EurWORK European Observatory of Working Life

United Kingdom: Employer and union reaction to ‘Brexit’ referendum result

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Following the UK referendum Leave vote, employer and trade union organisations are calling for the government to negotiate the maximum possible access for UK businesses to the EU single market. They also want guarantees on the status of EU citizens currently working in the UK and on that of UK citizens working in the EU.

Background

In the referendum held on 23 June 2016, 17,410,742 registered electors (51.9% of those voting) voted for the UK to leave the European Union, while 16,141,241 (48.1%) voted to remain. The UK government, now led by Theresa May following David Cameron’s resignation as Prime Minister, has made it clear that it will act in accordance with this outcome. However, the nature of the new relationship that the UK will seek with the EU is far from clear.

In talks with Germany’s Chancellor, Angela Merkel on 20 July, Ms May said the UK would not begin official negotiations until the UK’s objectives were clear, so she would not be triggering Article 50 of the Treaty of Lisbon before the end of 2016. She added that securing a ‘sensible and orderly departure’ from the EU would take time, that the UK would not ‘walk away’ from Europe and that it wanted to retain the ‘closest economic links’. David Davies, appointed by Ms May as the Cabinet minister responsible for the UK’s exit from the EU, has said the ideal outcome would be ‘continued tariff-free access’ to the EU single market, but with controls on the free movement of labour.

This article looks at the response of the UK’s main employer and trade union organisations to the ‘Brexit’ decision.

Initial reaction

In the run-up to the referendum, the two principal social partner organisations – the Confederation of British Industry (CBI) and the Trades Union Congress (TUC) – had argued strongly for remaining in the EU, as did most other employer bodies, although the British Chambers of Commerce (BCC) and the Federation of Small Businesses (FSB) adopted a neutral stance. Exceptionally among trade unions, the Rail, Maritime and Transport Workers’ Union (RMT) and the train drivers’ union, Aslef, both campaigned to leave the EU.

The CBI and TUC reacted to the referendum result with dismay. TUC General Secretary Frances O’Grady said:

The British people have made their views clear. As the UK prepares to leave the EU, the first priority is to protect jobs and defend the living standards of working people […]. Working people must not pay the price for the decision to leave the EU.

Carolyn Fairbairn, the CBI’s Director-General, writing in The Times newspaper on 27 June, said:

The British people have spoken in an explosive referendum result which will define the fortunes of the United Kingdom for generations to come. The impact cannot be underestimated and will take time to understand […] The government must act with urgency to minimise the uncertainties that affect investment decisions and slow job creation.

Joint statements issued

On 30 June, the CBI and TUC issued the following joint statement:

Following [the Brexit] vote, it is essential that the government does everything possible to secure jobs and investment, and to reassure workers worried about the potential implications for employment and social protections, as well as the impact on their working lives.

This is not a job for the government alone. It will require a national effort from businesses large and small, trade unions, the Westminster government and devolved nations, and a wide range of stakeholders at local and national level.

As a matter of urgency, government needs to act to allay the concerns of EU nationals living and working in the UK, and UK citizens living and working in the EU.

It’s clear that the overwhelming majority of the UK public – whether they voted to leave or remain – would be appalled by the reported upsurge in racially motivated incidents and hate crimes we have seen over the past few days. We urge employers, unions and others to do all they can to bring together our communities in what are uncertain times, making our workplaces a beacon of inclusion and tolerance.

The CBI subsequently co-signed an open letter with four other key UK business groups – BCC, FSB, the Institute of Directors and the manufacturers’ organisation, EEF – calling for the government to end the uncertainty facing EU nationals living and working in the UK, and for action to continue with long-planned infrastructure projects.

CBI and TUC develop more detailed positions

On 1 July, the TUC published a national action plan to protect the economy, jobs and workers’ rights (PDF). This calls for ‘immediate help for industry to help stave off job losses’ and increased investment in infrastructure. The TUC wants a ‘modern industrial strategy to start creating the skilled jobs of the future across the nations and regions of the UK’. The report identifies workers’ rights as a key issue and seeks protection for all workers’ rights guaranteed by Europe once the UK leaves the EU.

Following initial consultations with its member companies and organisations, the CBI published a report on 21 July setting out for the UK government, the key principles it believes should be followed in negotiations with the EU (PDF). These are:

  • retaining the ease of UK–EU trade that businesses gain from the single market;
  • balancing regulatory equivalence with the EU with flexibility and influence over the domestic environment;
  • ensuring that the UK’s migration system will allow companies to access the people and skills they need, while recognising public concerns;
  • developing a clear strategy for international trade and economic agreements;
  • protecting the economic and social benefits of EU-funded projects.

Commenting on the report, CBI Director-General Carolyn Fairbairn said:

The principles are clear: businesses want to continue trading easily with EU neighbours while bringing down barriers to new opportunities around the world. They also highlight the need to strike a balance between UK and EU-led regulation in future, to ensure access to global talent while recognising public concerns, and for clear plans to replace EU funding.

The CBI report calls on the government to:

  • lay out a clear timetable and plan to provide business with certainty;
  • maintain a partnership between the government and businesses of all sizes across the UK;
  • continue UK influence over EU legislation during the Brexit negotiations.

The CBI aims to be:

an active partner in Brussels, supporting the UK government’s efforts to secure the best settlement through our relationships with the European business community and governments in other Member States.

It has sent the report to the new government, including the Prime Minister, the Chancellor of the Exchequer, the Secretary of State for Exiting the EU and the Secretary of State for International Trade.

On 26 July, the TUC published five ‘tests’ that it is calling on the government to apply before triggering Article 50 of the Treaty of Lisbon to take the UK out of the EU.

  • The government must have a clear action plan in place to protect jobs, industries and public services at risk from Brexit, and must guarantee all workers’ rights currently derived from the EU.
  • The government must have led a national debate on realistic options for post-Brexit arrangements with the rest of the EU and with non-EU countries, so as to build a national consensus on the mandate for negotiations.
  • There must be a cross-party negotiating team including the devolved administrations, the TUC, CBI and civil society.
  • Existing EU citizens living and working in the UK must be guaranteed the right to remain, and approaches made to secure reciprocal arrangements for British citizens living and working in the rest of the EU.
  • An all-Ireland agreement on economic and border issues must be in place.

TUC General Secretary Frances O’Grady said:

If we rush headlong into Brexit without a water-tight plan for jobs and industry, the living standards of working people will suffer. If Brexit negotiations serve only narrow or elite interests, it will cause deep national divisions and make Britain’s future far less stable and secure. There is no existing model for this – we need time for a national conversation to create a new ‘British model’ for a relationship with the EU and the world that is fair and balanced for everyone across the UK.

 

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