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Brexit puts 400,000 services jobs at risk in UK

Friday, June 3, 2016 - 08:12
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Chancellor of the Exchequer George Osborne will say hundreds of thousands of jobs may be lost in the service sector, the main driver of Britain's economy, if the country leaves the European Union, as polls suggest the government's warnings of the impact on growth of a so-called Brexit aren't convincing voters.

[LONDON] Chancellor of the Exchequer George Osborne will say hundreds of thousands of jobs may be lost in the service sector, the main driver of Britain's economy, if the country leaves the European Union, as polls suggest the government's warnings of the impact on growth of a so-called Brexit aren't convincing voters.

Service companies, Britain's biggest employers with a workforce of 25 million, could be forced to cut 400,000 jobs over the next two years, Mr Osborne will say in a speech on Friday on England's south coast.

He will accuse the "Leave" campaign of failing to accurately portray the impact on unemployment of an exit from the bloc.

"It would be simply dishonest to go on claiming that people's jobs won't be lost by a vote to leave the EU," Mr Osborne will say, according to prepared remarks released by the official "Remain" campaign group.

"The 'Leave' campaign should come clean with the British people. This isn't about numbers on a spreadsheet, but working people's jobs and aspirations. It's not a price worth paying. "

With just under three weeks to go until the June 23 referendum, campaigning is getting increasingly acrimonious, and both camps have been accused of smears and overstating the facts.

While the "Remain" camp has relied on reports from the Treasury, the Bank of England, the International Monetary Fund and the Organisation for Economic Organisation and Development portraying the economic consequences of an exit, the "Leave" campaign has switched its focus to immigration and the government's failure to curb it.

LIVING STANDARDS

Two ICM polls, carried out both online and by telephone, put "Leave" ahead this week, suggesting its strategy may be working. Meanwhile, in a sign that the government's economic message hasn't cut through, an Ipsos Mori poll on voter attitudes found 58 per cent of respondents saying they don't think leaving the EU would affect their own standard of living.

A survey of academics, pollsters and journalists by the Political Studies Association found that while 87 per cent thought the result of the referendum would be a "Remain" vote, their average rating of the chance of a Brexit was 38 per cent, much higher than betting and prediction markets.

The Number Cruncher Politics website is calculating a Brexit probability of 21.7 per cent.

On Thursday night, in his first appearance in a television show dedicated to the referendum, Prime Minister David Cameron repeatedly emphasized the risk to jobs. In his closing address to the audience, he pressed the point. "When we wake up in the morning, and look our children and grandchildren in the eye, and we think who we're responsible for in our pay packet, let us not roll a dice on their future," he said.

'ECONOMIC SELF-HARM'

Mr Cameron defended himself against accusations of scaremongering and "waffling" from the studio audience, saying it was his duty as prime minister to warn the country against "an act of economic self-harm."

Earlier on Thursday, German Chancellor Angela Merkel made her strongest intervention in the debate so far, warning that the UK would be isolated and lose influence if it leaves the EU. "One nation alone will never be able to achieve such good results," she told a news conference in Berlin.

When Mr Osborne speaks on Friday, he'll warn that most service industries rely on cross-border trade and supply chains, making them particularly vulnerable to an exit from the EU. The services industry accounts for almost half of Britain's exports to the EU.

'CONVINCE NO ONE'

"This latest attempt to do down the British economy by the chancellor will convince no one,"

Vote Leave's chair, Labour Party lawmaker Gisela Stuart, said in a statement. "The reality is not even the European Commission can find significant evidence that the EU has benefited the UK's service exporters, but it has benefited the giant multinational companies which spend millions lobbying Brussels each year."

Heads of companies including HSBC Holdings Plc Chairman Douglas Flint and CEO Stuart Gulliver, BT Group Plc CEO Gavin Patterson, Compass Group Plc Chairman Paul Walsh and CEO Richard Cousinsissued a joint statement on Friday supporting the "Remain" campaign.

"As the leaders of some of Britain's biggest service businesses we believe that a vote to leave the EU would damage the UK's thriving service sector and put jobs at risk," they said. "We want to ensure that Britain remains a leader in this vital field, and that is why we support the UK remaining in the EU on June 23."

The government is also likely to face questions about a report Friday from Parliament's Home Affairs Committee, which says its failure to deport foreign criminals is harming confidence in the EU.

BLOOMBERG