FDs get cold feet over euro.

A majority of finance directors of small and medium-sized businesses have marked the first anniversary of the euro by calling on the government to rule out abandoning the pound for the lifetime of the next parliament. This week’s Accountancy Age/Reed Accountancy Personnel Big Question survey shows hostility among SMEs has grown by over a quarter in the last six months. In July, 42% of company FDs asked, said the UK shouldn’t join the euro during the lifetime of the next parliament. This week, 55% of the 208 finance directors who responded said the UK should not join. The result represents a fresh blow to the government’s euro plans. Concerns from FDs include uncertainty over the strength of the euro and fears over possible interest rates and tax rate hikes on entry to Euroland. It follows the value of the euro plummeting below the US dollar and suggestions by Bank of England governor Eddie George 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 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.’ But 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 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 economic co-operation.’

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