The media elites are somewhat right that the Brexit victory was about the UK voters’ disdain for globalization, immigration, and lost pride, but the real cause of the British asking for an EU divorce was the $46.6 billion in hard costs for intangible benefits.
Open Europe is a non-partisan think tank with offices in London and Brussels that produces an annual report measuring the cost burden of 40,000 EU-derived legal acts, 15,000 Court verdicts and 62,000 international standards on the United Kingdom.
Their 2015 report for the “Top 100” regulations estimated the financial burden on the UK economy at $46.6 billion. To put that drain on the economy in perspective, the top 100 EU regulations cost more than the $37.8 billion in local property taxes, called “Council Tax,” paid by British citizens to the UK Treasury last year.
The top five costliest EU-derived regulations in force in the UK were:
1) UK Renewable Energy Strategy cost: 6.6 billion a year;
2) Capital Requirement Directive IV on financial institutions: $5.9 billion a year;
3) Working Time Directive on labor standards: $5.9 billion a year;
4) EU Climate and Energy Package mandates: $4.8 billion a year; and
5) Temporary Agency Workers Directive on welfare: $3.0 billion a year
EU bureaucrats cleverly claim that the annual economic benefits to British citizens as members of the EU are $82 billion. But $65.2 billion of the so-called benefits stem from three unmeasurable and vastly over-stated items.
As an example, the EU bureaucracy claims that the UK receives $29 billion in “value” for participating in a global pact to reduce carbon emissions. But that falsely assumes that the Paris United Nations Framework on Climate Control treaty was fully implemented by all 196 participating countries with immediate mandated curbs on emissions, increases in renewable energy, and/or reductions in deforestation that will achieve a global warming temperature reduction of 2.7 to 3.5 degrees centigrade. The final Paris agreement is only “voluntary” and exempts China and India, the worst polluters, for decades.
The UK Parliament’s non-partisan “Impact Assessments” (IA) analysis of the EU’s regulations revealed that Prime Minister David Cameron’s Administration signed off on at least 26 of the top 100 EU-derived regulations, despite the IA explicitly stating that the financial costs outweighed the estimated benefits.
According to Open Europe: “Another 31 of the most costly EU-derived regulations have still not been quantified. Between the over-stated benefits, the regulations that come with a net cost and the ones with quantified benefits, it remains unclear how many of these EU-derived rules actually come with a net benefit in reality.”
Although Open Europe’s analysis found the cost of membership in the EU far outdistanced the tangible benefits, the organization does believe there is substantial value in free trade between Britain and the other 27 EU members.
Open Europe suggests that with the approval of the Brexit, the UK should work to negotiate a type of trading and cooperation relationship called the “Norway Option.”
After the Nordic country voted down a 1972 and a 1994 referendum to join the EU, Norway negotiated a semi-detached relationship with the EU through its membership of the European Economic Area.
The EEA agreement allows free movement of persons, goods, services and capital within the internal market of the European Union. The only supposed “cost” if the UK negotiates a similar relationship is that British will not be able to vote on the onerous Rules written by EU bureaucrats and hated by a vast majority of the UK public.