What would really happen if Britain left the European Union?by John Springford , Simon Tilford / December 10, 2015 / Leave a comment
Published in January 2016 issue of Prospect Magazine
The referendum on whether the UK will leave the European Union is likely to turn, in the end, on whether its interest in free trade with the continent will outweigh public hostility to unimpeded immigration from there. It may be a close call.
Britain’s political elite has long prided itself on its embrace of globalisation, but that consensus is fraying. The Conservatives remain rhetorically committed to free trade, but the party is increasingly hostile to the EU for overriding British law. Many Labour politicians—especially the current leadership—are suspicious of free trade, thinking rules are written for the benefit of global corporations and at the expense of workers’ rights, public services and the environment. Both parties seek to soothe hostility to immigration by promising to restrict flows of people or curbing access to welfare, but the rise of immigration from eastern Europe, the surge of refugees across the EU’s borders and the eurozone’s manifest failings all combine to make Brexit a real possibility.
Yet even if these are the strongest impulses within the “yes” and “no” camps, the arguments will—and should—turn as well on the impact that withdrawal will have on many different aspects of life in the UK. Very little is yet spelled out about some of these. Here, we set out 12 things that voters in the UK really need to know about Brexit before the day of the vote.
1—How much money would Britain save?
The UK handed over £19.2bn to the EU last year. But with the EU’s payments to British farmers, regional development funding and the British rebate, its net contribution to the EU budget was £9.8bn, equivalent to around 0.6 per cent of GDP, and hence a little less than the foreign aid budget (which is now 0.7 per cent of GDP).
If Britain were to quit the EU entirely, and settled for the same access to EU markets as, say, the United States, it would save 0.6 per cent of its GDP. But the EU would demand budget contributions if Britain wanted more than that. For example, if the UK were to withdraw to the European Economic Area (EEA) and pay into the EU budget on the same basis as Norway, it would reduce its net contribution by around a tenth. If it succeeded in negotiating a series of bilateral agreements with the EU similar to Switzerland’s, Britain’s budget contribution would fall by a little over a half. In short, the more unimpeded its access to the single market, the more the UK would have