World Economy
0

Britons Want Commitment to EU

Britons Want Commitment to EUBritons Want Commitment to EU

If the Tories win the UK election, Britons will be offered an in-out referendum on EU membership. But businesses say leaving – and even a vote on the option – would be bad for Britain.

The British general election on May 7 looks set to produce a hung parliament with no clear majority. With all parties dedicated to continued public spending cuts, one issue divides voters, business and the parties more distinctly than any other: Europe.

British Prime Minister David Cameron's Conservative party has guaranteed an in-out referendum on Britain's continued EU membership by 2017 in the event of a Tory victory. Ed Miliband's Labor has ruled out an EU plebiscite unless a major transfer of powers from London to Brussels is proposed – a scenario unlikely enough to discount out of hand.

Cameron was forced into offering the referendum by the fractious right-wing of his party and the rise of UKIP (UK Independence Party), which has conflated EU membership with immigration – a genuine touchstone issue in this campaign – in 2013. It was also a bid to appease the press, which sees Brussels as wielding an undemocratic influence on British life.

That offer may now have backfired as the election draws near, and business leaders and political rivals say the uncertainty of Britain's position could hit jobs and trade, while most voters are in favor of staying in the EU.

  Business Concerns

Pro-EU group Business for New Europe, which represents some of the biggest companies trading in the UK, including BAE Systems, Shell and Amazon, said the Tory promise of a referendum by the arbitrary date of 2017 is causing uncertainty among business leaders, putting investment at risk.

"If someone is making an investment, looking to set up production, for example, by opening in a factory in Britain, they are thinking 20 years ahead," said spokeswoman Lucy Thomas. "If there is a referendum looming, you can't be certain that we're going to be in EU. The fear of uncertainty is there."

Labor's long-standing anti-referendum stance was reiterated in its manifesto, published last week. "Labor's priority in government will be protecting the NHS and tackling the cost-of-living crisis, It is not to take

  Best for Britain

The Confederation of British Industry (CBI), the UK's leading business lobbying organization, believes that EU membership is worth up to 5 percent of the UK's GDP – around £78b ($117b) a year. Katja Hall, CBI deputy director general, said EU membership was best for Britain – and for business.

"It is the clear view of most businesses across the UK that our economic future is best served by our continued membership of a reformed EU," she said. "Most CBI members believe that the benefits of EU membership outweigh the costs and will not shy away from saying so."

John Cridland, director general of the CBI, said some reform was necessary, but agreed that most business leaders do not want to leave the EU. "Having access to the single market is fundamental to future jobs and growth," he said.

 

Financialtribune.com