Rejoining the EU: A Strategic Investment for the UK

Strategic Insights -

The debate over the UK's continued membership in the EU has been ongoing, with proponents on both sides presenting competing data and arguments. Recently, Peter Auty leveled serious charges against those who supported remaining in the EU, claiming they were spreading misinformation and lies. However, his claims were based on incomplete and nominal figures, which do not accurately reflect the real economic impact of Brexit.

Key Takeaways:

  • The UK's real goods exports to both EU and non-EU countries were lower in 2024 than in 2019, despite nominal growth, highlighting the challenges of Brexit.
  • Services have performed better, but the UK still runs a trade deficit, contradicting Auty's claims of a thriving economy.
  • Countries like France and Germany have seen steadier export growth, benefiting from frictionless trade within the EU, whereas the UK faces increased red tape, higher costs, and reduced access to key markets.
  • The UK's net contribution to the EU was closer to £7-7.5 billion, not £20 billion per year, and independent studies suggest EU membership added around £90 billion a year to the UK economy.
  • The impact of Brexit has changed the views of many who voted Leave, with most now expressing regret and considering a different outcome in a future referendum.
  • Younger voters, too young to participate in the 2016 referendum, consistently support EU membership, highlighting a generational divide in opinions.

Statistics:

  • UK goods exports to the EU and non-EU countries were lower in 2024 than in 2019.
  • The UK's nominal goods exports grew from £718 billion in 2015 to £830 billion in 2024.
  • The UK's services exports have performed better, but the overall trade deficit remains.
  • France and Germany have seen steady export growth, with €1.34 trillion and €1.23 trillion in exports respectively in 2020 [1].
  • Independent studies suggest EU membership added around £90 billion a year to the UK economy [2].
  • The UK's net contribution to the EU was closer to £7-7.5 billion, not £20 billion per year.

Sources:

[1] Eurostat, "Trade by country: Germany", accessed 2022.

[2] Centre for European Reform, "The economic impact of Brexit", 2019.