May 7, 2016 - We are currently going through a period of considerable uncertainty even though the economic situation is pretty good. The current situation is exasperated by the demands of all the 24 hour news services, which jump on almost any calamity or happening - no matter how minor - and flog it to death, with hours of reporting and analysis, finding all manner of experts to see the ever worst scenarios, frightening everyone to death. Politicians, put on the spot about what they are going to do about it, are spurred on to be seen to be reacting.
No matter what happens economically, the media will find a negative connotation - the oil price shoots up and it’s a disaster, it goes down and it’s a disaster. Inflation is high – disaster, almost zero - another disaster. The same applies to interest rates… you know how it goes. They analyse monthly or quarterly GDP numbers in the greatest of detail, fretting over a 0.1% fall in what is so far from an accurate number to be meaningless. The slower rate of growth in the Chinese economy is a catastrophe for the west even though few western economies rely on China for more than a percentage point or so of their GDP. All this unnerves investors - projects get postponed and equipment replenishment purchases put off.
As if all this uncertainty wasn’t enough, the UK conservative party added to the fire after being panicked by a small minority political party into promising a referendum on the European Union if it was returned to power. It was and now the country faces all the uncertainty leading up to that vote, at a time when we do not need the distraction. So what happens if people vote to leave? The only thing that is certain about that is that the country will face years of serious uncertainty as thousands of treaties agreements and arrangements are unpicked and new ones negotiated.
As with any large organisation the European Union is far from perfect, but that applies to the United Nations, Nato and national governments - not to mention companies, charities, associations - just about any organisation of size. In spite of this it has chalked up an extraordinary number of achievements, forging the world’s largest single market, from a disparate group of hostile national groupings, and in the process raising standards throughout the continent. As with an increasing number of such issues these days, the quality of debate over whether to stay in, or leave the EU is atrocious, with vested interests using any tactic or piece of misinformation they can, to scare the undecided. The facts are playing almost no role in the discussion.
Any well founded, measured statement or argument that manages to be made in the melee is rarely passed on to a wider audience, as the mass media seems to prefer to play with scary soundbites that sober facts.
Speaking from the point of view of a business owner, and someone that has worked internationally for more than 30 years, the single market has massively simplified trade within Europe, raised standards, lowered prices and brought Europe much closer together. Many people in business today will not have been around prior to 1992 when the single market began to take effect, before that cranes, aerial work platforms and other products had to comply with more than 30 different sets of rules and standards, much of it contradictory. It meant that manufacturers had to build a French machine, a Dutch machine, a German machine an Italian machine and so on… modifying between the different national specifications was a nightmare.
If you wanted to rent a machine from another country within the Union you had to complete a nightmarish set of paperwork and transfer documents and often modify the machine to boot. Thus short term cross-border rental was usually not worth the hassle. EU standards and directives far from complicating the running of a business have dramatically simplified it. Cutting costs and lowering prices as cross border trade becomes ever easier and raises competition throughout the continent.
In the old days if a British person got a job in France, or vice versa, they had to register and organise a work permit. Today the EU gives everyone the right to go work or live anywhere in Europe. The exit campaigners - I cannot abide or bring myself to use the Brexit word - play mostly on the immigration theme, focusing on the fact that a large number of Italians, French, Polish, Hungarian and other nationalities are currently working in the UK, knowing that rapid immigration is the one area that causes people genuine concern. This is exasperated by the myth that they are all coming purely to claim benefits. They never mention the fact that the country needs the skills that these people bring, or that more than two million British people are living and working in other EU countries - including around a very large number in Spain - many of them pensioners. Imagine the impact on the health service of hundreds of thousands of elderly people returning to the UK! They forget that it was not so long ago, that the tables were turned and thousands of unemployed British construction workers flocked to Germany to work.
That’s the whole point of freedom of movement. A company in the UK that needs more skills and cannot find them locally can bring in experienced people from other parts of Europe, and so build a prosperous business. The paperwork and delays required before the free movement of people came into force meant that most small business simply did not bother and thus did not grow and prosper.
I hear some small businessmen claiming that EU bureaucracy is crippling their businesses. This argument is trotted out surprisingly frequently, yet hard examples are never given. The myth is exasperated in the UK by the fact that politicians and some of the more melodramatic media have over the years blamed all manner of local silliness on the European Union, with most of the ‘issues’ such as banning straight bananas or 891 page specifications for cabbages, being complete and utter fiction.
In the past I have run a large pan European business and now run a very small one. If asked, I would struggle to give a single example of EU bureaucracy making our business more challenging, or one single thing we have to do that we would stop doing if the UK left the EU. In fact any business buying from or selling to other EU countries would face a substantial increase in paperwork and complexity if we were to leave. For most of us selling and delivering a product to a buyer in Paris is as easy as if he was in Glasgow, and if you are in the South of England, significantly closer.
Switzerland and Norway, while not EU members are part of the European Free Trade Area, and have many of the benefits of the EU without being members - however they still contribute to the Union coffers and have to abide by all of the trade rules, regulations and free movement, but have little say in the development of those rules, in spite of their contributions. Trade between the EU and those countries is not quite as simple and straightforward as it is between full EU members.
Another favourite of the exit campaign is to conflate the European Court of Human Rights or the Council of Europe with the EU, even though they are entirely separate organisations both of which pre-date the EU and have far more members than the EU. As an aside I for one appreciate the fact that there is a right of appeal over the head of a national government which has in the past been controlled by a single party.
Getting back on the subject it is looking as though this referendum will be decided on emotions rather than facts, and that is not all the leavers fault, after all they have no idea how an exit might work out. What might lay ahead after a no vote is anyone’s guess - who will negotiate it? Will we all need to vote again on what EU relationship ‘they’ decide to go with? They key thing is that we do not need more uncertainty, and the UK does not need a massive single market in its doorstep in which it has no say or no control.
While I am clearly exasperated over the quality of public debate on this issue, I also believe that most people when faced with such choices do usually make an intelligent decision and hopefully this is what will happen this time. Have your say in this debate - vote in our online poll
We appear to be sliding into an era where truth and facts are seen as disruptive irritations, not only by outspoken ‘populist’ politicians, but increasingly of large companies and industry associations.
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