10:00PM BST 16 Jun 2012
In a stark warning to the Government that any economic union as a result of the eurozone crisis could have negative effects on the UK, the director general of the British Chambers of Commerce, John Longworth, said that the balance of advantages of the single market were being damaged by the weight of regulation.
In a survey of 7,500 businesses to be released tomorrow, the BCC found that 35pc of all exporters believe that Europe should be a free trade area without the Brussels-led social legislation that many feel hamper their business.
Just over 20pc supported an economic union and just 6pc supported being members of the single currency.
“There is a concern about the balance of advantages in the single market,” Mr Longworth said. “Europe is a very important trading area for British business but the eurozone is creating a confidence issue.
“On balance [British businesses] would like a renegotiated free trade area.”
There are growing fears that as the eurozone increases the levels of fiscal integration - a policy advocated by both David Cameron and George Osborne - Britain will have an increasingly difficult relationship with the European Union.
Some leading British businesses believe that once fiscal integration among members of the eurozone happens, the Government will be forced to renegotiate with the European Union or face having to implement damaging policies because of a push from eurozone countries.
Mr Longworth pointed out that many businesses were now more interested in creating links with fast growing economies such as Brazil, India and China and that agreements to remove barriers by the World Trade Organisation were helping to support growth.
The lack of a European single market in services such as law, accountancy and financial services - in which the UK has a leading position - was also of concern.
“It is not surprising that businesses want to see more free trade, but less integration across Europe,” Mr Longworth said. “Companies tell us that the burden of European regulation and legislation is in danger of making them less competitive in the global market.”
The BCC survey also shows that although very few businesses want the UK to leave the European Union, many are unclear about what the advantages are. More than half of the respondents - both exporters and those with UK-only businesses - said they “didn’t know” what form of European economic relationship would be of most benefit to their business.
“Our results show that politicians must not be entranced by the siren songs of either the pro or anti-European camps,” Mr Longworth said.
“Less than one in every twenty companies responding to our survey holds either extremely positive or extremely negative views about Britain’s relationship with Europe. It is also staggering to see just how many business people are unsure or unaware of whether links to the rest of Europe benefit them.
“Companies in the real economy want the UK government’s European agenda to be practical and pragmatic.
“At the same time, our representatives in Brussels must continue to fight all proposals that would slap additional costs or regulatory burdens on British businesses.”
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