Are We Heading For ‘Brexit’?

For the first time the prospect of Great Britain leaving the European Union is on the table. Prime Minister David Cameron has promised a referendum after the next election.

Image by The Prime Minister's Office

The promised referendum will only have one question – should Britain be in the EU or not? There is no question of other issues such as monetary union being discussed. Cameron has said that he will be campaigning to stay, but that he will also be seeking a ‘repatriation of powers’.

Uncertainty

There has been criticism of the decision to announce a possible referendum for creating uncertainty. The consequences of Britain possibly leaving are at present unknown, however critics of the referendum plan say that uncertainty could discourage investment in Britain and delay economic recovery.

One of the consequences of uncertainty over Britain’s future in the EU could be an increase in the cost of government borrowing. This would be as a result of the bond market reacting negatively.

Majority would quit

A recent poll found that a clear majority of British voters would vote to leave the European Union. The referendum would happen in 2024, but if it were to happen now 34% would definitely ask to leave, along with a further 22% who probably would. The total amount who would definitely vote to remain is just 30%.

Support for remaining in the EU is in short supply across supporters of all political parties. The most pro-European are the Liberal Democrats, however even four out of ten amongst them would vote to leave. By promising a referendum despite thinking Britain should stay, it is possible Cameron is hoping for an electoral boost due to the popularity of this policy with both Conservative and Labour supporters, and to neutralise the threat posed by UKIP.

A lot could change by 2024, with both the ‘in’ and the ‘out’ camps having a chance to argue the case. The benefits of EU membership are likely to get more coverage as part of this discussion, as well as the possible risks and benefits of leaving.

Do you think Great Britain should leave the EU? Please feel free to share your thoughts in the comments below.

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