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Most UK firms seriously weighing risks of Brexit, says CBI head

Published 15/02/2016, 15:00
© Reuters. A Union Jack flag flutters next to European Union flags ahead of a visit from Britain's Prime Minister David Cameron at the EU Commission headquarters in Brussels

LONDON (Reuters) - Most major British firms are seriously considering the risk of Britain leaving the European Union and many are making contingency plans, according to the head of the Confederation of British Industry.

Speaking to reporters at a briefing, CBI Director-General Carolyn Fairbairn said the prospect of a British referendum around the middle of the year on whether to leave the EU was a growing concern for business.

Prime Minister David Cameron hopes to reach a deal to reform the European Union at a summit of EU leaders this weekend, which he can put to voters in a referendum that many analysts expect to be held in late June.

Recent opinion polls have shown a narrow but growing lead for campaigners who want to leave the EU.

"You are now seeing a number of companies recently that have had contingency plans (and) are debating important questions of what it means for their suppliers and their exports and so on," Fairbairn said.

"I would say it is most, now, that have given the issue serious thought," she added, based on having met almost 100 businesses since she took the CBI's helm in November.

A survey by the Economist Intelligence Unit for the Bertelsmann Foundation found that four out of five business leaders in Britain and Germany oppose Britain leaving the EU.

The survey of 782 business leaders at German and British companies showed that they feared a British exit would hurt revenues and investment in their sectors and corporations. The poll was conducted in November and December last year.

No firms have spoken publicly in any detail about how they would react if Britain decided to leave the 28-member bloc and had to renegotiate a raft of global trade deals.

But behind closed doors, some companies, including major international banks based in London's financial district, have spent tens of millions of dollars considering their options, according to firms advising them.

Fairbairn's comments show contingency planning is now common, and she said it was not concentrated in any one sector.

The Bank of England has confirmed that it has looked at what might happen if Britain voted to leave the EU, although finance minister George Osborne has said the government is wholly focused on ensuring reform of the bloc.

The CBI said most of its members wanted to stay in a reformed EU, and it has generally pointed to the benefits of staying in, drawing criticism from 'leave' campaigners.

Last week the CBI said firms' investment intentions had not been affected by the prospect of the vote. But at the briefing Fairbairn said this could change, given Scotland's experience of a referendum on independence in 2014.

© Reuters. A Union Jack flag flutters next to European Union flags ahead of a visit from Britain's Prime Minister David Cameron at the EU Commission headquarters in Brussels

"We are not surprised not to see an impact now," she said. "One of the things we saw from the Scottish referendum is that those decisions around investment tended to be quite late, at the point at which a date was actually announced."

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