On 23 June, the UK will go to the polls in a crucial referendum on whether to remain in the EU.
The problem for the Leave campaign is that their case does not survive rigorous examination. Simplifying it, their argument is that the UK can leave the EU, thus retaining its sovereignty – particularly on immigration matters – whilst not facing disruptive economic consequences.
The Norway option
A quick look at the alternatives shows this claim to be false. One possibility would be the so-called ‘Norway option’, which involves the UK leaving the EU but joining the European Economic Area (EEA).
Most EU legislation also applies to the EEA though, particularly in fundamental principles of free movement, and Norway contributes almost as much per capita to the EU budget as the UK does.
The Norway option would thereby have all the ‘disadvantages’ of being in the EU, through loss of sovereignty and contribution to the budget, but far less opportunity to shape debate.
The WTO option
Another option is that the UK does not enter an agreement with the EU (the ‘WTO option’). This would allow control of immigration and the stopping of payments to the EU budget, but at what cost?
Projections by the OECD and the Treasury (amongst others) show that each British household could be over 40,000 kroner per year worse off under this model. In reality this option would mean fewer jobs and less money to spend on public services like health and education.
In between extremes
In between these two extremes would be to negotiate a free trade agreement (similar to Canada).
This could temper some of the disadvantages but could take years of negotiating and uncertainty and, even then, would not offer complete access to the single market that the UK currently has.
This is important in areas like financial services where the UK has a comparative advantage.
Leaving too costly
Overall, the Leave campaign has failed to show how the UK can get the perceived advantages of leaving without paying a heavy financial cost. Putting to one side for a minute all the moral and historical reasons, this simple fact means the UK is best served by a Remain vote.