The EU Referendum - What would Maggie do?

At our most recent CFO lunch we decided it was impossible to ignore the EU referendum so we thought let’s hit it head on but from a slightly different angle as opposed to the usual business stance and ask our guests;

What, do you think, are the key issues that should and what ultimately will, influence Joe Public on whether to vote to exit or remain?

Immigration

The Finance Director of a large charity (who also happens to have worked within Margaret Thatcher’s policy unit) started by saying that immigration is a huge issue for most people. He recently attended a forum hosted by one of the larger investment banks who provided some detail around immigration figures and they made the point (which doesn’t seem to be getting through to the public) that there’s a difference between European immigration and non-European immigration. It seems that people who are coming from outside the EU tend to stay longer/indefinitely and put a greater pressure on public resources, as opposed to migration from the EU, who ultimately tend to return home and also create less strain when here. Whilst there are lots of facts and figures around immigration, there is actually very little clarity around the issue as a whole.

Disputing the figures in a lot of the recent press, he added that only a third of immigration is from the EU.

The Finance Director of a large housing association added that one of the main issues over immigration is that we don’t seem to be able to accurately say exactly who has entered the UK in the last three let alone ten years and that should be our starting point.

The Group Finance Director of an engineering services group said “At the moment, we do have borders and controls whilst the rest of Europe may not and that won’t change. EU immigration is good because you want skills coming in to the country and other immigration isn’t going to go away if we vote to leave Europe.”

“Whilst there are lots of facts and figures around immigration, there is actually very little clarity around the issue as a whole.”

Making the point about an absence of hard facts, the Finance Director of an ingredients business said he echoed what had been said in terms of just not knowing what might happen if we exited. We know something about what we have now but the reality is, if we vote for change, what unfolds over the next five or ten years will very much depend on the politics of the situation and what we can negotiate. The absence of hard facts is because there are so many unknowns, extrapolations and guess work. He also made the point that the biggest impact on international businesses may be on our currency.

The younger voter vs the more mature voter

The CFO of a manufacturing business said he wondered if people currently understood what is working well with regards to the EU and what could be improved upon. People are speculating about the threat of both routes and he wonders whether the general public is informed enough with regard to the current status quo, what we would be leaving behind and indeed, what the future looks like if we do exit?

The slightly more mature, seasoned voter will be looking back at what we had and will be reflecting on whether we could return to this, whereas this decision to a much greater degree, will impact the younger people. Younger people are not looking to the past and do not have this frame of reference. People will very much base their decision on the stage they are at in their lives added the Finance Director of a commercial legal firm.

“EU immigration is good because you want skills coming in to the country.”

The perception of benefits, in terms of what Europe can do for you, will sway younger people in terms of job opportunities and travel. Whereas the older generation are more concerned about sovereignty and the ability to change and influence laws. This explains the polarisation said the CFO of a valuations business.

Dichotomy of head vs heart

The Finance Director of a food group very much felt that people often have conflicting views between their business and personal ‘heads’.

The Finance Director of a renewable energies business made the point that with only a few weeks left, the ship has sailed in terms of people deciding they have all the information they are going to get at this stage and have made up their minds. A lot of this has not been helped by big celebrities wading in. Neither side, from the beginning, have had a balanced approach nor are people retreating to vote emotionally. “I for one, will focus on what is right for me and my family as there is no hope of understanding the big picture”.

“Her heart would be out and her brain would be in.” [on Maggie]

The European Union was set up for a particular purpose and now like a house party with too many guests, it has become unruly. At the beginning with 15 or 16 countries, there was a common purpose and ethos and to an extent, a like-minded intent. Now we are at the stage where there are too many countries to agree most things, most of the time. In Ireland the media says the UK would be crazy to leave, but they’re being selfish and only focusing on what it would mean for Ireland if the UK voted out.

The Group Finance Director of the engineering business agreed. “It leads to the ‘ever closer’ political union argument which is where I think those are in their thinking who are advocating Brexit.” This is the UK’s quandary. The benefits of being “in” versus the fact that the UK will never entertain political union with the rest of Europe. Trying to make everybody the same is never going to work and that could lead to war in its own right, as people are going to start to break away.

The charity Finance Director then added that he had been discussing recently what Margaret Thatcher would be saying if she were alive today. “As a group of people who had worked with her directly, she would want to be ‘In’. Her heart would be out and her brain would be in. She was very keen to engage with countries around Europe such as Poland and I think she would have concluded that she would need to be in to keep a handle on Brussels and maintain influence”.

“People will very much base their decision on the stage they are at in their lives.”

A clear sign to Brussels

The CFO of a private equity firm thought that the best outcome of the referendum was to remain in but by only 1 vote. This way we can stay but the rest of Europe would know it hung on a knife edge.

The Finance Director of the valuation firm made the point that no-one was really interested in the political union but the British wanted a trade union which made doing business easy. If the UK could say “Yes” to only that, then she thought we would. However, that’s not what’s on offer.

A CFO from the transport industry, whose business is domestic but owned by an international group, made the point that, when talking to colleagues from other European countries such as Holland or Germany, they too are unhappy with the EU and the idea of a super state. You can say that war has been prevented by European togetherness and certainly those people who remember their family’s houses being occupied during the war would acknowledge the success to date but would still not want an overarching European bureaucracy. However, we are more similar to our European peers than perhaps we let on.

If you had the one vote that would swing it, how do you vote?

The CFO of a food business answered with “On balance, I’d stay in. The point made about the federalism I take on board but so much is getting lost in all the noise, especially the Tory noise”.

The view from an NHS CFO was that people have strong opinions about the independence of the UK and the right to determine what is good for us but also about our opportunities to travel and work in Europe. He thought that a great many people would vote on fear. The fear of economic consequences if we leave versus the fear of political union and a lack of control if we stay. It won’t be a rational vote.

Will the argument be put to bed post the vote or will it keep raising its head like the Scottish referendum? The consensus was it would need to be a decisive remain vote in order to be accepted long term.

A CFO from the healthcare industry, who also happens to be an Antipodean, added “Despite the fact that my company officially does not have a position, my personal position is that economically I think it’s really a very obvious thing to stay and I’m surprised that the UK are even having the debate. When I look at it, it seems to me that the debate comes from generations and generations of proud British people and whilst I can understand why the debate is happening socially, I think the economic argument is very strong to remain. I can vote and so I’ll be voting to remain!”

A final decision?

The Finance Director of the housing association, stated that “An interesting question would also be if we weren’t in the EU now, would we vote to join?”

Our healthcare CFO countered with, the problem with that question is Britain wouldn’t be in the economic position it’s in today if it hadn’t entered the EU when it did.

“European Union was set up for a particular purpose and now like a house party with too many guests, it has become unruly.”

From the retail sector, a CFO thought that Europe is currently very keen to keep the UK in Europe but that, should we leave, the aftermath would be like dealing with jilted lovers. Certainly people he had spoken to in Germany, amongst others, felt the UK might be better off out in the short term but with great power comes great responsibility and that in the long term the UK leaving might precipitate the domino effect of other countries leaving. At the end of the day, the EU is a club with rules, if you want to be in the club you have to follow the rules.

The EU referendum vote is not binding on parliament but merely advisory

“If we vote to stay in then what’s our level of influence, how will Europe react to us and what are the ramifications?” asked the charity Finance Director.

Another CFO said whether we are in or out there will be political fallout. As businesses we could do without the uncertainty, being free to get on and build our businesses in a stable environment and either way, we face continued uncertainty. We could be looking at an early general election regardless of how the vote goes so a major concern is, does this solve anything with regards to uncertainty generally?

So when the UK has had its referendum, will it be settled? Denmark has already had two referendums so would other countries follow the EU with their own?

As the Finance Director of a property group commented “The reason we are even having a referendum is because Cameron promised it, not for a second believing he’d actually have to deliver it.”

And finally…

We ended with a comment sent in by a CFO based abroad “I joined the Common Market and in the Common Market I want to stay. This is the longest period we haven’t been at war with our siblings (France and Germany) since 1066 and that’s a fact that hasn’t been shared very widely with Jo Public.”

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