I can send it to the Chairman. It is not huge.
The other argument is that immigration has given rise to a huge flow of people into the United Kingdom, which has damaged the economy and resulted in pressure on the health and social services. That claim is also in dispute because most of the immigrants from the new accession states have contributed to output and output has been higher as a consequence. The number of welfare immigrants is very small. It is not in reality a big issue. The political process is different. It will make a lot of comment about these things even though they do not stand up.
If the UK does leave it is not just a question of leaving, it will want access to those markets. It cannot just leave and say that is the end. It will want to have a relationship with the EU. We have examples of only a few countries, Norway and Switzerland being the prime ones, that are outside the EU but have agreements with it. In effect both of these countries must meet EU rules if trade is to take place. The UK will find itself in exactly the same position. It will not be allowed to trade advantageously because it has managed to get rid of rules. Leaving will not confer a competitive advantage in the short term.
In terms of the financial services sector, the City of London will find it is just as influenced by the rules that will be developed within the EU with the one proviso, that it will have no input into those rules. If it leaves and new rules for the financial sector are determined the UK will be obliged to abide by those but will find that it has no say in their operation. At the moment it does have a say. This is very important and not clearly understood in Britain. I think people there believe they can leave and behave as they want but that is not the case.
It is true that the UK contribution will go down. Interestingly enough, both Norway and Switzerland are obliged to make a contribution towards the economic development of the new accession states that need funds. The United Kingdom will almost certainly be required to do so. In the case of Switzerland, it amounts to about 55% of the contribution it would make if it was a member of the European Union. That is kind of interesting and suggests that Britain's going will not save that much money in terms of payments.
There is also the question of CAP which I might say a bit more about later. Britain must think about the reduction of CAP payments because the burden of adjustment will fall on the British Government. Therefore, it would save money directly but indirectly it would have to support agriculture unless it decides to do something else.
It is almost certain there would be less immigration. I have read some material which suggests that if Britain does leave there will have to be a repatriation of people. That seems highly unlikely because I think the people who are in Britain will remain.
The third issue I want to talk about is how the UK economy will perform. If the referendum is held in 2017 then we are faced with two years of uncertainty about the outcome and uncertainty is detrimental to investment. The last referendum held in Britain led to a reduction in investment and a capital flight because of the fear that Britain would not be a member of the European Union.
There is no doubt that the UK economy's performance would deteriorate in the short to medium term. That is almost inevitable because of the uncertainty. Britain would also have to negotiate a trade deal with the European Union which may not be favourable. It will also find, when world trade is being discussed, that it will be by the European Union, the US, China, India and Japan. The UK will be peripheral to that discussion because it is so small relative to everybody else and Britain will find itself excluded from negotiations. I also suspect that the city of London will lose its relative position. It is not in the eurozone at the moment. Due to the UK not being in the eurozone it is peripheral and it will become more peripheral if it is out, I believe. The UK economy is likely to suffer a lower growth path in the long run.
The idea that it can abolish red tape is fanciful. A lot of the red tape, while it might be burdensome for companies, is necessary and would be introduced anyway and it is not just imposed by Europe.
What are the implications for Ireland? The UK economy is very important for Ireland and one cannot just get that by looking at trade. One third of food exports from Ireland go to the United Kingdom which, to my mind, is the key to it all. A lot of the rest of the exports would be chemicals and pharmaceuticals which are produced by multinational companies and they will go anyway. The food sector could be affected.
Why is the UK so important? We have two episodes that show us how important the UK is to us and one was the mid-1980s. We began to recover from the recession in the mid-1980s due to the growth in the UK economy following the loss and boom. I wrote a paper on this issue a long time ago which showed that the timing of our growth in exports was directly related to the growth of the UK economy and led our recovery. It took a good few years before it was evident that a recovery was in place. In the same way, the slow recovery that we are experiencing now began last year and is related to the growth in the UK and US economies. They are the two factors that have driven our recovery, as well as some domestic foreign direct investment. For us, the performance of the UK economy is critical. If the UK weakens then it will lead to a weakening of the growth of this economy and I do not see how such an outcome could be avoided.
For us, the important things will be trade, foreign direct investment and tourism. In terms of trade, the effect will be weaker.
There is no likelihood that FDI that goes to the UK will come to Ireland. Most of the companies go to the UK because the market is big but they also see access to Europe as important. Car manufacturers such as Toyota, Nissan and Honda are located there. If they lost that big market and European springboard, this investment would cease and there would be capital flight. The companies will not necessarily come here. I could not imagine companies such as these coming here because our market is small and, therefore, I do not see us gaining much from that.
With regard to tourism, it is inevitable that a weaker UK economy will lead to weaker tourism. We experienced this during the current recession.
Agriculture matters very much to us but it is not clear what would happen in the UK. It would lose the transfers under the CAP and the UK Government would have to make a decision on whether it would support agriculture. The amounts are huge. I saw data that suggest that over the next five years, almost Stg£20 billion will go into agriculture through the CAP. That money would not be available and, therefore, the UK Government would have to make a decision on supporting agriculture. The worst scenario from our point of view would be if the Government resorted to the same policies it had prior to entry into the EU when the UK had a deficiency payment system under which lower prices were guaranteed to farmers but incomes were maintained through additional payments. The effect of that was to reduce the price of meat and dairy products, in particular. Some members may recall that prior to joining the EU, Ireland subsidised the export of butter to the UK because of that deficiency payment system. We would not want to go back to that but that is a big risk for us, as we would find it hard to sell in the UK.
The milk quota system was a big barrier to the growth of the agriculture industry. It conferred income gains to people in the short run but it meant that output was constrained for the past 35 years. That constraint on milk output meant that the agriculture industry found it hard to develop. With the lifting of the quota, output will increase by between 40% and 50%. The producers and processors have geared up for that but our main market is still the UK and we could easily find that market distorted, which is a major risk.
The risks are high if the UK leaves. There could also be issues with the Common Fisheries Policy, CFP. The policy would cease because from the Uk's point of view, it would re-establish control over its fisheries.
