Business titans split over British EU referendum

As Cameron explained his position to global leaders at the World Economic Forum in Davos, 56 industry figures signed a letter to The Times saying his pledge to recast the relationship with Europe was “good for business and good for jobs in Britain”.

“This is the moment to push for a more flexible, competitive EU that would bring jobs and growth for all member states,” they said.

“We agree with the Prime Minister that Britain’s best chance of success is as part of a reformed Europe.”

The signatories included Paul Walsh, chief executive of drinks giant Diageo and Xavier Rolet, chief executive of the London Stock Exchange, although many are also donors to Cameron’s Conservative Party.

Their strong backing flies in the face of warnings from other business titans that Cameron’s pledge to hold an in-out referendum by 2017, providing his party wins the next election, will create uncertainty which could endanger investment.

The warnings carry real bite as Britain is at risk of falling back into recession this year.

Martin Sorrell, the head of advertising giant WPP, said after Cameron’s speech on Wednesday had “just added another reason why people are going to postpone investment decisions and the last thing we need is people postponing more.”

Sorrell and figures including Virgin founder Richard Branson had signed a starkly different letter to the Financial Times on January 9.

In it, they warned Cameron of the “dangerous” consequences for the British economy of seeking a complete renegotiation of the relationship with the EU.

While they backed calls for “urgent” reform of the European bloc to reduce the red tape that holds up trade, they said seeking a “wholesale” renegotiation “would certainly be rejected”.

The issue of Europe remains so sensitive that the chief executive of one of Britain’s biggest companies would only speak to AFP at Davos if he was not identified.

He warned Cameron was playing a dangerous game.

“As is the case in many countries, small extremist parties hold the right to hostage. It’s similar to the Tea Party in the United States. The result is catastrophic,” the executive said.

“Britain will not leave the European Union, it won’t happen. How can a country which does 50 percent of its trade with Europe pull out? This is just politics.”

Cameron insisted at Davos that he wanted Britain to remain in the EU — but that the 27-member bloc must change for that to happen.

“This is not about turning our backs on Europe — quite the opposite,” he said. “It’s about how we make the case for a more competitive, open and flexible Europe, and secure the UK’s place within it.”

A key financial supporter of Cameron’s party, billionaire Lord Michael Ashcroft, said the Conservatives would do well to remember that they could only implement their European plan if they win the next general election.

“That depends on whether we get a majority at the next election. And that depends on how voters think we are doing on the economy, jobs, public services, welfare, crime, immigration: whether we are on their side and understand their priorities.”

He concluded: “It is time for Tory Eurosceptics to declare victory and talk about something else.”

Guy Jackson / AFP / Expatica