Industry leaders insist euro will not push up wage costs

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The Independent Online
CONFEDERATION OF British Industry leaders yesterday gave Britain a fresh push in the direction of the single currency by arguing that a decision to join would not lumber firms with costly and inflexible European- style employment practices.

The claims are likely to infuriate Eurosceptics among the CBI's ranks and set the scene for a fiery session when delegates debate the single currency issue tomorrow.

According to an 85-page study released yesterday by the CBI leadership, claims that joining the euro would saddle Britain with the social costs and inflexible labour markets found on the Continent are the product of "stereotypes and generalisations".

In fact, the CBI argues that some countries with what are perceived to be rigid labour markets - such as France and Germany - are ahead of Britain when it comes to flexibility in skills and workers moving between different functions.

Adair Turner, the director general of the CBI and a prominent advocate of British entry into EMU, said the problems that did exist on the Continent were the result of mistaken national policies and needed to be fixed at the national level, not by European Union diktat. "The idea that staying outside the euro is a moat against adopting things you don't want is also a fallacy," he added.

CBI leaders argue that the "centre of gravity" of British business favours joining the euro when the time is right.

But the pressure group Business for Sterling argues that it will mean higher taxes, more regulations and increased costs. Rodney Leach, chairman of Business for Sterling, will argue his case with Lord Marshall, chairman of Britain in Europe immediately after Tony Blair addresses delegates tomorrow morning on the Government's stance over the euro.

The CBI report says that action to cut the EU's historically high unemployment levels must be the main priority. But actual measures must be left to individual member states.