Shore Capital founder: 'UK would be better off if we left the EU'

One of the City's best-known financiers has called for the UK to withdraw from the European Union, describing Brussels red tape as a "drain on the economy".

Howard Shore, the founder of City broker Shore Capital, said EU regulation was preventing small and medium sized firms from flourishing. The Tory party donor believes the UK economy would be stronger outside the 28-nation bloc.

"The most important reason that I think we should leave the EU is that even China is focusing its recent initiatives on deregulation to allow SMEs to grow more quickly. The reality is that if you want employment to grow, the true engine of employment growth is not large companies: it's SMEs. In order for them to grow they need a freer environment to hire people, to let people go.

"The number of regulations you need to go through to comply with your business is staggering – just look at construction. I'm sure we're able to work out health and safety regulations here without the EU telling us what to do."

Mr Shore is the latest City figure to call for an end to UK membership of the EU. Last month, Helena Morrissey chief executive of Newton Investment Management, did the same.

Mr Shore added: "Investors don't like over-regulated markets, there has to be a balance. You need regulation but if there is too much regulation, and particularly if there's uncertainty over future regulation, investors don't like it.

"There's no question that some of the world's largest investment banks are gravitating their business to the Far East. It doesn't mean they're closing here but they're increasing staffing in places like Dubai, Hong Kong and Singapore."