On 23rd June 2016 the UK goes to the polls to vote on the country’s membership of the European Union. Britain’s exit from the EU (now commonly referred to as Brexit) is a hotly debated topic but what are the top 3 issues? The official question at the ballot box asks:
In the coming weeks we will discuss the various issues that are being debated and looking at the impact that the prospect of a Brexit would have. We start by looking at the pros and cons of the UK leaving the EU.
Top 3 issues:
In an opinion poll conducted by Ipsos MORI during late April, people were asked about the issues that would concern them the most when it came to casting their vote. The top 3 issues were:
- The Economy (57%)
- The UK having the ability to make its own laws (50%)
- Immigration (48%)
But what are the general arguments that are cited for and against Britain’s exit from the EU?
What are the opinion polls saying?
The Remain camp had a clear lead of well over 10% around the beginning of the year, however the opinion polls seem to be increasingly close in recent weeks. Certainly the prospects for the Leave campaign seem to have improved significantly and the referendum looks to be far closer than Prime Minister Cameron would have hoped.
However, opinion polls tend to be volatile from one set to another so it is much better to take a poll-of-polls or an average reading. But even by doing this, once again, there are different poll-of-polls with different methodologys. It depends upon your source and some that I have seen have readings that suggest the vote is almost 50/50. A lot depends upon the method of polling with online (tending to favour Leave) and telephone (tending to favour Remain).
However my favoured source is Number Crunch Politics who were very close in calling the UK General Election (which was an election that was notoriously badly called by the opinion polls). The NCP poll-of-polls suggests that Remain still has a a lead of over 3 points over the Leave camp. The data as at 9th May suggests 45.8% for Remain and 42.2% for Leave. Also NCP calculated the probability of a Leave victory to currently be only around 22%. This is similar to the sort of odds that are currently being suggested by betting companies.
However, the massive caveat to all of this polling data is the number of voters who simply have not yet made up their minds. Currently the Dont’t Knows are around 12%. This is a significant variable and makes it still all to play for. The trend would suggest the vote is tightening. Furthermore, it also appears that the Leave campaign seems to be doing a good job as it has been noted that a larger portion of those previously undecided are moving towards Leave. However, whilst this undecided number remains so high there is clearly still sizeable uncertainty over the ultimate result.
What are the pros and cos of a Brexit?
- The UK can reclaim control of immigration. With the UK out of the EU, this means no longer having to accept the Freedom of Movement where citizens of the EU can move, live and work in any country in the union. The argument is that this is an open door policy for immigration.
- The UK can regain any sovereignty of law-making lost to the EU. The old argument of faceless unaccountable bureaucrats in Brussels making laws the UK has to follow.
- The Leave campaign believes that EU red-tape constrains Britain’s 5.4 million businesses who would be freer to grow and create jobs outside the EU.
- The UK can step back from any moves towards ever closer union and avoid what many see as the natural progression towards a United States of Europe.
- Economic factors predominantly based around one word: uncertainty. What sort of trade deals can be achieved? The reduced leverage of negotiating for 64 million consumers in the UK versus 508 million consumers of the EU. How long will the new trade deals take and the lost trade in the meantime? Loss of inward investment.
- Impact on UK monetary policy. A Brexit could mean the Bank of England needs to drastically change monetary policy either looser (to account for deterioration in growth) or tighter (to fight against inflation increases).
- Immigration from the EU has economic benefits by helping to provide a huge pool of labour to make up for any skills shortages in the UK.
- The benefits of fewer rules have been overplayed given that the UK is already one of the least regulated countries in the OECD.
Grey areas hotly debated:
- Cost of membership – is the EU membership cost worth it, or better spent elsewhere on areas such as hospitals and schools?
- Security – Would the UK be better off having control of its own borders back in no longer having to comply with the freedom of movement of people? Or would the severing of ties with EU-wide security agencies and the loss of the European Arrest Warrant outweigh the benefits?
If you are interested you can still view my other articles on the EU Referendum “5 arguments for and against a Brexit“, “Brexit – 6 key impacts on the financial markets” and “How is Richard Perry going to vote and why“.