UK manufacturers, big and small, depend upon access to the EU, the biggest single market in the world with 500 million people writes EEF chief Terry Scuoler
The question at the heart of the European referendum is simple, yet fundamentally important: how should the UK engage with the rest of the world and, are we better off economically in or out?
I believe there are two critical reasons why it is imperative the UK remains a member of the EU. First, political. We are fortunate not to have lived in an era that has been defined by European rivalry division and conflict but one of relative peace, economic prosperity, political security and social stability, much of which is clearly linked to greater co-operation among the nations of the EU.
Were we to leave the EU now when the continent faces challenges, perhaps greater than at any time since the union’s creation, from a volatile Middle East, and a turbulent world economy, there is a risk further uncertainty will be created. Domestically, an English exit majority, with the potential opposite outcome in Scotland, would put even greater strain on the EU.
Leaving would diminish both our, and the EU’s, place in the world
Internationally, leaving would diminish both our, and the EU’s, place in the world and significantly affect the relationships we have with overseas countries, especially the US. The second reason why we must remain is economic. The EU is the biggest single market of its kind in the world with a population of 500 million people. Our manufacturers, big and small, depend on access to it.
Over 80 per cent of EEF members in independent research identified the biggest advantage of membership as providing a base for exporting. Over half of British chemical and pharmaceutical exports go to the EU, worth some £30bn a year. Almost 90 per cent of British SMEs that export do so to the EU, and almost half of our overall trade goes to the EU.
The UK is the leading destination for foreign direct investment into the EU
Almost a fifth of manufacturers benefit from EU support for innovation. When it comes to receiving EU innovation funds, the UK has tended to receive 15 per cent of the total, making us one of the top-performing nations. Consider how many high-quality jobs this supports?
The UK is also the leading destination for foreign direct investment into the EU with the Japanese government having gone on record to say that the attraction of the UK being part of the EU has led to 1,300 companies investing in the UK. Half of all European-headquartered non-EU firms are now based in this country.
If we were to leave, nobody can predict that this attractiveness will remain. It may, or it may not. But what I do know are the facts and benefits of being in the EU now, which have been, and still are, largely positive.
The prime minister may, or may not, have agreed a good deal recently. That’s a matter of personal opinion but what he is fighting for is worth having. The recognition that there is more than one way forward than ‘ever-closer political union’, the stress on the importance of competitiveness, lower business costs and protection for countries outside the eurozone are important in themselves.
His actions have also shown that if you really put your mind to it you can start to get change. Did anyone really think that overnight everything would change in our favour? This may take time, strong leadership and a partnership with like-minded members. However, we are unlikely to achieve the change by not being members at all while shouting from the sidelines.
Having worked in many forums in Europe I know that we can bring influence and change. Organisations such as the EEF and other similar bodies have done this time and time again.
Independent research carried out for the EEF shows that almost two-thirds of manufacturers want to stay in
The job of our elected politicians is to commit themselves to using the power they have to make it work better, rather than make excuses about the limitations they face, and simply give up and take us out into an abyss of uncertainty and risk.
Those who would have us leave have accused those of us arguing to remain of conducting ‘project fear’. But it is not ‘project fear’ but ‘project reality’. Independent research carried out for the EEF shows that almost two-thirds of manufacturers want to stay in and only 5 per cent want to leave. In taking this view they, and the EEF, are not looking at the EU through rose-tinted spectacles and are fully aware of its shortcomings.
They are practical, however, and, on balance, have decided that it is worth remaining with the right way forward being to work to improve the EU for the benefit of all member states rather than simply walking away.
Terry Scuoler is CEO of the EEF