The lessons that big business must learn from the EU debates

 
Allister Heath

WHAT a disaster for Nick Clegg and the Liberal Democrats. They were slaughtered by Nigel Farage in yesterday’s TV debate on the EU and other matters, with a YouGov poll showing that the public thought the Ukip leader won it by 68 per cent to 27 per cent.

Whether or not one agrees with them, voters’ views were there for all to see yesterday: they are increasingly anti the political elite, they support far less immigration, are deeply sceptical of big business, are against taking part in foreign wars and want to reduce Brussels’ powers.

Clegg disagrees: his views are those of the overwhelming majority of the chattering classes but of a small minority of the public.

But one group wasn’t properly represented in the Ukip v LibDem debate – and that is classical liberal-leaning Eurosceptics who believe in the pro-freedom aspects of the EU but reject the rest. It is, of course, a small, minority group which probably only accounts for a few percentage points of the overall vote – but one that is heavily represented among readers of this newspaper and among London’s business and professional classes.

Take my own view: I back the four freedoms – the free movement of goods, services, capital and people – in Europe but profoundly dislike the EU and its undemocratic, authoritarian institutions, the crippling regulations on everything that moves, the harmonisation, the protectionism, the ridiculous forays into defence policy, the euro and the horribly wasteful subsidies.

Yet this libertarian take on the EU wasn’t represented in yesterday’s debate: Farage is far too anti-immigration and made a point of bashing big business and the “rich” (gaining in popularity in the process, needless to say), while Clegg supports the EU bureaucracy, its endless, profligate, ever-expanding interventions and is hysterically opposed to any real attempt at loosening the UK’s ties with Brussels (and thus lost three quarters of the public). Those of us who fall into neither camp were left feeling pretty lonely.

There are critical lessons here. The City has got it wrong. It is right to support the free-market aspects of the EU – but its increasingly loud and one-sided defence of the status quo on Europe is untenable. It is simply not true that we need the entirety of today’s EU – including the common agricultural policy, the European arrest warrant, bonus caps, labour market regulations and the rest – to retain free trade and the free movement of people. That is a nonsensical position, and one which will be rejected by the electorate.

It is madness for big business to align itself with the extreme pro-EU, status quo wing of this debate and help promote scare stories about what would happen in the event of a renegotiation. The most likely outcome of such talks, if conducted properly and seriously, would be a retention of free trade but fewer powers for the EU in other areas irrelevant to businesses. The devil would be in the detail, of course, and a dreadful outcome couldn’t be ruled out, but the doomsday scenarios being peddled by some large firms are not credible. Does anybody really think that investment banks will move the bulk of their HQs and staff to Paris or Frankfurt, to be hit by financial transaction taxes and Francois Hollande’s 75 per cent top rate of tax? Yeah, right.

The City must acknowledge that the public is deeply Eurosceptic – and back those politicians who are seeking the right sort of new deal, the kind of renegotiation that would be compatible with capitalism and pro-business policies. The City’s job is to make sure that the right sort of Euroscepticism prevails. Britain desperately needs to remain an open, globalised society; it needs to embrace the best and brightest from all over the world and reject all sorts of protectionism. Unless business plays a constructive role in fighting for this fresh approach, it will end up being swept away by forces that it helped unleash.

allister.heath@cityam.com
Follow me on Twitter: @allisterheath