Alistair Darling: Brexit would risk collapse of confidence in UK economy

Alistair Darling

Leaving the European Union could leave the UK exposed to economic conditions comparable to those before the global financial crash of 2008, Alistair Darling, the Labour former chancellor, will claim on Friday.

In another dire warning from the campaign to stay in the EU, Darling will say dark clouds are already gathering on the horizon and point to what happened when confidence in the economy collapsed in 2008.

“The single most important determinant of the health of our economy is confidence, and it is waning as the risk of leaving comes in to focus,” he will say.

“We know what happens when confidence plummets. We saw that in 2008 and we are still living with the consequences of the global financial crash. Confidence remains low and uncertainty is making that worse.

“When the IMF single us out as facing what will be a self-inflicted wound, we can’t ignore it. We can’t afford to take a decision where no one on the other side has any clear idea of where we would end up if we left.”

Darling will also highlight new research from London First and Frontier Economics calculating that if the UK were to follow the Canadian trade model, as advocated by Vote Leave, trade could fall by £92bn.

It comes after Lloyds Banking Group warned on Thursday that a vote to leave the EU would cause short-term economic uncertainty, while the long-term impact was unclear. The Bank of England has also said that a vote to leave the EU could harm economic growth and have a serious impact on the pound and other UK assets.

Darling’s intervention is one of a number from senior figures from the last Labour government warning against leaving the EU, as the Stronger In campaign tries to motivate leftwing voters to turn out for their cause.

There is a fear within the official remain campaign that their cause will be too closely associated with David Cameron to enthuse Labour voters. Despite Jeremy Corbyn having made it clear that he supports staying in the EU, many in the remain group would like him to play a bigger, more enthusiastic role in the campaign.

In his speech in Westminster, Darling is to argue that the leave campaign is “playing with fire and asking the British people to play along”.

“There is nothing patriotic about turning a blind eye to credible warnings of economic disaster, just as there is nothing patriotic about saying we are unable to hack it in a club that is big enough for 27 others, but not the UK,” he will say.

“The politics of division and separation fundamentally hinder our ability to progress in an increasingly interconnected world. The Leave campaigns misunderstand that today economic power is proportional to the strength of your international alliances, not the strength of your anti-Brussels rhetoric.”

The warnings are likely to prompt the familiar riposte from Brexit campaigners that their opponents are exaggerating the consequences of leaving the EU and running “Project Fear”to scare voters into staying in.

Boris Johnson, the London mayor and Conservative MP, last month urged
people thinking of voting to leave to hold their nerve and “not be
cowed by the gloomadon poppers”
who think the UK would not prosper on
its own.

The out campaign, now officially represented by Vote Leave, on Thursday accused the government of trying to bury an official report that accepts EU law is supreme over the UK.

Vote Leave said the document, published by the Cabinet Office, also acknowledges EU law may mean prisoners could get the right to vote.

Matthew Elliott, chief executive of Vote Leave, said the government had “cynically buried its own report because it admits how much control we’ve handed to the EU”.

Powered by Guardian.co.ukThis article was written by Rowena Mason Political correspondent, for theguardian.com on Friday 15th April 2016 00.01 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010