Sir Martin Sorrell, CEO of WPP, is in Davos along with lots of other movers and shakers (he likes the place, he met the current Lady Sorrell there) and, he, like lots of other UK business leaders is aghast at UK PM David Cameron’s plan to hold a referendum on the UK’s membership of the EU by 2017.
That’s assuming the Conservatives win the next election in 2015, which, with a bit of luck, they won’t.
Cameron plans to renegotiate the terms of Britain’s EU membership so that UK voters think it’s such a good idea that they vote to stay in. But the likes of France and Germany are likely to tell him to sod off, so he may find himself calling for an exit – a classic case of unintended consequences.
Cameron always looks as though he’s on top of things but this seems increasingly like a posh boy ex-PR man’s window dressing; in reality he doesn’t seem to have a clue – bending to whichever political wind is blowing strongest (in this case his Tea Party anti-Europe right wingers and UKIP).
Anyway SMS is not impressed. He says: “A referendum adds to uncertainty, it doesn’t diminish uncertainty. I understand the prime minister’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.”
And Sorrell is right to be worried. WPP has a bigger exposure to the UK and Europe than big rival Omnicom. Its research business Kantar is also being royally stuffed as European clients slash budgets. Omnicom, by contrast, is still primarily a US company and its big ad agencies there – BBDO, DDB and TBWA – will profit mightily as the US economy recovers faster than its rivals.