City Matters: Yes Britain is an island nation – but we mustn’t romanticise leaving the EU
SCARCELY a week has gone by in the last couple of years without a report being launched that explores the merits of remaining in the EU, or without a politician making an intervention. And as the debate has raged, the political and personal arguments have been conflated with the economic.
It is unsurprising, therefore, that the mayor of London has now entered this frenetic debate. He claimed last week that London does not need the EU on its current terms – but that he would campaign to stay inside with the right reforms. This issue may have been overshadowed by the statement that he intends to stand as an MP at the general election, but getting our relationship with Europe right is critical to London’s continuing success as an international business centre.
After all, heartfelt expressions of opinion do not address the central economic question of EU membership – and as our fragile recovery continues, it is important that all the facts are considered. That is why the report prepared by the mayor’s chief economic adviser Gerard Lyons on this subject is welcome. It makes it clear that a successful and reformed EU is a prize worth fighting for – as reflected by the fact that such a scenario delivers the best outcome for the capital’s economy of the four considered.
We should aim to engage at the deepest possible level with all EU members states to maximise the opportunities for outward-looking reform. This agenda should include completing the Single Market in services, cutting excessive red tape, and making the EU far more efficient. And our position as the gateway to Europe for many international firms enables those companies to take advantage of both Britain’s international expertise and our EU membership to expand their business. If we were to leave the EU, various industries established in London to advise and service this market would be lost.
As an island nation with many staunchly independent views, it is tempting to romanticise Britain as strong enough to “go it alone”. And it is true that our trade with the world beyond Europe continues to grow – and this is something we should all work to continue. However, it would be facile to suggest that this is an either-or decision. We can continue to grow our overseas investments and bilateral trade in places like Africa, China, South America, central Asia and Singapore without forfeiting our trade within the EU.
This is one of the many reasons why our polling, and that of the CBI and TheCityUK, shows that around 80 per cent of businesses wish to remain in the EU. The City has bounced back from many greater challenges than this: wars, fires and more. But there is no reason to tax its resilience unnecessarily. Campaigning strongly for reform from within the Single Market is our best chance for economic growth and the strongest position for London’s future.
Mark Boleat is policy chairman at Canada Corporation.