The United Kingdom’s ‘Brexit’ referendum – an Irish engineer’s perspective
31 May 2016
On 23 June this year, the United Kingdom will vote whether to remain in the European Union or not. What impact this will be have on both domestic and international affairs at this stage is unclear. However, as Ireland and the UK both joined the EU in 1973, the perspective of Irish voters living in the UK will be quite unique.
There are approximately 500,000 Irish living in the UK, with the vast majority eligible to vote in elections and referendums. While it is not a significantly large demographic in the UK, it is an opportunity as other foreign nationals in the UK are not eligible to cast their votes next month.
So, what has the EU done for Britain exactly? While it has helped Ireland with, for example, contributions to National Development Plans, agriculture and rural development, are there any similar benefits for the UK?
Put simply, the UK contributes approximately €12 billion into the EU budget (totalling about € 103 billion) and receives €6.3 billion. This contribution accounts for 0.64% of its GDP. This metric applies to each other country so, correspondingly, Germany and France contribute €18-19 billion each, while smaller countries such as Denmark and Ireland will contribute about €1.5 to €2 billion each. All of these countries’ contributions range from 0.75% to 0.91% of their GDPs. This ensures that each country will give an equal proportion of its income to the budget, rather than a set contribution.
The EU aims to contribute its funding towards administration, international aid, agriculture/environment, asylum/employment services and science/business development. Much of this spending is spent on EU members who require further development, while the larger countries will receive less than they contribute.
However, it is also an intention that this shortfall is made up by access to international trade and services agreements that being a member that the EU is a key benefit. Thus, the economies of France, Germany and the UK have large economies to service so these international agreements help greatly to furnish this. More information can be found at the EU budget website.
As shown above, the majority of spend is on agriculture (63%), with a further 23% on jobs and growth. The large part of agriculture is part of an EU-member-wide policy to make agriculture production more efficient across the continent and increase global competitiveness. The current average agriculture spend is at 40%, but it is expected this will drop below 33% from 2020 onwards and further efficiencies are identified.
It is also worth noting that the EU has helped the UK deliver key projects to boost its local economy and job creation. A recent example of this is Crossrail. This scheme was effectively allowed to proceed to design and construction once the European Investment Bank agreed a loan of £1 billion to the project. Since then, the scheme has undertaken immense work in that time with the scheduled open date from 2017. Many Irish engineers have worked on this scheme, utilising a variety of disciplines.
Irish Government position on the EU
The following is extracted from Irish Embassy webpage:
1. What is the Irish Government’s position on the upcoming referendum in the UK?
The Irish Government would like the UK to remain a member of a reformed EU. Our relationship with the UK is closer than with any other Member State. We believe Ireland has a unique perspective and interest in the outcome of the referendum: as a neighbour sharing a land border; as a partner with the UK in transforming British-Irish relations in recent years; and as a facilitator and co-guarantor, with the UK, of successive agreements aimed at securing peace and prosperity in Northern Ireland. But we fully respect that, first and foremost, this is a decision for UK voters to make on 23 June.
2. Why does the Government want the UK to remain in the EU?
Economy: Studies show there would be an adverse impact on both the British economy and in turn on the Irish economy if the UK leaves the EU. €1.2 billion in goods and services are traded every week between the UK and Ireland. Anything that might get in the way of seamless flows of goods, services, capital and people between our two countries would not be welcome.
Northern Ireland: The EU has been an important factor in sustaining peace and prosperity in Northern Ireland and in providing important opportunities in which nationalist and unionist representatives can work together. The EU also provides a broader context for relations on these islands. Much-needed funding, including through programmes like PEACE and INTERREG, will provide almost €3.0 billion in the six years to 2020. North-South co-operation is so much easier when both jurisdictions are members of the same Union.
Common Travel Area: The Common Travel Area which has been in existence since Irish Independence is an important feature of the close relationship between our two countries. It allows free movement between Ireland and the UK and ensures that Irish citizens and British citizens are treated on a par, with regard to access to social welfare. It is particularly important with regard to preserving the benefits of ease of travel on the island of Ireland.
EU: The UK is an important voice at the table in Brussels. We want that voice to continue being heard. We are allies on many of the key issues facing the EU, above all on economic issues. We want to ensure that the EU is competitive, with a fully functioning single market, including in the digital area. We want a sustained focus on completing trade agreements with global partners. The withdrawal of the UK would shift the balance of opinion within the Union on these issues. More broadly, it would weaken the Union in substance and reputationally at a time of serious challenges.
IBEC has also carried out analysis that suggests the impacts can be split into six main categories of key risks that Brexit is likely to pose to the Irish economy:
Exchange rate: This is the most immediate risk. In the aftermath of a possible Brexit the sterling/euro exchange rate is likely to move toward or above parity. This would leave Irish firms selling into the UK market 30% less competitive by June 2016 than they were in January 2016 through exchange rate movements alone.
Trade: Any new UK-EU arrangements may undermine free trade. An agreement would take at least two years, but is likely to take much longer. This would bring a level of uncertainty for Irish firms exporting to Britain in the short term impacting on employment, investment and export plans. Ireland’s investment-friendly business model is particularly exposed.
Competitiveness and investment: There are potential opportunities for Ireland from a Brexit. UK-based corporates and financial sector firms will need a home within the European single market. Dublin may be in a prime position to benefit. However, Brexit would also mean that the UK would no longer be subject to state aid rules when competing for FDI or encouraging indigenous business. The UK government might introduce enhanced business and investment supports in order to prevent capital flight and attract FDI.
Longer-term impacts may occur in the form of regulator divergence: firms operating within both the EU and UK markets would also have to deal with the prospect of regulatory divergence over the years ahead. For services companies operating in both jurisdictions the impacts are potentially greater as it is unlikely the UK would have to abide by common standards in their domestic services market. Energy Security may be impacted by an integrated energy market which will mean that Ireland is exposed to UK Changes. Finally freedom of movement for Irish people to the UK could be restricted.
The Engineers Ireland GB Region hopes this is of use to the GB Region members and any further information can be sought from either the Irish embassy in London or the foreign office in Dublin.
The registration deadline to vote is 7 June. Voting day is 23 June.
Hugh McCarthy, MIEI CIHT, chartered engineer, is chair of the Engineers Ireland GB Regionhttp://www.engineersjournal.ie/2016/05/31/ireland-brexit-referendum-an-irish-perspective/http://www.engineersjournal.ie/wp-content/uploads/2016/05/brexit-1-1024x678.jpghttp://www.engineersjournal.ie/wp-content/uploads/2016/05/brexit-1-300x300.jpgCivilEuropean Union,UK