Since Business for Britain launched last month, I have been asked on several occasions what powers I think the UK needs to get back to make staying in the EU worthwhile. To that end, we have just begun the process of consulting the 500 business leaders who support our campaign, alongside other business groups, to answer that question. While we don’t expect detailed results before the autumn, it is clear from preliminary conversations that the costs that accompany the Single Market outweigh any theoretical benefits for too many firms. To have a situation where only 23 per cent of Federation of Small Business members export, yet 100 per cent are saddled with burdensome European regulation, is clearly untenable.
Make no mistake, the price of EU membership is high. One study recently claimed that EU regulation cost UK firms £176bn between 1998 and 2010. The Temporary Agency Workers Directive alone (which demands that employers treat agency workers as employees) is estimated by the government to cost private sector employers £1.46bn a year. It’s unsurprising that 64 per cent of firms told the British Chambers of Commerce last month they wanted more powers devolved from Brussels to London.
It is often claimed that the regulatory burden is down to Westminster “gold plating” EU legislation, but there is little evidence for this. Considering all the European employment, health and safety and regional development laws in place, our regulatory burden is pretty unsurprising.
In many ways, the Financial Transaction Tax (FTT) is the epitome of this downward trend; badly thought out, populist, and costly (it is estimated the FTT would cost the UK economy around £25.5bn). Each of these directives sucks up employers’ capital, reduces their rights and makes job creation and growth that much harder. If any renegotiation is going to be seen as effective, Britain must come out protected from these mad, bad and dangerous ideas.
And almost every business person I have met has said one thing: the future of Britain’s trade lies not in in the Eurozone, but in the likes of the Americas, China and India. And they are already setting out their stalls. In a recent Ernst & Young survey, 72 per cent of US and 66 per cent of Asian investors said a renegotiated, looser, relationship with the EU would make Britain a more attractive location for foreign direct investment.
Over 40 years, EU directives have come to influence every facet of our economy, and any serious renegotiation package will have to be long and detailed. But from my initial conversations, it is clear that businesses, like me, see our links with Europe more akin to the relationship set out by the mayor of London – based on the principles of free trade and cooperation, rather than uniform regulation.
Matthew Elliott is the chief executive of Business for Britain www.businessforbritain.org