Business backs EU referendum

PROMINENT City figures are set to campaign for the renegotiation of the UK’s relationship with the European Union, dismissing claims it would be bad for business, City A.M. has learnt.

Jon Moulton, the venture capitalist behind Better Capital, is joining a group of businesspeople who will back a referendum on the UK’s membership of the EU. Yesterday he said that leaving the bloc could boost the country’s economy in the long run.

“If we stay in the EU it will tend to be more regulated, in favour of more employment legislation and in favour of more restrictions on trade,” Moulton explained. “Renegotiation would give the UK a chance of having a competitive advantage rather than being dragged down, arms linked with our European neighbours.”

Others who are expected to be part of the campaign include City grandees Lord Vinson and Daniel Hodson.

David Cameron is due to set out his plans for a new relationship with Europe in the next fortnight, leading some industry groups, such as the CBI, to warn that leaving the EU would harm UK business.

But entrepreneur Luke Johnson, the former Channel 4 chairman, yesterday dismissed the CBI’s stance: “They don’t represent the large majority of small and medium sized enterprises, and the broad diversity of British industry. The EU destroys jobs, it doesn’t create them. We require a wholesale renegotiation of the terms on which we do business with Europe. They need us more than we need them – the idea we would not trade with the EU if we left is a joke.”

This weekend Lord Wolfson, chief executive of Next, and the British Chambers of Commerce (BCC) came out for a new deal focused on free trade. Lord Wolfson told the Sunday Telegraph that “Britain should stay in Europe, but only on the right terms.”

The BCC surveyed its members and found just 26 per cent of businesses wanted to keep the status quo, while 59 per cent wanted a looser relationship with the EU or an EU exit. Of those backing change, 40 per cent wanted a vote within 12 months.

Ed Miliband yesterday said Labour would not support a referendum.