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PM “hits right notes” on EU reform, say business leaders

11 Nov 2015

The Institute of Directors today welcomed the Prime Minister’s call for a more flexible arrangement for the UK in Europe. The IoD, which represents 34,000 company directors mostly from small and medium-sized companies, pointed to the results of a recent member survey showing that cuts to red tape, an amendment to the principle of “ever closer union” and measures to make the EU economy work better are key reform priorities for British companies.

Simon Walker, Director General of the Institute of Directors, said:

“The Prime Minister hit the right notes for business. IoD members see benefits to being in the EU, including full access to the single market and skilled workers from across the continent, but they agree with Mr Cameron that the EU needs to change in order to boost economic competitiveness, rather than hinder it. Happily, there are signs that Europe is waking up to the need to stem the flow of burdensome red tape that is holding back businesses across the bloc from growing and creating jobs. The European Commission has this year put forward only a fraction of the amount of new laws that it has in the past. It also needs to ensure all legislation is designed to minimise the impact on innovation and entrepreneurs.

“Ending the UK’s commitment to ever-closer union may seem like a symbolic gesture, but it matters because it settles a fundamental difference of approach between the UK and many other EU member states. Only 13% of IoD members think that the EU currently has a viable socio-economic model, and it needs to be clear that Britain will not be subject to ever-growing mass of social and employment legislation.     

“The discussions must now begin in earnest, and the Prime Minister still has work to do to convince the business community that he can win change in Europe. Business is not split evenly on the issue of EU membership, with only 7% of IoD members definitely planning to vote to leave, but half say they will make up their minds based on the reforms secured. If Mr Cameron achieves the goals he has set out, it will go a long way to addressing the concerns of business leaders. Negotiating with 28 other member states will not be easy, but we urge the Prime Minister to push for a referendum next year. If he leaves it until 2017, not only will he run into the complications of the French and German elections, but it also risks becoming a popularity contest for the Government, rather than a vote on the issues.”

A survey of 1,259 IoD members, who lead businesses of every size, from every sector and operating in every part of the United Kingdom, conducted between 23rd April and 7th May 2015, found that: 

  • Two-thirds (65%) of IoD members agree with the statement “from my organisation’s perspective, the benefits of the UK remaining a full member of the EU outweigh the negatives”.
  • But half (51%) say the way they vote in the referendum will depend on what reforms David Cameron is able to achieve, with 40% intending to vote to remain under all circumstances, and 7% saying they will definitely vote to leave.
  • Businesses want Europe to focus more on securing trade deals and stay away from social and employment law, with over half (51%) saying that EU interventions on these areas were “unhelpful.”
  • Cuts to red tape, an amendment to the principle of “ever closer union” and measures to make the EU economy work better are the reform priorities for IoD members.
  • But only 13% think that the EU currently has a viable socio-economic model.
Six in ten (61%) IoD members say that the referendum on Britain’s membership of the European Union will create uncertainty for their business, but a slim majority (51%) still back the prime minister’s decision to hold the referendum.
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