We are one week away from the EU referendum, the moment when the British people will be called upon to make a historic decision – will they vote to “Brexit” or to “Bremain”? Both camps have been going at each other with fierce campaigns to tilt the vote in their direction, but according to the latest polls, with the “Leave” camp’s latest surge still within the margin of error, the projected outcome is too close to call.
It is a rare moment in history. The British haven’t had their say since they voted to join the European Community back in 1975. What was initially thought of as a project to unite Europe into one common market, with benefits of free trade and great promises of increasing national wealth, has mutated into a completely different entity. The British have, instead, found themselves being dragged into a regional economy of zero growth and a weak Euro, and heavily indebted states. You may have come across the arguments of both camps, but here we wish to address what a “Brexit” or “Bremain” scenario would mean for Britain.
If the UK Bremains..
If the British vote to “Bremain”, Britain will start to operate with a “special status” within the union, after Prime Minister David Cameron reportedly renegotiated Britain’s relationship with the EU, in anticipation of the referendum. Cameron tried to change some of the rules of the agreement, to address the concerns of the British public that made them favor a Brexit in the first place. The matter of ‘sovereignty’ came first in the list of the most common anti-EU grievances, as the public felt the country no longer had a say in its own affairs and was pressured to comply with EU regulations as part of the greater union. Cameron succeeded in having the UK released from any commitment to be politically integrated into the EU body, and there were talks about granting some autonomy and power to national parliaments, through the “red card mechanism” (i.e. if 55% of national parliaments object to one vote, they can block a proposal submitted by the European Commission). This proposal, however, does not in any way alter the UK-EU relationship, while it is also unlikely to be practically enforced, much like the preexisting “yellow” card that has only been used twice so far. Thus, British autonomy, specifically, remains unaddressed.
When it comes to economic self-governance, Cameron got an explicit recognition that the Euro is not the single currency of the EU and that the UK will not be pressured to contribute to the Eurozone bailouts. But what about the British economy itself? British businesses have long complained about losing competitiveness. In general, the EU single market makes it easier to move money and products and grants business a large consumer base. However, the data released by the Office for National Statistics casts a different light on this point: Europe has become a less important trading partner. In 2000, the EU represented 60% of the UK’s total exports. As of April 2016, this number has dropped to 48%. Meanwhile, imports from the EU have been within the range of 47% to 55% since end-2014 and are thereby contributing to a growing trade deficit.
According to the chief executive of the “Vote Leave” campaign, Matthew Elliott, the drop in UK exports to Europe is linked to the poor economic conditions in the Eurozone, thus reducing demand from Europe, while demand from non-EU partners has grown. Therefore, a Brexit will allow British businesses to speak for themselves, as opposed to speaking as one of 28 countries. The chart below reflects the increase in the trade balance of non-EU trade partners, compared to the EU, particularly since 2012.
Immigration and its impact on the domestic job market are another major concern to voters. According to the latest data released by the Office for National Statistics, net annual migration to the UK reached peak levels at 336,000 in June 2015, as shown in the chart below. Ironically, after his election victory last year, David Cameron had pledged to bring net migration below 100,000– arguably an overoptimistic promise, given that the last time the figure was that low, was in 1997.
It is no coincidence that 1997 was the same year the Labor Party (founded by the Fabian society) came to power. Andrew Neather, the former advisor to PM Tony Blair, revealed that the true nature of the open border mass immigration policy of the Labor Party was politically motivated to help construct a “truly multicultural country”. As per Neither, the ministers hesitated to publically reveal their plans, which could risk alienating the Party’s “core working class vote”. Therefore, to promote their open-borders agenda, they focused on arguments based on tentative projections of potential economic benefits.