Business support for Brexit grows

Growing numbers of British executives are hitting back at official claims that leaving the EU would be bad for business, highlighting the problems David Cameron faces in making the economic case for the EU.

The government, the Bank of England and the International Monetary Fund have all issued warnings that Brexit would damage the UK economy.

But many business people counter that Brexit would increase the UK’s economic potential, citing the EU’s low growth, burdensome regulation and the possibility of deals with more dynamic parts of the world.

"Regulation is our biggest handicap in the global race," says Robert Hiscox, retired chairman of Hiscox Ltd, a Lloyd's of London underwriter. "And if you add on to it the extra layer of very bad and corrupt government from the EU, the waste of money is phenomenal."

The strength of feeling in the pro-Brexit business camp is revealed by recent figures on funding ahead of the June 23 In/Out referendum.

Last week’s publication by the Electoral Commission of the largest donors to both sides of the campaign showed pro-Brexit business people digging deep into their pockets to support the eight registered Leave campaigns.

Peter Hargreaves, founder of Hargreaves Lansdown, the financial adviser, has given £3.2 million since February 1 to Leave. EU, the group backed by the insurance millionaire Arron Banks.

The total raised by the Leave camp has outstripped Remain, even though the pro-EU campaign is supported by big businesses and international banks such as Morgan Stanley and Citibank.

"The EU is the only bloc since 2008 that has not shown growth, whereas every other part of the world has," says Patrick Barbour, who has donated £500,000 to Vote Leave, the official Brexit campaign, and who ran two publicly listed businesses. "[AFTER BREXIT] we could concentrate on expanding our trade worldwide."

Such arguments appear to be making headway.

A recent survey by the British Chambers of Commerce showed the Leave camp gaining support among business, with those favouring Brexit up from 30 per cent in January-February to 37 per cent in April, while those backing remain slid from 60 per cent to 54 per cent.

Competitiveness

In a letter published by the Daily Telegraph on Monday, more than 300 business figures called for Britain to leave the EU, arguing that membership undermined the country's competitiveness.

Sir Rocco Forte, owner of the eponymous hotel chain, says the UK has been held back by the lack of impetus for reform in continental Europe.

Even though the industry in which Sir Rocco operates is highly dependent on non-UK staff, he says he “could live with” stricter rules on employing people from overseas. “This country has had the fastest growing economy in Europe for a while. It’s a magnet for people,” he says.

Sir Rocco also dismisses the argument that a vote to leave would usher in a period of damaging uncertainty, as the UK negotiated its new relationship with the remainder of the EU.

“There won’t be huge disruption,” he says. “There’s more uncertainty now than there would be then.”

Tim Martin, the founder of Wetherspoons, the pub chain, is similarly convinced Brexit would favour his business, even though he too works in an industry employing many non-UK EU nationals.

“The benefits for my business would be a more prosperous country,” he says, calling for a post-Brexit “preferential immigration status” for people from selected countries such as Spain.

Uncertainty

Like Sir Rocco, Mr Martin says he has “zero anxiety” about Brexit. “The greatest uncertainty in business is from new EU legislation which we can’t control,” he adds. “It would only be incompetence in negotiations which would give us a worse deal than we currently have.”

Emma Pullen, chief executive of the British Hovercraft Company, a small manufacturer in the south of England, also contends that a lower level of regulation means “the cost of business would massively reduce if we left the EU”.

She adds that it would even benefit the economy if, as some economists predict, sterling fell sharply after a pro-Brexit vote on 23 June.

“If the pound takes a massive drop, I’m the first person in the UK to be happy,” she says. “Keeping the pound low . . . will help our exporting.”

She also criticises the EU for not concluding more free trade deals and argue the UK would be more effective in doing so alone.

“I want [US]to be at the forefront of making deals with those countries where the money is,” she says.

But many business people add that the fundamental question facing the country goes far beyond pounds and pence.

“The whole idea of Europe has particular traction with the well-educated and the liberal elite,” says Mr Martin. “For me, I try to say that you have to look at the big picture. It’s very dangerous to give up democracy.”

Mr Hiscox echoes the sentiment.

“I love knowing that there is a government governing me that I can sack every five years,” he says. “ We are to 27 other countrieswho don’t have our desire, our spirit, and don’t share our values at all.”

– Copyright The Financial Times Limited 2016