EU Referendum: Which Stats Should Britons Believe?

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Union flags in London, December 17, 2015. There is much uncertainty around the impact of leaving the EU on the U.K. Luke MacGregor/Reuters

The EU debate in Britain is suffering from an unfortunate formula: lots of variables + extremely limited public knowledge = endless tenuous and seemingly contradictory statistics.

Both camps and their associated think tanks pump out numbers on the rewards and risks of Brexit at a rate that can't fail to confuse voters—if they've paid attention at all.

Monday's edition of the BBC's Today program gave a flavor of the debate over Britain's approaching EU membership referendum. Stuart Rose, the former supermarket executive and chair of pro-EU campaign Britain Stronger in Europe (BSE), and presenter Justin Webb got trapped in a battle of "my stats are better than your stats," as Rose refused to withdraw a claim that membership of the EU earns £3,000 ($4,300) a year for each British household despite a recent debunking of the figure.

So what should Britons believe? Turns out, in the referendum debate, as in Hollywood, nobody knows anything. We've taken a look at four key claims, two from each camp, and stripped away the fluff to establish what, if anything, voters can rely on.

BETTER OFF IN?

The Claim: British households are £3,000 ($4,300) a year better off thanks to the U.K.'s EU membership.

This is the one that Webb and Rose tussled over on Monday. It comes from a Confederation of British Industry (CBI) study published in 2013, which assessed five research papers and concluded that EU membership brought between £62 billion ($89 billion) and £78 billion ($111 billion) a year, or £3,000 ($4,300) per household.

A Channel 4 News factcheck at the time rubbished the figure, saying that the CBI had looked at too narrow a range of research and made more optimistic estimates than any of the studies they did look at.

Of eight studies of the economic impact of Brexit examined by the House of Commons library in a 2013 study, the most optimistic put the net benefits of EU membership at 6 percent of GDP each year, while the most pessimistic said we lost about 5 percent annually thanks to being in Europe.

So What Should We Believe?

The problem with making any cost/benefit analysis of staying in Europe is the range of possible outcomes.

The terms of any trade deals Britain managed to negotiate (or not) when it left would make a huge difference. At the moment, the country has access to the EU's "single market," first launched in 1993 to abolish trade barriers between EU states and harmonize regulations.

Some anti-EU types think Britain could leave the EU but stay in some version of the single market, others, including Vote Leave campaign director Dominic Cummings, say it would be better to negotiate a new arrangement to avoid remaining saddled with a range of EU rules as a condition of membership. It's too early to predict the terms of any such deal.

Anand Menon, professor of European Politics at King's College London, also points out that the impacts of EU membership vary by region; London, for example, does much better from freedom of movement than other places.

Menon says it is not possible to put any specific figure on the benefits or downsides of remaining in the EU. But he does say that losing the single market would create some short-term problems. "Initially there will be adjustment costs in the short term," he says. "If our access to the European market is hampered, then companies that trade with the European market might have to try and adapt to that. That's not to say that in the medium-to-long term they couldn't cope."

The Verdict

In the long term, it really is anyone's guess. But the U.K. could probably expect some short-term turbulence from a Brexit.

WORKING HARD

The Claim: Some three million jobs depend on Britain's membership of the EU.

Commonly cited by one of the U.K.'s most high-profile Europhiles, former Deputy Prime Minister Nick Clegg, this figure is the most common version of a wider pro-EU argument: that pulling out would threaten British jobs.

Plenty in the business world disagree, most recently Unilever boss Paul Polman, who told The Guardian that his firm's U.K. sites and 7,500 British employees would not be hurt by a Brexit.

So What Should We Believe?

Again, says Menon, it's uncertain as any hit to jobs would depend in large part on the terms of Britain's exit deal. If, for example, the EU decides to impose tariffs on British car exports, BMW and other big firms might not want to keep investing in the U.K. But any industries whose terms remain unchanged would see no impact.

Still, "in the short term," he says, "the renegotiation will be hideously complex and very lengthy. There'll be a lot of uncertainty." That could "have severe implications, or at least some implications, for investment into Britain."

The Verdict

Again, in the longer term anything could happen. But months of frenzied Brussels wrangling for a post-referendum prime minister could have some negative consequences for employment by multinationals in the U.K.

TAKING CONTROL

The Claim: Britain would win much greater control over its borders by leaving the EU.

Immigration consistently ranks among the top concerns of Britain's voters, so it's no surprise that the anti-EU camp often uses the end of freedom of movement as a carrot to lure potential "leave" voters. If Britain left the EU, they say, the U.K. would not have to let everyone who wants to from the other member states live and work in the country, as it does now.

But many contest this. They say that access to trade with Europe might come at the price of continued freedom of movement, as it does in Norway, while it's also true that a majority of immigrants to the U.K. come from non-EU countries.

So What Should We Believe?

Again, there's a caveat here: If the U.K. wants access to EU markets, it might have to buckle and accept some EU rules on migration. It's possible that, like Norway, we might still be subject to freedom of movement rules in return for access to the single market, for example.

But, says Madeleine Sumption, director of Oxford University's Migration Observatory, if the U.K. didn't keep freedom of movement rules for EU citizens, it would probably see some decrease in net migration into the country. "The general observation we can make is that net migration would almost certainly go down to some extent," she says.

In some low-skilled industries like hospitality and agriculture, Eastern Europeans are over-represented, so any new U.K. immigration policy (and at this stage we have very little idea what that would look like) is unlikely to be generous to such workers.

The Verdict

If Britain exempted itself from EU freedom of movement rules, it would probably bring net migration down somewhat. By how much, and whether that is desirable, remain open to debate.

SECOND REFERENDUM

The Claim: The U.K. could have a second referendum if it voted to leave.

Boris Johnson is reported to have advocated this idea, and it's been advanced by Vote Leave director Dominic Cummings on his blog.

The argument usually runs like this: A leave vote in the referendum wouldn't take Britain straight out of the union. Instead, Britons would vote first on David Cameron's renegotiation. Then, if they voted to reject it and leave, the government would work on a Brexit deal with the 27 other EU states, during which process Brussels could potentially offer better terms. Then Britons would vote once again on whether to leave on those terms.

Prime Minister David Cameron and Chancellor George Osborne have both denied that this is possible, insisting that whatever Britons choose in the first and only referendum will be final.

So What Should We Believe?

Alan Renwick of University College London's Constitution Unit wrote on the unit's blog that this was not possible under EU law. Article 50 of the Lisbon treaty, the EU mechanism that allows states to leave, "offers no mechanism to withdraw a notification of intent to leave," he said. In other words, once Britain says it's leaving, it has to leave. There's no room to decide to stay if voters call for it.

The Verdict

It's not impossible that Brussels and London would find some political workaround for this legal blockage if both sides felt it necessary. But Britain can't count on a second referendum.

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