UK prime minister pledges referendum on EU membership

The UK faces years of uncertainty over its place in the European Union, critics claim, after Prime Minister David Cameron promised to hold a referendum on membership of the EU.

In a long-awaited speech today on Europe, Cameron said that he wanted to renegotiate the UK’s relationship with the EU and then ask people to vote on whether they think the country should remain part of the alliance. He also called for a more “flexible, adaptable and open” relationship between all EU members, seeking a more flexible cooperation between the partner nations instead of “compulsion from the centre.”

The prime minister said that a commitment on the renegotiation and referendum would be included in the Conservative Party’s manifesto for the next general election.

Nick Clegg, leader of Cameron’s coalition partners, the Liberal Democrats, spoke out against the plans, saying that the extended period of uncertainty caused by the proposals would hit jobs and economic growth and “was not in the national interest”.

Former Lib Dem leader Charles Kennedy, together with Labour and Liberal Democrat colleagues in the House of Commons, the House of Lords and the European Parliament, wrote a letter to the Guardian, advising against putting in question Britain’s membership of the EU.

A number of business groups took a more positive view of the speech, with the CBI’s director general, John Cridland, claiming that there are benefits to be gained from retaining membership of a reformed EU. He said that the CBI will work closely with government to get the best deal for Britain.

John Longworth of the British Chambers of Commerce (BCC) also said that Cameron is right to renegotiate Britain’s place in Europe, pointing out that the country starts with a strong negotiating position as the UK runs a trade deficit with the EU. However, the BCC director general feels that a shorter timescale for negotiation and referendum would be better, with the aim of securing a cross-party consensus and the outline of a deal during the current parliament.

Support for renegotiation also came from the Institute of Directors, whose director general, Simon Walker, said that the prime minster’s approach is “realistic and pragmatic.”

Addressing the matter of the uncertainty brought about by the plans, Walker said that the issues need to be dealt with and British business is resilient and flexible and can cope with change or uncertainty. “The eurozone crisis is the source of far more uncertainty than a referendum,” he added.

UK businesses favour more free trade but less integration in Europe

British businesses value free trade with other countries across Europe but are unsure about the value of deeper integration in the European Union, according to a new survey from the British Chambers of Commerce (BCC).

Ahead of a meeting of EU leaders, the business group questioned more than 7,500 companies, asking firms of all sizes about what type of trading relationship with other European nations would most benefit their business in the long term.

A significant proportion of businesspeople are unsure or unaware of whether links to the rest of Europe benefit them. More than half (55%) of all respondents are uncertain about which trading relationship with Europe would be best for their business, including a third of exporters and two thirds of non-exporters.?

Of those who expressed an opinion on the matter, 51% of exporters believe that Europe should be a free trade area while less than a third (31%) support the concept of an economic union. A free trade area would allow the free movement of goods and services but would not have the EU’s social and economic integration, so firms would be less burdened by European regulation and legislation.

Commenting on the survey’s findings, John Longworth, BCC director general, said that businesses want to see more free trade but less integration across Europe. Noting that some companies said that they found it as easy to increase their trade with some non-EU countries as it was to increase their trade with other EU countries, he called on ministers to push hard to remove barriers to free trade among European countries, to make the single market work better.

Despite their scepticism about the EU’s ever closer union, British businesses still support UK membership: just 4.4% of all respondents favoured leaving the European Union altogether and agreeing bilateral trade agreements with individual European countries.

Perhaps unsurprisingly, given the ongoing crisis in the eurozone, only 3.9% of respondents expressed support for UK entry into a monetary union.