How might leaving the EU affect us on an individual basis?
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, we look at some of the possible implications the Brexit on our every day lives.
Mortgages and borrowing money
Most economists and market analysts predict that the pound will fall significantly should we vote to leave the EU on Thursday, as will share prices. Indeed, after the referendum was announced, the pound slumped to a seven-year low against the dollar, and there does seem to be a broad correlation between the fear of Brexit actually happening and exchange rates.
The financial markets hate uncertainty, and whether you think leaving the EU would ultimately be a good or bad thing, it is by its very nature the far riskier move. This would cause investors to drop sterling-denominated assets.
In order to counteract the fall in the pound, the Bank of England would have no real option but to hike up interest rates, to offer lenders a higher return relative to other countries. That's bad news for us because the cost of mortgages and of borrowing money for small businesses would increase significantly.
Travelling and holidays
The expected drop in the pound would mean that your money would be worth less abroad, so spending on your holiday will be more expensive. If you're travelling in Europe, that would at least be offset by an expected negative effect on the Euro too, but most experts expect sterling to drop more drastically.
Budget holidays may be a thing of the past too. No-frills airlines currently take advantage of the single aviation area, which allows them to fly across Europe freely. Since its introduction, fares have fallen by around 40% and routes have increased by 180%. If we leave the EU, this access would need to be renegotiated.
Using your phone or getting injured abroad would be more expensive too. Roaming charges within the EU are currently capped, and fees will be cut to zero from June 2017. Leaving the EU would exempt us from these agreements.
In terms of illness, a European Health Insurance Card (EHIC) entitles us to free or reduced-cost treatment in other EU countries. We'd have to renegotiate the terms our healthcare in the EU were we to exit.
Immigration and taxes
Whatever your feelings about how the free-movement of labour within the EU affects our way of life, the taxes paid by predominantly young and employed EU immigrants help prop up our ageing population. A steady influx of working immigrants is vital to the growth and sustainability of our economy.
HMRC data shows that EU migrants coming into the country in the last four years paid £2.5bn more in income tax and national insurance than they took in tax credits and child benefit. In terms of them 'taking our jobs', this has coincided with an 1 million increase in British people in work.
If we significantly reduce the number of foreign workers entering the country, this would not only have serious implications for certain sectors (such as the NHS who rely heavily on skilled migrant workers), but also put more onus on us to cover the cost of our ageing demographic, be it through increased taxes or cuts in other areas.
The alternative is to significantly increase the number of immigrants coming into the country from outside of the EU. Non-EU migrants already outnumber EU migrants (and always have done) - despite the fact that EU workers are currently free to enter. This would not appease those wanting 'their country back'.
Being part of the EU means that our government has to grant us certain employment rights. Part-time workers are entitled to the same basic rights as full-time workers; employees with children are allowed to take leave to look after their kids; temps on fixed-term contracts have to be treated the same as permanent staff.
European legislation also means employees cannot be discriminated against due to their age, sexual orientation, disabilities or beliefs. And we are entitled to certain levels of paid holiday and breaks. The government can't take these rights away from us due to our membership to the EU.
The fear for those opposed to Brexit is that those safeguards will be removed, and that the politicians leading the Leave campaign happen to be members of UKIP and the right-wing of the Conservative party - those most in favour of a full opt-out from the EU’s working-time directive and the agency workers' directive.
With David Cameron expected to resign if the country votes to leave the EU this week, critics worry this will leave the likes of Boris Johnson, Michael Gove, Liam Fox and perhaps even Nigel Farage with a mandate to take over control. Indeed it is rumoured that Farage has been promised a cabinet post in a post-Brexit government led by Johnson.