David Cameron risks making the UK the 'sulky boy' of Europe

The prime minister's self-serving promise of a referendum is not in our interest, given the huge economic benefits of membership, says Baroness Kingsmill.

by Denise Kingsmill
Last Updated: 18 Mar 2013

The EU is the world's most powerful political and trading bloc, and yet our relationship is at best equivocal and at worst downright hostile.

According to pollster Deborah Mattinson of BritainThinks, in a recent poll Europe scored just 7% as an 'issue of importance to me and my family', and yet people do care deeply about some of the issues they associate with our membership of the EU, such as red tape, human rights laws, and above all immigration. It is these issues that have shifted the consensus in the street towards a negative view of Britain's membership.

It is the nature of politicians to respond to popular concerns and they will often make rash promises in order to do so. But it is the responsibility of government to put the benefit of the whole country above such self-interest.

The uncertainty created by David Cameron's wild promise of an 'in or out' referendum on our membership of the EU in four years' time is an example of the sort of grandstanding negotiating approach that would get short shrift in the boardrooms of most international companies.

The broad economic benefits of membership of the EU may be summed up in Bill Clinton's phrase: 'It's arithmetic!' It seems abundantly obvious that a market of more than 500 million people with a combined GDP, even after the financial crisis, of around £11trn, without tariffs or customs duties and on our doorstep, has to be an unparalleled opportunity for business and jobs.

The Department for Business, Innovation and Skills has estimated that 3.5 million jobs have been linked directly or indirectly to the UK's trade with other member states. The statistics are many and varied, and provide wholly positive confirmation of the benefits of membership to the economic wellbeing of the UK.

Business leaders have consistently and in-creasingly vocally supported our continued membership and deplored the uncertainty created by the prospect of a referendum.

What company, contemplating a significant investment in Britain in order to trade within the single market, is likely to do so if there is a risk of a No vote in 2017 and a UK exit? What would be the future of the City without advantageous access to the European single market? Four years may be a long time in politics but most businesses are looking towards much further horizons.

Meanwhile, we are already on the outer edges of the EU, having refused to adopt the euro, or join the Schengen agreement, which allows the free movement of member citizens, and by seeking an opt-out from legislation such as the Working Time Directive and refusing to sign up to the Charter of Fundamental Rights and the proposed banking union.

This latest threat of a referendum on our continued membership is further evidence of our reluctance to commit, and our lack of collegiality is viewed by our neighbours with weary exasperation.

Instead of trying to bring about change from within, we stand on the sidelines endlessly complaining about Europe's faults and demanding special treatment or else we will leave. As a negotiating stance it seems about as effective as a toddler's tantrum and is doomed to fail. Yet we do not appear to have considered an exit strategy. What happens the day after a No vote? Where would we go if we leave the EU? Who would be our partners?

In these days of globalisation we are too small to go it alone. The US has made it clear that our value in its world view is as a member of a strong and vibrant European political and economic union, and that it is firmly in favour of us remaining within the European fold. We would be unlikely to receive any 'special relationship' favours from the Americans if we were to exit.

There are those who hanker nostalgically after the good old days of the Commonwealth and argue that this is our natural home.

Lord Howell of Guildford, a former Conservative minister and George Osborne's father-in-law, said recently: 'The Europeans are our neighbours, the Americans are our friends but the Commonwealth is our family.' Unfortunately, this feeling is not reciprocated when it comes to hard-nosed business.

Evidence of this comes with the news that India is buying £12bn worth of fighter jets from France rather than the UK, despite the 'soft diplomacy' of millions of pounds' worth of aid that we have continued to pour into one of the fastest growing economies in the world. No sentimental preferential treatment for 'family' here.

As trading partners, the Commonwealth nations have moved on since 1973, when the UK abandoned old alliances in favour of what was then seen as the new dynamic European Common Market.

They have found other markets, flourishing as they emerged from under the yoke of the old colonial relationship. In any event, the UK electorate may have warm feelings towards Australia, Canada and New Zealand, judging by the numbers of skilled British applicants to emigrate to these countries, but a Chatham House YouGov poll in 2011 illustrated the depth of its hostility to other Commonwealth countries such as India, Pakistan and South Africa, rating these countries at the bottom of the list in terms of their appeal.

There is much that is wrong with the EU but the confrontational approach taken by Cameron is not the best way to bring about change. As anyone with board experience will know, whatever differences and strong opinions may be expressed behind closed doors, ultimately, consensus is in everyone's interest and this is best achieved quietly, inside the boardroom.

Baroness Kingsmill is a non-executive director of various British, European and US boards. Lady Kingsmill can be contacted on editorial@managementtoday.com

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