Fantasy Europe debate

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The politics of the UK's relationship with the European Union is front and centre in the press once again. Commentators and politicians are making their positions clear on what it should look like early and often. Furthermore, resolving the actual timing of any public vote on the matter is also becoming a matter of urgency.

Tomorrow, the House will debate an amendment to the Queen's speech, which ‘respectfully regret(s) that an EU referendum bill was not included in the Gracious Speech'.

All these public declarations may well be valid, but the UK's starting point is a four-decade long relationship with our European neighbours, which has – for good or bad – led to stronger trade links, a strong European voice on global issues such as security and climate change, and a leveling of the competitive play field in areas such as employment rights.

There is no shortage of campaign groups setting out why the huge cost and regulatory burden stemming from Europe means we should get out AND, in the other corner, the benefits of influence, trade and investment mean we'd lose if we weren't in.

With our economy still struggling to get back on a stronger growth path, it is surely critical that significant long-term decisions (like that of our relationship with Europe) that have implications for certainty, confidence and ultimately much needed investment across UK businesses are a little more thoughtful.

Perhaps, therefore, an amendment which

‘respectfully regrets that the debate on an EU referendum bill lacks any clear evidence base on the advantages and disadvantages of membership, quantification of the wins from renegotiating any part of the UK's relationship with the EU and clear priorities for future reform of the EU'.

While the headlines would not be as eye catching, it would at least demonstrate that there is a clear understanding of the issues that both the public and business need to hear about. In order to decide what is in the UK's long-term economic interests we must start by presenting some level headed answers to the following questions (although I'm sure there are plenty more)

  • how have the recent pressures from the eurozone crisis changed the economic and political dynamics of the region and what does this mean for the UK?
  • with the rest of the world forging closer links as economic blocs on trade, investment and technology, where does the UK fit into this picture?
  • what is the real size of the prize from opting out of EU-generated regulation , how much would need to be replaced by domestic regulation and how much impact would this have on how business operates?
  • in key areas of policy and regulation could the UK do more to be influential leaders or are we happy to be followers?

If we get some answers to these questions in tomorrow's debate I'll be back on Thursday with an update. If not Thursday, it will need to be soon.

If you have any thoughts on where our relationship with the EU goes from here and, specifically, what it means for business let us know as part of our EU Challenge

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Chief Economist

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