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Will Brexit have positive or negative impact on the UK?

By:

Peilu Zhao

Shahid Naseem
Introduction

The British exit from the European Union, professed as ‘Brexit’, will have intensive consequences. British

voted with 52% to 48% in favour of Brexit. Right after the referendum, The UK stock market went down

drastically. The sterling pound was lowest in the history against dollar and euro. The UK’s decision of leaving

the EU not only had shaken their economy but also left aftershocks on other EU member countries.

In this argumentative essay, we will argue with the British point of view if the decision of leaving the EU is

beneficial for their country or not.

Economic disaster for scientific research and universities

The population of UK is around 0.88% (Worldometersof, 2017; Rankin, 2017) of the whole world. The

economist statistics suggest that more than 10% of the British universities’ funding were from the EU from

2006 to 2015. The Brexit will become a big problem for all native scientists and researchers. (LiGang, 2013)

Royal society released a series of a report which named “the British scientific research and the European

Union” in 2016. It showed from 2007 to 2013, UK offered funding about 5.4 billion euro to support science,

but UK got 8.8 billion euro as research funding from the European Union who was second level of total

funding just after Germany.

At present, 16% of researchers who worked in UK are from other EU countries, and more than 50%

researchers published papers in 2015 was multinational co-authored papers. (LiGang, 2013) In this opinion,

Brexit may cause damage in the liquidity of researchers between UK and international community.

According to BBC (2016), UK only get 3% of the total budget of the EU Research and Development. The UK can

increase this funding for science and education by saving the EU membership funding. Statistics from the

European Parliament website shows that in 2015, the UK received €7.46 billion in EU funding in total. On the
other hand, in the same year the UK contributed €18.21 billion to the EU budget (European Parliament ,

2015). These statistics demonstrates that the UK will have more money to spend on the universities.

Brexit does not mean that the only British can live and work in the UK. In March 2017, UK’s Prime Minister

Theresa May issued a statement saying that no EU citizen currently in the UK will be asked to leave. The EU

citizens who have spent less than 5 years in the UK, can get UK resident permit after Brexit. (Mullin & Harper,

2017). Hence, Brexit will not impact the situation of the researchers already living in the UK.

There are 49% of UK nationals, 36% from non EU countries and 14% researchers are from EU member

countries (The Royal Soceity, 2016). These statitics show that the doors for the researchers will remain same

because they get the scholarships and fundings based on their work, not just only based on their nationality.

Lose a big EU market to trade

A big part of British economy dependents on external trade, which is around 40%. The proportion of total

foreign trade between UK and EU were more than 50% from 2004 to 2012.

In 2015, the amount of exports was £223.3 billion, and the amount of imports was £291.1 billion. Research

shows that the top 10 countries who have economic trade with UK, all of them are EU member except United

Sates and China. (Digital, 2016)

Besides foreign trade, there are also many various investments between UK and EU. The total amount of

investment from EU to UK was calculated around £496 billion and the total amount of investment from UK to

EU reached up £404 billion. (Cathleen Cimino-Isaacs, 2016)

After exiting EU, UK would lose economic benefits. For instance, If the tariff preference of clothing return to

before, the price of all European clothing markets would improve 12%. This moment, both sides of people’s

daily life would be given a wrong effect. (LiGang, 2013; Migration watch UK, n.d.)
It is true that the British economy faced a big shock after the Brexit referendum and still having difficulties

with it. Sterling pound was at its lowest and British stocks lost £125 billion after Brexit (Anderson, 2016). But

this situation was at its worse right after the Brexit result. A recent study done by PwC (2017), shows that the

Brexit will not affect the UK economy in long term future. Brexit will be slightly beyond a bump for the UK

economy. Their forecast for the UK economy that it will drop only one spot from 9th to 10th in terms of

purchasing power parity by 2050. On the other hand, France will drop to 12th place from 10th and Germany

will drop to 9th place from 5th by 2050. The UK is projected to be the fastest growing economy of G7 with the

average annual growth of 1,9% by 2050. This shows that the Brexit will not impact the British economy on

long run, but it will improve. The actual growth rate will be depending on the negotiations with the EU and

how they will get the best out of it.

More funds for UK in terms of health and social services

Only in 2016 net migration to the UK falls to +248,000 (BBC, 2017), who use up much more in public benefits

than they pay in taxes. Gap Between Migrant Contribution and Migrant Cost to UK is £17 Billion (Slack, 2016).

Due to EU laws, UK cannot control the immigrants from entering the country, especially from the other EU

countries. Increase in number of immigrants from EU, leads to more spending of their budgets on immigrants

and the government left with less money for their own citizens (Slack, 2016). This is the reason why National

Health Service is getting more expensive every year and the government is forced to cut down the social

benefits.

After the Brexit, UK will not be bound to accept all the immigrants from EU, as well as the immigrants they

have to accept under the EU laws. They do not have to provide social benefits to every EU citizens.

According to the unified big market rules, capital can flow freely between members of the European Union.
This means London as a central position of international finance, and many foreign investors are also

interested in the European market. Thus, most of them will choose London as destination to operate

sub-company.

However, the exiting of UK will limit and be strict for foreign people. Thereby, the mobility of labour force

between UK and European countries is restricted, the millions of British and some industries will be shocked.

In the end of 2016, the number of population living in the UK from other EU countries reached 3.6 million,

and about 1.2 million British lived in other EU countries. It would bring a bad effect on their work and life if

deported people.

The reason why many people voted UK should exit EU is because more migrants coming lead to less job

getting for native people. However, a data shows that two thirds of 3.6 million from EU people have job. It

means they also are a big group of consumption for goods or services in UK, and they can improve the

demand of employment as a virtuous circle.

Conclusion

Brexit already have shown its impacts on the UK and EU. There are two sides of this decision. If we look from

British prospective, Brexit already had shaken the country but in long term future, it will boost their living and

economy. The Brexit will be a small collide and the UK will gain its spot of the world fastest growing

developed economy in decades.


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