Previously, the CBI advocated the UK joining the flawed Exchange Rate Mechanism (ERM). The ERM was a system introduced by the EEC to reduce exchange rate variability and achieve monetary stability in Europe, in preparation for the introduction of the Euro. However, it didn’t work out well for the UK. The UK was forced to exit the programme within two years after the pound came under major pressure from currency speculators.
Norman Tebbit was the first to call the ERM the “Eternal Recession Mechanism”, when the UK fell into recession in 1990. The UK spent over £6 billion trying to keep the currency within the exchange rates demanded by the system, with interest rates hitting 15% before the UK was forced to crash out.
The CBI, unperturbed by its lack of judgement on the ERM, then recommended that the UK join the Euro. I think it’s evident to all what a disaster that would have been for the UK!
And now, we have the president of the CBI, Sir Mike Rake, arbitrarily declaring “Business must be crystal clear that membership is in our national interest.” Forgive me, Sir Mike, if I find you and your organisation unconvincing in your attempts to extol the virtues of the UK being in the EU.
Of course, there are many business leaders who are happy to go on the record saying that they think leaving the EU could be beneficial to British businesses. The boss of JCB says that EU exit could lift the burden of bureaucracy on UK businesses, and of course he is right, especially for smaller businesses which do not have the infrastructure to cope with the endless rules and regulations imposed upon them by EU regulations and directives (over 3600 new rules since 2010). Over 90% of our small businesses do not export to EU markets – yet 100% of them have to comply with all the EU rules.
Marc Bolland, the boss of Marks & Spencer, has said that business should reserve judgement on EU membership depending on what Cameron can renegotiate. However, I agree with Nigel Farage that Cameron will not be able to negotiate anything more than “cosmetic” changes to our EU membership.
The UK is the world’s 5th largest economy by GDP. We can thrive outside the EU, but remaining friends with and trading with the EU. We should retake our empty seat at the World Trade Organisation and negotiate our own free trade deals with countries in the rest of the world, which we cannot currently do as members of the EU bloc. And to the naysayers I would remind them that Switzerland, a country outside of the EU, does 4.5 times as much trade per capita with the EU than we do.
And finally, you can draw your own conclusions from the infographic, above left, showing EU financial contributions to the CBI.