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EU FIGHT BEGINS PLUS SOME FUTURE INVESTMENT REMINDERS By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.

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28 May 15. British voters will “make the right choice” in an in/out EU referendum adding that he would vote to stay in when the referendum on continuing EU membership is finally held in 2017. This view from Andrew Tyler, UK and Europe CEO of Northrop Grumman, was reported in an article in the Guardian newspaper earlier this week. It is a view that I completely share and one also that I also know is shared by a great many industrialists, senior bankers and those responsible for vast amounts UK based employment.

The Engineering Employers Federation has gone as far as to suggest that no less than 85% of manufacturing industry participants say that they wish Britain to stay inside the European Union. That is hardly surprising and just as I do they fear the danger of disinvestment should we eventually decide to leave the EU.

Of course, I must also respect the views of those that have a rather different take on the subject of EU membership and I would be stupid to underestimate the power of argument that they have. For industry and commerce it is easy for us to reason why we should stay in the EU but for the individual it is all too easy for them to be persuaded to believe that the money we pay into the EU might better be spent increasing domestic health, education and welfare. Thus, to the public at least, the case for continuing EU membership is far harder to make.

We must be aware of the differentials in the overall argument for continuing EU membership and we must adjust the message accordingly. Everyone in this debate has a view and one of the big difficulties that we face is that in part of this argument and debate we know that everyone that has a view on the subject is right. I have made my bed so I will lie on it. Just as the ‘Iron Lady’ could I too can see the many faults of the EU but just as she had I prefer to stay inside and fight for change. Perhaps, if we were a nation that had real ambition; a greater sense of purpose that we have together with a real determination to succeed, I might just be persuaded to take a different view on EU membership but there we are. On that subject I live in hope rather than expectation.

Airbus Group CEO Tom Enders who I might remind was pleasingly just yesterday reappointed to the post for a further three years had in my view put forward some very compelling arguments for the UK remaining a member of the European Union and other useful remarks in relation to long term investment when he delivered the Wilbur and Orville Wright Lecture to members of the Royal Aeronautical Society in December 2013. I will take the opportunity to remind of some of the more relevant points Enders made in that excellent address today.

Entitled ‘Of Bus Lanes, Bikes and Britain’ Enders put forward a compelling argument for Britain to remain an active member of the EU and play its part in reshaping Europe but also one calling for national investment in advanced technology manufacturing. It was a wake-up call and one which as far as I was concerned he held his audience in the palm of his hand.

Focussing primarily on the importance of aircraft, defence and space programmes the message was a timely reminder that the UK and indeed, Europe as a whole could or should not rely entirely on the services industries to provide employment. It was a message that I interpreted as saying high-value exports are the result of long term investment. Pointing out that benefits from aerospace flowed generally into the economy Enders reminded that each Euro spent on research and development generates two Euros of value added.

I dare say that few will argue the validity of such excellent and well-made points such as these and I hope also that they might agree the validity of points that Enders made on Britain remaining as part of the EU.

As far as EU membership is concerned Enders reminded his audience that the UK has long been a powerful defender of free trade and of de-regulation. Without this voice, Europe he said would “close its frontiers” adding that buying short term relief from competition at the expense of long term competitiveness does not work. “Britain” he said “was needed in Europe to influence events and to promote best practice”. That is undoubtedly true and we must make our voice far better heard.

In the aerospace sector Enders praised the last Coalition Government for taking several important initiatives to underpin Britain’s contribution to European aerospace. The Aerospace Growth Partnership, the Space Industry Growth Partnership and the Defence Industry Growth Partnership continue what he called a government-industry partnership that would keep the country in the forefront of world aerospace adding that this would all be for naught unless there was a continued flow of young people coming into industry.

The point that Enders was making here was that investment in scientific and technological education is vital but the take home message is that Britain needs to do a lot more than it is already doing. Out of the EU and aloof in Europe Britain would be on its own paddling its own canoe. And ask yourself this, if there is not enough research and development investment going in now what would it be like in a climate of disinvestment that people like me reckon might well occur if Britain pulls out of Europe.

For all that I do understand the perspective put forward by those that take an alternative view. I have to try and be balanced in my opinions on such matters although I accept that is not always possible. Typical of responses that I received when I wrote on the same subject last week was that “to my mind this is our last (probably ever) chance to free ourselves from the bloated, undemocratic, expensive, corrupt shackles of EU membership”. “It is” my much respect correspondent went on to say “simply a choice of national freedom vs continuing down the road that clearly and inevitably leads to a United States of Europe where a Federal, split-up regionalised ‘Little Britain’ will become even more insignificant in all things important”.

I respect the view although I do not share it and perhaps my principal fear here is that as a nation that is now steeped in over expectation of what the State can and should deliver that living beyond our means becomes permanent. Perhaps if we had real and very visible leadership I might take a different view.

Today Prime Minister David Cameron begins a difficult tour of Dutch, French, Polish and German capitals in an attempt to persuade fellow large EU member states of the validity of Britain’s case that the EU needs to reform. I do not envy the PM in the task although it is one that has to be done. There are powerful voices that oppose change and the PM is no match for some of his adversaries on the subject of much needed reform. I wish him well but I am far from being optimistic about success. And if that is the case and if industry and commerce who I in this instance represent will need to redouble their efforts to persuade a doubting public that will no doubt be too easily led down a route of change for change sake.

hwheeldon@wheeldonstrategic.com

Tel: 07710 779785

 

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