LONDON, Jun 24 – Business leaders have called for the government to take “immediate and unambiguous” action to shore up Britain’s economy after the country voted to leave the European Union. Representatives of Britain’s biggest businesses said the government needed to guarantee that EU citizens have the right to remain in the UK, amid concerns that uncertainty about the consequences of the vote will harm the economy.
A string of chief executives have sought to reassure workers in the UK that their companies would adapt to the country leaving the EU, but others expressed disappointment at the result and warned they could have to restructure their business. Stock markets around the world are falling sharply after the vote, with the FTSE 100 down 8% at one stage, including heavy falls for banks and housebuilders.
JP Morgan warned in a statement that it “may need to make changes to our European legal entity structure and the location of some roles”. The bank, which employs 16,000 in the UK, said it will maintain a large presence in London, Bournemouth, and Scotland. However, BMW, another major employer, said: “While it is clear there will now be a period of uncertainty, there will be no immediate change to our operations in the UK.
“Today, we know that many of the relevant conditions for supplying the European market will have to be renegotiated, but of course we cannot say what this mean for our UK operations until those future regulatory and legislative arrangements are agreed. We will not speculate about the outcome of these negotiations nor about any possible effects that might have on our production operations in the UK.”
The result could also have serious implications for the steel industry, with Tata Steel trying to negotiate a deal to keep its UK business, which employs 11,000 people. Gareth Stace, director of UK Steel, said: “The decision to leave the European Union will send shockwaves across the UK’s steel industry. Our sector is well versed in having challenges thrust upon it, but it’s clear that this is like no other.”
However, other chief executives pledged it was business as usual for their companies. Sebastian James, chief executive of Dixons Carphone and a friend of David Cameron’s, tweeted: “Feels strange and unsettling following the vote but we are the same, our company is the same, and our job is the same.”
Lloyd Blankfein, chairman and chief executive of Goldman Sachs, said: “We respect the decision of the British electorate and have been focused on planning for either referendum outcome for many months. Goldman Sachs has a long history of adapting to change, and we will work with relevant authorities as the terms of the exit become clear. Our primary focus, as always, remains serving our clients’ needs.”
Jes Staley, chief executive of Barclays, said his bank “will not break our stride in delivering the Barclays of the future”. He said: “This is a significant decision and there will be many questions asked in the coming days and weeks about what happens next. The answers are complex but our position is not: we will not break our stride in delivering the Barclays of the future.”
EasyJet issued a stock market statement in an attempt to sooth the concerns of investors. The low-cost airline said it was confident the result will not have a material impact on its strategy or ability to deliver long-term growth in its profits. The company said it had prepared for a “leave” vote and wanted talks to ensure that the UK remains part of the single European aviation market.
Carolyn McCall, easyJet’s chief executive, said: “We remain confident in the strength of easyJet’s business model and our ability to continue to deliver our successful strategy and our leading returns. “We have today written to the UK government and the European Commission to ask them to prioritise the UK remaining part of the single EU aviation market, given its importance to trade and consumers.”
Business leaders overwhelmingly called for Britain to remain in the EU, with more than 1,000 chief executives signing a letter backing a “remain” vote just days before the referendum. The British Chambers of Commerce said the government’s response to the vote would be vital for businesses.
Adam Marshall, acting director general of the British Chambers of Commerce, said: “The health of the economy must be the number one priority – not the Westminster political postmortem. “Some businesspeople will be pleased with the result, and others resigned to it. Yet all companies will expect swift, decisive, and coordinated action from the government and the Bank of England to stabilise markets if trading conditions or the availability of capital change dramatically.
“Business will also want to see a detailed plan to support the economy during the coming transition period – as confidence, investment, hiring and growth would all be deeply affected by a prolonged period of uncertainty. If ever there were a time to ditch the straitjacket of fiscal rules for investment in a better business infrastructure, this is it.”
The Institute of Directors said businesses face a “nervy time” over the next few weeks and months. Simon Walker, its director general, said: “The weeks and months ahead are going to be a nervy time for business leaders, so they need to know that the government is focused on maintaining stability while a new relationship with the EU is established.
“British businesses are resilient and, with their characteristic ingenuity, they will weather this storm. It is now beholden on politicians to negotiate a deal with European leaders which preserves the ability of British firms to trade easily with the remaining member states.”
Walker said that despite the vote, the EU will remain as Britain’s biggest trading partner. He added: “One thing the government must do immediately is to guarantee the right to remain of EU citizens currently in the UK. Companies do not want to have to worry about losing valued staff.”
Malcolm Sweeting, senior partner at law firm Clifford Chance, said the vote will have “serious implications” for the City of London. Analysts said that the dramatic fall in the value of sterling could help businesses that export goods, but that the increase in the cost of imports from Europe could offset this benefit.
Stephen Roper, director of the Enterprise Research Centre thinktank, said: “Small businesses need to prepare for a period of volatility as markets react. Gains in terms of reduced regulation and EU membership costs may follow, but are probably some years off.”
Mike Cherry, national chairman at the Federation of Small Businesses, said that small businesses needed to do stress tests to prepare themselves for market volatility. Cherry said: “Today we call on the government and the Bank of England to urgently put in place measures to prevent any further instability negatively impacting small businesses in the UK. Small firms need to know what this means for access to the single market as soon as possible.”
Carolyn Fairbairn, director general of the CBI, the UK’s leading employers’ organisation, said the “urgent priority” was to reassure the market. She said: “Many businesses will be concerned and need time to assess the implications. But they are used to dealing with challenge and change and we should be confident they will adapt. “The urgent priority now is to reassure the markets. We need strong and calm leadership from the government, working with the Bank of England, to shore up confidence and stability in the economy.”