Thursday 23rd June 2016 will see the people of Britain voting in an EU referendum that will ask the question, should we stay as part of the European Union or should we leave? A referendum is a vote in which everyone (or nearly everyone) of voting age can take part in by giving a yes or no answer to a question. Whichever side gets more than half of all votes cast is considered to have won.
The people of Britain have not had a say about the country’s part of the EU since 1975 when we voted to stay in the EU in a referendum, so it’s a big deal! Especially to small and medium sized businesses in Britain. And since no country has ever actually done it, it is very difficult to predict the exact implications that leaving the EU will have on Britain.
It’s been more than 40 years since the last vote on Europe. In 1975, Britons were asked whether or not they wanted to remain in what was then called the common market – 67% said yes.
Those campaigning for Britain to remain as part of the EU believe that the country gets a big boost from its membership. These boosts include the ease of trade for businesses between EU member states, ease of migration flows – many of whom are young and keen to work which fuels Britain’s economic growth – helps to pay for our public services and helps our small business economy to flourish. In addition, those wanting Britain to stay believe that our status in the world would be damaged if we left, because we are much more secure as part of the 28 nation club rather than choosing to go it alone.
The international monetary fund says that the EU is the worlds largest economy with a nominal GDP of £16.6bn for all 28 economies combined.
On the flip side, those campaigning for a Brexit believe that leaving the EU would result in an immediate cost-saving for the Government because Britain would no longer have to contribute to the EU budget. And that businesses would welcome a cut in red tape, with Britain having the freedom to reinvent itself as a Singapore-style supercharged economy.
In 2015, the UK paid a net £8.5bn of contributions to the EU, making it the third biggest contributor behind France and Germany.
All in all, it’s uncertain times for the future of Britain’s part of the EU and the country is likely to see a slow down in inward investment in the run-up to the vote, due to the uncertainty of the outcome and its consequences.