Unless you’ve been hiding away in a cave for the last few months, the EU referendum debate has been unavoidable. From television to the tabloids, you won’t go a day without hearing a new argument from each side on which way to vote. And, with less than two months to go, the noise from both sides of the argument will only get louder. But do we have enough information to go on?
In our recent survey on the EU, we found that 750 businesses in the West Country favour remaining over leaving by a ratio of over 2 to 1. It’s an eye catching statistic, but equally intriguing is the fact that over a third of businesses felt that they need more information before they can make an informed decision on June 23rd.
Hidden beneath the noise are some key questions that businesses need answered.
What would a Brexit look like?
Love it or hate it, whoever coined the word Brexit will go down in history. We hear it on a daily basis without any real explanation. So, what would a Brexit look like?
The answer, put bluntly, is that we don’t know. There is no guide to go on as no country has ever left the EU before, and the Lisbon Treaty (that thriller we’ve all read) says that the UK will have a very limited say on the terms of an exit. The only clue we have is the four options that are commonly discussed:
- The ‘Norwegian Model’ – Often referred to as the ‘nearly not out’ option, the UK would remain a member of the European Economic Area but with no vote over EU rules.
- The ‘Swiss Model’ – Switzerland is not a member but has negotiated a number of trade deals. In return for this, it has to ensure that domestic regulation is aligned with the EU.
- A ‘WTO Scenario’ - The UK would lose access to the EU Single Market, and would revert to conducting trade with the EU under the rules of the World Trade Organisation.
- A UK-EU Free Trade Agreement – Negotiating a trade agreement upon exit, the UK would still have to implement EU standards on goods supplied to the EU, but would otherwise have greater freedom.
What would Brexit mean for confidence and investment?
It’s the million dollar question that we don’t have a definitive answer to. There have been plenty of numbers put out there by both sides, and most recently George Osborne announced that a Brexit would shrink the UK economy by 6%, costing households £4,300 a year.
Naturally, whenever a new estimate comes by one side it’s questioned by the other, leaving both business and the public confused. But people across the board can’t argue with the uncertainty leaving the EU would create.
In the short-term following a vote to leave the EU, there is likely to be significant political and economic uncertainty around our future relationship with EU countries. This uncertainty may impact on future decisions about investment and business growth from both companies inside and outside of the UK.
Ahead of the Scottish Independence Referendum, the pound fell sharply and shares in Scottish-based firms suffered slumps on the stock market. Could we see something similar in early June?
What would Brexit mean for business regulations?
This all depends on what type of exit we end up in as I mentioned earlier.
Most scenarios have a common theme. It appears that continued access to the EU Single Market would require continued adherence to its rules, meaning we would have to conform to the technical standards but without any way of influencing them as we had as a member.
Of course, this is all just speculative as we don’t know the result of the referendum let alone an exit scenario.
You will have noticed the recurring theme – the answers to these key questions are very hard to find. It’s understanding how frustrating this is; businesses and their staff need this information to make an informed decision.
Our policy team have been busy meeting businesses of all sectors and sizes with differing stances on Europe so we can understand the key questions that need answering before June 23rd..
In the next two months, we will be releasing fact sheets and sharing case studies, to give you impartial information, and answers to your questions, ahead of that all important date.