November 16, 2015

Pros and Cons of Britain Leaving the European Union

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Pros and Cons of Britain Leaving the EU

David Cameron, on the 10th of November 2015, sent a letter to the president of the European Council – Donald Tusk – aiming to negotiate Britain’s position within the European Union.

Cameron laid out four objectives at the heart of the negotiations:

  1. Exempting Britain from “ever-closer union” and bolstering national parliaments
  2. Protection of the single market for Britain and other non-euro countries
  3. Restricting EU migrants’ access to in-work benefits such as tax credits
  4. Boosting competitiveness by setting a target for the reduction of the “burden” of red tape

Former Tory chancellor Lawson commented that the objectives were “disappointingly unambitious”. While Conservative MP Bernard Jenkin asked “Is that it?”.

By the end of 2017 the UK will vote, in a referendum, on whether Britain should remain in the European Union.

Cameron stated that it would be the biggest decision of “our lifetimes”. Leaving many questioning why he didn’t fight harder for the negotiations his Tory back-benchers and many in the public wanted, such as: repatriation of fishing rights, reduction in contributions and the end of ‘free-movement’ of people.

When considering ones position on the debate it is imperative to consider both the pros and cons of Britain leaving the European Union:

Pros of Britain Leaving the EU.

  • One popular argument in favour of ‘Brexit’ is that Britain would see an increase in international trade. Since January the 1st 1973 the UK has been un-able to sign a commercial trade accord with any country outside the EU, evidently including the fast growing economies of China, India and Brazil. Switzerland, not being a member EU, in 2013 agreed a FTA (free trade agreement) with China. Many highlight this as evidence to the possible increase in international trade the UK would have it would leave the EU.
  • Another, perceived, advantage of leaving the EU is the removal of power away from ‘bureaucrats in Brussels’. In the 1975 referendum (which was for the EEC not European Union) an MP named Tony Benn asked three questions: Who appointed these people? What are the limits to their power? How do we get rid of them? Lloyd Evans in an article for The Spectator  highlighted that “satisfactory answers are still unforthcoming”. True, the European Parliament is directly elected by the people but the European Commission (which is responsible for proposing legislation and upholding treaties) is not. Many argue a significant pro of leaving the EU is that the un-democratic and bureaucratic natures of the Union will no long effect the everyday life of the British public.
  • Another ‘pro’ of leaving the EU is that Britain would avoid the often ill thought out policies of the EU. The most often used example of this point is the Common Agricultural Program (CAP) which effectively subsidies European farmers to not work efficiently. The CAP results in lower quality, higher priced goods for EU member states while simultaneously damaging the agricultural sectors of poor under-developed economies (mainly in Africa and Asia) who cannot export their higher quality and cheaper produce into the EU because of high tariffs. The CAP took up a staggering 75% of the EU budget in 1985, although it is now at around 40%. There is little to no economic justification of a policy that is inefficient and clearly wastes too much of the EU’s resources.
  • Another pro of leaving the EU would be a decrease in the budget deficit. The UK pays £8billion in net contributions to the EU annually. If the UK were to leave then evidently government spending would decrease and the deficit would fall.
  • Euro-sceptics argue another key benefit of leaving the EU is greater control over migration. ‘Free movement of people’ across member states, they argue, results in a lack of jobs for British nationals. There is also an argument, although in reality a weak/untrue one, that immigrants from European countries take advantage of the UK’s welfare system by abusing benefits such as the NHS and job seekers allowance. By leaving the EU, the UK would be able to have a more ‘open’ immigration policy to the skilled workers from outside of Europe, such as engineers from India: who currently struggle to get a UK visa. Euro-sceptic parties such as UKIP suggest we should have an immigration system mirroring Australia’s where visas are granted on skill and not nationality; hence the slogan  ‘Out of the EU, into the World’.

Cons of Britain leave the EU:

  • One of the most sited augments in favour of the UK staying in the EU, and thus a con of leaving it, is the possible fall in trade. The key principle of the single market is the removal of tariffs resulting in ‘free trade’ within the biggest market in the world. If the UK leaves this free trade area then our biggest trading partners (Germany and France) would have to pay tariffs to export their goods to the UK, similarly British good and services would have to pay the high EU tariff if they were to be sold in Germany or France. In the long run trade would undoubtedly decrease between the UK and EU countries. The main argument against the UK leaving the EU is the concurrent risk that long term trade would fall and thus too would economic growth and employment. However, there is a possibility that the UK could leave the EU and still be a member of the EEA. This would allow the UK to be a member of the ‘single market’ without being a member of the EU, an arrangement currently used by Norway.
  • A second major con of the UK leaving the EU is centred on immigration. The free movement of labour, although previously criticized, has been economically proven to benefit the UK economy. EU migrants are, on the whole, better educated/skilled than the average British national with 32% of EU immigrants having a degree compared to 21% of British nationals. Immigrants from the EEA since 2000 have contributed 34% more, in fiscal terms then they have received in transfers and benefits. Compared to UK natives who contributed just over 92% of what they receive in transfers and benefits. EU migrants benefit the British economy, so many argue: is it wise to deter them from entering the UK?
  • An often sited example of a country in Europe succeeding without EU membership is Norway. However Norway’s arrangement with the EU can also be highlighted as a serious con which could occur if the UK left the EU. Vidar Helgesen, Norway’s minister for the European Economic Area is quoted to say “We [Norway] are fully integrated into the EU single market as members of the EEA, but what we don’t have is the right to vote on those regulations that are incorporated into our law when they are made by the council of ministers.” A significant con of Britain leaving the EU could be the in-ability to influence policies while simultaneously being bound to them.

The in/out debate continues and the future of Britain becomes increasingly un-clear: do we stay on a sinking ship or jump into uncharted waters?