Brexit Debate catches British companies

Published: May 5, 2016

 photo courtesy of wikimedia commons British Flag shown flying with the German, Polish and European Union flag. Both Poland and Germany are members of the European Union, and neither have made motions to leave yet.

PHOTO COURTESY OF WIKIMEDIA COMMONS / BRITISH Flag shown flying with the German, Polish and European Union flag. Both Poland and Germany are members of the European Union, and neither have made motions to leave yet.

Staff Writer

A British exit from the European Union, colloquially referred to as “Brexit,” remains a very real possibility. The idea of Britain seceding from the EU was laughable a few years ago, but the movement has gained momentum as an increasing number of prominent British politicians and celebrities have supported the cause. One group that has been conspicuously absent from the debate is British corporations.

Companies are hesitant to pick a side in the debate because they are scared to alienate their customers. The stay/leave debate is a highly contentious issue in the United Kingdom. The Rev. Dr. Daniel Sweeney, S. J., a professor of political science who lived in Britain for four years while he attended University of Cambridge, provided some background information on Britain’s history with the European Union:

“Britain joined the then European Economic Community (the precursor to the EU) in 1973. Margaret Thatcher, the former Prime Minster of the UK, once referred to the EU as the common market, because she saw it as a trade area and had no aspirations for the political union envisioned by other European leaders. Among the British public there has always been unease over the public transfer of sovereignty to Brussels. The most visible symbol of this is the retention of the pound and cross party opposition to going into the Eurozone. In part, this stress on sovereignty is related to the fact that England is referred to as the Island Kingdom, and has always seen themselves as apart, not just geographically, from the rest of Europe. There is also unease among the electorate in other EU Member States over increasing power in Brussels and the number of regulations, but in Great Britain, it taps into this long-held mentality.”

This widespread British aversion towards the European Union is forcing companies to stay out of the debate. Most political issues are not divisive enough to warrant this sort of reticence, but this issue evokes strong feelings in Britons, as Father Sweeney pointed out. A company that backs David Cameron and the “Stay” camp risks losing those who want to leave the Union and a company that backs Boris Johnson and the “Leave” camp risks losing customers who want to remain in the EU.

This silence from British companies is a major setback for David Cameron. Cameron has repeatedly warned Britons that a “Leave” vote would be detrimental to businesses in the kingdom.

“I do not believe leaving the EU would be good for Britain. The costs seem to outweigh the benefits,” said Billy Li, a junior exercise science major. More than 30 percent of the companies in the FTSE 100 (the British equivalent of the NYSE) signed a letter proclaiming that the United Kingdom is better off in the United Kingdom. This is a significant amount, but Cameron and the “Stay” camp were hoping for an overwhelming majority. The June 23rd referendum is shaping up to be a close contest according to recent polls and the backing of several large corporations will likely help the “Leave” cause. Some of the large international banks, such as Goldman Sachs and CitiGroup, have expressed their desire to remain in the EU but domestic banks, who have a much larger proportion of their customers in the UK, have largely remained silent.

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