Founder of FTSE 100 firm backs EU exit

Peter HargreavesImage copyright
Hargreaves Lansdown

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London would still be a financial centre if the UK leaves the EU, Peter Hargreaves says

The “unknown” of leaving the EU could help stimulate Britain, according to Hargreaves Lansdown co-founder Peter Hargreaves, who backs the UK’s withdrawal from the union.

He told the Today programme a fresh start could help Britain innovate.

Demand for UK fashion and cars, as well as the attractiveness of the UK as a market for the EU, would ensure good trade deals, he said.

The Stronger In campaign said the EU supported jobs, growth and low prices.

‘Great incentive’

Mr Hargreaves founded stockbroker Hargreaves Lansdown in 1981 with business partner Stephen Lansdown.

He stepped down from the board of the company last year, but still owns a stake of more than 30%, worth just under £2bn.

“I’m firmly convinced, that day – hopefully – we decide to leave, that little bit of insecurity, that little bit of unknown will be an absolute fillip to everyone,” said Mr Hargreaves.

“It will be a great incentive for us to go out and prove that it’s right.”

“When Singapore became independent from Malaysia, that little insecurity that they were no longer part of Malaysia, it was an inspiration,” he said. “I honestly think that would be good for us too.”

Mr Hargreaves said he was speaking on his own account and not for the company.

He said concerns about leaving the EU and the impact it would have on the financial sector, particularly in the City of London, were overblown.

“We raise money for the Russians; we raise money all over the world, for countries that are not in Europe,” he said. “They’ve got to use London. London can raise billions on a few phone calls.”

‘Just imagine’

He said bankers would not want to move to Paris or Frankfurt because of higher taxes, and London’s attractiveness as a place to live.

But Richard Reed, co-founder of Innocent Drinks and co-treasurer of the Stronger In campaign, said: “Being in the EU means British businesses like Innocent, the company I co-founded, can trade more freely – both with the EU itself and with the more than 50 other countries we have trade deals with through the EU.”

“That supports jobs, growth and low prices for Brits at home.”

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Singapore was spurred by independence, says Peter Hargreaves

Mr Hargreaves said demand for goods in and from the UK would spur quick and favourable trade deals, and the popularity of British fashion and brands such as Rolls-Royce and Jaguar would help the UK flourish after an exit.

“Can you imagine if they put up a trade barrier – and we would reciprocate immediately – just imagine the three phone calls [German Chancellor] Angela Merkel would get the following day, the chief executive of [Volkswagen], the chief executive of Mercedes and the chief executive of BMW.”

He said his main objection to the EU relates to rules and regulations. He added that the free trade element was “marvellous”.

Keeping 28 members happy made trade deals outside the EU cumbersome, he argued. The UK could look to the Commonwealth for more trade, free of prior deals that may favour other European nations.

‘Domestic risk’

His views contrast with those of many other business leaders. Earlier this week, Britain’s biggest business lobbying group, the CBI, said 80% of members questioned in a survey want to stay in the EU, although it declined to join a campaign to stay.

The Stronger In campaign’s Mr Reed said: “We’d be faced with having to first renegotiate a trade deal with the EU, then our trade partners we already have deals with now,” which would take “years” and would mean losing negotiating power within the bloc.

Earlier this month, the possibility of Britain leaving the EU was cited as the “biggest domestic risk to financial stability” in the short term by Bank of England governor Mark Carney, although he emphasised the Bank was not taking sides in the EU referendum.

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