The true costs and benefits of staying in the EU - or leaving
Britain is at a crossroads. At some point within the next two and a half years, the British people will have their say over whether their country should remain a member of the European Union. It is the most important vote in a generation and, for many, will be a difficult decision. ‘Change, or go’ has been written for those who, like the authors, have not yet made up their minds on whether Britain should be inside or out of the EU.

As our analysis has shown, the current terms of membership are unacceptable and are only going to get worse. Britain’s economy has been held back by the demands of a regional bloc whose economy has become increasingly inward-looking and uncompetitive, and whose policies, not least the flawed single currency, have created the conditions for ongoing, persistent economic crisis.

Far from offering every consumer and business the benefits of a wider domestic market, after 40 years of membership, less than 5 per cent of UK companies directly export to the EU yet all are forced to bear the burden of its regulations. The EU is not a free trade area but a customs union, and one which has spectacularly failed to deliver trade deals with rising economic giants like China. This is a damning failure: over the last few years, countries far smaller than the UK but, crucially, outside the EU (including Iceland and Switzerland) have been able to secure free trade agreements with Beijing.

Perhaps most importantly, for over 40 years, the British public have been forced to endure the unwanted philosophy of ‘ever closer union’. It is a political ideal that has led to a steady transfer of powers to institutions that are distant and opaque. These are bodies in which Britain’s representatives are increasingly likely to be outvoted by the Eurozone states. As George Osborne has said, if Britain remains in an unreformed EU, it may soon face the dire prospect of having to join the euro. Quite simply, Britain’s future has been taken out of Britain’s hands.

That philosophy has attained its latest culmination in the euro: a poorly-prepared initiative which put political aspirations before economic realities. Due to inherent flaws, the Eurozone must either integrate or disintegrate. Britain cannot avoid confronting the question of how to prepare itself for either outcome.
However, before we think about leaving, we must first ask ourselves whether we can resolve these problems while remaining a member of the EU. The Government’s promise to renegotiate Britain’s EU membership is a crucial moment in the history of our country. It is a unique opportunity to address the many serious problems that stem from our current terms of membership. David Cameron’s pledge of “full-on treaty change” is, potentially, the most significant promise made by a British Prime Minister in the last 40 years.

There are many things that will need to change to make Britain’s relationship with the EU work, and securing such reforms will require political skill and absolute determination. However, there is now widespread recognition of the need for a ‘special deal’ for the UK. Even committed EU federalists, such as Jacques Delors, the former President of the European Commission, now say that Britain “could be offered a different form of partnership”.
But what if the EU refuses to offer such a new deal? We cannot assume that all those seated around the negotiation table will be reasonable. Were the EU to be intransigent then, given the fundamental problems that define our membership, we believe that Britain should vote to leave. As our study will show, the UK – as the world’s fifth largest economy – has nothing to fear from such a vote and, indeed, much to gain.

If it leaves the EU, the UK would not see its influence fade away. It would have a much louder voice, able to speak for itself in important international bodies like the World Trade Organization, where the terms of trade between nations are now being set. While, today, British representatives at these key bodies either find themselves compelled to toe a European Commission line or find their seats usurped by the EU, leaving would allow them to stand up for the British people and their interests. This is even more important when international organisations are increasingly devising the regulations that the EU then imposes on the UK. Being directly represented at the source of new global rules – including those related to the UK’s crucial financial services sector – would give Britain more influence over them, not less.

Nor would leaving necessarily diminish Britain’s influence with its European neighbours. The UK would have no interest in bad relations. Equally, the EU has committed itself to developing a ‘special relationship’ with neighbouring countries. As our study has shown, across a range of policy areas, the EU already works effectively and cooperatively with non-member states. Britain and the EU would find themselves friendly allies, trusted partners and good neighbours.

Most importantly, leaving the EU would increase Britain’s influence over its own affairs. Returning power from the opaque institutions of the EU to the British Parliament – and to the devolved assemblies – would make politics meaningful again. Political debate would no longer be hampered by mega-lobbying, corridor trading and back-room crisis deals in Brussels, but would reflect the views and opinions of the British public. This is the single most important advantage of leaving an unreformed EU: people would be able to vote for a Government that reflects their values and beliefs. Britain’s future would be in Britain’s hands.

Finally, there would also be a chance to increase prosperity for everyone. From an economic perspective, Britain has nothing to fear from leaving the EU, and the oft-cited claim that it would lose access to a large and important market fails to stand up to scrutiny. The considerable work that has been done over the last 40 years to bring down international tariffs has, in many ways, made the EU redundant. Were the UK to leave, it would continue to have access to the EU’s markets, as World Trade Organization rules prevent the EU from imposing unfair, punitive tariffs on UK exports. Furthermore, Britain could quite legally ‘compensate’ exporting firms for costs that they may face.

Were the UK to leave the EU, it could expect to see investment opportunities continue to develop and businesses continue to thrive. Employers could more easily expand without the deadweight cost of excessive EU regulation. Households would be better off too. These savings would come in many forms, including cheaper food and clothes. Often the savings would be in areas where less well-off families stand to gain the most.

Best of all, being outside the EU would limit the UK’s exposure to the problems created by the euro. If Britain were not an EU member it would have greater control over some of the consequences of a Eurozone meltdown – most obviously, the cost of any new ‘Marshall Plan’-style rescue packages, or the movement of people. In the event of further and deeper integration, being outside would mean that the UK did not face being in a permanently-outvoted minority within the EU but outside the Eurozone.

This is the vision of the new Britain that could be secured if we make the right decisions in the next few months. In the modern world, where tariff rates are so low, such a relationship would, in many ways, be closer to the idea of a ‘Common Market’ that many people voted for in 1975. Freed from the risk of ‘ever closer union’, the UK could once again have a relationship with the EU that it could accept.

This is a vision that can now be secured by either rewriting the EU’s Treaties or by leaving the European Union itself. We are, in short, in a win-win situation: Change, or go.