The potential for a second Brexit referendum relies on businesses
Brexit is bad for business. Brexit is good for business. There is no clear consensus on the British Parliament possibly holding a second referendum on leaving the European Union later this year, but both sides of the argument present solid evidence for their case.
Holding a second referendum affects business in a negative way due to the uncertainty it causes.
“Business likes certainty and I can’t see how discussion of a second referendum helps create that certainty when the negotiations are not even concluded,” Miles Celic, CEO of finance industry’s lobby group TheCityUK said.
A second referendum could possibly reverse all the planning both the government and private companies have prepared since the first referendum. As Paul Hardy, the Brexit director at DLA Piper Global Law Firm, said, “Those who have spent a lot of money on it are ready to deal with it.”
On the flip side, some argue that the original Brexit was bad for business, so a second referendum that may reverse it will, in the long run, be beneficial for businesses in the United Kingdom. The forecast for the British economy two years after Brexit is predicted to be the second worst performing in Europe, only ahead of Italy, according to the International Monetary Fund in its World Economic Outlook.
Furthermore, according to Consensus Forecasts, British annual growth is now projected to fall 0.5 percent relative to earlier projections.
From a political perspective, Martin Wolf articulated in an article for The Financial Times that the new variable introduced to the post-Brexit era is the election of President Donald Trump and his “America First” policies, stating, “The mutation of the US, under the banner of ‘America First,’” makes the strategic position of Europe as a whole (of which the UK is — and always will be — a part), far more fragile.”
The United Kingdom may have a special relationship with America, but it now lacks the powerful economic engine of the EU to strengthen its bargaining power with Trump’s America.
Both sides of the debate have rational arguments for either upholding the first referendum or holding a second one. The greatest underlying issue that the original Brexit referendum laid bare is that the British electorate is split down the middle for a future closer to or further away from the EU.
Wolf made an interesting point when he stated that, “The reasons Labour leader Jeremy Corbyn is against the EU — that it is a capitalist plot — are the opposite of those on the Tory right — that it is a socialist one.”
If a second referendum were to take place, not only would a large segment of the British business community be up in arms, but those who voted in favor of Brexit would also be upset. Even though a future far removed from these hostile debates within the business community and the society at large may prove more economically prosperous, a large segment of the British people would see the move as an affront to their democratic wishes.
In either scenario, the future of the British economy seems in peril.