EU membership a 'boon' to UK economy

Membership of the EU has been a "boon" for the British economy, and leaving the EU “would not be an economic liberation,” according to an expert group.

The conclusion is part of a 92-page report published on Monday (9 June) by the London-based Centre for European Reform.

The report was prepared by an expert group including former minister and EU trade commissioner Peter Mandelson, together with a string of economists and business leaders including the chairmen of the British Bankers’ Association and the Institute of Directors.

The report notes that membership of the bloc has increased Britain’s goods trade with the rest of the EU by 55 per cent, helped to establish the City of London as the EU’s largest financial centre, and seen the level of foreign investment from EU countries increase from 30 per cent of all foreign investment in the UK to 50 per cent since 1997.

It refutes the argument that mass deregulation would boost the UK economy, citing data from the Paris-based club, the OECD, that the UK has one of the least regulated labour markets in the world, despite being part of the EU.

It also warns that further curbs on immigration, a likely political move if Britain was to leave the bloc, would push up taxes or require spending cuts, noting that “EU migrants are net contributors to the public finances, helping to pay for the pensions and healthcare of an ageing society”.

Outside the EU, and forced to renegotiate a trade deal with the bloc, the UK “might perversely be left in a position where it would have ‘EU regulation without representation’.”

Meanwhile, the study says Britain’s net contribution to the EU budget would fall by 9 per cent, if calculated on the same basis as Norway, and by 55 per cent based on Switzerland’s rate. Any government “would face pressure to replace EU regional funding and agricultural subsidies with domestic spending,” it adds.

While recent polls indicate that Britons would vote to remain in the EU by a narrow majority, the UK Independence party’s triumph in last month’s European elections, where it topped the poll taking 24 of the UK’s 73 seats, will keep the debate high on the political agenda.

Prime Minister David Cameron is also bidding to re-write the UK’s membership terms if his Conservative party wins re-election next year, before holding an in/out referendum on the new terms in 2017.