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Brexit: Should UK Leave The EU?

By Ila Tyagi:

What is Brexit?

Brexit refers to Britain’s Exit from the European Union (EU). A referendum will be held on June 23, 2016, determining whether Britain will stay in EU. The debate on Brexit is of global importance because it will affect a multitude of companies, countries, and international trade relations.

britain-and-europe1In order to understand the arguments for and against leaving the EU, one needs to understand the concept of the Eurozone and the Single Economic Market. The EU is a community of nations, which allows for free movement of goods, services, and persons. It has evolved into a single market, making it relatively effortless to trade between EU nations. It also has its own currency and parliament. However, its currency is only used by 19 of the 28 states. UK uses its own currency, the Great British Pound, which is stronger than the EU currency, Euro.

The uncertainties regarding Brexit revolve around the model of exit that Britain could choose while leaving the EU. There are five main models that Britain could choose from:

  1. The Norwegian Model – Britain can choose to exit the EU but join the European Economic Area that will give it access to the single market with the exception of financial services.
  2. The Swiss Model – Britain can negotiate trade deals with EU related to different sectors like Switzerland.
  3. The Turkish Model – Britain could get access to the free market in manufactured goods but not the financial services.
  4. Negotiating a Free Trade Agreement with the EU with better access to financial services and other sectors.
  5. Leaving the EU completely and solely relying on its membership of the World Trade Organisation for fostering trade with other countries.

However, those campaigning for Brexit want a Free Trade Agreement similar to the Comprehensive Trade Agreement signed between EU and Canada. Such an agreement would not accept the jurisdiction of European Court of Justice, EU supremacy, free movement of persons and paying significant amounts into the EU budget.

Arguments for Brexit

One of the major arguments for leaving EU is saving upon the membership fees and UK’s contribution to the EU which is worth billions of pounds. Those who want Britain to exit EU (Brexiters) believe that this money could be used for boosting new industries and research in Britain.

Brexiters contend that EU’s importance in global economic affairs is declining as it only contributes up to 20% of the Global GDP now as opposed to 37% in the 1970s. Since EU membership makes it difficult for UK to access other markets, Brexit would mean that Britain would be free to negotiate better trade deals with other large and emerging economies such at USA, India, China, Japan, United Arab Emirates and the South East Asian countries. Another line of argument suggests that Brexit would be in the interests of Small and Medium Enterprises in UK.

The issue of immigration heavily influences the debate over Brexit. The campaigners for Brexit assert that Brexit would lead to the UK regaining control of its borders as they would not be subject to the laws concerning free movement of persons across the EU. There are approximately 1.6 million EU citizens living in the UK. Most of these are from Eastern Europe and have a high rate of claiming welfare benefits and, allegedly abusing the system.

There is also a security concern, some say if Britain remains in the EU. Brexiters believe that free movement of persons in the EU makes Britain more susceptible to terror attacks in light of the recent attacks in Brussels, Paris and, and earlier, Madrid. Leaving the EU would lead to Britain tightening its borders and enforcing greater security measures.

Lastly, there are concerns about EU regulation and its impact upon British law. Many campaigners view EU as over-regulated and burdensome bureaucratically. They see the acceptance of the supremacy of EU law and extension of the jurisdiction of European Court of Justice as a limitation to Britain’s sovereignty. By exiting the EU, Britain will be free of many EU laws related to human rights, arrest warrants, financial services, etc.

Arguments against Brexit

In my opinion, the arguments for staying in the EU outweigh the arguments for leaving the EU. Leaving the EU could lead to the following results:

Britain would lose EU as its largest trading partner. The trade with EU is worth approximately £400 billion. Leaving the EU would not only result in loss of easy access to the single market but also reflect negatively upon UK as an attractive investment destination (most of the Foreign Direct Investment in UK is EU related). The campaigners for remaining in the EU argue that the costs of membership of the EU pale in comparison to the benefits of access to the single market and free movement of goods and services.

Brexit would hit the financial sector with a bang. London might lose its reputation as the European financial hub because many foreign banks establish a presence in London, with a view to access the single market in EU. Brexit would mean that these banks would lose out on their customers in other EU countries and be subject to many EU regulations that they are free from today. Not only that, the law in the financial services sector is highly dependent upon EU regulations and Brexit would create a vast legal gap, which would have to be filled quickly.

Britain’s membership of the EU impacts up to three million jobs in the UK. An exit would see millions of jobs lost as manufacturers would prefer to move to lower cost EU economies. Brexit would also cause the 1.4 million British nationals working in other EU states to return home. Staying in the EU, therefore, offers lucrative job opportunities for the EU citizens over a large economic area. It also presents the employers with a larger talent pool.

Brexit would also mean that the EU regulations protecting British workers’ rights related to working hours, anti-discrimination etc would not be enforceable anymore. This would also create a big gap in terms of UK’s laws regulating certain areas such as Library, food ingredients, animal testing etc.

Leaving EU would mean that UK’s influence over EU decisions would diminish significantly. With little influence over the important matters that concern political and economic centers in the world like Paris and Berlin, UK’s global clout would be severely undermined. Therefore, allies like USA want Britain to stay in the EU. Following Norway’s approach could mean that Britain would be subject to EU laws but with no real say over how they are formulated.

On the security issue, the argument for remaining in the EU is that member states can facilitate the exchange of intelligence, criminal records, and passenger records. They can also take collaborative measures to counter terrorism.
EU membership also allows Britons to travel visa-free throughout the EU. The British Driving License is valid in the EU states and this makes it easier and cheaper for the Britons to fly to France or Italy for a weekend.

Lastly, a good free trade agreement seems difficult to negotiate at this point since Britain would be highly isolated upon leaving the EU.


I believe that the cost of leaving the EU seems to be higher than the costs of remaining within the EU. A study by Open Europe concluded that leaving the EU would mean the British economy would lose 2.2% of its GDP by 2030 or boost it by 1.6% if it carried out a “very ambitious deregulation” and negotiated a free trade deal to maintain the current economic status quo. EU is also in talks with USA with the aim of creating world’s largest free trade area, a plan that will be highly beneficial to UK if it decides to stay.

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Let’s Talk Period aims to change this by

Find out more about her campaign here.

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