EU Referendum: My own reasons for voting “IN”
- Small, high tech businesses trading across Europe
Since 2007 I have been almost entirely concerned with high tech SME companies, which have all been highly dependent on free access across the European markets, as well as a willingness for investors to make investments into or out of the UK without fear of anything beyond the currency risk affecting things. These companies have also been involved in several pan-European R&D programmes funded by the EU. I have recently been talking to one of the (Dutch) investors in an earlier UK business who outright confirmed that they wouldn’t have gone into that business if the UK had not been part of the EU.
Right now I am starting a new business supplying Carbon Nitride nanomaterials and as of now this is based in the UK and trading out of the UK as it is the most convenient way for me to do it. But if the UK votes OUT on 23rd, I should seek to establish this as an EU rather than a UK based business and I can imagine there are many new startups on hold pending the referendum outcome.
The stated aim of the OUT campaign is to establish free trade agreements between UK and EU as we have now, citing the fact that the Germans will still want us to buy BMWs as the guarantee of success. A lot of people probably don’t understand how international trade works, but basically every type of item can be classified into a commodity by a system of codes called “HS Codes” and each country or trading bloc will have a defined import tariff for each individual code. Thus, just because the Germans will want to do a deal with us to sell us BMWs, doesn’t mean I will be able to get duty free status into the EU for my products or you for yours. Maybe one day, maybe never. And so nobody can say with any certainty when a trade deal(s) would be done, what products would be importable or against what tariff rates and when.
So why would I start investing money and energy into a brand new UK business now with the risk of a 5%, 10%, 15% handicap just around the corner ? There are enough risks in a new business without adding another.
- Big corporations with locations across the EU
So nobody can be sure of the future, but I can tell you something about a company I used to work for that I joined when it had about 20 locations in the UK as well as several throughout Europe, manufacturing various products for automobiles. During the time I worked for the company a shadow appeared over the UK entities, initially related to an asbestos liability but ultimately it was about an underfunded pension. It was a handicap to the prospects of the UK entities that was perfectly surmountable but it was a handicap nonetheless, I would say a comparable handicap to the threat of losing duty free trade status throughout the EU. The result was that during a period of uncertainty, all new business programmes and machinery investments quietly went into operations outside of the UK. This created a gradual demise in the profitability of the UK entities with the result that when consolidation was called for in the name of efficiency a few years later, it was always the UK plants that were closed in favour of other EU plants.
Finally that company has just about 3 manufacturing locations left in the UK today and none of them manufacturing any of the company’s most important products. I would say that for anyone involved in working for or with any multinational with locations elsewhere in the EU doing similar things, you’ll have a couple of bad years to come if we vote OUT, not caused by the markets but because of the way things will be allocated within the corporation, and that might be all it takes to kill the viability of those operations even if a trade deal will come in due course as the Brexcists have promised.
- The opportunity for us and our children to work abroad
I spent a lot of my early career living and working abroad. Apart from my marrying my wife, having wonderful children, getting my engineering degree and owning a Lotus Esprit, it’s the best thing I’ve ever done. By going where the action was in those early days I was able to advance my career fairly spectacularly but it was also a great cultural enrichment. I think it’s fair to say I wasn’t particularly culturally rich back in my early days. It has affected the way I approach all different kinds of people and made me a lot more tolerant and interested in other people. I would absolutely recommend this to anyone.
Now as it happens I never lived in any of the EU countries, because there was more adventure to be had for me in China, Korea, India and the USA. But all those places I worked, I was only allowed to do so because of my particular expertise – it just happened that I was very good at manufacturing engine parts, eating strange food and drinking something that might have been paint stripper – and I would have had no right to outstay my period of usefulness if I had so wished.
I have high hopes for my children, and yours, that maybe they will also be expert in something unusual and be welcomed anywhere in the world, but in case they are just normal people I’d like them at least to have the right to go and experience the variety that we have in the EU.
Of course they can just stay here in Norfolk too if that’s what they want to do. They can still get some cultural diversity as we’ve got some Polish and Romanian people here, which is lucky because no English people want to pick the asparagus.