WHENEVER the Leave campaign has been challenged over the potential economic consequences of Brexit, its standard response has been “calm down dear, everything will be fine”. But the assertion that the UK will not be damaged by leaving the EU is looking increasingly hard to justify. In fact, it now looks like sheer blindness to the facts.
The latest to warn of the consequences of a Leave vote is the Confederation of British Industry which has said uncertainty ahead of the referendum is beginning to weigh on investment. Springboard, the organisation that monitors footfall on the high street, also says the uncertainty is having an adverse effect on consumer activity. It is all starting to look like a consensus among leading experts and organisations that leaving the EU would be an economic calamity for the UK - especially coming after the warning from Mark Carney, the governor of the Bank of England, that Brexit could trigger a drop in the value of the pound.
Naturally, we should be cautious in drawing too many conclusions from footfall figures – yes, they show a third fall in shopper footfall in Scotland, but the sales figures for April may show some of those shoppers have been spending their money online.
However, even if that is the case, Diane Wehrle of Springboard, is right to be concerned that a drop in retail spending is a sign that confidence has been shaken by the referendum. Quite simply, it is what consumers do when they are worried about a threat to their household budgets – they cut their spending or hold back on simple everyday tasks such as buying money for their trips abroad.
The warning from the CBI on investment is also convincing. The organisation says it expects GDP growth of two per cent in 2016 and 2017, down from its previous estimate of 2.3 per cent and 2.1 per cent respectively, and it is for the simple reason that businesses will be putting decisions on investment or pay on hold until after the referendum. Should the result be Stay, the uncertainty will go. Should the result be Leave, there will be uncertainty for years to come, with a resulting depressive effect on the economy, as the UK and the EU unpick their relationship.
There will be some in the Leave campaign who will just shrug off such arguments as Project Fear. But the Remain campaign keeps repeating the economic risks of a Brexit because they are real - indeed, the pound has been looking jittery at the mere threat of a Brexit.
Of course, there is a risk in issuing warning after warning that we end up with the kind of hysteria that Boris Johnson was spouting when he compared the EU to the Third Reich. The Remain side should also remember to use positive arguments about Britain’s centuries-old relationship with the Continent and what Pope Emeritus Benedict has called the moral heritage of the continent: the desire for a European identity that does not deny national identities but rather unites them into a community of peoples.
However, positive arguments about unity and friendship have to be combined with warnings about the economic reality of Brexit – warnings that are becoming increasingly hard to deny.
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