Liz Cameron: Business community still backing Remain

IN THE latest in our series of key voices in the debate over the EU referendum, Liz Cameron reveals the findings of three rounds of research

David Cameron delivers a speech to easyJet employees at the airlines HQ in Luton on the campaign trail to remain in the EU. Picture: PA

Scotland’s businesses have been faced with the prospect of a great deal of constitutional change in recent years. We have had the referendum on Scottish independence in 2014, which was the catalyst for the devolution of a range of new powers to the Scottish Parliament, and now – less than two years later – we are facing another immense decision, this time on the UK’s continued membership of the European Union.

Scottish Chambers of Commerce is taking an impartial stance towards the EU referendum, just as we did towards the Scottish independence referendum. We are a membership organisation and we respect that the business members of our network hold a diversity of views on the EU issue. Our network is made up of 26 Chambers of Commerce right across Scotland and the 11,000 firms we represent are drawn from all sectors and comprise businesses of all sizes, from the very smallest to the very largest.

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What we have done since the referendum was announced in the wake of the 2015 UK general election is to develop our engagement with businesses, to find out what the key issues are through a business lens, and to ensure that these views are heard and inform the debate. We did this in partnership with our colleagues at the British Chambers of Commerce to make sure business sentiment was being measured consistently both in Scotland and the rest of the United Kingdom.

We have conducted three rounds of research amongst businesses in September 2015, in February 2016 and, most recently, in May 2016. This research has told us a great deal about the journey of understanding that businesses have been on with regard to the EU referendum.

At its most basic, our research has measured the referendum voting intentions of Scotland’s businesspeople and we have always recorded a clear majority in favour of a vote to remain within the EU. However the gap between the ‘remain’ and ‘leave votes has narrowed over time. When we first asked businesses this question about voting intentions last September, we found that 73.5% of business people would vote to remain and 13.5% would vote to leave. By February of this year, that gap had narrowed to 69.4% to remain and 19.2% to leave and by May it had closed further to 68.3% to remain and 22.9% to leave. Therefore over a period of eight months, the remain vote fell by 5.2% and the leave vote rose by 9.4%.

We have also been able to break these numbers down by business size and compare the views of those businesses which export to those which do not. We found that business leaders within medium and large firms were more inclined to want to remain within the EU than their counterparts in small and micro businesses. Unsurprisingly, we also found that exporters were more minded to remain than non-exporters. Voting intentions seem to be consolidating too, with 90 per cent of business people now telling us that they are unlikely to change their mind before the referendum.

The timing of our research was also important. In September 2015, one of the clear messages from business was that whilst they were interested and actively following the EU referendum debate, over a quarter of businesses (27.3 per cent) were not at all familiar with the Prime Minister’s proposed renegotiation package.

This calls into question the effectiveness of the UK government’s communication strategy in the wake of the announcement of the referendum.

At that point in time, businesses had little clear understanding of the government’s position. Very few businesses appeared to have a clear understanding of what it was that the Prime Minister was trying to achieve through his process of negotiations with other EU leaders in the months leading up to the decisive EU summit in February 2016. By the time we were surveying businesses again that same month, there certainly appeared to be a broader understanding of the key aspects of the renegotiation package but almost two thirds of businesses (64%) also told us that the outcome of the negotiations over the package was unlikely to affect their voting intentions.

Where businesses have been clear is on the areas they would like to see some change for the better in terms of our relationship with the EU. Unsurprisingly the top priority for business was a reduction in the burden of regulation and red tape, followed by a change in the balance of power between the EU and individual member states, a change in the way the EU budget is spent, reform of regional subsidy programmes and the expansion of the single market.

The question is whether the deal which has been agreed with Europe would set us on a journey to influence these changes or whether the interests of Scotland’s businesses could be better served with the UK outside of the EU.

Most recently, we have been asking firms about their understanding of the business implications either of leaving the EU or remaining within it. The broad message here was that businesses were less likely to understand the implications of a leave vote compared to a remain vote across a range of areas such as access to labour, trade, prices and political governance.

We also found that that the number of business people who expected no change to their business performance in the event of a remain vote was higher than those who expected no change following a leave vote. This is understandable, given the fact that one option reflects, in essence, the status quo, whereas the other would represent a new direction for the UK.

We have also been monitoring the impact that the referendum itself is having on businesses in Scotland. Whilst a large majority of businesses are telling us that they have experienced no impact on orders and sales to date, this has fallen from over 83.1 per cent last September to 76.5 per cent today.

At a Governmental level too, we are still awaiting vital decisions such as that on airport capacity in the south east of England, which has been delayed until after the referendum.

Meanwhile in Scotland the political debate in the months leading up to May were dominated by the Scottish Parliament elections, with the political focus on the EU referendum yet to turn to Scotland. It is essential that the competing campaigns now focus their attentions on Scotland and explain to us in detail how remaining in or leaving the EU will benefit the Scottish economy and what opportunities will exist for Scottish businesses.

Once the EU referendum has been decided, it is time to get back to business. Our governments need to divert all their energy and focus back on our economy, on developing our talent, and ensuring the environment they are creating meets business needs, realising all of our aspirations.

• Liz Cameron OBE is director/chief executive of Scottish Chambers of Commerce

Chambers of Commerce fact box

• In our May 2016 survey, 68.3% of respondents in Scotland said that they would vote for the UK to remain in the EU and 22.9% said that they would vote to leave. In September 2015, these figures were 73.5% and 13.5% respectively.

• In the UK as a whole, the figures were 54.1% to remain and 37% to leave.

• 90% of respondents tell us that they are now unlikely to change their mind on how they will vote.

• If the UK were to leave the EU, 36.1% currently expect this would have a negative impact on their overall growth strategy, 41.1% feel this would have no impact, while 9.2% believe it would have a positive impact.

• Asked about the impact of remaining a member of the EU, 9.4% currently expect this to have a negative impact on their overall growth strategy. A majority (53.2%) feel it would have no impact, while more than a quarter (28.9%) believe it would have a positive impact.