Big business and the Tories: the Brexit paradox

The news that the front-running ‘Brexiteer’ James Dyson is moving his HQ operations to Singapore this year is nothing short of ironic. However, it might just be a perfect representation of the confusion and fatigue of British business sentiment – and in fact that of the British public – towards Brexit as we plod on through 2019.

Mention of Brexit to business leaders, colleagues and friends alike is universally met with an eye roll. In reality, could the least popular decision that Theresa May makes be to extend the 29 March deadline for leaving the EU? While our latest Ipsos Mori poll shows that half ( 50%) of the public say that they would support a delay to Britain’s exit from the EU, the byline of our findings from this year’s Ipsos Mori ‘Captains of Industry’ study of FTSE 500 executives could quite accurately be: ‘Sod it, let’s just get on with it'.

Most pressing however, must be the Bank of England’s recent warning of a recession as bad as the financial crash of 2008 if we leave the EU without a deal. It is therefore unsurprising that more than three-quarters of business leaders think that leaving the EU with no deal will be bad for their business. The weight of the problem at hand has become unavoidable.

Britain’s largest businesses have little confidence in the government’s ability to manage Brexit and are expecting their businesses to be adversely affected by it. For a party in power that is traditionally so in favour with big business, Dyson’s move and his fellow big-business contemporaries’ gloomy outlook about the economy as a whole must be quite a shock. Three-quarters of the ‘Captains’ interviewed expect the general economic condition of the country to decline over the next 12 months. This has increased from two-thirds this time last year and marks the third successive year of increased pessimism over the economy. 

Reassuring for Theresa May, however, is business leaders’ repugnance for Jeremy Corbyn. The overwhelming consensus is that the government’s policies are preferable to those of Labour. 94% of business leaders do not believe that, in the long term, Labour’s policies would improve the state of the British economy. May might not be popular, but the alternative is much less attractive to big business.

Business leaders, and the general public, are split on their view of Brexit – just over half of business leaders still view the decision to leave the EU as a significant risk to their company. However, what is unifying between the Leave and Remain camps is that patience in the government is waning. Business leaders want a decision because Brexit dominates business concerns; the overwhelming majority of 95% see the resolution of uncertainty around Brexit as the most important issue facing Britain today. As with the public, two-thirds say that they lack confidence in the ability of the government to negotiate the best deal possible for UK businesses with the EU.

Brexiteers, however, will take heart from the fact that 92% of business leaders are confident that their company can adapt to the consequences of Brexit. Despite pessimism about the economy as a whole, half expect business for their own company to improve over the next 12 months. While this is a strong message, I suspect that business leaders feel compelled to say that they are confident and expect improvement this year – why wouldn’t they? Most worrying is the 4% who disagree that they are confident they can adapt, at this stage in proceedings.    

Overall, looking at business, and the public views of the next year, one cannot help but have dampened expectations of much growth (and, dare I say it, even the prospect of recession?), but as we know, surprises can happen. Business leaders have unwavering confidence in their own abilities to weather the storm, although they feel distinctly cheated by the hand that has been dealt by the government. Dyson, named the most impressive business person by one in five business leaders interviewed at the end of 2018, may just have knocked himself off the podium spot, for business leaders and the public alike.

Katherine Shipton is research manager at Ipsos Mori