PracticeConsultingFDs grow cold over euro: hostility to single currency leaps 25% on first anniversary

FDs grow cold over euro: hostility to single currency leaps 25% on first anniversary

Finance directors of small and medium-sized businesses have marked the first anniversary of the euro by calling on the government to rule out any move to abandon the pound for the lifetime of the next parliament.

This week’s Accountancy Age/Reed Accountancy Personnel Big Question survey of attitudes to the single European currency shows that hostility among SMEs has grown by a quarter in the last six months.

In July, 42% of company FDs asked said the UK should not join the euro during the lifetime of the next parliament.

But this week 55% of the 208 finance directors who responded said the UK should not join the euro in the next parliament.

The result represents the latest in a series of blows to government plans to move into the eurozone.

Concerns for FDs include the uncertainty over the strength of the euro – which has fallen by almost 15% against the US dollar since it was launched in January 1999 – and fears that interest rates and taxes would rise following entry to euroland.

It also follows suggestions by Bank of England governor Eddie George late last year that the UK could survive outside the eurozone.

‘I am yet to see a benefit. Joining the euro will not affect export,’ said Philip Newton-Webb of Romsey-based structural engineers, Premier Structures.

The result was seized upon by the Conservative Party and shadow chancellor Francis Maude, who is against joining the euro for the lifetime of the next parliament.

He told Accountancy Age: ‘It is clear that there is less and less support among business people for the government’s commitment in principle to scrap the pound.’

Deputy leader of the pro-euro Conservative party, Brendan Connelly, admitted the views of SME FDs reflected those of the electorate, but added: ‘It is a pity publicity centred on the external value of the euro has made an impression on people.

‘At the same time the government isn’t putting forward positive messages regarding the euro. These views are unpopular with the electorate at the moment.’

However, 35% of FDs backed the new currency.

Mark Wellby of educational charity The British Academy, added: ‘The UK’s future lies in being an integrated partner in Europe, a full member of the club. A common currency is essential to proper economic co-operation.’

The euro a year on: Should the UK be in or out?

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