Picture CBI

There’s no hiding it, the apolitical CBI, a major voice for business, concludes that there is no credible alternative to EU membership.

A careful reading of their report gives no comfort to the Conservative or UKIP parties which in various measures want to see a different relationship with the EU. The CBI reach the clear conclusion that the UK should be IN, notwithstanding the need for reform.

But reform and exit are two entirely different things.

This is what the CBI said on the EU membership options:

There is no credible alternative to EU membership
The CBI report concludes there is no realistic alternative to EU membership that can combine all the benefits of the UK’s current relationship with none of the costs. Ultimately, all alternative models would leave the UK following market rules decided by others, rather than having a major role in setting the rules. The EU is increasingly having an impact on regulation not just on those who want to trade inside the EU, but at a global level. The report rules out the following options:
  • Customs union – this model would leave the UK with limited EU market access, a ‘standards-taker’ and with zero influence over trade deals – which means where the EU signs a trade deal, the third party country would have access to our markets but not necessarily vice versa.
A customs union is no longer sufficient to give the access UK firms need in a complex global economy. Turkey currently operates with this model on the pathway to full membership, but their agreement does not cover services
  • A bespoke UK-EU trade deal – there would be great uncertainty around the likelihood of a deal on favourable terms to the UK, with the EU having a stronger negotiating hand and unlikely to ‘reward’ an exit. This arrangement would not free the UK from having to comply with EU regulation
  • Going it alone with the World Trade Organisation – this alternative would reduce market access by increased tariffs. There would be greater freedom for the UK to pursue its own trade deals, but it would be unlikely to get as favourable deals as the EU can and there would be a long period of dislocation while any new deals are negotiated
  • Norway and Switzerland options – while the CBI recognises the different arrangements that Norway and Switzerland have with the EU work for them in many respects, they would not work for the UK.
It would leave British businesses on the margins of the world’s largest trading bloc, operating under market rules over which it has little or no influence and in the Norwegian scenario, still paying the bills.

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