EUROPE once again returned to the top of the political agenda last week following the intervention of several senior Conservative figures.
Former chancellor Lord Lawson set the tone by calling for the UK to leave the European Union, which was a position also later broadly backed by Michael Portillo. Meanwhile, as the debate intensifies, a group of Eurosceptic Conservative MPs are planning a Commons vote this week on an EU referendum.
From the City’s perspective, it is important to make the point that access to the Single Market is critical to the success of London and the UK. Being plugged in to this larger market underpins London’s position as Europe’s financial capital, which is a major asset for the UK and the continent as a whole.
Uncertainty over our relationship with Europe risks making the UK less attractive as a home for international businesses. The EU still accounts for nearly half of the UK’s exports of goods and services so the importance of the Single Market should not be underestimated – despite the growing influence of other markets in Asia, Latin America and Africa.
Firms based here in the Square Mile regularly make it clear to me that they want the UK to be fully engaged in the Single Market – regardless of the outcome of the Prime Minister’s attempt to renegotiate this relationship.
This means we need to build alliances with likeminded countries in order to strengthen our ability to steer the direction of travel in Europe.
When the UK is plugged in to the legislative process from its outset, we can and do deliver positive results. This was demonstrated by the summit last December when a non-discrimination provision was secured in the banking union deal.
We need to work to convince European policymakers that a more flexible and competitive approach benefits not just London but the continent as a whole.
In this context, the proposal that the UK takes a lead on liberalising the Single Market in services is an interesting one. According to Open Europe, removing EU-wide barriers to trade in this area could increase GDP by nearly €300bn (£253bn) – or nearly €150bn if the enhanced cooperation mechanism is used by the 12 member states already supportive of such steps.
Policymakers should explore whether this or similar proposals can be implemented to liberalise services across the EU. A stronger Single Market, reflecting the economic realities of today, could help to boost job creation and growth across the continent.
In any debate with 27 different voices, there will be times when the UK – like other countries – does not get its way. That does not, however, mean we should be defeatist. The UK has a crucial role to play in reforming the Single Market for the benefit of Europe as a whole.
Mark Boleat is policy chairman at the City of London Corporation.