POLITICS


EU in or EU out?


The UK goes to the ballot box on 23 June for a landmark referendum on its future relationship with the EU. As an apolitical organisation, the Chamber is maintaining a neutral position in the run-up to the vote but is committed to presenting the facts from both sides of the debate so business owners, managers and their employees can make an informed choice on polling day. In the second of a two-part series, following last month’s look


at the Remain campaign, Business Network Editor Jon Smart examines the key issues in the Referendum debate and the Leave camp’s position on them.


PART TWO


TRADE The UK could negotiate an amicable divorce, but retain strong trading links with EU nations in the wake of a Leave vote, according to campaigners. They believe a Free Trade Agreement could be


struck which would not involve the UK accepting the supremacy of EU law, the jurisdiction of the European Court of Justice, the free movement of people or the requirement to make significant annual budget contributions to the EU. This should, in theory, be easier to negotiate


than past trade deals, as full regulatory compliance between the UK and EU already exists. A recent precedent was set by Canada, which signed a Comprehensive Economic and Trade Agreement with the EU that will eliminate trade barriers in most areas, but does not require free movement or budgetary contributions. As a net importer from Europe, it would be


unlikely that European companies would want to see the introduction of tit-for-tat levies that could increase the price of their goods and services in the UK. Exiting the EU would leave the UK free to establish bilateral trade agreements, through the World Trade Organisation, with fast-growing export markets such as China, Singapore, Brazil, Russia and India. Currently, all the UK’s trade agreements have to be negotiated through Europe.


20 business network May 2016


JOBS The Leave camp argues that a UK exit from the EU would result in a jobs boom as firms would be freed from EU regulations and red tape, with SMEs which don’t currently trade with the EU set to benefit the most. A recent Institute for Economic Affairs research


paper claimed that “… jobs are associated with trade, not membership of a political union, and there is little evidence to suggest that trade would substantially fall between British businesses and European consumers in the event the UK was outside the EU.” It added: “The UK labour market is incredibly dynamic, and would adapt quickly to changed relationships with the EU.”


‘The Treasury will be freed of the annual contribution it is obliged to make to the EU budget burden’


THE ECONOMY The UK is one of only ten member states which pay more into the EU budget than they get out. Only France and Germany contribute more. In 2014/15, Poland was the largest beneficiary, followed by Hungary and Greece.


There are two factors to consider which


forecast a positive impact on the economy should the UK leave the EU. The Treasury will be freed of the annual contribution it is obliged to make to the EU budget burden – according to its own figures, the UK's net contribution for 2014/15 was £8.8bn - nearly double what it was in 2009/10. Meanwhile, businesses will benefit from a less-


costly regulatory framework. EU regulations are estimated to have cost UK businesses £33.3bn in 2014. Deregulation will lower costs and enable firms


to create more jobs. A UK exit would also, in theory, bring an end


to the ‘hidden tariff’ paid by UK taxpayers when goods are exported to the EU, caused by red tape, waste, fraud and other factors.


RED TAPE The Government’s own Impact Assessment estimate for the annual cost of the top 100 European Union-derived regulations to the UK economy currently runs at £33.3bn, although the same report indicates that those regulations provide a total benefit of £58.6bn a year. Think tank Open Europe, however, estimates


that £46bn of these benefits come from just three regulations (climate change, bank capital and money payments), with the benefits derived from the rest being “… vastly over-stated,” while “… 95% of the benefits envisaged have failed to materialise.” Open Europe’s report also estimates that EU


legislation has been responsible for 77% of the total cost of regulation of UK businesses since 1998.


MIGRATION A complete withdrawal would see Britain regain full control of its borders, meaning migration into and out of the UK could be regulated solely by UK law. In that scenario, Leave campaigners would


push for the introduction of a work permit system so that EU nationals would face the same visa restrictions as those from outside the EU, to reduce migration numbers, create job opportunities for British workers and boost


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