EU Referendum Press Releases : Britain Stronger In Europe – TUC and EEF Unite to Say British Manufacturing is Stronger in Europe
Below is the text of the press release issued by Britain Stronger In Europe on 22 June 2016.
Today [Wednesday], in a joint statement, TUC General-Secretary Frances O’Grady and EEF chief executive Terry Scuoler say that manufacturing is better off in Europe, and that “leaving would be a terrible gamble, amounting to playing poker with people’s jobs, businesses and the country’s economic stability.”
It comes as a new survey by M&A Adviser shows 65% of people working in the M&A field believe leaving the EU would make Britain worse off.
Commenting, Stephen Kinnock, Labour MP for Aberavon, said:
“Unions and manufacturers alike know that Britain’s economy is stronger in Europe, supporting jobs, lower prices and financial security for families across the country.
“Nine out of ten economists say that outside the EU’s single market trade and investment would be hit and jobs would be lost.
“When workers, experts and employers unite behind a single argument it cannot be dismissed by leave campaigners, who have no economic plan for Britain.
“Vote Remain for more jobs, lower prices, stronger public services and a decent, tolerant Great Britain. If we vote to leave, there is no going back. Don’t risk it.”
City experts are predicting “considerable and prolonged uncertainty” and there are questions on the “future role of the City of London as the leading financial centre”:
“The preponderance of views points to a post-Brexit world of considerable and prolonged uncertainty which will persist until the UK comes to an agreement with the EU on all aspects of their relationship. Questions have been raised over the future role of the City of London as the leading financial centre. Some say that the pool of talent that exists there will slowly begin to haemorrhage and other, principally European, financial centres will benefit from their knowledge and expertise and from increasing volumes of transactions in the future.”
The M&A Advisor, 21 June 2016
The uncertainty is already leading to a slow-down in transactions already:
“In the run-up to the referendum, we are aware of a number of deals that have been put on hold until the outcome is known. Merrill can look at deals that have been initiated in our systems and see that a significant amount of them have been stalled. A number of clients approach us, full of optimism, at the start of a deal only to inform us that, “Our buyer has pulled out or stalled pending the results of the referendum.” Anecdotally, our clients are telling us that deals are being suspended simply because if you are buying a UK business that has significant exports into the EU, they are going to be very cautious about executing that deal due to the uncertainty surrounding Brexit.”
The M&A Advisor, 21 June 2016
Following a vote to leave the EU, experts are concerned there would be less investment in the UK:
“Many people believe there will be less investment in the UK if Britain decides to leave. In a post-Brexit world it is unclear what trade agreements will be in place and whether any restrictions in the movement of goods would change these investment decisions.”
The M&A Advisor, 21 June 2016
A vote to leave will also lead to uncertainty increasing risk premiums on debt, making it more expensive for firms to invest and execute mergers and acquisitions:
“But,” he continues, “our research did point to the pricing of ‘uncertainty’ and we estimated that there would be a 50 basis point (BPS) risk premium on debt – a result that would have a major impact on a deal, reducing the price a buyer could pay. Such uncertainty reduces confidence. We believe a hiatus in dealmaking is likely if Brexit wins the vote, and one that could persist for a number of years until we all understand what the full terms of Brexit really mean.”
PwC’s Stuart McKee, The M&A Advisor, 21 June 2016
Survey results
Over 65% of survey respondents felt that the UK would be less likely to prosper if it left the EU. A similar proportion said that Britain would be less likely to attract overseas investment.
69% of respondents felt that uncertainty over the UK’s EU membership is likely to affect the current M&A and markets.
67% said that investment decisions are being negatively affected
64% of survey respondents said that UK businesses would be less attractive to overseas acquirers in the short term if Britain votes to leave the EU.
65% of our survey respondents felt that a vote for Brexit would have a negative long-term effect on M&A and high-yield markets.
The M&A Advisor, 21 June 2016
