The Confederation of British Industry has issued a stark warning that leaving the European Union would have serious repercussions for the UK.
With the official EU referendum campaigns now launched, the lobby group is setting out the business case for why the majority of its members want to remain in the union, albeit a reformed one.
In a new report, the CBI argues that while EU membership has its downsides, “membership is a prize worth having” as the disadvantages are significantly outweighed by the benefits, including access to a market of more than 500m customers, eight times the number in the UK.
It says: “Just as ’more Europe’ isn’t the answer to every question, neither is ’no Europe’. Being a member of the European Union helps British businesses to grow and create more jobs across the UK.”
It added that membership is highly beneficial for UK households too and estimates being part of the union is worth about four to five per cent of Britain’s national income, around £3,000 for the average household annually.
The CBI is however calling for a number of reforms to be implemented to ensure “the EU works better for business”. These include doing more to open up global markets, reducing and simplifying rules so that firms can grow and making sure that non-eurozone countries remain protected from further integration.
CBI director-general John Cridland says: “While there are many benefits to EU membership, we should not be blind to the downsides and recognise the EU, like any big institution has its faults and needs to do better.
“The burden of regulation on smaller firms in particular still needs tackling, even if some progress is being made. And the UK must push for reform to make the whole of the EU more competitive in the global economy and deliver a single market fit for the 21st century.”
On Wednesday night, at the Cairncross memorial lecture at St Peter’s College, Oxford, Bank of England governor Mark Carney will set out his stance on the UK’s potential exit from the EU.
Speaking previously, he said: “Clearly in terms of the issues around Britain’s place in Europe, the only thing we will say on that as an institution is to provide a perspective of the impact of being a member of the European Union, how that affects the keeping of our objectives, which are monetary and financial stability, which is quite a narrow but important foundational item.”