It’s not yet certain what repercussions David Cameron’s European walk-out will have, but it’s becoming increasingly clear that beyond the euro-sceptics within his own party and elements of the right-wing press, not many people seem to think it was a very good idea.
Defending his position in the Commons earlier this week, Cameron argued that treaty change without safeguards for the UK’s financial services sector would not protect Britain and claimed that his decision will not be bad for business.
But as many commentators and politicians have pointed out since not only has he not achieved any safeguards, but UK interests could be damaged by losing its place at the top European table.
Nick Clegg – notable by his absence at Monday’s commons debate – has described the decision as “bad for Britain”, whilst Ed Miliband dubbed it a “diplomatic disaster” that will put the UK on the sidelines for years. Others have accused the PM of recklessly throwing away UK international influence to protect from regulation an industry which is in fact in urgent need of regulation.
There are also concerns over the impact of the decision on the government’s plans to rebalance the economy in favour of engineering and manufacturing.
UK manufacturing is heavily reliant on both inward investment and demand from the EU (which accounts for around half of all UK exports). Anything which affects the day to day practicalities of dealing with European partners, or stokes up anti-British feeling in Europe could have dire implications for industry.
What’s more, the UK has long been seen as a route into Europe by the US, China and others. Despite Cameron’s protestations that its both desirable and possible for the UK to remain a full committed and influential member of the EU, a perception that the UK’s European influence is waning could seriously dent the appetite of foreign firms for investing in the UK.
So far, the response from industry has been fairly muted. Both The EEF and the CBI, usually vocal on any issues affecting manufacturing, have remained relatively quiet. They are, they say, monitoring the situation. And it’s clearly too early to do much more than argue over the possible implications.
But the warnings that the UK could find itself isolated in Europe’s slow lane are growing and the government now faces an uphill struggle to assure foreign investors that we’ll remain at the heart of international decision making.
Meanwhile, UK industry, a rare glimmer of hope in our cash-strapped economy will have to work doubly hard to sell its expertise to the rest of the world.