By Daniel Hunter
John Cridland, CBI Director-General, has urged the Government to protect the UK’s position as a global trading hub, fight strongly against harmful EU policies but reap the benefits of being in the EU, during a period of rapid change.
In a speech to the CBI’s London Annual Dinner last night (Thursday), Mr Cridland made clear that he was a ‘Euro-realist’. He outlined that while there are significant challenges to meet in Europe, the EU remains the springboard to the UK successfully carving itself a new global trading role, targeting exports to high-growth markets.
John Cridland, CBI Director-General, said: “What’s clear to me is that we need to get in there and fight. We need to fight tooth and nail for the great benefits we derive from being part of the EU but against bad EU policies, to secure our reputation as a premier trading nation and to champion the advantages available to us through the Single Market.
“Putting it simply, our challenge on Europe is to get it to do more of the stuff it does well and less of the stuff it does badly. I’m a European realist — I look at how the land lies and how we can make the best use of it.”
On the Cyprus banking crisis, Mr Cridland said: “Although now rejected by the Cypriot parliament, the ill-thought-out ‘stability levy’ on bank deposits has created a real mess. While technically a tax, it undermined the confidence of ordinary depositors in the safety of their savings - one of the fundamental pillars of stability that the Banking Union was designed to fix. Cyprus needs to press on with another of these pillars — bank resolution.
“The events are a stark reminder that not only has the Eurozone crisis not gone away but also how much Europe and the Eurozone countries in particular, are going through a period of rapid transformation.
On securing a global trading role for the UK, he added: “This unfolding drama should serve to concentrate our resolve and ensure that we don’t get deflected from the bigger picture. We need to create a global role for Britain in a new Europe.
“Most of the businesses I meet depend on their sales to the EU Single Market but are also busy expanding their sales to the growing economies of Asia and Latin America.
“Our place in Europe and around the world are two sides of the same coin.”
Mr Cridland spelt out the priorities of business for a positive UK agenda in a new Europe.
On trade, he said: “The UK helped build the Single Market, the world’s biggest trading block, and we have to remain right at the centre of it. The UK won’t secure proper recovery and growth if we don’t have a stable exports market in Europe. But the EU is also essential if we are to diversify what we’re selling and to where.
“An EU-US trade deal wouldn’t be a priority for President Obama without the prize of access to a Single Market of 500 million consumers for American firms. Think what benefits it will bring to both sides of the Atlantic if agreement is achieved, with UK firms well-placed to take advantage.”
On a changing European Union, he said: “The EU is changing rapidly with a Single Market tier of 27 countries and a Eurozone tier of 17. All Member States are working out how the two tiers work successfully together. There are opportunities and challenges here for Britain and other states that need addressing.”
On needing a more competitive trading area: “We need to press for a more ambitious EU growth agenda. Let’s start by completing the Digital Single Market, it could yield significant economic benefits and potentially add 4% to EU GDP by 2020.
“It could also be a real boost to the UK by allowing us to build on our existing strength as Europe’s leading e-retail economy.”
But he concluded by warning against the imposition of a cap on bank remuneration, country-by-country tax reporting for banks and the Financial
Transaction Tax, he said: “The imposition of a cap on bankers’ bonuses is a worrying precedent of intervention on pay and conditions. We’re already seeing the risk of spill-over into regulating other sectors’ pay.
"A requirement for country-by-country tax reporting for banks slipped into a directive on capital requirements. Originally applied to the mining and extraction industries, and now being applied to banks, it’s another example of an unwelcome precedent spreading.
“The financial transaction tax will act as a drag on Eurozone recovery by falling ultimately on the doorsteps of businesses and consumers with a knock-on effect for UK exports. A tax which has extra-territorial reach into financial services activity conducted in the UK is wrong in principle, and may affect the City if we collect the tax and other jurisdictions refuse.”
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