EU referendum: Business groups hit back at claims by Boris Johnson that business support for remaining in EU is not as strong as commonly thought

James Nickerson
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Boris Johnson Speech on Europe
Tyrie said Johnson's claim that EU membership costs British business £600m is wrong (Source: Getty)

Mayor of London Boris Johnson has said that business support for the European Union is not as zealous as people commonly think, in a clash with senior Tory MP Andrew Tyrie.

Speaking to MPs, Johnson said that he is aware that organisations such as the CBI and the British Bankers Association are in favour of staying in the EU, but that their support is less strong as people think.

Johnson added that some leading bankers are in favour of Brexit, including Norman Blackwell from Lloyds and Sheila Noakes from RBS.

"I’m struck by how shallow the enthusiasm for the EU seems to be even amongst its strongest advocates," he said.

Read more: Will leaving the European Union lead to more sovereignty for the UK?

But Tyrie, chair of the Treasury Select Committee, hit back and said that polls suggest that a lot of businesses do want to stay inside the EU, and "what [Johnson] gets in [his] anecdotal meetings doesn't seem consistent" with these surveys.

As Jo Valentine, chief executive of London First, said: "Boris Johnson leaves a great legacy as mayor. But our membership, the CBI’s recent poll, the technology sector, and indeed the majority of businesses, large and small, have made it clear: they want to remain in Europe."

Johnson added to the committee that leading bankers had told him Brexit would do no damage to the City of London's standing as a financial centre and that it would "flourish mightily" if Britain leaves the 28-member bloc.

That didn't go down well with the committee and was rubbished by the City of London Corporation. Its policy chairman Mark Boleat said:

"There is no doubt that Brexit would have profound consequences for the City in the years to come. I think what we would see over time would be job creation slowing down, rather than as some warn a mass exodus of workers overnight to our competing global financial centres.

"The City benefits a great deal from Europe – access to the Single Market and 500m consumers, passporting of services across borders and being able to attract talent from across the continent to name but a few – and without doubt leaving the EU would cause years of uncertainly and hinder our competitiveness," he added.

Meanwhile, BT chairman Mike Rake said Boris is "completely mistaken".

“The City of London, like British businesses big and small, is better off in Europe. Regulatory harmonisation across Europe has helped London achieve its position as London’s financial capital. We attract the best people and investment from across Europe and the world because of this," Rake said.

"And without the single financial passport, non-UK banks could desert the City for Dublin, Frankfurt and Paris. Boris is completely mistaken.

"Every survey has shown strong support for Britain’s place in Europe, and business leaders are just as concerned in private as in public about the consequences of leaving privately," he added.

In an exchange between Johnson and Tyrie, Johnson also had to defend claims that membership costs British business £600m a week.

But Tyrie said that this figure, from Open Europe, only looks at the costs of proposals, not the benefits. Johnson says Open Europe claims only 95 per cent of these benefits have not materialised, but Tyrie said said that's not right as Open Europe says the full costs are difficult to quantify. That is different, Tyrie said.

The terse exchange hit a particularly serious tone - especially for Johnson, who has been attempting to strike a statesmanlike tone after he made a political gamble in backing Brexit, speculated to have been motivated by leadership hopes.

Read more: Young voters "frozen out" of democratic process

The mayor stretched to say there "aren't any good economic arguments for staying in the European Union", and there are only good political ones and that leaving would not necessarily entail a period of uncertainty.

He also said the UK could make trade deals with the EU "very rapidly indeed" if it left the Union as it would be "totally self-destructive" if EU members decided against reaching such deals.

Still, Johnson did accept that no country in the world has a free trade agreement that permits full access to financial services.

Responding to a question from Tyrie, Johnson also acknowledged that Londoners are generally more pro-EU than the rest of the UK, but that he has a "Burekean duty" to act according to what he believes.

Johnson also accepted that the UK enjoys gold plating EU rules, raising questions over why he thinks there would be lighter regulation in a Brexit scenario.

And in further exchanges, Tyrie accused Johnson of making false claims about EU regulations. He pointed attention to rules on the size of coffins and an EU regulation that says children under the age of eight cannot blow up balloons.

The grilling came as a new poll by ICM found that Leave had taken a two per cent, garnering 43 per cent of the vote to Remain's 41 per cent.

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