A date has finally been set for a referendum on whether or not the UK should remain in the European Union. After months of negotiating with EU leaders the Prime minister finally got the approval he needed for his reforms from the 27 other EU members, reforms which include limiting the benefits that EU migrants can receive and allowing Britain to opt out from being part of ‘ever closer union’.
On the basis of those reforms the Prime minister announced he would campaign for Britain to remain in the EU along with the Labour party and most of his own backbenchers. However a number of cabinet ministers have since declared they will be joining the out campaign as well as the London Mayor Boris Johnson.
Now that politicians have taken up their positions in the debate the question is how will the rest of the country vote on 23rd June. Recent polls suggest that many voters remain undecided and it is too early to tell what difference Cameron’s negotiations with EU members has made.
How about UK businesses? A poll released by the Institute of Directors showed that 6 out 10 UK business leaders would vote to remain in the EU. Whilst a letter was sent to the Times signed by 197 UK business leaders, including bosses at Marks and Spencer and BT, stating that they believed the UK would be better off in the EU and giving their approval of Cameron’s deal.
However this is big business talking and there are signs that smaller businesses might be more likely to vote out in the summer. Smaller businesses do less trade with the EU and their only contact with the EU often will be when wrestling with Brussel’s regulations such as worker’s rights and data protections laws.
Cameron has said that leaving the EU would be a “leap into the unknown” for the UK and its’ businesses. It would seem that most business leaders are indeed anxious about what a Brexit might mean for their operations. These anxieties have probably only been heightened by the news that almost immediately after Cameron set a date for the referendum the pound hit its lowest level against the dollar since back in 2009. Market data however was unaffected by the announcement.
This financial data, which at one point showed the pound being down by 2.4%, would surely have caused some jitters for those already worried about the economic consequences of the pending referendum.
At this stage it is unclear what a Brexit would look like. When politicians and the media talk about what would happen if Britain left the EU the emphasis is normally on matters such as migration, defence and security. Even economic analysts have avoided making any concrete predictions arguing that no one can really foresee what kind of settlement Britain could hope to get after breaking things off with its’ European partners.
What economists are sure of is there will be some uncertainty for a least a couple of years after a Brexit which could hamper investment. A Brexit would mean that Britain would have to negotiate new trade deals which could take years to complete.
On the other hand those in favour of leaving the EU have argued that in the long term UK businesses would significantly benefit from a Brexit. Campaigners have argued that being out of the EU will give the UK more control over its economy and that the absence of EU red tape will allow it to more freely trade with non-EU global superpowers.
The IOD director general has urged employers in businesses of every size to begin a serious debate with employees about the EU question. The IOD found that only 54% of UK businesses had discussed the matter at boardroom level. Now that a date is set it is time organisations considered a Britain outside the EU would mean for their own business.