Brexit poses a grave risk to our economy’s short term stability and longer term potential

Seema Malhotra MP, Labour and Co-op Member of Parliament for Feltham & Heston Shadow Chief Secretary to the Treasury Tuesday 31st May 2016 17:13 EDT
 

It’s time for the Leave campaign to come clean about the costs of walking away from the European Union.

Investments by foreign companies whose investments are vital to the long term prosperity of British families and businesses. We know businesses are delaying decisions to invest because of fears about Britain leaving the EU.

I was told recently of a member of a major employers organisation who wasn’t sure how he would vote on June 23rd. But he shifted his view following a chat with an Indian business who told him their UK investments were on hold.

Why? Because at the moment their UK business gives them access to a single market of 500m people. It gives them not only customers but also a pool of talent. They get the benefits of cross border collaboration bringing together the best minds and skills that helps them to compete in today’s global environment.

But if we walk away from the EU they will lose all that. They would be in a market for talent and consumers of just 60 million people. When thinking long term and investing billions, they are asking why they should close themselves off from access to talent from 500m people? That's the reality of choices that investors are having to make, and the threat to our prosperity is real.

The facts show British economy is in a fragile and vulnerable state. Recent statistics have shown our construction sector shrinking, industry in recession and our trade deficit is ballooning.

And the lost investment and trading opportunities would likely mean a permanent reduction in economic growth and the tax revenues we need to pay for public services.

And nor must we confuse bashing Brussels to solve issues caused by national policies. Take Priti Patel’s claim that a problem faced by curry houses in getting visas for skilled chefs would be solved by Brexit. The reality is that this is absolutely nothing to do with Brussels. The Home Secretary Theresa May could fix it by applying the immigration rules more fairly and adding chefs to the occupation shortage list as many of us have supported. In fact Labour called for this and short term visas alongside having an apprenticeship in the constituency.

Priti Patel sits round the Cabinet table with the Home Secretary. What has she done to get the government to change its mind?

The effects of leaving the EU will be felt by millions of families. Wages will grow slowly, if at all there will be fewer job opportunities and increased insecurity.

The Treasury, the Bank of England and the IMF have made clear their honest assessment that the threat of Brexit poses a grave risk to our economy’s short term stability and longer term potential.

Those voting Leave must do so with their eyes open. They should be ready for a severe economic shock that could hurt us all.


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