The EU vote – Be careful what you wish for.

Unless you’ve been frozen in a block of ice for the last few months you would have noticed that the train wreck that’s come to be known as the “Brexit referendum” is very nearly upon us. On Thursday the 23^rd June, our generation of British voters gets to make another vote, but this time it’s much more serious….and the consequences could literally be a life sentence. Are we aiming head first towards Britain’s single worst decision in our 309-year history? From a small to medium business perspective, I personally think we are, so let me tell you why.

Who am I to comment?

Firstly, I am no Lord Bamford, the party loving billionaire, who, last week, waded into the fray from the heavyweight corner of commerce using his dynasty and presence to promote the “Leave” vote. I’m from the small to medium business fraternity and unlike Bamford, haven’t inherited a business from my father nor do I have £3.1 billion floating around in the bank as a back up if things go pear shaped. What me and my brothers have done together though was to found, run and grow various very successful UK businesses from scratch, two of which entered the Sunday Times FastTrack 100. I’ve had a business in the Times “Top 100 Best companies to work for”, been a finalist in Ernst & Young’s “Entrepreneur of the year”, been a leading charity trustee for nearly a decade and (probably like Bamford), have been invited by the Queen to eat cucumber sandwiches on her lawn. SME’s of course play an incredibly important role employing 60% of the UK’s workforce and contributing £1.6 Trillion to the UK economy. As a SME business owner for over 20 years, I feel I have enough experience in commerce to understand that billionaires like Bamford and Dyson (yesterdays new Brexit closet emergee) are simply seeking more variety in their life (whether the outcome is good or bad) and are certainly not representing the vast majority of employers across the UK. It’s because of their obvious advantage in terms of reach that I thought I’d put pen to paper and put my position across as I see it, which is that I strongly feel that being part of the EU gives us the best chance for a stable economic environment, the basic ingredients for successful entrepreneurship in small and medium sized businesses (SME’s) and anything else is just a gamble.

Lord and Lady Bamford.

The experts view

What really confuses me is the growing trend towards a “Leave” vote whilst we are hearing more and more each day about how bad life would be outside the EU. No less than 9 out 10 top economists are suggesting that Brexit will be be bad for the British economy. If we support the hypothesis that a bad economy is bad for each of us personally then why are the general public ignoring this advice and supporting a Brexit – a shift of 10% in the last day or so? I mean if a doctor said that you had 3 months to live if you carry on with your particular unhealthy lifestyle, would you ignore this advice? Imagine if 9 out of 10 doctors suggested the same advice, would you really back the one doctor who was saying the opposite and celebrate with a treble Vodka and a packet of Malboro? This seems totally moronic. The experts are saying that a vote for leave is a vote for recession and I’m sure nobody from the SME world wants to get straight back into that mode any time soon – the truth is that if the experts are right, we would need to make people redundant from our SME workforce – and possibly lots of them. Boris and Bamford of course would be arguing that the experts aren’t worth listening to and that they are wrong. The impact for small to medium businesses who do not have a strong global brand like JCB or DYSON (and lets face it, companies with a big global brand are in a minority) is catastrophic. In 2001, when that previous recession hit, we had to make 85 of our wonderful, rockstar staff redundant OVERNIGHT – that was really tough as it was 50% of our workforce. That’s what the reality of recession to an SME looks and smells like by the way – believe me.

Source:  Department for Business Innovation & Skills

Who has a crystal ball?

Whilst on the subject of the economy, the “Leavers” keep banging on about having independence to grow a better economy. This is pure fantasy unless of course these people have a time machine or a crystal ball. If they do have the flux capacity to travel back in time to 1950 then they will see for themselves that Britain was almost a third higher in per capita GDP than the EU6 average but by 1973 (when we entered the EU) we were 10% below. Outside the EU, Britain was in desperately steep decline and thankfully the EU helped stem this. So what’s all this rubbish about a better economy outside the EU? Has anyone noticed that none of the Brexiteers have any clue as to HOW we are going to have a better economy, whilst past evidence would suggest a decline. Haven’t these people learnt anything from history? If they do have some secret formula then lets hear it…but I’ve heard nothing so far except silence. As a small business owner, we pretty much consider all options carefully and the notion of getting behind a “Don’t have a clue” answer is totally alien to me.

Small business is actually quite sensitive to fluctuation and generally needs a stable environment in which to flourish. Anything that interrupts cashflow has a very detrimental effect as there is often no cash floating around to overcome the larger dips – this means business death and loss of ALL jobs as cash is normally a killer to the SME. This is cruel really as to start a new business 9 out of 10 fail despite the hard work and the cash expended by the entrepreneur. I’ve seen an awful lot of moaning and scepticism about the EU but has anyone stopped to notice how well the UK has actually done within the union? When we joined in 1973, we were the 6^th largest economy in the world but now we are the 5^th largest. With phenomenal business success like this the phrase “Leave well alone” springs to mind. Under the EU from the 90’s until today, we were able to grow companies like Jobsite from two people in a garden shed to a 450 person enterprise operating in 56 countries across the globe. This was undoubtedly helped by the stability and regulations under which we were free to operate. Not only were my brothers and I proud to have generated so many jobs in Britain, we were actually bringing in money to the country from 56 other countries around the world. I’m flabbergasted that Bamford and in particular smarty pants Dyson aren’t saying the same – maybe in Bamfords case he was too busy partying to pay it any attention but Dyson seems to have missed the fact that he flourished under the EU in his earlier years in the same way as we did. He was a start up enterprise and SME during the EU days.

Keep it in the family

So, it’s not just billionaires who are all for Brexit, as I’m sure you’ve noticed that the older generation are favouring it too. Could it be because it affects them the least? A final swan song in their twilight years for a bit of fun perhaps or maybe because they, like Bamford and Dyson, more than anyone else in the UK have much less to lose? When I look at my 12 year old boy, who is fairly oblivious to most politics, I know that the decision that the country will make will almost certainly affect him more than us voters but I (and the older people) get to vote on it and he doesn’t. It’s not as if we are making a decision on something we can change every four years or so, a vote for a Brexit is possibly forever – certainly for decades. Once we break those ties with Europe, we will never, ever be able to go back to the way we had it before we left and it is this long term position that bothers me the most. I’m sure that some people are bored of hearing “remainers” going on about our children so I can only assume that they either haven’t got any, don’t give a stuff about them or that they just enjoy gambling –  Will they be prepared to personally underwrite this decision for our children if their gamble does go wrong though? There are 5.4 million private businesses at risk with this gamble in the UK and 60% of our children will find themselves working in them – remaining is a vote for the “known knowns” but leaving is a vote for the “unknown unknowns”, in other words a complete gamble.

This is all bananas

Other claptrap that we’ve been hearing over the last few weeks is the notion that the EU directives are a load of time wasting rubbish. Well, sorry but I don’t really want malformed bananas either (not overly precious though), people are telling me that they’re not over keen to use oven gloves that burn their hands and I’m sure none of us would look forward to the prospect of wearing Marigolds that leak bleach onto our skin either – all of which are subjects of much mocking by the Brexiteers. As for this mumbo jumbo about banning waitress’ cleavages, the Queens corgis and custard creams, pull the other one Boris & co – was it you Boris who was suggesting that kids were being prevented by the EU from blowing up balloons? What a brainless shot that was. All very amusing but actually there is a very serious side to this, in that people are actually believing this bullshit as evidenced by a latest MORI poll. An article I read in the Independent the other day suggests that when it comes to the referendum, the British public have almost everything wrong!!! In fact, according to the poll, not only do a lot of people admit to believing at least one of these colourful EU myths, 84% believe incorrectly that Britain are in the top three contributors to EU funding when we are not. This ignorance really concerns me as, if we are to have a fair referendum, a lot of people voting are not only without the facts, they also believe some of the myths!! What chance have we of having a fair, considered, sensible outcome when it looks likely at this stage that the process could be as ridiculous as the Boaty McBoatface vote fiasco.  This all sounds ludicrous for such an important decision for Britain.

 

What’s the point of a point system?

Immigration is the central argument for the Brexiteers and one that seems to be capturing the British public’s attentions the most. The “Leavers” seem to have jumped on the bandwagon and using it to their own advantage by promoting the idea that a Brexit will help control immigration. The decision to opt for free movement goes back to 2004 during a period of strong economic growth. At that time, Britain had around 500,000 unfilled jobs and migration was somewhat of an attractive option. What we didn’t expect was that we would receive as many migrants as we did but it is true to say that migration generally helps with our economic growth by injecting talent into various parts of the employment spectrum – it’s been of huge help to our own businesses over the years. If we are to leave the EU, then new trade agreements would almost definitely mean a continuation of EU immigration (covered of course by sponsorship from an Employer). The Brexiteers are suggesting that the immigration puzzle will be solved by using a points based system but forgetting to mention United Nations figures which show that immigration per head is actually higher than the UK in Australia, The U.S and Canada – all who use a points based system.

Immigration is an issue of course which needs to be resolved and arguably best resolved from a position within the EU not from outside – but I’m prepared to take on that debate. There is no evidence to suggest that a Brexit would be an instant resolve to the immigration problem so I’m puzzled as to why the Brexit camp seemed to have hijacked it as their very own silver bullet. I won’t mention their names but there is a massively successful IT company on our site who couldn’t survive without immigration. They have attracted all sorts of amazing talent throughout Europe and beyond and I really hope for them that they are not ill-affected if the vote doesn’t go their way – a Brexit will certainly stifle their growth. The digital skills gap is actually a crisis of its own here in the UK and according to some latest research costs us, or should I say “wastes us”, £69 billion per year – yep that’s right. That, by the way is an annual loss that would have funded Britain’s £5 billion EU contribution for 14 years!! The report suggests that by 2017, we will be short by 745,000 digital workers and we currently have only managed to recruit around 70% of the required computer science teachers. We are always looking for digital talent ourselves as 90% of all jobs require digital skills to some degree and are proud to be working with co-workers from other countries – at Talenetic, it’s actually part of our fabric and certainly one of our USP’s.

  

Deal making is easy isn’t it?

 

Anyone worth their salt in business will tell you that doing a deal is a long term process which is labour intensive, legally expensive and involves a high degree of uncertainty. Brexiteers will have you believe that we will all go swanning around post Brexit, fixing this, negotiating that and rebuilding the deals which we just voted to scrap – which of course is absolute rubbish. At Talenetic, for example, we are currently in the middle of negotiating a small deal with a US supplier to incorporate their product into our offering and despite it being seemingly straightforward, we have been going backwards and forwards to the negotiation table for months – this is very typical of commercial negotiations I have seen over the 21 years I’ve been a CEO. What worries me is that Boris seems to think negotiating a commercial deal is simple and we all know that Boris is not a business person, he’s a politician, so how the hell would he know? Again this guesswork on the part of the Brexiteers is fuelling the confusion. I had a chat to one of our partners the other day who was arguing that a Brexit was a good idea and when I asked him what he liked about it, he said “We get the chance to take back control and all we need to do is renegotiate all the contracts”. RENEGOTIATE ALL THE CONTRACTS?!!! Is he kidding? There’s a 28 month lead time to renegotiate these types of contracts and we will be negotiating them from a much smaller and therefore weaker position (UK as opposed to UK + EU). Who has the time and the money to renegotiate all these contracts and what will a small/medium business look like following an almost definite commercial hiatus. A lot of small companies will be dead by then having run out of cash. Small companies simply don’t have the reserves to ride through crises whilst everything is “renegotiated”.

Be careful what you wish for

What I really hope happens on the 23rd is that the voting public only go to the polls if they are fully aware of the history, the consequences and the repercussions of what Brexit really means. I’m not suggesting everyone becomes economists but unlike what’s happening now, at least look into the basic facts with regards to what’s being said, some history of our involvement with the EU and a look at what it has actually brought us. Without it, you’re in the lap of the gods listening to the BS spouted out by people like Boris who seem to be saying anything to get your vote. Boris, rightly or wrongly is operating a scorched earth policy with his career at the moment – a mode that David Cameron, as Prime Minister, is unable to afford himself the luxury.

Voting to leave may well be the right vote but then again it might not. Bamford & Dyson have both said that leaving will be good for UK’s global brands but for the SME’s it’s a different story – leaving the EU risks 60% of your friends and families jobs and £1.6 Trillion to our economy. My advice is to be very careful what you wish for – if you’re really unlucky, your wish might just come true.

Recruiters EU Poll Click Here -> https://twitter.com/keithpotts/status/743382972456386560