FIRST we had the crisis that was last September’s independence referendum and the potential constitutional split of the UK. Then the deep concern of the corporate world around the general election and the spectre of a deeply fragmented, uncertain political landscape. Now we have skidded on rapidly to one of the business community’s deepest fears of all, a possible Brexit from the European Union via a referendum to be held by the end of 2017.
In terms of political volatility, business’s default position has almost become crisis. One seismic threat to the security needed for investment is followed by another. The corpse of the Tory/Liberal Democrat coalition government was barely buried before David Cameron placed renegotiating Britain’s membership of the EU front and centre of his new single-party premiership.
The concerns of business are understandable. For one thing, Europe takes 40 per cent of UK exports. For another, multinationals base a lot of their inward investment logic in Britain on us being a gateway to the much bigger business market across the Channel. Organisations such as the CBI and British Chambers of Commerce believe we risk cutting off our economic nose to spite our face if we pull up the drawbridge.
To Brexit or not is arguably even more fraught with uncertainty and imponderables than the UK election or the Scottish independence vote.
It is hard to see any reset of our relationship with the EU that would satisfy the Tory back benches against a backdrop of a smaller Cameron majority than the hapless John Major had that does not involve a significant clampdown on mass migration into the UK.
There are legitimate arguments for this based on pressure on UK housing, GPs, hospitals, schools, welfare benefits and the desirability of greater social cohesion. But many in Europe say the internal market and free movement of labour are red lines for them. Poland and Slovakia’s European ministers went public on that point last week.
Bluntly, there doesn’t seem any wriggle room on the issue in Europe, and it is too visceral for many pragmatic, non-racist British voters to allow for any diplomatic finessing.
I believe that the minimum Cameron would need to gain to allow him to campaign for us to stay joined at the hip with Brussels would be a significant freeze on migrants claiming UK benefits (probably needing unanimous support from all 28 member states) and a notable lessening of EU red tape.
Cutting the UK some slack on the working time directive and some of the EU’s justice remit might be an unlikely icing on the cake for Tory right-wingers. But Cameron faces a steep uphill climb in persuading his EU colleagues that the demanded changes are not a case of us wanting our cake and eating it and imperilling what is plainly a political as well as an economic project.
UK businesses will be vocal on the benefits of staying and the issue of economic efficiency will be repeated endlessly, but it is plain they are unsettled by the uncharted waters leading to what they see as a potential crashing waterfall.«