22 Feb

Brexit: What will it mean for Australian businesses

By Victoria Craw, news.com.au

IT COULD be the sweetest fry up David Cameron has ever tasted.

Eight am Friday morning, Brussels time, European leaders will sit down to a full English, in the midst of an intense summit billed as “crunch time” for the UK’s renegotiation over membership of the EU.

Whether the mood is congratulatory or tense depends on the 12 hours beforehand — when leaders will nut out changes to Britain’s relationship with the European Union.

Once the last cup of milky tea has been drunk, Mr Cameron is expected to announce June 23 will be the date for an ‘in or out’ referendum on whether Britain should remain part of the European Union.

Stronger in Europe chief campaign spokesman James McGrory told news.com.au the decision is the most significant choice in a generation that could affect everything from jobs to global security to mobile phone prices if Britain opts to leave the 500-million member single market the EU creates.

“I’m confident but I’m not complacent, there’s a lot of debate to be had. This is the biggest choice we’re going to face as a country in a generation and I very much hope that we’ll be able to take the people with us,” he said.


The lead up to the Brussels summit has seen a major escalation in rhetoric with politicians, business leaders and celebrities weighing in on what it could mean.

Australian former deputy Prime Minister Wayne Swan warned the UK against making a “grave mistake” in assuming Commonwealth membership could become some kind of replacement vehicle.

“In my opinion, and in that of the vast majority of my fellow Australians, Britain leaving the European Union would be a mistake of monumental proportions,” he wrote in the UK Telegraph, adding that many Australian laws such as four weeks leave and parental benefits are rooted in EU policy.

“Australians, like the citizens of all Commonwealth and English-speaking countries, are comforted by the knowledge that the United Kingdom is at the top table. For Britain to absent itself from one of the most important global decision-making forums would be a betrayal of its history and its role in the world,” he said.

Earlier in the week, EasyJet CEO Carolyn McCall said leaving could jeopardise the cheap flights Briton’s take for granted and see a return to days when flying was “reserved for the elite”. Former Tui Travel boss Peter Long, who ran the company when 33 of its travellers were killed in Tunisia last year said the ability of governments to work together could be compromised if “we weren’t in a situation where we were as Europe working together.”

HSBC boss Stuart Gulliver also said it could force the bank to shift 20 per cent of its workforce — around 1000 people — from London to Paris. Kensington Palace was forced to deny Prince William had inserted his own opinion into the political debate this week, after he said Britain had a “long and proud tradition of seeking out partners” in a speech at the Foreign Office.

Eurosceptics have accused the government of “scaremongering” over the decision and said the renegotiation does not go far enough. House of Cards original creator Lord Dobbs told The Sunday Times Mr Cameron’s deal was a “mouse that barely squeaks” with “not a chance” the UK would have voted to enter the UK as it is now.

A “poll of polls” over the last six months shows the 52 per cent will vote to remain compared to 48 per cent who will vote to leave. A spokesman for the Australian government would not be drawn on the official views, saying it was a matter for the British people to decide.

“Australia’s priority is to continue to maintain a strong relationship with the UK,” he said.

“It is very difficult to judge the likelihood of a ‘Brexit’ when we are several months or more away from the referendum.”


Australian British Chamber of Commerce chief executive David McCredie said it’s “business as usual” for Australian companies for whom the referendum doesn’t significantly feature on their radar yet.

“We have a sense that at this stage it’s business as usual. If there is a vote that were to change the UK’s membership in Europe … I think people would still be fairly confident going to the UK and there would still be fairly close ties to the EU which they would assume to be able to utilise.”

He said the UK is the second largest source of foreign direct investment in Australia and second largest destination for Aussies investing overseas — something that is unlikely to change whether it remains in Europe or not.

“London is the global financial capital,” he said. “New York is huge and obviously the financial capital of the largest economy but in terms of global, London is the place to be and I don’t think being in or out of Europe would change that.”

For Mr Cameron, the next 24 hours of negotiation is crucial to avoid his legacy becoming the ‘Prime Minister that led the UK out of Europe’.

The discussions will centre around four key areas: ability for national parliaments to block legislation, cutting red tape, ensuring no disadvantage for the pound and restrictions on benefits for EU nationals in the UK.

While it’s understood many European leaders want Britain to remain part of the union, European Parliament leader Martin Schulz said changes cannot be guaranteed and still have to be passed through the European Parliament.

European Council President Donald Tusk said Thursday’s meeting is a “crucial moment” with “no guarantee that we will reach an agreement”.

“There will not be a better time for a compromise. It is our unity that gives us strength and we must not lose this. It would be a defeat both for the UK and the European Union, but a geopolitical victory for those who seek to divide us,” he said.

Read this article herevictoria.craw@news.com.au

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