In or out? Business does EU Hokey-Cokey

The business community can be fickle: David Cameron's pledge yesterday to have an 'in/out' referendum on the UK's EU membership has met mixed reviews.

by Michael Northcott
Last Updated: 19 Aug 2013

So David Cameron has pledged to give the people an ‘in’ or ‘out’ referendum on EU membership by 2017, as long as the Tories win the next election. And after the CBI got behind the idea it seemed safe to say business in general supported it. 

But some others have suggested that uncertainty over Britain’s future will cause the cost of public borrowing to rise and damage investor confidence. Lenders are obviously not spooked yet however – bond yields remained virtually unchanged after the announcement. And Deputy PM Nick Clegg has described it as an 'implausible' plan.

But it also sounded as though the French government was expecting a deluge of investment as a result of Cameron’s speech. Foreign minister Laurent Fabius said on Wednesday: ‘If the UK decides to leave the EU, we will roll out the red carpet to businessmen,’ adding, ‘you can’t do Europe a la carte.’

It’s worth noting that Fabius stole the red carpet line from London Mayor Boris Johnson. He said exactly the same about France when French president Francois Hollande starting outlining swingeing tax rises on business.

Despite the dissenting voices though, another group of 55 British business leaders today had an open letter published in The Times newspaper, in which they expressed their support for Cameron’s stance.

In it, they said: ‘Sir, As business leaders we are passionate about Britain’s prosperity. We agree with the Prime Minister that Britain’s best chance of success is as part of a reformed Europe. We need a new relationship with the EU, backed by democratic mandate. ??Business faces ever more burdens from Brussels and the single market in Europe has not yet been fully realised. [The moment has come for] completing the Single Market and quashing the culture of red tape.’

Amongst those who signed the letter were Kingfisher's Ian Cheshire; Diageo's Paul Walsh (double winner at MT's Britain's Most Admired Companies awards this year); Stuart Rose of Ocado; bosses from miner Xstrata, retailer Dixons and even some entrepreneurs (Nick Robertson of ASOS; William Butler-Adams of Brompton Bicycles). 

Cameron is fighting battles on all fronts at the moment. He’s got the referendum debate, he’s got the IMF saying he needs to tone down his austerity measures (not for the first time), and he’s in Davos today arguing about ways to tackle global tax avoidance. Still, no-one said being PM was going to be easy.

Don’t get too excited. Cameron did also insert another little-mooted caveat: the vote will not happen until the future of Europe can be seen more clearly. The way things are going, that could take 20 years…

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