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May 5, 2016

Brexit’s balance sheet

By Vincent Huck

The Institute of Chartered Accountants of Scotland (ICAS) has published a report on the economic and fiscal status of UK/EU relationship in order to inform the debate ahead of 23 June Brexit referendum.

"The cost of the UK Contribution to EU Budget (2015) was £8.5bn (£17.8bn gross less rebate of £4.9bn and public sector receipts to UK of £4.4bn). This represents 0.5% of the UK’s estimated total GDP of £1.79 trillion for 2015," ICAS executive director of technical policy David Wood commented on the release of the paper. "This illustrates that the fiscal aspect of the UK’s relationship with the EU, while important, is dwarfed by the significance of the UK/EU trading relationship, and regardless of the outcome of the vote it is critical that this is maintained."

ICAS paper, UK Membership of the EU – Putting Into Perspective, highlights a series of key facts and figures on the UK’s membership of the EU. For example, the paper reveals a net annual cost of EU membership at around £8.5bn per annum, representing less than 3% of the average income tax paid per person in the UK.

However the paper also highlights the commercial benefits of membership with 44% of UK exports (£223bn or $323.2bn) going to other EU countries, while 53% (£291bn of the UK@s imports come from the rest of the EU.

ICAS’s paper also reveals interesting figures with regards to the labour market. More than 3m jbs in the UK are linked to exports to the rest of the EU, representing 10% of the UK workforce, according to the paper. Moreover 2m nationals from other EU countries work in the UK, while 1.26m UK citizens live in other EU member states.

"ICAS is not taking a formal position on whether the UK should leave, or remain in the EU and notes that there are fundamental issues of sovereignty at the heart of the debate," the professional body said in a statement. "It asks voters to note that there is a balance to be drawn and judgments to be made on the perceived net benefits or otherwise of remaining in the EU, as against a future outside the EU."

Wood said that it was important for the electorate to be able to make an inform decision. "There are currently considerable claims and counter claims from both camps. The aim of this paper is to focus on the facts to the extent that they are available."One of the challenges with the figures is that we know more about the status quo than what those figures would be if we were to leave the EU, Wood continued. "However, this paper sets out to take a fair path in balancing what we know about both scenarios."

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