The EU Referendum – A Huge Gamble

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Gina Miller – Businesswomen, philanthropist, and mother

 

Mr. Cameron has promised to hold a referendum vote on the EU by the end of 2017. But there is already an air of fantasy and irresponsibility surrounding the debate. The referendum vote is so important that we must not play political games on the exit. Commentators and media must focus on facts not fairy tales as a happy ever after is far from certain.

By way of background, the EU was born of the will for a political union to ensure we would not be threatened by fascism again in the aftermath of WWII, when nationalism was seen as bad ‘ism’. But even before this there was a union where 10% of Britain’s exports went to the six countries that formed the European Coal and Steel Community (ECSC).

Throughout history countries have conducted the majority of their trade with their neighbours and relied on them to help rebel invaders. For us that is Europe.

In terms of a cheque book, the EU takes over 51% of British exports of goods and close to 45% when services are added in. Those who say it is the same for the other member states who export to us are incorrect as the figures are vastly different, with the other EU countries exporting only 6.6% of their goods to the UK. (IMF Direction of Trade Statistics).

Under an optimistic scenario, in which the UK leaves but continues to have a free trade agreement (FTA) with the EU, losses would be 2.2% of GDP. I would argue our economy cannot accommodate this hit and that the highly probably net result is that the UK economy will suffer permanent losses on the back of weaker trade and investment; a highly risky gamble.

The London think-tank, Centre for European Reform, has carried out a modelling exercise which concluded that Britain’s trade with the rest of the EU was 55% greater than it would have been if outside. Those from the Out campaign that argue we can replicate the same levels of trade with emerging market countries and Commonwealth countries have obviously not done much business in these economies. In any case there is no reason why this is a mutually exclusive choice – we can still be part of the EU and build up trade with these global markets – for example, Germany’s second largest market for exports is China.

The full economic impact of Brexit is impossible to quantify but the concerns and anxiety that would result would create uncertainty in financial markets, which is never desirable. London would not instantly disintegrate as a financial centre but like a rug, once some part of the financial services tapestry gets pulled just a little bit, then over time the entire fabric could weaken.

But putting these financial facts aside, if Article 50, a so-far untested mechanism whereby countries can leave the EU, is triggered there is no going back; no room for ‘buyer’s regret’.

If we were to vote to leave, departure would come two years after formal notification, irrespective of what we have in place. Over these two years of limbo for the UK, we would lose our representation on the European Council of leaders of member states. We would also be unable to vote on any deal it negotiated. This is pure madness.

 

There are also real political reasons why a favourable exit package is unlikely to emerge from the remaining 27 member states:

 

  1. a) It would encourage the far right in many other member states to demand a referendum/renegotiations for exit –  France, Germany, Spain.
  2. b) An out vote could lead to each of the devolved areas under the new devolution Act to hold their own vote
  3. c) An out vote could push the unification of Ireland agenda even further

 

The irony is that the EU membership we have today has resulted from many years of successful change. We should be proud of what Britain’s influence on the EU has achieved for 500 million people. The grey haired, veteran Eurosceptics are right that the EU we joined in 1973 was flawed, with expensive ridiculous farm and fisheries policies, a budget designed to cost Britain more than any other country, no single market and only nine members. But thanks in no small part to British political clout, the EU now has less wasteful policies, a far more reasonable budget to which Britain is a middling net contributor, a liberal single market, and a commitment to freer trade.

Most collaborations are a constant work in progress. But to flirt with exiting or conscious uncoupling is insanity, as the future of the EU should not be about a cheque book or trade alone. There are issues such as climate change, environmental threats, terrorism, and fascism that have no respect for borders, global ‘isms’ marching across the world – virtually, physically, and virally. This has to be a sophisticated multilayered debate, not an overtly emotional one.

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