Why we need a new deal for the UK to end the crisis of excessive EU regulation

Oliver Hemsley

WHEN the British public voted in the European referendum 40 years ago, they were told they were voting to remain part of a Common Market. Businesses would thank them, the public was told, because trade is key and a country mired in debt and discord needed to be part of Europe to grow once more.

It seems we were sold a pup. There is little doubt that the EU is now engaged in building a political union. Britain has given up powers in several important areas, and in return has had to contribute more to an over-inflated EU budget. The European Commission no longer hides its desire to build a “federation” of European states. Forty years ago “Europe” was an economic idea; today it is a political one.

This is no mere academic distinction. It matters deeply for businesses like mine, which have to endure the laws and regulations that have emerged from these baby steps towards ever-closer union. Earlier this month, it was revealed that the EU had introduced 3,580 laws that impact UK firms since 2010. A businessman must put aside an hour a week reading these new rules, just to keep up to speed.

These regulations can prove devastating. Take finance; the bonus cap and the Financial Transaction Tax are just two among many measures the EU is threatening to introduce, most of which would have a crippling impact on the City. Complaint after complaint has been lodged, but Britain is forced into the absurd position of defending its financial sector from attack.

Business finds itself playing the role of political football to ideological ambitions. The experiences of a multinational company will not necessarily mirror those of a small or medium-sized firm looking to trade abroad. Yet I’m told business doesn’t like the “uncertainty” of a referendum, or that making the EU “more competitive” will solve the issue of Europe’s declining economic and political influence. I’m not convinced.

A poll out today by the Business for Britain campaign shows that most UK business leaders now believe the costs of complying with Single Market rules outweigh the benefits of being able to trade easily with Europe. If EU membership is to work for the UK, Brussels must shift its focus; opening markets rather than closing them to the world, and ending corrosive over-regulation.

Business leaders want to see Westminster take control over a host of areas, and with them the ability to pass regulation that fits with the vast changes taking place. The EU acts like an analogue set of institutions in an increasingly digital world. From tax to product regulation, business wants UK MPs writing the laws; not unelected European Commissioners.

David Cameron should be applauded for changing the debate to concentrate on renegotiation, instead of the In/Out morass. We must now focus on how we can achieve a relationship with the EU that could be worth voting “yes” to.

It’s clear to me what that relationship should look like: based on trade, not politics, giving firms like mine access to European markets, but not inundating us with oppressive regulation. Business wants Treaty change and a better deal. Once this programme has been completed, we overwhelmingly back holding a EU referendum. British business is speaking, politicians and European leaders would be wise to listen.

Oliver Hemsley is chief executive of Numis and signatory to Business for Britain.