Reform EU or let’s quit, City critic urges Tories

Helena Morrissey, the chief executive of Newton Investment Management, said that Britain would be capable of negotiating its own free trade deals internationally if it left the European Union and would be “taken very seriously”, reports The Times.

David Cameron’s aim of rolling back EU laws to give Britain more autonomy over the economy would be helpful, Ms Morrissey said, but she added: “I can’t see that we’re going to get what we really need.”

Europe will be a key issue at the Conservative Party conference this week, when the business world will want to hear more details about the concessions the government believes it can win from Brussels and the progress it is making in achieving them.

It also emerged that the Prudential, Britain’s biggest insurer, is to look again at relocating its headquarters outside the EU in the light of onerous solvency rules that come into effect in January.

The Pru, which looked at a move in both 2009 and 2012, is thought likely to consider Hong Kong and Singapore as potential new corporate homes.

Europe is regarded as among the most important issues by many businesses on both sides of the membership debate before the referendum, which will be held by 2017. Ms Morrissey is a member of the advisory council to Business for Britain, which is campaigning for radical change to European law or exit from the EU. Other figures linked to the group are Oliver Hemsley, the chief executive of Numis, a broker, Sir Michael Hintze, the chief executive of CQS, a hedge fund, and Sir John Ritblat, the former chairman of British Land.

Luke Johnson, the veteran entrepreneur, told a City gathering of pro and anti-Europeans last week that he favoured staying in the union with “significant renegotiation”. However, he added that “if we have to leave the EU we would prosper” and that the UK would remain a hub for international business because of its legal system, professional services, time zone, entrepreneurialism and language.

In contrast, a senior banker from a big international bank said that Britain was “having its cake and eating it” by being a member of the world’s largest single market, while also having a prominent place on the world stage.

One contentious issue is the attempt by countries including Germany and France to impose on Britain the tax on stock and bond trading that has been in the pipeline since 2011.

A financial transaction tax was proposed after the financial crisis as a way to force banks to pay back some of the multibillion-pound aid packages they received and to try to curb excessive risky trading. Critics in Britain argue that the City would suffer disproportionately as the world’s second-largest financial centre after New York.

It looked as if 11 countries that backed the tax had agreed to impose it among themselves, but last month Wolfgang Schäuble, the German finance minister, said that other countries should be included. That led to demands that the Treasury prepare a new attempt to keep Britain out of the initiative. Its legal challenge to the tax failed last year.

Ms Morrissey said that the tax illustrated the problem of being in the EU. “We delegate power to other countries and they don’t necessarily have our best interests at heart,” she said.