The latest entry in John Redwood’s Diary discusses the Business Secretary’s warning to the CBI on their stance on the EU.
I was delighted to read the Business Secretary’s speech to the CBI this week. In it he told them in no uncertain terms that if they continue to say the UK must stay in the EU come what may, they undermine the Prime Minister’s negotiations. He reminded them that in a negotiation you need to set out what you want, and to indicate that you will walk away if you do get a good offer. Business is for ever telling us they want to stay in a reformed EU, not the current EU. They should now tell us what reforms they want. They should also tell Brussels what reforms they want, and tell Brussels that people in the UK will vote against staying in if we are not offered solutions to the problems with our current membership.
At the base of the UK’s unsatisfactory relationship with the modern EU is the way in which the EU uses the so called single market as an excuse to regulate, legislate and interfere in a range of other important matters in ways which UK voters do not approve. The modern challenge for business is the way in which the demands of the Euro for more taxes, more financial controls and more business regulation are also spilling over into the wider EU. Big business does not like the banker bonus controls, the Financial Transactions Tax and the new banking capital rules from Brussels, though these may be popular with some voters. Nor does business like the results of the EU’s energy policy, with dear gas and electricity driving energy using businesses out of the UK.
The truth business needs to understand is that membership of the current EU is not a comfortable status quo that they can live with, but a ticket for a wild ride to political union which may do all sorts of things they do not want. The recent programme set out by the 5 Presidents of Euroland and the EU show just how central to the EU the Euro project has become. They want legally binding targets and controls on economies, a Euro Treasury, a financial union, and a political union. The UK has wisely decided not to join the Euro. Few business leaders want us to join the Euro. They therefore need to understand that any UK government now has to negotiate a new relationship with the emerging Euro state. We want to trade with them, be friends with them, have a range of sensible agreements with them but we do not wish to be governed by them.
It is an urgent task to get more business people to grasp that now we have an opportunity to free ourselves to be more prosperous, and to free the Euro area to get on with what it wants to do. The UK and our businesses do not wish to be drawn into a massive transfer union where we have to pay more tax to send to countries in the Eurozone that need more aid and support. That is why now is the time for business to tell us what reforms they need as we seek this change of approach.
Click here to read this piece in John Redwood’s Diary.