This is the first in a series of guest posts written exclusively for Cicero Elections by the main campaign groups on both sides of the EU referendum debate.
Membership of the European Union makes British businesses of every size and sector stronger. It boosts our exports, investment, and research and development. It means less red tape, and gives our companies a stable environment in which to plan, invest, and take on new staff. No available alternative can provide this level of benefits.
Our membership of the EU’s single market is a huge asset for British business. It guarantees our exporters tariff-free access to the world’s largest market, the destination of 45% of our exports. Companies can source products and people from a bloc with a population of 500 million. The Centre for European Reform has shown that the “EU effect” is worth an average of £670,000 for every business that conducts goods trade with the EU.
EU membership is a major contributing factor to the huge amount of foreign direct investment that comes into this country. European investors are responsible for 46% of our stock of foreign investment. And non-European companies, from American banks to Japanese car manufacturers, set up shop in Britain to access the European market. This investment creates jobs for our citizens and opportunities for British businesses – and we’d be putting that at risk if were we to leave.
The City has a particular interest in remaining in the single market. London is Europe’s financial capital, and the EU is the destination for a third of our exports of financial services. As part of the single market, banks benefit from an EU passport which allows them to operate across Europe. Leaving would throw this advantage away. Furthermore, we would lose all influence over European regulation, and would face attempts to lure businesses from London to Paris, Frankfurt, and Dublin. As Mark Carney has said, we should beware basing our economic strategy on “the kindness of strangers.”
Politicians of all stripes agree that we need to build a “knowledge economy”, taking the lead in hi-tech industries. The EU’s £57bn Horizon 2020 programme dispenses research grants to institutions embarking on cutting edge research. The latest figures show the UK receiving 20 per cent of grants, more than any other member state, and 126 British SMEs have benefitted from Horizon 2020 funding. Universities and scientists are clear that they are stronger in Europe, and that leaving would damage research-intensive industries.
The Leave campaigners seem, at last, to have stumbled upon a preferred alternative to EU membership. They support a free trade agreement, along the lines of that negotiated between the EU and Canada. But this deal would not eliminate all tariffs, deal with the red tape caused by regulatory divergence, or cover the services industry which makes up 78 per cent of our economy. Furthermore, it would take years to negotiate, and Britain would clearly be the junior partner. Such a deal, if it is even possible, would leave our businesses weaker, jobs at risk and families across Britain out of pocket. Research carried out by PwC for the CBI has found that leaving could cost the economy up to £100 billion, and increase unemployment by 950,000.
If you believe Britain’s businesses are stronger in Europe, and that leaving would be an unacceptable risk to our prosperity, join us before 23rd June and make your voice heard.
Lucy Thomas is Deputy Director of Britain Stronger In Europe. For more information visit www.strongerin.co.uk.