Unknown consequences of Brexit echo Lehman Brothers collapse, warns CBI President
THE CBI President has likened Brexit to the collapse of Lehman Brothers and warned the UK “could wake up with the mother of a hangover on June 24”.
Paul Drechsler was visiting businesses in the West Midlands yesterday ahead of the organisation’s regional dinner. While he talked up the opportunities that the West Midlands has – “it is an area that has all the ingredients for success”, he said – Mr Drechsler made it clear the result of next week’s referendum could have a significant negative impact on the economy.
“The biggest concern I have is the scale of impact of Brexit in the short to medium-term,” he said. “I think that’s going to give us unexpected downside consequences that will seriously affect jobs and opportunities.
“It’s a bit like Lehman Brothers – no-one understood the consequences of not letting them continue. If we had, we might have done differently.
“We could wake up with the mother of a hangover on June 24.”
The CBI has estimated that post-Brexit there would be 1m fewer jobs in the economy than it forecasts if the UK stays in the European Union.
He added: “Business doesn’t go looking for trouble. We don’t create risks unnecessarily.
“What is certain about Brexit, this is a totally unnecessary risk that we should not be taking.”
His tour of West Midlands businesses took in three very different companies – Saint-Gobain, Sanctuary Housing and Wedge Group Galvanizing, a variety which he said was indicative of his organisation’s membership – and his discussions with business owners and leaders in the region highlighted shared concerns.
Mr Drechsler said: “Common to all of them was issues around infrastructure. Are we creating the right conditions for growth, whether roads or housing or energy?
“There’s still a lot of concern about the apprenticeship levy and what it is. We need to clarify that quickly.”
He acknowledged that it is “early days” for devolution in the Midlands, with the Midlands Engine being a relatively new concept and the West Midlands Combined Authority only formally came into being this month.
He said: “It’s about the right business engagement and the right political leadership.
“The West Midlands, through the automotive sector, has shown it can do great things.
“It’s an area that has all the ingredients for success. It just needs the team to form the right industrial strategy for the Midlands region, decide what they want to do, and get the education and skills strategy to support it.
“This isn’t about a quick fix, this is for the long-term.”
