Brexit: What does it mean for business?

Weber Shandwick’s panel of experts look at the business issues surrounding the upcoming referendum

With 15 days to go and campaigning reaching fever pitch, Weber Shandwick hosted a Brexit Breakfast in the heart of Westminster to debate the business issues surrounding the future membership of the European Union.

The event began with a presentation of Weber Shandwick’s EU Referendum 2016 Engagement Index, research undertaken to explore how voters are engaging with the EU Referendum and which different forms of engagement have shaped opinion. This revealed some compelling findings, from the increasing role of Facebook in swaying voter opinion and the regional divides on remaining and leaving Europe (London, Wales and Scotland want to remain, whereas those in the East of England and East Midlands are more likely to vote to leave).

The panel was then introduced and lively debate commenced.

The panel –

  • Toby Perkins, Shadow Minister for Armed Forces and MP for Chesterfield
  • Jacob Rees-Mogg, MP for North East Somerset
  • Jon Moynihan, Chairman of the Finance Committee at Vote Leave
  • Ian Wright CBE, Food and Drink Federation

The arguments –

‘The Failed State’

Jacob Rees-Mogg made an eloquent case for Brexit, declaring the European Union a ‘failed state’. He pointed out that the Common Agricultural Policy, for example,  remains a major part of the EU budget but is a categorical failure for UK farmers. He claimed that the Eurohas left economies devastated across Southern Europe and  EU  tariffs makes it harder for the poorest countries to sell to the UK.

“EU is a customs union protecting yesterday’s economy” – Jacob Rees-Mogg MP

Unsurprisingly, Jon Moynihan of Vote Leave agreed, describing the EU as the major low-growth economic zone in the world.  He said that the EU had a specialism in creating youth unemployment and the EU’s restrictive and regulatory approach was a major reason why most of the world’s mayor tech companies had been established in the US rather than the EU. However, Ian Wright rejected this view of the European Union stating that the single greatest achievement of the EU was that it had kept the peace in Europe for 50 years and questioned how that could be called a failure.

‘The UK is one of the most globalised trading nations in the world’

Toby Perkins kicked off his argument by stating that an ‘out’ vote is regularly linked to a nostalgic desire to return to an attractive past, and made the case that an ‘in’ argument for the EU must be rooted in the 21st century. He contended that Britain is one of the most globalised trading nations in the world, and questioned what message we would send by stepping away from Europe, the result of 47% of our trade. Vote Leave, he argued, simply cannot reassure us that we would be able to negotiate better deals outside of it.

Moynihan rebutted this with the statement that 80% of the global economy is outside of the EU. He noted that our involvement in Europe has led many of our industries to collapse and disappear – highlighting clinical trials industry, medical devices, energy intensive companies, fisheries and London’s art auctions market as examples of those that have been forced out due to European regulation. He emphasised that the important thing to discuss was our exports to the world, rather than our exports to the EU.

“An iron curtain of tariff barriers” – Jon Moynihan comments on the EU’s relationship to the rest of the trading world

Ian Wright pitched in, affirming that a step away from the trading bloc of Europe would mean major international companies, like Diageo, would move out of the UK. He warned that we were likely to see major companies move to Scotland or Ireland to assure trade.  

Security

There were a number of questions from the audience around the geopolitical risks of a Brexit, and how our instability might play into the hands of our enemies.

The ‘Brexiteers’ made a compelling argument in this area with Rees-Mogg focussing on the rise of the far right across Europe. Right-wing politics was growing, he argued, because the EU fails in so much that it does and because it does so much undemocratically. He went on to comment that a reasoned decision from the UK to leave would be a much less dangerous option for Europe than a break up caused by far right or far left parties voted into government because countries are fed up with the EU direction.

When asked if it was NATO, rather than the EU, that was more important in preserving security, Toby Perkins, Shadow Minister for the Armed Forces, replied that if you accept that we ought to be a part of NATO, you accept that we are not a sovereign nation. In the same way ,The European Union, and the sovereignty we cede to it, remains an important part of protecting our security, he argued.

“Wars are not created by armies, they are created by circumstances” – Toby Perkins, Shadow Minister for the Armed Forces, on the role of the European Union in maintaining security

Other parts of the debate focused on a Scottish exit following a ‘Leave’ vote, which was deemed by the majority of the panel as not a price worth paying. Jacob Rees Mogg , said that there was very little risk of a second referendum if the UK voted for Brexit.  Support for the union has risen since start of the referendum campaign.

There was also discussion on whether Parliament would need to legislate to leave in the event of a Brexit. Piers Coleman, partner at  legal firm K&L Gates stepped in here to offer his expertise. He advised  that  there would be a clear requirement for the Prime Minister to receive parliamentary authority to serve a notice to leave the EU. He also made the point that any negotiation to leave would be likely to last up to two years and different Brexit packages could still be on the agenda at the 2020 election.

The debate was brought to a close with the question put by Weber Shandwick Chairman, Jon McLeod, who asked simply, is the EU a train we need to get off?

This was met with a resounding yes from the ‘Brexiteers’, and even the adamant ‘Remainer’ Ian Wright conceded that if the UK was to leave, it could have a damning effect on the Union and he would expect countries, particularly in Scandinavia, to follow.

EU Referendum 2016 Engagement Index from Liz Laurence