Analyses of BrExit options

Analyses of BrExit options

Here is some reading matter on the pros and cons of various options for leaving the EU. What we need is for the Brexiters to settle on one and argue the case for it rather than on the one hand claim they want a deal like the EEA (but don’t when the problems are pointed out) and on the other say “it’ll be fine don’t worry” but won’t be specific. Without knowing what they mean by “out” we have no idea what we’d be voting for. The UK government published an analysis of the various options on 2nd March 2016.

Various groups have analysed the likely impact of Brexit. Their views are summarised in this table:

Where the range is positive, there is usually an assumption that EU freedom of movement is maintained.

The UK Treasury published a report on the economic costs of these various options on April 18th.

The CBI view:

It’s ridiculous to claim the CBI is funded by The EU (hardly to a level that would sway its members) or that it represents “big business” who would say that. Big businesses buy stuff from and sell stuff to small businesses, and their employees spend money at small businesses, so if “big business” is materially impacted by EU exit, then there will be consequences elsewhere in the economy, including SMEs who don’t knowingly trade outside the UK or even their local area. These big businesses have a duty to their shareholders, employees, customers, suppliers and the country to say so. Voters need to know this. They can decide that they don’t care, that they don’t trust them or their motives, or that other benefits will offset the consequences. But what they don’t want is to be told “we could have told you that” after they find those consequences but were not warned about them. This applies to individual companies and their officers: they have a fiduciary duty to call out risks to their companies so their shareholders, customers, employees and suppliers understand them. It is unacceptable for Leave campaigners to deny busineses and their representative bodies like the CBI the right to express these concerns or accuse them of subverting democracy by doing so. The best protection for democracy is to have an informed electorate not, as Leave would like, an ill-informed one.

The economy doesn’t exist in a parallel universe to politics and society. They are inter-dependent and decisions in one affect the others. Neither does “big business” exist in a different economy to small businesses: they are also inter-dependent. “Big business” isn’t trying to bully small businesses or override the democratic will of the people or be part of some “plot” to thwart democracy. What they have is a mutual self-interest in being part of an organisation, the EU, that facilitates trade, investment and prosperity, which underpin freedom and democracy and are not opposite to them.

Moreover, making comparisons with what some companies and groups said about UK Euro membership back in the 1990s is also ridiculous. Euro membership (or not) did not affect the Single Market rules (and one of Cameron’s renegotiation goals is aimed at reinforcing that). EU Exit DOES affect the UK’s position and rights within the single market.

In fact, it’s ridiculous that the various Leave groups and individuals make accusations of malicious or pecuniary motivations. Accusations of treason are outrageous. Those advocating remaining in the EU, and maximising our engagement with it, are not people with nefarious, malicious, pecuniary or any other ulterior motives. They happen to have an honestly held belief that limited pooling of sovereignty is a better way of pursuing our national interest in a globalised economy than retreating into splendid isolation. We must assume that the Leave campaigners also have honestly held belief to the contrary. But since many of them also claim that we and they will be “better off” if we left the EU, then they surely also have a “pecuniary” motivation. The debate does need to focus on whether the costs of being a member outweigh the benefits, but that debate is being had whilst UKIP drown out the rational arguments with their rhetoric of fallacies, lies and myths. What’s worse is the cowardice of the other parties in responding to it.

Universities UK

UK universities punch above their weight in EU Research funding and believe BrExit would be a severe impact to their research endeavours and international standing. See more here:

Again, the Leave campaign either characterise their motives as pecuniary (“they would say that, they get paid to”) or that they are only getting back some of the money the UK put in in the first place. Leave have not explained how, if at all, universities would be compensated for loss of this research money other than refer, yet again, to the “Norway” option. They show a complete ignorance of how research gets funded, how internationally excellent research collaborations are now the norm these days, and how the EU facilitates both. They sometime point to CERN (especially given its headquarters in non-EU Switzerland) as evidence that outside the EU international research is still possible. But CERN actually proves the reverse: that collaboration via pooled sovereignty is necessary to achieve what no single state can do.

It is a reasonable assumption that university Vice-Chancellors have a pretty good idea of the benefits of EU membership both to their institutions and the Higher Education sector in the UK.  Moreover they have a very good idea of the medium and long term impact these benefits have to the broader UK economy and can make reasonably objective assessments of the consequences to UK research, to the HE sector and the general economy from withdrawing from the EU and closing off the funding and the international collaborations it is provided for. As they are now currently finding it much harder to bring non-EU academic talent into their universities due to new visa and NHS costs, they have a pretty good idea what the imposition of such requirements on EU skills would bring (and the reciprocal barriers to UK talent and students obtaining international experience). Like the CBI, they have a duty to inform their stakeholders of their concerns on BrExit.
Rather than questioning the motives of University Vice-Chancellors in launching the initiative, Leave should attempt to understand their reasons for doing so and their concerns on the consequences to their world rankings, funding, employment and the economy from EU exit. The employees and students of these universities, the towns and cities they are located in and the broader British public have the right to know as part of the process of forming an informed opinion so they can participate properly in the EU referendum. An administrator at a university and shopkeepers located near to universities need to know, rather than finding themselves out of a job or out of business after BrExit complaining they didn’t know their job security depended on EU membership.
Universities are only part of the argument for remaining in the EU. It is perfectly valid to argue that if one accepts the arguments from Universities UK, that the benefits to them are more than offset by costs elsewhere and so BrExit is economically still worth doing. But instead we hear from the BrExiters that these concerns are invalid and that the research funding will be more than offset by overall savings from withdrawal.

Economic Impact of various exit options:

Various reports that weigh up various BrExit options and the pros and cons of each:

For completeness, there is a “BrExit” report with a blueprint and roadmap for BrExit. It does not seem to be the “settled position” for any of the Leave groups, let alone for all of them. It confirms the above reports on the various problems with each option (indeed believes the WTO option will be economically very harmful). The roadmap is long, complex, disruptive and risky with a very uncertain outcome.  What may be of great concern (and perplexing) to many Brits wanting to be relieved of the alleged “jackboot” of EU laws is that step one (of a six step process) is to immediately incorporate all EU law directly onto the UK statute books!  Why do that if the whole point is to restore UK sovereignty?

It is ridiculous to portray these as “threats”: that the EU will threaten us with dire consequences if we leave. If you resign from a golf club, do you still expect to be able to play golf there and use the bar? If you break your obligations in any contract (and that’s what we would be doing) you lose the rights the contract gave you. That’s not a “threat”, that’s contract law!

However, rather than discuss “threats” let’s also look at the positives of EU membership:

Instead we hear politicians toying with the notion of BrExit. Boris Johnson claims that London could “thrive” outside the EU (in stark contrast to economists and businesses based there); Savid Javid, believing that [a severely reduced] BIS  can quickly renegotiate FTAs with both the EU and all others states the EU has FTAs with; Theresa Villiers undermining the core foundations of her job as Northern Ireland Secretary.

Below is a more detailed exploration of the issues:

Geo-Strategic Reasons for EU Membership

Geo-Political Considerations

What is meant by “Leave” the EU?

Analyses of Brexit Options

EU Laws: Are they really “pointless rules and regulation”?

Reciprocity: a glass half full or half empty?

Is the EU really undemocratic?

EU Cost of Membership

Implications for exPat Brits

Will we save money by leaving? The cost of EU Membership

Some tiresome arguments from BrExit advocates

It’s such an easy decision to leave, right?

Was Cameron shafted in the renegotiations?

Commentary on Gove’s BrExit statement

Does BrExit solve the migration crisis for the UK?

Boris at the Treasury Select Committee

Is it really Project Fear?

The Trade Embargo Strawman

Summary of Brexit Alternatives