City chiefs say UK must stay in 'reformed' EU

City leaders have called for Britain to remain a part of the European Union but insisted that the 28-member bloc must be reformed.

Ahead of a likely referendum on the issue after the next election, chief executives, chairmen, directors and partners across the Square Mile have warned that an exit from the EU would damage the economy.

In a survey of more than 100 business leaders, 84 per cent said they wanted the UK to remain within the EU and 90 per cent agreed that it helps domestic businesses compete with rivals across the world.

However, the research by TheCityUK, an organisation that promotes Britain's financial services industry, also underlined the desire for reform. Some 65 per cent of those surveyed believe regulatory change is needed while 56 per cent view the volume of red tape in Europe as one of their biggest hurdles.

James Nixon, the chief economist at TheCityUK, said: "The growth in financial and related professional services in this country over the last two decades is closely linked to the UK's membership of the EU. The attractiveness of the UK as the 'gateway to Europe' means the UK enjoys very significant net inflows of foreign direct investment.

"Our research has shown the benefits of EU membership are numerous for our respondents, not least in the gains we make from trade, increased competition and by providing access to the world's largest market."

The survey also explored the benefits of EU membership, as perceived by companies. Ease of access to customers, a single regulatory framework for financial services and cross-border trading were named as the most significant reasons by the respondents.

Chris Cummings, the chief executive of TheCityUK, added: "We know from our wider public opinion research that matters of immigration and youth unemployment are far more pressing in voters' minds than EU reform. However, it will be voters across the country that will decide the outcome of any referendum."