It’s the Economy, Voters

14th June 2016

With the referendum on Britain’s future in the European Union (EU) fast approaching, it’s time for the ‘undecided’ voter to give some serious thought as to which box their ‘X’ will be placed in on 23 June.

If you prioritise the economy over everything else, the argument for staying in the club has never been stronger – with the Treasury, Bank of England (BoE), International Monetary Fund (IMF) and World Trade Organisation (WTO) all warning of the potential negative impact on the economy should the UK leave the EU.

Talk of potential recession and loss of 500,000 British jobs is enough to make the most hardened Eurosceptic wince. While the methodology behind some of the government’s calculations has been called into question, the plausibility of the potential outcomes has not – the BoE and IMF have both raised the spectre of a technical recession should the UK vote leave.

The UK currently enjoys preferential access to other markets covered by 36 trade agreements with 58 countries negotiated by the EU. What would be the alternative should Britain go it alone? While hardening the resolve of many a Brexiteer, Barack Obama’s warning that the UK would be at the ‘back of the queue’ in any trade deal with the US if the country chose to leave the EU cannot be ignored.

The ‘leave’ camp has proposed that the UK could exit the EU’s single market and look to the WTO if it were unable to secure replacement trade deals. In a recent interview with the Financial Times, the global trade body’s Director-General, Roberto Azevêdo, said that reality wouldn’t be that straightforward.

He stated that a potential Brexit would result in unprecedented negotiations between the UK and the WTO’s 161 other members. To remain compliant with WTO rules, the UK would have to impose tariffs on imports from the 58 countries with which it currently enjoys free market access, while adding its own surcharges on British exports. WTO crunched the numbers and calculated the cost of additional tariffs on goods imported to the UK to be £9 billion, while exports would be subject to a further £5.5 billion in tariffs.

This should concern any international company with operations in the UK. Indeed, many of Priority Freight’s clients have said publicly that Britain leaving the EU would bring future UK investment into question. For example, the British automotive sector supports 800,000 jobs and contributes £15.5 billion to the UK economy. In this context, it’s understandable why 77% of members of the Society of Motor Manufacturers and Traders (SMMT) consider remaining in the EU to be the preferred option.

Until now, campaigners for Brexit have been unable to offer a viable EU ‘exit plan’, and, in my mind, it’s impossible to ignore the numbers and opinion from experts on British and global trade. The economy has dragged me from the fence, and it’s why I’ll be voting to ‘remain’ later this month.

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