UK voters will go to the polls on June 23rd to decide if Britain will stay within the European Union (EU). With the country heavily divided and the vote swinging at present in favour of an EU exit – what is the likely impact of such an outcome on UK-based HR professionals in multinational companies?
The EU’ is the UK’s principal trading partner and therefore the imposition of tariffs on UK exports would not only affect UK inflation rates – and therefore wage demands – but also make it less attractive for overseas companies to be based in the UK. The drift of regional head offices to locations such as Amsterdam or Zurich is already happening to a certain extent – but could accelerate in the event of a UK exit. However, the UK could still remain part of the European Economic Area (EEA) – as Iceland and Norway – so that tariff barriers would not be imposed. Being outside the EU could also leave Britain free to conclude its own trade deals – especially with China – set its own rate of VAT and have more freedom to cut corporation tax. But it would not stop the UK making certain contributions to EU budgets – especially the cohesion and regional support funds. Although there would be a substantial saving by releasing it from major financial obligations under the EU’s notorious common agricultural policy
As an EEA member the UK would continue to operate a visa-free regime with EU member states and UK-based employers would be able to move employees between the UK and EU. It would also continue to be obliged to enforce EU directives and regulations – such as those applying to health and safety, works councils, jobs posting, agency workers and data protection. Moreover, as the UK is not currently a schengen member non-EU status would not affect border controls. Neither is it in the eurozone and it already operates an opt-out from the working time directive . So conversion to EEA status would not change as much as if, for instance, Greece or France left the EU. In fact, the biggest sufferer from a UK exit would be the EU itself as it would leave a major European national economy outside its formal domain and weaken its international credibility and bargaining powers. It may also encourage other countries, such as Denmark, to consider giving up their membership.
The mantra of those supporting the UK’s exit from the EU is “let’s take back control”, but politicians who espouse this creed are just dishonestly courting popularity when they know full well that a vote to exit may not actually affect the UK’s fundamental position in the European market place, nor its imposition of EU rules. With a dash of typical British irony, it is just a case of doublethink, with a regime living on – even though it is officially dead.