The UK Would be Better Off Economically Outside the European Union
CON (4 arguments)
The pound is close to a thirty year low and the UK lost it’s perfect triple A credit score. Economists predict job losses and decline of the UK’s Gross Domestic Product, which is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. If the UK had not left the EU the pound would most likely be back up at $1.50 per dollar. The pound was about $1.50 before the UK left the EU but today, in early October, the pound is worth just above $1.27 per dollar. The last time we saw these kinds of numbers it was 1985 according to CNN.com. Additionally, businesses that trade with the EU will have uncertainty over that trading relationship and the UK will be a less favourable investment prospect because it is no longer a bridge to 500 million EU consumers. The UK Treasury has estimated that the UK’s GDP will be lower by 6.2% by 2030. As a result, so many British people will be considerably worse off. In addition, some big employers, such as many car makers, are located in the UK in large part so they can have access to the EU market. Without access to that market, they will leave the UK. Also, it is estimated that three million UK jobs are linked to trade with the EU. The fact that businesses will leave the UK will then lead to significant job loss - the UK Treasury estimates 500,000 jobs will be lost.
The impact of this weakening of the British currency is that the government has less money to spend on imports because the pound has been significantly devalued. This means everything from fuel to food costs the British citizens more, while at the same time, over half a million British people will lose their jobs as a result of business pulling out of the UK. This historic currency devaluation and job loss would not have happened if the UK had voted to stay in the EU. Thus, the UK would be better off economically had it voted to stay in the EU.
Economic integration with neighbours is the best way to economic growth. The UK really needed to be a member of the EU because they have to pay much more money when they are trading with other nations because of tariffs and taxes. The UK will also be left out of larger trade deals between the UK and other countries. By staying in the EU, the UK benefits greatly from having no tariffs on imports and exports when trading with other member states of the EU. In the UK’s case, the EU accounts for 44.6% of exports and 53.2% of imports, so trade with neighboring EU countries is the foundation of the UK economy. Also, if it leaves the EU, the UK will be left out of larger trading deals between the EU and other parts of the world, like the US. "The EU is currently negotiating with the US to create the world's biggest free trade area," says the BBC, "something that would be highly beneficial to British business."
Throughout the world the trend is towards regional integration rather than away from it. The EU is the best example of this single market in which no tariffs are imposed on imports and exports between member states. Membership in the EU meant that the UK always had a say over how trading rules are drawn up between the member states. Also, Britain benefitted from trade deals between the EU and other world powers. For these reasons, it is in the best interest of the UK economy to stay in the EU.
The UK needs to remain in the EU to ensure the organisation flourishes. The UK has a track record of having a strong positive influence on the EU. For example, the UK influenced the EU to expand its membership to create a bigger market for trade in the past. Another example is that UK’s former Prime Minister, David Cameron, had a deal with Europe prior to the Brexit referendum to get the EU to engage in “lowering administrative burdens and compliance costs on economic operators, especially small and medium enterprises, and repealing unnecessary legislation.”
The impact of the UK staying in the EU is that the UK’s influence would towards revising the EU rules would have benefitted not just the UK but the EU as a whole.
Passporting is the right for banks within the European Economic Area to freely trade with other companies in the EEA without individual country licenses, and it provides many cross-border services to banks within the EEA. When Britain leaves the EU, it will also be leaving the EEA, which would make cross-border trading and services harder for companies within Britain.
“Clearly some size of our businesses will have to be moved out of London into European headquarters with the absence of any passporting agreement,” says Colm Kelleher, president of Morgan Stanley. Without passporting rights that so many British banks and companies have relied on, it will make it a lot harder for British counties, and cause some of them to move their headquarters to a different country that is a part of the EEA. Rob Kapito, head of Blackrock, an investment company, feels the same way. “I don't think there is any good [financial services] firm that has not already started to look at real estate in different areas outside the UK in case they have to move larger operations," he says. These businessmen are not the only ones who are worried about this. The loss of passporting rights will make it harder for British companies, either causing them to establish new trading rights, which would cost them money, or move their headquarters, both of which would damage the British economy.