Reforms needed but leaving the EU would damage UK economy, business group says

In a new report, the CBI dismissed calls for the UK to exit the EU (184-page / 4.66MB PDF) but said reforms were needed to allow British businesses to grow internationally.

"Membership of the EU's single market remains fundamental to our economic future," CBI director-general John Cridland said in the report. "British business is convinced that, by staying in a reformed EU, the UK can get the best of both worlds – access to markets in Europe and beyond that build on our innate strengths – our language, time zone, respected legal system and flexible labour market. And by working with its European partners, the UK can help put the EU on a path to sustainable growth and global competitiveness – maintaining EU membership as the cornerstone of the UK's open posture."

According to the CBI's report, 80% of its member businesses said they would vote for the UK to remain in the EU in any referendum on the matter. A draft Bill currently before Parliament would, if introduced into law, require a national referendum to be held on whether the UK should exit the EU by 2017.

The CBI said that EU membership benefits to British business "have significantly outweighed the costs", with access to a single market of 500 million people in Europe "the biggest positive" for the UK economy. Other advantages stemming from EU membership has been the "direct investment" UK businesses have managed to obtain both from within the trading bloc and from further afield, as well as the access they have had to a large pool of potential skilled employees.

There are potential alternatives to UK membership of the EU that the CBI assessed. However, it said arrangements such as a customs union and a new EU-UK trade agreement would offer fewer benefits than remaining a part of the EU.

However, the CBI said that businesses do want to see a number of reforms made to how the UK operates within the EU.

"Any future reform of the EU must benefit all member states, whether they are in the Euro or not," Cridland said in a statement. "After next year’s vital European elections the new Parliament and Commission must reverse the growing sense of Brussels ‘mission creep’. There should be a moratorium on regulation where there is a strong argument for decisions to be taken individually by member states and the new Commissioners will need to recognise and respect the boundaries of national parliaments, directly elected by their voters. This is especially important with employment regulation."

"The EU must be single-minded when it comes to what matters, like signing more trade deals and delivering a Single Market fit for the 21st century. The business vision for reform is clear, but it doesn’t just begin and end in Brussels, we also need reform in London. We have influence, but we must get better at building alliances with like-minded European partners and get more Brits in the key institutions, to make sure that influence isn’t diluted," he added.

The CBI's report looked at some specific sectors and the pros and cons they have seen from the UK's membership of the EU. The pharmaceuticals industry has benefited from EU research funding, harmonised rules on the approval of new medicines and from how the EU's intellectual property framework works, the report said.

Earlier this year life sciences lawyers Stuart Richards and Helen Cline of Pinsent Masons, the law firm behind Out-Law.com, said that if the UK was to leave the EU it could have "major implications for commercial contracts". They urged life sciences companies to future-proof their contracts to account for the possibility of the UK leaving the EU or renegotiating the terms of its membership.