CBI chief: Brexit would cost every family £3,700 a year
Leaving the EU would also put one million jobs at risk, claims new analysis
LEAVING the European Union would imperil one million jobs and leave the average household up to £3,700 a year worse off, the head of the CBI warns today.
CBI Director-General Carolyn Fairbairn also said that a Brexit could cost £100 billion by the end of the decade, while the UK economy would still be worse off by 2030.
The warning comes from an analysis carried out for the organisation by the accountants PwC.
The CBI came under fire earlier this year amid claims its pro-EU stance did not reflect its members’ wishes.
A similar row in the run up to the independence referendum in 2014 saw the CBI eventually forced to withdraw an application to register as a pro-UK campaigner.
The latest forecasts are likely to be dismissed as scaremongering by those who back the UK leaving the EU
hey dispute previous calculations that around three million jobs depend on the UK’s membership within the EU.
But last week it emerged that the Bank of England will make available millions to help steady the stock market should it go into shock at the UK voting for a Brexit.
As well as costing potentially £100bn and 950,000 jobs, Ms Fairbairn will also warn that the “negative echoes” of the decision could last for years.
The CBI commissioned PwC to examine both an optimistic and a more difficult exit scenario.
Both assume that trade deals will be made with the EU.
PwC concluded that the UK’s living standards, growth and employment would all be significantly reduced.
It estimates that even if the UK was to rapidly secure a Free Trade Agreement with the EU households could be between £2,100 and £3,700 worse off.
Ms Fairbairn said that the analysis showed “why leaving the European Union would be a real blow for living standards, jobs and growth”. She added: “The savings from reduced EU budget contribu- tions 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.
“The economy would slowly recover over time, but never quite get back to where it would have been. Leaving the EU would mean a smaller economy in 2030.”
The findings explained why the majority of UK businesses are in favour of remaining within the EU, she added. Last week the CBI said it had re-affirmed its strong member mandate to back the EU through consultation.
A ComRes survey of CBI members, who employ a third of all private sector employees, found that 80 per cent believe being part of the EU is best for their business.
Andrew Sentance, senior economic adviser at PwC, said: “The three big impacts of leaving the EU we have been able to iden- tify are increased uncertainty, a negative shock to trade and investment, and reduced labour supply.
“While the potential to reduce the burden of regulation and lower contributions to the EU could be offset, the net impact of the UK leaving the EU is still likely to be negative for GDP, employment and living standards, both in the short and the long term.”
‘‘ The economy would slowly recover over time, but never quite get back to where it would have been. Leaving the EU would mean a smaller economy