By Sir Roger Carr, President, Confederation of British Industry
As British industry prepares for the challenges of the year ahead, while little has changed in reality, it does so with a more positive mindset and greater optimism than in recent times.
The economic misfortunes of Europe are increasingly contemplated as a fragile long-term condition to be managed rather than a looming crisis to be feared.
Recent achievements in building export volumes in growth markets are now seen as a spur for greater endeavour by all rather than simply the laurels on which a few may rest. The resurrection of the automotive industry through sensible co-operation between government and business has become a beacon for other sectors to follow rather than an isolated example of industrial success.
There are still many battles to be won. Levels of unemployment are unacceptably high — particularly among the young — and the pace of economic recovery remains slow. Inflation in food and energy prices continues to impact the hard-pressed consumer in the wake of ever-increasing global demand. With no obvious solutions in sight, the combined endeavours of government and business to improve education and training and pursue new forms of energy are at least positive signs of work in progress.
Business leaders and politicians of all colours, while differing in detail, are broadly aligned in the belief that growth remains our overwhelming priority with the increased export of products and services our key to sustainable prosperity.
But in a climate of relative harmony and common purpose, our membership of the European Union remains the issue that divides political parties, business communities, media magnates and the public at large.
More than any other topic, opinions are polarised and views driven by emotion over fact. Those who are passionate in their desire for departure are organised, vocal and visible. Siren voices that suggest the UK could survive as another Norway fail to register its population is one twelfth of the UK, its GDP per capita one and a half times that of Germany, its wealth in natural resources, the price it pays for a trading relationship with Europe or its absence of influence without full membership credentials.
Those who offer Switzerland as an alternative discount its unique strength as a country that has accumulated wealth through years of neutrality, established a financial niche through banking secrecy and invested years in reaching trade agreements with Europe that are far from all encompassing.
With a few facts and much prejudice there is a real and present danger that we move towards a referendum with the risk of "in" or "out" as stark choices. It becomes increasingly important therefore that those with a view — whether political or industrial — speak up to ensure a fair balance of argument is heard by a generation of voters who will determine the economic consequences for generations to come.
Whatever the emotional appeal of exiting the EU may be to some in our society, there are key facts that we must all remember: UK membership provides unfettered access to a single market of 500 million people, which today is our largest export customer. Departure would necessitate multiple bilateral agreements, frustrate free trade and damage our export performance in the medium term. Growth in new markets, however rapid, could not compensate for the inevitable decline in European activity.
UK membership attracts inward foreign investment from both banks and industry capitalising on the open market culture, skills, rule of law, flexible labour force, language and time zone. The UK is often the preferred bridge into Europe. Departure would undermine jobs, dilute international relationships and damage national wealth.
UK membership encourages large company capital investment within the UK, creating jobs and wealth that trickle down to medium and small company suppliers. Departure would be bad for employment and growth across a broad business spectrum. Europe benefits companies of all sizes.
But we must not pretend the EU is a perfect structure. It has levels of bureaucracy and cost that require addressing to ensure it achieves its potential in an increasingly competitive world. It requires streamlining, de-layering and deregulating to be a truly effective institution. And events mean that it is changing in front of us. The consequences of the eurozone crisis are driving ever closer union for eurozone countries, of which we will not be part. This will affect the nature of the EU of which we are a part. It, too, will be different and far from perfect.
The UK is an agent of change. It is a welcome ally of all those in Europe who seek improvement. It is potentially a force for good where its culture, instincts, experience and pragmatism will drive change. To have influence, the UK must be viewed as a committed partner today seeking constructively to create a better future for tomorrow. It is in no one's interest that the UK is persistently seen as a reluctant player constantly looking for the way out and not the way forward.
For the UK, an improved European vision should be the centrepiece of a growth policy that builds on the expansion of global trade to achieve a sustainable prosperous future. We are an island nation whose wealth was built in trading with the world, leading by innovation and winning by determination.
As countries sharing the same currency inevitably fuse, both economically and politically, the UK's voice still needs to be heard, helping to shape our collective futures.
We must remember when considering the EU that this time the door marked exit will not be revolving. Departure will consign many to a long-term economic future that ultimately few may envy.
Now is the time for cases to be made and arguments to be heard. Silence will not be golden.
This article appeared in the Observer on Sunday, January 13, 2013
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