Big business deeply troubled by Cameron's veto

 
David Cameron at the Brussels EU summit Vince Cable and businesses are worried that David Cameron will no longer be heard by Europe's decision makers

When Vince Cable travels the world selling the attractions of the UK as a place where huge companies and deep-pocketed investors should put their money, pretty much the first thing Britain's business secretary points out is that the UK is part of the biggest market in the world - the European Union's single market - and (he says) offers a more welcoming climate for business than much of the rest of the EU.

Which is why both Mr Cable and many business leaders are profoundly uneasy about David Cameron's refusal in the early hours of Friday morning to allow the eurozone's governments to adapt the EU's treaties such that they will incorporate reforms seen as necessary to save the euro.

To be clear, Mr Cable is not about to resign (all rumours to the contrary). He's unhappy, but keen to do what he can to rectify what he fears may be a serious economic error by the prime minister - given how vital it is to stimulate investment in productive capacity in Britain, so that we become a nation that starts to pay its way in the world, rather than living on borrowed money.

Removal

As for our biggest companies, well the bosses of three of them (none of whom would be seen as pro-European zealots) have all said to me that they are unhappy about the prime minister removing himself from the negotiating table not only on the future of the eurozone but also - potentially - on other issues of huge importance to the UK.

Here is what one said to me: "Margaret Thatcher was a constant thorn in the side of European leaders, but she never vacated the negotiating table; I am anxious by the implications of what the prime minister has done."

Also, John Cridland, the director general of the CBI, concedes to me that his members are worried. He says the prime minister needs to spell out in detail - in his Commons statement tomorrow - why he couldn't sign up for the proposed treaty reforms, or what (if anything) the French president and German chancellor did to make that impossible.

Because, as Mr Cridland says, it is not obvious that Mr Cameron made it easier to protect the interests of the City of London - which is what the prime minister said he was trying to do - by forcing the eurozone's members to design new institutional arrangements to manage their affairs.

Erosion

In fact, as all the business leaders to whom I spoke were quick to point out, the decision by the 17 eurozone nations - plus as many as nine other EU states - to opt for an intergovernmental agreement that excludes the UK raises the prospect of this group becoming (explicitly or implicitly) the decision-making body for all EU economic and business issues, especially those relating to the single market.

So, as the influential head of a major multinational said to me, if you are a Chinese or Indian multinational, and you have a choice between investing in Germany, the Netherlands or the UK, and you fear that the UK's influence in the single market has been eroded - and you also see some of the right wing of the governing Tory party seemingly in favour of the UK leaving the EU altogether - you probably won't put your incremental investment in the UK.

Over the past 25 years, inward investment has become more and more important to the UK. And the UK is relatively more dependent on big multinationals - in finance, pharmaceuticals, media and so on - than almost all rival economies.

'No, nay, never'

Now the thing about multinationals is that they are citizens of the world, rather than any particular country. They can base their respective HQs and invest their cash where the climate is most propitious. And if they begin to see the UK as an isolated island, they will not wish to stay.

So it would really matter if the UK's place in the world's biggest market, the European single market, were somehow in doubt. Which is why having done his "no, nay, never" in the early hours of Friday morning, businesses are now desperate to hear a positive statement from Mr Cameron about how the UK's position in the single market can somehow be buttressed.

All that said, everything I've just written could turn out to be wholly irrelevant - not even as useful as tomorrow's wrapping for fish and chips. Because if the eurozone were to melt down, and that remains a very real and present danger (as I pointed out on Friday), the priority then will be to limit the inevitable havoc for the economy (including ours) and build a whole new European entente.

 
Robert Peston Article written by Robert Peston Robert Peston Economics editor

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  • rate this
    0

    Comment number 617.

    how many people does it take to complain about the BBC's news coverage of this for any unbiased reporting to come about
    is anyone listening out there?
    to whom do we complain?

  • rate this
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    Comment number 616.

    If anything makes me convinced that David Cameron is right, it was the sight of Guy Verhofstadt telling the EU Parliament how wrong DC was. This man is the joke ex-Prime Minister of a country which holds the world record for the longest time to form a government (541 days). That's how long I reckon it is going to take to agree a Fiscal Union - much less before it collapses.

  • rate this
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    Comment number 615.

    My German bosses have asked me to prepare a contingency plan in the event of a UK exit of the EU (on the back of a Eurosceptic drive for an in/out referendum). The likely outcome is a downsize of our UK opps, with job losses.
    Hopefully the plan will sit on the shelf gathering dust, but its an example of how DC spooked investors.

  • rate this
    0

    Comment number 614.

    ""612.Faux Geordie
    3 Minutes ago
    610 - "Our econ is very dependent of the ----------------in the global economy and so it must be protected." A glutton for punishment. They've taken £1TN of our money its not coming back and you want to protect THEM?""
    How true: Bonused £10 billion say profit £200 billion; profit @ 5% gives £4 trillion!!

  • rate this
    0

    Comment number 613.

    I'm really worried whether Mr Cameron ( or Mr Brown before him) really understands that Britain cannot feed itself (unlike France) and therefore needs to sell its goods. If we cut ourselves off from our main market, what hope is there? Sell to the colonies? And why was R Murdoch entertained at No 10 in July 2011? Was it to dictate our policy towards the EU?

  • rate this
    0

    Comment number 612.

    610 - "Our econ is very dependent of the financial services and related sectors. it is the only hand we have left in the global economy and so it must be protected." A glutton for punishment. They've taken £1TN of our money its not coming back and you want to protect THEM?

    607 - Oh yes the 'silent majority' nonsense fools always trot out. Go ahead and fascinate us with these mythical industries

  • rate this
    0

    Comment number 611.

    What is camerons plan to get people back to work making 16 to 24 year olds go on a government scheme will not help in the long term.People need jobs and every move cameron is making is putting jobs at risk.He should stop trying to please back benchers and london and put people first not the bankers

  • rate this
    +1

    Comment number 610.

    The BBC is so biased on this issue. Their coverage rarely explains the detail of why David Cameron had to use the veto. Britain (Unlike Germany and France) is NOT a manufacturing country. Our economy is very dependent of the financial services and related sectors. To throw this away would make us sitting ducks - it is the only hand we have left in the global economy and so it must be protected.

  • rate this
    0

    Comment number 609.

    The City and Financial Secctor do business on a global scale, much of it with europe. I am therefore at a loss to understand how Camerons veto can protect them. If legislation is passed on inter EU transactions (Now without any input from us) I do not see what protection we will have.

  • rate this
    0

    Comment number 608.

    @MrJimMorrison - I suggest you read the 600 odd comments on this article ...

  • rate this
    +1

    Comment number 607.

    and there are also businesses that don't want to be in the EU, or associated in the same way as not vetoing would have made us.

    Collectively they employ more people than these "big businesses".

    However the BBC has it's agenda in not reporting this...

  • rate this
    0

    Comment number 606.

    Cunning plan or cock up, possibly both? Should the government not be asked to publish the note circulated late to the summit which set out its ideas for a protocol on financial services safeguards for the UK? What exactly were we asking for? Could it have been ambiguous enough to look like a request for off-shore status, even under the internal market provisions of the current Treaty?.

  • rate this
    0

    Comment number 605.

    There's a lot of people saying Peston's report is one-sided, that both sides should be given equal space. The sides are not of equal value, and there are more than two sides anyway.

  • rate this
    0

    Comment number 604.

    David Cameron = disaster.

  • rate this
    0

    Comment number 603.

    We cant still trade with Europe with out being part of the EU political union . One of the reasons countries invest in Turkey is because its on the doorstep of the EU, but turkey is not an EU member

  • rate this
    0

    Comment number 602.

    Mr Peston does not do his homework, and seems to prefer tired old Europhile arguments. UNCTAD data shows inward investment 1990-2010 in non-EU Norway grew 13.9 times, in Switzerland 15.7 times, and in a really isolated island of Iceland 80 times, whereas in EU Germany it only grew by 6.06 times, in France by 10.3 times and in the UK by 5.3 times.

  • rate this
    0

    Comment number 601.

    Overseas manufacturers come here to assemble their products most of which are made overseas. Obviously it is easier to send components (e.g., for cars) than the finished article. I heard Dyson say on tv he went abroad because components were not available here!! It is also my experience in plumbing and electrical work - guess where they are made - you have it - China.

  • rate this
    +1

    Comment number 600.

    Dave goes to a negotiation as part of a group of 27, comes back empty handed and isolated, and claims he's done right by Britain. How can we possibly be better off now than we were before he went? How did he make such a mess of preparations that he ended up with no friends and no options? Inept doesn't even begin to describe his performance.

  • rate this
    0

    Comment number 599.

    The government is not there solely to aid big business...they should be big enough to stand on their own feet...

  • rate this
    0

    Comment number 598.

    "4.Andrew
    11th December 2011 - 17:50
    So Vince is signing up all the guilty men =======>"
    Most City transactions are making unearned money out of money via high speed cable links gambling in deriviives, currency and commodities doing untold damage to the worlds money supply.. There is only one fixed pot off gold generated by the real economy. Like giving free access to bank robbers

 

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