BT and its Unions Issue Letter to Staff Over the Risks of a Brexit Vote

The senior bosses of telecoms and broadband giant BT have joined with the leaders of the CWU and Prospect unions to issue staff with a new letter that warns about the possible impact upon their business of a vote to leave the EU, which if recent polls are to be believed may now be looking more likely.

Next week, on Thursday 23rd June 2016, the United Kingdom will vote in one of its most significant referendums ever by choosing to either remain in or leave the European Union. It’s a hotly contested debate and one with few easy answers, not least due to the sheer complexity of the subject matter, its many hypothetical scenarios and the deeply divisive passions that run between supporters of both camps.

According to the BBC, the new letter from BT’s CEO (Gavin Patterson) and its Chairman (Sir Michael Rake) is being issued this morning to over 80,000 of the operator’s staff. In its message the operator warns that a vote to leave (Brexit) would have a big impact upon the company and the wider economy, although the exact wording has not yet been made public. We have asked BT about it and got a statement in reply.

A BT Spokesperson told ISPreview.co.uk:

“The Board and senior management of BT have been clear for months that the company’s prospects are better if the UK stays in a reformed EU.

We think the UK economy faces risks if we exit the EU, and that would impact the company.

We earn about a fifth of our revenue outside the UK – so we value the way the EU opens markets. The union leadership at BT agrees, so it’s a joint message with them.”

BT’s letter then continues on to highlight how 20% of their sales come from outside of the UK and that the company benefits from the EU through minimal import taxes and the removal of other trade barriers.

As ever the catch-22 is what would happen in a post-Brexit world when such rules need to be renegotiated, although few deny that there would at least be a potentially damaging period of uncertainty; lasting up to 2 years.

The letter concludes by highlighting the EU’s claimed benefit to workers’ rights via protection of key employment laws, although it doesn’t directly tell staff to vote one way or the other and merely recommends that they make up their own mind and then go out to vote.

Matthew Elliott, CEO of Vote Leave, said:

“Sir Mike Rake backed the euro and opposed a referendum as did Gavin Paterson. They never even wanted their employees to have a say on this issue. Likewise their talk of a reformed Europe is meaningless and hollow – everyone knows that renegotiation was an utter failure that achieved nothing.”

On the broadband side it’s worth noting that a vote in either direction wouldn’t have much of a traditional direct impact, at least not in terms of the infrastructure that is already in the ground and policy that is already established.

Indeed in this field UK policy has sometimes been ahead of Europe’s by a few years. Similarly the UK’s plan for a 10Mbps USO is also ahead of many EU states (note: a legally binding USO should NOT be confused with non-binding coverage targets for superfast broadband), although there’s still a question mark over whether or not we can achieve 100% coverage of 30Mbps+ connectivity without adopting inferior Satellite solutions to fill a 0.5-1% gap.

On the flip side the EU’s Digital Agenda project (i.e. 30Mbps for all by 2020) did serve as a very useful competitive push for countries to be more ambitious and losing that push may result in UK broadband policy becoming less competitive on the future connectivity side. The EU is already considering what targets and funding to adopt post-2020 and this is perhaps the biggest area of future risk for the broadband side of things, albeit one that is currently very difficult to examine pre-policy.

Many rural broadband projects have received significant amounts of money through the EU (e.g. Cornwall) and a number of forthcoming schemes will see more flowing their way in the future, albeit currently highlighting a lot less funding than we’ve seen in the past, which would cease two years after a leave vote.

Some may speculate that the UK could then use some of the money that it would have previously paid into the EU and flush that back into the UK, but it would perhaps be unwise to assume that broadband is going to be a significant recipient (e.g. some leave campaigners have already suggested putting it all into the NHS).

We must also not forget the fears of a general economic slowdown and recession, which has a tendency to cause job losses. Assuming that were to happen then consumer and business behaviour often becomes more protectionist, meaning they’ll look around to cut costs / switch to cheaper solutions. But that in turn means less money being spent on upgrades to even faster broadband, which on the flip side can make it harder for new networks to get built / attract investment. Mind you once an agreement is reached then we might see an improvement.

At the end of the day next week’s referendum is about much bigger and more significant things than broadband. Similarly many of the key questions remain difficult to answer with any absolute certainty.