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UK can exist outside EU - JCB chief

Published 18/05/2015

JCB has been helped by a construction boom in the UK
JCB has been helped by a construction boom in the UK

The boss of building equipment firm JCB has backed the idea of Britain leaving the European Union, saying the country could exist "peacefully and sensibly" on its own.

Lord Bamford's comments to the BBC - which are at odds with sentiments expressed by a number of other business leaders - come after Prime Minister David Cameron pledged to hold an in/out referendum on membership by the end of 2017.

The remarks came as the family-held firm posted annual earnings for 2014 down 3.2% to £303 million as revenues slipped 6.3% to £2.5 billion.

Lord Bamford, a Tory donor, told BBC Midlands Today: "We are the fifth or sixth largest economy in the world. We could exist on our own - peacefully and sensibly."

He said an exit would enable the UK to "negotiate as our country rather than being one of 28 nations".

JCB chief executive Graeme Macdonald told a newspaper that Britain should leave the EU unless it reforms, playing down fears that an exit could hit exports to the Continent.

He told the Guardian: "I really don't think it would make a blind bit of difference to trade with Europe (if the UK left an unreformed EU).

"There has been far too much scaremongering about things like jobs. I don't think it's in anyone's interest to stop trade. I don't think we or Brussels will put up trade barriers."

He said red tape and bureaucracy must be reduced, describing some of it as costly and "quite frankly ridiculous".

"Whether that means renegotiating or exiting, I don't think it can carry on as it is. It's a burden on our business and it's easier selling to North America than to Europe sometimes," Mr Macdonald said.

The comments are at odds with those of some other business leaders.

Following the Tory election victory, CBI director-general John Cridland said: "The majority of businesses want to stay in a reformed European Union which opens up the world's largest market of 500 million consumers."

In March, Sir Martin Sorrell, boss of advertising giant WPP, warned of the uncertainty that could be created in a run-up to a referendum, citing the importance of trade with Europe.

He said: "Reform it from within. It would be best to be inside the tent rather than outside the tent."

JCB's annual results showed the effect of slowing economies, lower oil prices and geopolitical unrest in developing nations were partly offset by a construction boom in the UK.

The 69-year-old Staffordshire-based firm said the construction equipment market in Brazil dropped by 17% last year, Russia fell by 27%, India by almost 15% and China by 17%. Markets in the UK jumped by 30% and lifted by 13% in the US.

Lord Bamford said: "For different reasons each of the Bric markets - of Brazil, Russia, India and China - were sharply down in 2014.

"However, the broad spread of our business enabled us to benefit from better conditions in North America, Western Europe and particularly the UK."

The firm, which employs 12,500 staff, sells heavy digging machines in more than 120 countries.

Lord Bamford added: "Global market uncertainty has continued into 2015, though our home market of the UK remains a rare bright spot."

The business said it had created 2,000 jobs at its 11 UK plants since 2010, adding that it was currently increasing production capacity at its head office complex in Staffordshire.

It is also building a new 25 million euro (£18 million) head office site at its German business, and last year it opened a 70,000 sq ft factory in Jaipur in India which cost £62 million.

JCB said Europe - including Russia but excluding the UK - accounted for 29% of its business.

Today's remarks were seized upon by campaign group Business For Britain, which said the intervention showed business was split on the EU.

Chief executive Matthew Elliott said: "Real business leaders and entrepreneurs are not slavish to the European project - they recognise that either sticking with the status quo or accepting piecemeal reforms would be the worst of all worlds for Britain.

"Polling shows that business leaders want a looser, trade-based relationship with the EU, including the ability to move forward quickly with free trade deals with the rest of the world.

"It's vital that those involved in the renegotiation process recognise that they have a strong mandate from the general election to secure these fundamental reforms. The Prime Minister is in a very strong position in these negotiations."

But Chuka Umunna, the shadow business secretary who last week withdrew from a Labour leadership bid, wrote on Twitter: "JCB doesn't speak for UK business on the EU. Of course we must reform it but ... many others say we must stay in."

Ukip industry spokesman and MEP Roger Helmer said: "This blows out of the water the commonly-held assertion that the UK needs to be in the EU to trade internationally when quite the contrary is true.

"As an example of a big player and a globally-trading UK business, JCB demonstrates that we should be looking beyond the limiting, outmoded Eurocentric model and freeing ourselves from regulation to do business around the world.

"He is absolutely right to remind everyone that the UK is the sixth-largest global economy and can exist, indeed thrive, beyond the shackles of Brussels and must seek to do so in order to be future-proof and to prosper.

"JCB is one of the most prominent companies to support British exit, but it should be borne in mind that under the banner of Business for Britain, many other big companies have come out against ongoing membership of the EU."

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