With four million voting in favour of UKIP on May 7th, Euroscepticism is becoming an increasingly mainstream concept. Conservative MPs continuously rebel against their party’s bills to put forward their discontent about the UK’s position within the European Union and a Eurosceptic branch on the left-wing is also increasing in popularity, with one of its potential backers being none other than Guardian columnist Owen Jones. Opposition to British involvement in the European Union was prominent during the Conservative government under John Major, in which several Conservative MPs rebelled against votes and challenged Major over leadership in order to project their anti-EU views. Twenty years later, Euroscepticism is again growing amongst the electorate, but is it a justified idea? Would leaving the EU be beneficial for the United Kingdom?
From an economic standpoint there is a clear divide on this issue: the National Institute of Economic and Social Research conducted a study in 2004 to see the effect leaving the EU would have on GDP, concluding that it would reduce the UK’s GDP by 2.25%. However, eleven years on, the world economy has crashed, suffered a recession and recovered in some areas such as the UK – yet leaving other areas e.g. Greece and Italy in dire straits. Therefore, the research conducted cannot be seen as an adequately reliable source as the economy has developed and fluctuated so greatly that the conclusion cannot be deemed relevant in today’s economy. However, the Centre for Economic Performance in a paper from 2014 predicts that in the most pessimistic of outcomes (where the UK cannot negotiate favourable trade deals) that GDP could suffer a loss between 6.3% to 9.5%. A terrible loss indeed, but the time-frame of this GDP decrease is unspecified, therefore we do not know the extent of this pessimism, nor how deeply the loss would be felt in the short-term and cannot be completely trusting of its prediction. The Independent’s Andrew Grice wrote in April 2015 that an EU exit would be a significantly worse outcome for Britain than any other EU country, costing it a huge £224bn to do so. Referring to a German report from ‘Bertelsman Stiftung’, GDP per head could suffer by 0.3-6% in a worse case scenario, in which the financial, chemical and automotive sectors are negatively affected due to their lost alliance with the EU’s single market.
Contrastingly many believe that these reports are exaggerated and that there is a positive case from an economic standpoint for leaving the EU. Matthew Elliott, founder of ‘Big Brother Watch,’ the ‘Taxpayers Alliance,’ criticised the report, claiming it to be imagining ‘a world where every negative and false assumption is considered to be true’ and described it as ‘simply not credible.’ The Eurosceptic claim that the UK can trade without the rules and regulations that the EU imposes on UK vendors and buyers, and that we can reinvest and trade with the fastest growing economies of India and China to compensate and grow even faster than our current state. Economist Roger Bootle claims that it is pointless to stay in the EU without fundamental changes as the UK has made payments of over £16bn to EU institutions and only received around £4bn back. A senior trade diplomat claims that an EU exit would boost the economy by £1.3bn due to its increased autonomy and independence from EU trade regulations.
From an employment point of view, a common figure thrown about by pro-Europe politicians is that 3 million jobs are dependent on British membership of the EU. Big businesses bosses have considered withdrawing their industry in the EU should a Brexit occur, the most significant of these being Goldman Sachs, Nestlé and Ford. Employment would significantly decrease if this were to happen. The Guardian claims 250 foreign banks employ 160,000 people (citing research from TheCityUK) but doesn’t outright claim or develop this statement to say that an EU exit would negatively affect this employment. But even the Japanese government have warned that more UK jobs would be lost as ‘its firms are attracted to the UK due to the gateway it has to the European market’. External pressure from businesses has made a justified case for the UK to stay in the EU, as businesses and corporations are those who hold all the power in employment, meaning we should take their claims as credible and serious at least.
However, the Eurosceptic wing can make a case that the UK economy is so dynamic it can redistribute itself among the labour market. Ryan Bourne, writer of ‘The EU Jobs Myth’, asserts that it can work when using the UK recovery after the financial crisis in which 4m jobs were created and 3.7m lost each year. I doubt the validity of this evidence as the job losses of a Brexit are more sudden and differ radically to the natural shifts in employment over a year, rather than the gradual withdrawal of foreign companies from the UK. Bourne goes on to claim in his paper ‘The EU Jobs Myth’ that jobs wouldn’t significantly decrease anyway, ‘as they are associated with trade not a political union’. But this is hardly an adequate response to businesses who will scale back UK operations in event of a Brexit. It is hard to see a credible argument in favour of leaving the EU when it comes to national employment.
A Brexit however would allow the UK to have true sovereign power. The UK would be able to decide its own laws without seeing whether it breaches EU law, settling the contentious debate surrounding immigration law once and for all. The UK’s attraction to those seeking work across Europe with an open border system is argued to be difficult for the country to cope with, an exit from the EU (as you’ve probably heard from every UKIP spokesman) would allow the UK to tighten up its own borders and reject the EU open border plan. The UK could revert to a Swiss system in which trade negotiations are made but it can be independent from EU law, an attractive proposition from those on the Eurosceptic left and right, the left from the withdrawal from TTIP (Transatlantic Trade and Investment Partnership) and the right in more power and independence given to businesses.
In conclusion, though both cases make justifiable claims and arguments, the entirely unbeneficial effect a Brexit would have on employment and the economy makes it an unattractive proposal for me to vote in favour for. I would categorically vote in favour of the UK staying in the EU, for the stability it provides and the instability that an exit could create.
Words by Chris Paschali