REPORT
By Gökhan Kurtaran
London letter for week beginning May 30

London letter for week beginning May 30

 - Heading towards historic Brexit referendum

Only 23 days are left until Britain’s historic referendum to vote to either stay or remain in the EU as both the in and out campaigns heat up to target the “undecided voters” expected to be around 15 percent. As of the beginning of this week, both camps were heading to a neck-to-neck referendum, with both attempting to close the gaps.

Scaremongering and fueling fear could well be considered the main methods of both campaigns. While the “remain” campaign underlines the possible aftershocks of the Brexit; uncertainty, lack of confidence, devaluation of the currency, and possibly fleeing capital out of the City of London, the “leave” campaign focuses on the fear of immigrants who are shown as a threat to locals in stealing jobs and benefiting from welfare funds. Such rhetoric has no statistical or rational base. The U.K. has long benefited from being the melting pot of talents and skills, which has contributed to making the country the fastest growing among the G-7 countries. Even Turkey’s EU accession talks have become a source of ammunition for both campaigns.

“The Vote Leave” campaign has published campaign posters saying that “Turkey (population 76m) is joining the EU”, alongside a picture of a British passport, suggesting a new wave of migration.

However, last weekend U.K. Prime Minister David Cameron tried to divert discussions away from Turkey by saying the country would probably not be ready to join the bloc “until the year 3000” based on its current rate of progress. This is notable as the U.K. has long been the strongest ally of the country’s EU accession talks.

U.K.’s former PM Tony Blair has chipped in by saying that Turkey could not become a member in the near future while the U.K. has the right to veto this should Turkey fulfil all of its criteria.

Tory MP Nadine Dorries branded Cameron a liar over referendum claims and said, “He's lied profoundly and I think that is actually really at the heart of why Conservative MPs have been so angered. To say that Turkey is not going to join the European Union ... is a lie. Turkey is well on the way to being part of the European Union.” She added that the EU referendum will be held in U.K., not in Turkey, despite the country’s dominance in daily discussions.

According to daily, The Independent, the hedge fund industry is commissioning private exit polls to get an early warning of the outcome with the aim of making profits from the result of next month’s EU referendum.

The outlook for U.K. companies is also growing gloomier day-by-day regarding trading prospects and economic outlook as the EU referendum approaches, according Lloyds Bank’s latest barometer of business. According to the survey which was conducted with 200 companies with a turnover of more than £1m, business-trading prospects have dipped to a three-year low in May while  business confidence and hiring plans were also down.

Moreover even if the U.K. stays in the EU, a new page of leadership discussions are set to soon start within the Conservative Party. 

Tory MP Dorries said she had already lodged a letter with the chair of the 1922 committee, Graham Brady, calling for a leadership contest after the referendum. She said she was 'not the only one' to have done so, but refused to speculate further beyond saying there would be a 'considerable number.' Once 50 MPs have signed such letters, a formal vote of no confidence is automatically triggered.

A senior Conservative MP Andrew Bridgen has also declared that Cameron is “finished” as the Tory leader and will have to be replaced after the EU referendum. It appears that the month of June in the U.K. will be one of the hottest for the Conservative Party.

Support for Britain to stay in the European Union stood at 51 percent, five points ahead of support for a withdrawal from the 28-member bloc but down from a 13-point lead a week ago, an ORB poll for the Daily Telegraph said. Support to leave the EU grew by 4 points to 46 percent according to the poll.

However, business and economic outlook is becoming pessimistic and it is getting harder to project the outlook for the U.K. following a possible Brexit.

Even if the U.K. leaves the EU, it will ensue with intense debates between the U.K. and the EU on how to establish a renewed partnership status following the “painful divorce.”

01 Jun,2016

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