Sir Win Bischoff: Forget about an EU exit — we must stay in and maximise benefits

Ever since Messrs Monnet and Schuman put forward the proposal for the European Coal and Steel Community in the early 1950s, the “Europe” question has been a contentious issue for Britain. The current in-out debate is the latest manifestation of the emotions stirred up by this issue. Plus ça change, plus c’est la même chose.

It is natural to have an initial emotional response to the question of whether Britain should stay in or exit the EU. But, as a businessman, my conviction is to put emotion to one side. An objective cost-benefit analysis of the economic facts, rather than ideology, must be the basis for this decision. The stakes are too high to do otherwise.

So what are the facts? I would like to touch on the relevance of EU membership for two important elements of competitiveness of the UK economy as a whole: market opportunities and investment. On both elements, the figures are substantial.

As a recent report by TheCityUK points out, the EU’s single market gives UK business access to the world’s largest market, with half a billion people, generating about £10 trillion in gross added value. To put this into context, this is an economic zone that is larger than the US and Japan put together. The EU currently accounts for more than half our total exports.

Another significant benefit to the UK from EU membership is the inward foreign direct investment that it attracts to these shores. A fact confirmed by surveys is that companies often locate in the UK precisely because the UK is inside the EU and has access to the single market. Were it to leave the EU, some companies might in turn decide to leave the UK or at least reduce future investment here. If such a reduction or exodus were to occur, there would be real financial implications for the UK — including in terms of jobs, skills base, innovation and tax revenue. Recent analysis estimates that the value of tax losses resulting from an exodus from the UK could be as much as £25 billion.

It is unlikely to be quite as much all at once but, if the actual outcome was anything close to that figure over time, it would be a huge blow to the UK economy.

Further, it would not just be these specific businesses where losses would be felt; the impact would also be felt in the ancillary services that have built up around them.

For instance, the financial sector represents about 10% of the economy, but the businesses that support it — legal, accounting — represent about a further 5%.

These economic facts point to one conclusion: Britain is measurably better off staying in Europe. In my view, the real question for the UK is not whether to give up its membership but rather how it can make sure that it maximises the potential benefits of membership and demonstrates at the same time to its European partners the benefit of UK participation — which, in turn, could lead to agreement for the benefit of all on some improvements in operation and governance by the EU.

The UK must show leadership as the EU undergoes necessary reform. Such leadership, given the UK’s unique position and perspective, will be good for both the British economy and Europe more broadly.