Half of British business wants to stay in EU, but re-negotiate employment law

The first major survey of British business following prime minister David Cameron’s policy speech on Europe in January 2013 has revealed broad support for the re-negotiation of Britain’s relationship with the European Union.

The British Chambers of Commerce’s (BCC) EU Business Barometer, which gathered responses from nearly 4,400 businesses of all sizes and sectors across the UK, tested five scenarios for Britain’s future relationship with the EU.

The number one British business priority for re-negotiation was employment law (54%). This was followed by health and safety law (46%) and regional development policies (33%).

Respondents were asked to give their view on the potential impact of each scenario on Britain’s business and economic prospects.

The survey asked respondents to pick from five options:

• Full withdrawal from the EU
• Withdrawal from the EU followed by a trade agreement
• Remain in the EU with specific powers transferred back from Brussels to Westminster
• Remain in the EU and integrate further with other EU member states
• Remain in the EU with no change to current relationship

The survey found “full withdrawal” from the EU received the highest negative impact rating (60%).

Remaining in the EU with no change to current relationship received the lowest positive impact rating (15%).

John Longworth, director general of the BCC said: “We now have confirmation of what we’ve suspected for some time: namely, that employment and health and safety are the areas where companies would like to see legislative competence return to Westminster from Brussels.

“From a business perspective, any re-negotiation of Britain’s relationship with the European Union must therefore focus on these areas which are not integral to the functioning of the Single Market in goods and services.”

Meanwhile, a separate survey of FTSE 100 chairman has found the majority believe an EU departure would damage Britain’s biggest businesses.

The latest Boardroom Pulse survey, conducted by talent management consultancy firm Korn/Ferry Whitehead Mann, found74% of respondents said that if Britain were to leave the EU, it would have a negative effect on business.

One chairman suggested that “the UK’s loss of its seat at the table would obliterate our ability to help resolve the deep structural flaws in the EU” and another suggested that over the next 25 years “Britain would lose all significant world influence” and “shrinkage in the City of London would become permanent”.

This view is not universal, however, with nearly a quarter (23%) arguing that departure from the EU would have no impact on their business, and a small number (3%) saying it would have a positive impact.

One chairman said that “if trade links are kept open there may be some short-term effects but long-term, not much” and another suggested that while “to be relieved of simply mad European-led regulation would be a bonus”, they would be concerned about “the negative effect on the UK economy of being outside of its largest trading market”.

Dominic Schofield, senior client partner with Korn/Ferry’s Board Practice, said: “A clear majority of the UK’s business leaders believe that their companies would be adversely affected if the UK was to leave the European Union.

“Though they overwhelmingly believe a departure is unlikely, if it were to happen there is a strong feeling that there is a need to ensure the continuation of favourable trading terms with EU countries.

Schofield added:”Given the importance to our economy of ensuring that our best businesses succeed on a global playing field in the coming years, our political leaders will need to work hard to carry business opinion with them in any re-negotiation efforts.”

In the May edition of HR magazine, there will be a full analysis of the impact leaving the EU could have on business and HR.