Victory for the Remain camp could herald “deeper engagement” with the EU but City pundits worry that the predicted narrow win may intensify internecine warfare in the Conservative Party, leading to ongoing uncertainty and damage to the UK economy.
The City’s Chairman of the Policy and Resources Committee, Mark Boleat, told a gathering of economic attachés that City leaders were engaged in talks with Government about the importance of “winning the peace” following the Referendum.
“A lot depends on the margin of victory. If Britain votes to remain by a good margin, 60:40, Prime Minister Cameron can make a speech in front of Downing Street and say that Britain must be a wholehearted member of the EU. But if the vote is close, 52:48, that may trigger a leadership battle and then we have a real problem,” he said.
The City’s trade envoy and former Foreign Office Minister, Jeremy Browne, said he hoped for a decisive vote to remain in the EU so that the City could focus its attention on important pan-European issues where Britain led the way in the run-up to the UK Presidency in the second half of 2017. This included the creation of a capital union, completing the single market in services and the single digital market.
“There will be a need for us to demonstrate that, having reaffirmed our membership, we wish to make a positive contribution to the collective endeavours of the EU,” he said.
However, if the vote is very close, he warned that Britain may be in for “a sustained period of guerrilla warfare” by disaffected Brexiteers. Because future treaty changes will be subject to a referendum in Britain, Tory rebels may use this as a weapon to “derail the process”.
Boleat said the City would start to lose inward investment if there was ongoing uncertainty about Britain’s EU membership. “That is why we want the debate over and settled,” he said.
Both agreed the result hinged on turnout, with younger voters more likely to vote to remain in the EU while older voters were more in favour of an exit.
Browne also pointed to different attitudes to the referendum based on social class, where university educated people were overwhelmingly in favour of remaining, while those who left school at 16 were in favour of leaving.
“It depends on whether you see globalisation as an opportunity or a threat – if you are a professional in the City, globalisation feels like an opportunity but if you are in a depressed post-industrial part of the UK and you feel that your skills cannot compete with migrant labour, globalisation will feel like a threat.”