Let's be clear: British business cannot afford a Brexit
6 min read
29 June 2015
The London School of Business and Finance (LSBF) CEO outlines why membership of the EU is like a marriage – and why Britain should help lead the charge in tackling the Union's weaknesses.
In the end – and against most predictions – the result of the general election was clear. The Conservatives won a majority and there was no need to form a coalition. Voters were promised a referendum on Britain’s European Union (EU) membership so it is only right that such a referendum takes place.
As someone who has worked closely with businesses and business people both here and abroad it is clear in my mind why Britain should remain in the EU. Trying to negotiate some kind of trade agreement (which is not on offer anyway) will not be a substitute for being inside one of the world’s largest single markets.
Though there will always be a few that will benefit from a Brexit, the overall business case for staying in the EU is crystal clear and I want to be plain about what reasonably can be expected to be the implications of leaving the EU would be for Britain’s economy – higher unemployment, a weaker currency and reduced inward investment. As far as any economist can predict the future, it is close to certain that Brexit in the longer term will cost jobs, since it most likely will affect negatively the investment climate of the UK and of course will lead to greater currency volatility.
The risk of leaving the EU is all the more significant because a vote to leave the EU could also break up the UK. If the country as a whole votes to leave but the Scots vote to stay then that would offer clearly grounds for another Scottish referendum – and this time the Scots would have a strong case to leave the UK in order to remain inside the EU. An exit from the EU combined with a likely Scottish exit from the Union would be a double whammy for a much smaller and weaker Britain.
My anxiety is not just about the huge dangers to the British economy. Over the years the eurosceptic arguments have overshadowed the benefits the EU has brought to British business, workers, universities and students. The EU gives British business access to a single market with 500m customers, it provides British universities with an extra 15 per cent of funding and it allows British businesses to export £40bn worth of goods to Europe each year.
This does not mean that suddenly all in Brussels is perfect, as in fact few would argue that all at Westminster is perfect. The EU is still a young organisation and it certainly is in need of a radical shake up in some areas. Quite rightly the UK should lead in addressing the weaknesses – even silliness at times – of the EU. But action from within will be more effective than sneering from the sideline.
As someone who works in higher education, I can’t help but think about the consequences for Britain’s young people. I know from my own direct experience the EU provides huge benefits to higher education. It pains me to think that all this would be taken away and in fact it is unfair that the benefits are not being recognised. Whether it is mobility schemes such as Erasmus, research collaborations or knowledge projects the EU has had hugely positive effects in this sector. It shows what can be achieved in the EU when carried by the relevant stakeholders.
Read more about a potential Brexit:
- In or out? The VAT cost of a Brexit
- European referendum: The business world needs assurances that the government has a plan A, B and C
- David Cameron’s ultimatum: Conservative MPs could lose job by campaigning for Brexit
I, as probably every EU citizen, recognise the need for reform. However, I would say you would struggle to find a single member state that is happy with everything the EU is doing. That’s why membership of the EU is like a marriage – you have to work on it rather than settle arguments through divorce. The financial and emotional pain of the latter should be avoided whenever possible and the prospect for another marriage is not available for a single UK. Our arguments do not justify a divorce, but a continued relation does require some serious changes.
David Cameron and the Conservatives spent much of the election championing their pro-business agenda. Business supports the prime-ministers attempts to get the EU to face some harsh realities. But ultimately the most pro-business thing David Cameron can do now is to lead the campaign for Britain to vote to stay in the EU. The future success of British businesses – and young British talent – depends on it.
Maurits van Rooijen is the chief executive of the London School of Business and Finance (LSBF).