Pros and cons of Brexit
Even though the UK has formally left the EU, the debate over the terms of its departure continues. Learn about the key points from both sides, and why the debate is important to traders.
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Benefits of being in the EU: the debate
The Brexit process began with the United Kingdom (UK) voting to leave the European Union (EU) in a 2016 referendum. Since then, there has been heated debate from both the remain and leave camps about the best scenario for Britain moving forwards.
With speculation playing a part in almost every claim for or against the EU, it’s sometimes difficult to distinguish between legitimate risks and doom-mongering. As the process of negotiating a withdrawal agreement nears its end, there is still uncertainty surrounding the UK’s exit from the EU, and the debate on the pros and cons of Brexit continues.
Benefits of being in the EU: the debate
The Brexit process began with the United Kingdom (UK) voting to leave the European Union (EU) in a 2016 referendum. Since then, there has been heated debate from both the remain and leave camps about the best scenario for Britain moving forwards.
With speculation playing a part in almost every claim for or against the EU, it’s sometimes difficult to distinguish between legitimate risks and doom-mongering. As the process of negotiating a withdrawal agreement nears its end, there is still uncertainty surrounding the UK’s exit from the EU, and the debate on the pros and cons of Brexit continues.
Remain
Though unsuccessful in garnering enough votes in the referendum, the remain camp have continued to advocate for a close relationship with the EU in the form of a departure from the EU with a deal in place.
The arguments for remaining in the EU focus on the benefits of being part of a wider union, and the security and favourable trading relationship made possible through EU membership.
Key arguments for remain
Foreign affairs
As part of a community of 500 million people, Britain has greater influence over international matters as a member of the EU.
Sovereignty
Britain has proved that it can opt out of some EU policies which it considers counterintuitive, such as adoption of the euro, the Schengen Agreement and enforced migrant quotas.
Security
A union better equips Britain to tackle threats to security, including terrorism and cross-border crime.
Money
European businesses invest billions of pounds in the UK every year, both in the public sector and private sector.
Trade
EU membership gives Britain access to the European single market, which is invaluable for trade and enables the easy movement of goods, services and people across member states.
Business
Free trade within the EU reduces barriers and enables UK companies to grow.
Jobs
Millions of jobs linked to Britain’s membership would be put at risk. Some sectors such as nursing and manufacturing could experience a slump in skilled labour.
Consumer goods
The average person in Britain saves hundreds each year thanks to lower prices of goods and services facilitated by the EU.
Leave
While the leave campaign succeeded in the referendum, there has been less success in negotiating with the EU.
But, while some on the leave side advocate a hard Brexit – gaining more sovereignty, taking control over immigration and reducing red tape – others are more moderate. Key arguments for why the UK should leave the EU include greater control over foreign affairs, greater national sovereignty and the potential for glitzy new trade deals with countries like the US.
Key arguments for leave
Foreign affairs
EU membership limits Britain’s international influence, ruling out an independent seat at the World Trade Organisation (WTO).
Sovereignty
Britain would have more control of its laws and regulations, without risk of having counterintuitive policies forcefully imposed.
Security
Some in the Leave camp believe that Britain’s domestic security could benefit from full border controls, which it would hope to gain outside the EU.
Money
EU membership fees – amounting to billions – could be repurposed and spent on issues that matter most to the British people, like funding for the NHS.
Trade
Membership of the EU keeps Britain from fully capitalising on trade with other major economies such as Japan, India and the US.
Business
The EU subjects Britain to slow and inflexible bureaucracy, making it more prohibitive for smaller companies to do business.
Jobs
Improved global trade agreements and more selective immigration could have a positive effect on the British job market.
Consumer goods
EU VAT contributions and agricultural subsidies policies cost UK consumers hundreds of pounds each year.
Remain
Though unsuccessful in garnering enough votes in the referendum, the remain camp have continued to advocate for a close relationship with the EU in the form of a departure from the EU with a deal in place.
The arguments for remaining in the EU focus on the benefits of being part of a wider union, and the security and favourable trading relationship made possible through EU membership.
Key arguments for remain
Foreign affairs
As part of a community of 500 million people, Britain has greater influence over international matters as a member of the EU.
Sovereignty
Britain has proved that it can opt out of some EU policies which it considers counterintuitive, such as adoption of the euro, the Schengen Agreement and enforced migrant quotas.
Security
A union better equips Britain to tackle threats to security, including terrorism and cross-border crime.
Money
European businesses invest billions of pounds in the UK every year, both in the public sector and private sector.
Trade
EU membership gives Britain access to the European single market, which is invaluable for trade and enables the easy movement of goods, services and people across member states.
Business
Free trade within the EU reduces barriers and enables UK companies to grow.
Jobs
Millions of jobs linked to Britain’s membership would be put at risk. Some sectors such as nursing and manufacturing could experience a slump in skilled labour.
Consumer goods
The average person in Britain saves hundreds each year thanks to lower prices of goods and services facilitated by the EU.
Leave
While the leave campaign succeeded in the referendum, there has been less success in negotiating with the EU. To dissuade other members considering their own withdrawals, the EU have been firm in their approach to the negotiation process so far.
Leave supporters are unyielding in their resolve that the referendum result is final, and that the UK must now leave the EU. However, while some on the leave side advocate a hard Brexit – gaining more sovereignty, taking control over immigration and reducing red tape – others are more moderate.
Key arguments for leave
Foreign affairs
EU membership limits Britain’s international influence, ruling out an independent seat at the World Trade Organisation (WTO).
Sovereignty
Britain would have more control of its laws and regulations, without risk of having counterintuitive policies forcefully imposed.
Security
Britain’s domestic security could benefit from full border controls, which it would gain outside the political union.
Money
Britain contributes billions of pounds in membership fees to the EU every year.
Trade
Membership of the EU keeps Britain from fully capitalising on trade with other major economies such as Japan, India and the US.
Business
The EU subjects Britain to slow and inflexible bureaucracy, making it more prohibitive for smaller companies to do business.
Jobs
Improved global trade agreements and more selective immigration could have a positive effect on the British job market.
Consumer goods
The average person in Britain loses hundreds of pounds each year due to EU VAT contributions and agricultural subsidies policies.
Pros and cons of no deal vs deal
There are two ways that Britain can leave the EU: with a trade deal, or without a trade deal. The transition period is meant to be used for the UK and EU to put together a trade deal before the 31 December 2020.
Pros and cons of no deal vs deal
There are two ways that Britain can leave the EU: with a trade deal, or without a trade deal. The transition period is meant to be used for the UK and EU to put together a trade deal before the 31 December 2020.
No deal
A no-deal Brexit would result in a rigid position on all the issues outlined above. It would likely mean that trade between the UK and EU defaults to WTO rules, which are widely seen as less beneficial than the current trading relationship between the two entities.
Argument for: a no-deal Brexit would see the UK leave the free trade zone, do away with EU regulations, and eradicate the need to accept the free movement of people. This would provide the opportunity to negotiate new trade deals with other countries.
Argument against: the EU is Britain’s biggest trading partner, and there’s no guarantee the UK will get better trade deals once it leaves. Adding to this, the UK could still end up being forced to comply with EU laws and regulations, as is the case with Norway and Iceland.
Deal
Leaving with a deal would aim to keep the trading relationship between the UK and the EU largely intact, or as frictionless as possible.
Argument for: strong trade ties between the UK and EU would make trading and economic activity easier. Many commentators have stated that it is within the interests of the City and the UK as a whole to maintain free trade with the EU. Leaving with a deal in place would also prevent the uncertainty that surrounds leaving on WTO terms.
Argument against: staying inside the single market and customs union is regarded by many as a betrayal of the referendum result. By staying in the single market and customs union, the UK would be liable to EU rules and legislation regarding the free movement of goods, services and people across borders. Plus, it could put the UK in the dangerous position of still having to accept EU economic and political policy, while at the same time denying the UK a seat at the negotiating table.
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