Why multinationals’ opinions on the EU are less than convincing
- They don’t do cost/benefit research on membership or exit
None of those that have raised their voices to urge the UK’s continued membership, and warned of Brexit’s serious consequences, have conducted, or at least published, any cost/benefit analysis from the point of view of the British people. They demonstrated their indifference when asked to support their opinions with evidence to Her Majesty’s Government’s Balance of Competences Review in 2013. They declined to do so, preferring to support their submissions for the status quo with assertions, anecdotes and hearsay.
The businesses who financed and guided what is by far the most thorough, rigorous and fair research on the costs of EU membership and the opportunities presented by Brexit – Business for Britain, with their report Change or Go – were a maverick minority, closer in heart and mind to entrepreneurs than to managerially-controlled multinationals.
- They have no interest in the political consequences for British people
Big business is not concerned with how the UK is governed, in the nature of its democracy, nor in the EU’s democratic deficit and its lack of accountability. Hence the argument that power over the British people has been transferred to unelected appointees or to courts, whose judges are nominated by foreign governments, are not of much interest or significance. Nor are the euro and ever closer union, both of which they would probably welcome from a business point of view. Brussels is not unaccountable to them. They have lawyers and lobbyists.
- Many are foreign
Many of those who participate in the debate and fund lobby groups urging continued membership are not in fact British. It would be unreasonable to expect them to place the interests of the British people above what is convenient and profitable to themselves, or to care about British democracy.
Japanese multinationals, one must add, have distinguished themselves from others by simply stating their preference, when asked, while otherwise remaining unwilling to interfere in what is fundamentally a domestic political debate.
- The costs of membership of the Single Market are paid by others
Financial costs are borne by UK taxpayers, consumers (tariffs), non-exporting firms (regulation) and the political costs of being governed by those they did not and cannot vote for, are paid by voters. Multi-nationals don’t pay for the benefits of the Single Market. They are subsidized. If the UK were not a member of the EU, all the trade costs of selling in the Single Market, including tariffs, would have to be borne by each exporting firm, just as their competitors from non-member countries currently do. It’s a choice between a subsidy and pay as you go. The EU is the low cost option.
- They do not recognize any obligation to the UK taxpayer, consumer or voter
One might think that they would recognize that they owe the UK taxpayer and consumer who has been subsidizing membership of the club which they claim helps their business, by providing rigorous and impartial research about their own industries which shows, in terms of trade and employment, why the Single Market is worth the sums that taxpayers have invested in it, to help them to come to an informed decision. Thus far they have limited themselves to comments and sometimes warnings, off the top of their heads.
- An unnecessary, additional risk
They have established a comfortable modus operandi with organized lobbies, professional advisers or personal contacts in the European Commission. Internal costings and procedures have been based on continued UK membership. Brexit would certainly disturb these networks, calculations and procedures for no identifiable benefit from their point of view. It might also spook markets. Hence it entails uncertainty and risk, which they would rather avoid. It would also be inconvenient.
- Their directors probably read the Financial Times
Which means that over many years they have read stories and research which put the EU in a favourable light, and portrayed Brexit as a horror story (see Chapter 45).