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An EU referendum isn’t ‘bad for the economy’ – businesses want it to happen

18 February 2014

Mark Carney has been a very successful Governor of the Bank of England. Since coming to office in June last year, the British economy has gone from strength to strength. Although Mr Carney can’t take all the credit, on his watch unemployment is falling rapidly and business confidence is at a record high. His appointment and policies have been met with general approval by the UK’s business leaders, which is to be welcomed.

So it is a shame that yesterday there were reports that the Governor thinks an EU referendum would be ‘bad for the economy’. The claim stems from the Governor’s comments on the Andrew Marr show on Sunday. In response to a question asking if the CBI was right to be worried about the ‘uncertainty’ that a referendum on EU membership might create, Mark Carney replied that ‘uncertainty is always bad for investment. It increases the value of waiting’. He also pointed out that:-

‘The uncertainties that we can influence at the Bank of England are not a European referendum or a Scottish referendum; what we can influence are uncertainties about the financial system.’

This is important: it’s not the Governor’s job to deal with the questions surrounding an EU referendum. What commentators should ask is – will a referendum actually create uncertainty (as some have claimed), and thus are businesses opposed to a vote on the EU?

The evidence overwhelmingly shows that they aren’t. Business for Britain’s definitive polling of British business leaders with YouGov showed last year that a majority of entrepreneurs support a referendum on our EU membership. Other surveys have come to a similar conclusion: Ernst and Young’s research  has shown that leading investors have said that they find the idea of a UK with looser links with Europe appealing. The latest economic data backs up this positive view, with the ONS’s analysis of business investment in the UK showing no substantial change since the Prime Minister’s Bloomberg speech in January 2013:-

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In fact the FTSE rose and industrial output increased after Cameron promised a referendum, while unemployment fell. These trends are, of course, down to a large number of factors, but taken together they show that there is precious little evidence to back up the view that the Prime Minister’s EU referendum pledge has compromised British business.

The value of having a set date for a future EU referendum is that it shows the EU that we are serious about getting a new deal. Ask most UK-based business people and they will say the great uncertainty in Britain’s EU relations comes from not knowing how the Eurozone, or indeed the European Commission, will respond to Europe’s flatlining growth. From tighter regulations, to financial transactions taxes, business people are growing increasingly concerned by Brussels’ response to the economic crisis. As the Governor himself admitted, there are big problems facing exporters, not least that ‘Europe remains weak’ and he thinks that weakness is going to remain a problem for many years.

We know some big corporations fear change and, while we must respect their need for stability, many of those who claim to be reconsidering investment in the UK as a result of the referendum pledge said the very same about Britain not signing up to the single currency – and you can imagine how grateful they are now that we didn’t.

The evidence is clear: Britain’s vital army of small and medium-sized companies want a new deal with the EU. They want the heavy burden of over-regulation lifted Getting a date set for a referendum makes it far more likely that we will get that deal, which is why over two-thirds of British business people support the Prime Minister’s referendum pledge.

Oliver Lewis is Research Director of Business for Britain

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Show comments
  • Clarke Pitts

    Surely a lot depends on the time frame we are considering. While Mark Carney must be right when he says uncertainty is always bad for investment, it may well be the case that EU will be even worse eventually – the medicine may be bitter but it might save the patient.

  • Conway

    And when, in 2017, we don’t get a referendum, what happens then?

  • CharlietheChump

    Dave won’t get a deal. We might get out though. Which is nice . . .

    • Daniel Maris

      He will get a deal (if he’s around) – his Eurochums will see to that- but it will be a meaningless deal.

  • Smithersjones2013

    The irony is that the last thing that Brussels is going to negotiate away is the regulation controlling the common market. The small a middle sized businesses will only get what they want outside the EU.

  • BarkingAtTreehuggers

    Carney! Look at you hands. Now stretch them out as far as you can. *That* is your realm.

    Everyone else is off – we don’t care about your forward guidance, we know it’s meaningless waffle whih has fallen at the first hurdle, we know you are in the process of handing over Scotland to the ECB because you are broke. Your bosses said it themselves: we do not *want* to take monetary responsiblity for an independent Scotland. That’s right – you don’t *want* to influence Scottish monetary and fiscal policy, even if they asked you to.

    Curious how Frankfurt has no such objections. The single largest transfer of assets from the BoE to the ECB is in full flow… this is how it plays out when you don’t sort out your bank of gangsters repeatedly gangbanking the taxpayer for cash, even SIX years after the event.

    The Scots wiil be off. Who would blame them?

  • serialluncher

    “YouGov showed last year that a majority of entrepreneurs support a referendum”

    Interesting but misleading. The interests of sum total enterpise is the crucial factor. The poll presumably includes plumbers but excludes CEOs of large companies.

    • saffrin

      YouGov polls are restricted to profiled participants likely to support whatever point YouGov are commissioned to promote.

  • rtj1211

    Uncertainty is only bad for risk-averse or risk-free investment.

    The billionaires who made their money in venture capital invest in uncertainty. Their edge is that the understand the nature of the uncertainty they invest in and when the odds shift in their favour.

    It sounds to me like the EU Referendum proposers should make Britain the Number One place for VC investment in the next 3 years as no VC worth their salt worries about ‘uncertainty’, unless of course that uncertainty involves governments hiking capital gains tax on VC divestments.

  • HookesLaw

    On the one hand the CBI is quoted in the article about being worried about uncertainty but than the author goes on to assert that business is not worried about uncertainty.
    Carney only seems to be stating the bleedin’ obvious when he says investors do not like uncertainty.
    In truth given that we get a Conservative government there will be no uncertainty we will get a referendum. Once that referendum is out of the way we will have no more uncertainty.

    In fact the biggest uncertainty is with the future of the Eurozone and how its members propose to further integrate themselves. Its this process which is inevitably going to drive Britain’s (and a few other countries) future relations and will need a treaty and a referendum.

    • Wessex Man

      now listen here Hooky to do what you are saying there needs to be a Tory win at the next General Election, unlikely, given that they are now the third party and in that unlikely event Call me Dave then has to negotiate with the EU who won’t, tyr telling the truth for once.

      and another thi zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

      • HookesLaw

        They are not the third party zzzzzzz……

        The plain fact is its you who is telling all the self serving lies.

        • fubarroso

          Err, remind me where they came in Wythenshawe & Sale East by-election then?

        • Conway

          Where did the Conservatives come in Eastleigh?

    • saffrin

      “In truth given that we get a Conservative government there will be no uncertainty; we will get a referendum.”

      If you believe that you’ll believe anything.
      Cameron is leading the Conservative party remember?

      • HookesLaw

        And you a saffrin remember? prejudiced as ever.

        • saffrin

          Why wouldn’t I be?

          • HookesLaw

            Ask 6 million Jews.

            • saffrin

              My reply went to auto-mod.
              The propaganda machine being at work again.

            • Wessex Man

              You should apologise for that stupid remark to saffrin, even for a toe licker like you that is way below the belt.

              Your mate Call me Dave is toast and after the European Election within a couple of weeks the famous Tory backstabbing will begin! To place Boris the Buffon in the hot seat, a halfwit who couldn’t even handle Merson and Hislop, oh dear.

    • Rockin Ron

      ‘Carney only seems to be stating the bleedin’ obvious when he says investors do not like uncertainty.’

      A common fallacy. Investors, particularly predatory speculators, love uncertainty as most gains can be made by the canny in that period. Business as usual is what such investors abhor.

      • HookesLaw

        You are right about speculators but its not all no downside.

    • Conway

      “In truth given that we get a Conservative government there will be no uncertainty; we will get a referendum.” Are the Conservatives planning to ditch Dave, then?

  • Agrippina

    Good news, some kick back to EU capitulation by most. Denmark have made the killing of animals for halal or kosher meat illegal, the animals must be killed humanely. Brilliant.

    I wish we would follow the Danes, then the religion of peace mob could move to a muslim country to practice their barbarism, and leave us in peace.

    • MichtyMe

      Yes but is not the Danish livestock industry mostly…….Pigs.

      • Agrippina

        mmm delicious bacon butties.

    • HookesLaw

      Virtually all our chickens sheep and pigs are stunned before slaughter and so as far as I can see is most of our cattle.

      • fubarroso

        Then it it not halal meat, not that pig meat is relevant.

        • HookesLaw

          Yet it gets by. The halal and kosher market is quite small.

          Despite govt offering religious opt outs (and for years no one bothered about kosher food), the Food Standards Agency did a survey which found that of all the animals slaughtered by the shechita and halal method in UK abattoirs during the survey period, only 3% of cattle, 10% of sheep and goats, and 4% of poultry were not pre-stunned. In other words, nearly 90% of all animals slaughtered by the halal method are stunned beforehand.

          Personally I would not want to eat non pre-stunned meat, but to be honest a bit like fox hunting I can’t get worked up about it. But lets face it all this fuss is just code for islamophobia.

          • Fergus Pickering

            Yup. And I am an Islamophobe. I fear muslims. I fear they come to do me harm.

      • Conway

        It is not labelled so we have no means of knowing unless we buy from a local butcher.

  • Geronimo von Huxley

    We need to make sure the resentment is a lasting one. We need to make sure that the Poles and now Spanish are fully integrated before we cast a vote. Has anyone seen any new Bulgurs and Romas? I haven’t.


    • Smithersjones2013

      So how do you identify the Bulgars and Romas. Do they have their nationality stamped across their foreheads or wear their national dress and carry their flag wherever they go? Or are they just anonymous caucasians unidentifiable amongst the vast majority of the population ?

      • Geronimo von Huxley

        Ask Stephen Robertson, man. How difficult is that – you right wing loons said that’s what Bulgurs and Roma would do, surely you are always right.

  • Kitty MLB

    I should imagine businesses are sick of being stuck in Shangra La,
    they need what ever is stifling them to stop and to know as soon as possible
    which way the wind will blow.
    I believe the referendum vote is too far in the future, one way or another it just needs to happen, all this waiting around is bad for business and also politically.

    • HookesLaw

      2017 is not far into the future. 2029 when HS2 opens is

      • Conway

        A week is a long time in politics – 2017 is a lifetime ahead.

  • slonytattery

    Oliver Lewis is Research Director of Business for Britain

    Business for Britain, hey? Hmmm, I wonder what Business for Britain’s stance with regard to the EU is

    Business for Britain is an independent, non-partisan campaign
    involving people from all parties and none, run by business for
    . The objective of the campaign is summarised in a statement
    that over 500 business leaders signed when the campaign launched in
    April 2013, and has since attracted the signatures of over 250 more UK
    business people:

    “As business leaders and entrepreneurs responsible for millions of
    British jobs, we believe that the Government is right to seek a new
    deal for the EU and for the UK’s role in Europe
    . We believe that, far
    from being a threat to our economic interests
    , a flexible, competitive
    Europe, with more powers devolved from Brussels, is essential for
    growth, jobs and access to markets. We therefore urge all political
    parties to join in committing themselves to a national drive to
    renegotiate the terms of Britain’s membership of the EU

    Business for Britain is funded through the kind donations of its
    business supporters
    . Over the coming months we will be launching
    Regional Councils across the United Kingdom, promoting ideas for how
    renegotiation could proceed and bringing together wealth and job
    creators across the country to campaign for a better deal for Britain in
    the EU.

    So, in layman’s terms, BfB are basically ‘down with’ the EU, they’d just prefer it to be even kinder to the vested corporate interests it currently serves so well – er – than it already is.

    BfB and other pluggers of the ‘referendum on a renegotiation’ meme are not your friends.

    • Michael Mckeown

      slonytattery, how are you formatting that?

    • Wessex Man

      Much like business for Europe then, you know the mob who wrote to the Governments of Japan, USA, Austraila, Canada, South Africa, New Zealand India and Brazil. They really should smarten up their act, as far as I know only The Yanks and Japanese have written back.

      • HookesLaw

        Who is talking about business for Europe?

        • Wessex Man

          I am Hooky, you know the organisation formed by ‘Tory’ Clarke and Mandelson!

    • HookesLaw

      So basically you are putting your spin with no evidence on the stance of BfB.
      The byline says he is a Director of Business for Britain so we know his stance which as you demonstrate is easily obtainable.
      Speaking personally I cannot see anything wrong with the publicly states views of the organisation and nor I doubt would the vast majority of the British public. You on the other hand are clearly running scared.

      • slonytattery


        So basically you are putting your spin with no evidence on the stance of BfB.

        The – er – ‘evidence’ is quite clearly displayed on the BfB interweb thingy. They’re keen on the EU, but want there to be ‘less red tape’. You know the sort of thing: offshoring more jobs within the EU would be even cheaper if only their corporate pals could import more Burundians on temporary intra-company work visa wotsits. If only this could be re-renegotiationarated and put to a heads-we-win-and-tails-we-win-too ‘referendum’ vote, business leaders and entrepreneurs responsible for millions of British jobs® would lead us onwards to the sunny uplands of EU-topia. Huzzah!!

        • BarkingAtTreehuggers

          …a United States of Europe, modelled on the great enemy I gather? One spin too many for me.

    • Smithersjones2013

      Basically BfB is a Tory front organisation.

    • Conway

      What they profess to want will never happen anyway. There is no way the EU is going to give up its acquis communitaire or abandon the United States of Europe project.

  • Agrippina

    …’some big corporations fear change’ … yes they do, because they like having sales in the billions here and paying little or no corp tax, by claiming head office is a cupboard in Luxembourg.

    We want contracts to be made between individuals, companies and countries in the usual way.

    We do not need now, nor did we ever need the corrupt and corrosive influence of the EU bureaucracy, creaming off monies and failing to add value, except for themselves, unable to get their accounts audited for over 20yrs, we are mugs.

    We need a referendum now.

    • telemachus

      ∙ More benefits: consumers
      Consumers benefit from the single market. You now enjoy the advantages of wider choice, better quality and lower prices. In principle, you can buy goods and services from any provider in the EU without having to accept contractual conditions different from those that apply in your own country.

      • Conway

        When consumers (eg in the poorer parts of the eurozone) don’t have any money, there are no benefits. Far better to trade with those (non-EU) countries which do have cash. In the meantime, it costs us a small fortune, both in tribute and in the costs of compliance (which are onerous for SMEs).

  • Hexhamgeezer

    Businesses require clarity and less regulation. You don’t get less regulation via ‘ever closer union’. Ditto clarity. Whether on a micro or macro scale the EU gauleiters have shown that they ignore their own rules at the drop of a hat. Whether it’s accession regulations, Stability & Growth or governance of the Euro, they have shown that the only rule is that there are no rules.

    • wycombewanderer

      95% of Uk ,businesses have no trade with other countries outside of the UK yet 100% of UK businesses are subject to EU regulations!

      I suspect the same is for most businesses in most countries within the EU as well.

    • telemachus

      MOST businesses in the UK feel European Union rules ensuring the freedom to trade goods with

      other members are “beneficial to the national interest”, a government report suggests.

  • Redvers Cunningham

    Carney has only been in the job for a few months. To describe him as very successful is not only premature but also wrong when, for example, one considers how the unemployment level part of his forward guidance is having to be revised so soon after it was announced and how sterling is going in the opposite direction to what the Bank of England wishes.

    • 2trueblue

      Agree with you that so far he has not been tested. The train had left the station before he came on board and so far is going well. The good news about our manufacturing is that some is being repatriated and that is where the greatest gain could be for the UK. House building and infrastructure needs to be stepped up to gain real traction for us.
      I did like his meeting with Salmond.

    • telemachus

      Carney is a superstar and his views on Europe should not be ignored

      • Fergus Pickering

        He doesn’t have any views n Europe. Nor should he have.

  • David Booth.

    If our so called democratic political masters grant the electorate a referendum then which ever way the vote goes it will put the matter to rest. This has been going on now for 30 odd years and needs to be finally resolved by putting it to the people.
    If the people vote to stay in we can start playing our part on Europe and if the people vote to leave then we can start building a place alongside, but not in, Europe.
    What we can’t have is another 30/40 years of resentment.

    • telemachus

      What is a plebiscite?
      •Easy, a plebiscite is a referendum!
      •Okay, a referendum is where a vote takes place on a particular question e.g. ‘Do you agree that I am the rightful Fuehrer of Germany?’
      •So, a plebscite could be described as being a ‘democratic weapon’ because it can be democratic, or in Hitler’s case it can appear to be democratic.

      • David Booth.

        OK, give us a referendum on EU membership and if Adolf Hitlers name is on the ballot paper I promise I will not vote for him!

        • telemachus

          As you very well know, the metaphor was to demonstrate where referenda lead

          • David Booth.

            Bringing A Hitler into an argument about an EU referendum is indicative of your argument running out of steam!

          • dalai guevara

            …for your metaphor to have relevance you would need to demonstrate that the plebiscite has been sufficiently dumbed down. I guess it is safe to say that our political elite believe they did a good job there.

            Why else would they be so afraid?

          • Nicholas chuzzlewit

            It is not a metaphor you hapless idiot.

      • Nicholas chuzzlewit

        Tagged tripe.

  • sir_graphus

    Probably the best thing for business is along the Chinese line, where the govt and various oligarchs get very rich, while the citizens work long hours for low wages.
    People having a say in their own destiny creates uncertainty. How inconvenient we are.

    • telemachus

      What we need is “hybrid forums”—in which experts, non-experts, ordinary citizens, and politicians come together—These reveal the limits of traditional delegative democracies, in which decisions are made by quasi-professional politicians and techno-scientific information is the domain of specialists.

      • Colonel Mustard

        Would you spam those and harass every comment too, you megalomaniac creep?

        • Nicholas chuzzlewit

          Yes he would because he is a megalomaniacal creep.

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