Brexit: Sheer amount of media coverage clouds business owners' judgement

Brexit - can’t see the wood for the trees

The question of whether the UK should remain a part of the European Union (EU) is one that is on everybody’s lips at the moment, as we each attempt to rifle through the seemingly endless reams of information in order to make an informed decision. However, while the question of whether we should remain in the EU is an important one, it is not easy to answer. In the technology sector in particular, it is no easier to come to an educated conclusion, which is a little worrying ahead of the referendum on 23rd June.

When running a business, it is essential to keep abreast of the latest economic and political developments, and with something as important as the ‘Brexit’, keeping up with the latest news is key to ensure we make the right decision. However, I’ve tried, and I simply cannot seem to make an informed decision either way.

What’s the big deal?

Despite my best efforts, I have found it incredibly difficult to plough through the Brexit-related newspaper cuttings, watch the latest news stories from Downing Street and scan through the Twitter updates without asking myself “but what does it all mean?”. Yes, I understand that staying or leaving will have significant implications for trade, but when news outlets (and often, politicians) are unable to make up their minds, how can we be expected to?

From what I have read, there seem to be a few possible outcomes if we opt to leave the EU. The first possibility is that the country could go from strength to strength: by separating ourselves from the underperforming eurozone economy, we would have the chance to look further afield to more dynamic markets. However, trade deals with all these groups would need to be struck quickly. At present, the EU is by far Britain’s biggest trading partner, and trade deals with another 60 countries would lapse if we opted to leave the bloc.

The second potential outcome is that there would be a troubled transition to independence, leading to a looser trading relationship with countries in the EU, ultimately making it more difficult to sell goods and, in particular, services to the continent. In this scenario, deals with third-world countries could become hard to reach, resulting in a decline to investments in Britain and us falling behind our trade rivals.

Judging from just how contrasting these two scenarios are, with seemingly little middle ground discussed in the media, it is almost impossible for businesses to make an informed decision that is free from speculation and based on cold, hard facts.

Another major implication of choosing to leave the EU would be the impact on consumers. At the moment, British shoppers are offered a level of protection thanks to EU laws, which ensure we receive 28-day refund policies - but this is something that could change if we opted to leave. Similarly, British consumers will be able to enjoy the same tariffs for mobile phone usage when visiting other countries in the EU - with charges scheduled to reduce from April 2016 and to disappear altogether from June 2017 - so voting in favour of Brexit would potentially bring this benefit to an end.

Looking at the figures

In March 2015, the UK exported £11.8 billion worth of goods to the EU, with imports standing at £19.7 billion. In comparison, all of the UK’s non-EU exports combined in that same month totalled £16.5 billion, with imports at £16.3 billion. Looking at these figures, it is clear that British companies and consumers benefit greatly from free trade within the EU, and without it, our income could be threatened.

According to thinktank Open Europe, if the UK was to leave the EU, the move would cut 2.2 per cent from the country’s gross domestic product (GDP) by 2030. A reduction of this measure is unlikely to be caused solely by agreeing a similar free trade deal as a non-EU member, however, with the most likely outcome, in which the UK strikes a widespread trade deal with the EU but does nothing else, would result in a 0.8 per cent loss to GDP.

A threat to innovation?

At the moment, urban areas across the UK receive funding from the EU for the development of so-called smart cities, which support innovation through energy efficiency and better transport solutions, plus the intelligent use of Information and Communication Technologies. A decision in favour of a Brexit could put these developments under threat, which is another major cause for concern.

Overall, there is no doubt that there is widespread confusion over the matter of Brexit, but whether we like it or not, 23rd June is fast approaching. Looking at the data, it is fairly obvious that the decision to leave the EU could have a damaging impact on the economy, and put trade under pressure. However, it is difficult to analyse how much of this is true, or whether the data has been skewed in a bid to impact the vote.

With something so big at stake, I for one feel as if I have little choice other than to continue to read as much as I can and attempt to cut through the sound bites and hyperbole so I can make an informed choice one way or another.

Albie Attias, Managing Director of IT hardware resellers, King of Servers

Image Credit: Flickr/Sébastien Bertrand