As a contribution to the debate, the CBI has undertaken a literature review of credible academic studies into the impact of the UK’s membership of the EU on the UK economy. This review was first undertaken in 2013, and has recently been updated to take account of new studies in the past two years.
The results are intended to be helpful to businesses, opinion formers and the general public who may not easily be able to access and assess all the available academic studies, which are contained in diverse publications and can be hard to compare.
The CBI is today publishing the findings of its most recent literature review, covering the period to the end of 2015. The key points are:
- A total of 12 studies, containing 14 estimates, have been reviewed, including five new studies since the last review in 2013.
- Seven of these estimates have been considered credible for the purposes of the CBI’s review, based on two main criteria : first, the study is based on well-sourced data; and, second, it employs a rigorous methodology with plausible assumptions
- The majority of these estimates, five out of seven, conclude that the long-term economic benefits of the UK’s membership have outweighed the costs. The estimates range from -2.5% at the most negative end to +9.5% of GDP at the most positive.
- Most of the studies focus on different types of impact on the UK economy, including access to the Single Market, effect on Foreign Direct Investment, and the costs of the UK’s budgetary contribution and additional regulation. The CBI has derived an estimate of the impact of each of these channels from the studies reviewed
- The mid-range estimate of the overall impact on the UK economy of EU membership is around 4-5% of GDP, or £2,700 - £3,300 per household. This estimate has not changed from that published by the CBI in 2013.
List of studies consulted
- BIS (2010) ‘The UK and the Single Market’, Trade and Investment Analytical Papers Topic 4 of 18
- Campos, N.F. & Coricelli, F. & Moretti, L., (2014) ‘Economic Growth and Political Integration: Estimating the Benefits from Membership in the European Union Using the Synthetic Counterfactuals Method’, IZA Discussion Papers 8162, Institute for the Study of Labor
- Civitas (2004) ‘A Cost Too Far? An analysis of the net economic costs and benefits for the UK of EU membership’, available athttp://www.civitas.org.uk/pdf/cs37.pdf
- Gasiorek, M., Smith, A., & Venables, A.J. (2002) ‘The Accession of the UK to the EC: A Welfare Analysis’, Journal of Common Market Studies v40, n3, September, pp. 425-47.
- Ilzkovitz, F., A. Dierx, V. Kovacs, and N. Sousa (2007) ‘Steps Towards a Deeper Economic Integration: The Internal Market in the 21st Century’, European Economy, Economic Papers No. 271, European Commission
- Lyons, G. (2014) ‘The Europe Report: A Win-Win Situation’, GLA
- Mansfield, I. (2014) ‘A Blueprint for Britain: Openness not Isolation’, Winner, IEA Brexit Prize 2014, available here
- Minford, A. (2006) ‘Measuring the Economic Costs and Benefits of the EU’, Open Economies Review 17 (4-5) , pp. 509-524.
- Open Europe (2015) ‘What if..? The Consequences, challenges & opportunities facing Britain outside the EU’, available at http://openeurope.org.uk/intelligence/britain-and-the-eu/what-if-there-were-a-brexit/
- Ottavio, G., Pessoa, J. P., Sampson, T., Van Reenen, J., & Vaitilingam, R. (2014) ‘Brexit or fixit? The trade and welfare effects of leaving the European Union’, London School of Economics/Centre for Economic Performance.
- Pain, N. and Young, G., (2004) ‘The macroeconomic impact of UK withdrawal from the EU’, Economic Modelling, 21 (2004), pp. 387-408.
- UKIP/Congdon, T. (2012) “How much does the European Union cost Britain”, available at http://www.timcongdon4ukip.com/docs/UKIP%20Cost%20of%20the%20EU.pdf