Money, Jobs and Sovereignty: Myth vs. Reality Ahead of ‘Brexit’ Vote


LONDON — British voters will go to the polls this month to decide whether their country should remain in the European Union. As the date, June 23, approaches, the “leave” and “remain” campaigns are dialing up the volume, with claims and counterclaims flying, many with only a tenuous relationship to facts.

According to those who favor leaving the bloc, Britain is the victim of faceless, highly compensated bureaucrats in Brussels who meet in secret and churn out off-the-wall regulations costing businesses billions of pounds a year. They say British citizens are subjected to taxes and other measures by a supposedly unaccountable European Parliament, while Britain as a whole sends far more money each year to Brussels than it gets back. Above all, perhaps, they say Britain is virtually powerless to stop the influx of migrants — more than 300,000 arrived last year.

Explaining ‘Brexit,’ Britain’s Vote on European Union Membership

Britain will hold a referendum on June 23 on whether to leave the European Union, a decision nicknamed “Brexit.”


Those who support remaining in the bloc play down those issues, focusing on what a seemingly inexhaustible supply of government officials, economists, bankers and business executives call the dire consequences of leaving: a weakened currency, job losses, slower growth, depressed trade, the end of London’s status as a world financial capital and a loss of influence in European affairs. Immigrants, just over half from European Union member states, give the economy energy, youth and creativity, they say, contributing to the economic vitality that makes multicultural London the envy of the world.

Some have called the campaign the “Trumpification of politics” in Britain. With dubious assertions flying around, the debate can appear unseemly.

Here are a few of the claims, and some judgments about their veracity:

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Boris Johnson, the former mayor of London, during the Brexit Battle Bus tour in York, England, in May.

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Christopher Furlong/Getty Images

The “Leave” side says: Britain sends 350 million pounds a week to the European Union.

According to the U.K. Statistics Authority, Britain owed a gross contribution to the European Union of 19.1 billion pounds, or about $28 billion, in 2014. That’s £367 million a week. However, Britain gets an immediate rebate off the top, negotiated in 1984 by Prime Minister Margaret Thatcher, so it actually sent £14.7 billion, or £283 million a week, in 2014. Brussels also returns money to Britain for sectors including agriculture, regional development, science and universities. The actual net contribution from Britain is about £9.9 billion a year.

That’s about £190 million a week, a little more than half of what Vote Leave claims. It is roughly 0.5 percent of British gross domestic product and around 1.3 percent of the current British budget of about £770 billion.

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The City of London. Many of those who support remaining in the European Union fear the end of London’s status as a world financial capital.

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Niklas Halle’N/Agence France-Presse — Getty Images

The “Remain” side says: Three million jobs in Britain depend on membership in the European Union.

Doubtful. The original study simply said that “3.45 million jobs depend upon exports to the E.U.” But there is no question that Britain would continue to export to the European Union and elsewhere even if it left the bloc. Trade might be more complicated and expensive outside the single market, but the United States and China, to name just two countries, do a lot of trade with the European Union without being members.

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Britain has lost 75 percent of the 131 cases brought against it before the European Court of Justice, but the European Commission, above, brings only cases it thinks it can win.

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Francois Lenoir/Reuters

“Leave” says: Britain has lost 75 percent of the 131 cases brought against it before the European Court of Justice, and thus has lost a crucial element of sovereignty.

True, at least the first part. But the European Commission, for example, brings only cases it thinks it can win. And 91 of the cases were brought by the commission because of Britain’s failure to put in effect European law, as it is obligated to do. France, by comparison, has lost 90 percent of the last 50 cases brought to the court.

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Prime Minister David Cameron advocates remaining in the bloc. The Treasury estimates that the country would be worse off to the tune of 4,300 pounds, or $6,200, a year per household.

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Will Oliver/European Pressphoto Agency

“Remain” says: A British exit would cost each household £4,300 a year by 2030.

It depends on your assumptions, but some loss of national income is inevitable.

Those who favor staying in the bloc cite a study by the British Treasury that looked at three alternatives to European Union membership. For comparison, the Treasury chose one, a negotiated bilateral agreement with the European Union, like the ones the bloc has with Switzerland and Norway.

The figure cited represents an annual loss of gross domestic product per household after 15 years, estimating 6.2 percent lower growth nationally by 2030. But this does not translate to cash, and it is based on numerous assumptions.

And, of course, there is no way of knowing what kind of relationship Britain would have with the European Union after a so-called Brexit. Michael Gove, a leader of the “leave” campaign, has said Britain would not want a bilateral deal that required it to accept freedom of movement and labor, so it would choose a simpler World Trade Organization relationship with the European Union, like the ones held by Brazil and Russia. That kind of relationship, the Treasury suggests, would mean a bigger annual loss of G.D.P. per household by 2030 of £5,200.

Still, every alternative the Treasury examined would reduce G.D.P., a position accepted by most economists.

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A banner in Maidstone, England, opposing membership in the European Union.

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Jack Taylor/Getty Images

“Leave” says: “Uncontrolled migration” imposes “huge unfunded pressures on the N.H.S. and on other public services,” said Boris Johnson, the former mayor of London, referring to the National Health Service.

Pressures, absolutely. Unfunded, not exactly.

An estimated 85 percent of non-British European Union citizens in Britain are economically active, contributing a net £22 billion to the Treasury.

But is immigration “uncontrolled”?

Citizens of European Union countries have the right to live and work in any member state. But Britain, which is not a part of the Schengen zone of largely passport-free travel, has the right to check everyone at its borders and can deny entry for a host of reasons.

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