Calls for EU referendum to take place as soon as possible

By Daniel Hunter

The 'in-out' referendum on the EU should take place as soon as possible, according to accountants ICAEW and Grant Thornton LLP.

The calls come as chartered accountants' joint study found business confidence to be flat with businesses expecting weaker profit and revenue growth over the next 12 months.

It comes after the governor of the Bank of England, Mark Carney, yesterday (Thursday) said the referendum should take place "as soon as necessary".

The EU referendum, promised by the Conservatives as part of their election manifesto, is due to take place by the end of 2017 - after Prime Minister David Cameron has tried to re-negotiate the UK's deal with the EU.

But there have been suggestions that it could happen sooner, and the ICAEW and Grant Thornton say that not bringing the referendum forward could create a state of prolonged downbeat business confidence.

Michael Izza, ICAEW Chief Executive, said: “The prolonged period of political and economic uncertainty has clearly had a material impact on business confidence in the last few months with investment, hiring, wage increases and exports all being on pause. With a clear majority, the incoming government now has to move quickly to get the UK economy moving forward again."

Mr Izza said the UK's first priority "should be to grow our exports" to rebalance the economy, with renegotiating the relationship with Europe the second priority.

"There is an increasing urgency to negotiating reform and holding a referendum. The risk is that, for the next two years, the UK is effectively closed to inward investment from countries within and outside the European Union. That’s why the Prime Minister must agree a package of reforms without delay and put that to the British people in a referendum as soon as is practically possible.” Mr Izza said.

Sacha Romanovitch, CEO-elect of Grant Thornton UK LLP, added: "Businesses at home and abroad tell us that they are concerned about a potential ‘Brexit’, particularly around talent flows and a captive market that still accounts for half of our export trade.

“A priority for the government must be to negotiate a package of reforms to our relationship with the EU to bring to the country. While it’s understandable that business confidence has stagnated given the run up to the election, now that is concluded we would hope that with clear action on Europe, skills and reducing regulation that business confidence will again improve.”