Brexit won’t sink the City, but that doesn’t mean it won’t do any damage

Outlook

The rival Out groups are competing to be named as the official campaign (AFP/Getty Images)

Businessmen tend to be wary of treading the boards on the political stage, and with good reason. There’s always a danger that they will be perceived as self-serving and a public that has little trust in big business might be inclined to do the opposite of what they say just to spite them.

John McFarlane’s intervention in the EU debate is, however, timely and welcome, coming as it did just a day after Leave.EU, one of the “out” campaigns, claimed that the City “everything to gain and nothing to fear” from a Brexit.

Arron Banks, the latter’s co-founder, accused his opponents of “spreading the myths that we are too small, too poor and too stupid to run our own country” arguing that the City will do just fine outside the EU.

But the point is, Mr McFarlane, speaking as chairman of TheCityUK, isn’t pretending that the financial centre will shrivel up and die outside of the EU. He doesn’t disagree that the City has powerful advantages over would be European rivals.

Mr McFarlane simply says that the City would be “significantly worse off” were it to operate outside the EU. It’s still attracting investment, as is the UK, but as ING’s James Knightley pointed out a year ago, the uncertainty created by the referendum is already causing problems.

That uncertainty will by amplified by an “out” vote because no-one’s entirely sure what a Britain outside of the EU will look like and how it will relate to its neighbours.

TheCityUK has produced a report making the case that the Britain’s membership of the EU drives innovation, productivity, and growth. That’s not to say that it wouldn’t like to see reform. It would.

But you would think Mr McFarlane, who is also chairman of Barclays, one of the world’s most important banks, ought to have a rather good handle on the economic arguments that voters have to weigh up. Ditto his old colleague Sir Mike Rake, who serves as the chairman of BT and has also been making the case for staying in.

They’re unequivocal. Britain’s economic interest is best served by us retaining our membership of the EU. With Chancellor George Osborne warning of a “cocktail of economic threats” facing this country, the best result for all of us would be an “in” vote in a referendum that should be held as quickly as possible.