Disadvantages of European Union include:
1. Common Agricultural Policy.
The CAP has been reformed, but arguably it still is an inefficient method of subsidising the declining agricultural sector.
For a long time the EU has maintained target prices for agricultural goods above the market price; this has various disadvantages:
- Higher prices for consumers
- Higher Tariffs on Imports required, this has been a stumbling block to trade
- High prices encouraged oversupply. EU had to buy surplus that was created.
- Expensive for EU Taxpayer. - CAP budget accounts for nearly 50% of total EU budget. It costs UK £14 billion per year.
The UK has a relatively small but efficient agricultural sector, therefore it benefits the least from CAP.
2. High levels of Bureaucracy and Administration within the EU.
The Bruges Group, a Eurosceptic think-tank, estimated that the combined direct and indirect costs in 2007 will amount to £100,000 a minute, or £52.4 billion — about £2 billion more than this year. This includes £20 billion in the additional costs to business of regulations emanating from Brussels. (1) However, it is worth bearing in mind the Bruges groups have an anti - EU ideology, so are likely to look for most costly report.
3. Increased Immigration.
A single market requires free movement of labour. This has led to an inflow of immigrants from Eastern europe, this has placed a strain on housing and other amenities in the UK.
4. UK Can maintain some benefits outside EU.
The main benefits of the EU are free trade. However, the UK could retain these benefits, even if it left. For example, Switzerland is not in EU but benefits from EU trade.
5. Labour Market Inflexibility
EU Social Policies like the Social Chapter have increased labour costs and reduced labour market flexibility. Therefore, by leaving the EU, we would be able to abandon restrictive labour market practices, and therefore reduce unemployment and increase competitiveness.
6. With expansion into the East the UK no longer receives regional policy.