CBI says single market is fundamental to British business, and EU membership benefits outweigh costs
Britain’s business lobby group will set out its “unequivocal” support for Britain staying in the European Union on Monday, claiming that membership brings each household some £3,000 a year.
The CBI said a poll of members around the country showed the vast majority wanted to remain part of the EU, subject to important reforms. At its annual conference in London, the group will stress that benefits such as easier access to export markets, both in Europe and further afield, easily outweigh the costs.
Presenting his “business vision for a reformed EU”, CBI director general John Cridland countered those calling for a so-called “Brexit” by stressing that being outside the world’s largest trading bloc would leave the UK isolated and without influence.
David Cameron has promised to put Britain’s EU membership to a vote in 2017. The referendum has caused huge controversy inside the Tory party, which is split between those MPs who are pushing the prime minister for a vote before the 2015 election and a faction led by the former chancellor Ken Clarke, who has described the vote as silly and reckless.
The CBI’s research could strengthen Cameron’s hand inside the Tory party, especially as it found that more than three-quarters of small and medium-sized businesses back staying inside the single market. Traditionally, polls have shown large majorities among large businesses for EU membership against a large no vote from smaller enterprises.
Cridland said: “We have looked beyond the political rhetoric to examine the pros and cons of EU membership and British business is unequivocal: the single market is fundamental to our future.”
The group’s conclusions credit membership of the bloc with giving Britain access to European markets of 500 million people, helping cement the UK as the world’s leading financial centre and attracting investment from around the world. It says that by aggregating research already available it has come up with a “conservative” estimate that the benefits amount to 4-5% of GDP, or as much as £78bn a year, making each household £3,000 better off.
But the group also outlines a number of frustrations. “The EU isn’t perfect and there is a growing unease about the creeping extension of EU authority. Europe has to become more open, competitive and outward looking if we are to grow and create opportunities and jobs for all our citizens,” Cridland said.
“I am clear that the ever closer union of the eurozone is not for Britain. The big reform issue is to ensure that Britain’s membership of the single market and the EU of the 28 does not become damaged or diluted by the eurozone’s drive for greater integration.”
The group is calling on the EU to fully implement a market for services and to create a digital one, and also to secure trade deals with the US and Japan as part of talks already under way. It also wants a moratorium on legislation where there is a case for decisions to be made at national level, such as employment law.
Separately, the National Institute of Economic and Social Research (NIESR) is calling for more research into the benefits of both staying in and leaving the EU.
“So far, while there has been plenty of partisan rhetoric, there has been little serious and comprehensive analysis of the implications for the British economy of an exit from the EU,” says NIESR’s director Jonathan Portes, writing in the group’s Economic Review.
“It is vital that the UK political debate on EU membership over the next few years is informed by high-quality, objective economic analysis. There will be few decisions that will be so important for our long-term economic future.”
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