This week EU leaders will gather in Brussels for the final European Council meeting of this year. Given recent developments in the fight against ISIL and last month’s tragic terror attack in Paris, it is likely that the topics of migration, counter-terrorism and EU sanctions against Russia will loom large on the agenda. But in addition to the plethora of pressing international issues up for discussion, one other agenda item is set to capture the attention of commentators: the EU referendum in the UK.

In November, Prime Minister David Cameron set out the four areas where he is seeking reforms to address concerns over UK membership of the EU. This European Council meeting presents an opportunity to discuss the current state of play and address some of the remaining political issues before a concrete proposal is adopted in February. Yet this discussion is unlikely to be plain sailing for the Prime Minister. Earlier this month, President of the European Council, Donald Tusk, issued a letter to Council members, setting out his assessment of the progress made on the renegotiation to date.

Over 90% of ADS’ 900 members currently export to the EU and ADS industries have been clear in their belief that staying in the EU would be better for the UK’s global competitiveness. A report published by ADS and KPMG in June 2015 highlighted the benefits of UK membership of the EU to ADS sectors. These included:

  • Free trade within the EU and integrated pan-European supply chains – UK companies are often key suppliers, providing components, critical elements and sub-systems into Europe’s supply chain.
  • Access to EU R&D funding – In 2013 alone, the UK’s aerospace, security and space sectors secured around £100m in EU R&D funding. Similarly, the defence sector looks set to benefit from funding through the so-called ‘Preparatory Action’ on Common Security and Defence Policy (CSDP) related R&D which could also lead to a longer-term programme.
  • UK influence in setting EU and global regulations and standards – ADS industries are global and UK businesses have to comply with international standards and regulations. By engaging and working with EU partners, the UK can influence and affect change that is beneficial to UK growth.

A survey of ADS members also found that 86% of respondents believe it would be better for their business is the UK remained in the EU. This support was consistent across the size of company and company ownership.

On Monday, the UK moved a step closer to holding the referendum on EU membership. The House of Lords voted to reject an amendment to the EU Referendum Bill which challenged government figures on the cost of registering younger voters. As a result, the Bill to deliver the referendum is now set pass into law before Christmas. Although the exact date of the referendum vote remains undecided, one thing is certain and that is the outcome – in or out – will be important to ADS industries.