Our global future: Britain in a globally competitive Europe

12 December 2013
John Cridland (External authors)

British business, large and small, is unequivocal – membership of a reformed EU is the best way to realise our global future.

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. But current economic and political 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 position 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 in November, 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. The main advantages flow from membership of the Single Market that not only provides a market of 500 million consumers but also helps attract inward investment from around the world, as well as from trade deals with nearly 50 partners that give access to £15 trillion worth of markets for British businesses. And, as the report sets out, no alternative option for the UK’s relationship with the EU – whether the models adopted by Norway, Switzerland, Turkey or a combination of the best bits of each – would come close to matching this balance of benefits or offer greater influence for the UK than full EU membership.

But we cannot ignore the fact that 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. The EU must reform and renew its priorities and purpose to keep pace with increasingly competitive international rivals. It is here – on positive reform for the whole of Europe rather than on stitching together a special deal for the UK – that the CBI’s focus is firmly fixed.

The EU 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. And, while the EU undoubtedly has to take the steps needed to save the Euro zone, it must safeguard the Single Market for those outside the Euro at the same time.

Finally, 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. The EU’s authority has today crept increasingly into areas and issues where national parliaments are, in fact, better placed to make decisions. The EU that takes us into the post-crisis period 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. As the Dutch government has succinctly put it, 'this will mean more Europe in some areas, and less in others'.

This reform agenda is achievable and can help put Europe back on a path to sustainable growth and global competitiveness. There is now a window of opportunity for the UK and the British business community to build alliances with like-minded countries to take this forward. From the traditionally liberal economies of Germany and Sweden to new Eastern European dynamism in places like Poland, the UK has allies in implementing this competitiveness agenda. It is only by driving this reform right across Europe that we can collectively realise our global future."

John Cridland is Director-General of the Confederation of British Industry.

Read the CBI's full report here.