Should the United Kingdom Leave the European Union?: Challenging Eurosceptics on the British Economy
By Ric Yeboah / ricyeboah.wordpress.com

On 23rd June 2016, the United Kingdom will vote to decide whether the country is to remain or leave the European Union. For the first time in a generation, the general public will have the opportunity to formally declare their position on the U.K.’s membership in the EU, a declaration that could potentially transform not only the country’s political, social and economic landscape, but the landscape of its European and international neighbours. In the lead up to the EU referendum, the main political parties have announced their allegiances to the opposing campaigns, which have either defended the U.K.’s commitment to the EU, or have argued for the country’s abandonment of the European politico-economic project. Within the Conservative Party, the EU referendum has reignited the historic divisions concerning the U.K.’s membership, creating a schism among the Tory leadership.

It is true that both the ‘In’ and ‘Out’ campaign groups have displayed instances of unsavoury scaremongering to encourage support for their respective causes. However, the fear-inciting tactics used in the defence of Brexit are in my view particularly concerning. Proponents of the Leave campaign, such as Nigel Farage, Michael Gove and Boris Johnson, have used the EU referendum to propagate misconceptions regarding the ailing state of the British economy, and promote an aura of hate towards immigrants across the country. The vile effect of the claims made by the ‘Out’ campaign have been exemplified by the brutal murder of Jo Cox MP by far-right activist Thomas Mair, who had previously links to neo-Nazi and pro-Aparthied organisations. But are ‘Brexiters’ correct in suggesting that the U.K. will be able to  improve the economy and control immigration if the country leaves the EU?

One of the central arguments advanced by the ‘Out’ campaign is that a Brexit would allow the U.K. to negotiate its own trade deals with other countries independent of existing EU trade agreements. There are currently no tariff barriers to trade for countries within the EU, creating a single market of goods and services (though non-tariff barriers such as product standards produce limitations on trade). However, EU member states (including the U.K.) are also subject to the trade agreements made with non-EU countries by the European Commission.

The EU trade agreements prevent the U.K. from negotiating separate trade deals with the rest of the world – which may appear suffocating given the rise in economic growth in the developing world, and the ever-increasing U.K. trade surplus with non-EU countries. In comparison, the U.K. has a trade deficit of £61 billion with the EU, with domestic consumer demand outweighing the value of our exports to the continent. In fact, U.K. exports have made a gradual shift from the EU to non-EU countries, with a decline in the EU share of total exports from 54.8 percent to 44.6 percent from 1999 to 2014. For Brexit campaigners, this illustrates the potential of the U.K.’s economic growth in the rest of the world, which could be maximised as a result of leaving the EU.

While it may be advantageous for the ‘Out’ campaign to postulate positive economic outcomes if the U.K. was to abandon the EU, we are simply unable to predict what kind of trading relationship the U.K. will be able to negotiate with the EU, or with the rest of the world. Eurosceptics have argued that the U.K. could negotiate a trade deal with the EU similar to that of Norway and Switzerland. Both countries are not members of the EU, but have access to the single market and can negotiate trade deals with non-EU countries independently. However, Norway and Switzerland are subject to EU rules and policies with limited or no influence, and make budget contributions to the union. Moreover, both countries must abide to the free movement of good, services and most importantly peoples.

On the other hand, Canada has also negotiated tariff free access to the EU, without making any budgetary contributions or the free movement of peoples. Though, the trade agreement took an incredible five years to complete, and is difficult to compare to a potential U.K. model as the EU’s share of Canada’s total exports was less than 10% – significantly less than the U.K’s. In the worst case scenario where the U.K. is unable to make any sort of trade agreement with the EU, the country would be subject to World Trade Organisation (WTO) rules. This would prevent access to the free trade agreements for goods or services with the EU, and the U.K. could face EU and non-EU external tariffs and no access to the single market. This uncertainty over what kind of trade deal can be arranged would heavily impact on the productivity of the U.K.’s economy in the interim, as the EU is the country’s main trading partner, evidently making Brexit a risky, uncalculated gamble.

Another important argument put forward by Eurosceptics regarding the economy is the view that the U.K. could save an estimated “£350 million a week” by leaving the EU – as quoted by Boris johnson in a recent television debate, as the country would no longer have to make a financial contribution to the union. It has been suggested that the £18 billion saved could instead be invested into public services, such as education or health care. However, as the Institute for Fiscal Studies noted, the figure of “£350 million a week” is absurd as it ignores the rebate the U.K. receives from the European Union. If the rebate is included the figure actually stands at £14.4 billion or 0.8% of GDP in 2014 (around £275 million a week).

The EU also spends £4.5 billion on the U.K. in areas such as agriculture and research, thus the U.K. only provides approximately £8 billion a year to the EU budget. Moreover, though the U.K. receive per-capita the lowest spend from the EU of any member state, EU spending is only 1 per cent of our GDP – lower than the EU average, and is a relatively small amount in comparison to the £169 billion spent on health and education alone by the government. It is also important to note that the membership fee also brings with it increased trade, investment and jobs, which the U.K. would lose if it is unable to negotiate a trade deal with the EU. In fact, many economists have revealed that lower economic growth as a result of leaving the EU will negate any savings made from EU contributions anyway.

Arguably the most distinguishable argument of the ‘Out’ campaign is the impact of EU immigration on the U.K. economy. UKIP leader Nigel Farage in particular has been defiant in his attempts to reduce immigration from the EU into the U.K., most demonstrable by the party’s  recent “breaking point” campaign poster. However there is no conclusive evidence to suggest that EU immigrants cause a strain on the British economy, with most studies suggesting that their impact is relatively small, costing or contributing less than 1% of  the U.K.’s GDP. Rather, a recent UCL report stated that since 2000, immigrants have made a more positive fiscal contribution than longer-established migrants – £5 billion from immigrants who entered the U.K. from countries that joined the EU in 2004. There is also evidence to suggest that EU immigrants pay more in tax than they gain in welfare or public services, and they have a higher net fiscal impact than non-EU migrants.

In any case, leaving the EU may not lead to a significant reduction in immigration. As alluded to above, the kind of trade deal the U.K. is able to negotiate with the EU after “Brexit” is pivotal to controlling immigration, as access to the EU single market is also likely to allow for the free movement of people. Therefore, it may require the U.K to leave the single market altogether in order to effectively control immigration, which could neverthless have a negative impact on the economy. In my view, the argument relating to the impact of immigrants is largely cultural; as Nigel Farage proclaimed “the country has become unrecognisable.” However, while the cultural impact of EU immigration is questionable, there is enough evidence to suggest that the economic value of EU immigration is likely to be beneficial to the U.K., counterpoising any superficial arguments that a Brexit will conclusively have a positive impact on the U.K. economy.

Finally, let us not forget the overwhelming consensus of economic institutions and researchers and businesses (according to the British Chambers of Commerce) that argue that the U.K. must remain in the EU in order to preserve economic stability and continued growth. There is one notable exception to this trend – the suitably named Economists for Brexit.  Supported by Patrick Minford and Roger Bootle, Economists for Brexit have predicted a net benefit to the U.K. economy. However, even the most comprehensive analysis on Brexit by independent think tank Open Europe has predicted that even if the U.K. is able to negotiate a trade deal GDP  could increase by 1.6% by 2030. However, if a trade deal is not negotiated GDP could be lower than 2.2% in the same period.

The argument against Eurosceptics is clear. I plead with the people of this great land, do not put our country at economic risk.

3.5 ·
1
What's Next
Trending Today
Who Are You? Watching This Breathtaking Video Could Be the Moment You Change Your Life
2 min · 13,219 views today · "Normal is getting dressed in clothes that you buy for work, driving through traffic in a car that you are still paying for, in order to get to a job that you need so you can...
How a Trump Presidency Would Unleash a Torrent of Racist Violence-And Devastate the Left
Arun Gupta · 11,951 views today · The Left should take the Trump threat very seriously.
Welcome to Marinaleda: The Spanish Anti-Capitalist Town With Equal Wage Full Employment and $19 Housing
Jade Small · 11,558 views today · With virtually no police, crime or unemployment, meet the Spanish town described as a democratic, socialist utopia. Unemployment is non-existent in Marinaleda, an Andalusian...
When You Kill Ten Million Africans You Aren't Called 'Hitler'
Liam O'Ceallaigh · 10,833 views today · Take a look at this picture. Do you know who it is? Most people haven’t heard of him. But you should have. When you see his face or hear his name you should get as sick in...
Maya Angelou's 3-Word Secret to Living Your Best Life
3 min · 6,596 views today · Dr. Maya Angelou says that in order to be the best human being you can be, you must follow one simple directive: "Just do right." Watch as Dr. Angelou reveals how you can never...
Today I Rise: This Beautiful Short Film Is Like a Love Poem For Your Heart and Soul
4 min · 6,526 views today · "The world is missing what I am ready to give: My Wisdom, My Sweetness, My Love and My hunger for Peace." "Where are you? Where are you, little girl with broken wings but full...
Forest Man
16 min · 6,459 views today · Since the 1970's Majuli islander Jadav Payeng has been planting trees in order to save his island. To date he has single handedly planted a forest larger than Central Park NYC...
How to Criticize with Kindness: Philosopher Daniel Dennett on the Four Steps to Arguing Intelligently
Maria Popova · 5,646 views today · “Just how charitable are you supposed to be when criticizing the views of an opponent?”
Alan Watts: What If Money Was No Object?
3 min · 4,242 views today · How do you like to spend your life? What do you desire? What if money didn't matter? What if money was no object? What would you like to do if money were no object? Spoken...
What Makes Call-Out Culture So Toxic
Asam Ahmad · 4,090 views today · Call-out culture refers to the tendency among progressives, radicals, activists, and community organizers to publicly name instances or patterns of oppressive behaviour and...
11 Traits of People With High Emotional Intelligence
Raven Fon · 3,729 views today · Lately, new ways to describe human interactions, social behaviours, and many facets of psychology have emerged on the social network scene. One of those descriptions is “high...
10 Shocking Facts About Society That We Absurdly Accept As Normal
Joe Martino · 3,619 views today · When you take a moment and look around at the world, things can appear pretty messed up. Take 5 or 10 minutes and watch the 6 o’clock news. Chances are, the entire time, all...
Do You Have Time to Love?
Thich Nhat Hanh · 3,321 views today · The greatest gift you can offer loved ones is your true presence.
What It Really Means to Hold Space for Someone
Heather Plett · 3,021 views today · How to be there for the people who need you most
Doctors Response to Daily Mail Bigotry is Beautiful
Neil Tiwari · 3,011 views today · A poetic open letter to the Daily Mail newspaper from Dr. Neil Tiwari, in response to a bigoted attack on his colleagues, is going viral and it's beautiful.
Capitalism Is Just a Story - Rise Up and Create a New One
6 min · 2,421 views today · How many of us have a sneaking suspicion that something pretty fundamental is going wrong in the world? We keep hearing about the potentially devastating consequences of...
Real Change in Democracy Comes Not in the Voting Booth but Activism at the Grass-Roots
Ilze Peterson · 2,247 views today · Many years ago, the late Judy Guay, a low-income woman from Bangor, founded the Maine Association of Interdependent Neighborhoods in order to advocate for the neediest in our...
Caitlin Moran's Posthumous Advice for Her Daughter
Caitlin Moran · 1,961 views today · My daughter is about to turn 13 and I’ve been smoking a lot recently, and so – in the wee small hours, when my lungs feel like there’s a small mouse inside them, scratching to...
Ten Ways We Misunderstand Children
Jan Hunt · 1,949 views today · 1. We expect children to be able to do things before they are ready. We ask an infant to keep quiet. We ask a 2-year-old to sit still. We ask a 3-year-old to clean his room...
Fighting Trump - Residents Opposing Donald Trump's Scottish Golf Resort
14 min · 1,945 views today · Documentary on the residents protesting against Donald Trump's golf development on the Menie Estate in Aberdeenshire, Scotland. Directed and Presented by James Trosh.
Load More
Like us on Facebook?
Should the United Kingdom Leave the European Union?: Challenging Eurosceptics on the British Economy