EU referendum

EU referendum pros and cons: Should Britain vote to leave Europe?

Jun 13, 2016

Or is the UK better off remaining in the EU? The country will decide in a referendum on 23 June

On 23 June, the UK will settle a question that's been rumbling close to the surface of British politics for a generation: should the country remain within the European Union, or leave the organisation and go it alone.

Both sides insist that the outcome of the vote will settle the matter of Britain's EU membership for the foreseeable future.

Polling data: Which side will win?The latest news on Leave and Remain
How we got here

The Conservative election victory last year activated a manifesto pledge to hold an in/out referendum on Britain's membership of the European Union by the end of 2017.

David Cameron made the promise of an EU referendum at a time when he was under pressure from Eurosceptic backbenchers within his own party – and when the Tories appeared to be losing votes to Ukip. Most political commentators agree that, given a free hand, he would not have wanted a referendum, and that he is now desperate to secure Britain's place in the EU.

This winter, he embarked on a tour of EU capitals as he sought to renegotiate Britain's terms of membership, which concluded at a summit in February. Presenting the result as a victory, he vowed to campaign with his "heart and soul" to keep Britain inside a "reformed" EU, but several members of his own Cabinet are campaigning for a British exit – or Brexit.

So what are the advantages and disadvantages of being a part of Europe? Would Britain be better off staying inside the club or going it alone?

The pros and cons of leaving the EU

The greatest uncertainty associated with leaving the EU is that no country has ever done it before, so no one can predict the exact result. Nevertheless, many have tried.

Membership fee

Leaving the EU would result in an immediate cost saving, as the country would no longer contribute to the EU budget. Last year, Britain paid in £13bn, but it also received £4.5bn worth of spending, says Full Fact "so the UK's net contribution was £8.5bn". That's about 7 per cent of what the Government spends on the NHS each year.

What's harder to determine is whether the financial advantages of EU membership, such as free trade and inward investment (see below) outweigh the upfront costs.

Trade

The EU is a single market in which no tariffs are imposed on imports and exports between member states. "More than 50 per cent of our exports go to EU countries," says Sky News, "and our membership allows us to have a say over how trading rules are drawn up."

Britain also benefits from trade deals between the EU and other world powers. "The EU is currently negotiating with the US to create the world's biggest free trade area," says the BBC, "something that will be highly beneficial to British business."

Britain risks losing some of that negotiating power by leaving the EU, but it would be free to establish its own trade agreements.

Ukip leader Nigel Farage believes Britain could follow the lead of Norway, which has access to the single market but is not bound by EU laws on areas such as agriculture, justice and home affairs. But others argue that an "amicable divorce" would not be possible. 

"If Britain were to join the Norwegian club," says The Economist, "it would remain bound by virtually all EU regulations, including the working-time directive and almost everything dreamed up in Brussels in future." And it would no longer have any influence on what those regulations said.

Leading Brexit campaigner Boris Johnson, meanwhile, has proposed adopting a Canada-style trade arrangement. "I think we can strike a deal as the Canadians have done based on trade and getting rid of tariffs" and have a "very, very bright future", he said. The idea was quickly dismissed by the PM, who said it would mean "years of painful negotiations and a poorer deal than we have today".

Eurosceptics argue that the vast majority of small and medium sized firms do not trade with the EU but are restricted by a huge regulatory burden imposed from abroad.

A study by the think-tank Open Europe, which wants to see the EU radically reformed, found that the worst-case "Brexit" scenario is that the UK economy loses 2.2 per cent of its total GDP by 2030 (by comparison, the recession of 2008-09 knocked about 6 per cent off UK GDP). However, it says that GDP could rise by 1.6 per cent if the UK was able to negotiate a free trade deal with Europe – ie to maintain the current trade set-up – and pursued "very ambitious deregulation".

Whether other EU countries would offer such generous terms is one of the big unknowns of the debate. Pro-exit campaigners argue that it would be in the interests of other European countries to re-establish free trade, but their opponents suggest that the EU will want to make life hard for Britain in order to discourage further breakaways.

France has said recently that there would be "consequences" for Britain if it left the EU.

Investment

Inward investment is likely to slow in the run-up to the vote, due to the uncertainty of the outcome and its consequences: that's what happened in before the Scottish independence referendum in 2014.

In the longer term, there are diverging views: pro-Europeans think the UK's status as one of the world's biggest financial centres will be diminished if it is no longer seen as a gateway to the EU for the likes of US banks, while Brexit campaigners suggest that, free from EU rules a regulations, Britain could reinvent itself as a Singapore-style supercharged economy.

Fears that car-makers could scale back or even end production in the UK vehicles could no longer be exported tax-free to Europe were underlined by BMW's decision to remind its UK employees at Rolls-Royce and Mini of the "significant benefit" EU membership confers. Likewise, Business for New Europe says tax revenues would drop if companies that do large amounts of business with Europe – particularly banks – moved their headquarters back into the EU.

Barclays, however, has put forward a worst-case scenario that might benefit the Outers. It says the departure of one of the EU's most powerful economies would hit its finances and boost populist anti-EU movements in other countries. This would open a "Pandora's box", says the Daily Telegraph, which could lead to the "collapse of the European project".

The UK would then be seen as a safe haven from those risks, attracting investors, boosting the pound and reducing the risk that Scotland would "leave the relative safety of the UK for an increasingly uncertain EU".

Sovereignty

For Brexiters, sovereignty may seem to be a simple win: few disagree that EU membership involves giving up some control over our own affairs.

Labour MP Kate Hoey says the EU is "an attempt to replace the democratic power of the people with a permanent administration in the interests of big business." Those on the right of the Conservative party may disagree with her emphasis, but they agree that EU institutions have drained power from the British Parliament.

"The trouble is that most of us have no clue as to how the Brussels monolith works, or who's in charge," says Stay or Go, the Connell Guide to the EU referendum. But, it says, we have only ourselves to blame. "We've made it that way" because too many of us "can't be bothered to vote" in European elections.

For those in the Remain camp, EU membership involves a worthwhile trade of sovereignty for influence: in return for agreeing to abide by EU rules, Britain has a seat around the table at which they are set - and, say campaigners, its voice is amplified on the world stage as a result.

"The truth is that pulling up the drawbridge and quitting the EU will not enhance our national sovereignty," says shadow foreign secretary Hilary Benn. "All it would do is to weaken it by taking away our power to influence events in an ever more complex and interdependent world."

Nor, they say, would UK sovereignty be absolute if the country withdrew from the EU: the British government would still be bound by membership of Nato, the UN, the World Trade Organisation, and various treaties and agreements with other nations.

Immigration

Under EU law, Britain cannot prevent anyone from another member state coming to live in the country – while Britons benefit from an equivalent right to live and work anywhere else in the EU. The result has been a huge increase in immigration into Britain, particularly from eastern and southern Europe.

According to the Office for National Statistics, there are 942,000 eastern Europeans, Romanians and Bulgarians working in the UK, along with 791,000 western Europeans – and 2.93m workers from outside the EU. China and India are the biggest source of foreign workers in the UK.

Inners say that, while the recent pace of immigration has led to some difficulties with housing and service provision, the net effect has been overwhelmingly positive. By contrast, Farage says immigration should be cut dramatically, and the leaving the EU is the only way to "regain control of our borders". Other pro-Brexit campaigners would not necessarily reduce immigration, but say that it should be up to the British Government to set the rules.

David Cameron says that concessions he won during the renegotiation of Britain's EU membership will reduce immigration as new arrivals will receive a lower rate of child benefit. 

Jobs

The effect of leaving the EU on British jobs depends on a complex interplay of the factors above: trade, investment and immigration.

Pro-EU campaigners have suggested that three million jobs could be lost if Britain goes it alone. However, while "figures from the early 2000s suggest around three million jobs are linked to trade with the European Union," says Full Fact, "they don't say they are dependent on the UK being an EU member."

If trade and investment fell post-Brexit, then some of these jobs would be lost – but if they rose, then new jobs would be created.

A drop in immigration would, all else being equal, mean more jobs for the people who remained, but labour shortages could also hold back the economy, reducing its potential for growth.

Stuart Rose, former Marks & Spencer chief executive and a prominent pro-EU campaigner, conceded recently that wages may rise if Britain leaves – which would be good for workers, but less so for their employers.

Writing for the London School of Economics, Professor Adrian Favell says limiting freedom of movement would deter the "brightest and the best" of the continent from coming to Britain and reduce the pool of candidates employers can choose from.

Free movement of people across the EU also opens up job opportunities for British workers seeking to work elsewhere in Europe.

Britain's place in the world

For Outers, leaving the EU will allow Britain to re-establish itself as a truly independent nation with connections to the rest of the world. To Inners, Brexit would result in the country giving up its influence in Europe, turning back the clock and retreating from the global power networks of the 21st century.

Brexit would bring some clear-cut advantages, says The Economist. The UK "would regain control over fishing rights around its coast", for example. But it concludes that the most likely outcome is that Britain would find itself "a scratchy outsider with somewhat limited access to the single market, almost no influence and few friends".

Britain would remain a member of Nato and the UN, but it may be regarded as a less useful partner by its key ally, the US. The American government fears that the "EU referendum is a dangerous gamble that could unravel with disastrous consequences for the entire continent", says The Guardian.

Security

Work and Pensions Secretary Iain Duncan Smith, who has come out in favour of Brexit, says we are leaving the "door open" to terrorist attacks by remaining in the EU. "This open border does not allow us to check and control people," he says.

However, a dozen senior military figures, including former chiefs of defence staff Lord Bramall and Jock Stirrup, say the opposite. In a letter released by No 10, they argue that the EU is an "increasingly important pillar of our security", especially at a time of instability in the Middle East and in the face of "resurgent Russian nationalism and aggression".

Defence Secretary Michael Fallon has also said the UK benefits from being part Europe, as well as Nato and the United Nations. "It is through the EU that you exchange criminal records and passenger records and work together on counter-terrorism," he said. "We need the collective weight of the EU when you are dealing with Russian aggression or terrorism."

In contrast, Colonel Richard Kemp, writing in The Times, says these "critical bilateral relationships" would persist regardless of membership, and that it is "absurd" to suggest that the EU would put its own citizens, or the UK's, at greater risk by reducing cooperation in the event of Brexit.

"By leaving, we will again be able to determine who does and does not enter the UK," says Kemp, a former head of the international terrorism team at the Cabinet Office. "Failure to do so significantly increases the terrorist threat here, endangers our people and is a betrayal of this country."

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A chain is as strong as its weakest link. Think of Spain, Portugal, Greece, and the answer is clearly "Yes, Britain would be better out of the EU". Its hard to soar like an eagle when you are surrounded by turkeys.

The current version of the EU with its emphasis on political and financial unity bears no resemblance to the trade zone we originally voted to join,aside from Germany and the UK only the eastern member states are showing any domestic growth,France,Italy and Spain are barely treading water,if the EU is to prosper it must return to its original concept,the euro has been a disaster and the drive for political union has been totally undemocratic.

Cameron should get off the EU fence and commit himself to either the YES or NO to Europe. He should lead not be led. The longer he sits on that fence he would only damage his rear.

Hopefully he will damage himself sufficiently that in a year he will be returned to the ranks of no-account posh boys with no idea about real life. Heard him on the radio the other day being interviewed, he was asked pointedly and repeatedly about the trashing he'd taken at the hands of UKIP, and all he could talk about was his superiority over Miliband. We need rid of such people, who neither lead nor follow, just muddy the waters and make themselves rich in the process

Let's get a bit provocative, shall we? Mr. Cameron quite clearly fails the courage to make up his mind: staying in or leaving the European Union. Besides, maybe the EU would be better off without the fickleness and obstruction of Great Britain, since this former world power may still have the pretension to be "Great", but has no longer the means nor the influence to claim that adjective. Besides, suppose the Scots do decide for their independance in September and ask for membership to the EU, where would that leave Merry Old England? In the dark and cold shadows of a once bright and glorious past? And with charming Nigel Farage as PM? Little Britain as a reality show.

TWe would be far better off leaving the EU. It costs us a fortune just to be a member--we are one of only two or maybe three contributors (Germany is a contributor and maybe a scandinavian country)--the rest are beneficiaries--they get far more than they pay in. The EU has destroyed many of our traditional industries--too numerous to mention here. It has the last word over our laws. The open borders mean that we are vastly over-populated. A tiny wee island sinking with about 70 million people all crammed together--far too many--by far. We have a trade deficit with the EU--they sell much more to us than we sell to them--so they gain from trade. The best countries, and most lucrative economies are ALL OUTSIDE THE EU. The EU is the past--countries in Asia , South America etc.--are where the future is. (and do not forget Australia , Canada, the USA and New Zealand.
The sooner we leave--the sooner we start to save money and reduce our one and a half trillion pounds deficit--a national disgrace.

The chain analogy is completely wrong. It was clear from the analysis above we would be taking massive risks if we decided to leave. try to put a value on the things we would lose (e.g. much manufacturing).

You sound like a Kipper...willing to grab any silly point that seems to support your pre-conceived policy position; sadly, there are many Kipper types who grab at the same nonsenses.

"There would also be costs"

FFS Kippers, read what followed that. Then try to think.

...with freedom come risks! We risked annihilation when we declared war on Germany over Poland in 1939. This nation now lacks confidence and leadership - not courage and enterprise.

Firstly, Winston Churchill did propose a United States of Europe, he also said that the UK should play no part in it.

Secondly a country technically has already left the EU, namely Greenland.

Yes of course there would be risks like anything, there are risks staying in and its costing us massively to do so.

There would be a few years of turmoil until it finally settled down. The Norway and Switzerland analogy is totally wrong, we are far more than these 2 countries. We import more than we export to the EU so they wont want a trade war with us it would cost them dearly. Besdies we are exporting less and less to the EU every year. We also had to end our trade relations with the anglosphere to join the EU and look what a disaster that's been. You look how well anglosphere countries are doing compared to EU countries. We would gain much back, control of our borders, our fishing grounds our right to trade with who we want.

What a load of rubbish. Mind you the EU would be better off without the UK, unfortunately they need our money and our military which is why they put up with us. As far as the EU is concern the UK makes no contribution apart from the above. My wife who is French worked for them for 4 years she knows exactly what the Eurocrats think of the UK and the British people and its certainly not nice.

What is all this FFS Kippers crap. Why dont you try thinking nugget. We know there would be costs, but they are worth it. Well obviously not to you you cave dwelling moss licker.