A voyage into uncentainty
I’m Peter Webster, chief executive of Corps Security, and this is where I examine the issues affecting the security industry. My thoughts and opinions are intended to generate debate, and whether you agree or disagree with them, you’re welcome to post your comments below.
With just a few weeks left until the public takes to the polling booths for the UK’s European Union (EU) referendum, debate is still raging about whether the nation’s future would be better served being in, or out. In my opinion the process so far has been riddled on both sides with conjecture and misinformation. All this has served to do is leave voters confused, and not enough is being done to inform UK businesses and the public at large about the true impact of Brexit.
Not surprisingly, politicians and other commentators have resorted to scare tactics, while Boris Johnson and David Cameron seem embroiled in a personal battle that does little to truly inform the debate. With so many potential ramifications, I think that people will go with their gut instincts and focus on the issues that are important to them.
The question is whether their concerns about national sovereignty, immigration and/or the growing power of Brussels, will outweigh the possible damage to trade relations, foreign policy and national security.
Weighing up the choices
For most of us the issue is not black and white and the outcome will be very close. In fact, results from a poll of polls conducted by NatCen Social Research suggested that exactly 50 per cent of voters support Brexit and 50 per cent would like the UK to remain.
It’s time to state my personal position (and not that of Corps Security) and whilst I firmly believe that many of the EU’s systems and legislation could be greatly improved on, in my opinion the pros of membership outweigh the cons. From a purely economic and business point of view, the UK is deeply connected by trade to the rest of the EU, with just over 44 per cent of all our exports going to Europe. Those in favour of Brexit counter that the UK is an important market for EU members such as Germany, France and Italy and point that the UK accounts for 16% of EU exports – although in fairness a far larger share of EU exports, some 45%, go to the rest of the world.
Regardless, there’s no doubt that a decision to leave would have significant consequences for business. However, the extent of any disruption would very much depend on the terms and timing of new trade agreements.
Again, the simple truth is that we simply don’t know what would happen. Those in favour of leaving have used comparative analysis with Norway and Switzerland to try and paint a picture about how a non-EU UK would look and operate. Even then there are different ways to go – Norway is a member of the European Economic Area and pays most of the regular costs of EU membership to retain most of the same trade privileges. Crucially, Norway must apply the same free movement rules as EU member states, but has no vote on the rules. Switzerland uses bilateral trade agreements, as it is part of the single market in goods, but not services. EU citizens are permitted to live or work in Switzerland.
However, Justice Minister and senior Leave campaigner Michael Gove recently said that the UK would surely quit the single European market in the event of a vote to leave the EU; an event that a large majority of economists suggest would be the most disruptive option for the UK. In reality, leaving the EU but maintaining access to the single market would mean paying a similar contribution to that paid at present and still allowing freedom of movement. Yet these two issues are central to the Leave campaign cause, and Brexit campaigners feel passionate about removing them.
Extricating the UK from Europe would not be an overnight process. Pinning our hopes on carving out separate trade agreements with various countries sounds fine in principle, but how long would it take and what would happen in the meantime? During his visit here last month, US President, Barack Obama, stated that it could take up to 10 years to negotiate trade deals and that the UK would have ‘less influence in Europe and as a consequence, less influence globally’. Some accused Obama of using scare tactics and UKIP leader, Nigel Farage, dismissed his comments as ‘utter tosh’. I’m not sure. Negotiations between Canada and the EU on trade have taken seven years to date, and the agreement as it stands still has to be ratified by the European Council and Parliament
The dangers of disruption
For me the biggest cause for concern about leaving the EU is the disruption to business that it could cause. Indeed, we’re already getting a taste of it, and in April the International Monetary Fund’s World Economic Outlook stated that the EU referendum campaign has created uncertainty for investors and weakened the pound. It said that between August 2015 and February 2016 the pound depreciated by seven per cent, although sceptics have pointed out that the IMF was circumspect about how much of this was down to the possibility of Brexit.
There is also the concern about legislation. Brexiteers point to a perceived mass of red tape issued from Brussels; yet the OECD claims that the UK has the least-regulated labour market in Europe. Further, as a leader in the Economist noted of UK legislation: “The most damaging measures, such as planning restrictions and the new living wage, are home-grown.”
The legislation that can be traced back to Brussels often took many years to negotiate, and this is now firmly set in stone. Unravelling this legislation may be unnecessary, or indeed undesirable, but it may simply be too tempting for a future UK government to avoid taking apart – so creating yet more uncertainty in the market. Witness The Transfer of Undertakings (Protection of Employment) Regulations (TUPE), which is our implementation of the European Union Business Transfers Directive. Leaving the EU would give those in power carte blanche to amend the current TUPE process – one that on the whole works well for the business to business industry in creating a marketplace where companies do not compete on the basis of who would exploit the workforce the most. Any changes to TUPE, rather than making life easier, could once again make life a whole lot more complicated and throw the whole B2B services market into confusion.
A secure future
We also need to consider our role in preventing the rise of global terrorism and working with other EU member states to combat Islamic State (IS). This is an area of major concern and the recent horrific attacks in Brussels not only reminded us of the lengths Islamic extremists are prepared to go, it also highlighted how vulnerable we are.
The cooperation between the police and the security services across Europe is a major advantage in the fight against terrorism and the UK has a considerable role to play. Furthermore, as a part of the EU, we are currently able to gain access to a network containing details of 300,000 wanted criminals and missing people, in addition to benefitting from the European Arrest Warrant process.
Although others agree with former MI6 head, Sir Richard Dearlove, that EU-based security bodies are of ‘little consequence’, I believe that changing the system now could potentially leave gaps that could be easily exploited by those with malicious intent. This view is shared by former MI6 boss, Sir John Sawers, who has warned that an independent UK would be shut out of decisions on the issue of data sharing.
There’s no doubt that if we decide to leave there will be repercussions for those operating in the UK’s security industry. How extensive these changes could be would depend upon the type of business concerned. For instance, for those operating in the UK only, border controls and duty would obviously be less of an issue than for those providing products and services further afield.
Being pragmatic about a passionate issue
Ultimately, my fear is that the broader uncertainties created by a vote to leave would affect all of those in the industry, whether they operate solely in the UK, or in the EU.
It’s true that the EU is a very different beast to the one that originally comprised six founding states – Belgium, France, Germany, Italy, Luxembourg and the Netherlands. Now with 28 members, the issues and complexities surrounding it are greater and can often seem intractable.
Yet we have to put emotion to one side and be practical. The issue is simply too important and it would carry too much unnecessary risk to pull out of the EU and throw the nation into a period of prolonged disruption for no clear advantage. For this reason I am, as the Economist put it in a recent article, the “Reluctant European”.
The views stated in this blog are personal to Peter Webster and are not necessarily representative of Corps Security’s position on this subject.
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