LONDON: March 22, 2016: A survey by the Confederation of British Industry (CBI), whose members employ 33 percent of the country's private-sector workers, has found that 80 percent believe being part of the EU is best for their business and 77 percent think it is better for the UK economy as a whole.
The CBI has now published a report by PwC claiming a British exit ('Brexit') from the EU would cost the country £100 billion - or 5.0 percent of GDP - and the loss of up to 950,000 jobs by 2020.
CBI director general Carolyn Fairbairn said: "If the UK leaves the EU without a free trade deal, 90 percent of British exports to the EU, by value, could face tariffs. Some sectors could be hit particularly hard. Under WTO rules, UK textile exports to the EU could face tariffs of nearly 10 percent. Transport equipment could face tariffs of about 7.0 percent."
Fairbairn added that products imported from the EU into the UK could also face tariffs – passing the costs on to customers through higher prices. She said that even if Britain subsequently joined the European Economic Area (EEA) or the European Free Trade Association (EFTA), rules of origin reporting and VAT payments at borders would make it harder for small firms to trade with the EU.
"So, in short, leaving the EU could mean the return of significant barriers to trade," she declared.
Rain Newton-Smith, CBI Economics director, explained that while there is a process for leaving the EU under Article 50 of the Lisbon Treaty, no country has ever done it. If the UK referendum on June 23 opts for an exit, the European Commission would respond by drawing up an agreement for approval by the European Parliament and the EU Council of Ministers, before presenting it to the UK.
Newton-Smith pointed out that the UK can't participate in the discussions about its withdrawal at the Council and it can't vote on it in the Parliament: "In trading terms as well, the EU would hold the balance of power. Some see the fact that we import more from the EU than we export to it as proof that they need us more than we need them.
"But this ignores the fact that 45 percent of the UK's exports go to the EU, it's our biggest export market by far - compared to just 7.0 percent of total EU exports which come here. So while it may be in both sides' interest to complete a trade deal, the balance of power would be far from equal."
Fairbairn added that a Brexit would hit some of the UK's top business sectors hardest and lead to job losses anywhere from 550,000 to one million: "At the CBI we've heard from a range of firms of different sizes, sectors and from different parts of the country and we've consistently heard from our members that the majority – though not all – want to stay in a reformed European Union," she said.