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Cameron's Birthday Wish Should Be a More Competitive EU

09/10/2015 15:30 BST | Updated 09/10/2016 10:12 BST

This evening, David Cameron will celebrate his 49th birthday with the most powerful women in Europe as he hosts Angela Merkel at Chequers. The atmosphere, however, is unlikely to be celebratory. The pair have plenty to discuss, and top of the list will be the EU referendum. According to reports this morning, the German Chancellor still does not feel that she knows exactly what the Prime Minister will be asking for in terms of European reform.

The meeting comes as the EU referendum debate enters a new phase. This morning a coalition of EU 'Outers', under the banner Vote Leave, launched their campaign, while we expect the 'In' campaign to launch next week, in preparation for the gathering of European leaders in Brussels at the EU summit on Thursday. Cameron will have a tough time choosing what to wish for as he blows out the candles on his cake.

Whenever there are big decisions to be made, businesses find themselves being pulled and pushed between competing interests. Winning an endorsement - and the cash that might come with it - from a business name is a big prize for any campaign or political party. When it comes to the EU referendum, it is already clear that business does not speak with one voice. There are as many 'business' opinions on Europe as there are chief executives, and as many calls for reform and change as there are newspaper columns which will carry them. The IoD's study of more than 1,200 of our own members, along with similar work from the Federation of Small Business and the British Chambers of Commerce makes this clear.

Very few IoD members would like to leave the European Union on principle. Only seven per cent say they will definitely vote to quit at the referendum. 40 per cent will vote to stay, but the majority have not yet made up their mind. With the business community so divided, and IoD members - seventy per cent of whom run small and medium-sized companies - yet to make up their mind, we should be wary of any group which claims to speak definitively on behalf of British business.

Our members are international in outlook and high-skill, high-wage employers. They typify the kind of successful, growth-focused and international entrepreneurs both 'Inners' and 'Outers' claim will thrive after the referendum. 56% of them export, 50% employ somebody from overseas and nine in ten already pay the living wage. On balance, two-thirds say that the benefits of EU membership outweigh the costs. But, businesses have some serious reservations about Europe's tendency to intervene and produce regulations which don't account for differences across the 28-member bloc. In fact, only one in eight IoD members say that the EU, as it stands, represents a viable socio-economic model.

It is for these reasons that the focus at this stage of the campaign should be on reform. If Angela Merkel doesn't yet know what David Cameron wants to achieve in his renegotiation, then there is no way businesses and campaign groups can guess how successful he will be, or exactly what the public will be voting on. Our members want to see reform in Europe and recent events have sharpened their minds to exactly what that reform needs to be. Both businesses and Mrs. Merkel will be hoping the prime minister brings them up this evening.

Broad interventions from the European Court of Justice on issues like counting overtime in holiday pay, the classification of 'mobile workers' and rules on data transfers between the EU and the US have frustrated businesses small and large. When Europe imposes regulation in a blanket fashion, designed to apply to a bloc of 500 million people and eleven different currencies, it makes it unnecessarily hard for companies to operate. IoD members want Europe to take a lead on trade deals and take a less enthusiastic approach to creating red tape. They value access to the single market, free movement across the EU and access to world's largest economy - but not at any price.

As the campaigns launch, the politicians lunch, the negotiations stutter and the rhetoric starts, the "voice of business" will be in high demand. With so many unknowns and so many companies hungry for reform, beware those who claim British business has already made up its mind.