Brexit will hit UK's service industries, bosses warn


Leaders of some of Britain's biggest firms have warned the UK's service sector will be damaged by Brexit, with Chancellor George Osborne saying as many as 400,000 jobs could be lost.

The warning came after Prime Minister David Cameron said a Leave vote in the June 23 referendum on EU membership would be an act of "economic self-harm" which would hit growth and jobs. 

In the first major TV setpiece of the referendum campaign, Mr Cameron was accused of "scaremongering" and "hypocrisy" by members of a Sky News studio audience, while pro-Brexit former cabinet minister Iain Duncan Smith called him a "Pinocchio" for claiming he would vote to join the EU under the terms obtained under the recent renegotiation.

But the PM insisted: "This is not about scaring anybody. I am genuinely worried about what will happen if we leave." 

He urged voters not to "roll the dice" with their children's future.

Prominent Brexit campaigner and Justice Secretary Michael Gove will subject himself to the same hour-long Sky News grilling on Friday evening, as TV gears up for  a succession of referendum specials in the final days of the campaign.

Meanwhile, Mr Osborne will make another high-profile intervention, with a challenge to the Leave campaign to admit that "jobs would be lost if we vote to leave the EU and the single market".

Speaking during a visit to the south coast, the Chancellor will accuse Brexit campaigners of being "dishonest" by pretending that the economy would not suffer if Leave triumphed in the referendum.

And he will highlight the business letter warning of the threat to service industries, which employ more than 25 million people in areas including retail, hospitality, transport, professional and financial services.

Leading players in the sector including HSBC's group chairman Douglas Flint and chief executive Stuart Gulliver, PwC chairman Ian Powell, Ocado chief executive Tim Steiner and BT's chief executive Gavin Patterson, signed the statement backing a Remain vote.

"Britain's service sector includes everything from retail to the arts, from finance to education, and from hotels to architects," they said.

"It accounts for around 80% of value added and 80% of employment, making it the jewel in the crown of British industries.

"As the leaders of some of Britain's biggest service businesses we believe that a vote to leave the EU would damage the UK's thriving service sector and put jobs at risk. We want to ensure that Britain remains a leader in this vital field, and that is why we support the UK remaining in the EU on June 23."

Other signatories from the 10 biggest services sectors include Glenn Earlam, chief executive of David Lloyd Leisure; Compass Group's chairman and chief executive Paul Walsh and Richard Cousins, both signing in a personal capacity; Adecco Group's UK and Ireland chief executive John Marshall; Universities UK chief executive Nicola Dandridge; UPS UK's managing director Luis Arriaga; and Universal Music's chairman and chief executive David Joseph.

Britain is now the world's second largest exporter of services in the world, with many firms relying on cross-border trade and international supply chains.

A report by Frontier Economics for business organisation London First indicated that £68 billion of service exports could be at risk from Brexit.

The research found: "Through its membership, the UK has promoted trade liberalisation across the EU, and has benefited from increased trade in services, estimated at between £36 billion and £68 billion in service exports, and £21 billion and £39 billion in services imports.

"This research estimates that total UK trade (ie the combined value of goods and services) has been between £212 billion and £400 billion a year higher because of the benefits of services liberalisation secured by the UK's membership of the EU.

"Leaving the EU is likely to increase trade restrictiveness in services, which could lead to UK trade falling by between £67 and £92 billion a year even in the event of a free trade deal."

But Vote Leave's chairwoman, Labour MP Gisela Stuart, said: "This latest attempt to do down the British economy by the Chancellor will convince no one.

"The reality is, not even the European Commission can find significant evidence that the EU has benefited the UK's service exporters, but it has benefited the giant multinational companies which spend millions lobbying Brussels each year.

"The safer choice for British business is to vote Leave on 23 June and to take back control of our economy and the £350 million we send to Brussels each week. This will be good for jobs and growth."

But Mr Osborne said: "Today some of our leading firms have come together to say that they believe that a vote to leave the EU would damage the UK's thriving service sector and put jobs at risk.

"It would be simply dishonest to go on claiming that people's jobs won't be lost by a vote to leave the EU.

"The Leave campaign should come clean with the British people.

"This isn't about numbers on a spreadsheet, but working people's jobs and aspirations.

'It's not a price worth paying. That's what this referendum is all about."