Hereford Times Column: EU Referendum and Business

What would the economic impact be of Britain leaving the EU?  Few questions are more fiercely contested in the current referendum debate.  No sooner does one side put up a statistic than the other shoots it down and puts up one of its own.

The Inners argue that the EU Single Market benefits both big and small businesses, because they can trade tariff-free with minimal exchange rate costs and a common set of regulations across the continent.

Meanwhile the Outers point to the burden of EU rules, and the dire effects of the Eurozone crisis in depressing economic growth across the continent, and ask if British businesses would not be better off outside.

Of course, this crossfire is part of the rough-and-tumble of political debate.  But in some ways it is a pity, and short sighted to boot.

Voters are not economic robots.  They do not simply vote as their purses dictate, and to assume they do underplays all the other factors that may play a part in the final decision.  Factors like concern about loss of control over our national borders, or a sense of what is distinctively British—or distinctively European—in British history.

But if we stick to the economics, what can we say?

First, there will undoubtedly be some short-term costs to leaving the EU.  Of course trade will not simply cease—people will still need the UK’s goods and services on the day after a Brexit vote.  But for a period at least there will be some, potentially considerable, uncertainty.

Secondly, different businesses will be affected in different ways.  Larger businesses already trading heavily with European countries, or exposed to European manufacturing supply chains, are likely to be most affected; smaller businesses less so.

Thirdly, much depends on the timescale chosen.  No-one can say with any real degree of authority what the long-term effect would be of staying in or leaving the EU.  Britain might struggle to recover lost economic ground, or it might be filled with a new sense of national purpose, expand its trade more quickly with the rest of the world and rise to still greater heights of prosperity.

I will be chairing a public meeting to discuss this and other key topics relating to the EU Referendum at the Three Counties Hotel on Friday 22nd April at 6 pm. The event will not be ticketed; round up your friends and family and come along!