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09/12/2016

Confederation of British Industry sees risks in Brexit

UK & Europe

Confederation of British Industry sees risks in Brexit

uk_and_eu_flags.jpg

[Sheffield Tiger/Flickr]

A leading British employers group stepped up its push to keep the country in the European Union, saying the alternatives would hurt trade.

As campaigning intensifies before a referendum on remaining an EU member, the Confederation of British Industry listed concerns among a sample of 29 member companies about leaving.

“Whilst it’s not a uniform view, the majority of firms believe that the ‘pros’ of EU membership outweigh the ‘cons,'” the CBI said in a report to published today (21 October). “But they also recognise that, like most institutions, the EU is far from perfect.”

The CBI, which represents 190,000 firms, backs British Prime Minister David Cameron’s efforts to secure changes to Britain’s relationship with the EU before the referendum. Cameron has promised a vote by the end of 2017; expectations are it will take place next year (see background).

The CBI said the kind of arrangements that give access to the EU market to some countries outside it failed to offer a better package than membership for Britain.

>>Read: UK scientists announce ‘stay in EU’ campaign

Switzerland took nine years to negotiate its first trade deals with the EU and only gained access to some parts of the single market, with no formal influence over the rules it must comply with, the CBI said.

A Norway-style arrangement would mean Britain still had to follow the bloc’s rules, including those allowing workers from EU countries to come to the country, something many British critics of the EU object to.

A special EU-Britain trade deal – another idea supported by British opponents of EU membership – would put trade at risk and reduce Britain’s influence over its terms, the CBI said.

A CBI survey carried out in 2013 found 80% of its members supported staying in a reformed EU.

A newly launched group campaigning for Britain to stay in the EU said the report “blows a huge hole” in the arguments of rival campaigners.

“The CBI’s report fundamentally undermines their extreme view that Britain has nothing to lose by leaving Europe,” the executive director of Britain Stronger in Europe, Will Straw, said in a statement.

The Vote Leave campaign could not be immediately reached for comment. 

Background

Britain’s governing Conservative Party won an absolute majority in the UK general election on 7 May 2015. With 12 more MPs than the other parties combined, the Conservatives no longer have to rely on a coalition partner.

Prime Minister David Cameron promised to renegotiate the UK's relations with the European Union. The renegotiation will be followed by a referendum by the end of 2017, to decide whether or not the United Kingdom should remain in the EU.

If he achieves the reforms, Cameron will campaign to stay in. Otherwise, the Conservatives might campaign to leave the EU. This decision could have far-reaching consequences for trade, investment and Great Britain's position on the international scene.

Some other European countries are ready to listen to Cameron's concerns on issues such as immigration, and may be prepared to make limited concessions to keep Britain in the bloc.

But EU leaders also have their red lines, and have ruled out changing fundamental EU principles, such as the free movement of workers, and a ban on discriminating between workers from different EU states.

>>Read our LinksDossier: The UK's EU referendum: On the path to Brexit?

Timeline

  • November: David Cameron to announce his views on EU reform.
  • 17-18 December: EU summit dedicated to possible reforms to accommodate the UK ahead of the referendum.
  • 2016: Likely year for British EU referendum.
  • 2017: Self-imposed end of year deadline for British Prime Minister David Cameron to hold his in/out referendum.