- Three in four fear Brexit would have a negative effect on the British economy
- Free movement of people considered significant business advantage to UK businesses
- Half (49%) would prefer Britain to return to being part of a purely economic union
More than four in five business leaders hope UK voters will vote to “remain” in the forthcoming EU referendum according to a new Ipsos study.
The findings, from “Captains of Industry”, a survey of more than 100 of the most senior figures in top UK companies, show most think continuing EU membership would be best for their business (87%), are personally hoping for a “remain” result in the forthcoming referendum (87%) and would themselves vote to stay in (83%) if there was a referendum tomorrow.
The clear stance of business leaders contrasts with the more mixed views of the wider public, and appears to be driven by concerns about the impact a vote to leave the EU would have on various aspects of trade, business and the economy. A clear majority (79%) consider that Brexit would have a negative effect on Britain’s trade with Europe. Over three-quarters predict a negative effect on the British economy overall (78%), on foreign investment in the UK (78%) and on Britain’s standing in the world (72%).
There is less concern about direct negative effects on their company, such as its prospects (76% predict no impact) or ability to attract and retain talented employees (61% say it would make no difference). Additionally, only minority (37%) think a vote to leave would negatively affect trade with the rest of the world. More believe that an exit vote would make no difference (49%). Only 13% think that it would have a positive effect on non-EU trade.
The favourable view of EU membership is driven in particular by the advantages of free movement of people and of cross border trading to their business:
- Over half (57%) of those surveyed consider the ease of visa free recruitment of people from across the EU as a significant advantage to UK business.
- Nearly half cite the ease of cross border trade in the EU (48%) and being part of the single market (47%).
- Additional positive factors mentioned include, ease of access to customers in the EU (29%), being part of EU Free Trade Agreements (29%), a single regulatory framework for their sector (22%), EU initiatives to support business (22%) and harmonisation of standards across the EU (18%).
However, there’s little consensus amongst board members about the UK’s future role in Europe. Whilst only 1% would prefer to leave the EU altogether, nearly half (49%) would prefer Britain to return to being part of an economic community without political links. Fewer than one in ten (7%) business leaders would like to see Britain involved in closer political and economic integration of the EU states, and two in five (39%) would prefer Britain’s relationship with Europe to remain broadly the same as at present.
In addition, the participants cite a range of drawbacks to EU membership, most notably the volume of EU regulation (67%) and the impact of regulatory changes (54%). Worries about uncertainty are also a common theme– 43% consider the uncertainty about EU membership a disadvantage, 40% uncertainty about the EU’s economic outlook and 34% about the uncertain future of the Eurozone.
Other concerns revolve around the economic risks of EU membership. The majority (75%) agree that Europe’s economy is too inflexible to face the challenges of the modern world and 55% agree that the debt crisis in some Eurozone countries is a significant risk to the British economy. But despite these levels of concern fewer see the debt crisis as a significant risk to their company (21%) or that in the end Britain would be better off leaving the EU rather than being part of an unreformed EU (25%).
There is considerable variation in levels of planning for a potential British exit. Just over a third of Captains’ companies (36%) are carrying out planning scenarios for a possible exit. Fewer expect to be consulted by the government about what reform agenda to pursue in EU negotiations (25%) or have already been consulted (7%). Only 5% have reduced or delayed investment programmes because of the uncertainty. One thing most (81%) agree on is that business leaders should play an active part in the referendum campaign once it gets underway.
Commenting on the findings, Ben Page, Chief Executive of Ipsos said:
“The boards of the UK’s biggest companies think EU membership is good for business, and personally hope for a “remain” result in the forthcoming referendum. That’s not to say they are cheerleaders for the EU, many are concerned about inflexibility and the risk to their business of Eurozone debt crises, and around a third are scenario-planning for a potential Brexit. Their clear support for remaining in the EU is in stark relief to the views of the wider population which are more mixed, and unlikely to harden until the referendum campaign gets underway. For voters, whether or not free movement of people is somehow restricted or discouraged is the issue which could hold the key to the referendum outcome, whereas in contrast, multinational businesses see their ability to move people across borders as necessary as a key benefit of the EU. Ultimately for those at the helm of big business it all comes down to the effect Brexit would have on the economy.”
Technical noteRespondents are executive board-level directors and chairmen. Companies are from the top 500 industrials by turnover and the top 100 financial companies by capital employed. A total of 102 respondents took part with interviews conducted from September to December 2015. 97 interviews were conducted face-to-face and 5 by telephone.