Whenever we get into a debate about EU membership, the euro-luvvies will come up with the assertion that all of British business, and all the British businesses groups like the CBI and BCC, support EU membership. Heads of large companies, especially auto companies, insist that if Britain leaves the EU, jobs and investment will be under threat, and businesses will move out of the UK and into remaining EU member-states. These guys must know the score, surely? They must be right? Well maybe not.
Let’s take the auto companies head-on. That’s people like Carlos Ghosn of Nissan – a big wheel in the auto businesses. He says that future investment would be under threat if Britainleft the EU. But then he was saying exactly the same fifteen years ago — but then it was “If Britain doesn’t join the €uro”. That was a vast error of judgement, and it doesn’t give us any confidence in his judgement in these matters. And given Nissan’s close links with Renault, we have to recognise a conflict of interests. Does Ghosn speak for Nissan? Or for President Fançois Hollande?
If it’s so important to be in the EU, how come the Ford Motor Company chose to close its van operations in Hampshire and move them outside the EU — to Turkey? Part of the incentive was an £80 bn loan from the European Investment Bank, but they must also be confident that they can service the EU market from Turkey.
Maybe ten years ago, you’d have heard the same from the City of London. As a global financial centre, many City figures took it for granted that the City had to be in the EU. Nowadays you’ll get a much more mixed reaction — especially in private. They’ve seen a series of irresponsible decisions, from bonus caps to the Financial Transaction Tax, which have been ill-thought-out and pursued with a reckless disregard for the EU’s most important financial centre — or as some would say, a deliberate determination to damage one of the UK’s major industries, and to teach a lesson to those troublesome Anglo-Saxons
Why are these senior business people happier to speak in private? We need to recognise that the EU wields enormous influence — far too much, in fact. So companies that want to modify the rules need to mollify the beast. Businesses and industries are simply afraid to speak out against Brussels, for fear their lobbying efforts are ignored when new rules are crafted. Or that they lose lucrative contracts, or are otherwise disadvantaged. I’ve lost count of the times when I have attacked EU policies in open meetings in Brux or Straz, and afterwards industry people have thanked me for stating a common-sense view. But they add “We’re glad you said it, but of course you understand why we can’t speak out so vigorously”. Indeed I do. It’s a bit like all the organisations that feel they need to pay lip-service to climate orthodoxy — yet get their people privately over a coffee or a beer, and they sing a different tune.
Of course it simply isn’t true that all businesses back EU membership — although I accept that a majority probably do, at least in public. But you only need to check the Business for Britain web-site to find hundreds of British firms that take a different view.
It’s easy to assume that the Captains of Industry really understand the issues of EU membership. But I suspect that they don’t. I spent 33 years in management positions in international businesses, and I’ve now spent fifteen years in the European parliament. So I’ve seen the question from both sides. And I suspect that most of the senior business people who pontificate about the EU couldn’t explain the difference between a Free Trade Area and a Customs Union (I suspect that the cuddly/fluffy term “Common Market” was deliberately designed to preserve this ambiguity). And they couldn’t, off the top of their heads, define “optimal currency area”’
Could you, I hear you ask? Well how about: “An optimal currency area is an area which is sufficiently large, and sufficiently uniform, that the benefits of a common currency, in terms of predictability and elimination of exchange costs within the area, significantly exceed the disadvantages of a one-size-fits-all monetary and interest rate policy”. The Isle of Wight is too small to be an optimal currency area, while the Eurozone is — not too large — but far too diverse, in terms of member-states’ economic performance and cycles, to be an optimal currency area.
Energy-intensive businesses in particular are voting with their feet and leaving the EU — or at least switching their investment outside the EU. Jim Ratcliffe of major chemical company Ineos has said that under present policies there won’t be a chemical industry left in the EU in ten years time. BASF, Germany’s chemical giant, has said that it will shift the majority of its investment outside the EU for the first time, and blames European energy prices. Siemens takes a similar view.
The EU is bad for business. Brexit potentially offers lower taxes, lower energy prices, more rational regulation, lower costs. What’s not to like?