UK Politicians Accused of Scaremongering Over Brexit Job Losses

A new report from the Institute of Economic Affairs says that politicians who claim that three million jobs are linked to Britain's EU membership should be publicly challenged. It says jobs are associated with trade, not membership of a political union, and there is little evidence to suggest that trade would substantially fall in the event of a 'Brexit'.

Deputy Prime Minister Nick Clegg, leader of the Liberal Democrats, who are strongly supportive of EU membership, said in 2011:

"There are three million of our fellow citizens, men and women, in this country whose jobs rely directly on our participation and role and place in what is after all the world's largest borderless single market with 500 million consumers right on our doorstep."

However, Ryan Bourne, Head of Public Policy at the Institute of Economic Affairs, said: "It can be said with certainty that three to four million jobs are NOT at risk in the event of a Brexit.

"It's high time that politicians and commentators stopped scaremongering, and recognised that jobs are associated with trade and not the membership of a political union."

"The UK enjoys a dynamic labour market, and a range of outcomes would be possible as it adapts to new policies outside of the EU. The public deserve a rational and informed debate," said Bourne. 

Swings and Roundabouts

In the report, Bourne said there may well be net job creation if the UK were to leave the EU. Prior to the financial crisis, the UK saw, on average, 4 million jobs created and 3.7 million jobs lost each year — showing how common substantial churn of jobs is at any given time.

The annual creation and destruction of jobs is almost exactly the same scale as the estimated 3-4 million jobs that are associated with exports to the EU.

He said trade is more important than political union and the worst case scenario would be a failure to negotiate a free trade deal in the result of Brexit.

If this were the case, both parties would be bound by the World Trade Organisation's 'most favoured nation' tariffs paid by other developed countries, which would prevent the imposition of punitive tariffs by the EU following the UK's exit. Job losses, he said, "would not be significant".