On Thursday 23rd June, the UK will vote on whether they believe Britain should remain within the 28 country bloc. The referendum will come following months and millions of pounds of campaigning for the Stay or Brexit campaigns.
Currently, the Telegraph’s poll has revealed that 49% of respondents would vote to leave the EU, compared to 47% who would vote to remain, highlighting the uncertainty of the upcoming referendum.
With the potential for the Brexit campaign to succeed in the upcoming referendum, it leads us to consider the possible consequences of this decision.
Businesses
Currently, very little is clear on what will be held for Britain’s businesses in the case of Brexit this June yet big businesses are preparing for Brexit through hiring lawyers and strategists to identify the risks that may ensue.
Whilst part of the European Union, British companies who trade with other EU nations do not have to pay any custom tariffs or costly paperwork such as certificates of sales tax or VAT on imports. Whilst Britain might negotiate the continued tariff-free imports, there will undoubtedly be an introduction of administrative costs that will importing and exporting from the EU more costly.
For many businesses, the uncertainty of a Brexit outcome proves to be difficult. This was highlighted by the owner of PK Engineering who commented: “It is extremely difficult to prepare for and it worries me witless, but our disaster plan is very clear: if all the kit is paid for, we hang on to it and we ditch everybody apart from the core.”
Bank of England
Whilst there is uncertainty of consequences of Britain’s economy if the UK is no longer part of the EU there have been predictions made by economists, many of whom believe that an exit to the EU would result in a shock to Britain’s economy and as a result, the Bank of England would cut interest rates from the already record low of 0.5%
At the same time, leaving the EU could also lead to an inflationary fall in the value of the sterling as much as 15-20% of its current levels, which would put pressure on the Bank of England to raise borrowing costs as well as lifting consumer price inflation to 3-4% a year for several years.
EU Security
David Petraeus, a former U.S. military commander and CIA director wrote in the Sunday Telegraph how he feared that the British exit from the EU would significantly weaker the bloc’s security following the terror attack seen in Brussels. He argued that the British population should vote in favour of remaining within the EU, as leaving would “deal a significant blow to [it’s] strength and resilience at exactly the moment when the West is under attack from multiple directions” and that he feared “that a ‘Brexit’ would only make our world even more dangerous and difficult to manage”.
Consequences for British Expats
There has been growing concerns among British citizens living abroad and the consequences faced if the UK saw an exit from the EU. For example, France has already warned that if Britain opts to leave, Britons living in France would no longer be able to access public health care. Chairman of the British Community Committee of France, Christopher Chantrey, is aware that “The issue is sowing panic among Britons who have taken early retirement to France,”
Mr McGory, from the stronger In Campaign, has said: “If Britain were to leave, there would be nothing to stop Spain, France or any other country from preventing Britons from accessing their healthcare system, because they are free to discriminate against non-EU citizens,”
Safiya Bashir on 29/03/2016
