Do businesses favour change in Britain’s relationship with EU?

Britain’s role within the European Union is a much discussed issue, with arguments for and against membership equally powerful and passionately articulated.

Business Leader Magazine asks what withdrawal or re-negotiation could mean for businesses.

Following the Prime Minister’s policy speech on Europe in January 2013, where he said he would offer a referendum on membership, should he get re-elected, a major survey of British businesses was conducted.

The British Chambers of Commerce’s new “EU Business Barometer”, gathered responses from nearly 4,400 companies of all sizes and sectors across the UK, testing five scenarios for Britain’s future relationship with the EU, tackling issues such as a full exit or further integration.

Results showed that remaining in the European Union, with specific powers transferred back from Brussels to Westminster, received the highest positive impact rating, with 64% of those polled favouring this.
Interestingly, ‘full withdrawal from the EU received the highest negative impact rating’ of 60 per cent; and ‘remain in the EU with no change in current relationship’ received the lowest positive impact rating, with 15 per cent.

The findings suggest that business leaders favour change when it comes to the UK’s relationship with the European Union; but re-negotiation rather than a full exit, and that the status quo is not an option.
A re-negotiated relationship

Business Leader Magazine has been discussing this issue with business leaders and politicians in the region, defining what a full-exit would look like and assessing opposition to such a move.

Colin Skellett, who is Executive Chairman of Wessex Water, said in early 2013 we need to get the issue of Europe out of our system.

He comments: “I believe that we need to be in Europe because of our position as an international trading country.

Obviously lots of things need to change but the idea we can be insulated from Europe isn’t right.

“It’s the Severn Barrage writ large – the more it is discussed and debated the more confidence can drain away. Too much time talking about how we want to leave Europe can erode confidence and make businesses think – do we actually want to invest in the UK?

“I think we need to get the issue of European membership out of our system. We do need to change and negotiate our position and push hard for change; but from within. We need to be part of Europe but make it more efficient.”

Striking a balance

Colin Sexstone, who is Chairman of Cook & Co Solicitors, suggested that a re-negotiation and change in the relationship was needed: “There is no doubt that we have some ridiculous legislation imposed on our country by faceless and unelected bureaucrats in Brussels.

“We need to ask ourselves how we got into a position where we can’t carry out reasonable tasks such as deporting known terrorists such as Abu Qatada.

“Whilst not an expert on the minute detail of the European Union, I feel the relationship has become strained.

“There has to be a realisation that in a time when businesses and commerce is tightening its belt; bureaucracy stemming from the European Union is immense, and quite frankly the tax free salaries and jobs for the boys are no longer acceptable.”

A full exit

Not long after the survey, Lord Lawson, former Chancellor of the Exchequer, said that Britain needed to fully exit the EU, not just re-negotiate, and that: “too much of British business and industry feels… secure in the warm embrace of the European single market, and is failing to recognise that today’s great export opportunities lie in the developing world, particularly in Asia.”

This intensified the debate, with critics suggesting that such a move would damage the UK economically.

Peter Kember of Kember Associates, which is a high-tech business based just outside Bristol, that manufacture microchips and exports globally, said: “Lord Lawson and politicians in general are fixated on the finance sector.

“What is good for Britain does not just equal what is good for the finance sector. Given their recent history I am astounded they get such priority in people’s eyes.

“Lord Lawson should try working on an SME for a bit and keep his comments to himself. Sensible re-negotiation is a good idea, an exit is certainly not; further integration in some areas is inevitable.

“We live a globalised world and Britain on its own cannot do much in this world; we need to be part of Europe whether we like it or not.”

Regarding trade with the developing BRIC nations Peter said: “Another nonsense statement. We have always done both and are actively expanding into BRIC countries as we speak.

“Again pontificating such as this would be better received if the people making them spent any time working in the sectors they are talking about.

“We have been helped by EU membership without a doubt. I can remember what it was like before. The continent is much more open and much easier to do business with these days.”

Becoming less important

In a late 2012 interview with Business Leader Magazine, Dr Liam Fox MP, a long-term advocate of a re-negotiated settlement said the EU is becoming less important as countries outside it prosper: “On the economic issue, the cumulative amount of money we have lost as a country due to EU regulation stands at around £124bn over the past decade.

“This is a loss that many of our global competitors do not have to bear.

“The EU is becoming less important, as countries like China, Brazil, Russia and Australia continue to prosper.

“In fact the EU is actually part of the problem as to why we are not trading more with these countries.

“Being hamstrung by the problems in Europe has narrowed our horizons and meant that we have ended up exporting more to Ireland than we do to Russia and China.

“Although the latest trade data suggests this could be changing.

“We are in a unique position and could have a strong economic relationship with the rest of the world without legal intervention and business regulations that are directed from Brussels.”