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Brexit could cost services industry up to £68bn a year in lost exports

Membership of the EU’s Single Market is responsible for between £36bn and £68bn in services exports, according to a new report by London First, based on research by Frontier Economics.

The report, Leaving the EU: an assessment of its impact on services and trade, says that if alternative arrangements to the Single Market were based on normal free trade agreements, the damage to UK services businesses would be significant.
Services

Leaving the EU would be particularly damaging to the UK because it is the second-largest exporter of services in the world.

Services account for around 80 per cent of GDP and 80 per cent of employment. Britain’s services industries are the biggest beneficiaries of EU measures to liberalise the services trade – such as the “passporting” regime for financial services firms selling into Europe.

London First’s report raises the alarm that it is not just the obvious UK-EU trade that could be affected by Brexit. It says that US-UK trade in financial services is also at risk. That’s because US banks tend to export through subsidiaries that are based in London, in large part because London and its EU passporting system gives American banks easy access to European markets.

The report was covered in the Guardian, Daily Telegraph and Daily Mail, and a letter in City AM.

Will Higham, Campaigns Director of London First, said:

“Leaving Europe would be a kick in the teeth for Britain’s services exporters. We are the second-biggest exporters of services on the planet and this success relies on having inside access to Europe.”

John Davies, of Lawyers In for Britain, said:

“If the UK were to leave the EU neither freedom of establishment nor freedom to provide services for lawyers and others would be guaranteed or protected. The UK is the foremost centre for international dispute resolution and that is underpinned to a substantial degree by the common rules on enforcement and jurisdiction of the EU – there is also no guarantee that this would remain in place under any revised trading relationship outside the EU.”

Sir Terry Farrell, the architect, said:

“Britain should be a leader in Europe and the only way to be so is by remaining within the European Union. The EU, and the upcoming Single Market for services, creates enormous opportunities for British architects, designers and developers.”

With a number of forewords from services leaders, this is the fourth London First report released as part of our campaign to Remain. To see all the reports visit our campaign page.

Contact: Naomi Smith, nsmith@londonfirst.co.uk

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