A large majority of big businesses and a little more than half of small firms opposed Britain leaving the EU – at least if the polls are to be believed. Now that the vote has gone against them, companies and trade bodies have been scrambling to reassure their investors and to help influence the future of thecountry’s relationship with its continental neighbours.
A few FTSE firms have put out statements to the stock market. On Friday British Airways owner IAG and easyJet, the latter of which had been particularly vocal in opposing Brexit, immediately put out statements saying they were confident it would not have a long term material impact on their ability to make money for shareholders. WPP boss Martin Sorrell called for some ‘stiff upper lip’ while warning that uncertainty will slow decision making.
Today shares in London-focused estate agent Foxtons plummeted after it admitted at upturn it was expecting in the capital’s property market was now ‘unlikely to materialise’. That drop was mirrored by big house builders including Barratt and Bovis and several banks – shares in RBS and Barclays were suspended today because of volatility.
There’s evidence of similar apprehension in private businesses too. Richard Branson has gone as far as calling for parliament to consider a second referendum. James Dyson, one of few prominent entrepreneurs to call for Brexit, seems to have gone very quiet (perhaps he’s working out a way to reduce loss of suction in Britain’s power vacuum?).
Remainer Rohan Silva, the prime minister’s former tech advisor, wrote in the Times that while he wasn’t pleased with the result, Britain should now radically dramatically cut business taxes to show the country is ‘open for business,’ while not ignoring public attitudes on immigration.
This morning the CBI set out its desires for the future of Britain in Europe. Its director general Carolyn Fairbairn said it was important that we get ‘calm and decisive leadership in place as soon as possible.’ While she said companies welcome the delaying the activation of Article 50, Britain’s formal notice to leave, we need ‘rapid clarity on who is making the decisions.’ Fairbairn also said the ‘the government should resolve publicly to preserve the openness of the UK’s economy,’ – specifically it needs to protect ‘barrier free’ access to the single market and to ensure that businesses ‘are able to continue to attract the best people to the UK with the skills we need.’
Today the Institute of Directors appeared particularly downbeat about the situation. Nearly two thirds of its members think the result will be bad for their business (compared to just 23% who said it was a good thing), almost a quarter plans to freeze hiring and 5% plan to make redundancies. More than 35% said the result meant they would slightly or significantly reduce investment and more than one fifth said they plan to move some of their operations outside the UK.
‘Businesses will be busy working out how they are going to adapt and succeed after the referendum result,’ said its director general, Simon Walker. ‘But we can’t sugar-coat this, many of our members are feeling anxious. A majority of business leaders think the vote for Brexit is bad for them, and as a result plans for investment and hiring are being put on hold or scaled back.’
Tech London Advocates, one of the organisations vying to be seen as the voice of the capital’s digital sector, also expressed disappointment. ‘Today’s result is not what the London tech sector wanted to see, but we will continue our efforts to build London tech and continue on our journey to make London a world-leading tech hub,’ said head honcho Russ Shaw.
And EEF, the manufacturers’ organisation, said ‘it is not the result many businesses wanted.’ The group’s CEO Terry Scuoler said, ‘The Government must tread carefully, keeping if we can a trading relationship with the single market, avoiding dramatic overnight changes and not becoming bogged down to the detriment of making long-awaited and much-needed decisions on projects vital to our future economic prosperity.’
Clearly many businesses are not happy with the result. What’s important now is that Britain finds a way to work with Europe that preserves stability, trade and flexibility.