George Osborne’s Budget this week was mostly welcomed by the business community.
But, his Budget plans for this year and beyond will be blown out of the water by Brexit, which the Office for Budget Responsibility warns is the biggest risk to the UK’s future prosperity, shattering its growth forecasts.
And Brexit is increasingly likely with a poll early in the week showing a win for those campaigning to leave the European Union.
Osborne’s speech, accompanied by muttering from the government’s benches over his Brexit warnings show the UK government is divided – lacking in unity, stability and leadership. The result is a voting public left confused by swathes of conflicting information and misinformation.
The ‘In’ campaigners talk of the irreparable damage that leaving the EU would cause, while Boris Johnson, Nigel Farage, and their merry band of Brexiters shout them down with accusations of scaremongering.
Some perspective is required.
Yes, the UK could survive as an independent nation. Yet the cavalier attitude of those suggesting we would be better off out ignores the detailed consequences of such a move.
The reality is that leaving the EU would destroy British businesses. The heads of each of BMW’s British companies have warned workers that an exit would hike costs and prices, affecting the company’s employment base. About a third of FTSE 100 businesses have signed a letter in support of the UK remaining inside the EU while investment banks have contingency plans to relocate staff in the event of Bexit.
We could renegotiate our trade agreements with the EU, but this will take time, and after shunning it, why would the largest single economy offer more favourable terms? Even if we ignore this and assume we can negotiate a better deal, the time taken to achieve this will be damaging in its own right.
The Cabinet Office reports it would not be feasible to leave the EU within the two-year timeframe stipulated by existing treaties: the referendum would mark the start of a decade-long process of extrication.
There are persistent myths posited by the ‘out’ campaign when it comes to immigration.
Research from UCL shows European migrants, rather being a drain on Britain’s finances, pay more in taxes than they take out in state benefits.
That contribution – around £2bn a year – is fuelling Britain’s economic growth and the volume of migrant workers in our construction industry alone is a key element helping us to tackle the housing crisis. The prospect of a job, rather than claiming benefits, is what attracts European migrants to Britain.
Last week, the government concluded that Britain would be “weaker, less safe and worse off” if it left the European Union. An ‘out’ vote would not give us a freer Britain; it would be another journey into years of economic instability.
If it ain’t broke, don’t fix it: we are only just recovering from the financial crisis; leaving the EU would derail that process, offering few potential benefits but a whole host of uncertainty.
And as far as the Budget and the government’s spending plans go – Brexit would consign them to the bin and put in jeopardy hopes of future growth.