastrous both to the British fishing industry and to fish stocks, was slipped into the final terms of Britain's accession to the EU in 1973.

5

In theory, yes. But because Britain's economy and traditions differ so sharply from those of Europe, the UK often loses out in practice. Measures which particularly affect Britain include the banning of the use of imperial measurements and restrictions on the percentage of English language broadcasting permitted in Europe. At the macro-economic level, because Britain is an Atlantic economy, economic decisions made to benefit continental Europe are unlikely to be beneficial to the UK.

There are a number of areas where the UK is singled out for particular victimization. Perhaps the most blatant example is in the Common Fisheries Policy, which was slipped into the final draft of Britain's accession negotiations. Under the CFP, which defines fish as a 'common resource', Britain, which owns 80% of the fish stocks in European waters is allocated only 18% of the catch by value. As a result, British fish stocks have been decimated and thousands of fishermen have lost their livelihoods. In contrast, independent Norway has managed to maintain its fish stocks as a renewable resource. The CFP does not even pretend to be even-handed. (It has never been applied to the Mediterranean.)

5

Should Britain be unwilling to conform to the economic and monetary restrictions imposed by the European Central Bank, there are plenty of coercive powers to ensure that she does: "As long as a Member State fails to comply with a decision taken in accordance with paragraph 9 the Council may decide to apply or ... intensify one or more of the following measures:

"to require that the Member State shall publish additional information to be specified by the Council before issuing bands and securities;

"to require the Member State to make a non-interest bearing deposit

"to impose fines of a suitable size."

Thus the punishment for transgressing would be a massive dose of deflation at the behest of an unelected group of bankers.

5

Peace in Western Europe until 1989 was secured by the NATO alliance and in particular by the US commitment to western Europe (or, if one is being cynical, by the bipolar division of Europe into spheres of influence by the US and the Soviet Union). As the French Prime Minister Alan Juppe put it, "Only nuclear deterrence has been able to bring half a century of peace to the European continent". [ Le Figaro 27 August 1995]

In the 'small' wars which have broken out since the demise of the Soviet bloc, the EU's involvement has been one of blundering ineptitude, as in Bosnia. If anything, the political and economic distortions imposed by the EU increase the tensions between members, particularly over issues such as intervention in Iraq and the military relationship of EU member states with the United States.

German pronouncements on this subject have bordered on the bizarre. In a speech in Brussels in February 1996, Chancellor Helmut Kohl made the extraordinary claim that European integration was "in reality a question of war and peace in the 21st century," while his (then) governing CDU party claimed that "If European integration does not progress, Germany might try to effect the stabilization of Eastern Europe on its own and in the traditional way". [ Reflections on European Policy, CDU/CSU-Fraktion des Deutschen Bundestages, 8 September 1994.] (Of course, these militaristic aspirations are not necessarily those of the German people as a whole. [For an analysis of the complex German psychology with regards to Europe see German guilt; French phobias.]

5

Article 5 of the Amsterdam Treaty commits member states to unified military action as part of a Common Foreign and Security Policy (CFSP) and 2000 saw the creation of an 100,000 strong 'EU rapid reaction force' - in effect the armed wing of the EU. Widespread concern has been expressed that the creation of this force will undermine the NATO alliance. [ For example, see The Times, Leading Article, 18 January 2001]. The head of the EU Commission, Romano Prodi, foresees "a fully integrated West European army. I do not think that to have the troops of one European nation serving under officers from another presents a problem. We have Sicilian troops under the command of officers from Lombardy". (sic) [Quoted in The Times 26 March 1999.] Jacques Delors, the former EU Commission President, believes an EU army will be necessary to "fight the resource wars of the 21st century".

Article 15 of the draft European Constitution demands total and unequivocal obedience to the EU in the field of foreign policy. Article 15 of the draft constitution tells us that "the Union's competence in matters of common foreign and security policy shall cover all areas and all questions relating to the Union's security. Member states shall actively and unreservedly support the Union's common foreign and security policy in a spirit of loyalty and mutual solidarity and shall comply in this area."

5

The EU's own figures show the European Union's share of global Gross Domestic Product (GDP) halving compared to that of the United State by 2050, and that by the same year the EU share of world trade will he half that of either the EU or China.

Projected share of global GDP

Share of world trade (%)

[Source: European Commission: The EU Economy 2002 Review.]

This poor long term prognosis is fuelled by the low economic growth rates in the eurozone compared to the United States. From 2001-6, the eurozone economy grew by only 10.0%, compared to US growth of 18.1%. [Source: Organization of Economic Co-operation & Development.] Outside the eurozone, British growth was a comparatively healthy 15.8%.

As the success of small countries like Singapore, Switzerland and Iceland shows, there is no correlation between size and economic performance. Clearly, the economic underperformance of the EU demonstrates that any advantages which may accrue through European union are more than undermined by the bureaucracy, over-regulation, and downright corruption which are the hallmarks of centralized EU economic planning.

5

There is increasing evidence that most British voters want Britain to leave the EU. In a May 2004 poll, 72% said they believed there should be a referendum on leaving the EU. 45% of voters would vote to leave the EU in such as poll as against 43% who would vote to remain. [YouGov Poll, 17 May 2004.] Support for withdrawal rises to 51% if the continuance of trade with the EU could be assured (as it would have to be under World Trade Organization rules). This is in line with a number of previous similar polls. 50% would vote to leave the European Union if they could be assured that our free trade with the EU would continue even if we left it. 13% were "don't knows" and only 37% would vote to stay in. [Mori poll, 1-5 February 2001.] 60% favour leaving the EU if the alternative is joining the euro. [YouGov Poll, 17 May 2004.]

5

A small minority of our MPs is ideologically committed to 'Europe', believing it to represent the manifest destiny of the British nation to become part of a European superstate. Others simply have their noses in the trough. The former Conservative MP Hugh Dykes (now a Liberal Democrat peer) received funds for so many foreign trips in his capacity as an office-holder of the European Movement that he was given special permission not to list them individually in the Register of Members' Interests! [Reported in The Times, 8 July 1998.]

But by far the greatest majority of pro-EU politicians are simply, and shockingly, ignorant of the facts. When asked why they support the EU, the usual answer is a kneejerk 'because of the economic benefits'.

It is doubtful if more than a handful of our legislators devoted the necessary time to digesting European legislation before they voted on it. Certainly our representative at Maastricht did not: "Now we've signed it - we had better read it," as the then Foreign Secretary (Douglas Hurd) reportedly said on 7 February 1992 - a frivolous remark perhaps, but, tragically, all too true.

Internationally, politicians in the smaller states such as Portugal, Belgium, Ireland and Luxembourg gain a prominence from acting as official representatives of the EU which they would never otherwise enjoy. Particularly in Germany and France, politicians often refer to the European 'project' in terms which imply it is almost a divinely-inspired historical process. The former German Finance Minister Oskar Lafontaine apparently believes that the dead of two world wars - wars fuelled by German expansionism - were some kind of ritual blood sacrifice on the altar of European integration: "Europe is a task which has been set for us by history, and by the millions who died on the battlefields." [Address to members of Germany's ruling Social Democratic Party, 9 December 1998.]

5

At the time of the 1975 referendum the Government distributed a pamphlet in favour of Britain's continued membership of the Common Market to every household. This categorically stated "there was a threat to employment in Britain from the movement in the Common Market towards Economic and Monetary Union. This could have forced us to accept fixed exchange rates for the pound, restricting industrial growth and so putting jobs at risk. This threat has been removed." [Britain's New Deal in Europe , HM Government, 1975]

The quotation is important for a variety of reasons:

• It shows there is no mandate for the European single currency from the 1975 referendum;
• It shows that Economic and Monetary Union has been at the heart of the European 'project' long before the Single European Act and the Maastricht Treaty made those objectives public. [The Common Market's Werner Plan of the late 1960s proposed the total and irreversible convertibility of currencies; the elimination of exchange rate fluctuations and the complete liberalization of capital movements. The plan would have included all Common Market members and was supported by Heathºs government. It collapsed in the aftermath of the oil price shocks of 1973, following the Arab-Israeli war.]

What the British people thought they were voting for in 1975 was membership of a trading association. It is now apparent that the EU is dedicated to the merger of its member nations into a bureaucratic single state.

5

In a word, yes. Consider the following:

"There will not be a blueprint for a federal Europe" - Edward Heath, as Prime Minister, House of Commons, 25th February 1970

Presenter (Peter Sissons): "the single currency; a United States of Europe; was that in your mind when you took Britain in?" Edward Heath: "Of course, yes" [BBC Question Time 1st November 1991]

The case that Britain might lose its political independence was loftily dismissed at the time of Britain's accession to the Treaty of Rome: "There is no question of any erosion of essential national sovereignty," as Edward Heath's 1972 White Paper puts it.

Since the very first paragraph of the Treaty of Rome talks about achieving 'ever closer union' it is difficult to see how our politicians could have fooled themselves that the Common Market did not have a political agenda. The conclusion is inescapable, therefore, that they were - and are - trying to pull the wool over the eyes of the British public. As early as 1962, Ministers were given specific instructions to fudge the consequences of Common Market membership. Minutes of the Cabinet meeting of 23 October 1962 advise: "Ministers should in public speeches avoid accepting specific commitments or giving explanations of the Government's general commitments which might prove embarrassing when the final terms (of membership) become known in detail." [Cabinet papers released under the 30 Year Rule, 1 January 1993.]

During the entry negotiations conducted by the Heath government in 1970, it was already known to ministers that massive extensions to the competences of the Common Market were envisaged, including the creation of a single currency. As Sir Crispin Tickell, one of the UK's negotiators at Brussels has admitted: "Everyone wanted to approach these monetary issues with extreme caution and the less they came out in the open, the better." (Our emphasis) [BBC UK Confidential, 1 January 2001.]

This process of deception continues to the present day, with the connivance of current political leaders. When plans to harmonize taxation across the EU were exposed, Tony Blair and Gordon Brown were humiliatingly obliged to plead for less emotive language from their European 'partners', lest British public opinion be aroused. Unfortunately, Oskar Lafontaine, the then German Finance Minister, promptly let the cat out the bag. In an address to German Social Democrats on 9 December 1998 he said: "Our British colleagues have asked us not to use the word 'harmonization' but 'co-ordination'. Don't be afraid that I could say anything which might be misunderstood on the island. We must, step by step, carry out a major reform."

5

The question of how many jobs are linked to EU membership has probably been the subject of more distortion and outright untruths on the part of supporters of the EU than any other single issue. For example, in February 2000 the pro-EU 'Britain in Europe' group leaked a report commissioned from the National Institute of Economic and Social Research, claiming that it said showed eight million British jobs would be lost if Britain pulled out of the European Union. Martin Weale, director of the Institute, condemned the way the research had been distorted. He told The Times Britain in Europe's approach was "pure Goebbels. In many years of academic research I cannot recall such a wilful distortion of the facts. ... Britain in Europe's claims are absurd. Nobody could plausibly believe the figures. As the experience of the 1960s indicates, there is no reason why being outside the EU should necessarily involve mass unemployment". [The Times 19 February 2000.]

The truth is that the European Union has been a disaster from the point of view of jobs creation, particularly in the eurozone. Citing rising unemployment rates, stagnant private sector employment, and poor labour market performance, the International Monetary Fund comments that "high unemployment remains a major problem in Europe, especially among most of the economies that entered monetary union on January 1, 1999. ... The remarkable failure of European economies to provide adequate levels of employment for the potential labor force presents a critical policy problem." [Chronic Unemployment in the Euro Area - Causes and Cares; International Monetary Fund, 1999.] Furthermore, most of the unemployment total in the euro zone is 'structural' - that is, it derives directly from the economic regime imposed by Exchange Rate Mechanism and the euro. [Lombard Street Research Survey, August 1999.]

When Britain attempted to hold a fixed rate of exchange with the other European currencies as part of the ill-fated European Exchange Rate Mechanism (ERM), unemployment rose rapidly, as is illustrated in the graph below:

UK, French and German percentage unemployment, 1987-1997

[Source: OECD Economic Outlook]

Ftom 1994-2000 unemployment fell much faster in the United Kingdom than in the in the rest of the EU. From 2000 onwards unemployment in the UK has continued to fall. But in the countries which have adopted the euro currency, the trend has reversed, with rates of unemployment increasing. (See graph below). Politically inspired and driven European integration is bad for employment.

UK and eurozone percentage unemployment, 1994-2004

[Source: Thomson Datastream]

5

Yes. The practical route would be for Parliament to pass a simple Act confirming the supremacy of British legislative institutions over those of the European Union. This would effectively repeal Section 2 of the 1972 European Communities Act and all subsequent European legislation which allows the European Union to overrule Britain's parliament and judiciary.

5

According to The Hansard Society: "Any attempts by any government to try to amend Community legislation to its own wishes are doomed to failure ... Parliament has little, if any, input upon the process of European law-making. Where successful changes are introduced from the UK, these are usually done by various interested sectors and bodies."

[Report of Commission on the Legislative Process 1993.]

In 1996 the House of Commons Select Committee on European Law concluded that Westminster no longer possessed an effective scrutinizing ability in matters of EU law. The Committee stated: "European law accounts for a large and increasing proportion of the law of each member state, yet it increasingly seems to be made in a private club."

[The 1996 Inter-Governmental Conference: The Agenda, Democracy and Efficiency and the Role of National Parliaments, House of Commons Select Committee on European Law, 1996]

5

'Reform from within' is the siren cry of those who favour European integration, but without the accompanying bureaucracy, cost, outright fraud, and lack of democratic accountability. All one can say is that throughout its history the drive in the EU has been wholly in the opposite direction. Britain, for all the occasionalrhetoric of its leaders, has failed to reverse this trend.

5

Not without a wholesale change in the way the EU operates. Under the doctrine of acquis communautaire all members of the European Union must adopt EU law in its entirety. This also applies to new countries joining the Union. At the November 1998 Baltic Sea Security Conference, the political director of the German Foreign Ministry, Klaus Neubert, speaking on behalf of the EU, said: "The (EU) acquis is 320,000 type-written pages (sic) with only 80,000 that are negotiable and those are not negotiable on substance but on transition times. Candidate countries must accept all of this law and make sure that it is applied effectively." (our emphasis) [The Baltic Times 26 November-2 December 1998.] In practice, EU enlargement has shown up the flaws int he whole integrationalist, 'one size fits all' approach to European development, as the failure of the EU constitution demonstrates.

5

Freed from the economic, political and treaty restraints of the obsolete European Union concept, an independent Britain might pursue a combination of options. These include:

• Continuation of a associated, or free trade, arrangement with the continuing European Union (it would in any event be impossible for the EU to levy trade restrictions against the UK under World Trade Organization Rules
• Re-establish intergovernmental relations with individual European nations through the Council of Europe and by re-joining the European Free Trade Area (EFTA)
• Pursue a closer relationship with the world's most successful trading area, the North American Free Trade Area (NAFTA)
• Pursue a closer relationship with the world's fastest growing economic area, the Indian/Chinese/Pacific region, a process facilitiated by Britain's leading role in the Commonwealth, to which many of this region's states are also members.

None of the above is an exclusive option, and none of them requires an isolationist stance from the UK - quite the contrary, in fact.

For a detailed analysis of the options facing Britain, including maintaining the status quo, see Britain and the European Union: Alternative Futures; Brian Burkitt, Mark Baimbridge, Philip Whyman; Campaign for an Independent Britain 2005; 140pp, ISBN: 0951964259

5

No. As Sir John Coles, former head of the Diplomatic Service, puts it Europe "will always need us - as a major economy and a major trading power, as a country with a serious defence capability, special international experience [and] acknowledged diplomatic skills." (In military terms, Britain is authoritatively regarded as the fourth most powerful nation in the world, after the US, China and Russia.[Index of Martial Potency Royal United Service Institute, 1998].) In contrast, he argues, if "the centralizing tendencies of the EU continue unchecked ... it will indeed reduce British influence". [Sir John Coles, British Influence and the euro, New Europe, November 1999.] Britain's Permanent Membership of the UN Security Council and membership of the G7/8 Group of Industrialized Nations are threatened by our continued EU membership. The Finance Ministers of France, Germany and Italy are already excluded from key G7 finance meetings in favour of a single (unelected) representative from the European Central Bank.

A survey by the Japanese Ministry of Trade found that 55% of all commercially viable inventions in the last 60 years have originated in the UK. 59% of Americans believe Britain is the European country with the greatest worldwide influence. [USA Today 22 January 1999.] Britain is also regarded - by Europeans - as the European country which has contributed most to the world. [Reader's Digest survey of 4,000 people in 19 EU states. June 2004.]

5

Certainly. By most measures Britain is the fifth largest economy in the world. [ United Nations Statistical Yearbook, published annually.] According to the EU's own figures, Britain's overseas investments are by far the largest of any European nation. Britain alone accounts for two thirds of all European investment into the United States. In 2002, Britain's overseas investments reached a record £644.8 billion. [HM Government, Central Statistics Office - The Pink Book 2004, United Kingdom Balance of Payments.] The UK is second only to the USA as the world's largest investor overseas. [Key Facts, Department of Trade and Industry, 2004.]

British companies are also the most acquisitive in the world. In the first half of 1999 alone, British firms were the purchasers in nearly 50% of international mergers and acquisitions, in deals worth a staggering US$409 billion. [ Survey from business consultants KPMG.] Although Britain is ranked only eighth among the world's most competitive economies, the UK is considered more competitive than all other EU member states, with the exception of Luxembourg. [World Economic Forum report, July 1999. Singapore is top of the competition league, followed by the USA and Hong Kong. Clearly, geographical size or population is no indicator of competitiveness.]

Since 1994, economic growth in the United Kingdom has consistently outperformed that of the eurozone. (See graph below).

UK and eurozone economic growth (GDP), 1994-2004

[Source: Thomson Datastream]

Opponents of British withdrawal attempt to paint an apocalyptic vision of job loss if we left the EU. Quite apart from the fact that trade penalties against Britain would be illegal under World Trade Organization rules, the EU is hardly likely to cut off links with a major economy with which it trades at a healthy profit. As a major study of the effects of leaving the EU has concluded "alternative arrangements with the EU would almost certainly benefit Britain. The idea that dire economic consequences make the UK departure from the EU unthinkable have no evident foundation." [ Better off Out? The Benefits or Costs of EU Membership, Brian Hindley and Martin Howe, Institute of Economic Affairs, 1996]

It is also worth noting that European countries outside the EU - such as Norway and Switzerland - continue to survive and prosper. Indeed, the highest standard of living of any European country is in one of the smallest states - Liechtenstein. Britain is far more integrated into the global economy than any of her continental neighbours, and has every incentive, therefore, to free itself from the artificial limitations imposed by the EU.

5

Being 'for' Europe means actively seeking social, sporting and cultural co-operation with our friends across the Channel. It particularly involves seeking trade with our neighbours which is to our mutual advantage. The inhabitants of these islands have been trading with their continental neighbours since time immemorial. Archaeologists find remains of wine jars imported from Marseilles dating from long before the time of Christ. These activities over thousands of years did not require a European Union. Opposing the European Union is entirely compatible with a cosmopolitan, European outlook - all the more so, indeed, because to do so rejects a bureaucratic centralized state that will stifle the cultural and economic diversity of the continent.

Version 14.6.
Last revised 18 May 2007.

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