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EU Vote: Lloyd's Of London Boss Warns Over Exit

EU Vote: Lloyd's Of London Boss Warns Over Exit

Qutting the EU would be "bad for business", Lloyd's of London chief executive Inga Beale has warned as the Government confirmed plans for an in/out referendum.

Her intervention came as a leading accountancy firm said the UK's pole position in Europe for inward investment would be threatened by the public vote.

The European Union Referendum Bill, contained in the Queen's Speech, will pave the way for David Cameron to deliver on his key pledge to hold a referendum on Britain's membership of the EU.

It will commit the Government to holding the vote before the end of 2017, although expectations are growing the vote will take place next year.

Asked about a UK decision to leave the EU at a meeting in Luxembourg, Ms Beale said: "We believe it would be bad for business.

"We think that open trade and being part of a bigger community is very important."

Meanwhile, EY said the uncertainty caused by the in/out vote would be "disruptive" and risked its lead as the top destination for foreign investors.

Nearly a third of investors surveyed said they would either cut or freeze planned investments up to 2017, according to EY's UK Attractiveness Report.

However, they were clear that EU reform was needed, the research found.

The EY report said the UK retained its leading position in Europe in 2014, recording 887 foreign direct investment projects (FDI) - the largest number secured in more than a decade.

This represents an 11% increase on 2013.

It also found the UK increased its market share of all European projects last year to 20.4%, its highest level since 2009, pulling away from Germany - the second most attractive destination for FDI in Europe.

Steve Varley, EY chairman and managing partner in UK & Ireland, said: "Global investors have a strong perception of the UK as an attractive place to do business.

"The relatively positive economic news from the UK, compared with other European countries, the Government's efforts to foster FDI, and the UK's dynamic labour market are likely contributors.

"The message that Britain is 'open for business' is getting across loud and clear to many existing and potential investors worldwide, but new strategies need to be developed to stay ahead in such a competitive market."

But EY predicted the EU referendnum would lead to a slowdown in investments in the next two years.

The report stated: "The uncertainty caused by a UK EU Referendum will be disruptive and is a risk to the UK's FDI performance."

The research also found that while London remained the single most important location for FDI in the UK, attracting 381 projects last year, there was also renewed interest in the English regions as destinations for foreign investment.

The regional winners in 2014 were Yorkshire with a 140% increase in projects, South East England (up 49%) and the West Midlands (up 38%).

Scotland was the second most attractive location in the UK for global investors to London, recording 80 projects.

Mark Gregory, EY's chief economist, said: "There are signs that the UK economy is rebalancing with global investors favouring locations outside of the capital, which is good news for the UK's overall future performance.

"To maintain its position as Europe's number one destination for inward investment, the UK must broaden its appeal outside of London."