On 23 June 2016, the British people settled a question that had rumbled under the surface of UK politics for a generation: should the country remain within the European Union – or leave, ending its 40-year membership to go it alone?
Or so it seemed when just under 52% of voters opted for Brexit. Now, however, years after the vote and deep into the departure process, argument continues about the pros and cons of quitting the EU – and what Brexit will mean for the UK.
How did we get here?
In 2015, the Conservative general election victory activated a manifesto pledge to hold an in-out referendum on the UK’s membership of the EU.
David Cameron had made the promise at a time when he was under pressure from Eurosceptic backbenchers and when the Tories were losing votes to UKIP. Most political commentators agree that given a free hand, he would not have wanted to hold a referendum.
Having called the vote, Cameron vowed to campaign with his “heart and soul” to keep Britain in the bloc. Several members of his own cabinet campaigned to leave.
Despite contradictory polling in the run-up to the vote, on 23 June most commentators expected the UK to stay in the EU. Even as the count was underway, UKIP’s Nigel Farage said it looked as if “Remain will edge it”.
However, the Leave campaign won by 51.9% to 48.1%, a gap of 1.3 million votes. Cameron announced his resignation the following day.
The pros and cons of Brexit
Arguments presented during the referendum campaign covered politics, economics and national identity:
Brexiteers argued that leaving the EU would result in an immediate cost saving, as the country would no longer contribute to the EU budget. In 2016, Britain paid in £13.1bn, but it also received £4.5bn worth of spending, said Full Fact, “so the UK’s net contribution was £8.5bn”.
What was harder to determine was whether the financial advantages of EU membership, such as free trade and inward investment, outweighed the upfront costs.
The EU is a single market in which imports and exports between member states are exempt from tariffs and other barriers. Services, including financial services, can also be offered without restriction across the continent. The consequences of Brexit for businesses that took advantage of these freedoms was always a matter of debate and conjecture.
“More than 50% of our exports go to EU countries,” said Sky News during the campaign, and membership meant we had a say over how trading rules were drawn up. Within the EU, Britain also benefited from trade deals between the EU and other world powers (now including Canada and Japan, which have both concluded free-trade deals with the EU since the UK voted to leave).
Outside the EU, said Remainers, the UK would lose the benefits of free trade with neighbours and reduce its negotiating power with the rest of the world. Brexiteers, meanwhile, said the UK could compensate for those disadvantages by establishing its own trade agreements – and that most small and medium-sized firms, which have never traded overseas, would be freed of the regulatory burden that comes with EU membership.
Brexit campaigners proposed several different models for post-EU trade policy. Boris Johnson, for one, favoured an arrangement based on Canada’s free trade treaty: “I think we can strike a deal as the Canadians have done based on trade and getting rid of tariffs” and have a “very, very bright future”, he said.
Before the referendum, Nigel Farage suggested maintaining even closer economic links with the EU, replicating Norway or Switzerland’s position. But, said The Economist, “if Britain were to join the Norwegian club, it would remain bound by virtually all EU regulations, including the working-time directive and almost everything dreamed up in Brussels in future.” Meanwhile it would no longer have any influence on what those regulations said.
Farage has since cooled on the Norwegian model, and now favours no deal at all – which would result in the introduction of tariffs under World Trade Organization rules. So too does Johnson.
Pro-Europeans argued that the UK’s status as one of the world’s biggest financial centres would be diminished if the City of London was no longer seen as a gateway to the EU for the likes of US banks. They also said financial firms based in the UK would lose “passporting” rights to work freely across the continent.
Business for New Europe said tax revenues would drop if companies carrying out large amounts of business with Europe – particularly banks – moved their headquarters back into the EU. Fears that carmakers could scale back or even end production in the UK if vehicles could no longer be exported tax-free to Europe were underlined by BMW’s decision, in 2016, to remind its UK employees at Rolls-Royce and Mini of the “significant benefit” EU membership conferred.
But Brexit supporters were adamant that a deal to allow continued tariff-free trading would be secured even if the UK left the single market. Britain had a large trade deficit with the EU, they said, and so it would be in Europe’s interest to find a compromise – for goods and financial services. Others suggested that Britain could cut links with Europe and reinvent itself as a Singapore-style economy, free from EU rules and regulations.
Since the Brexit vote, many banks and financial firms have been establishing EU bases to take some staff out of the UK – although most seem likely to maintain the majority of their British operations. Car-makers have fared less well – Honda is closing its Swindon plant, Nissan has abandoned plans to build a new model in Sunderland and Jaguar Land Rover is cutting thousands of jobs – but non-Brexit-related factors have also played a part in this gloomy outcome.
For Brexiteers, sovereignty was seen as a simple win: even the most ardent Remainers had to admit that EU membership involved giving up some control over domestic affairs.
Pro-Brexit Labour MP Kate Hoey said at the time that the EU was “an attempt to replace the democratic power of the people with a permanent administration in the interests of big business”. Those on the right of the Conservative party might have disagreed with her emphasis, but they shared the view that EU institutions drained power from the UK parliament. For Leavers, exiting the EU would allow Britain to re-establish itself as a truly independent nation with connections to the rest of the world.
For Remainers, it would result in the country giving up its influence in Europe, turning back the clock and retreating from the global power networks of the 21st century. To them, EU membership involved a worthwhile exchange of sovereignty for influence: in return for agreeing to abide by EU rules, they said, Britain had a seat around the negotiating table and its voice was amplified on the world stage as a result.
“The truth is that pulling up the drawbridge and quitting the EU will not enhance our national sovereignty,” said Labour’s Hilary Benn, before the referendum. “All it would do is to weaken it by taking away our power to influence events in an ever more complex and interdependent world.” Nor, said Remainers, would UK sovereignty be absolute outside the EU: the British government would still be bound by membership of Nato, the UN, the WTO and various treaties and agreements with other nations.
Although Brexit would bring some clear-cut advantages, said The Economist, the UK might well find itself “a scratchy outsider with somewhat limited access to the single market, almost no influence and few friends”.
Under EU law, Britain could not prevent a citizen of another member state from coming to live in the UK, and Britons benefited from an equivalent right to live and work anywhere else in the bloc. The result was a huge increase in immigration into Britain, particularly from eastern and southern Europe.
According to the Office for National Statistics, in 2016 there were 942,000 eastern Europeans, Romanians and Bulgarians working in the UK, along with 791,000 western Europeans and 2.93m workers from outside the EU. China and India were the biggest source of foreign workers in the UK.
Many Remainers acknowledged that the pace of immigration had led to some difficulties with housing and service provision, but said the net effect had been overwhelmingly positive. By contrast, Brexiteers said Britain should “regain control” of its borders. Most wanted a substantial cut in immigration, although some said it was less about numbers than the principle of national sovereignty.
Pro-EU campaigners put economic security at the heart of their message, claiming three million jobs would be lost if Britain voted to leave. But Brexiteers branded the campaign “Project Fear”, dismissing it as a collection of gloomy fantasies.
Those two simple positions masked a complex debate about economic forecasts and employment rates, which intersected with arguments about trade policy and migration.
Take immigration, for example. Fewer people coming to the country would mean less competition for jobs among those who remained and, potentially, higher wages – a point conceded by Stuart Rose, leader of the pro-Remain Britain Stronger in Europe campaign. “But that is not necessarily a good thing,” Rose said, as labour shortages and rising wage bills could reduce economic competitiveness and growth.
Reduced immigration could also cause damaging skills shortages in the UK workforce, said Remainers, as well as dampen demand for goods and services. Writing for the London School of Economics, Professor Adrian Favell said limiting freedom of movement would deter the “brightest and the best” of the continent from coming to Britain. Brexiteers, meanwhile, said Britain could tailor its post-Brexit immigration policy to the needs of the economy.
It remains unclear how Brexit will affect the jobs market. Economic growth has slowed since the referendum, but employment remains high – and what happens next will depend largely on what sort of trading relationship the UK seeks with the EU and the rest of the world, and what they say in response.
“Figures from the early 2000s suggest around three million jobs are linked to trade with the European Union”, says Full Fact, but “they don’t say they are dependent on the UK being an EU member”. If trade falls, and the slack is not picked up elsewhere, then some of those jobs will be lost – but that is not a foregone conclusion.
Former work and pensions secretary Iain Duncan Smith, who was in favour of Brexit, said Britain was leaving the “door open” to terrorist attacks by remaining in the EU. “This open border does not allow us to check and control people,” he argued.
However, several senior military figures, including former chiefs of defence staff Lord Bramall and Jock Stirrup, argued the opposite. In a letter released by No 10 during the campaign, they said the EU was an “increasingly important pillar of our security”, especially at a time of instability in the Middle East and in the face of “resurgent Russian nationalism and aggression”.
Michael Fallon, who was defence secretary at the time, said the UK benefited from being part of the EU, as well as Nato and the UN. “It is through the EU that you exchange criminal records and passenger records and work together on counter-terrorism,” he said. “We need the collective weight of the EU when you are dealing with Russian aggression or terrorism.”
By contrast, Colonel Richard Kemp, a former head of the international terrorism team at the Cabinet Office, said in The Times that these “critical bilateral relationships” would persist regardless of membership, and that it was “absurd” to suggest that the EU would put its own citizens, or the UK’s, at greater risk by reducing cooperation in the event of Brexit.
Since the Brexit vote, the Government has said it will work to maintain security relationships with the EU. “In today’s uncertain world we need that shared strength more than ever,” said Andrew Parker, the head of MI5, in May 2018. “I hope for a comprehensive and enduring agreement that tackles obstacles and allows professionals to get on with the job together.”