London’s top financiers and executives warn that a British vote to leave the European Union will have dire consequences: economic chaos, diminished trade opportunities and a decline in the City of London’s role as a premier hub for global business and finance.
Investor Richard Tice says they don’t speak for him. “The biggest risk is staying in something that, frankly, is flat-lining and not helping its citizens,” he said.
Tice, the chief executive officer of the property investment firm Quidnet Capital Partners, which manages about $756-million worth of real estate, is among a small group of prominent financial-sector figures publicly backing a United Kingdom departure from the EU.
Others say they will endorse leaving if Prime Minister David Cameron doesn’t negotiate fundamental changes to the UK’s relationship with the rest of Europe – more fundamental than those Cameron favours.
Cameron laid out his demands on Tuesday, which include changes to welfare rules for immigrants, cutting the regulatory burden on business and giving the UK an opt-out from the EU’s official goal to be an “ever-closer union”. Nonetheless, the premier said he believes staying in a reformed EU “will be unambiguously in our national interest”.
The EU Commission immediately criticised Cameron’s proposals on migrants.
That Britain should leave the EU is very much a minority view in the boardroom, especially at big companies. An April-May poll of 1?259 members of the Institute of Directors business group found that two-thirds agreed that the benefits of membership outweighed the negatives. Among large companies only, 71% were positive.
Nonetheless, the divisions show Cameron can’t count on unanimous support from the business community in his push to win voter endorsement of the reforms he’s seeking. He and the chancellor of the exchequer, George Osborne, say they will campaign for an “in” vote if they can negotiate devolving power to London from Brussels.
“Cameron must be worried that he has this group of very, very well-funded opponents,” said Richard Whitman, a professor of politics at the University of Kent. “Not only do they have pockets that are quite difficult to get to the bottom of, but also because they’re very driven.”
Wealthy or not, exit backers are swimming against a tide of business leaders urging the country to stay in, including top executives such as Stuart Rose, the former chairperson of Marks & Spencer, and the BAE Systems chairperson, Roger Carr. Many global financial institutions, including Citigroup and Germany’s Deutsche Bank, have also indicated support for the continued membership of the UK.
Those willing to contemplate an exit tend to work at smaller, less internationally oriented firms. They argue their views are more representative of public opinion, and of the bulk of the British economy.
Howard Shore, the executive chairperson of the broker and asset managerPP Shore Capital, says a departure could allow the UK to rebuild what he sees as the free-wheeling, entrepreneurial atmosphere of the 1980s, when then-prime minister Margaret Thatcher was deregulating financial services.
With about 150 employees and £800-million under management, his company is by no means small, but it’s still small enough to feel the pinch of time-consuming regulations, Shore said.
This year he funded a survey of 601 leaders of small and medium-sized firms that found 41% say the EU hinders their business. Significant majorities favoured large-scale repatriations of powers from Brussels.
About 40% also supported transforming the EU into a “less integrated free trade area”, which would almost certainly be unacceptable to France and Germany, and another 14% favoured an exit altogether. – © Bloomberg