01 June 2016
Justin King co-authors editorial for Mail on Sunday on potential Brexit impact
We have had the privilege of leading some of Britain’s largest and most successful retailers. Over the past 20 years, the retail industry has been through a phenomenal transformation and remains one of the most dynamic and innovative industries in the UK. British consumers have never before had such a range of choice and quality. We can shop 24 hours a day, either in-store or online, at a price that is more affordable than ever. This has all been achieved with Britain as part of the European Union.
Like the Leave campaign, we believe that Britain is a truly world-class country. But unlike the Leave campaign, we believe that the impact of a British exit from Europe could be catastrophic for the consumer recovery, upon which so much of our economic stability is dependent.
It is impossible for us to see how a split could take place without there being an impact on prices and inflation, the strong relationships we’ve built with our EU supplier partners, and the broader innovation and digital agenda. The unintended consequences of a vote to leave and the uncertainty it creates would be a massive shock to our system. It would likely mean further depreciation of the pound, driving up prices for goods we import and therefore negatively impacting the end consumer.
In the UK, we have strong and sophisticated supply chain relationships across Europe, which are now integrated in a way that they never were in the past. Currently, there are no barriers to trade within the EU. In trading with the rest of the world all sorts of rules and tariffs get in the way. A vote to exit would necessitate a complete renegotiation of our trading arrangements that can only be of detriment to UK consumers. Further, we can expect our trading partners to exploit this renegotiation to their benefit. It’s difficult to imagine that French farmers will continue to allow British lamb to be freely imported. This leads to the question over the future of British agriculture as well as UK food manufacturing, an industry in which we are net exporters, and therefore the ultimate impact on jobs.
There is no guarantee that we can renegotiate quickly and efficiently enough to deal with some of these issues. As large retailers, our experience in negotiation over many years is that scale gets you a better deal and being under time pressure is never helpful.
The advancement of British retailing over the next 10 years is heavily reliant on investment in digital technology. The EU’s recently agreed Digital Single Market strategy will open up opportunities for business and consumers across Europe, making the single market fit for the digital age. Britain is the digital hub of Europe, and we have led the way in shaping the European digital economy. Indeed, we are the e-commerce capital of Europe, with a market share of over one third. We have the clear expertise to continue to lead the market and it would be a massive missed opportunity to leave the EU now and not be part of the broader revolution.
Finally, there is the issue of regulation. The much cited suggestion that we will be free of the apparent constraints of over-regulation if we are to leave Europe is nonsense. We need regulation to protect consumers and if we want to continue to trade with Europe, the rules still apply. On leaving, there is the risk that Westminster would continue to build additional regulation on top of the European laws, making it more onerous rather than less. Therefore it makes much more sense to have a seat at the table to shape future regulatory change rather than simply be bound to it.
There is no doubt that this is a fundamental decision for the British people. While we are not advocates of scare mongering, it is just good business to understand the risks before reaching a conclusion in this complex debate. We have a responsibility to help inform the consumers that we have collectively served for many years. While the European Union is by no means perfect, an exit would hit consumers the hardest and for that reason, we will be voting to stay and continue to play our part in the successful and growing Europe that we all want to see.
Marc Bolland, Sir Ian Cheshire, Justin King CBE, Sir Terry Leahy
This editorial first appeared in the Mail on Sunday on 22 May 2016.