Sir Martin Sorrell
The WPP boss speaks out on the EU debate
My key idea: UK businesses must play an important and specific role in the debate and step forward. We have a vantage point that allows us to see clearly the importance of EU membership to the UK economy, and the very real consequences if we left. Now is the time for business to speak up for Europe. Now is the time to act.
Businesspeople in London are increasingly international in their outlook. Globalisation and technology have enabled small and large companies alike to trade across borders, while giving consumers access to a wider range of goods and services. In this environment, the capital has thrived as a hub for international business.
In the world of Westminster politics, however, things risk heading in the opposite direction. Voices calling for Britain to exit the EU have grown louder, while the prospect of a referendum creates uncertainty. Many in the business community feel conflicted. They see that leaving the EU would damage the UK economy, and be particularly bad for London given its international importance. But they worry also, for the best possible reasons, that it’s not their place to intervene in what is a political and emotive issue.
My view is that business must play a specific role in the debate. It has a vantage point that allows it to see clearly the importance of EU membership to the UK economy, and the very real consequences if we left. As a member of the EU, British businesses enjoy unrestricted access to around 440 million consumers in 27 foreign countries. They account for about 45% of our exports, and when combined with Britain, form the largest economic market in the world.
EU membership is also critical in attracting investment. Many companies locate operations in the UK in part because they want access to European markets. Furthermore, according to UK Trade & Investment (UKTI), 58% of foreign direct investment in the UK comes from Europe and is encouraged by EU membership.
The importance of such investment to the UK economy should not be underestimated. Last year UKTI recorded 1,773 foreign direct investment projects landing in the UK, which are expected to bring 66,000 new jobs and safeguard 45,000 existing jobs. Being within the EU also helps Britain trade beyond Europe. The EU is a signatory to 30 free trade agreements with more than 50 partners, covering around 60% of Britain’s trade beyond the EU, with the prospect of further trade deals to come.
If Britain were to leave, it would need to spend years negotiating a whole new range of trade agreements, and would do so from a weaker position, being a far smaller entity than the EU. Britain would also lose its influence within Europe if it left, especially in areas such as regulation.
Certainly, there are problems with the EU. Politicians must focus on reforms like reducing bureaucracy and red tape, and make it fit for the digital age, which would bring real economic benefits. If business does not make such points, the arguments will not carry weight, and the debate will be poorer for it. Indeed, can we really expect politicians to show courage and make business arguments when we ourselves are not prepared to do so?
My hope is that business leaders will ensure their voices are heard. Some may prefer to do so via trade bodies and other organisations. For example, I sit on the advisory council of Business for New Europe, a coalition of business leaders that makes the positive economic case for membership, and campaigns for reforms to make the EU more competitive and dynamic.
However, I also encourage businesspeople to make these points themselves. International business is no longer the preserve of large corporations, it affects the whole economy, and digital and social media allow everyone a voice.
This is an excerpt from LondonLovesBusiness.com’s Securing Britain’s Ambition - read the full publication online now
Mon, 16 Apr 2018
Mon, 6 Jun 2016