City 'support for EU based on resignation, not enthusiasm'

City of London professionals would vote to stay in the EU, even though many believe the European Commission is "hostile" to UK financial community interests, according to think-tank research.

"Support for the EU is based on resignation rather than enthusiasm," said Andrew Hilton, director of the Centre for the Study of Financial Innovation. "The City is scared of the implications of an 'out' vote and about its vulnerability if the UK chooses to go it alone."

The CSFI interviewed 408 London-based executives from the financial services sector, including bankers, investment managers and economists. While nearly three-quarters of respondents said they would either "definitely" or "probably'" vote to stay in the EU, 42 per cent said the commission was "hostile" to City interests. Only 16 per cent felt it supported City interests.

Younger City executives were more pro-Europe than their elders. Four-fifths of those aged 18 to 30 said they would definitely, or probably, vote to stay in, compared with two-thirds of over-60s.

Mr Hilton said, although the research showed City professionals wanted to remain in the EU, this was primarily because of concern about the financial community's future in the event of a British exit (Brexit).

If the UK remained in the union, respondents also expressed concerns over regulation, declining competitiveness, the EU's poor growth prospects and the possibility of Britain's influence diminishing within the bloc.

Two-thirds of respondents said the UK "gold-plated" EU legislation, putting the country's companies at a competitive disadvantage, and 62 per cent said Britain's MEPs did not fight hard enough in support of the City. More than half of respondents, 58 per cent, did not believe that the UK would be able to negotiate satisfactory City access to other European markets if Britain left the EU.

"If there is to be a referendum [on membership] it would be in the Tories' interest to hold it as soon as possible, rather than to delay," Mr Hilton said. "At the moment, the City is overwhelmingly pro-European."

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The CSFI is an independent not-for-profit think-tank, established in 1993. It recently organised one of a series of meetings in the City for the financial services spokesperson of the UK Independence party, Steven Woolfe, designed to dilute the hostility that the group has faced from some British businesses.

Many in the City are torn in their traditional loyalty to the Conservatives because of the Tory pledge for a referendum on EU membership.

Interviews with the FT City Network, which groups together more than 60 leaders from London's finance and business community, suggest that most of the financial services industry is convinced that leaving the EU would undermine the UK economy.

A survey by Populus this month said 39 per cent of the British public were in favour of leaving the EU, against 40 per cent wanting to stay.

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