Brexit would be huge shock to the economy

lucy thornycroft: Walking away makes little economic sense and risks throwing away the many  benefits we gain from being part of the EU. Picture: bruce rollinson
lucy thornycroft: Walking away makes little economic sense and risks throwing away the many benefits we gain from being part of the EU. Picture: bruce rollinson
0
Have your say

There are many factors which will play into the final decisions that voters make in the fast-approaching EU referendum, but the impact on jobs, the economy and living standards in Yorkshire and the Humber will play an important role for many people.

That’s why the CBI asked professional services firm PwC to independently examine what would happen in the event of two different EU exit scenarios up to 2030: one being optimistic where a trade deal is agreed swiftly with the EU, and the other recognising the likelihood of more difficult negotiations.

In truth, far more pessimistic exit circumstances could be made. Even so, the economic evidence was clear – leaving the EU would cause a serious shock to the UK economy, with a potential cost of £100bn and nearly a million jobs by 2020 with negative echoes that could last for many years after that.

Under both scenarios, UK living standards, economic growth and jobs are significantly reduced compared with staying in the EU. Household income in 2020, for example, could be between £2100 and £3700 lower and the UK’s unemployment rate between 2 and 3 percentage points higher, than if the UK had remained.

Even in the best case there would be a big hit to the UK economy. While it would slowly recover over time, the economy would never quite get back to where it would have been if we had stayed in.

The findings from PwC’s independent study help explain why the majority of UK businesses – small, medium and large – are in favour of remaining within the EU. An independent ComRes survey of our CBI members – who employ one third of all private sector employees across the UK – found that 80 per cent believe being part of the EU is best for their business and 77 per cent said it was better for the UK economy as a whole.

Every business survey bar none has demonstrated majority support for remaining within the EU. Quite simply, this is the mainstream business view. Being inside benefits the UK economy by giving a strong platform for British firms to trade with Europe and the rest of the world, attracting investment to create jobs here at home and keeping prices lower for consumers on the goods and services we buy each day.

Walking away makes little economic sense and risks throwing away the many benefits we gain from being part of the EU.

Yorkshire and the Humber business Specialist People Services Group are clear that the UK will be stronger remaining in the EU, believing that whilst EU is not perfect it offers many benefits to business which outweigh the disadvantages.

SPS Group owns a range of recruitment services brands, include Driver Hire Nationwide the UK’s largest specialist transport and logistics Recruitment Company, ISS Labour rail support services provider, Driver Hire Training, Driver Hire Australia and an eServices division.

SPS Group has directly benefited from the enhanced access to skills that the EU provides and believe a step into the unknown adds unnecessary risk for the UK economy without any known clear benefits.

While poorly-designed EU regulation is a source of frustration for many businesses, the PwC research found the economic benefits from less business regulation by leaving are pretty small.

For example, most of the cost from the EU Working Time Directive comes from guaranteed annual holiday and rest break entitlements for employees – which rightly are likely to remain whether the UK is in the EU or not.

Or is this what those pushing for a Brexit mean when referring to savings that can be made?

A gateway to Europe

Around half of all exports from Yorkshire and the Humber is to the EU. Global companies are choosing to invest in Yorkshire and the Humber because we are a gateway to Europe, writes Lucy Thornycroft.

HumberPort transports goods to and from mainland Europe and Scandinavia, together with some of Europe’s largest integrated shipping and logistics networks.

None of the alternatives on the table offer the same access to and influence over the EU single market as full membership.

They leave us on the outside, following rules on which we have no say in setting.