Leaving the European Union could cause a “serious shock” to Britain’s economy, with the risk of losing almost one million jobs, according to a CBI business group study released Sunday (20 March).
A so-called Brexit could cost about £100 billion (€128 billion) of economic output by 2020 — equivalent to 5% of annual GDP — the research found.
“This analysis shows very clearly why leaving the European Union would be a real blow for living standards, jobs and growth,” said Carolyn Fairbairn, director general of the CBI.
“The savings from reduced EU budget contributions and regulation are greatly outweighed by the negative impact on trade and investment.”
“Even in the best case this would cause a serious shock to the UK economy,” she said in a statement.
The stakes will be high for Britain’s historic role as a free-trading nation when it holds a referendum on whether to stay in the European Union on 23 June.
An exit could cost as many as 950,000 jobs, according to the study, meaning unemployment would be 2-3% higher by 2020 than if Britain remained in the EU.
The research was undertaken by services firm PwC on behalf of business group the Confederation of British Industry, which mainly represents larger British businesses. PwC was asked to examine two different exit scenarios based on the likelihood of reaching new trade deals — an FTA scenario and a WTO scenario.
The CBI, which has said it will promote the economic case for Britain to remain in the EU, has been criticised by anti-EU campaigners who say the business community is split on the issue.
The director general of another employers group, the British Chamber of Commerce, resigned this month after he went public with his anti-EU views, breaching the neutral position adopted by his organisation.
The head of a major British business group resigned from his post on Sunday (6 March) after publicly backing leaving the European Union, sparking a row over whether he had stepped down due to political pressure.
Vote Leave, which campaigns in favour of an exit, dismissed the results, with chief executive Matthew Elliott telling the BBC the CBI’s scenarios were “skewed” and leaving the EU was the “only safe option”.
Britain is due to vote in a referendum on whether to remain a member of the 28-country bloc on 23 June.
Opinion polls indicate the race is neck and neck with as many as 20% of voters still undecided, meaning the result is very much in the balance.
During his campaign fro re-election in 2015, British Prime Minister David Cameron promised to renegotiate the UK's relations with the European Union and organise a referendum to decide whether or not Britain should remain in the 28-member bloc.
The British PM said he will campaign for Britain to remain in the EU after a two-day summit in Brussels where he obtained concessions from the 27 other EU leaders to give Britain “special status” in the EU.
But EU leaders had their red lines, and ruled out changing fundamental EU principles, such as the free movement of workers, and a ban on discriminating between workers from different EU states.
The decision on whether to stay or go could have far-reaching consequences for trade, investment and Great Britain's position on the international scene.
The campaign will be bitterly contested in a country with a long tradition of euroscepticism and a hostile right-wing press, with opinion polls showing Britons are almost evenly divided.
- 23 June: Referendum.
- July-December 2017: United Kingdom holds rotating EU Council Presidency.