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The market that can’t decide – is Europe good for business or not?


Decision time over Europe is approaching for British voters. The publication last week of proposals to renegotiate the UK’s relationship with the European Union set the clock ticking on a referendum that could take place in less than six months.

It should also ring alarm bells among those who want Britain to stay in the EU. A shock YouGov poll, taken in the wake of David Cameron welcoming the proposals, pointed to a vote in favour of Brexit, which has hit the pound and sparked alarm among City economists. They have come up with doomsday scenarios of lost jobs, lower investment and weak economic growth if Britain chooses to sever links with Brussels.

But while the big business lobby groups have long supported remaining in the EU, a number of business figures are putting forward an alternative view. Leaving the EU would liberate the UK economy and individual firms, they say. It would mean savings for taxpayers, less red tape for employers and more control over trade deals, the Leave camp argues.

As with the Scottish referendum last year, economic questions are expected to make a pivotal contribution to the in/out debate. We asked business leaders and other opinion-formers what they make of the draft reform deal with the EU and how they want Britain to vote.

Chief executive of WPP

Whether the prime minister has done enough to secure a Yes vote remains unclear. The latest polls suggest a lead for the Leave campaign, but they also show that the gap would be significantly smaller if other EU countries accept the changes David Cameron is proposing. Critically, a large proportion of voters is still undecided, and polls have in any case been a less than reliable means of predicting recent election results.

From a personal point of view, I hope the UK does not vote for Brexit as the EU, for all its faults, is a net positive for the British economy.

Chief executive of Ann Summers

I believe we are better together and I hope that last week’s draft document goes some way to convincing others that Britain is better in Europe than out.

David Cameron has made significant gains with the draft document that I have been impressed with, such as cutting red tape for business and the recognition that non-eurozone countries would not be required to bail out single-currency members. I look forward to seeing the final document once negotiations have finished.

What I hope the public realise is that the implications of leaving the EU are greater than immigration alone, which is the issue that has grabbed the majority of the headlines.

I don’t dispute immigration is an issue that needs consideration and it is one that I care greatly about. But it is just one element – and I hope that as we approach a referendum, voters will put that in perspective.

Leaving the EU will, for business, mean the renegotiation of many deals and trade agreements, which will have cost implications for businesses which will cause secondary impacts in relation to higher prices and access to jobs. Nearly half of all of our exports go to Europe, and in return Britain gets £24bn of investment from the EU. Cutting ourselves off from Europe puts that investment, and the 3 million jobs that rely on it, in jeopardy.

Ex-head of the CBI; chair, Triumph Motorcycles

Five hundred and twenty million people living in sustainable peace for more than 70 years deserve better from a self-serving, unaccountable, unelected Brussels elite, distanced by far more than kilometres from those affected by their rules and regulations. We must have a Europe which is globally competitive in Asia’s century.

Where is the committed reform to make life easier for a small business-woman trying to employ one extra person? Where is the skilling-up of southern European youth so they are marketable and welcome in northern Europe or can contribute to and enjoy economic success at home? If they carry on exporting subsidised olives and importing BMWs they will continue to go bust!

What’s on offer isn’t the reform that this once-in-a-lifetime referendum opportunity warrants. It might appeal to gut political instinct, but surely we all deserve better than this.

Chief executive of BT

BT earns close to a fifth of its revenues outside the UK. So continued membership of a reformed EU is important to us, and to all those we employ and serve. British companies need to prosper if the UK’s bills for health, education and welfare are to be paid.

We value having open markets in Europe, where we supply services to public bodies and large corporations. Indeed, most of the EU institutions are served by us, as are Nato and the embassies of several member states.

We also value the sheer heft of the EU when it comes to arguing our case in world trade talks. We are trying to get a fairer deal for the business we operate in America, and having the whole EU on our side counts.

The prime minister seems to have secured the promise of important changes to the way the EU is run. It is reassuring that those promises will be turned into a form that is legally binding. The prime minister’s negotiations are far from complete, but he deserves support for what he’s trying to achieve.

Former Bank of England interest-rate setter

Is Brexit now more likely? There are clearly important issues which the UK government is negotiating with our European partners, but the question over whether or not we leave the EU is more fundamental. Do we continue with an economic arrangement which has served the UK economy very well for 40-plus years? Or do we embark on a very uncertain path outside the EU? We should choose stability over uncertainty and remain, in my view.

The process of the referendum may create some uncertainty, but British business is very resilient. Some investment decisions may be postponed for a few months, but I don’t think that will be a big factor.

If the UK leaves the EU, however, the implications will be more profound. Investments coming to the UK because we are a member of the EU could be reversed. All our trade relationships – both within the EU and with the wider world – would have to be reconsidered and renegotiated. And there would be a massive task of disentangling UK regulation from the current framework of EU law. None of this looks positive from an economic perspective.

Owner of H Forman & Son salmon smokery

The prime minister has tried to spin this week’s draft renegotiation of the UK’s relationship with the EU as a significant win. It’s not.

My business is Britain’s oldest salmon curer. We continually suffer from costly, ever-changing EU rules, such as food labelling, which may work for larger corporates but do not work for small businesses like ours. Small businesses are the drivers of Britain’s economic success and all we want is the freedom to get on and trade, and generate wealth and employment.

The European trading bloc was established before anyone had conceived of the internet and now we can trade just as easily with customers and suppliers in India, China, Singapore and Argentina – and we do, at the press of a button.

Being geographically close for trade is irrelevant in the 21st century. The EU has passed its sell-by date.

Britain will be stronger unrestrained by the EU. We should vote to leave.

Chief executive of easyJet

EasyJet is proud to connect people and businesses across Europe and believes that the UK is better off as part of the EU. That is why we are a supporter of the Stronger In campaign which is helping to make the case for Britain to remain part of Europe.

Aviation is a good example of the benefits of the EU. The single aviation area gives airlines freedom to fly across Europe and since its introduction passengers have seen fares fall by around 40% and routes increase by 170%.

Chief executive of Virgin Money

Many businesspeople over the years have bemoaned the fact that it seems to take forever to deal with the bureaucrats in Brussels and longer to get anything done. It is in that light that we should see David Cameron’s latest negotiations. In my view they represent positive progress on the key issues regarding British sovereignty – and all done quickly and co-operatively.

The terms give us the best of both worlds: the prioritisation of British interests, continued access to the single market, currency stability, job opportunities and prosperity.

I am not someone who wanted to remain in Europe without winning concessions. But we have them and they are good. Let’s lock them down and get on with the referendum. The uncertainty is bad for investors, businesses and the economy. That can be repaired. A vote to exit the union now would subject UK business to uncertainty, trade restraints and job losses for years to come.

European Trade Union Confederation

It is not the right deal for the UK or for European workers. We think the UK should stay in the European Union but not at any cost, and reducing the rights of mobile workers [ie other EU citizens working in the UK] would be a cost. If there will be this kind of concession, it will damage British workers, because it will turn mobile workers into cheap labour. There are a lot of unfair elements in this deal.

It is a tricky situation … We are strongly lobbying for the UK to stay in and we are strongly lobbying the other member states not to accept these conditions. If the UK were to vote to leave there would be terrible consequences for economic growth, for the economic performance of the UK. There is a risk that social benefits and employment standards in the UK – which are not the highest in the EU – could be undermined.

Former director general of the WTO

I believe Brexit would be very bad news for Europe, as well as very bad news for the UK. It is pretty obvious that the case for the UK outside the European Union in trade is just terrible; the UK would be naked in the cold and the price of clothing would be very high.

This proposal looks like a good balance for the UK reform requests. There is meat in there and yet it would not prevent other countries who want to further integrate from doing it.

This reform renegotiation is only part one of the show; there will be a second act, which is the campaign.

My own sense is [that this draft settlement] will not dispense David Cameron and his government from articulating a pro-European narrative – a narrative we have not seen for the past 30 years or so. This must be a narrative of heat and guts, not only reason. You have to speak to hearts and guts, not only minds.

Policy director, Federation of Small Businesses

In October we conducted the biggest ever study into what small businesses want from the EU referendum, speaking to more than 6,000 small firms. Our research found nearly half of our members (47%) leaning towards voting to remain in the EU, with two fifths (40%) leaning towards voting to leave. However, about one in 10 are still undecided (10.7%) and so much could change before voting day.

However, the standout demand was for clear, unambiguous, and impartial information. While small business will welcome the latest information to come out of the prime minister’s negotiations, the agreement is still only a draft and it remains uncertain what the final settlement will be.

Throughout the process we have been clear what small businesses want from any settlement: protection of the single market, simplifying of VAT and regulations to promote cross border trade, and maintaining the opt-out from the European Working Time Directive. Many small firms have told us they need to know how any final agreement will impact their business before they make up their minds.

European Council president Donald Tusk has announced his proposals for “a new settlement” between the UK and the EU. Here are the key points:

The prime minister wanted people coming to Britain from the EU to be barred from claiming in-work benefits or social housing for four years. Under the draft proposals, Britain would be able to request an “emergency brake” on in-work benefits for up to four years, subject to permission from other member states.

Economic governance
Cameron wanted an explicit statement that the EU had more than one currency and that taxpayers in non-eurozone countries should never be liable for operations to shore up the eurozone. The draft promises UK taxpayers’ money cannot be used to support the euro and that supervision of financial institutions in non-eurozone countries will remain a matter for national governments. But the UK will have to pledge not to “create obstacles” to deeper integration in the eurozone.

Cameron wanted less regulation and a stronger commitment to the free flow of capital, goods and services. The draft document commits to taking concrete steps towards better regulation.

The PM wanted an end to the obligation to work towards “ever closer union” – one of the founding principles of the EU. Tusk offered a declaration that the UK is “not committed to further political integration”.