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Economic news – Embassy 44

British SMEs want new terms with EU, says business group

The majority of British businesses want a renegotiated settlement with the EU, a top UK business representative told economic attachés at a packed AERL briefing on British business sentiment for 2013.

Dr Adam Marshall of the British Chambers of Commerce (BCC), which represents 104,000 businesses in the UK, said British SMEs were neither europhiles nor europhobes but were “pragmatic eurosceptics” who wanted the benefits of the single market and multilateral trade negotiations, but less of the red tape from Brussels.

He went on to say that Prime Minister David Cameron had “his finger on the pulse” of British business, quoting a recent BCC survey in which almost half of British businesses (47 per cent) favoured a renegotiated settlement with the EU, compared to 9 per cent who want deeper integration; 26 per cent want the status quo and 12 per cent who wanted to leave the EU.

“British SMEs don’t dislike Europe but they want to redefine the relationship with Europe,” he said.

However, Dr Marshall warned that “political uncertainty” and media hype about Britain leaving the EU was “a danger” for British business and had the potential to deter foreign investors.

He also felt the tone of the debate had not been helpful: “I think the tone that has been adopted will not be constructive to get concessions. We can’t go in with Mrs Thatcher’s handbag; we need to take a softer line such as asking for the deepening the single market in exchange for some subsidiarity issues.”

Summing up British business sentiment, he said there were signs of confidence but that growth remained slow and weak and was vulnerable to external shocks.

While businesses remained broadly in favour of deficit reduction, Dr Marshall said they also wanted bold decisions by Government, including further deregulation, reallocating government spending towards infrastructure investment and improving access to finance through a more effective mechanism, such as a British business bank.

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Dr Adam Marshall of the BCC
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