In the debate on the UK's membership of the European Union, some have called into question the value of the member state status. But British business – large and small – is unequivocal: membership of a reformed EU is the best way to realise our global future, writes Katja Hall.
Katja Hall is chief policy director at CBI, the largest British business lobbying organisation, which represents around a third of the UK's private sector workforce.
For the last 40 years, the UK’s relationship with the European Union has been the cornerstone of its engagement with an increasingly integrated world. When the UK joined, Europe was resurgent. Recovered from the Second World War, it seemed clear that the main opportunities for UK trade and growth were with our nearest neighbours. But the current circumstances have thrown that conclusion into doubt to the point that some in the UK are questioning the value of our membership of the EU, and some are even advocating withdrawal.
For British business, the answer is unequivocal – we must remain a member of a reformed EU. Eight out of ten Confederation of British Industry (CBI) members, large and small, would vote to stay in the EU if there was a referendum on membership. The CBI’s latest report Our Global Future: the business vision for a reformed EU, published this month, sets out the business case for why EU membership is the best vehicle for achieving the UK’s open, global ambitions in the 21st century.
It is clear to us that the benefits of EU membership to British business significantly outweigh the costs. Three-quarters of CBI members – of all sizes and sectors – say that the creation of the 500 million strong Single Market has had a positive impact on their business, not to mention the investment this brings from around the world and its contribution to making the UK the world’s leading financial centre. Furthermore, having signed free trade deals with nearly 50 partners, giving the UK access to £15 trillion worth of markets, the EU is now working towards opening up developed and emerging markets which would double that. All this has directly boosted the living standards of UK citizens, with our research suggesting that the average individual is around £1,225 better off every year from EU membership.
But the world is rapidly changing, with this the year that the world’s emerging markets – from the Eastern tigers to the growing powerhouses of Latin America – are set to take over from the developed world as the majority shareholder in the global economy. This throws up new challenges – to Britain, but also to the whole of the EU. The path to sustainable and healthy growth will be found in delivering on a reform and competitiveness agenda in the EU that helps drive forward a globally competitive European economy.
The EU must reform and renew its priorities and purpose to keep pace with increasingly competitive international rivals. It must be outward-looking, signing more trade deals and breaking down trade barriers. But getting a foot in the door isn’t a guarantee of taking a share in the treasure behind it – as Chancellor Merkel has said, “our yardstick should be whether our products can compete in global markets”. So the EU needs to update the Single Market for the 21st century and change its regulatory approach to drive European competitiveness. The business climate politicians create through regulation and legislation makes a big statement about the relative global position of Europe as a place to do business, and as a place to invest in and create jobs. And, while the EU undoubtedly has to take the steps needed to save the Eurozone, it must safeguard the Single Market for those outside the Euro at the same time. The EU of tomorrow must continue to work for all its members, with the right balance of power and division of tasks struck between the Commission, Parliament and the 28 member states.
Finally, the EU’s authority has crept into areas and issues where national parliaments are better placed to make decisions. The EU must refocus on its core task: helping European economies and governments to co-ordinate with each other, where necessary, to boost jobs and growth across the Continent. Political ambition and action should be directed to prioritising those areas where EU policymakers can add real value to the effort to make Europe more competitive globally.
Europe is made up of a number of historic global powers; has among its members the birthplace of democracy as well as the mother of parliaments; and its 450 Nobel Laureates put it at the top table of contributors to global prosperity. But our past history counts for little in the face of future challenges; nothing will be given to us for free in the 21st Century. It’s by being globally competitive that we’ll pay our way in the world, with a reformed EU at the heart of this drive to realise our global future.