Charles Dunstone, founder of Carphone Warehouse and one of Britain’s top entrepreneurs, has built his business on taking risks - but he’s clear that leaving Europe is an "unnecessary and dangerous risk” that should be avoided:
Two months out from the EU Referendum, the arguments are coalescing around the subject of risk: are we prepared to take the risk of leaving? Is the risk of EU exit worth the possible prizes?
As an entrepreneur, I am a fan of risk; in fact my career has been built on calculated risk. When I started Carphone Warehouse with £6000 from a one-bedroom flat, there were many who thought it mad – mobile phones were still brick-like and for the few. When we launched free broadband at Talktalk, there was the risk that we couldn’t make the numbers work. When we broke into the US in a partnership with Best Buy, there was a risk that we’d founder in the tricky American market like many before us. There wasn’t universal acclaim when we announced the merger of Carphone Warehouse and Dixons, yet it has proved to be a brilliant combination.
Inevitably things haven’t gone to plan along the way, but I like to follow the (Teddy) Roosevelt dictum that it is far better to be the person “who at the best knows the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”
So you might expect me to come out on these pages as a passionate Brexiteer, crying ‘Onward! Fortune favours the bold!’ On the contrary, I believe strongly that Britain should stay in the EU. Because in my experience there are calculated risks, there are clever risks, and there are unnecessary and dangerous risks – and from all I can conclude Brexit sits firmly in the latter camp.
Every commercial risk I take follows a serious, detailed, practical calculation about its chances of paying off and a clear idea of what you expect to happen. And yet with Brexit we are being asked to take a monumental risk with our economy and our standing in the world on the basis of little more than vague patriotic sentiment.
Though just a few weeks into the campaign proper, we have had months of phoney war; months for the Leave campaigners to set out a clear, detailed explanation of why the risks are worth it and how we will come through on the other side. But no one can tell us, because frankly nobody knows.
What is the detailed alternative to the UK’s membership of the EU? Will we be members of the EEA, or of a Free Trade Agreement, or will we rely on World Trade Organisation rules? Would Britain still have full access to the single market? If yes, wouldn’t we have to accept free movement of people? Why would the French or the Germans give us a better deal than they have themselves? If not full single market access, do the Leavers want a Norway-style agreement – and do they concede that this would mean still paying into the EU, and giving up our say over the rules our businesses would still have to follow? How many years do they anticipate it would take to exit and negotiate a new relationship with the EU? What about the 53 trade deals we have with other countries through the EU?
Instead of specifics we are offered vague sentiments wrapped up in the Union flag: that Britain has a proud, buccaneering, trading past and can have a proud, buccaneering trading future; that “they need us as much as we need them” (though with less than 8% of the EU’s exports coming to the UK, and 44% of our exports going to the EU, this seems a heroic assumption).
To ask for more detail on what Brexit would actually look like is, we are told, unpatriotic or pessimistic. This is nonsense. To me, patriotism is making a rational decision about what is best for Britain, based on the evidence. It is about trying to make Britain’s economy more prosperous, our place in the world more significant, the chances for our children and grandchildren more hopeful.
Taking a huge risk like Brexit might – just might – be worth it if the European Union really was the enemy of enterprise that the Leave campaigners make it out to be. But in decades of starting, building and chairing successful businesses, I have simply not found that to be the case. In fact our own homegrown bureaucracy and often inefficient public services are more of an impediment.
The truth is that Britain already has a great deal with the European Union and has enjoyed a remarkable economic resurgence. The job creation figures are phenomenal. Through serious hard work we have pulled our country out of the mire of recession – it’s unthinkable to risk all this now, and plunge ourselves into an uncertain and unpredictable future. Indeed, many of us in business are already seeing the uncertainty created simply by the prospect of the referendum slowing down investment and decision-making.
Those who suggest we’ll just swiftly sew up a few trade deals need to be honest with people about how long and grinding these processes really are. The most wide-ranging trade deal the EU has agreed, with Canada, took seven years to negotiate and still isn’t in force. How long will a UK-EU FTA take, and how will Britain continue to thrive in limbo? As for a deal with the USA – President Obama could not have been more clear that the interests of America lie first and foremost in doing deals with the big bloc of the European Union, and that Britain would be “in the back of the queue.”
Risk is to the entrepreneur what the sea is to sailors: something that cannot be avoided, that is necessary to getting anywhere, but – here’s the key bit – something you never do without knowing the weather you are heading into. I find it strange that many – who would regard someone like me as a serial risk taker – are happy to embark on a project with such extreme and unknown risks.