What would happen if Britain left the EU
On June 23rd, Britain will cast a vote to settle a generation’s worth of controversy: should the country stay in the European Union?
Prime Minister David Cameron recently announced a referendum to decide the issue, having promised to do so during the last election cycle. British, Irish, and other Commonwealth citizens residing in the UK will vote to leave or stay. As of this week, the public is split on the subject: ‘leave’ polls at around 49% and ‘stay’ at 51%.
Why is it important?
Removing the world’s fifth-largest economy from its biggest single market has serious economic and security risks. Britain’s choice could have a huge impact on European trade, investment, immigration, foreign relations and society as a whole.
If voters decide to leave the EU, withdrawal negotiations begin. This process is outlined in Article 50 of the Lisbon Treaty; the countries would need to agree on trade deals and international treaties to govern how the UK would interact with the EU moving forward.
If voters choose to stay, new reforms would immediately go into effect. Prime Minister Cameron recently renegotiated the terms of the UK’s relationship with the EU, including child benefits, migrant welfare, and financial safeguards.
This is exactly how the question will be put to voters:
“Should the United Kingdom remain a member of the European Union or leave the European Union?”
Held by most of the UK Independence Party, and some parts of the Conservative Party.
By leaving the EU, Britain could maintain similar trade relations but regain the ability to regulate important aspects of its own economy, immigration rules, and security.
For example, under current laws, the UK cannot regulate immigration from other EU countries. This has lead to an enormous increase in immigration to Britain. Though the government may choose to maintain similar rules, the UK government should be able to establish these rules independently.
The complete effects are not yet clear, but several financial realities are: Last year, the country spent £8.5 billion (about $12.3 billion) in net fees alone — paid for the privilege of membership in a union that does not demonstrably benefit UK trade. Though there are risks to withdrawing, it is in other EU countries’ best interest to negotiate free trade agreements with an independent UK. In other words, the country could reap the economic benefits of membership without being subject to other regulations. Estimates suggest GDP could rise by 1.6% if this negotiations go well.
Held by Prime Minister Cameron and most of the Labour and Liberal Democrat parties.
EU membership is vital to maintaining Britain’s prosperity and global influence. Withdrawing would be deeply misguided.
Take immigration. Increased immigration to Britain has in fact been shown to have overwhelmingly positive economic effects. EU membership fuels the economy, helps support public services, and opens up job opportunities for British workers across Europe.
Take jobs. Around 1 in 10 British jobs rely on the UK’s ability to trade with EU nations — their continued existence would depend on unreliable withdrawal negotiations.
Take financial concerns like exports and trade. As part of the world’s largest single market, EU countries benefit from collective trade agreements that an independent UK would not. Further, EU countries buy more than 50% of UK exports, which may be in jeopardy if the EU-UK relationship changed. If negotiations go poorly, the UK could endure up to a 9.5% reduction in GDP — a loss similar to the recession of 2008.
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