Voters in the UK have a big choice to make this summer. They will head to the ballot box on June 23 and shape the future of the country’s relationship with its Continental neighbours. While politicians in both the ‘Remain’ and ‘Brexit’ camps are already locked in a fierce debate, it’s down to voters to decide the EU Referendum.
Different people will come to their conclusions for a number of reasons but in any election the economy is likely to be a key factor. As Bill Clinton’s campaign manager famously put it in 1992: “It’s the economy stupid”.
So, what will the key economic arguments be in the EU referendum? Specifically, what impact, if any, will there be on the import and export of goods in the event of either result? From the blast rooms of Airblast to the stepladders of Zarges – and businesses of every letter and sector in between – there are businesses with an international outlook that will be desperate to know what the future holds…
The Economic Case For Staying In The EU
Campaigners calling for the UK to remain in the EU point to the fact that about 44% of the nation’s exports in terms of goods and services are bought by the EU, making it a crucial economic market. They argue that pulling out of the EU would jeopardise this trade, which takes place within the EU ‘free market’. It fears pulling out could cause tariffs to be placed on those deals and would put millions of jobs at risk.
Goldman Sachs argues that the value of sterling could plummet by up to 20 per cent while there are also fears that London’s dominance of the financial services sector could be harmed by an EU exit – with HSBC warning that 1,000 investment banking jobs could move to Paris.
Why The ‘Leave’ Campaigners Say We’d Be Better Off Out
Those backing ‘Brexit’ argue that the rules – labelled ridiculous by JCB chairman Lord Bamford – and the influence of the EU is actually holding the UK back and that pulling out would give the country greater freedom to set its own individual trade deals with the EU and the rest of the world.
The Leave camp says UK jobs are wedded to the trade businesses do with the EU and not the membership of the EU. They argue that the money spent on the UK’s membership of the EU – about £8.8 billion – could be saved by pulling out and say that figures quoted by the ‘Remain’ side over the falling pound, job losses and even drops in GDP are merely scaremongering.
Rest Of The World
The EU member states are not the only countries to want the UK to stay within the EU. Finance ministers of the G20 warned about the ‘shock’ that would be caused by a vote to leave the EU, while US president Barack Obama wants to see voters choose to stay in the EU.
Of course, the Leave camp dispute both interventions and point to the view of former British Chamber of Commerce Director General John Longworth, who feels the outlook would be brighter if the country was outside the EU. Longworth famously had to leave his role at the politically neutral body for expressing the view.
In some respects, there are too many uncertainties for the decision to be made on the numbers alone. At the end of the day it’ll come down to a ‘gut feeling’ over which side you believe when it comes to the impact on the economy and which path you think holds the greater risk to trade.