UK firms want EU powers reined in

Tim Wallace
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MOST British firms want a renegotiation of Britain’s membership of the EU with powers returned to London, a study by a leading business group has found, with businesses citing dangerous laws from Brussels that undermine the UK’s competitiveness and stifle recovery.

Business increasingly fear they are being harmed by EU rules

Of the 4,000 firms surveyed by the British Chambers of Commerce (BCC), 60 per cent said renegotiation would be positive for the economy. Just 11 per cent felt it would be damaging.

Despite UK efforts to cut red tape, the tide of regulation from the EU in areas like health and safety is dragging on growth, the BCC said.

Most businesses favour a renegotiation of Britain’s membership of the club with powers returned to London, the study found, while a small minority were against such a move.

More than half of firms highlighted employment law as the most important area that needs repatriation.

“Many British firms trade with the rest of the world, not the EU. Extra rules on employment make them uncompetitive against rivals in the US or Asia who are competing for the same business,” BCC boss John Longworth told City A.M. “The government’s one-in-one-out rule for regulation is working to a degree, but EU legislation is exempt. It is completely not working for rules from Brussels.”

Longworth highlighted the agency workers’ directive – which gives agency workers the same rights as permanent staff after a few months – as particularly damaging.

“These rules have perverse outcomes. They push firms to change agencies every six months which is ridiculous, and restrict the choices of agency staff who like flexible working, whose lifestyles it suits,” he said.

And the working times directive is also harmful, he warned.

“People who want to work hard and earn more face restrictions,” Longworth said. “And it constrains employers in meeting contracts, something which is particularly damaging to small firms.”

Only 15 per cent of the firms surveyed thought maintaining the status quo with Europe would be positive, while 23 per cent think further integration would be beneficial.

Meanwhile 18 per cent favour a full withdrawal from the EU – though 60 per cent fear that change would be damaging.

The study should provide a boost to David Cameron, who has spoken of his desire to shake up Britain’s relationship with the EU.

The BCC believes the Prime Minister has a strong hand in Europe, because the UK is Germany’s biggest export market, which provides an incentive for the state to keep Britain happy.

And it believes the UK would find allies across the EU as businesses across the Union face the same restrictions, slowing growth internationally.

Number 10 declined to comment.