5 groups of people who are likely to gain from Brexit
In the run-up to the EU Referendum vote on June 23rd, JOE will be running a number of pieces examining both sides of the debate. Here, Robyn Vinter looks at who is likely to benefit from leaving the European Union.
The EU referendum debate so far has been a shitshow of dodgy figures, scare tactics and hate-fuelled extremism. While the choice of whether to stay or go might end up being labelled a defining moment for our generation, it’s hard to make any kind of decision without knowing the facts.
Hopefully we can shed a bit of light onto the stumble into the dark that a Brexit vote might be, and take an educated guess at who is likely to benefit if we choose to leave.
1) Small businesses
Those who want Britain to stay in the EU often talk about the benefits for business of having access to the single market. However, small businesses don’t always see this benefit. Only 6% of UK businesses export to the EU but all have to abide by EU rules. That’s a fact often touted by the Vote Leave campaign, and it is backed up by evidence. According to an Institute of Directors survey, half of businesses thought the UK could make a success of Brexit, and 46% thought it would have a positive impact on red tape.
2) Non-EU migrants
The irony for many people planning to vote leave based on the volume of immigration is that there is no evidence leaving the EU will make any difference to the numbers of foreign-born people coming to the UK. In fact, data from the OECD shows that countries we plan to model our immigration system on if we leave, such as Norway, Switzerland, Australia, Canada and the US, all have a greater proportion of foreign-born residents than the UK does.
However, on the whole, Brexit would likely help non-EU migrants come to the UK. In 2011, shortly after his government came to power David Cameron brought in a cap on migration. The cap has arguably been a failure, with net migration rising 30% in 2015, however it has had the perverse effect of the UK turning down visas of desperately needed workers, such as a nurse from the Philippines with a job offer in a UK hospital, for example, while an au pair from France with few qualifications and no job to come to can move freely.
Brexit could put all migrants on a level playing field, giving the UK more control, likely to the benefit of many potential migrants from outside the EU.
UKIP has the most MEPs (representatives in the EU parliament) of any other party in the UK, with 24 out of a total 73. They may not be prepared to admit it but they haven’t been good representatives of our interests in Europe.
Of all the parties across 28 countries, UKIP has the worst attendance record, only bothering to turn up to 63% of the votes. And why would they, since MEPs get paid their £76,292 salary whether they show up or not? This means, effectively, that our choice at the referendum is to leave the EU or put up with the unfortunate truth that we’re a member of an institution in which many of our elected representatives aren’t even there to stick up for us.
However, in reality, only 36% of people turned out to vote at the European Elections in 2014 in which these people were elected, so it’s hardly surprising MEPs don’t always feel that accountable to citizens.
4) Some manufacturers
Germany doesn’t want us to leave the EU for a number of reasons - for example, our government sees eye-to-eye economically with theirs and often vote along the same lines, plus our economy adds stability to the EU and if we left, Germany would be forced to shoulder more of that responsibility, as the largest economy in Europe.
But Germany is a major manufacturer and our biggest trade partner, and a Brexit could make it harder for us to trade with EU members and increase the cost of what we buy from inside the single market. While this would mean things would get a little more expensive, it could encourage British firms to manufacture more and rely less on imports, particularly in industries that depend more on quality engineering than the cost of raw materials, such as cars, which currently account for 9.7% of our exports.
5) Poor British regions
While there is an argument that improving Europe’s poorest areas has a benefit to everyone, the UK doesn’t get as much money back from the EU as it spends on regional development, according to an Open Europe report from 2012. Between 2007 and 2013, we were the third largest net loser of all the countries in the EU, contributing £29.5bn to the EU’s structural and cohesion fund and getting back around £8.7bn. In fact, some of the UK’s poorest regions suffer the most. Open Europe estimated the West Midlands, which has the lowest disposable income per capita in the UK, paid £3.55 for every £1 it got back.
However, an important caveat is that if Britain left the EU and saved this money, there is no guarantee the government would plough it back into the regions and in theory there would be nothing to stop it being used for the very opposite - to give tax breaks to big businesses based in London - leaving regions with no EU cash to fall back on at all. As it happens, the last Labour government put a commitment in place to bring regional spending back under UK control, but it was abolished when the coalition government came to power.