Katja Hall is chief policy director at the CBI
Current economic conditions in the Eurozone have brought into sharp focus a historic unease in the UK with aspects of our membership of the European Union, including amongst some commentators on the pages of Conservative Home. The Prime Minister’s speech in January offering an In/Out referendum has put a question mark over UK membership, with some in the UK now advocating straight-out withdrawal.
While the offering of a referendum is properly a constitutional matter for government, for British business the answer to the question itself is unequivocal – we must remain a member of a reformed EU. This answer is not rooted in the benefits of membership we’ve had in the past; instead, it is founded on the notion that the opportunities of the future will require the UK to be engaged and influential in the world.
The CBI’s flagship report, Our Global Future: the business vision for a reformed EU, published today, sets out the business case for why EU membership is the best vehicle for achieving these open, global ambitions in the 21st century. We want to encourage as much debate as possible within and between the parties to ensure that the choices we make as a country are based on facts and evidence.
An embrace of ‘openness’ – to trade and people, to investment and ideas from abroad – has long been the foundation of Britain’s success throughout its history. But the world is changing, and the rise of emerging markets mean that opportunities for Britain to strengthen its role as a trading nation now lie in all corners of the globe. The growing complexity of the global economy means that, for business, being successful is rarely achieved through independent and unilateral action. Economies and businesses from across the globe are increasingly inter-connected, as goods, services, finance and people – not to mention knowledge and ideas – cross borders ever more rapidly.
Three-quarters of CBI members – of all sizes and sectors – say that the creation of a Single Market of 500 million consumers has had a positive impact on their business, not to mention the investment this brings from around the world and its contribution to making the UK the world’s leading financial centre. In addition, the EU has signed free trade deals with nearly 50 partners, giving the UK access to £15 trillion-worth of markets, and is now working towards opening up markets which would double that figure. All this has directly boosted the living standards of UK citizens, with our research suggesting that EU membership adds 4-5 per cent to GDP – that means the average person is £1,225 better off every year as a result of being ‘in’. And, as Our Global Future sets out, no alternative option would come close to matching this balance of benefits or offer greater influence for the UK.
But – to state the obvious – the EU is far from perfect. Too often, EU rules are poorly thought out or involve costs that are disproportionate to the benefits they seek to achieve. More importantly, the EU’s authority seems to be creeping into areas and issues where it has no business being. The EU must refocus on its core task: helping European economies and governments to co-ordinate with each other, where necessary, to boost jobs and growth across the Continent.
To do this best, the EU must reform and renew its priorities and purpose to keep pace with increasingly competitive international rivals. It must be outward-looking, signing more trade deals and breaking down trade barriers. It needs to update the Single Market for the 21st century and change its regulatory approach to drive European competitiveness. It should take the steps needed to save the Eurozone, but must safeguard the Single Market for those outside the Euro at the same time. The EU of tomorrow must continue to work for all its member states, with the right balance of power and division of tasks struck between the Commission, Parliament and all 28 member states, but this must be agreed across Europe, not as a special deal for the UK.
To achieve this, the British government must reform how it engages with the EU by strengthening links with other member states and getting more Brits into key European institutions to increase our influence in Europe further. Because influence through engagement is what creates the conditions in which business has to operate, however unglamorous the nuts and bolts of policymaking may be.
This reform agenda is achievable and can help put the EU on a path to sustainable growth and global competitiveness. But it is one we must shape from inside the EU. That is why eight out of ten CBI members, large and small, would vote to stay in the EU if there was a referendum – because they believe EU membership must continue to be the cornerstone of our international engagement as we look to realise our global future.
Read the full report at: www.cbi.org.uk/global-future