He also said that is his view the City would be hit badly by an exit from the European Union, with its dominance as a financial centre declining “dramatically.”
The first question centres on national sovereignty and the right to exercise it through Parliament without intervention from Brussels, Nusseibeh explained. Specifically, it concerns the right of the Home Secretary to expel individuals from British soil who may pose a danger to security without any challenge from a foreign court, he said.
The second issue is immigration, which Nusseibeh said is divided into two strands: mass political refugee migration mainly from North Africa and the Middle East, and the economic immigrant wave coming from Eastern Europe.
“If Britain left the union, it could close its borders and limit itself to the 20,000 refugees the government has agreed to accept by 2020,” said Nusseibeh. “Although it seems the vast majority of that flood is being absorbed by Turkey and Germany,” he added.
While there is merit to the two previous points for the leave campaign, in Nusseibeh’s view, the case is less clear cut for the leave campaign in terms of European immigration. “The fact that unemployment in the UK stands at 5.1%, one of the lowest rates in developed economies, suggests that these workers are not displacing native born workers,” he said.
But the fact that underlying wage growth is running under 2% suggests that this influx has forced down wages which is painful for low-income UK citizens, added Nusseibeh.
“However, the problem is that in most scenarios, leaving the European Union will not enable the UK to reverse this trend in any meaningful way, because any trade agreement with the EU will still have to entail some form of free movement of labour,” he said. “Therefore, it is difficult to see how the leave campaign can achieve its objective as it relates to the majority of the immigrant flow into the UK.”
The third issue is of economic benefits vs costs of being in the European Union. “In this part of the argument, it seems to me the weight of evidence stands with the remain campaign,” noted Nusseibeh. “Some 44% of UK goods exports are to the EU, possibly 42% taking into account the Rotterdam effect. This percentage has fallen from 60% with the slowdown in European economies over the past few years, but it is likely to rise again in time.”
“Therefore, on balance, a rational assessment would see limited gains from a vote for an exit, set against the probability of economic harm to the UK and a smaller possibility of severe global harm,” said Nusseibeh.
“The truth, however, is that the vote on the 23rd is likely to be emotive, not rational, and wise investors must therefore brace themselves for severe economic headwinds in the months to come,” he added.
