In the wake of the decision to leave the EU, Simon Walker urges businesses to do what they’re best at: be brave, innovative and remain ambitious…
There’s no sense in sugarcoating it: Brexit is not the result that IoD members wanted. We surveyed members the weekend after the EU referendum. Almost two-thirds think it will be negative for their businesses. Nearly a quarter say that they will freeze recruitment and 22 per cent are considering moving some of their operations outside the UK.
By and large, business has kept up its end of the social compact during my time at the IoD: to innovate, to invest, to create jobs and prosperity (my column prior to the referendum result had been about the disgrace of the BHS scandal). In the wake of the EU vote, we now need politicians to respond coherently to provide stability as we work out our future path.
We must not lose faith in the ability of British businesses to overcome these challenges. We are the world leader in the digital economy. We have more new start-ups in the UK than ever before and we must work hard to keep them here. The excitement we feel about our own entrepreneur programme – IoD 99 – is not dimmed by the referendum outcome.
The IoD is resolutely positive about the opportunities that globalisation brings. We were promised an open and outward-looking country after Brexit. Whoever ends up in charge must deliver on that pledge – a Britain that continues to play an outsized, global role in a world that is coming together, not moving apart.
It will be well after my departure from the IoD before the long-term consequences of Brexit become clear. But I will be desperately sad if the UK’s openness and abundant ambition give way to negativity, and a nasty vision of a backward-looking, introspective Britain. Before the referendum, half of our members said the UK could, still, be an economic success outside the EU. The challenge now for politicians of all sides is to convince the other half as well. That needs to start with a firm commitment to stability, openness and growth.
One important aspect of a liberal democratic society is the recognition that there is no right not to be offended. Recently, several airlines have tried to move female passengers because ultra-orthodox Jewish or Muslim men refused to sit next to them. They are wrong. When I was a child travelling on buses in Cape Town, many white South Africans were unhappy about sitting next to black passengers. By the time I finished school all buses were “whites only” or “non-whites only”.
Today someone would be arrested for objecting to the colour of a fellow passenger. That’s progress. Any good liberal respects people’s right to beliefs they do not share. But, just as my right to swing a fist ends where your nose begins, so prejudice on grounds of race, gender or sexual orientation must be overridden by the need to protect us all from discrimination.
The government’s apparent willingness to help Tata’s steel business by rewriting pension benefits to rise on the basis of RPI, not CPI, has been greeted with unsurprising suspicion. In reality, something practical must be done to offer a future to declining UK businesses with similar deficits.
One possibility floated in the Financial Times is to follow a Dutch law allowing the suspension of index-linked increases to members when the value of their assets drops below 112 per cent of their liabilities. Because of this Tata invested far more in its Dutch steel operation, Hoogovens, than Port Talbot. When a choice had to be made, there was an easy answer.
The world has changed since the days of jobs for life with final-salary pension schemes, as employees of BHS and Tata Steel are, sadly, likely to find out. It may be kinder to limit expectations in advance rather than risk the company with the loss of jobs and pension cuts that receivership entails.
Of course, compared to Britain’s unfunded state pension liability – estimated at £1.5trn – any deficit is a mere drop in the ocean. Solving this problem will be a challenge for our children – especially with the 20 per cent increase in the number of over-65s expected before the decade is out – and their children after them.
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