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.


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.


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

    Comment number 17.

    Dear Mr Peston, surely our relationship to the biggest market in the world could be satisfied by a free trade agreement? There are other countries that have such an agreement with the EU, and are not troubled by not being able to influence its own internal policies. And a free trade agreement would be guaranteed by all signatories to the WTO, so the EU could not refuse the UK.

  • rate this

    Comment number 16.

    I wouldn't take any notice ob Cable, he's a has been that never was to start with, virtually all of his comments attract derision. Cables only interest is to attract foreign business and workers into the UK with incentives (tax, government loans, rent free etc) why not help genuine British business with the same incentives - or do we come from the wrong country?

  • rate this

    Comment number 15.

    A good result for the UK. The rest of the EU and Euro zone is going to unravel big time in the next few months. We are well out of it!

  • rate this

    Comment number 14.

    It'll be interesting to hear what Cameron has to say tomorrow and how the markets react having had time to reflect on the non-agreement which was agreed by the 26.

    By all accounts the British 'demands' were not unreasonable so the question is why have the French (& others) pushed Cameron into a corner and forced him to use the veto. There was no prospect of the UK passing a referendum.

  • rate this

    Comment number 13.

    I'm tired of hearing comments declaring that the majority want to leave Europe.

    The question is – how do we deal with a system which involves a whole lot of dependency and interlinking of economies?

    European power might be corrupt – but running away isn’t going to help. Change needs to be embraced. Even if we want things to return to what they were (before globalisation) – they can’t.

  • rate this

    Comment number 12.

    If there is to be a two speed Europe who's to say that the UK won't be in the fast lane and the other 26 countries held back by too much bureaucracy. We can alter our regulations at will to encourage investment by foreign owned companies and banks and one hopes eventually we will withdraw totally from the EU.

  • rate this

    Comment number 11.

    In reply to pay row- the reporting on this whole affair by the NBC has been woeful and so selective it's untrue. What about all the business leaders who agree with Cameron? What about the valid points made by John redwood? All immediately ignored by the bbc as usual. Shameful anti conservative bias doesn't begin to tell the story

  • rate this

    Comment number 10.

    Hang on, we elected them, most of us want that elusive referendum, are you saying we were/are wrong? Vince resigning sounds about as likely as a British PM using his veto. Interesting times.

  • rate this

    Comment number 9.

    I totally disagree with the comment above. The majority of our people arn't stupid, it's just that they have been drip fed this nationalist posion by the like of the Sun, Mail ane Express.

    Once a balanced debate is held and what at stake is explained, I think you will find a huge back lash against the Tory right.

    There behaviour is becoming as bizzar as the tea party in America.

  • rate this

    Comment number 8.

    David Cameron is inexperienced and incompetent. He's embarrassed Britain with this blunder.

  • rate this

    Comment number 7.

    There is along way to go before this plays out. The Eurozone is very unlikely to survive in its current configuration. To spring a fundamental proposal for fiscal union that doesn't address the immediate crisis, without any democratic mandate from their electorates indicates the inadequacy of the main Eurozone politicians. How many will survive the next year? The veto may prove to be astute.

  • rate this

    Comment number 6.

    Just maybe Cameron fully expects the euro to fall o it's sword. If that is the case who will be the ones wih egg on their faces ?

    Cameron who kept us well out of the whole mess or Merkozy who's lack of immagination to really deal with it untimately killed it.

    It could go either way, hero or Zero

  • rate this

    Comment number 5.

    Would this be the same 'big business' which are akin to 'the markets' who seem to have the power to topple democratic governments and hold entire nations to ransom?

    Something has seriously gone wrong when elected officials fear financial institutions and the destruction they threaten on the electorate.

    'Banking establishments are more dangerous than standing armies'; Thomas Jefferson

  • rate this

    Comment number 4.

    So Vince is signing up all the guilty men who would have had us in the Euro to scare us again. As we watch the Eurozone crash into the brick wall we can be thankful that we are on the outside. We will continue to be an attractive home for foreign firms if we free ourselves from these terrible EU regulations and orientate to the world outside Europe which still has a future.

  • rate this

    Comment number 3.

    THe reporting on this topic has been so biased to the big city etc. The majority of the country want a trading agreement or removal from the EU. Why has not been highlighted anywhere this the case.

    I think we should concentrate on trading with the world. If the Germans don't want to sell BMWs to us buy Japanese, generally cheaper and more reliable anyway

  • rate this

    Comment number 2.

    No, he is elected to do what is right for Britain - not just what the public wants. He is in a position to have the facts, and (along with advisors) clever enought to disseminate these and make the right decision - rather than the popular one.

  • rate this

    Comment number 1.

    If we'd been in the Euro we'd be in a mess with the rest. If we'd signed up to this we'd have less say over our own economics.

    Being out of Europe has it's advantages too. I wish the reporting on this topic would be more balanced.

    Besides, the majority of the UK agree with Cameron on this. He is elected to represent the views of the British people and that's exactly what he's done.


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