A Briefing for Business by Geoff Beattie

Four months from today, on June the 23rd 2016, the British people
will vote on the question of whether to remain part of the European
Union.
The stakes could hardly be higher. The next four months of
campaigning will determine the very future of the United Kingdom.
Or even if it has one. Some commentators speculate that the bitter
aftermath of a vote to leave could trigger a second independence
referendum in Scotland and potentially the break-up of the country.
The news headlines are all about the bitter personal rivalry between
Prime Minister David Cameron and London Mayor Boris Johnson,
with the latter declaring his support for the UK to exit the European
Union (Brexit).
Looking beyond those headlines, the key word to consider is
uncertainty, which dominates almost every aspect of this
referendum campaign.
Polling
The first uncertainty is around polling. With results varying wildly from poll to poll, it is impossible to
establish any pattern, or predict for sure in which direction public opinion is heading. The
overwhelmingly negative reaction to the initial deal between Cameron and EU President Donald
Tusk resulted in a nine-point margin in favour of Brexit. Conversely and somewhat perversely an
equally hostile response to the deal agreed between the UK and other EU leaders last week in
Brussels appeared to produce a 15-point lead for those arguing to stay. This kind of volatility can
only mean that there is a very large pool of voters who are currently undecided. How the course of
the referendum campaign influences their vote will determine the outcome. Its all to play for! This
poses an interesting dilemma for businesses who may be reluctant to voice an opinion one way or
another. In a campaign where every voice counts, the opinions of employers large and small have
the potential to influence those critical undecideds. It could be in your interest to speak out in favour
of your preferred choice.
Markets
This year has already been a highly volatile one for global markets, with more turbulence expected in
the months ahead. Uncertainty over Brexit is only going to contribute to that market nervousness.
Again, it is hard to establish any kind of pattern. Yesterday (Monday 22nd) Sterling fell to a sevenyear low, given that a vote to leave the EU could impact the UKs ability to service its large current
account deficit. But on the same day, the FTSE 100 index rose above the 6,000 mark. Inevitably, the
UK referendum will be just one factor affecting these key economic indicators. But if the vote to
leave the EU establishes a comfortable lead for several weeks, we can expect Sterling to fall further.
Larger firms may announce a pause in any UK investment plans they may have, causing a drop in
economic confidence.
The UK Deal
As the detail of Mr Camerons final agreement with Brussels is being picked over by legal and
constitutional experts, a number of questions and grey areas are emerging. For business, the
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agreement establishes beyond doubt that the UK has an opt-out from joining the Euro currency
forever. But few considered that a realistic prospect anyway. The text also makes it clear that Britain
is exempted from ever closer union as a matter of principle. But the real test of this part of the
agreement will come when the next ever closer EU proposal is drafted. By contrast, its far clearer
that the UK, in return for this concession, is absolutely forbidden from impeding the process towards
EU monetary and economic integration for the other Member States.
Mr Cameron was very keen to stress the importance of the agreement he won that ensures nonEuro states such as the UK are not discriminated against through further Eurozone legislation.
But, somewhat paradoxically, this does not give the UK a veto over new EU financial regulations. The
French government, in particular, was keen to stress this point. Instead, the UK can apply a
safeguard mechanism to new rules it considers to be discriminatory and appeal to the EU Heads of
Government for a change. Again, its unclear how this will work in practice.
The biggest uncertainty, perhaps, is whether any parts of the UK-EU deal will be subject to a legal
challenge through the European courts. It is expected that the new agreement on restricting some
benefits for migrants workers will be the most likely to be challenged. Expect Brexit campaigners to
continuing sowing seeds of doubt about the efficacy of Camerons deal as we move closer to June
23rd.
Impact of Brexit
Whatever question marks may exist over the new UK-EU accord, they are dwarfed by the enormous
uncertainty over the impact of a vote for Britain to leave the European Union. This will be the
subject of much controversy and confusion in the months ahead. Some of the more likely impacts
include:
1. A second referendum on independence in Scotland, with polls showing that Brexit would
result in a Yes vote this time.
2. Severe turbulence in the markets, including a large fall in the value of Sterling.
3. Sudden economic slowdown as firms postpone investments decisions while they wait for
the result of an agonising two-year Brexit negotiation process with the EU.
4. The potential resignation of David Cameron as Prime Minister and a possible split in the
Conservative ranks as the partys pro and anti EU factions go to war over the result of the
referendum.
5. Skilled migrant workers choosing to leave the UK due to uncertainty over their future
status, potentially causing more skills shortages in vital services such as the NHS.
Employees
In the midst of all this turbulence, some of the greatest uncertainty in the run-up to the referendum
will be felt by employees of British-based companies with international operations, particularly
those whose ownership lies in other parts of the EU. Many of these firms will have a choice about
whether to continue operating in the UK or locate to another part of Europe. Any real news of such
decisions being made before June 23rd will only increase anxiety among workers, not to mention
business partners, local politicians and other parts of civil society. Consequently, APCO Worldwide
believes that all companies faced with these questions should develop a robust communications
strategy for both the run-up to the referendum and the immediate aftermath, whatever the result.
APCO has developed a communications package to address this need.
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Likely Outcome
It would be foolish at this stage to predict the final result of the referendum. To quote former US
defence secretary Donald Rumsfeld, we have been able to identify the known unknowns in this
historic referendum. What we cannot predict are the unknown unknowns which will emerge in the
four rocky months ahead of us.

For more information about the UK referendum and APCOs offer to companies preparing their
communications around this issue, please contact:
Geoff Beattie
Executive Director
APCO Worldwide
90 Long Acre
London WC2E 9RA
gbeattie@apcoworldwide.com
@GeoffSBeattie

About APCO Worldwide

Founded in 1984, APCO Worldwide is an independent global communication, stakeholder
engagement and business strategy firm with offices in more than 30 major cities throughout the
world. We challenge conventional thinking and inspire movements to help our clients succeed in an
ever-changing world. Stakeholders are at the core of all we do. We turn the insights that come from
our deep stakeholder relationships into forward-looking, creative solutions that always push the
boundaries. APCO clients include large multinational companies, trade associations, governments,
NGOs and educational institutions. The firm is a majority women-owned business. For more
information, please visit www.apcoworldwide.com.