You vote, you decide – Should Britain leave the EU?
Prime Minister David Cameron has announced that the UK referendum will be held on the 23rd of June.
This referendum gives the British public the chance to decide whether they think Britain should remain in the European Union (EU).
Daniel Hannan, secretary-general of the Alliance of European Conservatives and Reformists stated that, “It makes no sense to be here [in the EU], especially not when we are having to pay both a democratic price and a financial price for the privilege of belonging. A democratic price as we longer get to fire and hire the people who pass our laws; and a financial price as we spend £19billion gross and £10billion net every year.”
During these last few months, there have been many debates and discussion around this topic, but the points of views vary enormously. Some politicians, such as Peter Mandelson, British Labour politician believe that “Brexit would be bad for both Britain and the EU as Britain is a stronger and safer country being part of the EU. If Britain were to leave the EU, the British economy and its prosperity would be put at risk.”
Mr. Mandelson says, “Brexit would jeopardise Britain’s security as well as shrinking its trading area, hence affecting Britain’s capability to negotiate elsewhere in the world.
Although this trade aspect seems to be the main argument there are those that think trade would not be at all affected. John Redwood, British politician and Eurosceptic, conservative MP argues that “A lot of other countries around the world, which are not part of the EU, trade very successfully with the rest of the world on a daily basis, without having to be member or having to pay any contributions.”
Mr. Hannan sees no reason “to be trapped on the only trade block on the planet of the Earth that isn’t growing.”
Even though there have been no agreements on what Britain should expect if it left the EU, it is a fact, according to the House of Commons brief paper (2016) that the EU taken as a whole is the UK’s major trading partner. The trade accounted for 45% of exports and 53% of imports of goods and services in 2014.
Martin Woolf, the Financial Times’s chief economics commentator reminds, “If we leave the EU, there will be a period of extraordinary economic uncertainty. Nobody will know what exactly the rules will be for trade because we won’t know exactly how we will leave the EU. Second, if we really leave we will lose our exceptionally favorable access to the single market and the customs union to the biggest economy in the world, and far and away our most important trader and partner which takes almost half of our exports”
Christine Lagarde, head of the International Monetary Fund also fears times of uncertainty. Time of uncertainty leave “economic players afraid to invest.”
Howard Shore, founder of investment bank Shore Capital insists that voters need to analyse things in the longer term, rather than in the short term. Hence “looking at things from an economic standpoint, if Britain leaves we will be able to take control over our fiscal policy as well as create our own immigration policy and bring in people on a more merit base system, which is not by only fairer but is going to be more fruitful for both the city and the economy more generally.”
The two sides of the argument are extremely important to analyse as a decision like this will not only affect Britain, but also the EU and the rest of the financial market.
The argument for Brexit is based on the fact that Britain will spend less money on the EU, hence using that money to implement new strategies and create a stronger economic system within the UK.
Mr. Redwood believes that, “Brexit will be a boost to the British economy, as we will get back the £10billion a year we pay into Brussels, which they keep and spend in other countries in the continent. Meaning that our balance payments deficit will fall by a fifth in the first year after leaving the EU. We would be able to get out of tax cuts and extra public spending with those £10billions so that we spend it on our priorities which will provide a boost to the British economy.”
Mr. Redwood firmly believes that “Being in the EU makes us poorer and takes away our freedom and our right to serve government.”
These arguments for an against Brexit are by far important to make an informed decision, nonetheless it is important to understand that EU relations are very important to the UK.
Seeing that almost 80% of the British industry is supported by the service sector, and jobs are directly and indirectly connect to the exports of good and services to the EU, it is important to evaluate accurately how this decision will in fact affect the UK.
In a speech in 2014, the former Chief Secretary to the Treasury, Danny Alexander said, “The latest Treasury analysis shows that 3.3 million British jobs are connected to Britain’s place in Europe.” Thus, leaving the EU would ultimately affect these jobs.
According to Lucy Thomas, deputy director of Britain Stronger in Europe, “David Cameron secured a great deal for the UK on the proposed agreement as this agreement gave the British parliament more power to block and amend EU rules. Now we know what staying means, but what does out look like?”
A decision like this one should not be made lightly, which seems to have evenly split the British people, according to recent polls. Uncertainty is already hovering the world financial market and this referendum will definitely show us who had the strongest arguments.