Brussels might seem a long way from Newcastle. But a new poll of North East businesspeople shows they realise just how important EU membership is to the regional economy. 

By Will Cousins

Anti-European rhetoric seeks to divide business. Large PLCs in London, they say, might be pro-European. But small businesses in the rest of the United Kingdom are drowning in/being throttled by “Brussels red tape,” and as such they want to leave the EU unless it is changed beyond all recognition. Fortunately, new evidence is coming to light which utterly refutes this argument.

Last week, a survey of 4,000 businesses by the North East Chamber of Commerce (NECC) was released. It showed an overwhelming majority of 58% of businesses wanting to stay in the EU, against a mere 11% who want to leave. This isexactly the same proportion as that found by the CBI (a target of Eurosceptic vitriol)- 11% for leaving, 78% for staying in.

And is it any wonder? A conference in London last Wednesday, attended by very prominent anti-Europeans, concluded that the best option for Britain would be to leave the EU and trade with it under the World Trade Organisation rules. This would mean that our exporters would face the EU’s common external tariff. The tariff on cars is 10%. Think about Nissan’s plant in Sunderland, the greatest industrial powerhouse in the region. Most of its cars are sold to the EU- how would it cope with such a rise in cost? Nissan is one of those big, foreign companies that hold a special place in Eurosceptic demonology. But what about supply chains? Car companies like to source their parts as locally as possible. Small, privately owned engineering firms would be hammered if Nissan got into trouble.

Further south, in Teesside, chemicals are a dominant local employer. The North East Process Industry Cluster employs 35,000 people directly, and another 190,000 people indirectly. It produces 50% of the UK’s petrochemicals, and 35% of pharmaceuticals. The EU tariff on chemicals is 5%- how do eurosceptics expect the industry to cope with that? Leaving the EU would achieve nothing more than the shipping of jobs, investment and scientific expertise in the chemical industry to Germany.

Foreign direct investment is also vital for the region. Siemens, the German industrial giant, employs 2,000 people in the North East, mostly in high-skilled energy sector jobs. Denmark’s Grundfos makes pumps in Sunderland; Germany’s TyssenKrupp makes parts for the automotive sector in Aycliffe; Hitachi is investing £5.8 billion in a new factory near Durham. Without access to the EU Single Market, many of these sorts of investments would become uneconomical.

It is also true that the North East benefits from the EU’s regional policy. Over the next six years, the region will receive £1 billion from Brussels, allocated to projects in infrastructure, small business support, digital and trade support.

Of course business does not want the EU to stand still. As the NECC’s Ross Smith put it: “Our members feel passionately that reform, rather than further integration or outright withdrawal, is most likely to deliver business and economic benefit to the UK.” Business wants the EU to change, along the lines of our Business Manifesto for Reform: completion of the Single Market, more free trade deals, greater competitiveness and less regulation. The good news is that this is happening. Just yesterday, for instance, Britain’s EU Commissioner Jonathan Hill outlined his plans for a Capital Markets Union across the EU. This will make it easier for small business to get funding from non-bank investors, such as venture capital and crowdfunding.

As the general election gets ever-closer, business minds are being focused by the possibility of a referendum on EU membership. All the evidence we see is that business wants to stay in the EU and work to make it better. And that is as true of small manufacturers on the Tyne and the Tees as it is of big banks by the Thames.