Personal Comment – Jonathan Smith – CEO and Founder, Aiteo Consulting

There has been an awful lot said, blogged, written, debated – even screamed and yelled – about the UK’s EU Referendum on 23 June. Boom if we Remain, Bust if we Leave.  Or was it vice versa?  It’s sometimes difficult to keep up with the claims and counter-claims.

A few of the major corporates, such as Goldman Sachs and JP Morgan, have nailed their colours to the Remain mast, and one or two independent-minded privately owned companies such as Tate & Lyle, JCB and Dyson have similarly hoisted their flags for Brexit.

Why risk London’s leading position in the world?

In Tech, Aiteo Consulting’s chosen specialist industry, and especially in London, there appears to be huge backing for the Remain campaign. Why risk London’s leading position in the world?

Many businesses, though, just hope to get through without having to voice an opinion. With the country fairly evenly divided between the two options, and the (ahem) vigour with which positions are taken by respective supporters, why would we risk alienating half of our customer base by declaring one way or another?

While as a company we are not ‘declaring’ for Brexit or otherwise in the EU referendum, careful readers of our Twitter feed, however, may have noticed occasional interactions which betray my own sentiment on the matter.

And as this is such a major decision for the country, I think it only reasonable to articulate those here.

Crisis? What Crisis?

As background, I was brought up in the rock solid Labour safe seat of South Shields. I’m 46 years old, born in 1970, so my formative experiences and memories include the family poring over newspaper notices advising of the timing of power cuts; buckets of water in the garage to cover for firemens’ strikes (“Green Goddesses” on the streets); rubbish remaining uncollected.  My older brother imitating those words that Callaghan never actually uttered: “Crisis? What Crisis?”.  The reflected despair in the school playground when Margaret Thatcher was elected.

The past is a foreign country: they do things differently there

Coming from the north-east of England, I was very aware of the painful transformation the country went through in the early 1980s. I have a traceable family history working in coal mining back into the first half of the nineteenth century. But, to my idealistic mind, I believed the transformation was a very necessary one. Could it have been done differently – more as a truly “United Kingdom” than as a very disunited one? I don’t know, but to be honest I doubt it.

I look at video clips of social strife from the 1980s now and I’m reminded of LP Hartley’s insightful words: “The past is a foreign country: they do things differently there.”  I lived through it, yet it now feels very strange.

With the development of technology, the world has become a much smaller place and geographic proximity is less relevant

As an undergraduate, I joined what was a ground-breaking course run by what was to become Leeds Metropolitan University. One of the first courses of its kind, and supported by EU funding, I did a degree of study for European Finance and Accounting, which included a year studying and working in France. This was 1988-1991 – in the run up to “1992” – the introduction of the internal market. My fellow students and I were broadly of a similar ilk – committed to a single market, freedom of trade, and free movement of people. Who wouldn’t be?

One thing that did strike me though, as we did our study, was that we were getting an insight into the workings and operations of the EU (I’ll use this term throughout for simplicity) which I would say more than 99% of the UK population were ignorant of. It was clear to me that power and law-making was being centralised without a complementary shift in democratic accountability.

Since that time, I’ve personally tolerated the democratic deficit of the EU for the sake of the economic benefits of the single market. But a lot has been changing over these subsequent years. We had a close escape with the introduction of the Euro, which can only truly work with common economic and political control – something the various crises in southern Europe have demonstrated. And with the development of technology, the world has become a much smaller place and geographic proximity is less relevant.

…as a nation, have closed our doors to genuine refugees…

Further power has been brought to the unelected centre, to the extent that democratically elected governments are given their policy instructions by the EU, and in the worst case, with Greece, an elected government was even dismissed at the EU’s behest. Referendums have been held and ignored. Did I ever vote for such power to be centralised into unelected hands? Did you? Meanwhile, the EU has expanded at such a pace that the brave principles of free movement of people are not one-sidedly beneficial, but can result in great social dislocations in both the giving and receiving member states. And I do believe these dislocations due to economic migration have muddied the waters of debate so that we, as a nation, have closed our doors to genuine refugees, where our proud history would once have compelled us to accept far more from war-torn countries.

Should I stay or should I go?

If we remain, will we be able to reform the EU from within? If you believe so, go with it and vote accordingly, but I believe all of the evidence of history is to the contrary. I do not believe the EU institutions and core members have given up the dream of ‘ever closer union’. And if they want it, but we do not, why should we hinder them?

If we leave, will we be locked out of Europe, and subjected to the vagaries of world markets? As a committed free marketeer, I say, bring it on! I am enthused by the opportunity of the United Kingdom going to ‘global free trade’ under WTO agreements, which is one of the options that has been proposed. Few people may like Patrick Minford’s analysis, but in it he and other economists show how a move would be instantly beneficial for prices and trade, even if we assume a worst case scenario for our trading relationship with the EU. And I am quite convinced that the dependence the EU member states have on trade with the UK will result in a sensible agreement between ourselves, without the escalation of a tariff war.

77% for Leave!  Hmmm……

So how will things go, with less than 48 hours to polling day? Polls by reputed organisations show the campaigns neck and neck, with a hint of favourability to Remain. Betting markets give an even clearer indication of a Remain win. But everywhere I travel, I see nothing but ‘Vote Leave’ billboards. So I decided to run a highly scientific poll on the Aiteo account. Given our follower base, and the industry we operate in, I expected something closer to 50:50, or indeed more in favour of Remain.  Here are the results, following over 200 votes over a 24 hour period:


Hmmm. A bit of a surprise there! Is the Leave campaign more vocal? More active on social media? More engaged? Are there thousands of ‘shy remainers’ out there?  Will any of this influence the outcome on 23 June?

Whatever the outcome, we’ll still be here to serve you

Back in 1989 I remember discussing the development of the EU with a French family who kindly invited me for dinner during my period of study. Why, they asked, is England (yes, the French do tend to say ‘Angleterre’ when they mean the UK) so opposed to the European project (and yes, we were perceived as the feet-draggers even back then)? I explained my concerns on what I would now term the ‘democratic deficit’. So, they asked, if we democratise the EU institutions, will England come along with us? No, I said, because we don’t want these institutions at the European level.

Probably without quite realising it, I had articulated in my inexpert French my rejection of a federal Europe in favour of agreed levels of collaboration between nation states.

How was I so confident that I was articulating the will of the British people back then?

Youthful over-optimism, probably.  But whether I was right or wrong then, we will soon find out the decided will of the UK people on 23 June.

And whatever the outcome, D.V., we’ll still be here to serve you.

About Aiteo Consulting

Aiteo Consulting provides CFO advisory services to innovative and motivated FinTech businesses. So whether you’re in start-up mode, or are running a growing enterprise which is pushing through to the next level, our virtual CFO service can help you to dramatically improve your efficiency, save you time and make real improvements to your bottom line.