Richard Reed, co-founder of Jam Jar Investments, says access to the EU can benefit companies large and small. Simon Dawson / Bloomberg
Richard Reed, co-founder of Jam Jar Investments, says access to the EU can benefit companies large and small. Simon Dawson / Bloomberg

Brexit: Two sides to UK’s most important vote



Britain’s marriage to the European Union could be over in just eight days’ time, yet debate is still raging over whether a split will leave its economy for better, for worse, for richer or poorer.

The Brexit poll on June 23, in which citizens decide whether to remain in the EU, has been described as the most important vote Britons will ever cast.

The prime minister David Cameron has warned an exit would “put a bomb under our economy” – leading to weaker trade, recession and years of uncertainty. The Bank of England, the IMF, Barack Obama and numerous others echo the concerns over the economic impact.

Yet the “leave” camp insists Britain would be stronger if left to chart its own course, unimpeded by the EU, which campaigners claim costs Britain £350 million (Dh1.81 billion) a week – a figure that has been widely disputed.

One UK entrepreneur certainly believes that voting to remain is the right decision – not least because he owes his own union to the EU.

Richard Reed, the co-founder of smoothie brand Innocent, of which Coca-Cola took full control in 2013, says his partner relocated to the UK from her native Switzerland.

“I’ve only got a girlfriend because of the EU,” said Mr Reed.

“My girlfriend is a wonderful, very smart Swiss entrepreneur, who tried to set up her business in Geneva trading into the EU, but left to come to London because she found it to be such a faff to be on the outside of it, whilst trying to trade with it.

“So Switzerland’s loss, the UK economy’s gain. Because we’ve now got a new entrepreneur, now employing three people. And I stand the biggest win of all.”

Mr Reed was speaking at a Brexit debate at last week's World Trade Symposium in London, organised by the Financial Times and Misys Financial Software.

He described how the EU had helped him and his co-founders build Innocent, which started selling smoothies from a market stall in 1999 and grew to be valued at £320m by the time Coca-Cola bought its controlling stake.

He said Innocent employed 70 people when it only sold its smoothies in the UK. But when it started trading with 18 countries across Europe, this grew to 300.

Speaking to The National, Mr Reed – who is now co-founder of Jam Jar Investments, a venture capital fund that backs young entrepreneurs – explained how access to the EU can benefit companies large and small.

“You could either open a shop on a street that has 60 people that go by it, or open a shop on a street that has 500 people go by it. Which one are you going to want to do? Which one is going to allow you to do better business?

“The world’s economists are virtually universal in their independent recommendation that if we [want] to grow, and create, and have opportunity, we should stay ‘in’ … The majority of people saying we should come out [of Europe have] never done a day’s business in their life.”

Yet that is certainly not a view shared by all.

John Longworth, the chairman of the Vote Leave Business Council, was on the opposing side at the World Trade Symposium debate. Mr Longworth in March resigned as director general of the British Chambers of Commerce, one of the UK’s biggest business groups, after being suspended for expressing his support for a British exit from the EU.

Despite Mr Reed’s assertions, Mr Longworth says he has “done business in every continent”, and co-founded SVA, a science and technology business he says now employs over 300 people.

“The fact is that the European Union has been a disaster for working people in the UK. [It has] had a downward pressure on wages, there’s no incentive to train people because of an unlimited supply of cheap labour, and there’s no incentive to invest,” Mr Longworth said.

A key argument about the benefits of EU membership is its international trade agreements.

Roberto Azevêdo, the director general of the World Trade Organization, said that – if a Brexit happened – the UK would need to renegotiate deals with 58 countries to enjoy the same preferential access.

“Trade negotiations are highly complex; conducting multiple negotiations simultaneously would bring a further level of complexity,” he told the World Trade Symposium.

“In the meantime, while trade would continue, it could be on worse terms. Most likely it would cost more for the UK to trade with the same markets – therefore damaging the competitiveness of UK companies … UK exporters would risk having to pay up to £5.6 billion each year in duty on their exports.”

But Liam Fox MP, a member of the Vote Leave Campaign Committee, and former Cabinet minister in the UK, said that the EU is far from being key to Britain’s success in international trade.

"Most of the world trades without bilateral trade agreements. Britain's biggest single trading partner is the United States; we don't have a bilateral agreement with the United States," he told The National.

But the looming Brexit vote has already hit the pound, and HSBC in February warned that sterling could lose an additional 15 to 20 per cent of its value against the dollar should Britain leave the EU. HSBC itself warned it could shift 1,000 investment banking jobs from London to Paris in the event of a Brexit.

Despite this, Mr Longworth said the financial services industry would thrive if the UK left.

“Banking and financial services generally have been burdened by a huge amount of regulation from the European Union, which we could get rid of some of,” he said. “We can make the UK the best place to do business in financial services in the world.”

But Lucy Thomas, deputy director of Britain Stronger in Europe, the official “remain” campaign, pointed to the advantages of European “passporting” rights, which allow financial firms authorised in Britain to conduct business in all EU countries.

“London is the global banking capital, financial services capital. And a large part of that is multinationals based here in order to access the single market,” said Ms Thomas. “These banks … have all been incredibly clear that they are making contingency plans in order to relocate.”

But Tim Martin, founder of the UK pub chain JD Wetherspoon – another speaker at the World Trade Symposium – argued that the central decisions taken by Europe amount to an erosion of democracy. And democracy, he said, trumps any trade deal.

“It’s always democracy which produces economic progress,” said Mr Martin. “Did anyone ever tell you that Japan’s rise from rubble in 1945, over 25 or 30 years, was due to a trading agreement?”

And even if Britain does divorce Europe on June 23, as Mr Martin wants, ties with the continent – trade or otherwise – need not be broken altogether.

“[It’s not] about having a girlfriend from France,” said Mr Martin. “I had one of those before the EU.”

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