The economy could suffer a shock like the 2008 slump if Britain leaves the EU, with independent retailers forced to hike prices to cover increased costs while facing years of instability.
That was the key message from pro-EU campaigners former shadow business secretary Chuka Umunna and former business secretary Sir Vince Cable as they outlined the argument for small businesses to vote ‘remain’ in the 23 June referendum.
Both highlighted the cost of leaving the single market, the impact of uncertainty on consumer spending and the lack of EU influence on regulations impacting independent retailers.
“28% of produce on the shelves of high street stores comes from the EU. So you are looking at £2.2bn worth of wine imports, £1.4bn of cheese and £1.1bn of chocolate,” Streatham MP Mr Umunna said.
“If we weren’t in the single market, all those goods would be subject to tariffs under World Trade Organisation rules. That means imported goods you sell in your shop will cost more and you will have to charge your customers more, which is going to be bad for business.”
He also highlighted the impact on consumer spending if the economy suffers the shock being forecast by experts and if the value of the pound falls as indicated by the Bank of England.
“If we have the economic shock that so many independent experts are telling us will come, just think how bad it felt in 2008-09 and in 2011-12,” Mr Umunna said. “Consumer confidence fell dramatically and people simply weren’t coming through the door, or if they were they were not spending as much.”
Meanwhile, both campaigners said the EU had become a “dumping ground for blame” for regulations impacting businesses, when “actually the blame lies closer to home”.
“Plain packaging lobbying focused on the domestic government because it was done on its instigation,” Mr Umunna said. “Auto-pension enrolment and the National Living Wage again were done by the domestic government.”
Meanwhile, Boris Johnson reportedly compared fears over an economic shock on the event of a Brexit to the concerns people had over the “millennium bug”.