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11/3/13

Britain: Europe is an anchor for British business - by Vince Cable

For centuries, Britain has developed economically through being an open, outward-looking country. Today, the economy has a high level of global integration. The UK is the world's fifth largest exporter of goods and services, and we attract more foreign direct investment than any other European country.

While I am more worried than Mark Carney, the governor of the Bank of England, about the risks of becoming over-reliant on financial services for growth, I do acknowledge that 60% of City-based firms are in London because of the single market, and that is important to defend because of Britain's ability to influence its rules.

However, it is clear that the UK's future prosperity will require us to adapt to new realities. Over recent decades we have seen a rapid shift in the centre of gravity of the world economy. The combined GDP of emerging economies has already overtaken that of the west, and the gap is widening. Meanwhile, new technologies are transforming the way firms do business, creating demand for greater investment in skills and infrastructure and making it easier to relocate supply chains overseas.

There are fantasists on the right who dream of a lost world of global empire and believe we can walk away from the successful trading block on our doorsteps. The opposite is true. We should take careful note of Monday's report by the Confederation of British Industry, which stresses the importance of continued EU membership. Eight out of 10 firms surveyed said they would vote to stay in the EU if there was a referendum tomorrow.

The report estimated that each British household derives annual benefits of about £3,000 a year from EU membership. That compares with an annual net contribution per person of just over £110 to the EU budget.

Significantly, the report concludes that far from acting as a constraint, the EU serves to anchor the UK's global trade. By being part of a group that is pursuing an outward-looking approach to trade, it is easier for British firms to export and invest internationally.
Read more: Europe is an anchor for British business | Vince Cable | Comment is free | The Guardian

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