Brexit Risks 400,000 U.K. Services Jobs, Osborne Warns

  • ‘Remain’ camp keeps focus on economic dangers as polls tighten
  • Expert survey says markets may be underpricing Brexit risk

Why We Should Approach Latest Brexit Polls with Caution

Chancellor of the Exchequer George Osborne will say hundreds of thousands of jobs may be lost in the service sector 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.

QuickTake Will Britain Leave the EU?

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, 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.

George Osborne

Photographer: Daniel Leal-Olivas - WPA Pool/Getty Images

“It would be simply dishonest to go on claiming that people’s jobs won’t be lost by a vote to leave the EU,” 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 bodies including the Treasury, the Bank of England and the International Monetary Fund portraying the economic consequences of an exit, the “Leave” campaign has switched its focus to the government’s failure to curb immigration.

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 percent 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 percent thought the result of the referendum would be a “Remain” vote, their average rating of the chance of a Brexit was 38 percent, much higher than betting and prediction markets. The Number Cruncher Politics website is calculating a Brexit probability of 21.7 percent.

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’

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.”

When 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.

“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 U.K.’s service exporters, but it has benefited the giant multinational companies which spend millions lobbying Brussels each year.”

Backing ‘Remain’

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 Cousins issued 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 U.K.’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 U.K. remaining in the EU on June 23.”

Northern Ireland Secretary Theresa Villiers said the low paid are the worst affected by membership of the bloc and leaving would not have the effect the business leaders allege.

‘With Certainty’

“The people suffering because of EU membership at the moment are people on lower wages and in lower-income jobs,” she told BBC Radio 4’s “Today” show. “With certainty we will have a trade deal with the European Union, I’m in absolutely no doubt about that.”

Former Deputy Prime Minister Nick Clegg criticized the tone of the “Leave” campaign and compared former the populist style of London Mayor Boris Johnson, its leading proponent, to that of U.S. presidential hopeful Donald Trump.

“The tendency for the Brexit campaigners over the last few weeks not to engage in arguments but to personally insult people has sullied and polluted the tone of this debate,” Clegg told Sky News. “There is a similarity” in Johnson and Trump’s “populist appeal to people’s legitimate fears, but neither of them have answers to those fears,” Clegg said.

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