Theresa May talks about a “Brexit dividend”. Her chancellor doesn’t use that phrase, but he has dropped heavy hints in advance of today’s Budget that the way to end austerity is by signing up to the miserable deal the prime minister is trying to negotiate.
But there is no Brexit dividend. Leaving the EU would cut trade and investment. Companies and people would earn less money and so pay less tax. This hit to the public finances would dwarf any savings from reduced financial contributions to the EU.
Philip Hammond is right that crashing out of the EU with no deal at all would have a bigger impact than the miserable half-in-half-out Brexit the prime minister has been negotiating. But both would harm the economy by reducing trade and investment.
By contrast, there would be a large “no Brexit” dividend if we stay in the EU. During the referendum, the government’s central estimate of the net annual hit to the public finances was £36 billion in 15 years – after taking account of reduced financial contributions to the EU.
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demand a People's Vote
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Even before we have left, investment is on hold and the economy is sagging. We have moved from the fastest growing large industrialised nation to the one of the laggards. The economy is 2.5% smaller than it would have otherwise been and the public finances have already been hurt by £26 billion a year, according to the Centre for European Reform. What’s more, this figure keeps growing as we continue to underperform.
If we stay in the EU, most of the investment that has been on hold in the last two and a half years would probably flow back. We would resume our position as the gateway to Europe. After that, we would probably return to the sort of growth rates we would have otherwise enjoyed.
What’s more, the new investment would be productive. Firms would no longer have to invest billions in Brexit preparations and the government wouldn’t have to spend or earmark billions on creating new regulatory agencies just to replace work done by the EU on our behalf.
We could also benefit from the new EU initiatives to improve its single market: a digital single market, capital markets union and integration of energy markets. Given that we have an edge in services industries, these projects play to our strengths.
The “no Brexit” dividend would be worth billions of pounds – and probably tens of billions of pounds – a year to the public purse. If we stay in the EU, this money should be invested in public services and neglected communities to heal our divided country and show that politicians have listened to the concerns that led many people to back Brexit in the first place.
With momentum building behind the People’s Vote campaign, it is not too late.
Edited by Luke Lythgoe
The Conservative Government has caused confusion and uncertainty about the future of our country and its people. Rather than increased prosperity and jobs, we are faced with reduced jobs, chaos on the roads at Ports such as Hull, Dover and Holy-head, secret trade deals excluding the people, an agriculture bill that omits to mention agriculture, reduced spending on the NHS and other public services and higher cost of living. Reduced opportunity for young people and EU workers who have worked in our health services made to feel unwelcome in our country after caring for us in our hospitals. No one voted for this situation.
The Government is making a mess of Brexit therefore let the People have the final say in a Peoples Vote.
Not to mention those of us Brits, living in the EU, excluded from the Brexit referendum but nevertheless impacted financially as a result of the termination of the EU pension agreement, for pension contributions made whilst living and working in the UK. I just wish the politicians and government would have the guts to turn this whole situation around and stop what is inevitably financial suicide, not only for the current generation but for many following ones.
Whenever I see:
“We need a peoples vote to right the wrong choice”
my mind filters it to:
“I didn’t get what I want and it’s not fair and that’s not the democracy I signed up for and I’m going to hold my breath until I turn blue in the face so you better give me what I want”.
Suck it up buttercup. Democracy isn’t about getting what you want. It’s about having your say. Whether you get what you voted for or not.
The people had their vote. The people had their say.
So stop fear mongering and start supporting democracy.
One man, one vote, one time.
Where did that “one time” come from?
I already know of at least two UK referenda on Europe.
And lots of votes on who should be the Government – we do that every four or five years.
We call it democracy.
And by the way for 100 years in this country it has been “One man or woman, one vote”
Mark,
If you really think that Remain supporters are just upset because a vote was lost, rather than the self evident fact that it will be harmful to the country as a whole, perhaps mainly to the people who voted for it, we are talking a different language.
I’ve yet to see any evidence of an EU dividend. We have more than 40 years of lacklustre economic data that shows no financial benefit from funding all those lunches in Brussels and no real evidence to support the social claims and political claims that are so frequently touted. The EU 28 collectively accounted for almost a third of global GDP in 1980, and the US about 26%. Today, they are roughly equivalent at a smidge over 16%. In other words, the EU has grown considerably more slowly than the US despite the Reagan years, two Bushes, the current muppet, trillions squandered in Iraq and Afghanistan, under-investment in just about everything…
At the same time, wage inequality has soared across the EU and is now close to US levels, there is mass youth unemployment, rising poverty, and these social costs of the EU’s failure are reflected in the rise of populism and the widening gap between the values touted on paper in Brussels and those on the ground in the member states.
Nor should we lose sight of the institutional challenges that make it so impossible for the EU to change course or resolve its internal issues. It take five years to pass a piece of legislation in a world being completely transformed by population pressures, new technologies, climate change, pollution, etc. The regulatory process is practically moribund and completely unfit for purpose but the only way to accelerate it is to federalize completely, which national governments will not allow. Sadly, there is no time in which to resolve this. EuroStat, for example, estimates that roughly half of all jobs will be redundant by 2025, but it would the European Commission and European Parliament at least that long to react to that challenge because of the internal consultation, review, negotiation and approval processes. The EU is just not sufficiently agile a structure to cope with the change that is happening around us.
It’s worth adding that if the UK had matched US economic growth since 1980, GDP would be roughly $900 billion higher. That’s nearly a quarter of our GDP today. We need to understand what happened and why, having invested so much in the EU project we have not achieved better results as a nation and so many people in this country feel left behind.
I dont think anyone has said that the European Union is perfect, there is of course always room for improvement and the EU is a young democracy and evolving. However, I think it is a huge problem that we have been very slow in promoting the benefits that we have received by being in the EU. We as a nation are very uninformed about the aims and objectives of the EU – that of peace in Europe and security of its citizens, collaboration of ideas in medical research and engineering and promotion of social values to name but a few. While on a visit to the European Parliament in Strasbourg it was clear just how little we know about the Union when compared to the rest of Europe and of course always a problem has been the Press, which it appears have deliberately continued to print facts about Europe that have been proven to be incorrect such as the audit accounts, continually promoted by the press as not being signed off – this is not true in fact.
Finally, It is not a question of feeling upset that the side I voted for did not win – I have to cope with this regularly, it is the fact that a large percentage (not everyone) where unaware of the issues they were voting forand how their country and the lives of the people are likely to be affected by leaving Europe. In my opinion an uninformed voting electorate does not embrace democracy – democracy is information and honesty.
Absolutely and very well put!
Mark Owthan,
When have you ever seen ‘we need a people’s vote to right the wrong choice’ written anywhere?
I think what you mean is that whenever you see ‘we need a people’s vote’ your mind filters it to add the final five words. What it would be is an informed choice, which if enough people considered that they had made the wrong choice in 2016, might reverse the original decision. Or it might confirm the original choice. Either way, it would be based on rather more information than was available two years ago.