Mapping out the future

In just a few days, the nation will decide whether the country should remain in the European Union or leave the association of countries known as the Common Market it joined in the 1970s. For those with long memories, many of today’s arguments are echoes of points raised in the 1975 referendum. They include immigration and the economy, red tape and the fear of being ruled by foreigners. One thing has changed: the shadow of World War II has gone. People no longer talk about the Germans and the war as they did back then when Harold Wilson called the election.

Fears of a recession

For the signage industry, the main issues are whether an exit vote affect the economy, orders and in particular their customers. It has been taken as read that if the remain vote wins, then nothing much will happen to the economy, other than what can be predicted at the moment. For those involved in the printing, wide-format and sign-making industries, there are real concerns over whether leaving the European Union would trigger a recession.

That is what is being predicted by the Prime Minister David Cameron, who said the nation would have a DIY recession if the vote to leave the EU wins on June 23rd. He comments: “If we leave, the only certainty we will have is uncertainty. The Treasury has calculated that the cost to every household in Britain would be as high as £4,300 by 2030 if we leave.


 
“The overwhelming weight of independent opinion—from the International Monetary Fund to the OECD, from the London School of Economics to the Institute for Fiscal Studies—also supports the fact that Britain will suffer an immediate economic shock, and then be permanently poorer for the long-term. The evidence is clear: we will be better off in, and poorer if we leave.”

However, these warnings of economic melt-downs are rejected by the leave campaign. The Justice Secretary Michael Gove says: “We can take back the billions we give to the EU, the money which is squandered on grand parliamentary buildings and bureaucratic follies, and invest it in science and technology, schools and apprenticeships. We can get rid of the regulations which big business uses to crush competition and instead support new start-up businesses and creative talent. We can forge trade deals and partnerships with nations across the globe, helping developing countries to grow and benefiting from faster and better access to new markets.”


The other high profile Conservative Boris Johnson also dismissed the benefits of remaining in the EU. He notes: “In trying to compute the costs and benefits of belonging to the Single Market, we should surely add the vast opportunity cost of not being able to do free trade deals with the most lucrative and fastest-growing markets in the world—because we are in the EU.”



A signage point of view

People in the industry are understandably coy about voicing opinions—presumably because they do not want to alienate customers with opposing views. David Catanach of the British Sign and Graphics Association (BSGA) says the organisation has to be apolitical, although he feels the regulations on health and safety and other aspects of the industry have helped the business of sign making and is something that will not go away if we leave.
 
Catanach says: “I feel the industry and business in general is collectively holding its breath until after the vote, no big decisions will be made until the result is known.”  He adds that it was a difficult decision as to which way to vote due to the conflicting arguments, but endorses the idea that everyone should vote on June 23rd.

The leave campaign has largely concentrated on the themes of ‘controlling immigration’, ‘taking back power from Brussels’ and ‘controlling our borders’. They also champion the view that being outside of the EU would allow new business opportunities to develop with new trade deals with nations around the globe. Nigel Farrage of UKIP says: “Instead of being stuck inside an outdated customs union, we should be free outside of the EU to negotiate our own global trade deals with emerging economies like India, Brazil and China.

“If tiny little Iceland can broker a free trade deal with China—something the EU hasn’t yet managed—it demonstrates the extremely exciting economic future Britain could have outside of the EU. Only UKIP would unshackle us from the burden of EU membership.”



Meanwhile, the Chancellor George Osborne says the cost to jobs and business in the event of a leave vote would be huge, citing the report by the Treasury published that warns of the results of a leave vote. He says: “Within two years the size of our economy?our GDP?would be at least three percent smaller as a result of leaving the EU?and it could be as much as six percent smaller.”


However, his former college friend and Conservative colleague, Johnson, disagrees saying: “In trying to compute the costs and benefits of belonging to the Single Market, we should surely add the vast opportunity cost of not being able to do free trade deals with the most lucrative and fastest-growing markets in the world—because we are in the EU.

“When you consider that only six percent of UK business export to the EU 28; and when you consider that 100 percent of our businesses, large and small, must comply with every jot and tittle of regulation; and when you consider that the costs of this regulation are estimated at £600m per week, I am afraid you are driven to the same conclusion as Wolfgang Munchau, the economics commentator of the FT, who said, ‘whatever the reasons may be for remaining in the EU, they are not economic.’”


Change or no change

It is generally felt that a vote to stay in the EU will mean nothing much will change, although that does not guarantee a recession-free future. A vote to leave may lead to speculation and conjecture as nobody quite knows how things will pan out and in particular how it will affect business. Clearly uncertainty is one thing businesses dislike, and the leave campaigners admit there may be a period of disruption but long-term it could be good to leave the EU.
 
Rudi Blackett of the trade show Sign and Digital UK, which attracts many in the sign industry, is unequivocal about which way to vote. He comments: “As it is widely reported, it is for the people to decide. However as an industry we need to weigh up the pros and cons. The sign and digital industry operates in an international market.



Suppliers source many products from across Europe and from around the world to sell in the UK. Trade agreements are a key factor in this context and if leaving the EU meant having to re-negotiate many different import and export agreements then this would lead to inevitable delays and frustration.



“Sign and Digital UK’s exhibitor profile is made up of many international and European influenced and operated businesses. If staying in the EU means better business for our industry, then we should consider that as the decider when it comes to the vote and play up to the strengths of being part of the union. ‘Leading not leaving’ would be the stance I would take.”

Editorial viewpoint

The editor of SignLink Brendan Perring believes most people are not keen on a referendum and that an exit would precipitate a short-term downturn in the economy hitting firms reliant of Europe as a market. Longer-term, he says things may get better, but feels the referendum is really a diversion.
 
Perring comments: “The EU referendum is not really about our sovereignty or lack of, in my opinion it is more to do with the Conservative party trying to stave off an onslaught from UKIP, and to satisfy promises that David Cameron made to his right wing part members that he would have a referendum on this issue if they backed him into power.”

The organisations and individuals that have lined up in support of the Chancellor include 88 percent of more than 600 economists asked for their opinion on the vote by The Observer. Plus a long list of business leaders have signed a letter of support for remain in The Times including those at BP, Credit Suisse, BT, HSBC, Asda, Marks & Spencer, Airbus, AstraZeneca, BAE Systems, and Ryanair. Many of these are customers of UK signage firms and there lies one possible answer to the question about what does the sign and wide-format industry think about the referendum. They may not be keen on the EU but being pragmatists they have to look at the bottom line and make their judgement based on that.


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