The Electoral Commission has named Vote Leave and Britain Stronger in Europe as the official campaigns in the EU referendum. With both sides of the in-out debate trading blows across a dizzying number of issues, and many business owners still unsure which way they will vote on 23 June, we suggest questions you might pose in order to make the best choice for your company
The referendum on the UK’s continued membership of the European Union is one of the most significant political and economic events in decades, and the campaigns are ramping up for a battle in the newspapers, on the airwaves, and in debates up and down the country. While the two sides continue to throw punches at each other, with claim and counter claim the order of the day, many people remain unsure of their vote and indeed what to believe. One recent survey, conducted by the Electoral Reform Society, found only one in six people felt well informed about the upcoming poll.
Whether voters choose to stay in or leave the EU could have a significant impact on you as business leaders. The IoD is remaining impartial in the debate (see here for more on why), but here we outline the questions you might ask yourself in order to reach the best decision for your company…
1. What links do we have with Europe?
Much of the economic argument for our staying in the EU is centred around our unfettered access to the single market in which we can trade goods to anywhere in the EU tariff-free. This means that even those firms which don’t export to Europe or trade indirectly with the EU may well be affected if they import anything from countries inside the bloc. Being part of the single market also guarantees protection from discrimination and the right of establishment, which allows companies and the self-employed to set up in any member state, an important consideration for those in the services sectors. Those advocating leaving the EU argue the UK’s trade deficit with it (some £10bn at the last count) means a deal to preserve that single market access will be made swiftly.
2. Does EU regulation impact my business?
The EU is known for coming out with some questionable legislation – from regulating the dimensions of fruit and vacuum power to social and employment laws that have significantly increased administrative burdens on employers. For businesses trading with the EU, it can sometimes be helpful to have a level playing field of standards across the 28 countries, but for others this amounts to added paperwork with little discernible benefit. Outside the EU however, there is a chance that trading firms and the UK government would continue to adhere to many of these regulatory standards.
3. Do we have the skills to compete?
There’s no question that one of the key battlegrounds in the referendum will be the issue of immigration, which remains the public’s number-one concern. Businesses tend, according to recent polling, to be more relaxed about immigration than the public at large, and many companies rely on labour from abroad to fill skills gaps while training the next generation of British workers. The government is committed to meeting a target that sees net migration set at 100,000 a year – around a third of the current figure. Leaving the EU could allow it to hit that mark due to the possible end of the free movement of workers, but would such a decrease in labour entering the UK mean businesses struggling to expand? Or would this allow us to be more ‘choosy’ about the skills levels of those who come here to work? And what are the implications for the many European migrants already employed by British businesses? Nearly 40 per cent of IoD members currently employ non-UK EU nationals – it is important to realise that this in itself is a significant commercial link to Europe.
4. What would a vote to leave do to Europe?
Some commentators have suggested that, if we were to leave the EU, serious change would occur on the continent itself. Without the UK’s free-market persuasions balancing out more protectionist elements, could the EU end up becoming less liberal when it comes to trade? That would, of course, affect British companies attempting to trade into the bloc. Some have gone so far as to suggest the combination of the UK’s departure and the migrant crisis could lead to a radical restructuring of the EU, with it splitting into two tiers – one for eurozone countries, and one for those within the single market but not using the euro. This might sound catastrophic in the short term, but such an arrangement could have benefits over the medium and longer term if the EU can operate in a more cohesive way, encouraging growth and driving the global economy.
5. What’s riskier?
Most referendums ultimately come down to one question: stick with the status quo or risk a leap into the unknown? Never has that been more obviously the question businesses need to ask themselves, and never has the answer been so difficult: inside an occasionally dysfunctional club, with access to all the benefits, or out on our own – free to do deals, but possibly unable to actually make them?
Allie Renison is head of Europe and trade policy at the IoD