As a business man that worries me. I understand Britain’s presence in Europe has become an issue worthy of national debate, in which citizens will be given the opportunity to make up their own minds, but it is deeply troubling that we are already seeing manoeuvring and political spin.
At my advanced age, experience tells me that this could lead to nasty “side-effects” for the British economy due to the uncertainty generated among businesses which will hamper investment and undermine long-term planning. Our elected representatives are often accused of not understanding the world outside the “Westminster village” and regrettably once again we see the different factions already releasing statements that frankly leave questions unanswered – or worse still open to significant interpretation.
On behalf of business, particularly small and medium sized ones, I would like to say that it is critical the government moves quickly to set out the agenda and give the industry as many reassurances as possible. While the result is unknown it will be important for businesses to hear what the government is planning for all eventualities. If we were to leave the EU, what planning has been done to map out the consequences of such a scenario? For example, speaking to my peers there are fears about borrowing in the immediate to support future growth strategies.
We are seeing signs of project deferment of planned and costed work, which had been allocated since the green shoots of recovery were apparent. Does the government have a plan to ensure businesses will not be subject to volatile borrowing rates should the UK leave the EU?
I understand that the Bank of England is devising contingency plans and strategies in the event of a leave vote. It is, in my opinion, essential that before the referendum the government produces a detailed plan which spells out the pros and cons of the impending result and the subsequent actions that are essential in either decision. It must also declare the effect on our world status should we leave and how the reparations to the damage of our existing trading agreements will be handled.
I recognise that complex negotiations lie ahead and in all probability the outcome will not be as simple as “are we in or out of the European club”.
Read more on the EU referendum:
- Continental business leaders want UK in Europe even more than British counterparts
- In or out? The VAT cost of a Brexit
- UK plc: Clueless within Europe, rudderless without
Whatever the outcome it will be imperative for business confidence that CEOs and business owners know government is thinking ahead. Business relies on confidence and if there is an economic hiatus at a time when the economy is still in recovery it will be critical for the government to have the mechanisms in place to minimise the impact on our trade.
As we move towards the EU referendum I can sense that the adversarial approach to the debate could be polarising and nullify the great progress the economy has made in recent times. If the “no” camp is arguing that Britain is better off out of the EU, citing examples of Norway, it must also make every effort to explain the practicalities of how the economy will function. Will Britain have to seek new trade agreements with individual countries or economic blocks? What resources will be in place to make such changes happen as quickly as possible and has the cost of those changes been budgeted for? If we leave what is the strategy to replace any potential export opportunities to Europe, currently our largest trading partner?
If the yes campaign is to convince Britons that it is best for us to stay in the EU, with some form of revised treaty, it must address the concerns of the no campaign and be specific about the economic and social value of continued membership and the preservation of our “Favoured Nation Status”.
The migration issue is in the forefront of a lot of current thinking, much of it generated by UKIP and the Euro sceptics. Thus a clear statement from government is needed as to the benefits of enabling workers with key skills to migrate to the UK. Additionally, the value of sharing of academic research and innovations to develop world leading products and services, and our negotiating strength as a trading block must be explained. The “yes” camp must show clear evidence to reassure voters.
Overall I hope we can have a robust and frank debate about Britain’s participation in the European Community, but my request is that it does not slide into the “barroom style” debates we so often see in parliament. The eyes of our trading partners around the world will be watching throughout this process and they will make decisions, based on how they interpret the signals coming out of the UK. It is critical that those signals reflect a sensible debate and do not appear reactionary. Otherwise, the UK and particularly UK businesses could be in for an uncomfortable ride in the next year or so.
Roger Thorpe is chairman of CCE.
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