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 Leaving the world's biggest economic area, the market for almost
half Britain's exports, may sound like business folly. And yet small
company bosses like 55-year-old Simpson - and even executives of
some larger firms - are divided over the vote on EU membership that
Prime Minister David Cameron has promised.
Four decades ago Britons voted decisively to stay in the European
"common market", the precursor of the modern EU which has become a
major economic and political force as well as a trading bloc.
But sitting in the showroom of his Over2Hills business in the
Yorkshire town of Cleckheaton, Simpson says Europe has changed for
the worse since the last referendum in 1975.
"As a younger man, I thought the EU was good," said Simpson, whose
company collects office furniture and sells on refurbished pieces
and raw materials.
"Some of the old views to help people trade and to help people work
within Europe are good, but the EU's got a long way from its
original values," he said. "I am completely undecided."
Simpson was too young to vote in 1975 when business bosses mobilized
a powerful campaign, casting membership as a way to save the country
then known as "the sick man of Europe" by joining Germany and
France, whose economies had overtaken Britain's since World War Two.
Today economic growth in Britain is a percentage point faster than
in France or Germany, and business is less united on the benefits of
staying in the EU - important differences that could influence
voters as they try to work out whether leaving would hurt their
wallets.
Cameron, who is trying to negotiate more favorable EU membership
terms for Britain, has promised to call the referendum before the
end of 2017 but it could be held a soon as June this year.
Public opinion polls show the gap between the pro- and
anti-membership camps is narrow, with a significant number of voters
undecided.
BUSINESS DIVIDED
Chief executives of major British corporations believe "Brexit" - a
British exit from the EU - is the biggest political threat to the
economy. But other business owners are more skeptical, saying EU-imposed
rules are burdensome and costly.
Support has dwindled even among bigger companies over the past six
months, according to a quarterly survey conducted by business
consultancy Deloitte.
The poll of chief financial officers at firms in the FTSE 350 stock
index and other large privately-owned companies showed 62 percent
backed Britain's continued membership of the EU in the final quarter
of last year.
This was sharply down from 74 percent in the second quarter of 2015,
with a growing number of executives saying they wanted to see the
results of Cameron's renegotiation before deciding.
Outright opposition is much stronger among more modestly-sized
firms. A survey conducted last year by the Federation of Small
Businesses showed 41 percent of respondents backed leaving the EU,
not far behind the 47 percent who wanted to stay, with regulations
from Brussels one of the main gripes.
Surrounded by colorful refurbished tables and chairs ready for sale,
Simpson said he had become ambivalent to the EU partly due to the
ever-growing amount of "red tape", believing the burden on his
business would be lightened were Britain to leave the EU.
"We're asked to fill in questionnaire after questionnaire about how
much we pay people, how much waste we produce and the questionnaires
just get longer and longer and longer," said Simpson, whose firm
employs just 23 people.
He put the cost of adhering to rules and regulations at up to 30,000
pounds ($44,200) a year, equivalent to around 10 percent of the
firm's annual profit.
"INTO THE UNKNOWN"
Two of Simpson's senior staff are surer of their views, but still
reflect the divided business community.
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Sales manager Jo Green is likely to back leaving the EU. "Britain
was a leader and now we're just a follower," said 46-year-old Green,
whose parents live in Norway - a country outside the EU but which
has the sort of trade agreements with the bloc that supporters of
Brexit say Britain could also negotiate.
"(Europe) holds us back in moving forward in our industries, having
to comply with their rules and regulations," she added.
But Logistics Manager Kirsty Wilson told Reuters that her "gut
instinct" was to remain in the EU. "If it isn't that broken, why do
you go into the unknown?" she asked.
Avoiding uncertainty is, broadly, the chief argument of the main
business lobby, the Confederation of British Industry, as well as of
the boss of the pro-membership campaign.
"Leaving Europe is a leap in the dark and I don't believe that is a
risk that is worth us taking," Stuart Rose, a former boss of
retailer Marks & Spencer who chairs the "Britain Stronger in Europe"
campaign, said in October.
But despite leaning in opposite directions, both of Simpson's
managers said the core EU freedom of movement of people, which
Cameron is not attempting to change and has pushed net migration to
record levels in Britain, was a problem.
"People who ... are trying to get work do find it annoying that
people who have just come into the country get a job straight away
because they are willing to be paid less," Wilson said.
While Simpson's business is largely domestic, others rely heavily on
the single European market, which allows goods to be transported
across the EU without customs checks at each national border.
About 100 miles (160 km) south of Cleckheaton, another business
owner sees higher costs if Britain left.
James Wilson, the boss of distribution firm Palletways, said Brexit
could mean British lorries are subjected to customs checks,
lengthening journey times and taking drivers up to the maximum
number of hours they are permitted to drive each day under safety
rules.
"It will be less efficient, it'll be more costly, I suspect, for
customers to send their goods through Europe," he told Reuters.
"Let's imagine (customs clearance) takes eight hours; you probably
will add an extra day to the transit time, the driver runs out of
hours so you need more drivers."
British-based financiers who trade internationally also largely want
to stay in the EU. But even in the City of London there is a small
but significant group of Eurosceptics who believe the EU is
dysfunctional and globally uncompetitive.
"We would rather not be a part of a chaotic European Union that
looks like it is about to fall apart and which has fallen far behind
its global peers," said a British businessman with 40 years'
experience in the financial services industry who spoke on condition
his name was not used.
"The clarity of an exit is now more appealing than staying with all
this political and economic uncertainty of a rather tired EU
bureaucracy," he said.
($1 = 0.6788 pounds)
(Editing by Guy Faulconbridge and David Stamp)
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