By James Kirkup 21 June 2015
A group of business leaders and analysts have published a 1000-page assessment of Britain’s place in the EU and the changes needed
The UK should leave the EU if it cannot get the major changes and reforms it needs, business leaders and economists say Photo: Alamy
David Cameron should lead Britain out of the EU if he is unable to secure a veto for the UK over European laws, win back control over employment rules and permanently protect the City from Eurozone regulations, a group of business leaders and economists has said.
Unless the Prime Minister can achieve a fundamental change in Britain’s relationship with Brussels, the country’s households and businesses will be better off if the UK ops to leave the EU, the report concludes.
The study, entitled Change, or Go, is the most detailed, fact based report produced to date on the UK's membership of the EU, and the alternatives on offer. It sets out ten major reforms that it suggests Mr Cameron must seek from EU leaders before the in-out referendum he has pledged to hold by the end of 2017.
David Cameron is due to meet with European leaders at a summit in Brussels this week
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Mr Cameron will this week attend a European summit in Brussels where he will set out his renegotiation strategy.
Many Conservative MPs worry that the changes Mr Cameron has so far suggested, which focus on new welfare rules preventing EU migrants accessing benefits for four years, do not go far enough.
The Telegraph is this week publishing extracts from the 1,000-page document. The editorial board that produced the report was chaired by Jon Moynihan, the former executive chairman at PA Consulting Group. Other members include Andrew Allum of LEK Consulting, Luke Johnson, a leading venture capitalist, and Helena Morrissey, one of the City’s most prominent fund managers.
The report will be seen as a key moment in the intensifying debate on the UK's future in the EU. It questions some of the central arguments made for EU membership, especially the claim that being inside is good for British businesses.
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“Far from offering every consumer and business the benefits of a wider domestic market, after 40 years of membership, less than 5 per cent of UK companies directly export to the EU yet all are forced to bear the burden of its regulations,” the study says .
“The EU is not a free trade area but a customs union, and one which has spectacularly failed to deliver trade deals with rising economic giants like China.”
The report calls for the reintroduction of a national veto to be a priority in Mr Cameron’s renegotiation.
“Far more effective tools are needed to ensure that the UK could block measures that it fundamentally disagrees with, and these tools must be secured in any renegotiation,” the study concludes.
“Examples of possible changes could be the securing of a genuine ‘red card’ (which would give legal weight to the parliaments’ opposition and would force the European Commission to drop proposals) or an entitlement for national parliaments to revoke EU law in certain circumstances. These would, however, require Treaty change to have legal weight and to be permanent.”
Mr Cameron should also demand that the EU exempts Britain from its commitment to “ever closer union”, it states.
It also says that as part of the renegotiation, Mr Cameron must force Brussels to “introduce mechanisms to reduce the burden of regulation on businesses”.
Substantial safeguards are needed that would protect businesses that do not export to the EU, the study states.
The UK must also be given “control over social and employment laws”, a key demand being made by Eurosceptic MPs.
The report also warns that “EU laws have become extremely expensive and damaging for the UK’s financial sector”.
These “damaging” financial laws “must be reversed” and the UK should have a veto over any new EU legislation in order to protect the City of London and other British financial institutions, the report states.
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FAQ
EU referendum
When will it be held?
David Cameron promised to hold it before the end of 2017 but it looks likely to be held sooner, perhaps in May 2016
What will the question be?
The question will ask: 'Should Britain remain a member of the European Union?'
What happens next?
David Cameron's Bill on the EU referendum has passed its second reading in Parliament. Meanwhile, he is trying to secure a better deal from the EU by negotiating with fellow European leaders on issues such as migrants' access to welfare
Elsewhere, the study calls for a “a permanent mechanism for protecting the non-Eurozone states” to ensure the UK government can never simply be out-voted by countries belonging to the single currency.
Crucially, it calls for a “permanent, lasting reduction in the EU Budget”. Between 2003 and 2013 the UK’s net contributions to the EU increased from £3billion to £11billion.
And it says that “control over migration policy must be restored to the member states”.
Finally, Britain should only stay in the EU if the bloc does more to strike trade deals with emerging economies like China and emulates Britain by making all of its spending more transparent.
Mr Cameron has already signalled he wants some of the changes on the list, such an end to the symbolic commitment to “ever closer union,” welfare changes for migrants, less regulation, and reform of the EU budget.
The authors say they are confident that other EU leaders would see the merits of those reforms. But if those changes are not made, Britain will be better off leaving.
“Were the EU to be intransigent then, given the fundamental problems that define our membership, we believe that Britain should vote to leave. As our study will show, the UK – as the world’s fifth largest economy – has nothing to fear from such a vote and, indeed, much to gain,” they say.
Mr Moynihan said: "Change, or go sums up the position that Britain takes into the forthcoming EU referendum. Business opinion has been long divided over our relationship with the EU, but as this research makes clear, our current relationship has become unsustainable and must change.
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"David Cameron has a mandate to seek wide ranging reforms of the EU to ensure Britain is part of the looser, economic based trading relationship it voted for forty years again. But if we can’t secure the changes we need, leaving an unreformed EU is the right course to plot for Britain’s prosperity.
