The most commonly quoted reasons why Britain should not leave the EU
by Dave Dalrymple-Pryde
Perhaps the greatest concern associated with leaving the EU is that no country has ever done it before, so no one can predict exactly what will happen.
One of the biggest advantages of the EU is free trade between member nations, making it easier and cheaper for British companies to export their goods to Europe. Some business leaders think the boost to income outweighs the billions of pounds in membership fees Britain would save if it left the EU. The UK also risks losing some of its negotiation power internationally by leaving the trading bloc, but it would be free to establish trade agreements with non-EU countries.
Ukip leader Nigel Farage believes Britain could follow the lead of Norway, which has access to the single market but is not bound by EU laws on areas such as agriculture, justice and home affairs. But others argue that an “amicable divorce” would not be possible. The Economist says Britain would still be subject to the politics and economics of Europe, but would no longer have a seat at the table to try to influence matters.
As adam&eveDDB CEO James Murphy writes:
“The “out” campaigners say we can have a future like Norway, prospering without interference from and the costs of Brussels. Again, let’s get our facts straight – in order to trade with Europe, Norway has had to adopt 75 per cent of legislation and pay 55 per cent of the per-capita costs. But without getting any say in EU policy.”
A study by the think-tank Open Europe, which wants to see the EU radically reformed, found that the worst-case “Brexit” scenario is that the UK economy loses 2.2 per cent of its total GDP by 2030. However, it says that GDP could rise by 1.6 per cent if the UK could negotiate a free trade deal with Europe and pursued “very ambitious deregulation”.
Some have argued that leaving the EU would allow us to develop stronger and more direct links with emerging economies outside of the EU and with the Commonwealth – and though there certainly opportunities we could seize in India for instance, the weakness of this argument is summed up rather pithily by James Murphy who writes:
‘Last year, our agency grew by more than 25 per cent – half of that from Europe. I’m not confident I can make up for that by meeting demand for our services in Samoa.’
Speaking to Euractiv, Sir Martin Sorrell summed up the concerns of many within the industry when he said:
‘If businesses want to go global, then they have to use a trading bloc such as the EU to get there If you ask me about Brexit, I would express a personal view only. A third of our revenues comes from Western Europe and my feelings would be based on this information.”
The general view is that inward investment could slow in the lead up to the vote due to the uncertainty of the outcome and its consequences, following the precedent set ahead of the Scottish independence referendum in 2014. Longer term, there are diverging views: pro-Europeans reckon the UK’s status as one of the world’s biggest financial centres will come under threat if it is no longer a seen as a gateway to the EU for the likes of US banks, while Brexit campaigners argue London’s unique appeal will not be diminished.
Barclays has put forward a different view, which will be seen as positive by those advocating a vote to leave. It reckons the departure of one of the union’s most powerful economies would hit its finances and also boost populist anti-EU movements in other countries, the Daily Telegraph says. This would open a “Pandora’s box” that could lead to the “collapse of the European project”.
In this event, the UK could be seen as a safe haven from those risks, attracting investors, boosting the pound and reducing the risk that Scotland would “leave the relative safety of the UK for an increasingly uncertain EU”.
Free movement of people across the EU opens up job opportunities for UK workers willing to travel and makes it relatively easy for UK companies to employ workers from other EU countries. Ukip says this prevents the UK “managing its own borders”. But, writing for the LSE, Professor Adrian Favell says limiting this freedom would deter the “brightest and the best” of the continent from coming to Britain, create complex new immigration controls and reduce the pool of candidates’ employers can choose from.
Moreover, Brexit would likely reduce the number of EU citizens attending UK universities (currently EU students make up about 5% of the UK student body (and contribute, according to one recent estimate, £2.7bn to the British economy) – British universities also receive €1,7bn in grants from the European Research Council – €600m more than the next largest nation (Germany). As Mike Galworth from Scientists for EU put it:
“Politically, it’s impossible for the biggest recipient of EU grants, which we have been, to be a country that has deliberately chosen to leave the EU. It’s just not going to happen”
Obviously, such a shift could hurt the development of much needed STEM talent but creative agencies could also stand to lose out here – UK art schools are amongst the best in the world – however, establishing a new barrier to entry for EU citizens will make their intake less competitive and, ultimately, undermine the quality of the graduates they produce.
And, of course, this is to say nothing of the 100,000 or so EU supported apprenticeships whose continued existence would be called into question.
Eurosceptics argue that the vast majority of small and medium sized firms do not trade with the EU but are restricted by a huge regulatory burden imposed from abroad – and within the industry there are those that worry about the consequences of looming EU data privacy legislation for a host of digital advertising practices.
However, UK agencies delivering services to clients in EU markets will remain subject to EU regulation in those markets and will have to put up with the complexity and operational cost of managing campaigns in different regulatory regimes. Moreover, in so far as they currently have the power to effect some degree of influence over EU decision making via the UK government, in the event of Brexit UK agencies would find themselves completely powerless to influence policy in a vital export market.
Britain may lose some of its military influence – many believe that America would consider Britain to be a less useful ally if it was detached from Europe.
On the plus side, The Economist says Britain would also be able to claim back its territorial fishing waters, scrap caps on limits to the number of hours people can work per week, free itself from the EU’s renewable energy drive and create a freer economic market. This would turn London into a “freewheeling hub for emerging-market finance – a sort of Singapore on steroids”, it says.
But it concludes that the most likely outcome is that Britain would find itself “as a scratchy outsider with somewhat limited access to the single market, almost no influence and few friends. And one certainty: that having once departed, it would be all but impossible to get back in again.”
We would also suffer reputational damage – James. Murphy points out:
“Our agencies are held up as the best in Europe. A retreat from the bloc would create more subtle and emotional damage to our industry. Many continental clients believe we are creative, cosmopolitan and open to the world. If we vote out and go off in an isolationist sulk, that sentiment could turn.”