EU membership: What do London's business experts think?


As Westminster prepares for a Commons vote on a referendum that could end UK membership of the EU, we asked London’s business figures – is the EU good for business?

On Monday, MPs will vote on whether to hold a referendum on the UK’s membership of the EU.

The vote was originally planned for 27 October, but has been brought forward so David Cameron and William Hague can attend.

The move has sparked rumours of a major rebellion by Conservative backbenchers who are against the PM’s opposition to a referendum. So far, 50 Conservative MPs have signed the motion put forward by Tory MP David Nuttall in favour of holding a referendum, and another 24 from other parties.

Cameron has enforced a three-line whip requiring Tory MPs to vote against it. If a large number of them do vote for the motion, it will signal an embarrassing breakdown of Conservative Party discipline.

If the referendum is passed, the electorate will be given three options: keep the status quo, leave the EU or remodel the terms of the UK’s membership of the European Union.

We spoke to some of London’s leading business figures and asked them whether leaving the EU would be good for business?

Stuart Fraser, policy chairman at the City of London Corporation: “The EU has provided huge benefits to the UK”

“Being a part of the developing European single market has provided huge benefits to the UK, both in terms of removing barriers to European trade and in helping the UK to compete in the global marketplace as part of a significant trading bloc that can go toe-to-toe with the US and the emerging Asian superpowers.

“Despite its current woes, the European Union also remains the UK’s most significant trading partner, accounting for around half of our trade.

“Many might see diminished global influence as a price worth paying if it frees the UK from the bureaucracy of Brussels and allows us to reshape our economy to be more competitive on the global scene. However, others will rightly worry about the threat of protectionism and the difficulty a small country might face when negotiating with powerful economic blocs and countries such as China and India.”

Dr Eamonn Butler director Alan Smith Institute: “Rolling back EU regulation could save us £9bn”

“Fundamentally it’s the social chapter and employee regulations that are killer. Also, financial services is a hugely important area and we have passed regulating it on to Brussels where we don’t have very many friends; that is rather alarming.

“There is no question that if the UK left the EU and then rolled back some of the regulation, it would be a good idea for the country and in particular London. These regulations have proved particularly damaging when the UK economy is struggling.

“The department of business said the cost of EU regulation was something around £9bn mark. Many would argue a lot higher. So even according to the government we could save £9bn which is a large chunk of change in difficult economic times.

Nick Haynes, Institute of Economic Affairs: “Things can’t carry on as they currently are”

“We have seen this all before but with the Eurozone crisis now rumbling well into its second tortuous year, it would seem that next week’s debate in the House of Commons might well contain a dash of piquancy. Maybe even a smattering of drama. Because this debate actually matters. No more is it merely a Tory Party obsession of perennial tedium; but an actual debate, with long-term economic consequences. Jobs, livelihoods – all of them potentially affected by the outcome.

“The most important point to note is that things cannot carry on as they currently are. It is interesting to observe that the proposed referendum being debated would offer three choices: in, out, or a renegotiation of powers. It is not as simple as to say that Britain would be better off out (although any number of people would argue that position), but it is certainly a truism to say that things must change.

“Free trade and less regulation is what is important to British businesses. They must be allowed to compete properly – on merit – no longer with the millstone of overbearing Brussels regulation weighing around their necks, hampering their growth. One need only look to the current proposals for a EU-wide financial transaction tax to shudder at the chilling effects it would have on the City of London and on the UK economy at large. Any such moves must be resisted.

“Whether a framework of free trade exists within a reformed European Union as such, or whether the UK chooses to take part from outside is open to debate, but discussions in parliament next week are of crucial importance.

“London businesses should welcome – indeed demand – the chance to have their say on Europe. Let us hope that next week’s debate actually leads us somewhere.”

Peter Gordon, ex-3i partner and co-founder of In-Deed Online: “Our fortunes are inextricably linked with Europe”

“I worry in case this sort of movement gains credence based on a misplaced (and possibly emotional) view that leaving the EC somehow creates distance between the UK and financial issues in Europe.

“We are better placed outside of the Euro than as a participant in monetary union, but the fact remains the fortunes of the UK are inextricably linked to those of the remainder of Europe (more than any other part of the world), and these will be fostered by a united European community.”  

Kevin Poulter, associate, Bircham Dyson Bell: “Business should work with Europe not against it”

“In recent years, some businesses and business leaders have spoken out against what they consider to be the invasive and prescriptive nature of European legislation, but in practice much of the law is to protect worker’s rights in a way which is fair, reasonable and essential to the success of a progressive nation.

“Many believe that leaving Europe will see employment laws revert to how they were 30 years ago, where the only legislation prevented sex and race discrimination. We have all moved on since then, for the better. 

“The truth is that many of the laws created in Europe are now entrenched in our own legislative and common law systems and are unlikely to be repealed. A referendum will not solve the problems that businesses think Europe causes. Business needs to work with Europe in forming policy, not work against it.”

John Miln, treasurer of UK Fashion and Textiles Association: “We need to retain European ties”

“I think on the whole we are pretty self-sufficient but fundamentally there are commercial and cultural business ties between London and Europe and it is within the interest of our industry to retain those ties.

“Of course there are good and bad sides to every partnership but I believe that we should work as well as we can to make it work and strengthen the UK’s position without leaving the EU.”