Two Futures: What the EU Referendum means for the UK's prosperity

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The UK has a choice ahead of it – a choice between two futures. This choice is a rare opportunity for the British people to shape the UK for generations to come. We will all make our decisions based on a variety of complex considerations – such as the UK’s identity, security and prosperity. Business has a key role in this debate. In a campaign full of claim and counter claim, business can provide a clear, credible and rational voice on the implications for prosperity, jobs and living standards. It is critical that this voice is heard and this is the commitment the CBI has made: "to reflect the voice of our members in an open and balanced way". We have asked our members. 80% believe that being in the EU is better for their business. 5% would like to leave the EU. As with all other significant business polls the results are clear: being in the EU is better for our prosperity.
Our best future is inside the European Union. Our members tell us that the EU isn’t perfect but that the UK’s membership has benefited British business and the UK economy. Access to the single market, skills, global markets and increased investment has enabled businesses to grow, create more jobs and contribute to the UK’s prosperity. In 2014, the EU cost the UK £9.8 billion in direct budgetary contributions. But, the collective impact of the benefits of EU membership has made the average household in the UK around £2,700-3,300 better off and added £70-90 billion every year to the UK economy. This is a return of 9 to 1. The EU faces challenges but the Prime Minister’s renegotiation secured the UK’s special status inside the single market, protected it from further integration and put the EU on course to a more competitive future. By remaining in, we can unlock further benefits of EU membership for business – using our influence we can remove the final barriers to a single market in services and digital, industries which are of particular importance for the UK, and add 7% to UK GDP.
An uncertain future awaits outside the European Union. Leaving the EU will be a step into the unknown for the UK and cause a significant economic shock. It will cause unnecessary uncertainty and leave the UK economy smaller. The negotiation of a new relationship with the EU could take 10-15 years. In the worst case scenario this could leave businesses and consumers facing tariffs on exports to, and imports from, the EU. Even with a new relationship with the EU, the benefits of EU membership are likely to be impossible to replicate fully outside. The UK is already a highly competitive market as the second least regulated product market in the developed world. Depending on the pace of negotiations, there could be 550,000 – 950,000 fewer jobs and the average household in the UK could be £2100-3700 worse off in 2020.
Keywords: 
European Added Value, Internal Market, Economy, Growth, Employment, Competitiveness, Budget
Country of publication: 
United Kingdom
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Publication date: 
Friday, April 1, 2016
Number of pages: 
20