The European Union: What effect does it have?

examines the role of the EU in the General Election

Image: Rock Cohen

Image: Rock Cohen

Britain’s membership of the European Union is a hot topic in the run-up to the General Election. On one side of the debate, UKIP argue that Britain should be “released from the shackles of the interfering EU”, while the Labour Party plan to stay and “work to change the EU in the best interests of Britain”. The Conservatives and the Green Party both plan to implement an in-out referendum to decide the issue. But with so many claims and statistics being thrown around, it is difficult to know what to believe with regard to the relationship between Britain and the EU.

The primary issue which is under debate is whether the EU offers Britain good value for money. As Britain is a net contributor, it hands over more money to the EU than it gets back. In 2013, Britain’s net contribution to the EU was £11.3bn. Although this figure sounds like a lot, to put this in context in that year total government expenditure was £720bn, making EU contributions a tiny proportion of this. This money goes towards funding development schemes, addressing social issues and research programmes across EU member states. In Britain, EU funding has helped to renovate Birmingham’s city centre and railway station and to build pedestrian bridges in Newcastle and Glasgow, among others. As well as directly giving money to Britain, our membership of the EU brings further financial advantage through trade. The Single Market allows us to trade freely with other EU member states without facing tariff barriers. The Department of Business, Innovation and Skills has estimated that as a result of the Single Market EU member states trade twice as much with each other. The European Union is Britain’s largest trading partner, as over 50% of our total trade in goods and services are exported to other member states. Additionally, the ability to access the Single Market has driven Foreign Direct Investment, as companies look to base themselves in Britain in order to access tariff-free trade with other member states. These companies help to fuel the economy through providing jobs and driving regeneration in their local area.

That is not to say, however, that the European Union is without its drawbacks. The most highly publicised issue surrounding the EU and Britain is the right to freedom of movement. This EU-protected right allows citizens of member states to relocate freely within the European Union. Although this allows Britain to gain skilled workers to contribute to the economy, uncontrolled immigration puts a strain on areas such as healthcare and education. Moreover, this directive is evidence of another criticism of the EU: the removal of sovereignty from member states. As the EU will pass laws in the interests of the EU as a whole, Britain’s national concerns are sidelined.

If Britain were to leave the EU, it would nonetheless have to comply with EU regulations in order to continue to trade with member states. While Eurosceptics hold up Norway and Switzerland as models of countries that have succeeded without EU membership, this is reliant on Britain’s ability to negotiate similar relationships with the EU as the aforementioned countries. If this is not possible, the trade barriers which could be placed on British goods being imported into Europe could render them uncompetitive, thus endangering the many British businesses which are reliant on European trade, as well as discouraging businesses from basing themselves here. As it stands, it is impossible to weigh up the true cost or benefit of leaving the EU as we cannot predict the terms on which such an exit would take place.

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