There is just under a month to go until Britain goes to the polls to decide whether we should stay in or leave the EU. Latest polling from YouGov has the Remain camp on a narrow 4 point lead and falling numbers of people who are unsure how they’ll vote.
If you’re still gasping for some facts in amongst the political posturing and propaganda, there’s still time to download our ebook which outlines the case for and against Brexit and how it could affect the ecommerce industry.
We’ve summarised the main business arguments for you here. Whether you vote with your corporate or personal hat on is, of course, entirely up to you.
Remain – Business reasons for the UK remaining in the EU
- Economic growth - The government argue that each household will be on average £4,300 a year better off if we stay in the EU. They also predict that we’ll keep more than £20 billion in tax receipts and be between 3.4 and 4.3% of GDP better off inside the EU compared to creating an alternative agreement, such as Norway, as part of the European Economic Area (EEA).
- Continuing investment - If the UK remains in the EU we will have continued access to the single market, the world’s largest market. The BBC reports that: “just under half (48%) of total foreign direct investment in the UK in 2014 was from other EU countries. It is hard to say whether this would be the case were the UK outside the single market. However the common rules in the single market make it simpler for firms to expand across the EU, encouraging investment.”
- Ease of exporting - According to ONS figures, in 2014 almost half of our exports, with a value of £226,687 billion, went to the EU. Benefits of exporting to the EU through the single market include reduced bureaucracy, e.g. being able to record VAT in the same way as your UK return. As a member of the EU, the goods are not subject to customs duty for goods that are ‘in free circulation’ within the UK, i.e. “Goods that have been produced in the EU, or that have been imported into an EU country with duty paid.” This oils the wheels of business and makes it easier for the UK to trade with the EU compared with the rest of the world.
- Being part of multilateral agreements - Our trade with the rest of the world has grown much faster since we have had our current trade contracts in place. Remaining in the EU means that the EU continues to take care of maintaining and setting up new trade agreements, which some feel we do not currently have the experience or administrative capacity to produce.
- Ease of recruitment - Our service industries including retail and logistics, need migrant labour to keep up with capacity. Hiring workers from the EU reduces labour costs, in ecommerce warehouses for example, and makes recruiting retail staff easier.
- Uncertainty and downtime - If we leave there will be a period of instability and time needed to re-establish ourselves in business terms. This carries a cost which some deem too high, particularly as we’re still recovering from a long recession.
- Collapse of sterling - The pound has maintained its value with the UK in the EU. Uncertainty in the aftermath of leaving the EU is likely to cause the value of the pound to drop.
Brexit – Business reasons for the UK leaving the EU
- Money savings – The Brexit camp want to re-invest the billions that we give to the EU back into the UK. They do not believe that we get enough value from Europe for our money. According to Treasury figures reported in the Telegraph, last year Britain paid £12.9 billion to the EU – around £200 for every person. The figures include that “Britain last year gave almost £6.5 billion to the EU that would otherwise not have been paid out if we were not members of the club”. This was the net contribution after rebates and payments, such as agricultural subsidies, were taken into account (figures reported by the Centre for Retail Research provide a breakdown – see Section 6 – but do vary slightly. Variance in figures does also make the ‘saving money’ aspect of the debate harder to assess). Leave campaigners argue that Britain could keep “some or all of that membership money”.
- Cut red tape – Businesses are frustrated with having to go through multiple layers of bureaucracy to get things done and think that we could administrate things better in the UK. According to the Open Europe think tank, four of the top five most costly EU regulations are either employment or environment-related including the UK renewable energy strategy, the working time directive and the temporary agency workers directive.
- Trade agreement value – In 2014 we exported £226,686 billion of goods to the EU and £281,036 billion to non-EU countries. However, we paid £288,265 billion for goods from the EU and £253.2 for goods from non EU countries. Brexiters suggest that as we import more than we export to the EU, and trade with the rest of the world is increasing, European countries would quickly sign new trade agreements, supporting the argument for leaving.
- Setting our own rules – We could design our own system for VAT, employment rights, agricultural policy and quality standards.
- Benefits of the pound falling – The UK pound may fall if the UK leaves the EU. Some Brexiters support the idea that “sterling is already overvalued and that a small depreciation might be required to boost our exports” and that in the long run “a lower exchange rate… is not necessarily a bad thing”.
Has this helped make your mind up? Contribute your thoughts to the debate in the comments box below.