For years we have been led to believe that British businesses are strongly in favour of EU membership. We have mostly heard only the voice of large multinationals with huge lobbying operations in Brussels aimed at the unelected officials who make the rules. The voice of entrepreneurs and smaller businesses has been largely ignored.
The CBI has consistently got the big decisions on Europe wrong. It called for UK membership of the European exchange rate mechanism. Unfortunately, the government listened. The result was interest rates at 15 per cent, millions losing their homes, and one of our worst ever recessions. The CBI then campaigned to join the euro. Again it was wrong. In these debates, it relied on flawed polls and admitted it was ignoring the views of small businesses.
Now it is campaigning for the EU. It claims that “eight out of ten firms say the UK must stay in the EU”. This poll was described as “dodgy” by the British Polling Council.
The CBI is again ignoring the views of small businesses and entrepreneurs. It has welcomed almost every expansion of the EU’s powers. The CBI does not speak for British business.
The truth is that business opinion is split on Europe. Big multinationals are generally more positive about the EU. Smaller businesses and entrepreneurs are more hostile. Polls over the past decade have consistently shown that about two thirds of businesses think that the UK would be more prosperous if we take back control of negotiating our own trade agreements. This is a core competence of the EU and it would require a complete withdrawal from the European Union to take back these powers.
Advertisement
Most businesses also reject the premise of the single market. They do not think that we need to have common rules enforced by a supreme European Court in order to have free trade. They are, of course, right — no other part of the world has the EU’s system. Other countries have free trade agreements without having a supreme court in which unelected judges decide everything from how we test cancer drugs to how our intelligence services pursue terrorists.
Entrepreneurs are increasingly suffocated by EU rules and have little influence in shaping them. They are less able to afford expensive lobbyists or large compliance departments to cope with the stream of regulations from Brussels. As a result, disruptive technology is rejected to preserve the dominance of the incumbents. One only has to look at the case of Sir James Dyson, whose innovative new product was discriminated against by the EU in order to protect the interests of older German technologies.
“Most businesses don’t think we need common roles to have free trade
Entrepreneurs also see the dangers of tying our future to the eurozone, which has such profound problems. Youth unemployment is around 50 per cent in some European states. The debt mountain grows every day. Unfunded pension systems leave governments with no alternative to raising taxes. Economic growth has stagnated.
The eurozone’s institutional architecture is also dysfunctional. Its response to this is another huge centralisation of power in Brussels. This will have enormous implications for Britain if we vote “remain”. The eurozone has a permanent structural voting majority under the new EU rules. We will be outvoted even more than we are now. UK taxpayers and businesses will be paying the bills for the eurozone’s failure and inevitable bailouts.
Entrepreneurs such as Dyson and Luke Johnson see a “leave” vote as a great opportunity. Across the country, small and medium-sized businesses are taking to local media to explain that a “remain” vote is the dangerous option for local jobs. The government’s own figures show that only about one in twenty British businesses export to the EU. However, every single business in Britain is forced to obey every single one of the costly EU rules that often undermine businesses’ ability to employ more people.
Advertisement
After we vote “leave” we will establish a free trade deal with the EU. There is a free trade zone stretching from Iceland to the Russian border. The government’s claim that we will be the only country to be outside this zone is risible. Britain will have free trade with Europe but without accepting the supremacy of the European Court and without accepting that court’s control of immigration.
We will be free to negotiate free trade agreements with the high-growth parts of the world — to do our own deals with India and China, opening up new markets for our entrepreneurs. Small businesses will be free of rules that undermine job creation. We will regain our independent voice in the World Trade Organisation and use our new influence to shape global rules that are of growing importance. We will be able to invest some of the money saved from our EU membership in fundamental scientific research such as in robotics and genetics.
When businesses gather at the British Chambers of Commerce annual conference today, they should ponder the costs of giving away permanent control of so many vital policies. They should ponder the costs of having the European Commission, dominated by French interests, controlling British commercial policy for decades to come. They should consider how the eurozone’s trajectory will make this worse. A vote to leave is not “a leap in the dark” — it is a leap from a ship heading, like the Titanic, towards a huge iceberg.
Priti Patel, MP, is employment minister.