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Here’s what is at stake in the battle over Brexit

Britain EU Referendum Updated: Jun 21, 2016 14:27 IST
Prasun Sonwalkar
Prasun Sonwalkar
Hindustan Times
EU referendum

In this file photo, Britain's Prime Minister David Cameron can be seen speaking during a service of thanksgiving for Queen Elizabeth's 90th birthday at St Paul's Cathedral in London.(Reuters)

Britain is so enmeshed in the European Union that it will take years to extricate itself if the vote in Thursday’s referendum is to leave the 28-nation bloc, but at the heart of the acrimonious campaign are the issues of immigration and economy.

Britain has had an uneasy relationship with the EU project since its origins in the early 1950s as a counter to nationalism that ripped through the continent after World War II.

The unease has increased since 1975, when, despite considerable tensions in Harold Wilson’s ruling Labour party, Britain voted in a referendum to remain in the European Economic Community. By the early 2010s, unease gave way to increasing ennui due to EU expansion.

Read: France warns UK it will be inflexible over Brexit

In 2004, ten eastern European countries joined the EU, providing “freedom of movement” to their citizens across the continent. In 2007, Romania and Bulgaria too joined. Large-scale migration from these countries changed the face of towns .

Prime Minister David Cameron announced in 2013 that another “In/Out” referendum on membership of the EU would be held if the Conservative Party won the 2015 elections.

The EU issues guidelines and rules for almost every area of public life, prompting anger in Britain against unelected representatives based in Brussels. National sovereignty is seen to be diminished, while the EU is perceived to be taking the form of a “super-state”.

Despite all the news reports, hours of television coverage, leaflets, studies and analyses, no one quite has an inkling what Britain will wake up to on June 24.

Implications for India

India has significant trade – goods and services – exposure to both Britain and the EU.

The finance ministry and the Reserve Bank of India are reported to be keeping a close watch on the referendum and keeping options open in the event of a “leave” vote.

But the main focus is Indian investment in UK and the future of nearly 800 Indian companies that use London and Britain as a base to operate in the European market.

India is the third largest investor in Britain and the single European market allows free movement of goods, services, capital and workers.

The question on the ballot paper

Should the United Kingdom remain a member of the European Union or leave the 28-nation bloc?


  • EU immigrants pay more in taxes than they claim from Britain’s state benefits
  • The deal secured by Cameron from Brussels means that state benefits for new EU migrant workers will be limited for the first four years
  • If Britain is outside the EU and wants to access the 500-million strong single market, it will have to accept free movement of people
  • Immigration cannot be controlled while remaining within the EU
  • Schools, hospitals and other public services face strain due to increasing number of migrants from within the EU
  • A points-based system currently applicable for Indian and other non-EU citizens should be applied to migrants from within the EU


  • Leaving EU will shrink Britain’s economy and slow growth, forcing cuts in public funding
  • In terms of export share, Britain is more dependent on rest of EU than vice-versa
  • Britain will still need to implement EU rules to retain access to the 500 million-strong European single market
  • Britain outside would no longer have to follow EU regulation
  • Trade with EU countries would continue because Britain imports more from them than export to them
  • It would be possible to negotiate trade deals with India and other growing economies


Read: IMF fires Brexit warning as Putin cites Cameron EU ‘blackmail’