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Analysis

Mega dividend from staying in EU should be used to heal UK

by Hugo Dixon | 09.12.2018

Some say a People’s Vote would tear the country apart. But the boost to the public purse from staying in the EU could, in fact, be deployed to bring the country together. If so, a People’s Vote could be part of the healing process.

That’s the thinking behind a report published today by CommonGround, the key conclusions of which have been backed by 59 political and community leaders in a letter to the Observer.

There would be a “dividend” probably worth tens of billions of pounds a year if we don’t leave the EU, according to the report, Tackling the Causes of Brexit. To stimulate debate, it proposes investing this in three ways: a Jumpstart Fund for parts of the country which have been starved of investment; a Migration and Communities Fund for areas which have been challenged by sudden or significant population changes; and a cash infusion for the NHS.

The report, which I co-authored, is being published as the Brexit debate reaches crunch point. While much of the media and political class is absorbed in discussions of backstops and meaningful votes that leave the public cold, too little attention is being given to the need to address the concerns that led many people to vote for Brexit in the first place.

Under-investment, public services starved of funds, an NHS facing unprecedented strain, and our failure to integrate migrants better were not the only reasons people voted to leave the EU – and public spending isn’t the only answer. But these problems are crying out for attention whatever happens on Brexit and, without money, it will be harder to solve them.

The ​Institute for Fiscal Studies​ has estimated that the Prime Minister’s deal will in the long run cause a negative fiscal impact of 1.8% of GDP once the hit to productivity is taken into account. That’s £36 billion a year in today’s money – and is a rough measure of the size of the dividend we’d get if we stay in the EU.

Politicians who have signed the letter include: former Tory cabinet ministers, Stephen Dorrell and David Willetts; Labour politicians such as Andrew Adonis, Luciana Berger, Peter Kyle, Chris Leslie, Chuka Umunna and Paul Williams; Lib Dem deputy leader Jo Swinson; Green Party co-leader Sian Berry and former co-leader Caroline Lucas; and Plaid Cymru leader Adam Price.

While we shouldn’t pretend that our country will miraculously come together after the bitter divisions of the past two and a half years, a People’s Vote could be part of the healing process – provided there is then the political will to address our deep-seated problems. It is encouraging that there is much common ground from across the political spectrum to do precisely that.

If you wish to sign our open letter, you can do so here.

Edited by Luke Lythgoe

8 Responses to “Mega dividend from staying in EU should be used to heal UK”

  • The Remain dividend is an excellent platform for campaigning. However it should be remembered that the main reason for the vote was many years of vilification of the EU and relentless propaganda by the right wing press, and this needs to be effectively countered next time

  • Perhaps it would be better to act on the 2 powerful slogans of the Brexit campaign: “Take back control” and “Get back our sovereignty”. The U.K. never lost either. It was influential, powerful, a sort of “ primus inter pares” among EU partners. When negotiating with them, the U.K. was on the winning side 87% of the time. The U.K. was a rule-giver in the EU. It had its judges on the ECJ. It had its elected members in the EP. It had its ministers in the Council. “Brussels” was not deciding anything. But “IN Brussels” the U.K. was negotiating and winning most of the time.

  • I just read an article about Barry Gardiner in the Canary announcing that labour would open national infrastructure banks . This article also states that this would be in contravention of EU rules controlling state support of local authority governments. Is this true? Would the EU oppose ending the UK’s version of austerity and attempt to block our efforts to revitalise local authorities and communities? I find this hard to believe.

  • Open Britain, Peoples Vote and the Liberal Democrats are all after a 2nd Referendum so join forces now TOGETHER WE CAN WIN. I agree with the Welsh Nationalist MP who talks about working to change the EU from within. From outside we have no voice

  • No – it’s not true. There are large infrastructure banks in Germany (KfW) and France (CDC) … and something similar in Italy. KfW funded most of Germany’s reconstruction after the war, then the rescue of East Germany. CDC has funded some interesting innovation investments in pubic and private sectors in France. Other countries – especially those which needed rebuilding after 50 years of soviet rule – have similar institutions which work with the EBRD.

  • Barry Gardner seems unaware that the UK already has a local authority infrastructure bank. It’s called the Public Works Loan Board – and lends long term at 3.5% . I built a Town Hall using it, and our current Tory council is building a multistorey car park. It needs scaling up to work like a proper public bank – like its counterparts in Germany, France and Italy.