Investors seek certainty when they are deciding where to put their money. As the UK prepares to go to the polls on June 23 for a referendum on membership of the EU, certainty is something that is severely lacking. In choosing to hold this referendum, which is currently creating much heated debate, the UK government has taken a big risk with the country’s enviable FDI record. For decades, the UK has consistently been a leading FDI performer, ranking number one in Europe and usually in the top three globally. I am not so sure the figures will be so impressive for this year.

The economic argument to stay in the EU is a no-brainer, particularly for the short to medium term. Anyone who is anyone in the world of international economics has been spelling out the significant economic downsides to leaving the EU single market. The IMF, the OECD, the Bank of England and the London School of Economics – to name just a few – have all predicted a negative outcome if the UK exits. International businesses investing in the UK have also been vocal, with names such as Airbus, Cisco, GE, Ford, Hitachi, IBM and Microsoft stating a preference for the UK to remain in the EU. These companies invested in the UK as a gateway to the European single market with zero-tariff access to 500 million people and free movement of labour and capital. It would be stupid for the UK to give away this gateway factor.

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If the UK did exit the EU, uncertainty would linger for several years, not least because trade agreements with multiple countries would have to be renegotiated, raising the possibility of higher trade costs for UK-based businesses. In addition, the UK would have no influence over EU regulations and requirements, putting it at a disadvantage. As a UK-based businessman involved in international trade, my hope is that we vote to remain.   

Douglas Clark is a director of Location Connections, consultants for economic development innovation. Email: douglas@locationconnections.com