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Leaving EU would hurt the City, warns Barclays chairman John McFarlane

Mr McFarlane has urged Prime Minister, David Cameron, to hold a referendum sooner rather than later

Nick Goodway
Friday 15 January 2016 02:22 GMT
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Barclays was hit with a £72m fine for failing to carry out proper checks when a single client from the Middle East brought a £1.9bn deal into the bank
Barclays was hit with a £72m fine for failing to carry out proper checks when a single client from the Middle East brought a £1.9bn deal into the bank

Barclays’ chairman John McFarlane has warned that the City of London would end up in a “significantly worse” position if Britain votes to leave the European Union.

“Our opinion is that the City will be significantly worse” because “the rest of world wants Britain to remain in the EU,” Mr McFarlane said. “Foreign organisations use London as their main access to Europe, and we don’t know what the impact of withdrawal will be.”

His views were echoed by Sir Mike Rake, the chairman of BT and WorldPay and, until recently, Mr McFarlane’s deputy at Barclays.

“There has already been some loss of investment” and “there will be more if we start to get into a position where it looks serious that we might leave,” Sir Mike said.

Both men, speaking on Bloomberg Television, urged the Prime Minister, David Cameron, to hold a referendum sooner rather than later. Although Mr Cameron originally set a deadline of a vote by the end of 2017, it is looking more and more likely to come this summer.

“The one thing businesses can’t handle is uncertainty and this has brought a significant amount,” said Mr McFarlane, who was speaking in his capacity as chairman of the lobby group TheCityUK. “My own personal opinion is that there will be a successful negotiation that will probably be enough to get it over the line.”

Holding a vote early “would reduce the uncertainty,” he said.

Sir Mike said it would be “hugely regrettable” to leave the EU because it would lead to a minimum of two years of uncertainty. “There is no easy option to an alternative to the EU; all the options talked about come with costs.”

“We have had net significant investment in this country during this period of uncertainty because people are convinced common sense will prevail and we’ll stay,” he said.

“But there has already been some loss of investment, not huge, and there will be more if we start to get into a position where it looks serious that we might leave.”

Mr McFarlane said that an exit would lead to New York banks and investment businesses seeking to poach people and trade from London although, he added, the threat from Hong Kong and Singapore had somewhat reduced given the recent turmoil in Far East markets.

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