Alan McGauley: Jobs will be the big EU loser if UK calls it quits

The European Union supports 4.2 million jobs in the UK according to new analysis by the Centre for Economic and Business Research. More jobs in the Midlands and the North are associated with trade within the EU than elsewhere, and it is these areas that will suffer most if the UK decides to leave.

In Yorkshire, this is largely down to the density of manufacturing companies. Europe is a vital market for things like paint, packing foam, cars and cables. EU membership supports the trade in these products in our region by removing economic barriers such as tariffs on exports.

Over the past decade, hundreds of millions of pounds have been invested in infrastructure, skills, technical know-how and innovation in Yorkshire via the EU. However, many policy-makers fail to acknowledge this.

Asked about this apparent contradiction, an EU official, Johannes Hahn, recently told this newspaper: “This is not only a subject particular to the UK. Many politicians don’t speak about the benefits of Europe.”

Mr Hahn said he had seen examples elsewhere in Europe where investment funds were being created using EU money that looked like they had been financed locally.

He said: “I have some examples where regional politicians have pushed for such a fund, have promoted such a fund, giving the impression it is a particular measure of the region and on the other hand this fund was financed 50 per cent by the European Union and the same politician was, like Ukip, very fiercely against the European Union. In the future we will not be ready to accept such a kind of development.”

In the next EU spending round, Yorkshire is expected to receive more than £600m. This will focus less on infrastructure and more on investing to help business grow and create jobs.

Drax, the operator of Britain’s biggest power station, has secured up to £238m of EU funding to build a power plant whose carbon dioxide emissions will be trapped and buried deep beneath the North Sea.

The new plant will be built on land next to Drax’s existing power station near Selby and will burn enough coal for 630,000 homes.

The UK is a net contributor to the EU to the tune of around £12bn a year. However, the EU is our main trading partner, worth more than £400bn a year to the UK economy.

Mayor of London Boris Johnson wrote last year that, if Britain finally ended its “sterile debate” over Europe by leaving the EU, it would quickly discover “that most of our problems are not caused by Brussels, but by chronic British short-termism, inadequate management, sloth, low skills and a culture of easy gratification and under-investment”.

He added: “Many large US-owned financial institutions such as Citigroup and Morgan Stanley are said to be considering leaving London if Britain quits Europe. These companies see the UK as a route into Europe... withdraw and that closes.

“Our financial centre would get hollowed out. There are around 500 banks that have their headquarters here, and without a passport to operate throughout Europe in the form of the single market, they simply can’t be here. Financial services represent about 10 per cent of GDP; if that was threatened, it would be deeply, deeply damaging.”

By the spring of 2017 preparations for Britain’s EU referendum will be ready. The campaign for exit, heavily funded by several Yorkshire-based millionaires, argues that Britain will not just survive, but boom if it leaves Brussels. The campaign will target voters across the country that do not think it is in Britain’s interests to remain part of an economic bloc that has suffered a decade of low growth and high levels of unemployment and joblessness.

If Britain leaves the EU after 44 years of half-hearted membership, it can be argued that there would be no going back a second time. The Yorkshire jobs lost may not impact on the rich backers of a vote to leave, but will affect those manufacturing and service jobs that need the European market.

Many businesses would need to spend a lot of time and money understanding the new business climate and this would need urgent attention, with new treaties negotiated to protect essential national interests.

Are voters and workers in the Yorkshire region prepared to take the massive risk of disengaging from the European Union because of short-term concerns over immigration?

Will they be swayed by some charismatic politicians from Ukip?

If so, the consequences could be catastrophic for Yorkshire – it would be like turkeys voting for Christmas.

• Alan McGauley is principal lecturer in politics at Sheffield Hallam University.