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Is the economic cost of Brexit too great?

With a British referendum looming over whether to leave the European Union, many in favor of staying cite cultural and altruistic reasons. But according to some, including Prime Minister David Cameron, Brexit would also have severe economic consequences, including massive trade revenue losses and brain drain driven by shifting job markets. Economics correspondent Paul Solman reports.

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  • JUDY WOODRUFF:

    But, first: It is less than a week until voters in the United Kingdom decide whether to stay or leave the European Union.

    Campaigning was suspended for a second straight day today because of the shooting death of a lawmaker.

    Last night, our economics correspondent, Paul Solman, explored the arguments in favor of Brexit, or exiting the E.U.

    Tonight, he hears the case for remaining. It's part of his series on Making Sense of financial news.

  • MICHAEL HESELTINE, Former Deputy Prime Minister, United Kingdom:

    This is a two-tiered debate, hearts and minds.

  • PAUL SOLMAN:

    At the Oxford Debate Union last week, the audience seemed to side with those in favor of the United Kingdom remaining in the European Union.

  • ALEX SALMOND, Scottish National Party MP:

    I have never heard the phrase workers' rights come out the mouth of any of the three of the leading protagonists.

  • MICHAEL HESELTINE:

    The man in the desert is sovereign, he is free, he can do whatever he likes, but he has no power. We're better together.

  • PAUL SOLMAN:

    And the remain sentiment certainly prevails at Mansfield College, where I'm spending the spring term.

  • LUCINDA RUMSEY, Senior Tutor, Mansfield College:

    We should definitely stay in Europe, absolutely, unambiguously.

  • PAUL SOLMAN:

    Lucinda Rumsey teaches old English literature.

  • LUCINDA RUMSEY:

    We should be in Europe, because it's good for Europe to have us in. And we should be contributing. We're a rich country, and we should be contributing and helping people.

  • PAUL SOLMAN:

    But why then has there been so much support for leaving? Well, one reason, Rumsey speculates:

  • LUCINDA RUMSEY:

    Lots of English people hate the French, hate the Germans since the — kind of since the wars, and so they kind of come back to that. They don't want to be in that club with those people. They just don't like them; they haven't liked them since the 13th century. They're not going to like them now.

  • PAUL SOLMAN:

    But put prejudice aside, says Paul Flather, who runs the Europaeum, an association of top European universities. The costs of leaving, he says, are simply too great.

  • PAUL FLATHER, Secretary-General, Europaeum:

    Every single financial economic report of the last two weeks have unanimously pointed out that we will have between 2 and 4 percent down on growth.

  • PAUL SOLMAN:

    Because of less trade?

  • PAUL FLATHER:

    Because of less trade, because of having to renegotiate agreements and not being able to sell things, of tariffs, losing markets. I think 40 percent of our exports go to Europe. Only 3 percent of theirs come to us.

  • PAUL SOLMAN:

    Economics, the key to conservative Prime Minister David Cameron's case for remain.

  • DAVID CAMERON, Prime Minister, United Kingdom:

    The shock to our economy after leaving Europe would tip the country into recession. This could be, for the first time in history, a recession brought on ourselves.

  • PAUL SOLMAN:

    And what about Mansfield's students?

  • ROSHAN FOROUHI, Student:

    I'm for remaining.

  • ELLA GRODZINSKI, Student:

    I think we should remain as well.

  • PETER BERGAMIN, Student:

    Remain.

  • LUKE CHARTERS-REID, Student:

    Yes, I think Britain should remain.

  • PAUL SOLMAN:

    Luke Charters-Reid came to Oxford from a low-status state school.

  • LUKE CHARTERS-REID:

    I think pretty much all the students I spoke to want to stay in Europe. I think it's better off for students who are thinking about the jobs for when we leave, and I think those jobs are more secure if we remain in Europe.

  • ELLA GRODZINSKI:

    The lack of confidence people would have of a Britain outside of Europe would itself cause losses in jobs.

  • PAUL SOLMAN:

    Ella Grodzinski says no one can predict what would happen.

  • ELLA GRODZINSKI:

    But it seems to me that the predictions of what will happen if we stay are much more solid and grounded than the predictions of what will happen if we leave.

  • PAUL SOLMAN:

    Roshan Forouhi is more emphatic.

  • ROSHAN FOROUHI:

    The world is going to carry on globalizing without us. For me personally, I would perceive the opportunities in the job markets to be more international, and I would probably leave Britain, whereas, if we remain, I have a strong case for remaining in Britain myself.

  • PAUL SOLMAN:

    So you think that there is a possibility of brain drain, essentially.?

  • ROSHAN FOROUHI:

    Absolutely. The job markets will shift abroad, more to the states, more to Germany, more to the emerging markets in Asia. And the prominence of London as a financial sector will massively decline if we leave.

  • PAUL SOLMAN:

    But wait a second. These kids go to Oxford. Their futures are assured. What about Britons who feel their wages, jobs and safety are threatened by immigration?

    Peter Bergamin hails from Canada.

  • PETER BERGAMIN:

    I think, when times get tight, people tend to look for easy answers or easy solutions. And this is exactly what's happening now. This is why you can see the moves towards these kind of populist leaders. And they approach things from, let's say, a primordial, nationalistic perspective, right?

    It's all about ethnicity on some level, Britishness on some level, which usually means a certain stereotype.

  • PAUL FLATHER:

    I sense that there's been a failure on the part of the governing elites. I don't think we have explained properly what changes are happening in the world and the benefits of being in a big club, in an international, much more interdependent, much more complicated world.

  • PAUL SOLMAN:

    Paul Flather has been a journalist, diplomat, and professor in England, but was raised in India.

  • PAUL FLATHER:

    I actually came as a migrant on a boat through the Suez Canal, but I'm so British that I sometimes put, you know, other Brits to shame, you know, the village green, the sound of cricket bats, and sunny teas and lovely sandwiches. But we can't pull up the drawbridge.

  • HELENA KENNEDY, Principal, Mansfield College:

    Listen, there is a kind of fiction around the business of sovereignty.

  • PAUL SOLMAN:

    Mansfield's head of college, Baroness Helena Kennedy, is also a human rights lawyer and a Labor party member of the House of Lords.

  • HELENA KENNEDY:

    being the sole operator, far from giving you this swaggering, you know, independence and freedom, actually makes you low on the list of people that nations want to do business with. They want to do business with bigger blocs.

    And a tiny, wee country like the U.K. isn't going to figure very well in all that.

  • PAUL SOLMAN:

    But in the end, says Kennedy, the remain case is bigger than just economics.

  • HELENA KENNEDY:

    Europe is a union of nations, making us close enough that we would never think of ever getting involved in conflict again, about coming together in order to defeat things like fascism, to coming together to prevent the kind of horror that I imagine could easily happen just now.

  • MICHAEL HESELTINE:

    So that the self-interests of this country, driven by people like you, is as important in the generations to come as it has been in the generations of which I have been privileged to be a part.

  • PAUL SOLMAN:

    So, finally, how did the vote go at the Oxford Debate Union?; 227 in favor of remaining, only 79 for Brexit.

    Next week, we will see if the rest of the country mirrors those results in any way at all.

    This is economics correspondent Paul Solman, reporting from Oxford, England.

  • JUDY WOODRUFF:

    At the moment, polls show more British voters are in favor of leaving the European Union. But the betting markets, which have often been more accurate, see it differently. There, the wagers are weighted toward Britain staying in.

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