Last Wednesday - the 13th of July, there was a phenomenally dull but hugely important Treasury Select Committee meeting on the future of the UK’s relationship with the EU. The hearing was important not only because of what was discussed, but because it felt like one of the first landmarks in the Brexit process. It was a turning point in the discourse of the conversation from the rhetorical and populist debate that came before, to the complex practical realities of what is to come. It was at once a stark realisation of the enormity of the task we have set ourselves and a manifestation of the problems we will face whilst tackling it, because almost nobody turned up.

The panellists were Hosuk Lee-Makiyama – Director of the European Centre for International Political Economy, Shanker Singham – Director of Economic Policy and Prosperity Studies at the Legatum Institute, and Richard North – Member of the Leave Alliance (a beacon in the pre-referendum fog) and author of “Flexcit” - the most comprehensive strategy for exiting the EU that exists. The conversation was often impenetrable, covering many aspects of the road ahead with a level of detail and technical understanding not yet seen. It was in stark contrast to the efforts of Dominic Cummings, Aaron Banks and other high-profile leavers that earned them a roomful of attentive MPs and mass media coverage before the referendum. This time though, with panellists equipped with real expertise, the room sat empty and the committee frankly struggled to keep up. Whilst it is frustrating that it took a vote to leave the EU for these sorts of informative and productive exchanges to start happening, the reality is that the debate has now left the realms of comprehension for all but a select few, and certainly of our politicians. Andrew Tyrie called it our biggest political crisis since Suez, and he might not be far off.

There were enough points touched upon in the two hours to fill numerous textbooks, but some broad conclusions can be drawn. The most obvious is the sheer complexity of the choices we will face and the processes required to achieve them. There was clear agreement that invoking Article 50 early is in nobody’s interest, not until we have an idea of our desired future relationships with the Union and what the landing zone for the negotiations looks like. It was even suggested that the button should not be pressed until we have agreed an up-front extension of the negotiation period to five years. Mr Makiyama was conciliatory on this point, stating that anybody who knows anything about trade negotiations understands that artificial time constraints do not exist.

On trade arrangements, the issue of tariffs was dealt with swiftly: business can handle tariffs, grandfathering EU tariff agreements should be easy, and the tariff sections of new trade deals can be done in an afternoon. The conversation focussed instead on the more serious issue of non-tariff barriers, mainly relating to issues of standards compliance and Mutual Recognition Agreements (MRAs). Non-tariff barriers like these would be the main problem faced by exporters should we be unfortunate enough to fall back on WTO rules for trade with the EU. Without an MRA on conformity assessment it could no longer be assumed that our goods comply with EU standards, which would require additional documentation and potentially conformity checks on goods set to leave the UK. Many people have said repeatedly that you don’t need trade deals to trade, which is true, but without mutual recognition of conformity you may need new testing procedures at borders and a whole bunch of new paperwork, which is extremely problematic if you don’t have those things in place at the moment. Free trade deals typically include nothing about conformity or harmonisation of standards, in fact, TTIP is one of the only trade deals that does, and it now looks to be dead in the water. The panel repeatedly emphasised that it is non-tariff barriers and MRAs that should be the primary focus of trade negotiations, rather than tariff and quota focused bilateral trade deals.

There are further issues with the idea that we don’t need trade deals or that trade deals mean easy free trade. Free trade agreements almost never cover services, and there is no precedent whatsoever for having full services access to the single market without being inside it. The importance of services to our economy cannot be overstated. We can be optimistic about service agreements with places such as Australia or Canada, less so China or the USA where the regulatory frameworks differ greatly from our own. If our service access to the EU is hindered though, new service deals elsewhere will not make up for it.

In all, the hearing was wholly inconclusive, but made a good start in moving these discussions towards something we can move forward with. Two clear conclusions could be drawn however: firstly, the best landing zone for the initial negotiations would keep us within the single market. Of course life outside is possible, but the disentanglement of 40 years of integration and the establishment of new arrangements cannot happen within the initial negotiation period, Mr. North asserted it could take twenty years. Outside the single market, we would face regulatory and tax policy inconsistencies costing businesses far more than tariffs. The political havoc and economic disruption caused by falling out of the single market without these arrangements in place could not be reconciled for decades, no matter how big our ambition. Doing trade deals with other countries is the relatively easy part, it is securing our immediate and future relationships with Europe that will be the most difficult and important task in the first stages of the Brexit process. This is besides the fact that we are unable to actually sign trade deals until that relationship is secured, and the negotiation of these deals will be contingent on what that relationship looks like. Moving towards a Swiss or WTO-like scenario should be done from the relative comfort of some EEA-based position.

The second broad takeaway from the hearing is that all of this stuff is about to get really complicated. Interlopers like me can only do our best to keep up, then again, if we fall out of the single market, the complexity will be tenfold. Let’s get ourselves settled in the comfy waiting room of the EEA, and take our sweet time over everything else.

​Full video of the Treasury Select Committee hearing: here.
Full transcript of the meeting here: here.
A handy summary of the meeting: here.

Economics is dominating the EU referendum debate as of late, with multiple reports and forecasts coming out each week. They almost unanimously show that leaving the EU would negatively affect the economy. Despite this, the vote is still split fairly evenly down the middle according to the polls.

To name a handful, we’ve heard about the negative effects of leaving the EU from the Confederation of British Industry, the London School of Economics, the National Institute of Economic and Social Research, the Institute for Fiscal Studies, the International Monetary Fund, the Bank of England and the Treasury. Only Economists for Brexit suggest that there may be positive economic effects. The economic consensus seems obvious, so why does the electorate seem reluctant to heed the warnings?

Without delving too much into conspiracy-like musings, some leave voters may suggest that there are some vested interests involved - that the CBI receives EU funding, that the Bank of England and the treasury will not contradict the government, or that the IMF needs us to help deal with the EU’s debt obligations and the probable default of Greece later this year. Alas, whilst this may be claimed of a few, it certainly cannot be said of all the bodies producing forecasts.

More robust criticisms can be made of economic forecasting in general. To predict the future, economists must make assumptions about possible variables that may affect the result. In other words, if economists assume that we handle Brexit badly and make bad decisions, then the results will be accordingly negative. Some forecasts factor in a fall in productivity due to changes in trade patterns, which is difficult to back up with evidence. Others include potential falls in trade with EU members but ignore the possibility of increased trade elsewhere. Most forecasts assume that Britain would exit the single market immediately after a leave vote, which is not likely and would be a bad strategy, so the forecasts look bad.

Patrick Minford of Economists for Brexit makes the assumption that we exit the single market and fall back on WTO rules for trading, then assumes we would be entirely non-protectionist in imposing no tariffs, and finds that there would be economic benefits from an exit even in the short term. He uses his own bespoke economic model to do the forecasting though - a different model to the CBI, who used a different model to the treasury. Where forecasts are designed with a particular mind set, even if subconsciously or due to groupthink, the pieces often fall in the right places. Different economists with different views make different assumptions, use different models, and produce different results.

These are valid criticisms, yet the fact remains that the forecasts have been unanimous in their conclusions. Economic models are far from perfect prediction machines, as everybody surely understands. Without doubt, a forecast for 2030 should be taken with considerable salt when economists often struggle to forecast a few years hence with success. But it cannot be denied that there is a consensus, across multiple forecasts from multiple sources. The long term effects are more difficult to have confidence in, but at this point only the staunchest of leavers would argue that an exit wouldn’t risk negative economic effects in the short term.
​
We may not know exactly what “Out” looks like, but the options are in front of us and educated guesses can be made. It is disappointing then to see the least risky option – the EEA/EFTA route – not getting the economic coverage it demands. The trouble is, for many people this referendum is about culture, politics and sovereignty above economics, and so must be won on those grounds. The economists have concluded that some degree of short-term economic grief is a certainty in the event of an exit, and whether you think this is due to groupthink or not, the real question is whether it’s a price worth paying.

Our EU referendum campaign started with 100 days to go and now there are less than 50. What can we expect from the coming weeks? In terms of new information we are starting to see a plateau at the halfway point, and already the campaigning has become more fierce and bitter. Well, enough of it. Here’s what’s going on with our campaign work.

We’ve been asking for your questions on postcards at all our Action for Business events and there is a small pile growing on my desk. Some of them are almost one-word answers and some of them have taken days to research. It is increasingly apparent is that the Q+A may be the best way of getting information across and it is becoming my favourite part of the site. Some of the questions allowed really in-depth analysis of select issues that might have been skimmed over all too quickly elsewhere. It is a great way of really getting to the nuances in the evidence and providing arguments that you won’t find anywhere else. I’m doing my utmost to source everything I write too (just click the orange words), hopefully giving the answers more credibility and leading the readers down other paths. Keep the questions coming and keep checking the Q+A for new content as the referendum approaches.

The results of the final British Chambers of Commerce survey are in and there was a big shift across the North West, where a 59% to 30% lead for remain has become a 47% to 43% lead for remain; quite a shift in 3 months or so, especially when the number of “Don’t Knows” has barely changed. For Greater Manchester the shift is less dramatic with remain leading by 56% to 35%. Interestingly, this is at odds with what we are seeing at our Action for Business events, where we have been asking you to hold up one of three cards signalling your voting intentions for group photos. Some of these can be seen on the business view page. We are consistently seeing a vast majority of “Ins”, with almost all others saying “Don’t Know”; there have only been one or two “Out” cards seen at a single event. This begs the question: where are all the leavers? Is this a similar case to “shy tories”? Are the polls getting it wrong?  Or is it a reflection of the type of businesspeople coming to our events? We don’t know the answer, but it’s interesting nonetheless.

If you are a leaver – shy or otherwise, or you still haven’t made your mind up, we would like you to get involved with our campaign. We have three events coming up: roundtables with both Vote Leave and Britain Stronger In Europe and a hustings-style debate featuring both campaigns. We would like to have a fair representation of all viewpoints at these events to make them as useful and interesting as possible. At this point we are in abundance of remainers it would seem, so please get in touch if you have alternative viewpoints or if you would still like to know more. This is everybody’s chance to question and scrutinise the campaigns so please, let’s not make it too easy for them.

In the coming weeks we are going to be looking towards post-referendum issues. Whatever the result, it is vital that a clear strategy exists. In this respect we will be building upon the work of other pro and anti-EU sources to recommend general directions of travel, be it from inside or outside the EU. We will also continue to answer your questions so please ask us anything at all. In the meantime, make sure you are ready to use your vote!

alex.davies@gmchamber.co.uk @GMCC_Alex

Trying to maintain neutrality in this debate feels like tap-dancing on the edge of a volcano. One of the reasons for this is that being neutral means different things to different people. Does it mean that 50% of the material should be pro-leave and 50% pro-remain? That every point which gives weight to a particular argument must be countered with one that takes it away? The problem with this sort of idea is that the referendum debate itself isn’t neutral.

We are choosing between a situation which is familiar yet imperfect, and one which is unfamiliar. In this case, if we are truly interested in gaining a full and equal understanding of the arguments either way rather than simply reinforcing our existing views, time should be spent considering both the imperfections of the familiar option and the possibilities within the unfamiliar one. We should strive to understand the pros and cons of both sides, even when one is more complicated than the other.

We are about to vote in a referendum on our EU membership in which the government will not tell us what it plans to do if we vote to leave. The government has taken a position in a referendum it dictates the terms of, and refuses to talk seriously about the opposite one. In fact, they haven’t said anything about their post-referendum plans whatever the result. We can all agree that if the government is not making plans for an EU exit then it is not functioning in our best interests. Of course they are making plans, they have to be. But then, why are they doing it behind closed doors? If the plans they are making will lead to the disastrous things they keep telling us about, wouldn’t it bolster support for remain if we knew about it? Are they not telling us what they are thinking because it would bolster support for leave?

This skew of information is the root cause of this whole debate seeming so impenetrable and so hard to navigate. The aim of this campaign is to make the case for and against leaving the EU and staying in it. To present 5 or 6 scenarios and the potential impacts isn’t really good enough. We need to consider what is actually likely to happen, which means making predictions.

If we vote to leave the EU on the 23rd June, the terms of our exit will be negotiated by a government which fought for us to remain, and a government that will do everything in its power to mitigate any negative effects to our economy or anything else. If we trust the government to act accordingly, we should have faith that they will pursue the path of highest continuity and least resistance– the strategy that mostly resembles remaining in the EU. This would mean re-joining EFTA as soon as possible and taking the Norway option.

Both leavers and remainers might find this difficult because the Norway option is not the one that they want. Critics will say that we don’t want to be like Norway, it gains us nothing, it would be EU membership in all but name, and they may be right. But this would be making the regular mistake of seeing Brexit as an event rather than a process. Whatever reasons you may have for wanting to leave, and even if you want to remain, this option is the easiest and least disruptive method of exiting the EU that exists. The legal framework for doing it has existed since 1994. If you want to stop immigration, or think we should negotiate bespoke trade agreements, or you want us to be more like Turkey, you should think about achieving these things in maybe five or ten years, not on June 24th. Think about minimising short term disruption, and maximising long term gains.

If this is the option the government is planning for, it seems as if they won’t tell us about it because it might hurt the remain cause. One would think that the leave campaigns would jump on this opportunity to increase their support, but instead both Vote Leave and Grassroots Out have rejected the Norway option, and indeed all the other options you may have read about.

“First, not in chronological order, we will repeal section 2 of the European Communities Act 1972. This is Parliament’s instruction to our courts to treat EU law as supreme. We will repeal it and restore democratic government.”

Their plan, in simple terms, is to immediately sever all ties between the UK and the EU and unilaterally break all of our treaty obligations. This puts us in totally uncharted waters, it removes the obligation for the EU to negotiate with us; it breaks us from all of our existing EU trade agreements, and means the EU immediately imposes its common external tariffs on us. It essentially takes every piece of EU related legislation and throws it into the shredder. We would have to start again from scratch. This is economic suicide and no sensible government would consider it. Yet the people who intend to represent entire leave voter base won’t take any other suggestion seriously. If they lose and we vote to stay in because people are scared of what might happen, they will only have themselves to blame.

The remain campaigns aren’t being allowed off the hook here either. They know that if it comes to it, there is a relatively painless path out of the EU that is preferential to all others and that it is the one we would be most likely to take. Like the government however, to reveal this would mean they would have to stop endlessly repeating uncertainty and dubious statistical arguments and start coming up with some more passionate and endearing ones. If they lose and we vote to leave because people are not hopeful we can achieve anything substantial by staying in, they will only have themselves to blame.

​If the government loses and we vote to leave; and if the reality of taking the path of least resistance enrages the leave voter base who were expecting a more devastating break up, they will only have themselves to blame.

The cloud of confusion over the leave side is systemic and it makes productive debate almost impossible. Whatever you believe, you should be annoyed by this; we are being presented with a false choice. This is bad news for anybody who wants to put themselves in the best position to make a rational decision. Remain advocates, perhaps even more so than leavers, should do their utmost to have an understanding of the best course of action if the result does not go their way. This is very difficult when we don’t have the relevant information as to what the plan is.

If the result of the referendum is not your preferred one, it would be in your best interest to have an idea of what you hope to achieve and the possibilities available for doing so. Otherwise, it may fall to people who do not share your views to dictate the direction of travel. Business will not halt on June 24th, and whilst we are perhaps not being given the full tool set we need to make a decision, we must be prepared for whatever may need to happen in the following years. Everybody, make sure you vote, and make sure you’re ready, whatever the result.

alex.davies@gmchamber.co.uk @GMCC_Alex

I’ve been talking to people a lot about the referendum over the past few months in both professional settings and in the pub. Purely from my own experience, two things strike me at once: firstly, everybody wants more facts and more clear-cut arguments for and against. Secondly, everybody seems to have made their minds up. The amount of people who admit to not knowing which way they will vote is staggeringly low. Not only this, but I’m constantly surprised at how steadfast people are in their views. What are people basing their opinions on?

Every one of us has instincts. Personally, I have been reading everything I can about the referendum for a while now, from daily broadsheet coverage to obscure independent blogs. Being part of my job, I knew in advance that I would be doing this. I also knew that I would have to report on my findings, ideally from a neutral standpoint. So I left my instinct behind.

University helped me with this, in behavioural economics we learn about cognitive biases and heuristics - shortcuts the brain takes when processing information that can lead us to acting irrationally. For example, confirmation bias means we are prone to believe information that supports our existing viewpoint and discredit that which challenges it. The availability heuristic means we rely on immediate examples that come to mind when evaluating a decision, rather than seeking out new information. Status quo bias tells us that we have a natural preference for the current state of affairs. The point is that we cannot switch these things off, but by being aware of them, we can try.

So I did exactly that. Let’s go in with no preconceptions, listen fully and intently to both sides, and see where we end up. It goes something like this: start with the basics, read the arguments from the campaigns, read the factsheets, read as many bullet-pointed cases for and against as I can get my hands on. Immediately, alarm bells are ringing. Conflicting statistics, hyperbole, inconsistency: it’s everywhere. Deeper we go then, chasing sources, trawling through legislative documents, tackling all the long-reads. Find everything that argues against what I think I already know and read it all. Do it again and again. This is my job, but it’s for me too. I am waiting to be inspired, to have a revelation, to have the answer shake me by the collar and say “this is who you are!”

It hasn’t worked. I have never moved more than 5% or so from the fence. Will something happen in the next 10 weeks or so that will change this? I hope so, but I am not hopeful. I have to remain impartial in a professional sense, which at this point is not difficult because I can just tell the truth. But all of us need to make a decision, and all of us should use our vote to the best of our ability.

It has been said many times by myself and others that there is only one fact in this debate: that there are no facts. Obviously, there are facts about what the EU is, what it does, what our trade relationships are, all those things. But as for what happens if we stay in versus what happens if we leave? There are no easy answers. In objective terms, every single point of contention is debateable. There is a case to be made both ways. All we can do is figure out what the potential outcomes are and weigh up the odds of those outcomes coming to fruition. Even if we knew every piece of relevant information in existence this would be impossible to do without making any judgement calls along the way. The problem is, when we take this kind of debate and try to wrangle it into appearing factual, we create an environment in which hyperbole, cherry-picking and fear-mongering thrives; an environment where every comment is interpreted as an absolute by the opposition, leading to false-criticisms of false ideas; an environment where the more confident the prediction, the more it should be treated with caution.

When faced with this situation what tools do we have for making a decision? Well, we have our instincts. More information is always good, but in the end we will have to make judgement calls, we have to be subjective. How a person will vote will be based on all the things that makes them who they are: their upbringing, where they are from, where they live, where they work, their friends and family, their political leanings, their experiences. So you know what? Let’s not try and condense our views into ten bullet points, let’s just have a chat about them. By empathising with one another, we can understand both sides of the argument much better than if we throw dodgy statistics about the place. We all need to use our vote on June 23rd, being undecided won’t be an option by then. So people say they want more information, but they are still managing to make their minds up. They’re going with their instincts. I’m not going to question why this is anymore, I’m going to say “That’s okay. That’s good”.

A longer version of this blog first appeared in Issue 101 of 53 Degrees magazine.

​alex.davies@gmchamber.co.uk   @GMCC_Alex

It’s getting pretty difficult these days to go anywhere without some mention of the EU Referendum. Obviously in my day job this is an issue I have a great deal of interest in and I am slightly worried that the few facts that are available are getting lost in a mixture of half-truths, complacency and scandal laden headlines.
 
I think it’s important then that the Chamber has identified a crucial role to play in this and act as an honest-broker in making sure that when you vote on 23rd June - and please use your vote - that you can do so after having had the benefit of well-informed, fact-based and well-reasoned articles, debates and analysis.
 
And this isn't just for our members either. I hope that the work that the Chamber team are committed to can be used by other people too whether they're in business or not. For example, only a few weeks ago my daughter got some mail from the leave campaign - completely unsolicited - and outlining in quite attractive detail why the UK should leave the EU. So far nothing similar has been forthcoming from the stay campaign. The information may be right, it may be wrong but without considered analysis most people would never know.
 
So please get involved with this campaign and don’t just look at this from a personal perspective. One of the big things that I am keen on members doing more of is involving their employees in work like this. As President I sit on the Policy and Campaign Committee for the Chamber and when we were discussing activity on the back of this campaign, it was very clear that the call to action should be as widespread as possible so look out for more information on this as we move closer to the big day itself.  I believe that it is crucial that we debate the issue with our employees to ensure everyone understands the facts.


Read Wayne's full column in the April edition of 53 Degrees.

We are now just a few weeks away from the start of the official campaign period ahead of the EU Referendum on 23rd June though it already feels like this has  been going on forever.
 
So far we have been fed a mixed bag of politics, personalities and white noise. What there hasn't been so far is a concerted effort by either side to present to business, in fact the British public in general, any reasoned assessment of why we should remain in or leave the EU.
 
The Chamber will take an even-handed approach that will try to deal with the alarming ambiguity and conflicting data. Our primary goal is to do everything we can so that our members, indeed anyone that accesses what we are producing on this issue, can make a better informed decision come 23rd June. We will remove the relentless rhetoric that adds no value and try to set out the case for and against in a succinct and understandable way.
 
Promoting the case for both sides  doesn't mean being bland; it doesn't mean that we can’t and won’t highlight and myth bust on both sides’ claims; it doesn't mean our members can't have opinions, but it does mean that we can and must set out the case for and against in an even-handed way.
 
Our members have already made their views clear in recent surveys done as part of the BCC’s work on this with nearly 60% wishing to stay, 30% wanting to leave and 10%  undecided. This may and probably will change as June draws near.
 
As June 23rd comes ever closer I believe that a good many people will actually start to realise the importance of this vote and its potential implications. We must encourage as many people to vote as is possible. We must persuade the apathetic and reluctant.
 
We have one shot at this; let’s make sure that we use our votes and most importantly, we use them wisely.

The financial times does a “poll of polls” that aggregates every poll conducted on the referendum. The most recent set of results saw 'remain' at 46%, 'leave' at 38% and 'undecided' at 16%. Since the first poll in February 2015, 'undecided' has remained fairly steady at around the 16% mark, whilst the in/out positions have slowly converged on each other. They have actually jumped apart recently; an earlier YouGov poll in January put 'In' and 'Out' at 41% and  42% respectively – the closest result we have seen yet and the first to show a majority of 'Out' supporters. If anything, the result is becoming harder to predict. The picture within the business is perhaps even more interesting.

There has recently been a letter circulating with 198 signatures from 36 FTSE 100 companies stating their support for continued EU membership. Obviously, these companies are all big, high growth companies that hire large numbers of people and trade globally. It is no real surprise that they support Britain's membership of the EU. A vote to remain is the less risky of the two as things are most likely to stay just as they are it would be business as usual. Throw in potential uncertainty in the economy and financial markets and it is easy to see why these big companies are being risk averse. 

A recent British Chambers of Commerce (BCC) survey seemed to support this mentality, with 75% of companies with more than 250 employees wanting to 'remain' against 53% for small companies. Similar rifts appeared amongst exporters – 76% of EU-only exporters support EU membership, whilst 57% of non-EU exporters support an exit. Overall, the remain/leave split across all respondents was 60% against 30%, with just 10% undecided. Again, this showed a slightly smaller majority than the previous BCC survey, where the result was 63% for 'remain' and 27% for 'leave'.

A YouGov survey published in January paints a similar picture. Interviews with a handful of big private sector firms from the FTSE 100 and FTSE 250 found that all but one supported continued EU membership. The 501 leaders of small and medium enterprises however, were split more akin to the general public – 47% to remain against 42% to leave. An earlier poll by the Federation of Small Businesses showed the same split between in and out, with 50.5% of those surveyed saying that EU membership benefitted the economy – a slim majority.

There certainly seems to be a focus on the thoughts of “Big Business” in the media rather than the real driving force behind the economy – the SMEs. Whether the views of such global behemoths have the best interests of Joe Public at heart, or that they should be the basis of any pro-EU argument is another debate. What is clear is that their resolute support of the status quo looks slightly out of sync with the ever-shifting views of SMEs and the general public. In a debate so devoid of facts the question of whose opinion matters can be as important as what the opinions are. After all, businesses will not be doing the voting, the people will.

Tell us what you are thinking! Will the views of big companies affect your decision? What concerns do SMEs face that bigger firms do not? Should businesses be rallying their workforce?

Alex.davies@gmchamber.co.uk
@GMCC_Alex

With the news that British officials have entered the final phase of negotiations to reform the UK’s relationship with EU, an early referendum date is looking more and more likely. June 23rd is the date hot on everybody’s lips, and will become an even safer bet if Mr Cameron is successful in sealing the deal at this weekend’s European Summit in Brussels.  It seems apt then, that this week saw the Chamber’s engagement with this issue become more active, as we hosted the Britain Stronger in Europe campaign (BSIE) for a round-table discussion with our members. Headed by former CEO of Marks and Spencer’s, Lord Stuart Rose, BSIE is currently pushing to become the officially recognised “In” campaign, and this week launched their campaign across the North of England. 

BSIE outlines three key areas in which they feel we benefit from being an EU member: the economy, security and influence. They make their view very clear that the best outcome is for the UK to remain a member of a reformed EU. The worthiness and intentions of the proposed reforms was the first point of slight contention in an otherwise uncharacteristically civilised discussion, given the topic. The main concerns seemed to be around the general public’s views rather than that of business, and about how the campaign plans to engage with those for whom the sticking points in the debate may seem to have little relevance in day-to-day life. 

Overall, there was an obvious pro-Europe air in the room. This was perhaps to be expected, as a recent poll of members by British Chambers of Commerce (BCC) showed that 60% of senior business people surveyed would vote to remain. 34% said they would reconsider based on the Prime Minister's reform negotiations, but it was the nature of the discussion after turning to the tactics of the “leave” side that was perhaps most indicative of the failures within the wider debate.

BSIE have the advantage of supporting the status quo, and are opposing a number of squabbling “leave” campaigns that share no unified voice. All the “remain” campaigns have to do is show that the prospect of leaving the EU is a risk, that it entails uncertainty, which at this point is no effort at all. Many options would be available to us should we leave, so people inevitably want to leave for a multitude of different reasons and wish to achieve a multitude of different things if we do so. Bundling this wide array of potential economic and political pathways under the “NO” on the ballot paper could be viewed as counterproductive if we are really striving to have a serious and fair discussion. There cannot be a unified voice within the “leave” campaigns or the “leave” side of the public simply because one does not exist. We will hopefully soon know exactly what a vote to remain is a vote for, this won’t happen for their opposition (If we leave we would have a pro-EU Prime Minister and government involved in the negotiating – a bizarre thought), so the temperament of the business community is unsurprising and entirely reasonable. It is tough to imagine that 34% of them will see anything significant enough to be swayed. This does mean however, that as and when we can arrange one, a similar event with a “leave” campaign should be quite exciting, and seeing both sides in the same room at this year’s BCC conference should not be missed.

Are you interested in us doing more events similar to this? Do you plan to engage your workforce concerning the referendum? Still unable to make up your mind? Get in touch!

Alex.davies@gmchamber.co.uk
@GMCC_Alex

In the coming blogs I will break down some of the statistics and arguments most commonly used in the debate. I aim to clear up any common misconceptions, prove that numbers can be made to show almost anything based on the underlying assumptions made, and to show how the lines from both sides on the very same issues often contradict one another. If I seem to give more time to one side than the other, it is because their numbers or assumptions are riper for scrutiny, or reveal something more complicated.

A commonly cited figure is the 3 or 4 million jobs that are “linked to trade with the rest of the EU”. These essentially are any jobs in exporting industries or those linked to the wages arising from such industries. It’s certainly a nice figure to bandy about but what does it actually mean? Within the context it usually appears in it seems to mean: “If we leave the EU 3,000,000 people will lose their jobs”, or maybe: “3,000,000 jobs have been created as a result of being in the EU”, or the slightly less apocalyptic: “If we leave the EU 3,000,000 jobs may be at risk”. In reality the figure is pretty much meaningless in relation to the debate. These figures are not calculated with the intention of reflecting the impact of the UK leaving the EU, as they are linked to our exports rather than our membership status. The researchers at South Bank University who originally reported figures in this ballpark stress that “we do not seek to test this counterfactual hypothesis”; a similar paper from the National Institute of Social and Economic Research (NIESR) warned that: “there is no a priori reason to suppose that many of these [jobs], if any, would be permanently lost if Britain were to leave the EU.” Would the demand that creates these jobs really just disappear if we leave?  Retaining access to the single market will undoubtedly be a priority if we do, and article 50 of the Lisbon Treaty ensures we would have at least two years to conclude an agreement. Even so, if we were able to set our own trade regulations how much would we realistically be able to or want to deviate from current standards? “EU” regulations are far from the only ones affecting us, and most essentially bundle together and enforce a whole bunch of wider international agreements, standards and protocols. We would still need to adhere to such standards and accept global convention in order for us to remain an attractive country to trade with. Even if we strive to achieve more bargaining power in such negotiations, we would unquestionably do everything to avoid risking jobs in export industries.

There are many misconceptions surrounding article 50. The idea that the UK will “not be in the room” during any exit negotiations is false: Clause 2 states that an agreement will be negotiated and agreed upon with the withdrawing country, clause 3 states that the two year negotiation period will be extended until a unanimous agreement is made and clause 4 states that the withdrawing country will remain a full part of EU institutions during negotiations. Another often heard line is that the referendum puts our free movement status at risk. This is also not necessarily true. The referendum concerns our membership of the EU, whereas the free movement of people, goods and services results from us being a part of the European Economic Area (EEA). We should have no qualms about retaining our status within the EEA – if we so wish - if we vote to leave. This would be part of what is often referred to as “the Norwegian option” - just one of multiple exit strategies that will be discussed in later editions of this blog.

If your company trades with the rest of the EU please let us know your take on the issue. How does our trade relationship with the EU affect your business? What reforms should we be fighting for? What are your concerns about the result of the referendum?

More numbers in the next post.

alex.davies@gmchamber.co.uk