BREXIT IN BALANCE: FACTS & FIGURES TO FUEL YOUR DEBATE

BREXIT IN BALANCE: FACTS & FIGURES TO FUEL YOUR DEBATE

Finally a balanced compilation of cold, hard facts. Here at Enlightly we want to help you make up your mind on this very important issue. With the referendum set for June 23 and public opinion heated and divided, it is more important than ever to understand what is at stake. Here are 6 reasons for and against staying in the EU:


1. TRADE

1.TRADE

It is a fact that more than half of the UK’s goods are exported to the EU; 45% if we also include service exports. Leaving the EU would likely hurt that trade flow in the form of higher export tariffs and controls. Britain also benefits from Europe’s combined power in trade negotiations vis-à-vis third parties to obtain better terms.

That being said, there are a number of very large markets with whom the EU has not yet agreed large-scale trade deals, and which Britain could target independently, like Russia, India, China and the US. While the US and the EU are in the process of negotiating a treaty it is highly unlikely that an EU-led deal with Russia could be accorded any time soon, given recent sanctions imposed against the Eastern behemoth.

2. EUROPEAN UNION BUDGET

2.BUDGET

Britain pays the EU a lot of money, £9 billion to be exact. The amount of money sent to Brussels has remained stubbornly high despite the rebate granted to the UK in 1984 on the accounts that the country benefited little from the (highly inefficient) agricultural subsidies of the Common Agricultural Policy (CAP).

However, Germany contributes 50% more to the EU budget than the UK, and both countries receive back a similar proportion of the money contributed. The cornerstone of benefits to the UK are the estimated 2.5 million jobs across trade, service and manufacturing that exist in the UK thanks to the EU. This helps partly explain the fact that the UK has grown 1% more than the average of France, Germany and Italy since it joined the European common market -but not before-.

3. REGULATION

3.REGULATION

Britain sees itself as a dynamic economy sometimes burdened by the weight of regulation from the EU, which hinders growth and impedes initiative. The OECD does not fully agree, saying that Britain is less regulated than many of its European peers, and indeed even less than other countries like the US.

Employment law is an area of particular contention. Labour is notoriously tightly regulated in continental Europe, and Britain sees many health and safety regulations as camouflaged attempts at regulating its own market too.

 4. INFLUENCE

4.INFLUENCE

The UK is exceptionally well positioned in international institutions, being a permanent member of the UN Security Council, G20, G7, NATO, a founding member of the Commonwealth, one of the first non-Asian countries to join the Asian Infrastructure Investment Bank, etc. All of these seats can arguably be kept in a world in which the UK does not belong to the EU anymore.

However, in a context where parallel international institutions are being built to challenge those still reflecting the world order belonging to the aftermath of World War II, the UK may be starting to spread itself too thin, with embassies and delegations understaffed and underpaid. The UK can use the common support and resources of other European countries, which materialise in EU delegations working together with the UK in conferences and institutions the world over.

5. IMMIGRATION

5.IMMIGRATION

The UK is growing, its population set to overtake that of Germany to become the largest country in Western Europe by 2047 at the latest. Partly aided by this, Britain is also on-course to surpass the size of the German economy in about two decades to become the largest in Western Europe and the fourth largest in the world for a brief time (until the UK itself is surpassed by Brazil).

However, the majority of these changes allowing Britain to compete in an increasingly global market are due to the effect of positive net migration, not natural growth. Notwithstanding this, should Britain choose to leave the EU, it could curtail the recent increase of EU-originated immigrants, which have only recently overtaken non-EU immigrants as the primary source of new inhabitants for the country.

6. BRITISH VOTERS’ PREFERENCE

6.PREFERENCES

The voters have the last word, so there is no arguing whatever their choice shall be in the end. Yet there is no doubt that opinions are divided. While EU membership has been favoured for much of recent history, the race has become much more disputed in recent years.

British people seem to be a lot more worried about immigration than about the EU itself, but immigration is a function of EU membership. The opinion of voters is also not necessarily the exact same as the opinion of businesses. SME-size businesses worry about excessive regulation, and 20 to 41% of them think that the EU hurts business rather than help. Economists hold different views depending on the weight that is assigned to each of the possible scenarios after Britain decides to stay or to leave. Big business thinks Britain is better-off within Europe, while the City seems to lean discreetly towards the pro-stay side, with a minority campaigning to leave.

In this momentous running-up to the final vote, what message will Britain send to Europe and the rest of the world on how it sees itself?

 


SOURCES

Chatham House

The Economist

Bloomberg News

Ipsos Mori

Financial Times

Eurostat

Business For Britain

Politico

CityAM

International Bankers