Speaking this morning at a Dublin Chamber of Commerce Business Breakfast, guest speaker Patrick Coveney said “My personal judgement is that they (Britain) will” vote to exit the EU.
This morning’s headlines tell us that Britain’s “Leave” campaign has now opened up a 7-point lead over “Remain”. Recent polls are suggesting that momentum has swung towards the “Leave” camp, or a so called Brexit, unsettling investors. “Leave” in recent days has focused its campaign on the issue of immigration. According to the YouGov poll for The Times, “Leave” held 46% support compared with 39% support for “Remain.” Undecided voters were 11%, while 4% won’t vote.
This morning’s event was opened by the host company’s Managing Partner, Matheson’s Michael Jackson who clarified some interesting points on the legal implications of the referendum before Mr Coveney took the podium to speak, highlighting his view from a Greencore perspective.
Greencore, which reported a turnover of £1.34 billion for financial year 2015, has a massive interest in terms of its own operation in the UK. When measured by employees, Greencore is the largest Irish company in the UK. They feed a jaw dropping 50% of the UK population every week and 75% every month - 1 in 2 of all UK sandwiches are Greencore produced. At peak, they employ 15,000 people in the UK and everything they sell in the UK is made in the UK (although much of their ingredients supply is Irish).
For Greencore, the biggest impact of Mr Coveney’s expected “Brexit” is one of cost. He also anticipates that revenues will sink marginally in line with depressed demand as the average Briton’s income will fall. Another potential consideration is that 35% of their employees in Britain come from EU member states but are non UK nationals. From an Irish perspective Mr Coveney went on to comment that notions that FDI investment destined for Britain will be steered towards these shores are not founded in any real evidence.
What came across however most strongly, both from Mr Jackson and Mr Coveney was the level of uncertainty that the referendum brings with it. Not only is there the current speculation about the referendum result, there follows a whole wealth of critical decision points, whose outcome cannot be anticipated.
Article 50 of the Lisbon Treaty provides that any Member State may decide to withdraw from the EU in accordance with its own constitutional requirements. What is known is that exercising Article 50 is an unknown path, never before ventured.
What we are seeing this week in terms of the slide in the value of Sterling signals what we know to be true. Uncertainty around political stability for an economy is negative.
Both the Dublin Chamber’s CEO and Mr Coveney encouraged us to get connected to our friends and family in the UK and strongly urge them to vote first and foremost (a higher turnout is anticipated to favour a “remain” outcome). I certainly intend to.