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UK businesses split over Brexit

03 March 2016, 19:32 CET
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UK businesses split over Brexit

Photo © Andre - Fotolia

(LONDON) - Divisions in Britain's business community over whether to stay in or leave the EU widened Thursday as the car industry backed the remain campaign while small business owners spoke out against the cost of Brussels red tape.

With less than four months until the referendum, the Society of Motor Manufacturers and Traders (SMMT) revealed that three-quarters of its members believed staying in the European Union was best for business.

Employees of German carmaker BMW in Britain have also reportedly received a letter from their bosses warning of the dangers of a British withdrawal.

Meanwhile, pro-Brexit group Leave.EU published an open letter signed by the bosses of more than 200 small businesses urging Britons to vote to leave and criticising excessive EU regulation.

And the head of the British Chambers of Commerce (BCC), which represents thousands of businesses across the country, reportedly suggested Britain could have a "brighter" economic future outside the EU.

John Longworth was quoted in British media as saying that, in the long-term, "we have the capacity and capability to create a bright, if not brighter, economic future outside of the EU".

Britain faces a vital vote on June 23 to decide whether to remain in the EU and Prime Minister David Cameron is leading the battle to keep Britain in.

- Concern over risks -

The SMMT survey, conducted by independent pollster ComRes, found the vast majority of car firms said Brexit would have a negative impact on them.

A majority of 77 percent of respondents said that, if a referendum were held tomorrow, a "remain" outcome would be best for them.

Just nine percent argued that leaving would be the best option, while 14 percent were "uncertain".

"The message from UK Automotive is clear -- being in Europe is vital for the future of this industry and to secure jobs, investment and growth," said SMMT chief executive Mike Hawes.

"Our industry supports 800,000 jobs across the UK and contributes more than GBP 15 billion ($21 billion, 19 billion euros) to the UK economy -- our members have clearly stated that pulling out of Europe could jeopardise this."

The bosses of each of BMW's six British companies have reportedly written to their workers in Britain warning that a Brexit would drive up costs and affect jobs.

"Tariff barriers would mean higher costs and higher prices and we cannot assume that the UK would be granted free trade with Europe from outside the EU. Our employment base could also be affected," Torsten Muller-Otvos, boss of Rolls-Royce Motor Cars, wrote in a letter obtained by The Guardian.

Reflecting support for EU membership in the powerhouse City of London financial district, the City of London Corporation -- the area's local authority -- also came out Thursday in favour of remaining, in a rare political intervention.

"If something affects the vital interests of the City, we will take decisions like this," policy chairman Mark Boleat told AFP.

"We were not unanimous. We never thought we would be but we have a clear corporate view."

- 'Unnecessary' red tape -

Some small businesses argued Thursday that Brexit would allow them greater flexibility and adaptability and avoid costly red tape, in a letter organised by Leave.EU.

The signatories ranged from the owner of a sweet shop to a haulage company boss and most of the firms employ dozens of staff.

Small and medium-sized companies account for some 60 percent of all private sector employment in Britain, according to the Federation of Small Businesses.

"As entrepreneurs, we deal with the EU's constant diet of unnecessary regulations which add to our cost base, reduce our bottom line, and raise prices for our customers for no return," the letter read.

"The price for this is often the loss of jobs."

The authors noted that "much has been made" of the support for EU membership from "a minority of managers from Britain's largest companies".

"But little attention, as ever, has been given to the stance of SMEs (small and medium-sized enterprises) in this debate," it added.

"Our businesses thrive because we instinctively understand that flexibility and adaptability are key to our long term success."

 


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