Construction Industry could stand to lose Brexit related billions
Brexit will cost the UK’s construction industry billions in lost infrastructure investment, Downing Street has warned.
Prime Minister David Cameron said last week the loss of European Investment Bank (EIB) funding will “put the brakes” on crucial UK infrastructure projects because Britain would no longer be a member.
The EIB has invested more than £16bn in UK projects over the past three years including £280m for the expansion University College London and £700m towards the £4.2bn Thames Tideway Tunnel project.
Mr Cameron said: “We know leaving the EU would result in an economic shock in the UK, after which we would be permanently poorer. We also know businesses would lose access to the single market of over 500 million people, and the contraction of our economy would mean less money for public services.
With a smaller economy hit by new trading barriers and job losses, it’s unlikely we’d be able to find that money from alternative sources.” – Prime Minister David Cameron
But something less remarked upon is the devastating impact on future infrastructure investment of our expulsion from the European Investment Bank. Vital projects across every region of the UK have been financed by the EIB.
“These make a huge difference locally, nationally, and sometimes globally – from the purchase of 65 new Super Express Trains for the East Coast Main Line; to investment in development of emission control technologies in Hertfordshire; to extension of the M8 motorway between Edinburgh and Glasgow; to the expansion of Oxford University’s research and teaching facilities.
“Not only would leaving the EU see us wave goodbye to this crucial funding – but, with a smaller economy hit by new trading barriers and job losses, it’s unlikely we’d be able to find that money from alternative sources.”
The EIB is financially autonomous and independent of the European Commission, European Council and European Parliament. It offers long-term investment loans to EU member states on favourable terms and its mission is to support economic growth across Europe.
The amount of investment received by the UK from the EIB has more than doubled since 2012, and in 2015 EIB lending in the UK totalled a record €7.77bn, representing 11.2% per cent of its overall lending to EU states.
‘Brexit equals self-destruction’
David Cameron says people who are planning to vote Brexit in next month’s referendum are choosing the “self-destruct option”. Speaking at the unveiling of a report by the Treasury, the Prime Minister questioned the morality of voting to leave the EU and warned that such a decision would cause a shock to the economy.
He argued that it would be detrimental to British families and would undo all the hard work and all the “pain and sacrifice” that was required to recover from the 2008 financial crisis.
“It would be like surviving a fall, then running straight back to the cliff edge…the self-destruct option,” he said. Mr Cameron was joined by George Osborne at the release of the analysis, with the Chancellor echoing the Prime Minister’s fears.
In the event of a Brexit, they predict a fall in GDP of between 3.6 and six per cent, a plunge in the value of sterling, lower house prices, a reduction in wages of between 2.8 and four per cent, more than half a million job losses, more borrowing and higher inflation.
Mr Osborne put it simply to the electorate when he said: “With one month to go to the referendum, the British people must ask themselves this question – can we knowingly vote for a recession?” Backing up Mr Cameron’s claim, he added that voting to leave would be a risk to all the progress the country had made financially since 2008.
“It’s only been eight years since Britain entered the deepest recession our country has seen since the Second World War. Every part of our country suffered,” he said.
“The British people have worked so hard to get our country back on track. Do we want to throw it all away?”
Leading leave campaigners criticised the report as mere scaremongering and accused Mr Osborne of manipulating the proposed economic impact. Former Work and Pensions Secretary, Ian Duncan Smith, compared the Chancellor to Pinocchio, while Nigel Lawson said the Treasury “simply assumed a disaster in order to scare the pants off the British people”.