The British PM’s team is actively engaged in negotiations with counterparts within the EU to try to achieve accord over British reform demands for its relationship with the EU. The demands have struck common chords with other EU states, but a measure designed to delay certain social security benefits from (low paid) migrants to the UK (higher paid migrants, or British citizens, are already ineligible to claim these means tested benefits) look likely to be a sticking point. The government’s position is that it will strive to gain (some or all of) these concessions and armed with the renewed relationship, commend continued membership of the EU to the British people when the matter goes to a referendum before the end of next year.
The continued membership of the EU is a divisive matter both within the government, most political parties (UKIP being the obvious exception), the business community (but a clear, strong majority want to remain within the EU) and the populace as a whole. The lines of division are such that cabinet ministers are to be given freedom to campaign on either side of the debate once the renegotiations have run their course.
It is hoped that an agreement may be reached over the reform process by the end of next month which could pave the way for a referendum later in 2016 – all sides agree that uncertainty over the countries continued membership of the EU is not in that national interest and needs to be resolved as soon as possible.
Without quite breaching the agreement that ministers will not take sides before negotiations have run their course, cabinet minister Chris Grayling warned that, in his opinion, the UK was at "a crucial crossroads" and "cannot be left in a position where we have no ability to defend our national interest. Nor can we simply accept endless migration from across Europe with no ability to slow or stop the resulting growth in our population. It is time for Britain to vote again on its future in Europe. I am someone who believes that simply staying in the EU with our current terms of membership unchanged would be disastrous for Britain."
In the meantime, two senior figures from the UK business community, Michael Rake and John McFarlane, chairmen of BT Group and Barclay’s Bank, both came out strongly in favour of the UK remaining as a member of the EU in interviews with Bloomberg. They cautioned that a Brexit could damage London’s role as a major financial centre and harm inwards investment. A Brexit would probably cause a number of major banks to relocate their businesses from the City as the UK would lose its unique place as they use London for their main access to Europe. An obvious choice for relocation would be Frankfurt, an established financial centre, but New York could also benefit from such an exodus.
The overwhelming majority of players within the financial sector seem to favour continued membership with one recent poll suggesting 85% in favour of continued membership with just 4% backing a withdrawal.