Facts to Consider in the European Referendum

By Robert Clark

1. What is the European Union?

Fact: Founded in 1951, and joined by the UK in 1973, the EU is now a political federation of 28
sovereign nation states which agree policies on economic and foreign affairs, security and
justice. In the 1980s the UK pressed for the creation of a unified market where all abide by the
same rules, thus maximising economic efficiency and reducing red-tape.
2. Has it worked in the UKs financial interest?
Fact: In 1993 the single market came into effect. Since then UK GDP has risen by 62%,
compared with 42% for France, 35% for Germany, 15% for Italy.1
3. Democracy
Fact: The EU is controlled by the European Council, comprising elected heads of state, the
Council of Ministers (nominated by member states) and an elected parliament. The much
demonised European Commission is the EU equivalent of our Civil Service. The commission is
certainly not elected, but then no civil service in the world is elected. By these terms the EU is
democratic. It is also not huge: the EU has 55,000 civil servants, serving 28 countries; the UK
has 393,000 (BBC. 13 May 2016).
Question: Rather than leave, wouldnt it be better to work with other countries who are similar
demanding improvements to its accountability and procedures?
4. Sovereignty, Regulations, Justice
Fact: The UK has 14,000 treaties in effect which limit its sovereignty by agreement with other
nations. It shares its sovereignty in NATO, the United Nations, the World Trade Organisation.
Fact: the UK Parliament remains sovereign. The UK can veto the admission of new members
(e.g. Turkey), budget increases and any EU attempts to increase its powers. The UK can leave
at any time, and we have opt-outs from policies on migration, passport-free travel (Schengen),
asylum, justice, ever-closer Union, and the Euro.
Fact: The UK is the second least regulated market in the developed world.2 Most regulations
passed by the European Parliament aim to facilitate the free movement of goods, services and
labour. They relate to contracts, product and services standardisation and improvement,
consumer protection (safety issues, food standards, animal welfare, cleaner beaches, lower
1

OECD report, referenced by David Smith in The Sunday Times, 12 June 2016, Business p. 4. http://www.thetimes.co.uk/article/britainsucceeds-in-the-eu-wed-be-daft-to-leave-it-q292ql3vt
2
http://www.economist.com/news/special-report/21673507-better-or-out-common-market-economics

Remain in the European Union some facts, questions and arguments

mobile phone charges, cheaper airfares and ensuring employees and citizens rights. The EU is
currently working to standardise EU-wide treatment of services, areas in which the UK excels
(see below). As more of this is achieved, the UK stands to benefit profoundly.
Fact: The Leave campaign paints a picture of the UK being forced to accept regulations it does
not like. This is untrue. According to ITV, Official EU voting records show that the British
government has voted No to laws passed at EU level on 56 occasions, abstained 70 times, and
voted Yes 2,466 times since 1999. In other words, UK ministers were on the winning side
95% of the time, abstained 3% of the time, and were on the losing side 2%.3
Fact: EU law has improved the lives of all EU citizens, expanding human rights, sexual equality,
workers rights. Whilst there are some important tensions and areas of difficulty, the Prime
Minister, a consistent Eurosceptic, has said that such difficulties are part of any good
relationship and do not give grounds for divorce.
5. How big are the EU and the UK compared to the rest of the world?
Facts: The European Union (GDP of $18.5 trillion) accounts for 25% of the worlds GDP, slightly
more than the USA.4 Whilst he UK is the worlds fifth largest economy, its GDP ($2.8tn.) is only
30% bigger than Californias ($2tn.). In this perspective, leaving the EU looks unwise.
6. How important is the EU market to the UK?
Fact: 45% of UK exports go to the EU; the USA is our next biggest market with 18%. The
remaining 37% goes in small amounts around the world.5 Brexit will raise trade barriers and
tariffs for almost half of the UKs exports.6
7. What will the renegotiation with the EU involve and produce?
Fact: Firstly, we will lose our special opt outs and privileges. Secondly, the UK voice will no
longer be heard in EU debates: the EU will simply impose its terms on the UK, take it or leave it.
This is what Norway gets. In this model, we would pay more money to the EU than we do
today, accept the free movement of EU labour and give EU residents the right to live in the UK,
and have no ability to influence regulations and decisions. The Vote Leave campaign has no
idea what kind of agreement it will seek.
8. How does the UK produce the wealth that funds our daily lives?7
Fact: The UK earns 79% of its money in the services sector; 20% through industry (only half of
which is from manufacturing); 1% from agriculture. The service sector includes transport and

http://www.itv.com/news/update/2016-06-09/fact-check-britain-outvoted-more-than-other-countries-in-eu/
4 http://uk.businessinsider.com/charts-eu-economy-is-bigger-than-the-us-2015-6?r=US&IR=T
5
Professor Nicholas Barr (LSE): http://blogs.lse.ac.uk/brexitvote/2016/05/27/dear-friends-this-is-why-i-will-vote-remain-in-the-referendum/
6

http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/international-transactions/outward-foreignaffiliates-statistics/how-important-is-the-european-union-to-uk-trade-and-investment-/sty-eu.html.
7 The Economist: Pocket World in Figures. London: The Economist, 2016, p. 234.

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Remain in the European Union some facts, questions and arguments

distribution, wholesaling and retailing, information technology and communications,

healthcare, financial and legal (insurance, banking, accounting, advising, contracting) and
entertainment (cinemas, television, hospitality, tourism, restaurants, pubs, clubs, fast-food).
The service sector generates $2.2 trillion per year and is set to grow (see above).
Fact: UK financial services employ over 1 million people, 3.4% of workforce. It is the UKs most
productive and profitable sector.8 The UK is the worlds largest exporter of financial services,
which amount to 15% of our GDP, 12% of our tax receipts.9 London alone contributes 10bn
more to the UK economy than it receives in public spending. It is our golden goose, but Brexit is
causing international banks to consider relocating activity to Ireland or the Continent.10
Fact: Each year the UK spends 4.5% more than it earns. It exports 480bn, imports 650bn, so has
a negative trade balance of 170bn each year. ThE deficit is covered by a) capital inflows of
$100bn and b) by government borrowing of $80bn. Capital inflows come from people prepared
to keep money in the UK, and by companies investing in the UK because we are part of the
European Union and are therefore thought to have a robust, secure economy. Brexit is already
radically undermining this confidence. 65bn has been withdrawn from London in the last two
months. According to Peter Spence, writing in the pro-Brexit Daily Telegraph Experts said that
the pullback confirmed that money managers were taking the June 23 referendum seriously,
and were prepared to take funds out of the UK entirely.11
9. How does the UK spend our money?
Fact: UK government spends 798 billion each year, 15 billion per week.12 20% goes on the
NHS, 15% on welfare, 20% on pensions, 12% on education, 6% on defence.
Fact: The UKs contribution to the EU each year, after deduction of rebates and EU investments
in the UK, is not 350m per week. Vote Leave is lying. We contribute 120m per week, 6.3bn
a year. This is about two to three days worth (or 0.6%) of annual government expenditure.13
UK development aid costs 12bn a year, twice as much.
Fact: 45% of the EUs money is spent developing poorer parts of Europe (Cornwall for example).
42% is spend on ensuring sustainable growth and natural resources. This expenditure improves
the overall economic potential of all the member states of the EU.
Question: Is it worth investing 0.6% of UK government spending to increase the economic
potential of all Europeans?

8 http://www.statista.com/statistics/298370/uk-financial-sector-total-financial-services-employment/ ;
http:// www.parliament.uk/briefing-papers/sn06193.pdf.
9
http://www.cityoflondon.gov.uk/business/economic-research-and-information/statistics/Documents/an-indispensable-idustry.pdf
10
Sunday Times, 12 June 2016. Business Section, p. 2. http://www.thetimes.co.uk/article/banks-prepare-for-city-exodus-in-wake-of-voteq3ql0wq0b
11
http://www.telegraph.co.uk/business/2016/06/07/investors-pull-cash-out-of-uk-assets-at-fastest-pace-since-finan/
12
http://visual.ons.gov.uk/uk-perspectives-2016-the-uk-contribution-to-the-eu-budget/
13
https://fullfact.org/europe/our-eu-membership-fee-55-million/; http://infacts.org/mythbusts/uk-doesnt-send-brussels-55m-day/

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Remain in the European Union some facts, questions and arguments

10. What do those who study economic affairs expect from Brexit?
Fact: Nearly 90% of economists responding to an Ipsos Mori survey said the UK economy would
be negatively affected over the next five years if we left the EU and the single market. 72%
thought the effect would be negative over 10 to 20 years. 14
Fact: National and international agencies charged with understanding the global financial
system -- the IMF (International Monetary Fund), World Bank, OECD, IFS (Institute for Fiscal
Studies) and Bank of England -- predict recession if the UK leaves the European Union. The
Leave campaigners deride these experts, and then quote their own experts as if they were
better authorities, even though they are individuals of no distinction.
Fact: Not one single national or international financial organisation believes Brexit will be good
for British citizens. All predict a dip in GDP for at least two years, and very likely longer. The
loss of earnings and productive capacity during such a recession takes many more years to
make good. Brexit will reduce living standards last for at least a decade, probably forever.
Fact: Post-Brexit, crucial high-tech manufacturers such as Airbus expect a gradual transfer of
manufacturing, research and skilled personnel to the Continent, depriving the UK of significant
participation in an industry the UK helped to pioneer.15 No one is allowed to talk about it in
public, but privately senior bankers say they are making plans to relocate at least some of their
activities to the Continent. The French government in particular has gone public about rolling
out the red carpet to attract them to Paris.16
11. Migration and Immigration
Fact: Since the 1620s, UK citizens have been enthusiastic migrants (to the Americas, Australia
and New Zealand, India, Africa, and more recently France and Spain).
Fact: There are nearly 1.2 million Brits living elsewhere in the EU.17 There are about 3 million EU
citizens living in the UK (5% of the population); 2 million EU citizens are working in the UK
(about 7% of working population). 18
Fact: migration is an inescapable part of the modern world where capital is highly mobile,
multinational and globally diverse. As the money flows, so do people. Young people in the UK
particularly value the right to work in other countries. Older people value the right to free
movement, the right to live in other EU countries, and to receive health care.

14

https://www.ipsos-mori.com/researchpublications/researcharchive/3739/economists-Views-on-Brexit.aspx
http://www.bbc.co.uk/news/uk-politics-eu-referendum-35958693
16
https://next.ft.com/content/730bc5f6-2d82-11e6-a18d-a96ab29e3c95
17
http://www.bbc.co.uk/news/uk-politics-eu-referendum-36046900
18 https://fullfact.org/europe/how-many-uk-citizens-live-other-eu-countries/ and https://fullfact.org/immigration/eu-migration-and-uk/
15

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Remain in the European Union some facts, questions and arguments

Fact: Immigration is a major social problem of our age, but it is not going away. It creates local
pressures on health services, housing and labour markets which governments have failed to
sufficiently address.
Fact: Immigrants are making a huge contribution to UK wealth.19 They pay more in taxes than
they take in benefits; they add to our productive capacity, creating a richer society. Research
by University College London shows that they do not take work from other workers; rather they
increase the amount of work that can be done.20
Fact: Immigrants cost the UK nothing to raise, train and educate. It takes 16-25 years of
investment to produce someone able to work effectively in an advanced economy.21
Fact: UK unemployment is currently around 5%, which means technically full employment.22
Immigration/ migration occurs because the UK economy is booming. We need to increase the
workforce because we have an ageing population that needs expensive health care, and a
shrinking number of British-born workers. We need more young producers of wealth. 23
Fact: In 2015, net immigration from the EU was around 185,000, but another 188,000 came
from non-European countries.24 Vote Leave has said it wants to control European immigration,
but they know the economy needs more workers so they admit they will increase immigration
from the Commonwealth, Asia and Africa.
Fact: The NHS already depends upon immigrants: 11% of its staff and a staggering 26% of
doctors are non-British born.25 Vote Leave often talk about training Brits to take their place,
conveniently forgetting it takes 7-12 years post-secondary education to train a health
professional and we do not have a surplus of 18-year olds smart enough to train. 26
8 What will people get from leaving the EU
Facts: The inflow of capital to the UK will certainly fall. Hitachi has said as much. 27 Standard &
Poors have said they will immediately reduce the UKs AAA credit rating. This will make our
massive foreign borrowings more expensive, and probably push up interest rates.28 The pound
will fall against other currencies; interest rates may then have to rise to protect the exchange
19

http://www.economist.com/news/britain/21631076-rather-lot-according-new-piece-research-what-have-immigrants-ever-done-us

20

http://www.independent.co.uk/news/uk/home-news/european-immigrants-contribute-5bn-to-uk-economy-but-non-eu-migrants-cost118bn-9840170.html
21
The Sunday Times, 12 June 2016. Business, p. 7. http://www.thetimes.co.uk/article/immigration-is-working-8w6pn7qh2
22
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/may2016#un
employment
23 https://www.parliament.uk/business/publications/research/key-issues-parliament-2015/social-change/ageing-population/
24
`http://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/bulletins/migrationstatisticsquarter
lyreport/may2016
25 http://www.theguardian.com/society/2014/jan/26/nhs-foreign-nationals-immigration-health-service
26 https://www.parliament.uk/business/publications/research/key-issues-parliament-2015/social-change/ageing-population/.
27 http://www.chroniclelive.co.uk/business/business-news/hitachi-chairman-warns-brexit-lead-11436613
28 http://www.telegraph.co.uk/business/2016/06/09/brexit-might-trigger-run-on-britains-record-financial-debts-sp-w/

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Remain in the European Union some facts, questions and arguments

rate and curb the increasing cost of food, energy and raw materials. House prices will almost
certainly fall. Many owners will find themselves in negative equity and unable to sell or move
house. There is no way of knowing how deep the recession will be and how long it will last.
Fact: Despite Vote Leaves talk of an amicable divorce, the UK will be cold-shouldered by the
EU after leaving. For one thing, they will need Brexit to prove a disaster in order to discourage
any others. Hostility to a post-Brexit UK has already been clearly expressed.29 Discussing a new
trade deal will be difficult, and is likely to drag on, undermining investment in the UK.
12. Geopolitics
Fact: Vote Leave conjure an image of a return to British greatness. They hide the fact that from
1968 to 1993 the UK lurched from one economic crisis to another.30 It was saved by North Sea
Oil and by promoting the idea of the EU as a single market.
Fact: Until the fall of the Iron Curtain, 27 years ago, Eastern Europe was run by totalitarian
states who threatened nuclear annihilation; until the 1970s Greece, Portugal and Spain were
ruled by military dictatorships. Northern Ireland was almost in a state of civil war. Today, the
entire European space is democratic, progressive, buoyant. Brexiters cheerfully say they want
to pull this house down. They may succeed; they will certainly encourage neo-fascists in
France, Germany, Austria, Poland, Hungary.
Fact: The idea that the UK will be able to control its own destiny is not supported by past or
future history. Power today and in the future is invested in the EU, US and China with GDP
above $10,000 trillion. It is no longer invested in small nation states.31 The EU has been
instrumental in keeping global multinationals in check, getting rid of bank secrecy and tax
havens, protecting the ecosystem and climate.
Fact: Outside the EU, the UK will have to do what others tell it to do. It will have control over
immigration, a little more technical sovereignty, and much less political and economic power. It
will be a boat in a storm.
13. Conclusions
Leaving the EU solves none of the UKs problems with immigration, housing and the provision
of services (NHS). These are national political problems which need to be solved by our
national government. Brexit will produce recession, and make the UK permanently poorer. It
will lead to less money for social services and pensions. It will please the oligarchical and
corrupt President Putin, who wants to break up the EU and take back control in the East.32 It
will please proponents of unregulated capitalism such as Donald Trump. It will empower the
29

http://www.theguardian.com/politics/2016/jun/10/no-single-market-access-for-uk-after-brexit-wolfgang-schauble-says;
http://infacts.org/uk-punished-leaving-suggests-survey/
30
https://en.wikipedia.org/wiki/Black_Wednesday
31
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29
32
See Gary Casparov. Guardian, 13 May 2016. http://www.theguardian.com/commentisfree/2016/may/13/brexit-perfect-gift-vladimir-putineu

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Remain in the European Union some facts, questions and arguments

Conservative right-wing whose policies will increase the alienation of the British electorate.
The British will sorely regret they did not find a better way of addressing their difficulties.
Robert Clark
rclarkremain@gmail.com
Version 2. 13 June 2016.

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