Has the UK counted the cost of leaving the EU?
At the moment, there is considerable tension in the U.K. over its future within the European Union, with opinion polls showing a significant number of Brits wanting out. However, businesses have sounded repeated warnings that the impact of a U.K. exit from the EU could be significant. Indeed, for global companies such as Amazon or Nissan, which have large operations in the U.K., a departure would be very unwelcome.
The U.K. economy has been struggling for many years in the global economy and its growth in productivity has been much lower than that of its main trading partners, and especially those of its competitors in the U.S. and Asia.
But the U.K. should be aware that the West's economic dominance is not permanent. In 1825 China and India represented an incredible 40 percent of world gross domestic product. The rise in power of the U.K. and other Western European countries over the past 200 years is seen by economists such as Robert Gordon as a small blip which will soon be corrected.
In today's world size matters; and being a small country facing the rising influence of the emerging economies -- just like being a small company -- can often mean being squashed. There has been much talk in the British press, and from British politicians, that leaving the EU would bring economic and political benefits and greater freedom to the people of Britain. However, this is rarely based on fact.
Regents University has just launched a report to which leaders such as Peter Sutherland (Chairman of Goldman Sachs), Lord Simon of Highbury (former Chairman of BP) and myself have contributed. The report highlights the powerful benefits and implications of EU membership.
Certainly, the U.K. membership cost of $10 billion per annum sounds large, but would consumers and businesses really get better value for money leaving the EU? The U.K. spends less than 0.5 percent of total government spending on its EU membership. This tiny figure brings huge and disproportionate benefit to British consumers, British workers and to the many multinational companies that set up in the U.K. in order to gain access to the wider European market.
Half of all U.K. trade is with the EU; we are a part of Europe. However, if we were outside of the EU, the U.K. economy and companies would be subject to significant influence and indirect control through regulation and biased market forces. The Swiss banking industry has already been pummelled by U.S. and EU regulation, of which it has no control or influence. Norway spends more money per citizen on being an external member of the EU than the U.K. does as a member, yet has no say in any of the EU's decisions.
The EU is a relatively young institution and it has flaws which Britain, along with Germany and other members, are helping to transform and make more effective. The EU negotiates and gets better deals for U.K. citizens in global trade agreements, in protecting citizens' rights and preventing corporate greed and monopolies than Britain could ever achieve on its own.
Regarding defense; the U.S. today is less interested in NATO than at the height of the Cold War. This will increasingly mean that the U.K. and EU will be responsible for their own defense -- at a time when the U.K. is reducing its military expenditure. Rather than relying on help from the U.S., if we want to defend our freedoms and ideals, the U.K. will increasingly need to do it with our European partners. This means buying the same type of equipment and have common organisational structures.
The British people have an opportunity to be at the heart of Europe and use their power to increase the economic prosperity and freedoms that they desire. If they believe in what British values are and want to keep that for the next 200 years, they need to be at the heart of the EU and help shape it.
Sacha Zackariya is founder and CEO of www.changegroup.com which handles international payments and currency exchange for millions of people and businesses.