CBI: Focus EU debate on growth - CBI chief
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Focus EU debate on growth - CBI chief

Trying to emulate Norway and Switzerland is not the solution

CBI chief John Cridland will today argue that this week’s political demands for a bill to underpin the Prime Minister’s promise of an EU referendum are a diversion from securing growth and jobs which should be the UK’s top priority.  

Mr Cridland will also reject the notion that emulating non-EU members Norway and Switzerland would be better for the UK, arguing that British businesses don’t want to find themselves at the margins of the world's largest trading bloc operating under market rules over which they have no influence. 

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Speaking at the British American Business Council, the Director-General of the UK's leading business group will say:

“Just as the Prime Minister was trying to do the right thing – showing leadership on the Transatlantic Trade and Investment Partnership and highlighting the positive value of the EU – back at home we had an unnecessary distraction. 

“The recent tussle presents an inward looking picture of British politics to the outside. For those of us in the business world, it feels like a diversion from what we should be doing in Europe which is restoring growth, through trade deals, and championing the reforms that we want to see. 

“And these issues matter to the public too because their primary concerns are about the economy, jobs, and the cost of living. 

“The demands for a bill to underpin what the PM had already promised, doesn’t actually move the debate further forward. 

“David Cameron had already set out his terms for a referendum by 2017 on continued membership of a reformed EU. It’s already given us clarity over the process - if not the outcome. 

“So for business and the public, it’s economic growth that matters. Growth at home and growth abroad. And the best way to achieve this is to keep a firm foot in European trade at the same time as securing a bigger exports foothold elsewhere in the world. 

“Business has to make the nuts and bolts case for what our relationship with Europe should look like. Maintaining our influence to shape, and our access to, the Single Market will be central to that case. 

“We have to focus on a positive vision of reform so Europe does less of the things we don't want, and more of the things we do: boosting competitiveness and resisting bad policies that work against growth and stability. Let’s be clear. Being a member of a reformed EU is the best way to preserve market access.” 

Mr Cridland will also reject the suggestion that the UK follows the path of countries like Norway and Switzerland, saying:

“There are some who say that we could retain access to the Single Market without being a member of the EU; that the UK could withdraw and have a relationship with the EU more akin to Norway’s or Switzerland’s. I’d urge them to really look at the detail. 

“Norway’s membership of the European Economic Area (EEA) – being outside the EU but part of the Single Market – means that it still pays the bills and follows the rules but has much lower influence on EU decision making than if it had a seat at the table. 

“As the Norwegian Conservative MP, Nikolai Astrup, said to my team during their fact finding mission to Norway: “If the UK wants to run Europe, it needs to be in Europe. If you want to be runby Europe, feel free to join us in the EEA.” 

“While this works for Norway’s economy, the British would never accept such a relationship. And it removes none of the issues identified as problems by those who want to leave the EU. 

“And while Switzerland appears to have greater flexibility to pick and choose the EU regulations it applies, the 120 or so agreements which govern the EU-Swiss relationship took six years to negotiate from the point at which it rejected the terms of the EEA in the early 90s. 

“At a time of great economic challenge, could businesses struggling at the margins here survive without access to our primary market for an unknown period? 

“Also, where Switzerland has negotiated access to the Single market, it too follows the rules yet has limited influence over their shape. Partly, for that reason, it has not yet secured an agreement covering financial services. 

“Taking rules without the power to influence them is not my idea of much-touted greater sovereignty.” 

On future trade relationships with developed economies inside and outside the EU, he concluded:

“Approximately 55% of global growth over the next 15 years will come from outside of traditional UK markets in the OECD. But only 6.5% of our exports go to the BRICs – the same as we export to France. So, of course, we must target exports towards those markets where we can expand our sales.

“But we must also maximise the potential of being part of the biggest market in the world – the EU single market – which remains the destination for nearly half our exports and will continue to befundamental to our economy for many years to come.

“Demand for the goods and services which the UK is best at producing will continue to be greater in other highly developed economies. It’s not an either/or relationship - we need trade with Europe and the rest of the world. And that means retaining access to the Single Market.”

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