Brexit or Bremain? It’s an impossible topic to avoid, and polls have so far failed to pin down a clear winner. On 23rd June, Britons will be voting on a land-mark decision on whether or not the UK remains in Europe or leaves to stand on its own.
There has been much debate over what the outcome will mean for businesses, and the decision could bring major changes to the way business owners conduct their companies both in and outside the EU.
Many believe the Government are using the ‘fear factor’, positioning the vote as Stability and Prosperity (Remain) or Crisis and Disaster (Leave). Whilst many companies may agree with this, backlash from speaking out against the Scottish referendum has left them nervous to speak up, and businesses this time are being more discreet as they are conscious not to appear biased. According to a survey by YouGov in February 2016, 96% of big businesses want to stay in Europe, but only 47% of SMEs agreed.
Opposing letters have been sent by both the Remain and Stay camps, and we take a look at some of the arguments from these companies.
Vote Remain Camp
Innocent Drinks founder Richard Reed has thrown his weight behind the campaign for Britain to stay in the EU by sending a letter signed by over 200 entrepreneurs to The Times in February. The letter had the backing of a large number of companies including Skype, Net-a-Porter, Jack Wills, and Lastminute.com and the campaign is chaired by Ocado Chairman and former Marks & Spencer CEO, Lord Rose. The letter expressed that Brexit would cause ‘economic’ shock, as well as being incredibly damaging to start-up companies. As it stands, start-up companies benefit from “being able to do business within Europe’s single market of 500 million consumers, with one set of regulations across 28 countries, and the ability to recruit the brightest people here and across Europe”. Although it is unknown what would happen to these regulations if Britain were to leave the EU, it is undeniable that free trade deals with EU countries will become void and will have to be re-negotiated. It is uncertain whether the new terms will as beneficial and it has also been argued that the UK no longer has the experience of negotiating trade agreements alone nor at the level needed.
Sir Terry Leahy, Justin King, Marc Bolland and Sir Ian Cheshire, the former heads of Tesco, Sainsbury’s, Marks & Spencer and B&Q, have also written a letter warning of Brexit, published for “Britain Stronger in Europe”. They claim the move could prove “catastrophic” for millions of families and believe that exiting “would hit consumers the hardest” as prices and inflation would rise. It would damage the strong relationships companies have built with their EU supplier partners, and the broader innovation and digital agenda. The letter also claimed that a Leave vote “would probably mean further depreciation of the pound, driving up the price of imported goods for consumers”, a point that HSBC have backed up, agreeing that leaving Europe could wipe 20% off the pound.
Vote Leave Camp
However, there are plenty of businesses that back Brexit, and the Vote Leave campaign published their own letter, signed by a similar number of business leaders, including JD Wetherspoon founder Tim Martin, luxury hotelier Sir Rocco Forte and Luke Johnson, Chairman of café chain Patisserie Valerie. Tim Martin argued it would be better for business “if we regain control of our own laws and economy” and “in many respects” EU membership has harmed his company. Martin has even gone as far as printing 200,000 beer mats for his pub chain calling for the UK to leave the EU!
The EU is often considered responsible for unnecessary red tape, making it more difficult and expensive for British businesses to operate freely. Leaving Europe would free up some of these regulations, helping businesses to operate under their own direction and as they see best.
Some companies have not aligned themselves to a camp, and believe that the outcome will not affect them. Chief Executive of Primark-owner Associated British Foods, George Weston, believes that they would not be damaged by Brexit and it “isn’t a major threat to us one way or the other”. Weston added that they have a natural hedge between euro and sterling earnings and do not move much manufactured food product between the Eurozone and the UK as their supply chains are local. Changes in tariffs or currency are therefore not expected to affect AB Foods.
Dave Lewis of Tesco has also commented that it should be a “matter for the British people to decide” and he will not be commenting on his own thoughts. George Osborne remarked that he does worry about “people on both sides treating this as a public relations campaign rather than as a debate on the future of our country” and people are “inclined to exaggerate because they feel they are selling a position”.
With large corporations divided on this issue, it is clear to see the difficulty in predicting the outcome of the referendum!