Would Britain be better off outside the EU?
In the recent European elections many voters seemed ready to reject the EU. Here’s what that might entail
European leaders are meeting in Brussels to discuss their response to last week's elections, in which anti-EU parties made striking gains.
"The results of the European Parliament election led to calls for an EU rethink by those leaders who suffered defeats," the BBC reports. "Reforms could include less regulation and less focus on economic austerity policies, while measures to boost growth and create jobs could address voter discontent."
But what if Europe, or individual members, took a more radical approach? What are the advantages and disadvantages of being a part of Europe? And would Britain be better off staying inside the club or going it alone?
How did the European Union come about?
After the Second World War, Winston Churchill proposed “a structure under which [Europe] can dwell in peace, in safety and in freedom... a kind of United States of Europe”.
At the time, the proposal was broadly popular in Britain, but when the European Coal and Steel Community was founded in 1951 with the aim of making “war not only unthinkable but materially impossible”, Britain stood aside.
Britain also declined to join the European Economic Community, when the six founding nations: Belgium, France, Italy, Luxembourg, the Netherlands and West Germany signed the Treaty of Rome in 1957.
Britain relented in 1961 and applied to join the EEC after watching France and Germany’s economies show signs of recovery. But its application was rejected not once but twice because the then French President Charles de Gaulle saw “deep-seated hostility” in the British attitude towards Europe.
Ironically it was the Conservative Party that eventually led Britain into Europe in 1973, with the more sceptical Labour party promising a referendum on whether the country should stay in, leave or seek renegotiated terms. When the referendum was held in 1975, the main political parties and all national newspapers campaigned for a vote to stay in the EEC, a stance backed by 67 per cent of voters.
Over the next two decades Britain’s relationship with Europe became more complex, with Margaret Thatcher expressing deep antipathy towards the project. In 1992, however, her successor John Major signed the Maastricht Treaty, which created the European Union and the single pan-European currency (though Britain later opted out of that).
How might Britain exit the EU?
The most likely way out of the EU would be for Britain to hold a referendum. David Cameron has committed to holding an in-out referendum by 2017 if he wins the next election, and has said he would not trade that promise as part of any coalition negotiations.
Another scenario could see a referendum triggered by provisions contained within the European Union Act 2011, under which a referendum must be held in the event of any new EU treaty that attempts to shift significant power from Westminster to Brussels.
How would Britain fare outside the EU?
It would quickly see some benefits The Economist suggests. Treasury figures show that the nation would in fact be £8 billion better off each year. It would also be able to claim back its territorial fishing waters, scrap caps on limits to the number of hours people can work per week, free itself from the EU’s renewable energy drive, and create a freer economic market. This would turn London into a “freewheeling hub for emerging-market finance—a sort of Singapore on steroids”, the Economist says.
There would also be costs. British farmers would lose £2.7 billion in EU subsidies once Britain left the union, many UK car producers may leave the country rather than pay the EU’s four per cent tariff on car-equipment sales, and business investment would probably drift away from Britain towards the continent. Airbus might also leave in a bid to keep its supply chains simple, and an end to the movement of free labour would see a rush of British nationals and foreign citizens relocating before the door closed.
Britain would have to renegotiate bilateral trade deals with all its European business partners. It may also lose some of its military influence – many believe that America would consider Britain to be a less useful ally if it was detached from Europe.
Most critically of all, Britain would still be subject to the politics and economics of Europe, but would no longer have a seat at the table to try to influence matters – the situation in which Norway finds itself now.
“Norway has to swallow almost every regulation that comes out of Brussels, despite having virtually no power to shape them,” The Economist says. Another possible model for how Britain might interact with the EU is Switzerland, but it too has a fraught relationship with the EU, which is getting more problematic as more countries sign up to the Union.
If a referendum were held tomorrow, what would happen?
It could go either way. As of last month, the public was evenly split: 35 per cent of people polled by the BBC said they would vote to remain in the EU if a referendum were held tomorrow; 32 per cent said they would vote to leave. Another 27 per cent said they were undecided, and 6 per cent said they would not vote.
Perhaps the greatest uncertainty associated with leaving the EU is that no country has ever done it before, so no one can predict the result. “The most likely outcome,” The Economist suggests “is that Britain would find itself as a scratchy outsider with somewhat limited access to the single market, almost no influence and few friends. And one certainty: that having once departed, it would be all but impossible to get back in again.” ·