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January 25, 2013

In or out? Business groups speak out on Europe

The main UK business groups have responded to David Cameron's speech on the UK's future within Europe. There is widespread support for the renegotiation of the UK's position within the EU. However, there has been a mixed response to the proposed referendum.

John Longworth, director general of the British Chambers of Commerce (BCC), said: "The vast majority of businesses across the UK want to stay in the Single Market, but on the basis of a revised relationship with Europe that promotes trade and competitiveness. It is of critical importance to business and to Britain's national interest that we have access to the European market, but not at any cost."

BCC research conducted in 2012 shows that 47% of businesses want to negotiate a looser relationship while remaining a part of the European Union. Only 12% of firms want to leave the EU altogether and 26% want to maintain the status quo.

Alex Jackman, head of policy at the Forum of Private Business (FPB), acknowledged that businesses are split on the issue of the EU. He said: "It is a genuine bugbear for those small businesses in communities that have nothing to do with exporting who wonder what right the EU has to dictate how long their employees should be paid for sick leave, or how they should sit at work.

"But there is the other demographic for whom the common market has helped enormously in growing their businesses overseas. Like it or not, most businesses export within Europe as their first step."

The FPB does not support a simple in/out referendum. Jackman said: "We don't think it will give anything like a clear mandate." And the Federation of Small Businesses (FSB) says it is "neutral" on the issue. John Walker, FSB national chairman, said: "Nearly a quarter of FSB members export and the vast majority do so within the European Economic Area. Governments around the world need to do all they can to keep markets open and take barriers away."

Meanwhile, the CBI backs EU reform. John Cridland, CBI director-general, said: "The EU single market is fundamental to Britain's future economic success, but the closer union of the Eurozone is not for us. The prime minister rightly recognises the benefits of retaining membership of what must be a reformed EU."

And Simon Walker, director general of the Institute of Directors (IoD), said a referendum would be, "the best way to affirm Britain's participation in a free-market Europe which is competitive and deregulated."