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Feature - What would happen if Britain left the EU - #brexit?

Ever since Britain joined the European Union in 1973 (back when it was called the 'European Community'), there have been murmurings of whether to withdraw.

In fact, just two years after first joining, Britain held a referendum on whether to stay within the Union, for which 66 per cent voted yes. This turned out to be the first national referendum of its kind - with the second taking place in 2011 and concerning the AV system of voting.

Ever since 1975, calls to leave the EU have surfaced intermittently, with some commanding more attention than others. Whilst none have yet resulted in a straight 'in-out' referendum, this is the outcome many have sought, looking at it as a way of gleaning whether the modern-day Brit is still keen on being a member.

If Britain were to leave the UK, however, it would become the first country to ever do so (although some dependent territories or semi-autonomous areas have done). Currently, no countries have positioned themselves to leave, despite small-scale rumblings across the Union. Of all these rumblings, though, few are more audible than those from the UK.

So why are the calls to leave so prevalent if no other member state has done so in the last forty years? Likewise, what do those looking to stay in the EU have to benefit from such as outcome?

What would happen if Britain left the EU?

The 'In' crowd

One of the biggest arguments for those who want to stay in the EU is that of free trade. Currently, Britain operates in a free trade environment unburdened by tariffs or heavy taxes - which could potentially harm total sales volumes. From a business perspective, this enables international trade without concerns over heavy fees or additional cost. This, of course, is on top of the existing concerns with which businesses already have to contend, such as safe cash management and having enough money to fulfil future orders whilst older ones are being invoiced.

This argument is also applicable to imports. A withdrawal from the EU (with subsequent rises in costs) could see Britain also react with a higher tax for foreign countries exporting to Britain, meaning that not only the selection of items such as cheese and wine would decrease, but the price could be set to rise.The knock-on effect could be a complete dismantling of the "cuisine culture" currently thriving in Britain where people are trying new and different items.

Travel and tourism is another sector noted by those looking to stay in the EU. Flights, for example, could be taxed more heavily on EU destinations, meaning that the days of the cheap package holiday could be ruined almost overnight. Sticking with foreign travel, it was EU lawmakers who clamped down on mobile providers charging consumers excessive roaming charges. Such an outcome would be significantly more difficult to achieve without the EU.

The issue of jobs is also a sizable one, with three million Brits thought to be directly employed as a result of the Union. These roles - and more - could be put at risk in the event of a withdrawal as foreign firms may move out of Britain for fear of higher costs or taxes. Furthermore, this may not only be true of EU firms, but American ones as well. Even though it has nothing to do with the EU, America could see Britain's withdrawal as putting it in a more precarious situation.

Lastly, the EU is Britain's single biggest export market, with over half of our goods (53 per cent) sold to member states. In fact, research from the National Institute of Economic and Social Research claimed that foreign direct investment would fall if Britain left the EU, which would result in GDP permanently being 2.25 per cent lower than it otherwise would.

'Out' for the count

Those, on the other hand, looking to leave the EU will often point to the cost that remaining a member will entail. Britain's net annual contribution to the EU is £4.6 billion - or £13 million a day. Whilst this figure keeps us in free trade, the 'out' camp has also claimed it goes to a number of different recipients which may not prove to be so beneficial for Britain, such as subsidising continental competitors of British farmers.

Sticking with free trade, it is said that the much-feared tariffs that would come from a withdrawal wouldn't be as bad as some suggest. This is because, despite being separated, the UK and EU would still be members of World Trade Organisation (WTO), which has the power to clamp down on any fees it deems to be excessive. Furthermore, the UK exists in an annual trade deficit with the EU of roughly £40 billion a year - meaning Europe sells to us more than we sell to it. In real terms, this would make foreign countries reluctant to lose such a big market, so taxes may not be high, if imposed at all. In addition, links with America could remain largely unchanged, even in the case of a full withdrawal.

Even those who may not want Britain to pull out altogether are still pressing for amendments, with David Cameron among them. Despite previously using his veto in Europe, the Prime Minister still believes the 1975 referendum and its landslide victory to remain in the EU reflects the views of today's Britain. Cameron had previously ruled out a straight in-out referendum, but has since claimed that Britain will hold a nationwide vote in 2017 on whether to renegotiate the terms of membership if he is re-elected in 2015.

Those looking for renegotiation will often cite success stories in Switzerland and Norway, who appear to have done just that to get the best of both worlds. Switzerland, for example, has renegotiated terms and now is widely seen to have the richest population in Europe. Norway, meanwhile, is a member of the EEA (European Economic Area) but not the full EU, which means it's allowed to participate in the single market, but doesn't have to contend with the political structures.

No matter which way the public votes in the case of a referendum, no-one would really know exactly what the outcome would be. Despite member states being given the right to withdraw, the fact that no one has exercised this right means it's unchartered territory.

What could be likely is that a deal would be done between the UK and EU that may negate every single one of the forecasts...

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