Pros and cons of leaving the EU

With the final deadline for Britain’s departure from the EU fast approaching, the debate over whether the vote to leave was the right decision still rages. Learn more about the key points from both the leave and remain sides, and why the ongoing debate is important for traders.

Benefits of being in the EU: the debate

The Brexit process began with the United Kingdom voting to leave the European Union (EU) in the 2016 referendum. Since then, there has been heated debate from both the remain and leave camps about the best scenario for Britain moving forwards.

With speculation playing a part in almost every claim for or against the EU, it’s a big ask to distinguish between legitimate risk and doom-mongering. As the process of negotiating an exit deal nears its end, there is still uncertainty surrounding the UK’s exit from the EU, and the debate on the pros and cons of EU membership continues.

Remain

Though unsuccessful in garnering enough votes in the referendum, the remain camp have continued to advocate for a close relationship with the EU in the form of a ‘soft’ Brexit.

Another way for the UK to remain in the EU, would be for a second referendum to be held and for the result to be in favour of remain. However, this scenario has been criticised as undemocratic, and the government has stated that it is not an option.

The arguments for remaining in the EU focus on the benefits of being part of a wider union, and the security and favourable trading relationship which EU membership gives.

Key arguments for remain

  • Foreign affairs

    As part of a 500 million-strong community, Britain has greater influence over international matters as member of the EU.

  • Sovereignty

    Britain has proved that it can opt out of some EU policies which it considers counterintuitive, such as the euro, the Schengen Agreement and enforced migrant quotas.

  • Security

    A union better equips Britain to tackle threats to security, including terrorism and cross-border crime.

  • Money

    Europe provides Britain with billions of pounds’ worth of investment each year, both in the public sector and private sector.

  • Trade

    EU membership gives Britain access to the European single market, which is invaluable for trade and enables the easy movement of goods, services and people across member states.

  • Business

    Free trade within the EU reduces barriers and enables UK companies – particularly small ones – to grow.

  • Jobs

    Millions of jobs linked to Britain’s membership would be put at risk. Some sectors such as nursing and manufacturing could experience a slump in skilled labour.

  • Consumer goods

    The average person in Britain saves hundreds each year thanks to lower prices of goods and services facilitated by the EU.

Leave

While the leave campaign succeeded in the referendum, there has been less success in negotiating with the EU. To dissuade other members considering their own withdrawals, the EU have been firm in their approach to the negotiation process so far.

Leave supporters are unyielding in their resolve that the referendum result is final, and that the UK must now leave the EU. However, while some on the leave side advocate a hard Brexit – gaining more sovereignty, taking control over immigration and reducing red tape – others are more moderate.

Key arguments for leave

  • Foreign affairs

    EU membership limits Britain’s international influence, ruling out an independent seat at the World Trade Organisation (WTO).

  • Sovereignty

    Britain would have more control of its laws and regulations, without risk of having counterintuitive policies forcefully imposed.

  • Security

    Britain’s domestic security would benefit more from greater border control than political union.

  • Money

    Britain contributes billions of pounds in membership fees to the EU every year.

  • Trade

    Membership in the EU keeps Britain from fully capitalising on trade with other major economies like Japan, India and the UAE.

  • Business

    The EU subjects Britain to slow and inflexible bureaucracy, making it more prohibitive for smaller companies to do business.

  • Jobs

    Improved global trade agreements and more selective immigration could have a positive effect on the British job market.

  • Consumer goods

    The average person in Britain loses hundreds of pounds each year due to EU VAT contributions and agricultural subsidies policies.

How to leave the EU

There are two ways that Britain can leave the EU: with a deal, or without a deal. A scenario in which Britain leaves with a deal is referred to as ‘soft Brexit’ and a scenario in which Britain leaves without a deal is known as ‘hard Brexit’.

Hard Brexit

A hard Brexit would result in a rigid position on all the issues outlined above – it would likely entail full severance of the relationship between the UK and the rest of the EU.

  • Argument for: a hard Brexit could see the UK leave the free trade zone, do away with EU regulations, and eradicate the need to accept the free movement of people. This would provide the opportunity to negotiate new trade deals with other countries.
  • Argument against: the EU is Britain’s biggest trading partner, and there’s no guarantee of getting better trade deals once we leave. Adding to this, the UK could still end up being forced to comply with EU laws and regulations, such is the case with Norway and Iceland.

Soft Brexit

A soft Brexit would aim to keep the relationship between the UK and the EU intact and, most importantly, would aim to keep Britain in the single market or, at the very least, would aim to arrange some sort of free-trade agreement.

  • Argument for: staying in the single market would make trading easier – it has been frequently stated it is within the interests of the City and the UK as a whole to maintain free trade with the EU. It would also prevent the uncertainty that surrounds a hard Brexit.
  • Argument against: staying inside the single market and customs union is regarded by many as a betrayal of the referendum result. By staying in the single market and customs union, the UK would be liable to EU rules and legislation regarding the free movement of goods, services and people across borders. Plus, it could put the UK in the dangerous position of still having to accept EU economic and political policy, but with no seat at the negotiating table.

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