Ahead of this week’s EU speech by David Cameron, journalists are
searching high and low for businessmen and women to go on record on the
vexed question of Britain’s European future. Alas, there’s no simple
answer that makes for good radio or TV. Though broadly reflecting
sceptic sentiments amongst the public, the business community is split
and largely undecided, and as always it depends on the sector, size and
position of a given firm. One thing is clear though: there’s absolutely
no way the UK debate on Europe – among business or other groups for that
matter – can be defined using the binary Eurosceptics-v-Europhiles
logic that some in the media still cling on to. It’s far more fluid than
any fixed pro or anti campaign.
A poll published yesterday
by the British Chambers of Commerce is a case in point. Of BCC members,
only 9pc of firms want closer EU integration, 12pc want to leave the EU
altogether, 26pc want the status quo, 6pc are unsure. But here’s the
interesting part: a full 47pc want "a looser relationship…but with the
UK remaining a member of the EU".
Over the last few days, several business leaders have warned against
the consequences of the UK leaving the EU, but very few have addressed
the sharp end of the actual policy debate. A letter from Roland Rudd of
Business for New Europe, for example, called on the UK to “lead” in
Europe (surprise, surprise). But though these types of interventions are
often written up as “Europhiles” challenging “Eurosceptics”, what they
in fact show is how far the centre of gravity has moved (there’s no talk
of more EU integration, as in the past, and certainly no talk of
joining the euro, which Rudd used to passionately argue for). Also, they
tell us very little. Most business people would have no problem
agreeing with the “completion” of the single market, more trade deals,
securing market access etc. Or, as the Rudd letter put it, “a strong
reformed EU with Britain at the heart of it”. But what does this mean
exactly? You’d be hard pressed to find a business person calling for “an
unreformed EU with Britain at the margins”.
Remember, in policy terms, the UK quitting the EU isn’t actually on
the table, as David Cameron has said several times and repeated on the Today programme this morning.
Apart from Ukip (with no MPs), no party with national significance
argues for it, so a "better off in" business letter misses the point (at
least for now). Instead, the key question is: which is a greater threat
to the trade benefits currently enjoyed by business in Europe? A new
EU-UK deal or the status quo?
Here, Rudd’s lot will say that any “wholesale renegotiation” will be
rejected by EU partners (as it means a “lower-cost membership”, etc)
and, subsequently EU membership will be rejected by the British
electorate in a referendum as expectations have been raised too high.
But there’s another way to look at it: given that around half of the
British people favour the UK leaving the EU absent a new deal in Europe,
it is, in fact, the “do nothing” option – not renegotiation – that is
the biggest threat to the UK’s EU membership. Continue with EU
membership despite the will of the British people and there may soon come a day when the electorate throw out the baby – the market access, free movement, mutual recognition, behind-the-border liberalisation etc – with the bathwater (the high non-trade costs around EU membership).
There are two other factors that should make business nervous of the
“do nothing” option: First, further eurozone integration – not least via
banking union – means that the status quo isn’t an option in Europe
anyway. The prospect of a new “club within a club” has clear implications for business. The UK has to negotiate to secure existing rights,
at least. Secondly, and most fundamentally, the EU simply needs reform
to bring it up to speed with the global business environment: returning labour market laws closer to the shop floor, less EU micromanaging in environmental laws, ending the recycling of regeneration cash in Europe – riddled with opportunity costs for business – ending growth-destroying farm subsidies, and securing safeguards against investment-diverting measures in financial services,
would, for example, all genuinely help business in Britain and beyond.
That will require a new deal in Europe – not tinkering at the margins.
It will also require a debate focussed on policy, not clichés.
This is a very complicated debate, as the interaction between UK
domestic politics and eurozone politics continues to produce an
exceptionally fluid and emotional debate. To expect business people –
who after all have a business to run – to have a firm view of a
proposition that has not yet been made, is pretty unrealistic. But
please, don’t make the mistake of thinking that this is a debate between
two distinct camps. And that largely goes for the debate as a whole.