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This article was published prior to the publication of the post-Brexit agreement between the UK and EU which covers the relationship between the UK and EU following the end of the implementation period (commonly referred to as the “transition period”) created by the European Union (Withdrawal Agreement) Act 2020, and should be read in that context. For up-to-date commentary and information on our services, please see our Beyond Brexit page.
Around 100 business leaders from the south west attended our debate, held on 18 May 2016 at Sutton Barton, on the upcoming referendum on Britain’s membership of the European Union.
Chaired by broadcaster Steph McGovern, the debate was led by a panel of four speakers: retired diplomat Anthony Smallwood and economist Vicky Pryce put the case for remaining in the EU, while retired MP Ann Widdecombe and Devon businessman Ian Coggins argued that we should leave.
The case for remaining in the EU
Those wanting to remain suggested that the statesmen who started the Common Market in the 1950s would be proud of what the EU has become. In addition to the advantage of the single market, which accounts for around half the UK’s exports, we benefit from the EU’s bargaining strength in our trade agreements with other nations. If we leave, we would be in a weaker position. The trade deal we already have, as EU members, is better than anything we could negotiate on leaving. European rules are reached by agreement and observed by all, by way of a voluntary political and economic union; they are what any decent country would do. The EU sometimes makes mistakes, but we can work together to make it more efficient and democratic.
The advantages to the UK of the single market are significant: the economics of scale have resulted in lower prices, constant innovation, increased investment and improved productivity, all underpinned by effective regulation of competition. We have benefited from the single market in such areas as air transport and mobile phone tariffs. The opportunities for British exports to grow elsewhere are limited; the economies of Brazil, Russia, China and much of Asia are not currently growing, and concern about Brexit is dampening investment, leaving our economy more dependent on consumer spending. The EU is not the only example of pooled sovereignty – we are also members of Nato and the World Trade Organisation, and it was the UK that wanted the EU to expand to include the former Warsaw Pact countries. It is unusual for the UK to be in the minority when an EU vote is taken. While many see the euro as a mistake, the migration crisis has made further political union unlikely.
The case for leaving the EU
Those wanting to leave said that the main question is whether we want Britain to run Britain. The influence of the EU over UK affairs is pervasive; all UK legislation must be compliant with European law and in some areas, such as employment, there is direct interference. Because of qualified majority voting, we now have less say over European law than before. We have a global history and we were successful in trade before we joined the EU. The changes that would result if we leave will be gradual, but we would regain control over our own affairs by our own elected government.
The EU is in fact a declining market, with British exports to the EU accounting for about 12% of our gross domestic product. The tariffs that would be imposed on European trade if we were not part of the single market would be no more than 3%, which could be easily absorbed by British manufacturers. We would be able to negotiate our own trade deal with the EU - with high levels of unemployment in Europe, other European countries would want to be able to export to us. The benefits of EU trade deals with other countries are limited: it would be better for us to negotiate our own deals. Small businesses cannot lobby Brussels and would do better if freed from EU regulation. It is larger businesses that gain from EU membership, but since it is easier for larger companies to reduce their tax liabilities the benefit to the UK as a whole is limited. The EU cannot make good policies because it is hard for 28 nations to reach agreement on what should be done. All we need is the confidence to go it alone.
Questions and discussion
Migration – those arguing for remaining in the EU pointed out that the current migration crisis is a new phenomenon, unlike freedom of movement within the EU (from which we are exempt) or immigration from outside the EU. It has been our own choice not to trace people after they have arrived in the UK. Those wanting to withdraw from the EU argued that by leaving we would regain control of our borders so that we could limit migration to those with the skills we need. The ability to control immigration ourselves, to match the UK job market, would benefit our young people.
Trade outside the EU – there was some agreement that, whether we remain in the EU or not, we should do more to develop our trade with markets outside the EU. Germany, for example, has done well in exporting to countries such as China because it produces goods that those markets want to buy; in German trade missions, large companies bring with them smaller companies from their supply chain. We could do more, as a matter of domestic policy, to understand overseas markets and support smaller firms wanting to export. Those wanting to leave mentioned our participation in the World Trade Organisation, while those wanting to remain pointed out that the WTO does not cover services, which amount to a significant proportion of British GDP.
Fishing and farming – in favour of remaining, it was argued that, while the common fisheries policy can be criticised, the common agricultural policy has benefited farmers, and we would have had to regulate fishing even if we had not joined the EU. In favour of leaving, it was argued that outside the EU we would have control over our own fishing policy.
EU enlargement – in answer to a question about the proposed enlargement of the EU to include Turkey and the Balkan states, those in favour of remaining argued that Turkey is a major trading partner of the UK. There has been a flow of funds from Britain and other western European countries to eastern Europe, but as well as being a matter of solidarity this is also to our benefit; as eastern Europe develops it will provide more of a market for us, and some of those who have come to Britain from the east will return home as their native countries prosper. Those wanting to leave pointed to the advantages of being able to control our own borders against the possibility of large-scale migration.
What will happen if we leave or stay – those wanting to remain argued that if we leave negotiations for a new relationship with the EU would take some time. Foreign direct investment would reduce in the meantime, and the resulting uncertainty may lead to recession. Leaving the EU may make Scottish independence more likely and put pressure on the arrangements that have brought peace to Northern Ireland. If we stay, on the other hand, we would be able to influence Europe for our mutual growth and chance to flourish. Those wanting to withdraw from the EU argued that a vote to remain would only prolong the uncertainty, as the pressure to leave would continue. If we leave, on the other hand, there would be no sudden changes; we would keep some European laws and repeal others. It would be to our advantage that future developments in European law would not affect us. Independence for Scotland would be less likely, since some of the powers that would be repatriated from the EU would be devolved matters and become the responsibility of the Scottish parliament. There would continue to be freedom of movement between Northern Ireland and the Irish Republic, as there was before we joined the EU. Changes to our own laws would be gradual, but we would be free.
A straw poll
We asked the audience to indicate whether they wanted to remain in the EU or leave, and whether they had changed their view after listening to the debate.
Most of those who indicated a preference wanted to remain in the EU, but the effect of the debate was a swing towards those wanting to leave, narrowing the majority in favour of remaining. As a result of the debate, the percentage of those wanting to remain fell from 56% to 46%, while the percentage in favour of leaving rose from 26% to 39%; the percentage of those who were unsure fell from 18% to 15%.
We are grateful to our speakers for their insights into this important question. For further analysis and comment, please see our Brexit page.