Posted in: Europe
By Alex Jackman - 25 January 2013
David Cameron’s eagerly anticipated speech on Europe was delivered yesterday.
While we agree with some of what the PM said, we think a total exit from the Union would be bad for UK SMEs, and the wider economy in general.
Neither do we support an ‘in/out’ referendum, simply because we don’t think it will give anything like a clear mandate. In all probability, there wouldn’t be a significant majority one way or the other, and then what happens...faced with a 55% ‘stay in’ will the ‘out’ minority stay silent? Probably not. Furthermore, a referendum of everyone in the UK is likely to see any decision skewed by individual prejudice rather than sound economic argument. And that’s dangerous for UK plc.
That said, we feel there are dangers that without some kind of renegotiation, anti EU sentiment will grow. Institutions that are already seen as undemocratic will grow to become tyrannical in the eyes’ of many. The ever spiralling central budgets will create even louder voices than present. So the issue must be tackled.
We think this Government – and future ones – should be given the mandate to renegotiate terms and to maintain an opt-out from ever closer integration.
In particular, we must insist that EU budgets are more closely monitored. If the European Commission wants greater funds from countries, it should first have proven the case that money cannot be saved from within. Businesses will tell you there are plenty of pointless policy exercises that could be culled if savings were being sought.
And pinch points for small businesses do differ. It is a genuine bugbear for those small businesses in communities that have nothing to do with exporting and wonder what right the EU has to dictate how long their employees should be paid for sick leave, or how they should sit at work.
But there is the other demographic for who the common market has helped enormously in growing their businesses overseas. Like it or not, most businesses export within Europe as their first step.
What causes greater uncertainty for businesses isn’t how closely integrated within the EU we are, it is the long term stability of our tax system. A huge multinational will invest in the UK not because of a common market but because of a stable tax regime and highly skilled workers. These are the real long term problems the Government needs to address.