From the 1960s in the UK the dominant argument for EU membership has been economic1. Arguments for joining centered on increasing international (European) investments in the UK1. The EU is the world's biggest global market, and membership gives the UK a say in what its rules and regulations are2.
The EU is heavily tied to our economy. It represents 508 million customers3, 200,000 UK businesses trade with it4 and 3.1 million jobs are "linked" to the EU5 (3.5 million according to ProEuropa6). "71% of all members of the Confederation of British Influence (CBI), and 67 per cent of small and medium-sized enterprises (SMEs) [say] the EU has had an overall positive impact on their business"7. A poll by the British Chambers of Commerce found only 12 per cent of medium-sized business want to leave the EU and that big business is squarely pro-Europe8.
As a member, the EU added 4.5% to UK GDP (£62-78 billion per year) through economic and business benefits according to the CBI's estimate7 and we get £66 million investment every day from EU countries9. A UK Department for Business and Innovation Skills report in 2010 found that for a 14-year period across the whole EU the average GDP was 2.2% higher than it would have been without the Single Market10. Gordon Brown, a former Prime Minister, says that "nearly half the foreign direct investment we secure - £450 billion in total - comes from mainland Europe"11. Although as long ago as 2013 "associations representing investors from the USA, Germany, France, Ireland, Canada and Sweden voiced concerned that the UK government is dragging the debate on membership, making it difficult for businesses to plan and harming the UK economy"8, and reports in 2016 May surfaced of acute loss of investments due to the increasing risk of Brexit. There is simply no point producing goods in the UK to export to the EU if the UK is not a member.
EU membership directly saved UK families £3,000 annually; that value was attained by bringing many of the benefits together and calculating the net financial gain after deducting costs of EU membership, on average12.
44% of everything the UK sells abroad is bought in the EU6,7,9,13. If we left, we would cease to have any say in trading standards and requirements, but, we would still have to comply with all such rules. It is of great benefit to be part of the system rather than an outsider. Conversely, if we left this massive trading block will be swayed only very little by UK bartering as "less than 8% of EU exports come to the UK"13.
EU membership prevented tariffs and trade barriers between the UK and the EU9, almost completely. Tariffs massively harm economies across the rest of the world.
We benefitted from EU free trade deals with over 50 countries around the world14, a massive effort that the UK simply doesn't have the bargaining power to orchestrate on its own. The rise of several economic superpowers has meant that most trade deals are now done inbetween economic blocs that surpass the UK in size and wealth, and who can negotiate better deals on account of their populations and economies. The EU, as a single block, is one of those bodies that can orchestrate the best deals. As a member of the EU, we benefit from this strength. If we left, the EU would become our largest competitor for global trade deals.6
EU membership made it cheaper to import vital goods, saving the UK £11 billion each year and saving individual families on average £450 per year15.
The EU made creating businesses easier, cheaper and quicker16. "Easier cross-border trade within the EU means that small- and medium-sized enterprises now have access to new export markets, which previously were not an option because of the cost and hassle that was involved with border bureaucracy"10. Because EU regulations are standardized many products can be made without having to create different models per country.
“It has become easier to start or buy a business with the average cost for setting up a new company in the former EU-15 has fallen from €813 in 2002 to €554 in 2007, and the time needed to cope with the administrative procedures to register a company was reduced from 24 days in 2002 to about 12 days in 2007.”
UK Department for Business and Skills (2010)10
- (2021 post-Brexit new entry). After leaving the EU, the UK has found itself with major shortfalls of staff in catering, hospitality, farming and haulage. Some of these issues were seen coming: in 2019 the Government's Brexit department published a report saying that "approximately 8 out of every 10 lorries in UK roads is an EU haulier"17, roaming freely between EU national boundaries. The loss of truck drivers has caused a rolling series of outages, closures and goods deficits, including the fuel crisis of September 2021, which has seen most petrol stations closed, lacking fuels, or enforcing rationing18,19. The surge in demand for truck drivers would normally be met easily by large supply firms by simply tasking workers from throughout the EU, but this simple measure is now unavailable to UK companies, meaning that responses to temporary surges in requirement simply cannot be met in a timely manner.
The UK received considerable farming subsidies as an EU member, helping 476,000 people in the UK7. "The average British farmer makes more money from European subsidies than from farming"20. Without this aid many farmers would go out of business21. Although we pay more into the Common Agricultural Policy than we get out, remember that the scheme as a total subsidizes food production throughout the EU which helps bring down the cost of food. The alternative is that all of us rely on expensive imports from further afield. If the UK leave the EU it will still have to import (lots of) food, but will have no say in its production or economies.
The EU funded assets ranging from the Eden Project (£26 million) to Universities (£76 million in the SW alone)9.
EU-wide trademark protection: Since 2003, UK companies can "protect their trade marks and designs throughout the EU by making a single application for EU-wide registration. This cuts down bureaucracy - avoiding the need for trade marks or designs to be examined in 25 different jurisdictions each with its own rules"10. Before this, many trademark abuses simply went unchallenged, damaging business integrity especially in the long-term. The savings to businesses of this simplified scheme is incalculable.
The UK car industry depends on the EU22. The UK is the gateway to the EU for a wide range of South Korean, Japanese, Indian and American car producers - "they invest in Britain as their platform for investment in Europe", writes Gordon Brown, a previous UK Prime Minister and previous Chancellor of the Exchequer (the top politician responsible for economic and financial matters). Continued:
“The car industry thrives today not because of the domestic market but because nearly 80 per cent of its output is exported, most of it to Europe. [...] Access to the EU market means that 49 per cent of UK-produced vehicles are sold across the largest Single Market in the world, unhindered by any tariffs or costly regulatory barriers. [...] If we take motor trades as a whole, including wholesale and retail, we find that there are 240,000 auto-industry jobs associated with demand from the EU. [...]
The British car industry benefits from the tariff-free Single Market and from Europe's strength as a bloc in trade negotiations that set standards for the worldwide car industry. [...] Common regulation and standards are vital for manufacturers to compete across the Single Market. Standardisation of regulations at an EU-level removes the complexity and cost to conform with varying national standards.”
"Britain: Leading, Not Leaving: The Patriotic Case for Remaining in Europe"
Gordon Brown (2016)23
It is not just car manufacturing of course, in addition we produce nearly 1 million engines that are exported to Europe23. The UK can continue producing cars without the EU but local companies will face many awkward added complexities, tariffs will result in the UK being less competitive, and the attraction for companies to situation production in the UK will be somewhat lessened. Over time, loss of efficiency may endanger the entire native industry. The UK car industry is a beacon that highlights the benefits of EU membership.
The UK finance services industry depends on the EU22. 41% of the UK's financial services outputs are sold to the EU24. We are an ideal "gateway" for the entire world to the EU because English is the global language of finance, and because in terms of time zones the UK stock market bridges and connects the USA in the West to Tokyo and the rest of the East. Although we do also sell 26% of our financial services to the USA24, this will drop once we no longer provide internal access to the massive EU market.
“Financial services, account for 8 per cent of UK output and around 3½ per cent of our employment. The sector employs 1.1 million people in the UK, while almost another one million work in associated professional services, such as legal accountancy. Of these two million or so employees, more than half work outside London and the South-East. [...] Under the Single Market's single banking licence and common prudential and regulatory minimum standards, a bank located in one Member State is able to set up branches in others.”
"Britain: Leading, Not Leaving: The Patriotic Case for Remaining in Europe"
Gordon Brown (2016)25