Britain's business leaders sympathise with the political pressures on David Cameron over Europe but warned the prime minister on Wednesday that he needed to tackle the uncertainty caused by the promise of an in-out referendum in 2017.
Executives at the World Economic Forum in Davos responded cautiously to Cameron's long-awaited speech, expressing concerns – but not widespread alarm.
Sir Martin Sorrell, chief executive of the multinational advertising company WPP, was among the most anxious, identifying the possibility of Britain leaving the European Union as one of the five major threats to the global economy as it struggles to emerge from financial crisis, recession and a half-decade of weak growth.
Sorrell said there were a number of "black and grey swans" – hidden or half-hidden risks – that could derail an already tentative recovery. He warned that the promise of a referendum in 2017 would make businesses less likely to invest.
"A referendum adds to uncertainty – it doesn't diminish uncertainty," Sorrell said. "I understand the PM's predicament. But a referendum creates more uncertainty and we don't need that. This is a political decision, not an economic decision. If I am looking at it from WPP, it isn't good news."
Sorrell fears Britain could "say no and move out at precisely the wrong time", when the tough measures being taken by the eurozone are bearing fruit.
Peter Sands, chief executive of Standard Chartered bank, told Bloomberg TV: "My feeling is that the UK needs to remain part of the EU. I completely understand why prime minister Cameron thought it necessary to offer the people a referendum. Europe is changing, and as the biggest country in Europe outside the eurozone, the UK's relationship with the eurozone is going to change."
He added: "The European Union has been a massively important creation within Europe. It is very good for the UK to be part of it. It will evolve. We have seen that already in the eurozone. It is changing quite markedly. It is not a bad thing to have the evolution, debates and questions." Sands said he thought it unlikely a referendum would lead to the UK leaving the EU.
However, Ian Cheshire, chief executive of Kingfisher, which owns DIY chain B&Q and its equivalent in France, Castorama, said he supported the idea of a referendum that he hoped would "put this to bed".
"It is a good step forward. The prime minister is trying to shape the agenda rather than things happening as a result of drift and by default," he said.
Cheshire was one of 55 business figures who signed a letter to the Times welcoming Cameron's move as "a European policy that will be good for business and good for good jobs in Britain."
Others included Samir Brikho, chief executive of engineering firm Amec; Sir John Peace, chairman of fashion firm Burberry and Standard Chartered; Paul Walsh, chief executive of drinks group Diageo; Sir Simon Robertson, chairman of Rolls-Royce; Lord Wolfson, chief executive of Next; and John Nelson, chairman of the Lloyd's of London insurance market and property developer Hammerson.
The CBI, mindful of the fact that its membership has widely different views about Europe, is adopting a cautious approach to Cameron's speech.
Sir Roger Carr, the president of the CBI and chairman of the energy firm Centrica, said: "The tone, the style and the emphasis of the speech, which was positive about European membership, was good news.
"But the referendum builds in a degree of uncertainty and business never welcomes uncertainty. Managing that change is something business and government has to do. We have to demonstrate to our partners in Europe that this is a positive approach and that we making changes for everybody's benefit in Europe in terms of greater competitiveness and higher productivity."
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