Businesses back single currency

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The Independent Online
DIANE COYLE

Economics Correspondent

British businesses are firmly in favour of keeping open the option to join a single European currency, and think political squabbling over Europe is damaging business interests.

Sir Bryan Nicholson, president of the Confederation of British Industry, presenting the results of the biggest ever survey of business attitudes to Europe, said yesterday: ''We must be aware of the danger that the UK's loss of credibility and influence poses to business prospects.''

Robin Geldard, president of the British Chambers of Commerce, said: ''Business would like the Government to come down firmly on the basis that we stay in Europe and take a leading part in Europe.''

The business community tends to favour European monetary union, according to a survey of 1,700 firms conducted by MORI for the CBI and BCC. A clear majority favour keeping all options open.

A majority are also against ruling out membership of the single currency during the lifetime of the next parliament - an idea said to appeal to the Prime Minister.

Only one in eight reject EMU outright, although nearly a third say it would not benefit or would damage British business prospects.

But adding the 8 per cent who would like the start of the single currency to be delayed points to a significant minority who are sceptical or hostile to the project.

More than half the firms surveyed believe the political debate about Britain's commitment to Europe is harming their commercial interests. Only a fifth said it helped the Government's ability to promote British interests.

The respondents are also critical of Britain's ''over-zealousness'' in implementing European Union regulations.

This was cited by 44 per cent of firms as a factor behind unfair competition in Europe, followed by uneven enforcement of regulations by other EU countries, cited by 41 per cent, and illegal state aid in other countries, blamed by 22 per cent.

However, there are clear majorities in favour of two specific Government policies: the opt-out on the single currency, and rejection of the Social Chapter. Four-fifths of the companies surveyed are against the EU's social measures. Promotion of more flexible labour markets and skills training are seen as the priorities for social policy.

More than two-thirds of firms think EU membership has increased inward investment into the UK. There is also support for the single market, with just over half saying it had improved business opportunities within the EU.

Nine out of ten think business interests would be best served by Britain's continued membership of the EU. Only 7 per cent favour withdrawal. Big firms are the strongest supporters of membership, with 97 per cent in favour. Small firms are less avid, with 84 per cent in favour.

Businesses are strongly against giving more powers to the European Parliament, but tentatively in favour of extending qualified majority voting by EU members in order to complete the single market more quickly.

Yesterday's survey confirms the result of earlier informal surveys by both the CBI and BCC. A survey of members by the CBI a year ago showed a greater proportion of respondents were then in favour of being in the leading group of countries to join the single currency, but the proportion in favour of keeping options open is slightly higher now, at just over two-thirds.

The Institute of Directors, which has a membership weighted more towards small businesses, remains hostile to EMU. In a report published in June it emphasised the economic costs of a single currency, particularly the loss of control over interest rate policy.

The CBI and BCC plan to publish fact sheets for members on the single currency and other issues.

Mr Geldard said yesterday that there was a lack of clarity about what businesses want from Europe, but the survey showed there was a pragmatic and postitive view.

''We hope it marks the beginning of a more rational discussion that puts the interests of British commerce and industry at the forefront,'' he said.

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