Issues in the 2016 United Kingdom European Union membership referendum

Issues in the 2016 United Kingdom European Union membership referendum are the economic, human and political issues that were discussed during the campaign about the withdrawal of the United Kingdom from the European Union, during the period leading up to the Brexit referendum of 23 June 2016. [Issues that have arisen since then are outside the scope of this article].

According to a poll by Ipsos MORI released on 18 May, issues identified by voters as being very important to them in deciding which way to vote were headed by the impact on Britain's economy (33%), the number of immigrants coming to Britain (28%), and Britain's ability to make its own laws (15%).

Issues identified as important by voters who said they were likely to vote leave were headed by the number of immigrants coming into Britain (49%), Britain's ability to make its own laws (30%), the impact on Britain's economy (25%), the cost of EU immigration on Britain's welfare system (16%), impact on public services/housing (11%), the number of refugees coming to Britain to claim asylum (10%), Britain's ability to trade with countries in the European Union (9%), cost of EU membership fees (9%), regulations by the European Union on British businesses (8%), the impact on British jobs (7%), and Britain's status in the world (7%).Table 28, Ipsos MORI Political Monitor – May 2016 , Ipsos MORI, 18 May 2016. Page 30.

Issues that had been identified as important by voters who were likely to vote remain included the impact on Britain's economy (40%), the number of immigrants coming into Britain (15%), Britain's ability to trade with countries in the European Union (12%), the impact on British jobs (11%), the impact on the rights of British workers (10%), Britain's relationship with other countries (7%), the impact on British national security (7%), the ability to travel in the European Union (7%), the ability of British citizens to live and work in other European countries (6%), and Britain's status in the world (6%). Other issues were identified by 5% of respondents or less. This collection of issues is broadly in line with the findings of other surveys published during the campaign.Freddie Sayers, Campaign Memo: It’s the economy versus immigration, YouGov, 28 April 2016https://d25d2506sfb94s.cloudfront.net/cumulus_uploads/document/ieuepajv7k/TimesResults_160424_EURef_W.pdf Which one of the following will be most important to you in deciding how to vote in the referendum?], YouGov / The Times, 25–26 April 2016 (fieldwork). Page 4 Which if any issues do you think will be very important to you in deciding which way to vote?, Ipsos MORI for Unbound Philanthropy, 14–25 April 2016 (fieldwork) Of the following issues, which three will most affect how you choose to vote in the referendum?, Opinium / The Observer, 20 March 2016

Economy

The economy and the number of jobs lost or gained by a withdrawal are likely to be dominant issues; the BBC's outline of issues warns that precise figures are difficult to find. Scenarios of the economic outlook for the country if it left the EU are generally negative. In its May 2016 Inflation Report the Bank of England said that a vote to leave the European Union might trigger a recession. Think tank, Open Europe claims the most likely permanent effect on annual gross domestic product by 2030 upon leaving would range from −0.8% to +0.6%, but notes +1.6% is possible under widespread deregulation. Another, more narrowly focused studied by the Centre for Economic Performance at the London School of Economics puts the figure between −9.5% and −2.2%. Research group, Oxford Economics says that depending on the new trading relationship with the EU, the impact on the British economy would be between −0.1% and −3.8% by 2030, than if the UK had remained inside the EU. The impacts would vary across sectors but the group said that construction and manufacturing would be the worst affected.

Those arguing to remain in the EU, say that 3.3 million British jobs are linked to the EU through exports and suggest that some would be lost in the event of a British exit. A report by the Confederation of British Industry and PricewaterhouseCoopers found that the UK would lose between 350,000 and 600,000 jobs by 2030 if it left the EU. A KPMG report cites the UK's EU membership as influential in its ability to attract investment in the automotive industry. Clifford Chance call on the importance of the EU Internal Market legislation in the UK's financial services sector. Groups in the leave campaign, including the Institute of Economic Affairs, counter the claims of job losses by stating that "whether EU membership is a net positive or negative for jobs and prosperity in the UK depends on what policies the UK pursues outside of the EU" rather than membership itself.

The leave campaign argues that a reduction in red tape associated with EU regulations would create more jobs and that small to medium-sized companies who trade domestically would be the biggest beneficiaries. A more detailed examination of the report shows that this analysis was conducted on the basis of impact assessments made by the UK's civil service before regulations came into force. Few impact assessments are carried out after the introduction of regulations so it is very difficult to properly analyse their impact. A review by the British Government examined the level of EU regulation on the UK and found that British businesses benefited from access to the Single Market and therefore accepted that a level of regulation and harmonisation was desirable. The same report said that British economy is bigger because of access to the Single Market. A study by Open Europe on the 100 most expensive EU regulations found that they cost the £27.4 billion per year and that 24 of those regulations had a net cost to the UK.

The EU's importance as a trading partner and the outcome of its trade status if it left is a disputed issue. While those wanting to stay cite trade with the EU is valued at £400 billion annually (52% of the total), those arguing to leave say that its trade is not as important as it used to be. Trade barriers with the EU such as tariffs on British exports could emerge if the UK left The leave campaign observes that countries such as the US, India, China and Japan still conduct significant volumes of trade with the EU. It says it would put the UK in a better position to trade with other economies such as BRICS countries. Some leave campaigners, such as James Dyson, have spoken favourably about tariffs on EU goods as a possible source of tax revenue; he also suggested that as Britain ran a 100 billion pound trade deficit with EU countries it would be very much in the EU's interests to minimise trade barriers.Sir James Dyson: 'So if we leave the EU no one will trade with us? Cobblers...' A. Pearson, The Daily Telegraph, 10 June 2016 Dyson also argued that keeping the exchange rate of the pound against the euro competitive was much more important than a lack of tariffs for British exporters to sell their products into European markets.

On 14 April 2016, Conservative politician John Redwood argued that Britain would end fiscal austerity by leaving EU, pointing out that leaving EU would allow the UK to: scrap VAT on energy, tampons and other goods and services, claw back money from Brussels and increase social-welfare expenditures, and embrace the World Trade Organization rule to trade with other countries without paying anything.The end of British austerity starts with Brexit J. Redwood, The Guardian, 14 April 2016

On 20 April 2016, former Governor of Bank of England, Mervyn King said that those treating the EU referendum debate as a public relations campaign tended to exaggerate the economic impact of a British departure from EU.Economic threat of Brexit is being 'exaggerated', says former Bank of England chief P. Spence, The Daily Telegraph, 20 April 2016

The European Union roaming regulations say that mobile phone roaming between EU countries shall be without charges starting 2017. When the UK leaves, no laws prevent operators in the EU to treat the UK like other non-EU countries and claim fairly high charges, unless such laws are agreed between the UK and the EU.

The UK's EU membership fee

Britain pays more into the EU budget than it receives. The net contribution figures range from £5.7 billion (2014) to £8.8 billion (2014/15) depending on sources and the time frame. In 2014, the UK was the third biggest net contributor to the EU budget, or the 8th highest by net contributions per head.

The membership fee paid by the UK to the EU has been used extensively by the Leave campaign as an example of how the UK would benefit from leaving the EU. The Leave campaign claimed the cost as £350m per week, a figure criticised 'as 'misrepresentative' by Sir Andrew Dilnot (head of the UK Statistics Authority), The net transfer of cash from the UK to the EU in 2014/15 was £8.5bn (£163m per week) after subtracting the UK's rebate and the money spent directly by the EU in the UK. This represents about 1% of government spending or 2% of taxes received. The Remain campaign has used the figure of 1% in their Referendum Leaflet but have otherwise not discussed these figures widely in their campaigning.

Leave campaigners argue that this transfer of cash is a "hidden tariff" for exported goods, while the remain argument claims the net contribution is negligible in comparison to the benefits to business. In either event, changes to government finances as a result of the economic loss from leaving are likely to outweigh the membership fee.

Fiscal policies Conservative MP and Conservatives for Britain member John Redwood argued leaving the EU is necessary to enable the UK to abolish VAT on tampons and green goods. According to Redwood, legislative proposals outlined in a consultation document show that the EU intends to move to further centralise VAT policies having concluded that more flexibility on VAT for EU member countries could damage the single market, and any move to allow more flexibility on VAT rates would require the unanimous consent of the 28 countries and the European Parliament.We cannot set fair taxes as long as Britain remains in the EU J. Redwood, 7 June 2016

Redwood also argued that European Courts rulings made it more difficult to levy corporation tax on some firms and amend tax codes. According to Redwood, the HM Treasury stated that Britain lost more than 70 billion pounds from tax cases in the last Parliament, and this is mainly because of European Court of Justice decisions, and that the UK was forecast to lose more over the next five years.

Many supporters of Brexit also suggested that as Britain is a net contributor to the EU, the British government could continue to guarantee grants to farmers, universities and regions currently paid out of its contributions to the EU budget after leaving the EU and still be able to apportion more to other public services or tax breaks.CfB Brexit Manifesto: How the first Brexit budget can end austerity J. Redwood, 23 March 2016 However, the Institute for Fiscal Studies warned that the economic impact of withdrawal would reduce public finances by far more than its contribution to the EU budget, suggesting that the government would likely be forced to impose further austerity measures. According to the IFS every 1% decline in GDP would force the government to find an extra £14bn in additional taxes or cuts, with the think tank noting that the NIESR forecast of a 2%–3.5% decline in GDP by 2019/20 resulting from Brexit was the midpoint of the various economic forecasts they had looked at.

George Osborne stated that if the UK were to vote to leave, his response would be to raise taxes and cut spending to fill a "£30 billion black hole" in public finances. 57 Conservative MPs said that they would vote to block his proposed "emergency budget".

Immigration