Disadvantages of EU Membership to UK include:
- Cost. The costs of EU membership to the UK is £15bn gross (0.06% of GDP) – or £6.883 billion net. See UK government spending. (UKIP claim that the cost of EU membership in total amounts to £83bn gross if you include all possible costs, such as an ‘estimated’ £48bn of regulation costs – or £1,380 per head . The ONS have estimated a net contribution cost of £7.1 bn
- Inefficient policies. A large percentage of EU spending goes on the Common Agricultural Policy. For many years this distorted agricultural markets by placing minimum prices on food. This lead to higher prices for consumers and encouraging over-supply. Reforms to CAP have reduced, but not eliminated this wastage.
- Problems of the Euro. Membership of the EU doesn’t necessarily mean membership of the Euro. But, the EU has placed great emphasis on the Single Currency. However, it has proved to have many problems and contributed to low rates of economic growth and high unemployment across the EU. See: Problems of Euro
- Pressure towards austerity. Since 2008, many southern European countries have faced pressure from the EU to pursue austerity – spending cuts to meet budget deficit targets, but in the middle of a recession these austerity measures have contributed to prolonged economic stagnation.
- Net Migration. Free Movement of Labour has caused problems of overcrowding in UK cities. The UK’s population is set to rise to 70 million over next decade, partly due to immigration. This has pushed up house prices and led to congestion on roads. The concern is that the UK is powerless to prevent large scale immigration because EU rules allow free movement of labour. See: Impact of immigration on UK economy
- More bureaucracy less democracy. It is argued that the EU has created extra layers of bureaucracy whilst taking away decision making process further from local communities. For example, the British Chambers of Commerce has estimated that the annual cost to the UK of EU regulation is £7.4bn. The introduction of Qualified majority voting (QMV) mean that on many decisions votes can be taken against the public interest of a particular country.
Evaluation of these problems
- The cost of the EU is a relatively small percentage of overall UK government spending.
- The UK does receive a rebate from the EU (€ 3.8 billion a year) because it gets a relatively small amount from CAP – though there is pressure to reduce this rebate from other EU members. The UK has also received regional funds over the years.
- The CAP and other policies are being reformed. If the UK stays in the EU it can help to promote policies which work in the long-term interest of the UK.
- An estimated 3.5 million jobs are linked to membership of the EU.
- Some EU bureaucracy has been very beneficial, e.g. forcing mobile phone networks to limit charging when using mobiles abroad.
- Issues like farming and fishing and the environment are global issues which need to be tackled within a European framework, it is insufficient to have just a national policy on fishing and the environment.
- The EU Health Insurance Card enables EU citizens to receive emergency healthcare on the same terms as the citizens of the EU country they are visiting (often free). (Euro-movement)
- By staying out the Euro, the UK has retained independence over monetary policy, fiscal policy and the exchange rate. The UK doesn’t have the same pressure to pursue austerity as countries in the Eurozone have. This shows that the UK can combine membership of the Euro with flexibility over economic policy.
- Migration works both ways. Many British people have emigrated to take advantage of opportunities elsewhere in Europe. An estimated 748,010 Britons live or work in the European Union (link). However, net migration has been running at around 200,000 a year.
- The free movement of labour enables a more flexible labour market, with immigrants able to fill gaps in the UK labour market, such as nursing and plumbing. Also the additional labour increases UK productive capacity and helps increase real GDP. (see impact of rising population)