Leaders June 2016

EU membership

Leave or stay?

With less than a month to go at the time of writing before the UK’s referendum on membership of the European Union, news is dominated by speculation on the economic impact of a Brexit—a UK departure.

At the Group of Seven Summit in Ise-shima, Mie Prefecture, in May, leaders warned that such a move would pose a serious threat to the global economy. Individually, a number have also publicly expressed their hope that the UK will vote to remain. These include Prime Minister Shinzo Abe, who last month stated that, “a vote to leave would make the UK less attractive as a destination for Japanese investors”.

In spite of these high profile interventions in favour of the British government’s campaign to remain, research by the University of Oxford’s Reuters Institute for the Study of Journalism shows that press coverage in the first two months of the campaign was firmly skewed in favour of leaving. Amongst articles on the referendum, 45% favoured an exit, while only 27% backed retention of the status quo.

Voters’ views

One way to make some sense of the differing and increasingly partisan viewpoints is to consider the position of the commentator. A chief executive reliant on sales to Europe might feel duty bound to his or her shareholders to campaign vigorously for continued membership, which would guarantee access to the single market. Conversely, a small business owner selling exclusively within the UK may cast a vote to leave in the hope of lighter regulation.

Not all voters, though, are calculated realists acting in narrow self-interest. Most, it is hoped, will weigh the impact of EU membership on the British economy, sovereignty and security, and vote for what they believe is right for the country as a whole.

Engage in the process

As a mature and stable democracy, however, the right to vote in Britain is sometimes taken for granted, and a low turnout would be damaging to the government. Not least because a key objective in calling the referendum is that it draws a line under the debate on Britain’s commitment to the EU.

In this respect it is disheartening to learn from the Electoral Commission that only around 200,000 British expats have registered to vote. Moreover, according to The Financial Times, 54% of 2,000 students surveyed were unable to name the month in which the referendum is to take place.

The future

Regardless of the outcome of the referendum, two things are certain.

First, the appetite of Japanese consumers for innovative and high-quality British goods and services will not evaporate. So, whether British exporters are governed by an EU–Japan Economic Partnership Agreement or a bilateral UK–Japan deal, Japan will continue to be an important market for UK businesses.

Second, Britain will rapidly need to accept the referendum result and move forward.

For those who have an active interest in business between Japan and the UK, this will mean doing all we can to demonstrate that the UK continues to be the most rewarding and richly deserving European destination for Japanese investment.