Would Brexit be good for tradesmen?

With the EU referendum fast approaching, we take a look at what this could mean for tradespeople of the UK.

Would household spending power drop?

One of the headline figures of the debate has centered around the cost to individual households of leaving the EU.

The exact number varies, but according to the National Institute of Economic and Social Research, a wage drop could mean households being £2,000 worse off a year in the event of Brexit.

The Treasury, meanwhile, are more pessimistic, suggesting that it could cost households £4,300 per year. However, the exact figures are hotly contested, with controversial arguments flying across both fences.

Household spending power is, of course, important for tradesmen. When families are worse off, work is harder to come by. This may well be a factor for tradesmen voting on 23 June, but it is by no means a clear-cut argument.

Immigration: more available workers or lower wages?

‘Uncontrolled immigration’ is one of the major bugbears of the Leave campaigners. According to them, the movement of labour into the UK from poorer EU countries has driven down wages, and made it harder for British workers to find jobs.

However much of the construction industry relies on Eastern European immigration. Earlier this month, a group of housebuilding companies pledged their support for Remain, pointing out that their sector could collapse without the supply of labour coming from within the EU.

David Thomas, chief executive of Barratt Developments, told the Guardian: “We have a significant part of our labour force, particularly within the London market, coming from continental Europe. If you ask any housebuilder what their main challenge is, they say it’s labour availability.”

On the other hand, tradesmen often cite immigration from Eastern Europe as a factor in driving down wages. With immigrants often living extremely cheaply in unsafe accommodation, however, could better control over living conditions help to redress this balance?

What would happen to imports?

It is no secret that the UK relies on both exports and imports. As the situation currently stands, British tradesmen and companies can import goods from anywhere in the common market without tariffs. Remain campaigners insist that this privilege would be lost in the event of Brexit. The Leave campaign, meanwhile, suggest that we could adopt the ‘Norwegian model’, which has access to the single market but has avoided EU laws.

GDP implications

Finally, we should consider the impact of a potential Brexit on the UK economy as a whole. The Treasury estimates that gross domestic product would drop by 6.2 per cent in the event of a vote for Leave. That’s roughly comparable with the impact of the 2008 collapse.

The same report suggests that tax receipts would be down by £36 billion – a figure equivalent to a raise in the basic rate of income tax of 8 pence in the pound.

However, Leave campaigners argue that whilst there may be a short term shock-hit, once the business community has settled GDP will recover perhaps increase at a faster rate.

Are you in favour of Brexit? Or do you want to see the UK stay in the EU? Let us know in the comments.

Are you protecting your trade?

As the UK’s biggest business insurance provider, we specialise in public liability insurance and protect more trades than anybody else. Why not take a look now and build a quick, tailored tradesman insurance quote?

Start your quote