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Monday, May 09, 2016

Brexit or Bremain?

UPDATE: See also my follow-up post with thoughts after a few days of the results being known and some of the immediate financial risks being noticed (will be linked to once ready)

On 23 June 2016, the UK electorate will visit the polls (or some ratio of them will bother to) to decide whether we should remain in the EU.
There are big campaigns - Vote Leave ("Vote Leave Ltd"), Leave.EU, Remain, Britain Stronger in Europe ("In Campaign Ltd"), aiming to capture those floating voters or convert a few.

There are several main arguments and lots of lies or out-of-context/missing-half arguments being used by both sides to try and persuade the floating voters. I'd like to cover a few and fill in some holes in those claims using information from various sources - media and politicians or leaders on the opposite side to some arguments, lobbying bodies and a few independent groups.

Cost to the UK of EU membership?
  • Certainly much less than the £350 million a week as I've seen quoted. Even if it was, thats a bit over 2% of the total UK public spending budget. Not a huge cost.
  • Less our £74m rebate (taken off before payment, like a shopping voucher) - negotiated by Mrs. Thatcher (hated though she may be by many, be thankful for this!).
  • Less £88m spent back here directly on farmers and regional aid.
  • Less £27m spent directly here for research in universities and companies.
Total cost (unless I'm not aware of further sums): £160million per week (rounded to 2 significant figures as per other figures).

[via a BBC articleThe Institute for Fiscal Studies calculated during the campaign that of the £360 million the UK sent to the EU weekly in 2014, the net contribution was just £109 million.]

Its impossible to avoid spending all of this if we still wish to trade and move people between UK and EU easily, and we get a good package deal for all those benefits - countries not in the EU that still want to be part of the "single market" pay much more per benefit than we do, and they still have to abide by many EU laws in order to do so. There's no simple way to cut off all our EU spending, we'd leave ourselves very isolated if we did and be heading into the European backwaters economically and technologically.

If taking more control over the money we currently pay to EU, do you think the government would pay as much of it to farmers or for research? It would almost certainly change which projects received more money, and I suspect (just a guess based on experience of our government) it would shift more to the commercial side - which would hurt our universities.

We've said it before and we'll say it again - the UK does not send £350m a week to Brussels - the rebate is deducted before the money is sent, which takes the contribution down to £276m a week.
That figure includes £88m a week spent in the UK on things like regional aid and support for farmers. The government could decide after a Brexit that it should take that money away from farmers and give it instead to the NHS, but it might be an unpopular decision in rural areas.
Then there's another £27m a week that goes to support things like research projects in UK universities and companies.

Worried about control of our(UK) own borders? We have the ability to turn away people missing a valid id, and to refuse entry from non-EU nationals. You might be thinking of the "EU border free zone — the Schengen area". We're not part of this. Being part of the EU means EU citizens with valid id have the right to free movement and work throughout the EU. This allows us to holiday and work abroad as well as foreign EU nationals to holiday and work here without visas (though further rules apply for longer-term stays, this is the basics). Giving up this could mean negotiating individual deals for all sorts of situations. That might leave us better or worse off, but you can't deny it would take time - likely several years, and until then the default status would apply and we'd be treated just like any other non-EU country by EU members [editor's, ie. me, expectation].
The United States is not keen on pursuing a separate free trade deal with Britain if it leaves the European Union, the US trade representative, Michael Froman, said – the first public comments from a senior US official on the matter. This could mean we end up with the same rules that eg. China, Brazil or India has to cope with when trading with the US. Cars, fuel and chocolate could be hit by their 2.5% import duty imposed on these other countries due to this change [source http://www.theguardian.com/politics/2015/oct/29/us-warns-britain-it-could-face-trade-barriers-if-it-leaves-eu ]
Government's leaflet claims and fact-checked rebuttals where appropriate (via 38-degrees):
Leaflet: "The UK is not part of the EU's border-free zone"

Source of the following snippets of article (from ft.com under the title "Three pieces of Brexit Bullshit") - parts cut to keep to the core of the issue from my view:

Three million jobs depend on the EU

[....snipped...]
The claim is that “up to 3.2 million jobs” were directly linked to exports of goods and services to other EU countries. That number passes a quick reality check: it’s about 10 per cent of UK jobs, and UK exports to the EU are about 10 per cent of the UK economy.
But even if “up to” 3.2 million jobs depend on trade with the EU, that does not mean they depend on membership of the EU. Nobody proposes — or expects — that trade with the EU will just stop. Three million jobs might well be destroyed if continental Europe was to sink beneath the waves like Atlantis, but that is not what the referendum is about.


£8.3 billion is £160 million a week. This is a huge number by personal standards, but in context, tiny - its only ~1% of the UK's public spending budget. The EU also spends money directly in the UK, for instance, in research grants, so the true cost of money that doesn't come back here directly is smaller. Those countries that pay for access to the single market without being in the EU pay much more for it. This money gives us many benefits though, and even if we only care about a few of those they'd be harder and more expensive to negotiate on individually, and some might not be available to us without further concessions.
Leaving would give us control over the money spent by the EU in the UK, but not guarantee that it would be spent on other things - that would be down to the government. I'm betting more of that money would end up elsewhere and not necessarily in a way that benefits all of us eventually (as research can do).

From fact-check of Michael Gove's Leave camp statements (performed for 38 degrees by independent fact checks who fact-checked both sides of the argument, in detail here):
“The EU has failed to secure trade deals with the huge economies of India, China and America. Outside the EU we can cut those deals”
"failed" for India and America only means failed so far, as negotiations are in place. However, the US side of this refers to "TTIP" of which many many people strongly disagree the clauses and power it gives to corporations over the government and its ability to set laws that help the people rather than companies, its also somewhat secret (until much was exposed in a leak recently). India talks for a similar agreement began in 2007 but nothing further is happening at present.
The UK cannot independently make agreements with other (non-EU) countries, we have to use the EU to do that and follow the group agreements; however, the EU is the biggest party there and is likely to come away with the more powerful side of the agreement if any were made. The UK may not end up with as favourable agreement individually (though it might be faster and easier to negotiate with us as a smaller group than the EU).
If we want to have easy trade with the EU and non-EU "single market" countries after splitting, we'd have to arrange that ourselves, and pay for the privilege; this would take years to set up and would be likely to cost considerably more than that part of the benefit we currently pay the £8.3billion for would. We'd still have to accept many EU laws in order to be part of the single market, so we can't get away with having no red tape in order to trade easily with the rest of the EC trading area - if one major point of leaving the EU is to have more freedom over our own laws, this somewhat cancels that out. The financial loss due to NOT being in the single market area would be significant, I doubt anyone in big international businesses wants that (lobbying would be strong and I don't think the government would hold up against it).
Leaving the single market would be the only way to fully control immigration though, as "free movement of people" applies to any countries in the European Economic Area.

Other surveys and industry (or representive groups) opinions
ADS (UK trade association representing Aerospace, Defence, Security and Space sectors) - 70% want to stay, 10% to leave, 20% don't care/don't know

Government and National Institutions, MPs...
George Osborne - Remain campaign
David Cameron - to stay

Bernie Ecclestone (old head of FIA, F1 racing) - Leave (thinks immigrants never contributed anything to economy, but also insanely thinks Putin should run EU and UK - what a way to push people the opposite direction Bernie!)

Treasury - produced a dim Brexit forecast of reducing economy by 6% (based on net migration reaching near three million between now and 2030) [source]

John Redwood (tory) - Vote Leave campaign
Boris Johnson - Vote Leave
Michael Gove - Vote Leave
Iain Duncan Smith - Vote Leave
Jeremy Corbyn - to stay
David Miliband (ex-Labour if you'd forgotten) - to stay

IMF (~= global bank) - "Britain leaving the EU could cause 'severe regional and global damage', the International Monetary Fund (IMF) has warned." (though Vote Leave says the IMF are consistently wrong)

For a much more inclusive list of notable people or groups and their opinion (Stephen is open to suggested updates, if you're voting LEAVE please do as there are a lot less of them listed there), via Facebook:
https://www.facebook.com/photo.php?fbid=10153877268048640&set=p.10153877268048640&type=3&theater

[note: edited 11 May to correct Gove's direction; clarifying some easily misinterpretable long clauses; adding details from Gove's April Radio 4 speech
          edited 19 June to add Stephen Hill's list of people and groups and their choices
]

BBC page with claims and facts from both sides: http://www.bbc.co.uk/news/uk-politics-eu-referendum-36027205

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