Europe: In or Out? Business Groups Speak…

The Prime Minister, David Cameron, said this week that he would hold a referendum on Europe to decide the UK’s future within the European Union.

Whilst there is apparent support for a regenotiation of the terms in which the United Kingdom is part of the European Union, the idea of an actual referendum has had a mixed reaction within the business community.

Business groups have responded with

The British Chambers of Commerce (BCC) conducted research which showed that while 47% of UK businesses wanted a "looser" relationship with Europe, they still wanted to remain part of the EU. 26% of businesses questioned were happy with the current situation and 12% wanted thye UK to leave the EU.

The BCC’s Director General, John Longworth, said:

"The vast majority of businesses across the UK want to stay in the Single Market, but on the basis of a revised relationship with Europe that promotes trade and competitiveness. It is of critical importance to business and to Britain’s national interest that we have access to the European market, but not at any cost."

The Confederation of British Industry (CBI) also welcomed the prospect of EU reform with Director General, John Cridland, adding:

"The EU single market is fundamental to Britain’s future economic success, but the closer union of the Eurozone is not for us. The prime minister rightly recognises the benefits of retaining membership of what must be a reformed EU."

The Institute of Directors (IoD) were all for a referendum with the IoD’s DG, Simon Walker, saying that it would be:

"…the best way to affirm Britain’s participation in a free-market Europe which is competitive and deregulated."

However, the Forum of Private Business (FPB) gave the most barbed reposnse with Alex Jackman, head of policy at the FPB, defending small businesses who have nothing to do with Europe. He said that small firms who do not export to Europe…

"…wonder what right the EU has to dictate how long their employees should be paid for sick leave, or how they should sit at work."

However, recognising that many small businesses do trade on the continent, he added:

"But there is the other demographic for whom the common market has helped enormously in growing their businesses overseas. Like it or not, most businesses export within Europe as their first step."

"We don’t think it will give anything like a clear mandate."

The Federation of Small Businesses (FSB) says it will remain "neutral" on the subject with John Walker, the FSB’s national chairman, saiyiong that

"Nearly a quarter of FSB members export and the vast majority do so within the European Economic Area. Governments around the world need to do all they can to keep markets open and take barriers away."

Since David Cameron made his speech on Europe, the economy at home has taken a turn for the worse with the ONS releasing figures yesterday (Friday) to say that the UK economy has shrunk by 0.3% in the last quarter (October to December 2012)

Should there be further contraction in the economy this quarter, due to the ill effects of the snowy conditions, the continued increase in borrowing by the Government and the continuation of austeruty measures by Geirge Osborne, then the UK could very well lose its triple A rating with the credit agencies and also fall into a second consectutive quarter of negtive growth, prompting fears of a triple-dip recession and the threat of economic depression.

The referendum hinges on the Conservatives winning the next election.

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