By Daniel Hunter

The Director General of the Institute of Directors, Simon Walker, will tell the IoD Annual Convention today (Wednesday) that 'Europe has lost its way and is in need of fundamental reform'.

In a speech to the Convention, which will hear from the Chancellor, the Mayor of London and Sir Richard Branson, Mr Walker will reveal the attitudes of IoD members on the contentious issue of Europe. He will make the case for repatriation of powers and an expansion of the single market to include services.

A recent survey of members found that 57 per cent support the Prime Minister’s planned renegotiation. If a referendum were held 49 per cent say they would vote for the UK to remain a member, with a third saying it would depend upon the renegotiation. Just 15 per cent would vote for a British exit.

79 per cent of IoD members have some form of business link with the EU, and 60 per cent agreed with the statement that “continued access to the Single Market is important to my organisation”.

However, there is a broad appetite for deep reform. Members cite home affairs, employment law and corporate governance as areas where powers should be repatriated.

Mr Walker will say: “In too many areas, Europe has lost its way. Its regulatory and legislative output ties up the efforts of small and medium sized businesses. Efforts which could otherwise be spent on innovation, expansion and investment.

“IoD members value the single market, but there’s much less enthusiasm for EU intervention in corporate governance, employment law and home affairs.

“The financial crisis, combined with some very real concerns about the politics of Europe, has presented this country with an opportunity to question the foundations of our EU membership. The IoD would be failing its members if we didn’t engage in the debate around Britain’s future relations with the EU.”

The IoD will seek to make the case for reform and renegotiation, but will caution against British withdrawal.

Mr Walker will say: “Amongst IoD members and across the business community there is very little appetite for such a policy.

“As business leaders I believe we must make the case for a reformed, more equitable relationship - but one that still has Britain at the heart of European influence.

“Reform is possible, if the political will exists. The IoD stands four-square behind the Prime Minister in his bid to renegotiate the terms of UK membership.

“High on the list must be the creation of a genuine single market.

“It’s a scandal that 20 years after it was supposed to be completed, there is nothing close to a single market for services across Europe.

“Whether you’re a carpenter or an insurance broker, the single market does little for you. A recent Europe-wide poll found that these barriers in the service economy mean just 8 per cent of European SMEs engage in cross-border activity.

“Given that 99 per cent of all EU businesses are small to medium-sized enterprises, accounting the vast majority of all European jobs, creating a single market for the services market and for the digital economy must be a priority.”

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