EU exit will harm UK, says leading British industry group

Employers' leader John Cridland makes case for continued European Union membership after Cameron's Juncker defeat

The Guardian, The Observer, Toby Helm, Saturday 28 June 2014

John Cridland, director general of the CBI, has warned against Britain's
departure from the EU. Photograph: Linda Nylind for the Guardian

The leader of Britain's biggest business group has said that the country's economic success depends on it remaining a full member of the EU, after senior Tories revealed that more than 150 of the party's MPs would campaign to leave the union in a referendum.

The warning, from CBI director general John Cridland, came after David Cameron admitted on Friday that he now faced an uphill struggle to convince the British people to remain inside the EU, in the runup to an in/out referendum which he has promised to hold by the end of 2017.

Cridland told the Observer that full membership of the EU boosted British jobs, growth and investment. "The EU is our biggest export market and remains fundamental to our economic future," he said. "Our membership supports jobs, drives growth and boosts our international competitiveness."

He dismissed the idea that the UK economy could be just as successful outside the EU with some form of associate membership status, which some Conservatives advocate. "Alternatives to full membership of the EU simply wouldn't work, leaving us beholden to its rules without being able to influence them. We will continue to press the case for the UK remaining in a reformed European Union."

After a two-day EU summit last week, Cameron was left isolated and defeated when his attempt to block Jean-Claude Juncker, the federalist former prime minister of Luxembourg, from becoming the new president of the European commission ended in failure.

Cameron, who will make a statement to the House of Commons on the summit on Monday, said Juncker's appointment and Europe' s refusal to change had made his task of renegotiating the UK's terms of membership before the referendum much harder.

Labour leader Ed Miliband also highlighted the economic danger of an exit from the EU, saying Cameron was putting future success at risk. "David Cameron and the Conservative party now pose a clear and present danger to our economy," he said. "The choice is between Labour, which would win the argument and build alliances for reform, or David Cameron, who by his own admission is taking the country towards the EU exit door, threatening 3m jobs across the UK.

It is understood that Tory MPs have been given private assurances by Cameron that they will be able to campaign to get the UK out of the EU – even if the prime minister has secured what he regards as satisfactory new terms of membership by 2017, and backs staying in himself.

Many Tory MPs now believe that ministers, including those in the cabinet, should also be given the right to campaign as they wish in the planned referendum. Charles Walker, a vice-chairman of the 1922 Committee of Conservative backbenchers, said more than half of the 305 Tory MPs would back leaving the EU, and would campaign to do so in a referendum.

He said it was right to give MPs freedom to campaign as they wished. "I would hope that that would be the case for all MPs, including ministers," he said. "I don't want to see any MP shoehorned into supporting a position in public that they don't back in private."

Another senior Tory said Cameron would have to allow his ministers to campaign as they wished "or else he will lose half his cabinet as a result". Downing Street said it was confident Cameron would succeed in his renegotiations and refused to comment further.

Former European commissioner and Labour cabinet minister Peter Mandelson said: "As ever on Europe, it's not that Cameron is necessarily wrong on the issues, but he has no workable strategy to achieve his ends.

"When he made his about-turn on a UK referendum he thought that he could close down disagreement within his party and force other member states to give in to Britain's point of view. Instead, the chasm inside the Tory party is as wide as ever and others in Europe are refusing to have a pistol put to their heads."

He added: "Britain's approach needs completely rethinking. Cameron is unable to do this because he is a prisoner of his party but while this remains the case, Britain's national interest in Europe will continue to suffer. It is a crying shame that at a time when so many in the EU share a strong reform agenda, the current British government is shooting itself in the foot and disqualifying itself from leading this agenda."