Open Europe Blog

As we argued here, though there has been quite a bit of noise from the business community over recent weeks, few interventions are actually dealing with the sharp end of the policy debate, e.g. what is the greatest threat to business: Trying to artificially lock in the status quo – and risk voters throwing out the baby with the bathwater; or seek a new deal that will put the UK’s relationship with the EU on a sustainable footing? Car manufacturers, for example, rightly warn that Britain leaving the EU would be bad for their industry. However, they fail to explain – as do many of the usual suspects – how to square UK public opinion and further eurozone integration, with continued EU membership. To wish away the debate – saying that it causes “uncertainty” – is hardly credible, since for so many different reasons, the debate is happening any way, whether we like it or not.

Which is why this piece by John Longworth, the director general of the British Chambers of Commerce, was so timely. He writes:

What may surprise some in the Westminster bubble is that the view from the coal face is different from the one trotted out by some high-profile captains of industry and the chief executives of multinationals. In fact, it doesn’t follow either the classic Europhile or Europhobe lines [ a point we made here – OE remark]. Britain’s business community, many of whom export, wants to see real and substantive change in our relationship with the European Union. While four out of five insist that they want to remain part of the European single market, an even larger number say they are against further integration and transfers of power from Westminster to Brussels.

The prime minister’s preferred approach of “renegotiation and referendum”, then, is an option that chimes with the thinking of many pragmatic businesspeople whose primary interest in the European debate is ensuring that they can trade, hire, export and flourish. Forty-seven per cent of our members, a large plurality, think this is the right approach. In the simplest terms, a settlement that supports their business interests would simultaneously safeguard the UK’s economic interest. It is premature to talk of extreme solutions to Britain’s European question.

Yet maintaining the status quo, which both Europhiles and approximately one-quarter of companies favour, is simply not a viable option. Europe is changing. Britain cannot expect the EU to simply stand still while it navel-gazes and debates its future involvement. Nor can it just seek to negotiate favourable reforms within the club’s existing rules, because the club’s rulebook is changing. If Britain does nothing to renegotiate its position now, it will be dragged down the road of ever-closer union in the wake of the Eurozone. That raises the spectre of an “in/out” referendum in future that no pro-European campaign could realistically hope to win.

Similarly, Lord Wolfson – Chief Executive of Next – in the Sunday Telegraph:

I have listened carefully to the arguments of certain business people who oppose the renegotiation of our position in Europe. All their fears revolve round the loss of the single market. They rarely espouse the need for more regulation, less democracy or wider EU powers over our justice system. Implicitly, they argue that these burdens are the price we must pay for remaining in the EU. They claim it is risky for the Prime Minister to even try to negotiate a better deal for Britain. They assert that the uncertainty of renegotiation will undermine our economy. This is nonsense. Investors already know that British support for the EU is fragile. Unless we call time on the process of EU aggrandisement, democratic opposition will make our place in the EU even more uncertain. In the real world, very little investment is lost as a result of this so-called uncertainty, because it is already a fact of life. These scare tactics are all too familiar to me. They were the same threats used by the same people when they urged us to join the euro. I remember their warnings of economic isolation and ruin.

 He concludes:

Those Europhiles who argue that we must either accept a federal Europe or lose our place in the EU unwittingly act as recruiting sergeants for their opponents who say we should leave. Before adopting either extreme, we should at least try to negotiate a middle way – an EU that the majority of us would be happy and proud to be a part of. The message is clear: single market yes, federal Europe no.

Spot on.

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