Andy Bagnall is Campaigns Director at the CBI.
The UK’s future relationship with the EU is clearly a matter for the public to decide at the ballot box in June, but the CBI, like many other civil society organisations, has a role to play in the debate: providing clear evidence about the pros and cons for business and representing the views of our members who employ around a third of the private sector workforce.
The majority – but not all – of our member companies wish to remain within a reformed EU. We know this because our position was first formulated in 2013 following the biggest consultation and research project in the CBI’s 50 years. We spoke to hundreds of members though our regional councils and standing committees – our business parliament – and since then we’ve carried out over 100 further consultation events.
Recently, one number has been pored over, questioned and, in my eyes, misrepresented – our evaluation of the benefits of EU membership. In 2013, we concluded that current EU membership was worth 4-5 per cent of GDP per year, equivalent to up to £3,000 per household. We were clear at the time that this was our best judgement of the likely order of magnitude of the benefits of membership based on a literature review of the most credible research available. We’ve since updated that research, to include the most recent studies, and we stand by our original assessment. Based on 2014 GDP figures, we estimate the benefits of membership to be worth somewhere between £2700 and £3300 per household per year.
No one estimate of the costs and benefits of EU membership is comprehensive. It is undoubtedly difficult to quantify the exact value of the UK’s membership overall. The costs are more clear-cut because we pay a direct contribution each year. But the benefits that come from having one set of rules in a market of 28 countries and 500 million people, tariff-free trade, increased investment, improved access to talent and European-wide supply chains, are much harder to quantify. Nevertheless, the CBI has derived an aggregate estimate of the impact of each of these factors from the studies reviewed.
Contrary to claims, our research did in fact cover the work done by NIESR. We did not include the IoD study because it used a very similar methodology as a Civitas study – which we did include. We make no apologies for judging some studies as more credible than others if they did not use well-sourced data and employ a rigorous methodology with plausible assumptions.
What is clear is that the majority of credible evidence shows that the UK has benefitted in terms of jobs and economic growth by being inside the EU. You can’t blame the CBI for highlighting that.