Inward investment was always predicted to slow in the run-up to the vote, due to the uncertainty of the outcome and its consequences: that’s what happened in before the Scottish independence referendum in 2014.
In the long term, there are diverging views: pro-Europeans think the UK’s status as one of the world’s biggest financial centres will be diminished if it is no longer seen as a gateway to the EU for the likes of US banks, while Brexit campaigners suggest that, free from EU rules a regulations, Britain could reinvent itself as a Singapore-style supercharged economy.
Fears that car-makers could scale back or even end production in the UK if vehicles could no longer be exported tax-free to Europe were underlined by BMW’s decision to remind its UK employees at Rolls-Royce and Mini of the “significant benefit” EU membership confers. Likewise, Business for New Europe said tax revenues would drop if companies that do large amounts of business with Europe – particularly banks – moved their headquarters back into the EU.
Barclays, however, put forward a worst-case scenario that might have benefitted the Outers. It said the departure of one of the EU’s most powerful economies would hit its finances and boost populist anti-EU movements in other countries. This would open a “Pandora’s box”, said the Daily Telegraph, which could lead to the “collapse of the European project”.
The UK would then be seen as a safe haven from those risks, attracting investors, boosting the pound and reducing the risk that Scotland would “leave the relative safety of the UK for an increasingly uncertain EU”.
For Brexiters, sovereignty was seen as a simple win: few disagree that EU membership involves giving up some control over our own affairs.
Labour MP Kate Hoey says the EU is “an attempt to replace the democratic power of the people with a permanent administration in the interests of big business”. Those on the right of the Conservative party may disagree with her emphasis, but they agree that EU institutions have drained power from the British Parliament.
“The trouble is that most of us have no clue as to how the Brussels monolith works, or who’s in charge,” said Stay or Go, the Connell Guide to the EU referendum. But, it said, we have only ourselves to blame. “We’ve made it that way” because too many of us “can’t be bothered to vote” in European elections.
For those in the Remain camp, EU membership involved a worthwhile trade of sovereignty for influence: in return for agreeing to abide by EU rules, Britain had a seat around the table at which they are set – and, say campaigners, its voice was amplified on the world stage as a result.
“The truth is that pulling up the drawbridge and quitting the EU will not enhance our national sovereignty,” warned Labour’s Hilary Benn, who was sacked as shadow foreign secretary this week after complaining about Jeremy Corbyn’s leadership. “All it would do is to weaken it by taking away our power to influence events in an ever more complex and interdependent world.”
Nor, said Remainers, will UK sovereignty be absolute out of the EU: the British government would still be bound by membership of Nato, the UN, the World Trade Organisation, and various treaties and agreements with other nations.
Under EU law, Britain cannot prevent anyone from another member state coming to live in the country – while Britons benefit from an equivalent right to live and work anywhere else in the EU. The result has been a huge increase in immigration into Britain, particularly from eastern and southern Europe.
According to the Office for National Statistics, there are 942,000 eastern Europeans, Romanians and Bulgarians working in the UK, along with 791,000 western Europeans – and 2.93m workers from outside the EU. China and India are the biggest source of foreign workers in the UK.
Remainers say that, while the recent pace of immigration has led to some difficulties with housing and service provision, the net effect has been overwhelmingly positive. By contrast, Farage insisted immigration should be cut dramatically, and that leaving the EU was the only way to “regain control of our borders”. Other pro-Brexit campaigners would not necessarily reduce immigration, but said that it should be up to the British Government to set the rules.
Cameron claimed that the concessions he won during the renegotiation of Britain’s EU membership would reduce immigration as new arrivals will receive a lower rate of child benefit.
The effect of leaving the EU on British jobs depends on a complex interplay of the factors above: trade, investment and immigration.
Pro-EU campaigners suggested that three million jobs could be lost if Britain goes it alone. However, while “figures from the early 2000s suggest around three million jobs are linked to trade with the European Union,” says Full Fact, “they don’t say they are dependent on the UK being an EU member.”
If trade and investment falls now the UK has voted for Brexit, then some of these jobs would be lost – but if they rose, then new jobs would be created.
A drop in immigration would, all else being equal, mean more jobs for the people who remained, but labour shortages could also hold back the economy, reducing its potential for growth.
Stuart Rose, former Marks & Spencer chief executive and a prominent pro-EU campaigner, conceded recently that wages may rise if Britain leaves – which would be good for workers, but less so for their employers.
Writing for the London School of Economics, Professor Adrian Favell said limiting freedom of movement would deter the “brightest and the best” of the continent from coming to Britain and reduce the pool of candidates employers can choose from.
Free movement of people across the EU also opened up job opportunities for British workers seeking to work elsewhere in Europe.
Britain’s place in the world
For Outers, leaving the EU will allow Britain to re-establish itself as a truly independent nation with connections to the rest of the world. But Remainers fear that Brexit will result in the country giving up its influence in Europe, turning back the clock and retreating from the global power networks of the 21st century.
Brexit would bring some clear-cut advantages, said The Economist before the referendum. The UK “would regain control over fishing rights around its coast”, for example. But it concluded that the most likely outcome would be that Britain would find itself “a scratchy outsider with somewhat limited access to the single market, almost no influence and few friends”.
The UK will remain a member of Nato and the UN, but it may be regarded as a less useful partner by its key ally, the US. The American government said it feared that the “EU referendum is a dangerous gamble that could unravel with disastrous consequences for the entire continent”.