Labour: Revisiting EU membership risks instability for UK firms

Instead of a blanket political deal, the party is prioritising closer relationships in specific areas, like security, research and development and education.

British businesses would suffer from the instability that revisiting arguments around the UK’s membership of the European Union or Customs Union would cause, Labour’s Jonathan Reynolds said today.

Speaking at the British Chamber of Commerce’s (BCC) Annual Conference, the shadow business secretary argued that the business community would benefit more if the UK avoided the volatility that any renegotiation would bring.

“You could not relieve the arguments – which it would be because there’s no consensus – and provide people with the assurance that we’re moving to a period where British politics is going to be in a stable position rather than, frankly, causing more difficulties,” Reynolds said.

The country’s relationship with the EU has gone largely undiscussed in the general election campaign with both main parties opting against addressing the UK’s future relationship with the trading bloc.

The Labour Party has stopped short of committing to formally renegotiating Britain’s relationship with the EU – be that through rejoining the Customs Union or the Single Market – despite business groups like the BCC campaigning for a negotiated settlement.

Instead of a blanket political deal, the party is prioritising closer relationships in specific areas, like security, research and development and education.

But Reynolds maintained that smaller, trade oriented improvements would benefit businesses more than any political agreement between the neighbouring economies.

“I think that practical, trade based improvements in performance, rather than constitutional arguments around the customs unions and single markets are a genuinely better way to [approach our relationship with the EU],” he said.

The crystallising of Labour’s position on the EU differs from that that adopted by BCC. The trade body, which represents 50,000 UK businesses, made renegotiating our trade arrangements with the European Union one of the five headline policies in the manifesto it compiled ahead of next week’s election.

Ahead of Reynolds’ address, the BCC’s Director General Shevaun Haviland addressed the issue explicitly, saying: “We must stop walking on eggshells and start saying it how it is. The current plan isn’t working for our members.

“The EU is the UK’s largest market, accounting for 42 per cent of all our exports. Leaving the EU has made it more expensive and bureaucratic to sell our goods and services across the Channel. But better trading terms are possible if the UK government and the EU reach agreement in areas of mutual benefit for business on both sides.”

Reynolds was also pushed on Labour’s position on workers’ rights. The party’s New Deal for Workers, which aims to make fire and rehire illegal and outlaw zero hours contracts, has been one of its flagship policies, but has been criticised by some corners of the business community.

However, Reynolds remained adamant about the value of the reforms, saying: “We’re all signed up to and believe in this. It reflects the conversations we have in our constituencies. I have doubts that anyone [in business] believes or wants anyone to think their business model is in any way about exploiting people.

“[Businesses] want to provide the jobs for people and quite rightly take pride in that.”