UK200Group comment on the upcoming EU referendum
Members of the UK200Group of independent accountancy and law firms have commented on the governor of the Bank of England’s response to the upcoming EU referendum.
Speaking during a speech in Oxford, the governor of the Bank of England Mark Carney said that Britain had an economic boost from its membership of the European Union (EU), as the debate over whether the country should remain in the Union hots up ahead of the proposed referendum in 2017.
Mark said: “Broadly speaking, the evidence suggests that the UK has successfully harnessed the benefits of openness afforded by its EU membership, while avoiding some of the drawbacks of reduced flexibility from which some continental European economies suffer.”
He also described Britain as the “leading beneficiary” of the free movement of goods, services and capital across the EU and said that the free movement of labour had helped the UK tackle a growing domestic skills shortage.
Jonathan Russell, partner at UK200Group member firm ReesRussell, said:
“The big question is could the UK still retain much of the free trade, labour movement and cross border harmony, but escape some of the regulatory burden and Euro risk if it was to leave the EU.
“The original model of an EU wide free trade and labour area is still very attractive, but moves towards monetary, and more significantly, political union (Federalism) have become the issue.
“Renegotiation will have to significantly curb and possibly reverse the latter areas to make continued membership attractive to many. The one issue is that a yes vote requires the politicians to do nothing, whereas a no vote means a change of relationship has to take place.”
Duncan Montgomery, tax partner at UK200Group member firm Whittingham Riddell, said:
“SMEs generally are pro-stability, and those we speak to would be more concerned by loss of market, both for themselves and others, particularly if that meant larger competitors focussing more domestically. Business is likely to be cautious in the run up to a vote and as a result capital spending and investment will probably pause in that period.
“We saw that in the run up to the Scottish Referendum and in a much more pronounced way before the last election, so if the vote is predicted to be tight, expect the economy to slow, and businesses relying on growth to have to slow down and take stock.”