Nov. 4 (Bloomberg) -- The Confederation of British Industry backed Prime Minister David Cameron’s position on membership of the European Union in a report that said the single market is “fundamental” to Britain’s economic future.
Keeping Britain in a reformed EU will aid growth and boost trade with emerging economies in Brazil, India, Russia and China, CBI Director-General John Cridland said as the business lobby group published the results of a 10-month investigation to coincide with its annual conference today.
“There’s a false premise that we either trade with Europe or go on a mission to the rest of the world, but companies need to do both and they need to do it at the same time,” Cridland told reporters in London. “We’ve concluded that Europe is essential to helping us compete in new markets.”
Cameron has promised a referendum on EU membership by the end of 2017 if his Conservative Party wins a majority in the 2015 general election. Cameron said in January he wants to negotiate the return of some powers to the U.K. before putting it to the popular vote.
Cridland cited 30 free-trade agreements between the EU and countries outside the 28-member bloc as evidence of the benefit for trade with emerging markets. EU membership is worth as much as 5 percent of U.K. gross domestic product, or about 3,000 pounds ($4,800) for every household in Britain, the report found.
Reform of the EU must include a genuine single market for services and legal safeguards for countries outside the euro area, the CBI said. EU regulations should be cut back and there should be a moratorium on legislation where decisions could be made by individual governments.
An opt-out used by the U.K. and 17 other member states to avoid the working-time directive, which limits workers’ hours to 48 hours a week, should be made permanent, Cridland said.
“We have looked beyond the political rhetoric to examine the pros and cons of EU membership and British business is unequivocal: The single market is fundamental to our future,” Cridland said. “But the EU isn’t perfect and there is a growing unease about the creeping extension of EU authority.”
There need to be more Britons in senior positions in the key European institutions, including the EU Parliament and Commission, to ensure the U.K.’s influence isn’t diluted, Cridland said.
Economists and executives warned at the time of Cameron’s speech in January at Bloomberg LP’s European headquarters in London that the referendum pledge might damage investment in Britain as companies weighed the uncertainty of remaining in the EU. Cridland declined to say if he thought the vote was a good idea, saying it was a matter for the premier.
“Business lives with uncertainty, uncertainty was there before the prime minister’s speech at Bloomberg and after the prime minister’s speech at Bloomberg,” Cridland said. “It’s one of a cocktail of factors business deals with.”
Danny Alexander, the chief secretary to the Treasury and a member of Cameron’s pro-European Liberal Democrat coalition partners, welcomed the 180-page CBI report, which he said makes a “powerful” case for continued EU membership.
“We can only build a stronger economy working together with our neighbours, exerting maximum influence in our continent and leading the reform agenda as the most liberal economy in Europe,” Alexander said in an e-mailed statement. “EU membership is one of the reasons why Britain is an attractive place to invest.”
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