The 2017 Referendum: A Briefing

In his 2013 election manifesto, David Cameron promised to hold a referendum on whether the UK should remain in the European Union, which would take place in late 2017. Before that however, the Prime Minister wants to renegotiate the terms of the UK's membership. He has said he will campaign for Britain to remain in the EU, if he gets the reforms he wants.

But what does he actually want to achieve? It is clearly visible that the EU has changed substantially, since the UK joined the Common Market Area in 1975. The Union has increased in size substantially, especially after the 2004 enlargement, when 10 Eastern-European countries joined it. Britain also dislikes the fact, that more and more power is divested to Brussels. Cameron wants to get a British opt-out from the ‘ever-closer union’, so that the UK is never forced to join a European Super-State. Secondly, he negotiates to explicitly write into the European treaties that the EU is a multi-currency union, deleting references to the euro as the EU’s official currency. Thirdly and vitally, he aims to repatriate power to Britain through a “red card” system to allow parliaments to block new EU directives. He will also try to get restrictions on welfare benefits, in particular, tax credits for migrants.

Numerous arguments about why Britain would better off outside the EU have been raised in the Brexit-campaign. The one that has emerged as the most popular recently is the Norwegian-Model, arguing that Britain just like Norway could join the European Economic Area, which would give it access to the single market, but free it from EU rules on agriculture, fisheries, justice and home affairs. Such a system could apparently cut immigration and introduce a work permit system, which would create job opportunities for British workers and boost wages, as well as easing pressure on schools, hospitals and other public services- an appealing prospect to the British public. The public opinion about whether Britain should leave or stay in the EU has changed over the years and recently anti-EU sentiments have been on the rise.

However, David Cameron has recently taken on a more definite stance on the Brexit, warning that Britain being outside the European Union will not be a “land of milk and honey“. It could cost the country hundreds of millions of pounds and may not cut immigration, Norway and Iceland, which is also a member of the EEA, pay huge fees to get access to the single market and are still bound by EU rules on employment, health and safety, transport and the environment. Norway also has to abide by the principle of free movement, which allows people to live and work anywhere in the EU. Norway spends twice as much as Britain on public services for migrants, but they have no seat at the EU table, no ability to vote and negotiate EU rules. There is also a common misconception about the impact of immigration. In fact, The UK's growth forecasts are based, in part, on continued high levels of net migration. The Independent Office for Budget Responsibility says the economy relies on migrant labour and taxes paid by immigrants to keep funding public services. University College London’s report, ‘The Fiscal Effects of Immigration to the UK’ has shown that the immigrants added £4.96bn more in taxes than they took out in public services.

Moreover, The UK's contribution to the EU budget (£10.4bn in 2015) is a drop in the ocean compared with the benefits to business of being in the single market. The EU is the UK's main trading partner, worth more than £400bn a year, or 52% of the total trade in goods and services. Complete withdrawal from the EU would see trade barriers erected, with car exports to the EU, for example, facing a 15% tariff and imports a tariff of 10%. For this reason, most big businesses are in favour of Britain staying in the EU. The British Chambers of Commerce says 55% of members back staying in a reformed EU.

It is certainly difficult to predict the exact effect of the Brexit, but it seems like Britain would be much better off staying in and ideally renegotiating some of the EU rules.

2017 may seem like a distant point in the future, but it will come sooner than we think. The referendum is a chance to decide on a vital issue, which will certainly affect our lives. Instead of basing our opinion on stereotypes, we should try to gain a better understanding of the issue, in order to make the right decision.