Britain is likely to leave the European Union – dubbed a Brexit – if Prime Minister David Cameron does not renegotiate the terms of the country’s EU membership, says an influential group economists and business leaders.
However, leaving the EU wouldn’t be as bad as you would think, Business for Britain adds.
In fact, the group in their latest report entitled “Change, or Go,” claims that the average British household would be nearly £1,000 ($US1,600) better off in a Brexit.
So why are business leaders and financiers so upset with the UK’s current deal with the 28-nation bloc?
According to the report, which had Mark Littlewood of the Institute of Economic Affairs, John Mills of JML, and fund manager Helena Morrissey of Newton on its editorial board, tax payments to the EU, level of bureaucracy, and the changing population are all contributing to greater cost for the nation.
The EU’s position in the world has changed
The report points out that the EU “Britain signed up for” in 1973, looks very different to today.
The report highlights how the EU’s economy is “shrinking relative to other countries across the globe” and that its population is ageing, which means in 2020, the ratio of working age people to pensioners in the EU will be 3:1 while in 2050 it will be 2:1.
This effectively means there are less people able to work to support the older generation meaning a greater productivity and cost burden.
The EU spends a lot
Business for Britain also highlights in the report that spending in the EU are spending more than communist states, like China.
Budget, bureaucracy, and tax payments are massive and prolific
Some of the biggest issues and concerns around Britain’s current membership with the EU, cited from business leaders and financiers in the report, is the sheer volume of red tape that affects the UK. For example, since 2010, the EU has introduced over 3,500 new laws affecting British business.
The report calculates that a business person would have to read for 55 minutes per week just to keep on top of the new red tape. It also says this could be seriously costly.
“The British Chambers of Commerce has shown that the total cost of EU regulation is £7.6 billion ($US12 billion) per year,” says the report. “Since the Lisbon Treaty came into force in December 2009, it has cost British businesses £12.2 billion ($US19.3 billion) (net) in extra regulation.”
The Lisbon Treaty is the successor to the European Union Constitution, which became law in 2009. It includes heightened powers for the European Commission, European Parliament and European Court of Justice. It also opened the doors for more freedom of movement between EU members and greater control from Brussels over the final say on asylum applications.
Also, Britain’s multi-billion tax payments, which increases with the greater financial stability and growth it fosters, is also a sore point.
“Our net contribution to the EU has risen by over 200% in the last decade, but our economy has only grown by 14%,” it pinpoints.
On top of this, the EU’s budget for funding is “too big.”
Currently, it’s difficult to make changes to EU law
While the above only highlights some of the concerns, although key ones, over the UK’s EU membership, Business for Britain says not having a strong voice is perhaps the most alarming issue.
“The Commission proposes new laws in the EU, but the UK’s representation has declined dramatically and many officials are adamantly opposed to the sort of changes that the UK seeks,” says the report. “When the UK joined the EU in 1973, we had 20% of the votes. Today we only have 9.5% of the votes British MEPs voted against 576 EU proposals between 2009 and 2014, but 485 still passed and became law.”
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