UK would need substantial reforms to benefit economically from Brexit, says study

A study on the impact of Brexit by a respected think tank says that the UK is more dependent on the EU than vice versa.

A new study challenges the Leave campaign's notion that the UK will be economically stronger outside the EU | Photo credit: Press Association

By Martin Banks

Martin Banks is a senior reporter at the Parliament Magazine

11 Jul 2016

The European Movement, based in Brussels, says that 12.6 per cent of the UK's GDP is linked to exports to the EU, whereas only 3.1 per cent of GDP among the other 27 member states is linked to exports to the UK.

The EU, it says, is the destination of 44 per cent exports and 60 per cent of total UK trade is covered by EU membership.

The study challenges the notion, proposed by the Leave camp in the recent referendum campaign, that the UK will be economically stronger outside the EU.

It says, "For the UK to benefit by 1.6 per cent of GDP gains by 2013, as the best case scenario implies, it would have to substantially reform its economy on broad fronts."

These include pursuing a "liberal" policy for labour migration, it says, and "slashing" regulation on social and employment protections.

The authors conclude that a British exit will carry "large economic and political costs", adding, "It is evident that none of the alternative relations with the EU presents itself as more advantageous compared to EU membership."

European Movement brings together 39 national councils and 34 international associations.

Meanwhile, Theresa May, now expected to become the next Prime Minister in Britain, has reiterated that "Brexit means Brexit".

In an article on Monday, the UK Home Secretary and Conservative leadership candidate argued, "As we leave the EU, we must forge a new role for ourselves in the world. We must make Britain a country that works not for a privileged few but for every one of us."

May also pledged to crack down on big businesses and executive pay as she launches her national campaign to be Prime Minister.

However, Ukip donor and Leave.EU co-founder Arron Banks said on Sunday that if May were to win the Conservative leadership race and become Prime Minister, "I think [it] will be the death of Brexit by a thousand cuts."

Banks added that, under a May government, the triggering of Article 50 would be delayed and that the UK could opt for a 'Norway-style' relationship with the EU.

He concluded, "I think that, if Theresa May wins, Ukip will be back with a vengeance."