FEARS FOR BRITISH BUSINESS IN DERBY AS UK LOSES VITAL INFLUENCE AFTER EU SUMMIT

As the ramifications emerge from David Cameron’s decision to walk away from the negotiating table and use the UK’s veto at the recent European Council, it is increasingly clear that British business is now worried.

There is uncertainty for business looking to plan for the long-term. There are concerns over the impact on exports, on inward investment and whether global firms will put their operations in Britain. There are worries over our influence of the operation of the single market, the biggest market for British firms.

Business leaders have asked what it will mean for Britain’s economy. The CBI’s Director General John Cridland has said that we are in “uncharted territory” and has questioned whether, given the UK’s increasing isolation, whether we will “still be in a position to stop new financial regulations that come about as the eurozone becomes more integrated”.

These concerns have been echoed by the body representing British manufacturers, the EEF: “it's going to affect how we engage with our EU partners on a daily basis”. Sir Martin Sorrell, boss of FTSE 100 firm WPP, has said: “I’d prefer to be inside the tent not outside. Change is easier to achieve from within. It seems to be more about politics than economics.”

The Prime Minister claimed he used the UK’s veto to protect the financial services sector. However, no safeguards were won. Financial regulation is decided by qualified majority voting at European Councils - this was true before the Prime Minister’s veto, and afterwards - and the UK has never lost a vote in this area. But following recent events, the fear is that Britain’s ability to marshal a majority has been compromised and we will be shut out of discussions on financial services regulation. In short, our ability to defend financial services in the UK has been hampered, not enhanced.

The implementation of the Financial Transaction Tax – another ‘justification’ for the veto - wasn’t on the agenda of the Council meeting and in any case a Financial Transaction Tax could only have been implemented following a unanimous vote by all member states of the EU. This was true before the meeting and is true after. Again this questions the rationale of David Cameron’s decision.

But there are now real concerns being expressed by British businesses that firms will lose out following the UK’s loss of influence in the single market. They say Britain’s ability to attract inward investment could be weakened and global corporations could be less likely to set up operations or European headquarters in the UK in the future. Businesses are worried about the uncertainty that has been created.

On top of this, the Prime Minister’s decision has done nothing to tackle instability and the lack of growth in the Eurozone which, as our main export market, is crucial for our firms.

These are challenging times ahead for firms and that is why I‘m going out talking to local businesses, including larger firms with operations and offices in our area, to understand their concerns so I can press the Government on what this means for jobs and growth here in Derby.