Leaving the EU is a walk into the unknown that would put our prosperity at risk

Robert Elliott
EU Referendum - Signage And Symbols
Source: Getty

As arguments on either side of the EU referendum debate are increasingly cast as products of fear or fantasy, an objective assessment is becoming, for the many in the undecided camp, increasingly difficult.

I appreciate that there are emotional and political considerations in this important debate. But I prefer to see it in purely business and economic terms because I believe the EU referendum heralds great threats and opportunities for UK plc.

While I express my view in a personal capacity, I naturally look to the position of my own firm, which employs almost 5,000 people globally, generating revenues of over £1.2bn. It contributes significantly to the UK economy through the taxes we pay and the community investment and pro-bono activities we run.

In common with many others in professional services, which undoubtedly ranks as one of the UK’s biggest and most successful export sectors, we benefit from a major London base and significant European operations that make the EU the heartland of our business. Our growth over recent decades, both in the UK and internationally, has been largely helped by building an integrated European network of offices that operate within the common legal framework that the EU provides.

Read more: Losing the EU financial services “passport” would be a disaster for the UK

It is all too easy to take for granted what the EU and its Single Market gives both to us as a firm and the clients we serve. Legally enforceable rights in all member countries. The ability to provide our services without discrimination. The right to live, work and study where we choose. The freedom to move and develop the careers of our people where clients need them most. The chance to be free of national obstacles to doing business by benefiting from greater consistency and certainty in the rules for doing business.

Whatever the frustrations that many – including myself – sometimes feel at the way the EU operates, I am clear about the balance of these benefits that flow from EU treaties and the laws made under them. They are ones that the UK has had an influence in securing over the past 40 or so years and they significantly outweigh the burdens connected with them. They are good for business and consequently good for our employment, tax revenues and national prosperity.

Read more: Britain must not turn its back on its friends by leaving the Single Market

Having these rights gives us and our clients the opportunities to prosper. But membership of the European Union also provides the UK with enormous influence to shape the evolution of laws across the EU – be that in relation to technical standards for products or rules on climate change. The EU amplifies the UK’s soft power many times over what it would otherwise be.

Voluntarily giving up all our enforceable EU rights, and those that we have through the EU, carries great risk in a globally interconnected world dependent on the rule of law. It is a walk into the unknown, withdrawing from an international legal order and asking to re-instate the parts you want by relying on the “neighbourly goodwill” of countries with their own agendas. It’s a gamble that no company board would ever contemplate in an equivalent business context.

Read more: Twelve reasons Britain is better off remaining a member of the EU

Brexit would give just a two-year window to negotiate new terms. After that, if we haven’t reached agreement, we will be out of the EU unless the other 27 EU states unanimously agree to extend the period. Getting unanimity would be unlikely and costly. In reality, the post-Brexit arrangements between the UK and the rest of the EU (let alone with other countries outside the EU) would probably take many years to conclude.

Uncertainty would prevail and it’s hard to see how the outcome would be as favourable as the position today. Without detailed agreements in place, World Trade Organisation tariffs would automatically apply to imports and exports between the UK and the rest of the EU, and between the UK and many other countries, and could not be reduced without affecting the bargaining position on tariffs elsewhere.

I am concerned about the risk of a prolonged period of uncertainty and a depressed economic outlook. Businesses would need to spend time and resources on understanding and adapting to new trading terms under a different legal framework, most likely at the expense of new investments and other growth-led corporate activity. While restructuring business may be good for some lawyers in the short term, anything that may threaten the UK’s longer-term prosperity would be detrimental to the whole profession and business more generally.

Read more: Seven reasons Brexiteers are wrong to think EU exit talks would be easy

The vote on 23 June risks wiping out, within a two-year period, the rights, responsibilities and benefits that currently underpin much of the way we live, work and do business. In my professional role as a senior lawyer, I know that I have been much more effective working in partnership with others than I could ever have been as a sole practitioner. The same goes for countries. It is nothing new. The world today faces problems which are global and interconnected. If we are to help shape the solutions, we need to be able to sit at the global table.

That is why my firm personal view is that we should vote to remain in the EU.

Robert Elliott is chairman and senior partner of Linklaters but writes in a personal capacity.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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