The time has come for business to truly sound the Brexit alarm

Before the European Union referendum of 2016 British businesses were polled on their Remain versus Leave preference. The result was 82 per cent in favour of remaining in the EU. That view has not changed; but it will have been noticed that British business has on the whole been quiet about repeating that view or overtly supporting the Remain cause. This might be about to change as the campaign for Remain enters a new phase with the People’s Vote initiative, while parliamentarians are beginning to push back at the Withdrawal Bill (as witnessed with the House of Lords vote on the Customs Union).

There are reasons for the restraint shown by business. First, large corporations operating across a number of countries have plenty of options for soaking up the damage that Brexit is likely to cause. They do not like the idea of the UK leaving the EU, but with their resources and options they can adjust to whatever the realities will be, even if their level of investment and presence in the UK is set to reduce. The latest large multinational employer to signal this is Honda, with implications for its Swindon operation.

Big business does however share a problem with the types of business that are going to be worst hit by Brexit: medium and small companies, companies in the supply chains of other businesses including large ones. To see how the tenuous margins of smaller businesses will be affected, you need only look up the difference in costs for a UK company exporting to Sweden compared with exporting to Norway: they are over twice higher. The latter is unsustainable for most, and post-Brexit, great barriers to trade with the whole continent will be thrown up.

The explanation for businesses’ lip-buttoning on Brexit is the anxiety they feel about spooking their clients and workforces by being frank about the threats Brexit poses.  Imagine the scenario: a business publicly goes on about the damage that Brexit is doing and will do to them: if you were a customer, you might think it best to look elsewhere for your supplies in case this at-risk venture goes under; and if you were an employee, you might be anxious enough to seek alternative work.

There is a serious dilemma for boardrooms of businesses in these circumstances, whose duties include protecting shareholders’ interests, but also alerting them to the risks that Brexit presents. If they seek to do the former by not doing the latter, are they nevertheless in breach of their duty?

The time is rapidly approaching, however, when fence-sitting, tight-lips and keeping fingers crossed that something will come along to solve the problem is not enough. Business—which provides the employment, the tax base, the lifeblood of the economy and society—faces being excluded from the largest single market and the largest economy in the world, with 500m people at present easily accessible in a well-regulated and frictionless way.

Turning Kent into a car park, reviving tensions and hostilities in Ireland, seeing thousands of small businesses struggle and close and big businesses move abroad, are among just a few of the more obvious and imminent difficulties. It is truly beyond strange that the supposed party of business, the Conservatives, should be sacrificing its own base for an ideal nourished by its right wing: but so it is.