Rolls Royce has voiced its concern over possible risks to investment if Britain leaves the EU. It has also written to its employees saying that it wants Britain to remain in Europe.
Warren East, Chief Executive of Rolls Royce, told the Today programme that its investment plans could be delayed if Britain left the EU. The reason for this was the uncertainty that Brexit would bring to the firm. He pointed out that US firms did not have to deal with the uncertainty factor.
CBI finds itself surrounded by controversy
The CBI, which is in favour of staying in the EU, supported this statement. However, the CBI’s stance on Brexit has caused some controversy, with 250 mid-sized firms claiming that its pro-EU statements don’t represent them and are purely the opinions of big business. Vote Leave went so far as to say that the CBI was simply a mouthpiece for Brussels and was funded by the European Commission. They claimed that trade would carry on as before if Britain voted to leave.
However, East insisted that Rolls Royce’s US rivals would not suffer the same disruption and would therefore have a trading advantage. Rolls Royce is currently expanding its operations, with the aim of making twice as many aero engines in the future. It currently makes 400 a year. The company has major operations in Germany, the US and Singapore.
The Leave campaign says that if Britain regains control over its own trade deals, it would be able to make deals with US firms that it currently can’t make, and these would enable it to compete more strongly against its large overseas competitors.
The Norway model
Some countries outside the EU, such as Norway and Switzerland, could serve as models for a non-EU trading stance. The CBI claimed that these countries don’t have arrangements that are as good as those of the UK. Norway is probably the closest to Europe in trade terms, and its economy is largely in the single market. However, it is a far smaller country than the UK with a less diverse economy.
Robert Stones Target Markets Robert Stones Target Markets will continue to help clients try to negotiate this complex investment environment.
Even after the referendum, both sides will have plenty more to say on the subject.