The Business Case for Brexit

Many thousands of words have been written on the subject of how the UK will fare should we vote to leave the European Union on 23 June... However, it is likely that many fewer words have been written describing the balanced view - that while there will undoubtedly be some uncertainty, it is inevitable that there will be some very substantial economic benefits too.

Many thousands of words have been written on the subject of how the UK will fare should we vote to leave the European Union on 23 June. I would hazard a guess that the majority have been devoted to how our economy is sure to fail on the back of prolonged business uncertainty due to suspended EU trade deals.

However, it is likely that many fewer words have been written describing the balanced view - that while there will undoubtedly be some uncertainty, it is inevitable that there will be some very substantial economic benefits too.

Free to trade worldwide

UK trade with the European Union is declining and it has been for many years. This is not a blip; rather it is a slow and steady decrease in the amount of goods and services we sell to the EU. In 2006, the EU accounted for 54% of our total trade, versus 44% today.

There is little doubt that this figure will continue to fall whether we remain a member of the EU or vote to leave. This deficit needs to be filled somewhere else and we have been successfully doing so thus far, striking landmark deals with booming emerging nations such as India. So why do we persist in the belief that we cannot exist without this declining EU market?

Despite being told that being a part of the EU gives us the ability to benefit from excellent trade terms, the facts show that the EU does not have a good track record of striking trade deals on behalf of its members outside the block.

Recent research by think-tank Civitas actually indicates that most trade agreements entered into by the EU are followed by a decline in export growth between Britain and the new partner nation. The study looked at 15 EU agreements for which good trade data is available. Only five saw a subsequent rise in export growth from the UK - in the other 10, the growth rate fell.

Much has also been made of the strength of the EU in terms of its growing number of members: the more countries that join, the greater the amount of trade potential. But let us look at this critically. Outside of the core countries, do we really think that in 10 years' time, trade with accession countries such as Turkey or Albania will be more beneficial to the UK than extending our trade with India or China or the Asia Pacific Rim countries?

As it stands we are tied to and by the EU. Take a look at the recently Tata Steel crisis. The Government cannot intervene without breaking multiple EU rules and risking financial sanctions. The EU would rather the UK steel industry disappeared altogether than allow government intervention. This is not the kind of trading club we really want to be a member of.

It is this generation's job to lift its vision on behalf of the next, look outward to where the huge growth will come and build the foundations and partnerships necessary to capitalise on these opportunities long term.

Continue to trade with the EU

In my view, and that of many others, there is little reason to believe that we cannot strike good trade deals with the EU if we leave. As many continue to repeat, the UK is the fifth largest economy in the world with ties to every continent. Rather than believing that, if we leave the EU we are in danger losing out, we must accept that, in fact, it will be the EU that is losing something potentially much bigger if they fail to strike decent trade deals with the UK. And this is clearly the view of the EU.

If they cared so little about losing us as a member and trade partner then they would not be quite so determined to ensure that we do not see the benefits of leaving.

Europe's Trade Commissioner, Cecilia Malmstrom, put this point forcefully just the other day. "[We hope the] Brits will choose to stay. We want them, we love them, we need them." And yes, the EU does need us very badly indeed. Currently, we have an extremely large trade deficit with the EU. We import much more than we export. Again, this situation is unlikely to change any time soon. The future of export trade for the UK lies firmly outside the EU and there is nothing the EU can do to reverse this global trend.

Cut stifling EU business regulation

More than 70% of the UK economy is made up of domestic businesses that do not engage in international trade. Exports of goods and services to the EU represented only 13% of GDP in 2014. But every single UK business must adhere to the ever-growing mass of EU business regulations covering almost every aspect of starting, growing and operating a UK business.

This situation has become a great deal worse since the financial crisis of 2008. We are now at the point where one corporate treasurer at a FTSE 250 manufacturing company told the Financial Times earlier this year: "The last 10 years have been the toughest of my career - and that is all down to regulations. They [the EU] are swamping us. It even takes six months to do simple things like open a bank account."

There is no doubt that many EU regulations have led to a fairer and better life for workers and a reduction in risks in the workplace. But we are now at the point where EU red tape is stifling business growth, not to mention costing firms very large sums to implement. Based on an analysis of UK Government Impact Assessments (IAs), it was found that the 100 most burdensome EU-derived regulations cost the UK economy £33.3billion a year.

On top of our EU membership fee, which, including everything, last year amounted in total to almost £20billion, we are leaving ourselves very short indeed. And this shortfall is landing firmly on those in our society who are least able to bear the economic and social cost. With the money we spend on the EU and the money businesses waste on EU regulations, we could be building schools, hospitals, and transport systems, and creating jobs for young people who are currently unemployed.

Do we really believe that this is the right way to run our economy and our country?

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