There is a bright future for business outside the EU

Opinion

01 Jun 2016, Richard Tice

There is a bright future for business outside the EU

It is often claimed that the referendum is offered a choice between certainty and uncertainty; that Brexit means stepping out into the howling darkness, cold and alone. Former Prime Minister Gordon Brown even went so far as to describe it, in all seriousness, as “the North Korea Option” – an assessment which raised a few eyebrows among our wealthy neighbours in Norway and Switzerland.

In reality, of course, self-government is the normal condition for advanced democracies in the modern world. Australia, Canada and indeed South Korea are all free-standing and prosperous nation-states, crafting their own laws and managing their own trade without reference to an unelected overseas Commission. Somehow, they seem to cope without one.

Within the EU, meanwhile, we have uncertainty in abundance. Take the new EU VAT rules, which fell on the broadcasting, telecoms and digital sectors like a bolt from the blue last January, wiping out thousands of online start-ups. Or the EU ruling on tax emptions for cider-makers which threatens to push hundreds of small producers out of business. Or the woeful mismanagement of fisheries at the EU level, which are estimated to have destroyed 100,000 jobs in the UK alone.

Businesses in the UK can never be quite sure what is going to fall on them from Brussels next, and they can have little faith in the Government’s ability to shield them from the ill-effects of poorly considered directives: out of 72 attempts to block unwanted EU measures since 1996, we have been unsuccessful 72 times. Consequently, just the top 100 EU-derived regulations are now costing the UK economy some £33.3 billion per year, according to an analysis of Government Impact Assessments.

This uncertainty all stems from the lack of control over our own affairs which is part and parcel of EU membership. Traditionally a business-friendly and trade-minded country, the UK cannot offer wealth creators any surety about the economic environment they will face because our power to manage it is increasingly limited and circumscribed by EU institutions.

Take, for example, the forest of technical standards and regulations governing business. We are often told it is absolutely vital that the UK have a voice in Brussels when these are made, but most now come down to the EU from larger regional and global bodies like UNECE and the IMO. Our ability to shape these regulations is hamstrung, however, by the EU’s insistence on speaking for its members in many important global forums.

Does having the EU speak on our behalf simply afford us more “clout” on the world stage, as the In campaign would have it? The evidence would suggest that it does not. For example, in 2010 experts from the Marine and Coastguard Agency, British Marine Federation and UK boatyards had been busily preparing a paper for the IMO to help amend pending regulations which posed “a significant threat to revenue and jobs” in the superyacht-building sector. However, at practically the last minute the EU decided to exercise its “competence”, and threatened the UK and other Member States with infraction proceedings if they continued to push for changes independently.

Our representatives tried in vain to have the Commission submit the paper on our behalf, but to no avail. We were forced, ultimately, to find a friendly IMO member outside the EU to submit the proposal for us, but could not actually support it when it came to a vote because the EU dictates a ‘common position’ to its Member States.

What a humiliating state of affairs for the world’s fifth-largest economy to find itself in. It is not an unfamiliar position for the UK, either, with our being in a voting minority on the European Council more often than any other Member State, but nor is it unique to us – officials in Sweden often have to turn to their neighbours in Norway to submit proposals for them in global forums, because the EU will not allow them to do so in their own right.

The implications of this extend far beyond the vibrant but rather obscure superyacht-building sector, too. The EU’s control over trade policy has kept the UK from extending commercial opportunities worldwide by signing free trade deals with its old partners in high-growth economies like Australia, New Zealand and India for literally decades, because such deals have not found favour among the instinctively protectionist governments of Germany, France and so on.

Shying away from these deals has cost us billions in potential revenue, in all sorts of sectors. The Scotch whisky industry, for example, would enjoy an almost overnight export boom if it had free access to India, the world’s biggest spirits market, where tariffs currently stand at around 150%.

On the other hand, leaving the EU would also allow us to provide more security for businesses, with the UK being afforded the flexibility to support strategic industries like steel through lower VAT bills, lower energy costs, anti-dumping tariffs and emergency aid in a way it cannot at present.

There’s a bright future for the UK outside the European Union. We can have peace, free trade and honest friendship with our near neighbours and collaborate on cross-border issues on a voluntary basis, while being free from stultifying regulations like the Clinical Trials Directive and an insular trade policy. That’s not a vision which should frighten anybody.


Richard Tice is co-chairman of Leave.EU and CEO of Quidnet Capital Partners. 

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