The UK’s membership of the EU Single Market of 500m people, across 28 countries, has stimulated economic growth. Since we entered the EU in 1973, our per capita GDP has risen annually by an average of 1.8 per cent, compared with 1.7 per cent in Germany and 1.4 per cent in France.
Thousands of jobs across the UK are linked to the Single Market. Conversely, it is likely that a Brexit would lead to substantial job losses (as many as 500,000 over the first year). Financial powerhouses such as HSBC and JP Morgan have made clear that they would move jobs from the UK in the event of a Brexit.
The UK is well positioned as a gateway to the rest of Europe, and attracts foreign investment from American, Japanese and other foreign companies accordingly. It is not accidental that some 60 per cent of all European headquarters of non-EU firms are based in the UK, and a Brexit would change this for the worse.
Brexit would jeopardise passporting, which allows any financial service business established in one EU country to do business in all 28. Firms, such as my own, have benefited from this right, as have many others in our world-class financial services sector.
A Brexit-induced fall in sterling would have an overall negative impact, pushing up shopping bills by as much as £220 per year for the average family. It would also increase the cost of holidays abroad (over three-quarters of Britons’ visits overseas last year were to EU countries).
British entrepreneurs have been beneficiaries of our EU membership (I am proof of that). As IMF chief Christine Lagarde said last week: “Membership in the EU has made the UK a richer economy, but it has also made it a more diverse, more exciting, and more creative country.” Last year a record number of companies – over 600,000 – were created in the UK, which runs counter to the Leave camp’s assertion that the EU is suffocating to enterprise.
7. Trade and exports
75 per cent of UK businesses that trade goods internationally do so with the EU, and almost half of our exports go to the rest of Europe. A Brexit would damage our trade, requiring the UK to replace all of the EU’s 53 free trade pacts.
This is an issue of real concern for many, but we need to get our facts straight. First, the UK economy has benefited from migration, and it is two-way, with 2m UK citizens living elsewhere in the EU. Second, countries outside the EU, like Norway and Switzerland, are still effectively subject to its free movement rules (and have to pay for access to the Single Market). Furthermore, since migration flows are global, this will be an ongoing challenge, Brexit or not.
Through the sharing of sovereignty, we maximise it. The UK can use its unique position, as the only country to be a member of the EU, the Commonwealth, the G8, Nato and the UN Security Council. Sovereignty is not an end in itself, it should serve the national interest. As Michael Heseltine has pointed out: “A man in the desert is sovereign. He is also powerless.”
The EU was established in the aftermath of the Second World War. It has been an important stabiliser and helped to transition several countries to democracy, including the formerly Communist states of eastern Europe. As has been commented, it is a mark of progress that, instead of meeting each other on the battlefield, today European countries meet in the summit room.
The EU is far from perfect. At its worst, it can be meddlesome, bureaucratic and haughty. But I have no doubt the UK will be richer and stronger staying part of the EU. We would be pressing the self-destruct button if we leave, precipitating uncertainty, instability and negative economic consequences. As three of our home nations reach the last 16 of the European Championships, it is apt to remind ourselves that a Brexit would be the biggest own goal in post-War history.