Cameron's EU Speech: Business Backs The Single Market, But Has Concerns About Referendum

Did British Business Back ALL Of Cameron's Tantric EU Speech?

Following days of reaction in the press to David Cameron's EU speech, the Huffington Post UK has produced a two-part feature on how the business world has reacted to the offer of a referendum on the UK's continued membership of the EU.

The first part considers whether businesses truly were supportive of everything Cameron announced in his speech on Thursday.

The past week has been full of media reports suggesting that British businesses are backing Prime Minister David Cameron on his tantric EU speech delivered on Monday. But did they truly support everything Cameron said in his speech?

Certainly, there were some strong advocates of the entire speech – including the need to have a referendum on Britain's continued membership of the EU.

The British Chambers of Commerce (BCC) not only backed the prime minister, it called for the timetable to be brought forward "to ease uncertainty".

John Longworth, director general at the BCC, said: "The lengthy timescale for negotiation and referendum must be shortened, with the aim of securing a cross-party consensus and the outline of a deal during this Parliament."

The Institute of Directors (IoD)'s director general Simon Walker, added that it was better to "not shy away” from the referendum issue, and that the move will help put to rest doubts among its members who have become "sceptical about many of the institutions and practices of the EU".

In the Times on Thursday, the headlines said business leaders had given David Cameron a resounding vote of confidence, citing a letter signed by 56 industry leaders endorsing Cameron’s promise of a negotiation on the future of the EU, followed by an in-out referendum – It is "good for business and good for jobs in Britain", the paper said.

"The actual wording of the letter includes this phrase: 'We need a new relationship with the EU, backed by democratic mandate'. That could easily mean a general election, not a referendum," wrote Waugh.

"Sources in Davos claim that when Open Europe circulated the letter among businesses, the original version did indeed include the phrase: 'We need a new relationship with the EU, backed by an In-Out referendum'. Yet when some of those business leaders said that they couldn't sign up to such strong meat, the letter was amended, the claim goes. Instead the R-word was replaced with the M-word (mandate)."

In addition, shadow minister without portfolio Lord Wood tweeted: "Why was there no reference to the EU referendum in the Times business chiefs’ letter today backing Cameron? We should know if they support it."

Indeed, if you look at a lot of the press releases that appeared from business luminaries immediately after the Cameron speech, not one of them references the referendum, and the impact it might have. Most, instead, focus on the issue of how important the single market is and how good it was that Cameron was championing it.

Here's a typical response – this one's from the British Bankers' Association: "The single market is the EU's greatest asset and is of crucial importance to the banking and financial services industry in the UK. We are very pleased that the prime minister has put the single market at the heart of his European vision, which will help to protect London's position as a pre-eminent global financial centre."

The Confederation for British Industries (CBI) towed a similarly cautious line – director general John Cridland said: "The EU single market is fundamental to Britain's future economic success, but the closer union of the Eurozone is not for us", although it also appeared to nudge the PM towards a 'staying in' vote by adding: "The Prime Minister rightly recognises the benefits of retaining membership of what must be a reformed EU and the CBI will work closely with government to get the best deal for Britain."

Most commentators believed Cameron would bang the drum for the UK to remain in the EU

Iain Anderson, director at Cicero, went further, saying the context was clear for all to see – the prime minister will offer a referendum, but he fully expects to remain within the EU.

"He could not have been clearer as he talked constantly of his view that the UK must remain 'at the table' to be able to influence its decisions," he wrote in a blog post for the Huffington Post UK.

"He made continued reference to the single market as a prime mover in the UK's economic interests."

Cameron spoke to Bloomberg Television on Thursday and was asked if he had received any scepticism about the referendum from the business community.

He said the business community wanted is to know there is a plan. "My judgment, and business backs this, is that the greatest risk is to sit back rather than engage in the debate and try and change Europe in a positive way," he said.

Bloomberg suggested that actually what the speech had brought was uncertainty; why would an international chief executive invest in Britain now if you do not know what the outcome would be in 2017?

"The arguments for investing in Britain remain the same," Cameron responded. "We are part of that single market. We have very low tax rates, a competitive labour force, and all sorts of excellent things like our brilliant universities, the English language and the time zone that is so central to the world.

"And now on top of that, we have a plan for making that single market, making Europe more competitive, open and flexible and securing Britain's place within it.”"

But the fact remains others think he's taken a gamble by offering a referendum. Swedish finance minister Anders Borg told Bloomberg: "For us, this is a big risk... If they want to be competitive in the world market, and safe, it is very difficult to have their banking business outside of the European Union and their customers inside of the Union."

But what if the unthinkable happens? What if a referendum is called and the great British public decides it no longer wants to be a member of the EU? Will it be a disaster for business and trade? And how should businesses prepare for it?

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