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November 6, 2012 10:59 pm
From Mr Andrew Fraser.
Sir, Your report on the BBC weekend interview with Iain Duncan Smith (“Senior Tory sees shift in opinion on EU”, November 5) shows that he betrays an astonishing ignorance about the UK’s relationship economically with the rest of the EU. Coming from a member of the current cabinet, it is deeply dangerous.
Mr Duncan Smith’s claim that Britain is “more of a global trader than any other country in Europe” is quite simply wrong. He should compare our exports to China with those of Germany, and ask why we are no longer India’s largest trading partner in the EU? He should also be aware that we export more to Ireland than all the Bric countries combined. More than half of all our exports go to the rest of the EU. Does he really want to return to a world of tariff barriers between ourselves and our biggest trading partners?
More importantly, he should be aware that – almost uniquely among large economies – the UK is disproportionately dependent upon foreign direct investment, which accounts for about 50 per cent of our gross domestic product. Whole strategic industries such as automotive production are almost wholly dependent upon choices of location by foreign investors. More than 50 per cent of our gross exports are provided by those investors.
For six years (1994-2000) I served as the chief executive of the UK’s Inward Investment Agency. During that time the stock of investment in the UK more than doubled. I don’t recall a single instant when any investor was focused solely on the UK market: all were investing for access to the EU, the world’s largest market.
For Mr Duncan Smith to ignore these simple economic truths is to put literally millions of UK jobs at risk. Already, his comments will reduce the confidence of potential and current investors in the stability of the UK as a place to do business in Europe. He may choose to believe that he can win favour from the eurosceptic wing of his party. But he should be in no doubt that he is already doing serious damage to the UK’s future prosperity. Perhaps he should take a lesson from the devolution debate in the UK with regard to Scotland and acknowledge that – with full access to the single market – we are “better together”.
Andrew Fraser, London SW19, UK
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