Working with global and domestic businesses of all sizes across the country, the CBI has identified the pros and cons of EU membership in a wide-ranging report, ‘Our Global Future: the Business Vision for a Reformed EU’.
The report finds that while there are drawbacks and well-documented frustrations, the benefits significantly outweigh the costs. It is overwhelmingly in our national interest to stay in the EU – but reforms are urgently needed.
It highlights research showing that membership of the EU is worth approximately 4-5% of UK Gross Domestic Product every year, or £62-78bn, roughly the size of the economies of the north east and Northern Ireland combined.
John Cridland, the CBI Director-General, said: “We all need to know where Britain’s future lies in a changing global economy. 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.
“We are better off in a reformed EU than outside with no influence. Each year, membership is worth £3000 to every household in this country.
“But 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.
“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 EU must modernise the Single Market by fully implementing a market for services and creating a digital one, and also secure major trade deals with the US, Japan and others. The CBI is calling for reform that ensures the EU recognises and respects the boundaries set by member states, especially the co-existence of countries wanting closer union with those that do not.
The benefits of EU membership
The report analyses the UK’s current relationship and identifies that there are significantly greater benefits than any alternative option. Access to European markets of 500 million people for goods and services has been the single biggest positive for our economy, while membership of the EU has also helped cement the UK as the world’s leading financial centre. Membership of the Single Market has helped the UK attract investment from around the world.
The EU has helped open global markets on terms that support the UK’s global trading ambitions. With 30 Free Trade Agreements (FTAs) already signed, and a recent agreement reached with Canada, British businesses have access to markets worth $24 trillion. If current negotiations with Japan and the US prove successful, that will grow to $47 trillion.
But membership has also had its costs:
– Common rules are essential to the Single Market but the UK’s lack of unilateral control over some regulations is the biggest downside, especially on employment law where the Temporary Agency Workers Directive and Working Time Directive have caused deep frustration
– The European Commission has a strong tendency to regulate, giving a sense of ‘mission creep’, particularly in areas around health and safety, and welfare legislation
– There is an EU membership fee although net costs are less than often reported – equivalent to £116 per person every year – and it is dwarfed by the benefits of membership.
Overall, the UK has been successful at influencing the shape of the EU over the years as a strong advocate for developing the Single Market and EU enlargement which has boosted British firms. The report calls on the UK government to use this influence to reform the EU for the better.
Mr Cridland added: “Contrary to popular myth, the UK is influential in the corridors of Brussels and will still be as long as we play our cards right. The Single Market is a great British success story and the best way for us to remain a leader on the world stage is from within the EU.”
