"When politicians treat EU membership as a political football in Westminster, they put jobs at risk across the country"
- Alisdair McIntosh, Director of Business for New Europe

Business for New Europe, the business group which makes the positive economic case for EU membership, today commented on the EU referendum bill which is having its second reading in the House of Commons.

This private members' bill seeks to ensure a referendum on EU membership by the end of 2017 no matter which party wins the forthcoming general election.

Alisdair McIntosh, Director of Business for New Europe, said:

"The prospect of an EU referendum would make it harder for companies to plan and invest for the future by creating uncertainty. For honourable reasons, many business leaders do not want to express political views on whether or not there should be a referendum, but they do face real and practical challenges as a result of the uncertainty.

Whether Britain stays in the EU is a vital economic issue, not just a political one.  Leaving the EU would damage our economy, making it harder for our companies to compete internationally. It would also make it very difficult for Britain to influence policies in our most important export market. We would lose out to other European nations if we left the EU.

We would also fall out of trade deals around the world, and lose investment and jobs across Britain.

Recent independent polling by YouGov found that 16% of people think that leaving the EU would make no difference to our economy, and 17% said they didn't know. This is, frankly, alarming. It is vital that people understand the full implications of this issue.

When politicians treat EU membership as a political football in Westminster, they put jobs at risk across the country".

The signing today of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada will provide great opportunities for British business and further deliver growth and jobs in the UK, say business leaders. As well as eliminating 99% of tariffs, Canada has agreed to open up federal and provincial public procurement to a degree never before seen. The agreement will raise Canadian intellectual property standards closer to EU levels and, vitally, will liberalise trade in services, particuarly in finance, energy, telecommunications and transport. Canada and the UK have a close economic relationship, with £48 billion of Canadian investment in Britain and £30 billion going the other way. The EU as a whole exports £37 billion of goods and services to Canada every year, and recives £111 billion of Canadian foriegn direct investment.

"This excellent news underlines two key facts", said Business for New Europe Director Alisdair McIntosh. "Firstly, that the sheer size of the EU economy allows us to negotiate from a position of real strength. Secondly, that the UK has genuine influence inside the EU, for free trade has long been a British cause and we do more trade with Canada than any other member state".

The British government estimates that CETA will be worth an extra £2.3 billion a year to the UK economy, and could increase our exports to Canada by 29%. What business needs now is for both Brussels and member states to approve this agreement as quickly as possible, to allow business to take advantage of this exciting opportunity."

"Meanwhile, with EU negotiators currently in Washington working on the Transatlantic Trade and Investment Partnership (TTIP) with the United States, which could benefit Britain by as much as £10 billion a year, CETA shows that ambitious agreements are possible, and it provides a template for a European deal with the US".

The new Commission line-up announced this morning shows a determination to focus on British priorities of growth, reform and efficiency, according to business leaders, and gives the critical financial services brief to the UK's Jonathan Hill. Jean-Clause Juncker's decision to create powerful new Vice-Presidents for growth and competitiveness, better regulation and budget, while reducing the numbers of seperate portfolios and Commission departments, sent a clear message of intent, said Business for New Europe. The crucial financial services brief has been given to the UK's Jonathan Hill, which should both allay City concerns and play to UK strengths; and the idea of creating a new full-time Eurogroup president has been shelved. 

BNE chairman Roland Rudd said: "This line-up shows that Juncker is serious about reform. Reducing the number of portfolios and departments will help streamline the Commission. Creating a new Vice-President for better regulation and giving the job to Frans Timmermans, who has been a tireless champion for subsidiarity, is a very good move. And giving the financial services brief to Jonathan Hill, together with capital markets union and financial stability, is clearly good news for the UK and plays to London's strengths".

"Overall, the new commission line-up, with five former Prime Ministers and a further dozen former Ministers, is a strong team to deliver the reforms that business wants to see- and that Juncker has committed to deliver. We are impatient for them to get on with the job".

Claims that Eurosceptic Tory MPs will pledge to vote no in an EU referendum whatever reforms the UK secures, and that the UK lacks influence in Brussels and Strasbourg, sell Britain short, according to business leaders. 

Commenting on recent press reports about Britain's influence in the EU, Alisdair McIntosh, Director of BNE, said:

"The interests of business, and of the UK as a whole, are ill-served by eurosceptics talking down our voice in the EU or saying that no reform will overcome their hostility to Europe.

On any view, the UK remains a highly influential member of the European Union. UK calls for reforms to make Europe more competitive and outward-looking have increasingly been taken up by other members of the European Council, and even by Jean-Clause Juncker- a fact the sceptics conveniently ignore. The appointment of Donald Tusk as the new President of the European Council is a further step forward, given his commitment to reform.

Now it is suggested that some Tory rebels are planning to join Ukip in pledging to vote for UK exit in any referendum whatever reforms are achieved: an approach which is as transparently destructive as it is ideological.

The British Chambers of Commerce survey published today shows that most UK companies want to see reform: it also shows a clear majority in favour of the UK's continuing membership. Other recent surveys show that even more emphatically. Business wants the government and UK MPs and MEPs to put their efforts into delivering that change."

The claims by Boris Johnson’s chief economic adviser, Gerard Lyons, that the UK could be better off if it left the EU are plain wrong, warn business leaders. 

Staying in the EU is better than leaving. Here’s why:

•  
  • Free access to European Single Market is worth up to £80 billion year to the UK  economy, according to the CBI, and  supports millions of jobs across the country
  • EU membership has expanded UK trade in goods  with the rest of Europe by 55 per cent
  • The City alone is home to some 250 foreign banks employing upwards of 160,000 people.  Many of them would simply not be here if the UK were not in the EU
  • If we were not in the EU, we would not have the same leverage to secure free trade deals with other countries.  The recent EU-South Korea agreement will save UK exporters £500 million a year; the EU-US deal currently under discussion could be worth £10 billion a year to the UK, and could increase jobs in the UK’s car industry by 7 per cent
  • Membership of the EU also gives the UK greater influence on the world stage to defend our strategic interests, and to deal more effectively with political crises like the Ukraine
  • All the alternatives to EU membership would deliver fewer benefits, at a high price

Where business leaders do agree with London’s Mayor is that the UK can and should push for the EU to reform, so that the benefits of membership are even greater. Where business leaders disagree, is the best way to achieve the reforms we all want. 

Responding to press coverage of Lyons’ report, to be published tomorrow, BNE chairman Roland Rudd said:

‘We agree with Boris Johnson that the UK should push for better than the status quo, and we agree with many of the reforms that Boris would like to see to make Europe more dynamic, competitive and outward-looking.  But the question is how best to achieve them.   
  
‘The plain fact is that leaving the EU would make Britain worse off.  So a strategy based on issuing threats is very dangerous. It is also very unlikely to work. It didn’t work in 2011, when we stood on the sidelines and failed to block new rules on financial services.  It failed again last month, when we tried to block Juncker from becoming Commission President.’

‘Instead, we need to relearn the word ‘diplomacy’.  We need to work with our European allies, make the case, and build wider support.  We have done this in recent years – for example, in limiting the EU  budget - and we can do so again, despite the damage we have caused by issuing threats.’

An approach like this has a real chance of success; it would make the EU much better for us all; and it won’t damage the UK’s national interest.  The alternative, saying we will leave if we don’t get what we want, is a recipe for protracted uncertainty and ultimate failure.’

The government should do more to increase the number of Brits in EU institutions if it wants to maintain UK influence and secure reforms.

Business leaders expressed concern about the imminent fall in the number of British officials in senior posts in the EU institutions, reported in an analysis by the British Bankers Association [footnote the report].

The UK has enjoyed considerable influence in the European institutions and has had many successes in shaping policy in Brussels.  But this is now at risk and needs urgently to be addressed, according to Business for New Europe.  

Specifically, the UK Government should:

-       Make a period of secondment to Brussels a career requirement for progression to senior levels in the UK civil service, and to all posts with significant European responsibilities

-       Increase the resources at the UK mission in Brussels devoted to getting Britons into the institutions and helping to get them into key positions 

-       Invest more in training UK graduates for  the  entrance  exams for the institutions

-       Strengthen networks among UK universities to increase awareness of European opportunities and support talent-spotting

Roland Rudd, chairman of Business  for New Europe, said: ‘The

UK has a strong historic record of influence in Brussels.  But unless the UK Government acts now  to tackle the impeding fall in senior posts, and develop  a pipeline of future talent,  it will be harder for the  UK  to maintain the  strength  of  its  presence, and secure the reforms that  we want to see. The Government should treat this as a key element in its positive European agenda’’.

Mooted Conservative proposals would seriously damage Britain’s standing and influence in the world according to Business for New Europe.

Reports that a future Conservative Government would pass a law to limit the role of the European Court are extremely worrying. It is strongly in the interests of ordinary UK citizens and any UK Governments to have clear and enforceable standards of human rights both nationally and internationally.  To undermine the system because we do not agree with a tiny minority of the court’s judgements would be short-sighted populism of the worst kind, and would seriously damage our credibility on the international stage.  How could the UK challenge human rights abuses elsewhere in the world if it signals that it is not prepared to work within the system – a system that the UK itself played such a big part in creating? 

A vote for independence would require Scotland to leave the European Union and apply for membership from scratch, because several Member States have reason to veto any short-cuts.

That is a key finding of a new report by Business for New Europe, which says that 2019 is the earliest that an independent Scotland could expect to re-enter the EU. 

The report concludes that: 

• On becoming independent, Scotland would leave the EU, and would have to apply to join under the normal accession procedure - rather than the unprecedented, expedited route suggested by the Scottish Government

• To bridge the gap, Scotland would need a temporary agreement to guarantee continued access to the Single Market.  This would require a three-way negotiation between the Scottish Government, the UK Government and the EU - running in parallel with UK-Scottish  negotiations on the terms of independence;

• It would be next to impossible for Scotland to negotiate a budget rebate like the UK’s, and very difficult for it to keep zero VAT rates on food, children’s clothing and books

• Scotland would also find it very hard to negotiate a formal opt-out from the euro, and if it did succeed in securing a currency union with the remaining UK – as the Scottish Government has proposed, although the UK Government has rejected that -  that very fact would seriously complicate negotiations on EU membership

• If negotiations between the UK and Scottish Governments dragged on, or if Scotland pushed for special deals from the EU, the date of accession could slip into the next decade. 

The author of the report, Dr Daniel Furby, an EU expert based in Brussels, said: ‘If Scotland were to seek special terms of membership, such as a UK-style budget rebate or Euro opt-out, current EU members would ask why Scotland should receive better terms of membership than they do. The UK only won its rebate and opt-outs as full member of the EU, through many years of hard negotiation.’

Roland Rudd, chairman of Business for New Europe and RLM Finsbury, said: ‘There have been claims and counter-claims in the debate about Scottish independence.  But on the issue of Europe, one thing is absolutely clear.  An independent Scotland could not count on rapid and smooth entry to the European Union – or to get the terms of membership that the UK currently enjoys. There would be a price to pay.  And the more Scotland pushed for special deals, the longer the process could last.’