Two leading UK businessmen present for and against arguments on the biggest business decision of a generation.
YES – Richard Reed, Co-founder of Innocent Drinks
It’s fantastic for UK businesses to be part of the European Union, to have unfettered access to opportunities within the world’s largest free trade zone. Why anyone would want to put sand into that machine and try to extract us is unfathomable. There’s no rational economic argument for doing so.
If we come out, independent economic think-tanks predict anything between a drop in GDP of 8.8% to an increase of 0.6%, so the mathematical probability is towards the former. People claim we’d save money because it costs £6 billion a year to be a member, but that’s less than 1% of UK government expenditure. What they also don’t realise is that the UK is a disproportionate winner from the EU – 14% of our exports are sold into Europe and 2% of the EU’s exports are sold into us. The EU is a shop window to 500 million potential customers.
If people think there will be less regulation if we leave the EU, they’re wrong, because firstly it would mean we’d still have to abide by those regulations to continue trading with EU countries and, secondly, we’d be unable to shape future EU regulations.
The reason that I’m so clear on this is from my experience of having gone from selling smoothies from a market stall at a music festival in west London 18 years ago to [nowadays] trading in 17 countries across Europe, with 50% of our revenue coming from trading in the EU area.
But not only is access to the EU good for my business, I really believe it is good for the UK economy, creating jobs here by selling things there. Of the jobs created by Innocent, 80% are as a result of trading in Europe. Many business people moan about regulations, but rarely mention those that help them. Everything that the EU has brought in that has affected my business makes sense to me.
‘The EU is the biggest game in town’
The EU is the biggest game in town. It’s the world’s largest trading area and we have a unique selling proposition within it. English is the international language of business, which partly explains why the UK is the biggest recipient of direct foreign investment – everyone who wants to do business in Europe wants a bulkhead here. As we’re currently in the EU, it’s the responsibility of those who want to leave it to articulate how our country would be net better off as a result, and I don’t believe they can.
NO – Lord Bell, Chairman of BPP Communications
The EU is founded on the concept of fear – it says to the people of Europe: “If you don’t do what we tell you, something ghastly will happen.” I would like people to be enthusiastic about being part of Europe, but the EU isn’t good at finding things that people can be enthusiastic about.
I happen to think that the British are very different to people of other European countries – culturally, legally, etc – and that we aren’t natural bedfellows. Indeed, we aren’t full members anyway, having opted out of the single currency. And I don’t think there’s one businessperson in Britain who for one moment would suggest we should adopt the euro at this moment in time, including the business people who constantly prate on about how important the EU is to us. Some go on about three million jobs and £30 billion-worth of exports disappearing if we leave the EU, and that’s clearly absolute nonsense.
I think I would aim for something like a Swiss relationship where a levy is paid to operate within the EU, on the same basis as everybody else, so individual sovereignty isn’t interfered with.
People say we won’t be able to influence EU policies from outside it, but I think unfortunately the future of the EU won’t be determined by Europe but by events outside. The Russians want nothing to do with the EU and other great power blocks – India, China and the Middle East – have no sympathy with the EU at all. The relationship between the UK and India is totally different from the relationship between European countries and India. As a businessman I should be thinking about reaching out around the world and not just Europe.
I agree with much of the EU trade and single market stuff but I think all business is badly affected by the blunt regulation. You do what you think is in the best interests of your business, but then you’re told by your lawyer that Brussels won’t allow you. That’s an absurd impediment to free trade. We had to close an office in Brussels [recently] because the regulation and the administrative costs were so enormous that we couldn’t make a profit.
‘The EU needs us more than we need it’
If the only perceived options are EU or not EU, it’s a false equation; there are many other organisations we can join. The reality is the EU needs us more than we need it.
Infographic source: Grant Thornton International Business Report 2015
Illustrations: David Mahoney