Members of the UK200Group of independent chartered accountancy and law firms have today commented on George Osborne’s claim that leaving the EU would cost UK households £4,300 a year making them “permanently poorer” and would leave Britain with diminished influence and less trade.

 

On Monday the Treasury published its long-awaited document containing estimates of what leaving the EU would mean for the UK economy.

 

The document claims the UK economy would be reduced by 6% if the UK was to leave the EU, leaving Britain with reduced influence and lessened trade.

 

A key hypothesis of the report is that if the UK broke its links with Europe and trade and foreign direct investment were reduced, productivity growth would be much slower.

 

David Whiscombe, Director, at UK200Group member firm BKL Tax, said:

 

“It seems to me that, even without descending to making unkind comments about the Treasury’s track record in such matters, it is difficult to attach very much credibility to anyone’s assessment of the likely state of any economy up to 14 years hence.  To put this into context, you need only consider what dire predictions would have been made in 1946 of the future performance of the West German economy and compare those with the position in 1960.  Arguably, publishing what is in reality wild speculation under the guise of firm information does more harm than good to the “Remain” camp.

 

There is as much risk and uncertainty in staying in as in coming out. Ignore the great bulk of what you are told by either side on the economic arguments for and against, the truth of which is unknowable.  Essentially, this is not an economic decision but a political one.  Make your decision on the simple question – do you want the UK to be a part of a much larger political and economic unit which on the one hand inevitably involves surrender of aspects of sovereignty but on the other has significantly contributed to avoiding conflict in Europe for the past 70 years?  It’s not an easy decision.”

 

 

Jonathan Russell, Partner, at UK200Group member firm ReesRussell, said:

 

“The Government with it’s remain in EU camp have leapt upon the Treasury's document with glee and latched on to numbers to frighten the general public. Unfortunately even discounting the poor past performance of previous Government departmental forecasts George Osborne needs to be careful not to broadcast his lack of understanding when using numbers. The figure of £4,300 so heavy promoted as a loss per household, with previous caveats in place over the accuracy, would be reasonable if that was the loss per household. The Treasury figures quote that figure as a loss of GDP per household when the actual loss per household in monetary terms is currently about 2/3rds of that so nearer £2,850. Not such a great headline.

 

Coupled with this the Treasury has made two big assumptions which need to be understood and could easily make the predictions meaningless.

 

1. The forecast has not been adjusted for any variation in immigration or household numbers basis on leave or remain. This is one of the central issues.

2. It assumes a free and open economy is the best form of relationship but interestingly the World's three largest economies do not work in that environment.

 

The problem we have is uncertainty and predictions for 15 years hence must be even more uncertain.

 

This uncertainty and lack of clarity in the facts being broadcast makes life for businesses and in particular smaller businesses very difficult. Smaller businesses may not have the in house experience or expertise to know how to deal with these issues and may be concerned by the numbers being thrown around. At the end of the day these businesses may turn to professional advisers for help in identifying the real concerns they should have and the factors which will actually impact on them.”

 

www.twitter.com/uk200group

 

Established in 1986, UK200Group is the leading mutual professional association in the UK with some 150 offices of quality-assured member accountancy and law firms throughout the UK totalling more than 500 partners who act for business clients and global links in nearly 70 countries. Our member’s contributions reflect the views, questions and answers arising from their 150,000+ SME clients. UK200Group provide services and products that are designed to enhance the business performance of its members. Telephone: 01252 401050 or: 01252 350733, email: admin@uk200group.co.uk or visit: www.uk200group.co.uk.

 Disclaimer:

UK200Group is an association of separate and independently owned and managed accountancy and law firms. UK200Group does not provide client services and it does not accept responsibility or liability for the acts or omissions of its members. Likewise, the members of UK200Group are separate and independent legal entities, and as such each has no responsibility or liability for the acts or omissions of other members.

 

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