CBI review reaffirms pro-EMU policy
Following an extensive consultation exercise, including an opinion survey of member companies, the July 1999 meeting of the national council of the Confederation of British Industry issued a policy statement confirming its support for the principle of UK membership of EU Economic and Monetary Union.
On 20 July 1999, the national council of the Confederation of British Industry (CBI) adopted a policy statement reaffirming that the CBI is "in favour in principle of UK entry into European Economic and Monetary Union once key conditions for success are in place". The CBI believes that UK membership of EMU"has the potential to deliver significant benefits to the UK economy", but that further progress is needed towards "sound fiscal conditions in all major euro-zone countries", together with a shift in labour market policies towards more flexibility. The new policy statement is the culmination of a three-month consultation process involving voting on CBI regional and national committees and a survey of wider membership opinion carried out by polling organisation MORI.
Commenting on the outcome of the policy review, CBI president Sir Clive Thompson said: "CBI policy is a clear yes to EMU, but not an unconditional one. Previous surveys and consultations had indicated that, while the majority of members are in favour of membership at least in principle, there remains a minority of members who are against, and a significant body who favour a 'wait and see' approach. Today's results continue that pattern, and contain nothing to suggest that we should markedly alter our view."
The outcome of the consultation process and membership survey indicates that the CBI's wider membership is more "euro-sceptic" than the "insiders" involved in the CBI's committee structure, as the table below indicates.
|CBI committees||Member organisations|
|Britain should join the euro as soon as possible (ie before 2002)||19%||19%|
|Britain should join the euro between 2002 and 2005||31%||11%|
|Britain should be in principle committed to joining the euro, but should not yet decide the timetable||28%||22%|
|Britain should wait and see how the euro develops before making any decisions, even of in principle commitment||20%||31%|
|Britain should decide now not to join either in this parliament or the next (ie not before 2007)||1%||5%|
|Britain should never join the euro||1%||10%|
The CBI policy statement says that the timing of UK entry will need to be determined "in the light of reasonable cyclical convergence" between the UK and other EU economies, and that the appropriate exchange rate could only be decided nearer the date of entry. CBI members' responses to the survey indicated that an exchange rate of between EUR 1.35 and EUR 1.38 to the GBP might be considered appropriate. The CBI statement argues that the UK government should maintain its commitment in principle to British membership of EMU, and should:
- work within the EU to urge progress on the policies needed to ensure EMU's success, specifically in the areas of sound fiscal policy and continued product and labour market liberalisation;
- continue with the practical preparations needed to ensure that entry can follow swiftly once a decision in a referendum is made;
- review regularly whether the conditions for UK entry are favourable; and
- encourage an informed debate about all aspects of UK membership of EMU.