Last month, the Global Payroll Association hosted a roundtable on the EU referendum. A number of senior figures from the world of payroll attended and contributed to a lively and sometimes heated debate, the highlights of which are featured here.
We would like to thank HiFX for sponsoring the event, which was held at the Union Club in Soho, London. A post-referendum roundtable was suggested by several attendees so watch this space.
“It’s going to be emotional,” says Neil Sutcliffe, commercial director, EMEA of TMF Group. “People will walk into the polling booths and it will be an emotional reaction.” While Michael Howard, managing director and founder of Frontier Software, reminded us all that decisions over who to vote for are often made in the “last 20 minutes” before entering the booths, “regardless of what happens two days” before.
Both sets of comments summed up the feeling in the country perfectly: there is plenty of emotion being shown by voters and politicians and, with less than a month to go at the time of writing, it certainly isn’t clear which way the electorate will swing.
And indeed, there was a fair amount of emotion in the room that evening, too. “If Britain votes to leave, it potentially could be followed with Scotland wanting to leave the UK and maybe Ireland,” says Carsten Staehr, CEO, Cintra HR & Payroll Services. “As a Dane, the potential break-up of the UK will make me feel very sad.”
For those working in payroll, much has been made in the run-up to the impact of both leaving and staying on areas such as legislation, employment contracts and data protection and, as the following shows, attendees were vocal on these and other areas.
Attendees:
(JG) John Galvin, CEO, Galvin International
(CH) Carol Haag, managing consultant, PA Consulting Group
(PH) Peter Holland, CEO, EMS Group
(MH) Michael Howard, managing director and founder of Frontier Software
(MM) Mark McAllister, director, Giant Group
(JM) Jerry Montgomery, senior manager payroll & global expansion (CS) Carsten Staehr, CEO, Cintra HR & Payroll Services
(NS) Neil Sutcliffe, commercial director, EMEA TMF Group
(CT) Chris Towner, managing director, HiFX
Should we stay or should we go?
CT: “This is a massive vote for everyone. I think the outcome is unknown and polls inconclusive and we can write them off. This is a question about sovereignty in most people’s minds, rather than politics. There are lots of people who want to remain because they don’t want the uncertainty. Those who want to exit are pointing to things like immigration, pressure on the NHS and generally believe we’ll be better off outside of the EU. If we do vote to leave, I think it will lead to chaotic unrest for a given period of time.”
PH: “The argument is interesting because I’ve spoken to tax accountants and lawyers and various people including investment bankers. The tax professionals are keen on keeping things the same because they are low risk but some investment bankers want to go because they think the real business will be coming from outside of Europe.
“The divisions [over voting] are dependent on the business you are in be it relying on the EU or not; and the age you are, as young people have grown up with the EU and tend to be more accepting; and timing, firstly the immediacy and the tendency to ‘do nothing’ as people don’t like change, and secondly, ‘human nature’ which favours decentralisation.”
MM: “We in Europe are not strong enough yet to have all these countries and grow to be a United States of Europe. “Our roots aren’t European union at all. The Commonwealth is where are roots are – we have roots all over the world. We were the largest economic force before Europe as we know it now existed.
MH: “I don’t want to become like the USSR and become 28 separate states. If I was president of the EU, I would want complete harmony.”
CH: We can be a bit pig-headed in the UK. If people say we can’t do something we become bloody minded and go ahead and do it. But have we thought through what would happen?”
Trade agreements and free movement of labour
JM: “If we go out and Britain takes control of its borders, what impact will that have? It will stop the lower paid people coming in and increase the higher earners. Some want to aim for the Australian model but more higher earners will drive inflation up and we will lose a lot of people who are prepared to do the lower paid jobs.”
CS: “Surely no-one at this table thinks the free movement of labour is a disadvantage?” NS: “If we leave the EU and want free trade agreements, Europe will say we can have those but that we must continue with the free movement of labour so we’re in the same position.”
JG: “If we vote for Brexit then Article 50 kicks in and will become the thing everyone talks about. Unless we agree to the new trade terms drawn up by the EU within two years, we will revert to World Trade Organisation terms. We can negotiate with them for preferential terms but, as Neil points out, we will have to agree to the free movement of labour. Are the EU remaining members really going to give us a good deal if it potentially precipitates the failure of the EU? Everyone cites the Norwegian arrangement but Norway has the same labour market rules as if they were in the EU.”
MM: Sixteen per cent of all European exports come to the UK and six million European jobs depend on our market whether or not we stay in the EU. They will need to trade with us as we take their exports. If we change the tariffs and they won’t export to us, what will happen? Our manufacturing will increase or we will trade more with the Commonwealth or others. The reality is all of the remain arguments are based on fear about Britain’s economic strengths.”
CT: “I was brought up in London in the 1970s when London wasn’t a fantastic city. It was quite a scary pace to be and we had the Winter of Discontent. I like the free movement of labour but am not just thinking about ourselves but the next generation. We had a vote in the 70s and we’re not going to get another one for many years so we have to get it right for our children and our children’s children. If London isn’t such a fantastic city to work in one day, the free labour movement will give them an opportunity to look elsewhere. This is one thing on my mind that people aren’t focusing on. The remain voters tend to be the younger generation and older generation tend to be on the side of exit.”
Legislation and employment contracts
MH: “If we stay in I think it will create harmonisation across the EU. Despite the fact we are a union, employment contracts are so different because of historical reasons. If we stay in, I believe that will change; if we leave, we’ll just carry on with separate contracts.”
CS: “Michael makes a particularly good point when he says by staying in we can open the debate about things like harmonising employment contracts and how we can make the EU work more efficiently. There isn’t a country in Europe that doesn’t want the EU to be more efficient.”
JM: “Under current agreements, it would take a minimum of two years before any renegotiations could take place in order to alter legislation.”
NS: “We are Dutch-based but the power is in London and we work under the English law. That is a powerful argument for remaining as it is one of the most respected legal systems across the world.”
Impact of global companies with HQs in the UK?
CS: “The key thing for me is that organisations use the UK as the gateway to the EU. So American and Chinese companies who want to deal with the EU often have headquarters in the UK and if the gateway disappears, organisations will go somewhere else.”
NS: “Yes, and we have more of those companies here than anywhere else.”
MH: “I would stay in the UK because the English language is imperative for world trade. I wouldn’t move to Frankfurt, Paris or Madrid but stay in the UK, regardless of in or out.”
JG: “If we vote to leave, how will companies that have made Britain their base react? Look at the pound, that sank as soon as Boris said he was joining the Leave campaign.”
Impact on manufacturing
MM: “Our manufacturing stopped when we joined Europe. We destroyed our manufacturing base.”
JG: “A lot of our decline in manufacturing is due to the decisions we’ve made as a sovereign country. Germany is in the EU and is incredibly strong in manufacturing and the French nationalise their important manufacturing organisations rather than let them go. We haven’t prioritised manufacturing.”
NS: “On manufacturing, what we have is very good but a large proportion of it isn’t UK-owned and how much of that would remain.”
Impact on data protection/data management
MM: “As a country that trades internationally, our data protection laws will mirror those of our trading partners wherever in world they are.”
CH: “It [data protection] is an issue but not the biggest issue.”
NS: “If we left the EU it would give us an opportunity to change our data protection and look at what the best option is for us but the European data protection laws are very good.”
Impact on the continued uncertainty that leaving may bring
JG: “Right now businesses are holding back on investment because of the uncertainty and manufacturing could be going into recession. That uncertainty will only resolve when businesses know what the future deal is with the EU and that could take two years. The uncertainty won’t finish the day after the referendum.
CT: “I can’t speak about the longer term as we are quite robust at sorting things out but, if we remain, Europe becomes stronger. If we do exit, those that think we can negotiate quite easily with Europe will find a bit of a wall that goes up. Also, the bigger EU nations might want the UK to go into disarray because if we do exit and it works out perfectly it gives good example to other countries.”
CH: “I’ve heard views on both sides that have resonance but would like to change the direction. We’re talking a lot about the impact on us but what would the impact on the rest of Europe be? If we did leave we would set a precedent for others who might ask if they want to be in Europe and what would that mean to all of us?”
MM: “Only one person has mentioned the word “opportunity” if we left. It would represent massive opportunities and is going to create jobs. It’s an opportunity to change things. Not all change and opportunity is positive but it is an opportunity to change how we do things worldwide. The UK is usually good at taking an opportunity.”
Last month, the Global Payroll Association hosted a roundtable on the EU referendum. A number of senior figures from the world of payroll attended and contributed to a lively and sometimes heated debate, the highlights of which are featured here.
We would like to thank HiFX for sponsoring the event, which was held at the Union Club in Soho, London. A post-referendum roundtable was suggested by several attendees so watch this space.
“It’s going to be emotional,” says Neil Sutcliffe, commercial director, EMEA of TMF Group. “People will walk into the polling booths and it will be an emotional reaction.” While Michael Howard, managing director and founder of Frontier Software, reminded us all that decisions over who to vote for are often made in the “last 20 minutes” before entering the booths, “regardless of what happens two days” before.
Both sets of comments summed up the feeling in the country perfectly: there is plenty of emotion being shown by voters and politicians and, with less than a month to go at the time of writing, it certainly isn’t clear which way the electorate will swing.
And indeed, there was a fair amount of emotion in the room that evening, too. “If Britain votes to leave, it potentially could be followed with Scotland wanting to leave the UK and maybe Ireland,” says Carsten Staehr, CEO, Cintra HR & Payroll Services. “As a Dane, the potential break-up of the UK will make me feel very sad.”
For those working in payroll, much has been made in the run-up to the impact of both leaving and staying on areas such as legislation, employment contracts and data protection and, as the following shows, attendees were vocal on these and other areas.
Attendees:
(JG) John Galvin, CEO, Galvin International
(CH) Carol Haag, managing consultant, PA Consulting Group
(PH) Peter Holland, CEO, EMS Group
(MH) Michael Howard, managing director and founder of Frontier Software
(MM) Mark McAllister, director, Giant Group
(JM) Jerry Montgomery, senior manager payroll & global expansion (CS) Carsten Staehr, CEO, Cintra HR & Payroll Services
(NS) Neil Sutcliffe, commercial director, EMEA TMF Group
(CT) Chris Towner, managing director, HiFX
Should we stay or should we go?
CT: “This is a massive vote for everyone. I think the outcome is unknown and polls inconclusive and we can write them off. This is a question about sovereignty in most people’s minds, rather than politics. There are lots of people who want to remain because they don’t want the uncertainty. Those who want to exit are pointing to things like immigration, pressure on the NHS and generally believe we’ll be better off outside of the EU. If we do vote to leave, I think it will lead to chaotic unrest for a given period of time.”
PH: “The argument is interesting because I’ve spoken to tax accountants and lawyers and various people including investment bankers. The tax professionals are keen on keeping things the same because they are low risk but some investment bankers want to go because they think the real business will be coming from outside of Europe.
“The divisions [over voting] are dependent on the business you are in be it relying on the EU or not; and the age you are, as young people have grown up with the EU and tend to be more accepting; and timing, firstly the immediacy and the tendency to ‘do nothing’ as people don’t like change, and secondly, ‘human nature’ which favours decentralisation.”
MM: “We in Europe are not strong enough yet to have all these countries and grow to be a United States of Europe. “Our roots aren’t European union at all. The Commonwealth is where are roots are – we have roots all over the world. We were the largest economic force before Europe as we know it now existed.
MH: “I don’t want to become like the USSR and become 28 separate states. If I was president of the EU, I would want complete harmony.”
CH: We can be a bit pig-headed in the UK. If people say we can’t do something we become bloody minded and go ahead and do it. But have we thought through what would happen?”
Trade agreements and free movement of labour
JM: “If we go out and Britain takes control of its borders, what impact will that have? It will stop the lower paid people coming in and increase the higher earners. Some want to aim for the Australian model but more higher earners will drive inflation up and we will lose a lot of people who are prepared to do the lower paid jobs.”
CS: “Surely no-one at this table thinks the free movement of labour is a disadvantage?” NS: “If we leave the EU and want free trade agreements, Europe will say we can have those but that we must continue with the free movement of labour so we’re in the same position.”
JG: “If we vote for Brexit then Article 50 kicks in and will become the thing everyone talks about. Unless we agree to the new trade terms drawn up by the EU within two years, we will revert to World Trade Organisation terms. We can negotiate with them for preferential terms but, as Neil points out, we will have to agree to the free movement of labour. Are the EU remaining members really going to give us a good deal if it potentially precipitates the failure of the EU? Everyone cites the Norwegian arrangement but Norway has the same labour market rules as if they were in the EU.”
MM: Sixteen per cent of all European exports come to the UK and six million European jobs depend on our market whether or not we stay in the EU. They will need to trade with us as we take their exports. If we change the tariffs and they won’t export to us, what will happen? Our manufacturing will increase or we will trade more with the Commonwealth or others. The reality is all of the remain arguments are based on fear about Britain’s economic strengths.”
CT: “I was brought up in London in the 1970s when London wasn’t a fantastic city. It was quite a scary pace to be and we had the Winter of Discontent. I like the free movement of labour but am not just thinking about ourselves but the next generation. We had a vote in the 70s and we’re not going to get another one for many years so we have to get it right for our children and our children’s children. If London isn’t such a fantastic city to work in one day, the free labour movement will give them an opportunity to look elsewhere. This is one thing on my mind that people aren’t focusing on. The remain voters tend to be the younger generation and older generation tend to be on the side of exit.”
Legislation and employment contracts
MH: “If we stay in I think it will create harmonisation across the EU. Despite the fact we are a union, employment contracts are so different because of historical reasons. If we stay in, I believe that will change; if we leave, we’ll just carry on with separate contracts.”
CS: “Michael makes a particularly good point when he says by staying in we can open the debate about things like harmonising employment contracts and how we can make the EU work more efficiently. There isn’t a country in Europe that doesn’t want the EU to be more efficient.”
JM: “Under current agreements, it would take a minimum of two years before any renegotiations could take place in order to alter legislation.”
NS: “We are Dutch-based but the power is in London and we work under the English law. That is a powerful argument for remaining as it is one of the most respected legal systems across the world.”
Impact of global companies with HQs in the UK?
CS: “The key thing for me is that organisations use the UK as the gateway to the EU. So American and Chinese companies who want to deal with the EU often have headquarters in the UK and if the gateway disappears, organisations will go somewhere else.”
NS: “Yes, and we have more of those companies here than anywhere else.”
MH: “I would stay in the UK because the English language is imperative for world trade. I wouldn’t move to Frankfurt, Paris or Madrid but stay in the UK, regardless of in or out.”
JG: “If we vote to leave, how will companies that have made Britain their base react? Look at the pound, that sank as soon as Boris said he was joining the Leave campaign.”
Impact on manufacturing
MM: “Our manufacturing stopped when we joined Europe. We destroyed our manufacturing base.”
JG: “A lot of our decline in manufacturing is due to the decisions we’ve made as a sovereign country. Germany is in the EU and is incredibly strong in manufacturing and the French nationalise their important manufacturing organisations rather than let them go. We haven’t prioritised manufacturing.”
NS: “On manufacturing, what we have is very good but a large proportion of it isn’t UK-owned and how much of that would remain.”
Impact on data protection/data management
MM: “As a country that trades internationally, our data protection laws will mirror those of our trading partners wherever in world they are.”
CH: “It [data protection] is an issue but not the biggest issue.”
NS: “If we left the EU it would give us an opportunity to change our data protection and look at what the best option is for us but the European data protection laws are very good.”
Impact on the continued uncertainty that leaving may bring
JG: “Right now businesses are holding back on investment because of the uncertainty and manufacturing could be going into recession. That uncertainty will only resolve when businesses know what the future deal is with the EU and that could take two years. The uncertainty won’t finish the day after the referendum.
CT: “I can’t speak about the longer term as we are quite robust at sorting things out but, if we remain, Europe becomes stronger. If we do exit, those that think we can negotiate quite easily with Europe will find a bit of a wall that goes up. Also, the bigger EU nations might want the UK to go into disarray because if we do exit and it works out perfectly it gives good example to other countries.”
CH: “I’ve heard views on both sides that have resonance but would like to change the direction. We’re talking a lot about the impact on us but what would the impact on the rest of Europe be? If we did leave we would set a precedent for others who might ask if they want to be in Europe and what would that mean to all of us?”
MM: “Only one person has mentioned the word “opportunity” if we left. It would represent massive opportunities and is going to create jobs. It’s an opportunity to change things. Not all change and opportunity is positive but it is an opportunity to change how we do things worldwide. The UK is usually good at taking an opportunity.”
