Business fought for European membership in 1975. Where is it today?

The news that the government will temporarily operate a slimmed down system of checks on goods entering the UK from the EU when transition ends may seem like a sign that it is listening to business concerns. Yet, in general, business has been neither very influential nor very vocal throughout the Brexit process.

This is in marked contrast to the high-profile and pivotal role it played in the 1975 referendum on whether to remain in what was then the European Economic Community. Then, businesses both campaigned vigorously for and extensively funded (what wasn’t then called) remain. That was much less so in 2016 and, certainly, in the years since, up to the present debate about transition period extension, business has been relatively muted. This despite the fact that most surveys show that the great majority of leaders of large businesses, and a smaller but still clear majority of small business leaders, were or are opposed to Brexit. What explains the contrast?

There are many reasons. The entire political environment is different. In 1975 the strongest opposition to EEC membership came from the left of the Labour Party, including most trade unions, and indeed it was largely to satisfy them that the referendum was held at all. The Conservatives, then considered the party of business, were much more united in being pro-membership, and the only major figure on the right supporting leaving was Enoch Powell, who had left the Tory Party—over Europe—the year before. So businesses were in step with their natural political allies.

By 2016 that had all changed. The Conservative Party had become viscerally Eurosceptic to an extent which would have been unimaginable in 1975. So too had much of the press. In 1975 the only national publications backing a “no” (leave) vote were the Spectator and the Morning Star, and there had been nothing remotely like the drip-drip of years of anti-European press coverage that preceded the 2016 referendum. Whilst there were a still a few “Lexiters” in 2016, Labour was largely pro-membership as were most trade unions.

Equally, although the subsequent decades had seen the growing dominance of business interests, and a decline in the strength of unions, by 2016 the memory of the financial crisis loomed large. Any sense that businesses spoke for the people was limited and suspect. Moreover, in the intervening decades, much of the business landscape had been transformed by globalisation. Foreign-owned firms might have seen Brexit as an inconvenience but, ultimately, as something relatively peripheral to their global operations while, if it happened, they could if necessary remove or run down their British operations. Meanwhile, de-industrialisation had cut a swathe through the big industrial employers, including nationalised industries, which in 1975 had lobbied their own employees, and also spoken authoritatively for their job prospects, were Britain to leave.

But the biggest difference is the extent to which Brexit is bound up in a culture war in a way which simply wasn’t the case in 1975. Businesses had had a small taste of what that might mean for them during the 2014 Scottish independence referendum. In 2016, the toxic atmosphere of the campaign made opposing Brexit very risky. Whereas in 1975 supermarket chains, for example, had extolled the case for membership in their customer magazines, to do something similar now might well have invited a serious backlash from a substantial proportion of their customer base. And whilst even in 1975 it was the case that business support for membership could be, and was, depicted as “fat cat” self-interest, that was as nothing compared with today’s populist characterisation of such support as part of an “establishment” elite sneering at “ordinary people.”

Since the vote, those risks have escalated. Any suggestion that the outcome should be revisited, for example through a second referendum, has invited the same rabid denunciation as “enemies of the people” that judges and others have suffered. Moreover, businesses had to deal with a government that was monomaniacally pro-Brexit, excluding from consultation those who were not “on board” and, at least reportedly, excluding them from government contracts as well. Then, more recently, as a result of Covid-19, businesses have become dependent on the government for life support.

As a result, business statements since the referendum, especially, have been fairly muffled. It’s important to remember that such statements are always informed by business logic rather than political principle. Thus, even when disinvesting or relocating, firms have typically not made a point of ascribing this to Brexit. Why do so, when it imperils what is left of your UK business in terms of governmental or consumer punishment? Why do so at all? Hypothetically, a politically committed Remainer might emigrate in disgust and be vocal in saying exactly why. Such point-scoring is irrelevant to businesses.

Similarly, lobbying since 2016 has been fairly unambitious in scope. Certainly both individual firms and trade organisations have urged the government to reach a deal with the EU, to make adequate preparations for the new terms of trade, and, in some cases, to extend the transition period. They have made very little headway. As things stand, the last has been ruled out and the first two remain very much in the balance.

Neither during nor since the referendum has anything said in public by businesses remotely reflected the near desperation with which, in private, many business people talk about the dire consequences of Brexit in any form. Perhaps were they to have done so there would have been a very different outcome, as there was in 1975. Or perhaps, after all, the past is a foreign country, and Britain was always going to be a third country.