Nation-Now 'Brexit' risks economic instability, head of biz group says
EDINBURGH, Scotland — The Scottish economy, already reeling from the effects of cheap oil and gas on North Sea drilling, will face challenges on multiple fronts if the United Kingdom votes to leave the European Union, according to the head of a British group that represents almost 200,000 companies and trade associations.
Last week the Fraser of Allander Institute at the University of Strathclyde in Glasgow indicated that Scotland was lagging the four countries of the United Kingdom economically and is at risk of entering a recession.
“Why would we (while) at our most vulnerable take a risk that could present us with all sorts of challenges and a prolonged period of uncertainty?” said Paul Drechsler, president of the London-based Confederation of British Industry. “All the things I look at say exit would take us somewhere that would be less attractive, more unknown and very risky.”
Drechsler was in Scotland’s capital to speak to the organization’s members here and said before the meeting that a vote for “Brexit,” British exit from the European Union, could cast doubt on a range of things businesses rely on, including access to key export markets on the European continent and a pool of skilled labor.
“If you look at what would happen in terms of taxation if we were out of the EU, there’d be plenty to worry about,” Drechsler said.
He noted that Scotland benefits from foreign investment that membership in the European Union helps to attract. And if a “leave” vote were to trigger another referendum for Scottish independence from the United Kingdom, his outlook was more grim.
“Uncertainty is bad for business, and therefore, I think the Scottish people have to decide what their priorities are,” said Drechsler, who was born in Dublin.
Although 5 in 6 residents of the United Kingdom live in England — Scotland has about 8% of the UK population — Scotland’s more than 4 million voters potentially can play a decisive role in Thursday’s vote.
“My assessment is the odds are 50-50,” Drechsler said. “50-50 means Scotland will play a vital role in the outcome, so its vote really counts.”
Drechsler is a former chief executive of the Wates Group in Leatherhead, Surrey, one of the largest construction companies in the UK, and is present chairman of Liverpool-based Bibby Line Group, which has shipping and financial services interests, in addition to his confederation duties. He said the European Union is not perfect, but he believes that the answer to the EU’s problems is reform from within.
He asked employers to encourage their employees to vote.
“This is the most important decision for a generation, and it is the most important decision for the next generation,” he said. “Most of the people I see arguing about this on the TV are not the next generation.”
Follow Mark Williamson on Twitter: @MarkWHerald