In reality nobody knows what will happen once the UK leaves the EU.
A couple of observations. The big unknown is what will happen to our exchange rate, assuming we leave. I have now seen two reports out of Germany (neither from Brexit supporting organisations I would add) that suggest that one of the biggest concerns of their industry is that the tariffs that will apply under WTO terms, plus a devaluation of the pound, will mean that German manufactured product will be prohibitively expensive in the UK, one of their largest markets. The same survey suggested that the impact of tariffs would be nullified for UK manufactured product through a devaluation, even accounting for the back and forth required under complicated supply chains. Clearly if the currency doesn’t devalue, this won’t be the case and the UK will likely suffer. Interestingly though, the survey then stated that the majority of German business would be prepared to see a restriction to the four fundamental freedoms of the EU, if that meant closer relations with the UK. The stated view of EU politicians is obviously different.
On the UK, it’s biggest issue for years has been poor productivity. One reason this may be the case is a lack of investment in processes and technology. There are many views on how this can be dealt with and nobody has the full solution. One point that is difficult to challenge though is that if business can import cheap labour, and that same business has a short term view of planning, investment will always be limited. If you take agriculture as an example, if you can import cheap labour as many do to pick fruit, you don’t need to invest and seek ways of making processes more efficient through innovation; a double edged sword then. Now, if we remove access to cheap labour business will either be forced to invest, or will fundamentally fail. Again, nobody knows what will happen.
One way that the UK missed a trick (applying hindsight) was the decision not to join the Euro. The value for the Euro is realised based on the purchasing power of all EU nationals - an average if you like. The strongest economies who, on a stand-alone basis, would drive their currency higher, benefit through an effective devaluation through the single currency. It’s a main reason why Germany has the second largest trade surplus in the world. If the UK had joined the EU, it would likely have benefitted in a similar way. Retaining the pound on reflection was not a good decision.
I could carry on with various points but I go back to my initial observation, nobody really knows what will happen. Basic economic theory however will tell you that even if we leave the EU without a deal, whilst there will undoubtedly be some rebalancing, the UK is one of the wealthiest countries in the world, has a highly skilled workforce, and has significant purchasing power, so it will adapt with only short to medium term pain at worst.
The question for me then is whether we are prepared to risk the cost of that short to medium term pain to achieve the political and societal change that some desire. Either way though, I’n pretty confident that we will be fine.