From benefits to bendy bananas: ins and outs of UK’s EU debate

The pro-‘leave’ camp says the 28-nation bloc is a bureaucratic behemoth that sucks up billions from British taxpayers while imposing undemocratic laws.

By: AP | Updated: March 7, 2016 12:55 am
BorisJohnson-and-David-759 Boris Johnson and David Cameron (Imaging: Subrata Dhar)

Britons are grappling with how to vote in a June 23 referendum on whether to stay in the European Union or walk away. The Conservative Party is divided, Prime Minister David Cameron’s ‘stay’ line being opposed by London mayor Boris Johnson (right). The pro-‘leave’ camp says the 28-nation bloc is a bureaucratic behemoth that sucks up billions from British taxpayers while imposing undemocratic laws. The ‘stay’ group argues that Britain’s prosperity and security benefit from EU membership. Here are some claims — on both sides — and some facts.

CLAIM: The EU makes most of UK’s laws; it even regulates the shape of bananas.

FACTS: According to the group Business for Britain, 65% of laws introduced in Britain either stem from or are influenced by the EU. Researchers at the House of Commons Library have a much lower figure: 13.2% of British legislation introduced between 1993 and 2014 was EU-related. However, this calculation does not include EU regulations that are implemented without the need for new national laws — so the real figure is probably higher, though likely not as high as 65%.

As an example of legislative heavy-handedness, Britain’s tabloid press loves to cite the claim that the EU bans “bendy bananas” and crooked cucumbers. A 1994 EU regulation did indeed specify that bananas must be “free from abnormal curvature”. EU rules also governed the shape of many other fruits and vegetables — cucumbers, for example, needed to be almost perfectly straight. Many of these specifications were abolished in 2008, but the banana guidelines remain.

CLAIM: The EU costs British taxpayers almost half a billion dollars a week.

FACTS: This figure, cited by anti-EU group Vote Leave, comes from the House of Commons Library, which estimates that Britain paid 17.8 billion pounds to the EU in 2015, roughly 350 million pounds — or $ 490 million — a week. But Britain got half the money back, including 4.9 billion pounds through a rebate negotiated by Prime Minister Margaret Thatcher in the 1980s. The UK’s net contribution in 2015 was 8.5 billion pounds — or about 165 million pounds ($ 230 million) a week. On a per-capita basis, Britain is only the eighth-biggest contributor to the EU budget.

CLAIM: Britain will be poorer outside the European Union.

FACTS: While the economic impact of a Brexit is hard to predict, many economists believe that leaving the EU’s tariff-free internal trade and market of 500 million people would be an economic blow. Trade with EU countries accounted for 45% of UK exports and 53% of imports in 2014 — a trade that a Brexit would disrupt, at least for the time new agreements are negotiated. The LSE’s Centre for Economic Policy has calculated that even if trade barriers with other European countries do not significantly increase, per capita income in Britain will fall by 1.1%-3.1% after a Brexit. Britain also would likely have to pay into EU funds to secure trade deals with the bloc, as non-EU members Norway and Switzerland currently do.

Other economists, however, say the British economy would benefit if freed from EU regulatory shackles and protectionism. Prof Patrick Minford of Cardiff Business School argues EU policies often prop up unsustainable industries and “warps our economy”, and that Britain — which has been charting a more free-market path than many of its neighbours since the Thatcherite 1980s — would be better off leaving the bloc.

CLAIM: The UK would be able to limit immigration if it left the EU.

FACTS: As an EU member, Britain must allow citizens of all 27 other member states to live and work in the UK. Britons too can move abroad, but over the last decade the traffic has been lopsided. The House of Commons Library estimates there are around 1.2 million Britons living in other EU countries, compared with around 3 million EU migrants living in Britain.

If Britain leaves, it would regain the power to stop EU migrants settling. But according to Jonathan Portes of the National Institute of Economic and Social Research, a move by Britain to limit or end free movement “will make it very difficult, and maybe impossible, to negotiate the kind of free trade and single-market relationships that many people on the Brexit side want to see.’’ Countries outside the EU that have struck free-trade deals with the bloc, such as Norway and Switzerland, have had to allow EU nationals access to their job markets in return.

CLAIM: Migrants are drawn to the UK by generous welfare benefits, and limiting benefits will reduce immigration.

FACTS: EU leaders have agreed to let Britain impose a temporary ban on new arrivals from member states claiming some top-up benefits paid to lower-income workers. The British government says this will help curb immigration by removing “the ‘pull factor’ arising from the UK benefits system”.

But there is little evidence that benefits are really a pull. A recent study by the Overseas Development Institute found “essentially zero evidence” to suggest welfare systems pull migrants to wealthy countries. The National Institute of Economic and Social Research too reached the same conclusion.

Most economists and policymakers think wages are a much bigger attraction. Britain’s minimum wage is 6.70 pounds an hour, three times the rate in Poland, and more than six times that in Romania.

CLAIM: Leaving the EU will make Britain less safe.

FACTS: A group of former generals, admirals and air marshals said in an open letter that “within the EU, we are stronger” and better able to confront threats ranging from the Islamic State to Russian muscle-flexing. Britain’s independent reviewer of terrorism legislation, David Anderson, says EU-wide mechanisms such as the European arrest warrant and passenger-record sharing are effective counter-terror measures. Others point out that Britain would still remain a nuclear power and NATO member, and the UK’s security rests on its close intelligence-sharing relationship with the US, which would likely not be affected by a Brexit.

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