12 May 2015

Sajid Javid brushes aside business concerns over EU referendum

Sajid Javid, the new Business Secretary appeared to dismiss business concerns over a potential Brexit, saying the most important thing was to press ahead with a renegotiation and an in/out referendum.

Speaking to Channel 4 News he said he would listen “very carefully” to what business has to say but added: “There’s no point in having a referendum for any government if you’re worried about the outcome. So I think that the important thing is that we go ahead, renegotiate with our partners and then whatever the outcome of the renegotiation, we then have that referendum, a simple in/out referendum and let the British people decide.”

Read more: Who is Sajid Javid, high-flying ‘Muslim heir to Maggie’?

British bosses including Sir Martin Sorrell of WPP and BAE Chairman Roger Carr have said the uncertainty around an EU referendum would be damaging for the UK economy, given a referendum is not due to take place until sometime before the end of 2017. Others have said Britain pulling out of the EU could result in higher tariffs, more stringent regulation and restricted access to vital labour markets.

When asked if he accepted those concerns, Mr Javid surprisingly turned the tables, saying it was business themselves who were pushing for the referendum. “One thing that they have talked about for many, many years and before we committed to have this referendum, is the whole issue of uncertainty around the EU. And I think what businesses want to see is an end to that uncertainty. And that’s what this referendum will bring about.”

His tough reaction may surprise some chief executives who were probably hoping an incoming business secretary, himself the son of a Pakistani immigrant, might be more sympathetic to their cause. Yet when asked several times whether he understood business concerns that uncertainty and Brexit could hurt the UK economy, Mr Javid declined to address the issue head on.

David Cameron has wasted no time this week in placing Britain’s renegotiation with Europe at the top of his agenda. Mr Javid said those negotiations would begin immediately and George Osborne, the Chancellor, is likely to raise the matter when he meets Europe’s finance ministers in Brussels today.

EU leaders say they welcome talks about changing Britain’s relationship with Europe but they will stop short of any wholesale treaty change.

Business lobby groups are pressing the government to crack on with the negotiations and potentially bring forward the date of the referendum, to 2016, to bring an end to the uncertainty which they fear could deter businesses from investing. And there is already some evidence that businesses are putting a lid on spending until the outcome is more certain.

Mr Javid reiterated the aim to have a referendum before the end of 2017 but signalled it could be brought forward. “But clearly as those negotiations commence we can then decide an actual date,” he said.

Asked what would happen if those negotiations do not prove successful, Mr Javid said that should not stand in the way of a giving Britain a say.

“I am very confident the Prime Minister can get what he wants but regardless of whether we are ultimately successful or not there will still be a referendum. This isn’t predicated on what the outcome of the renegotiation is.”

Follow @siobhankennedyC4 on Twitter

Tweets by @siobhankennedy4