EU Referendum debate: ‘Why the European Union is no longer fit for purpose’
Tom Gray, a solicitor and partner in the corporate finance team of Nottingham firm Fraser Brown solicitors tells us why he’ll be voting Leave on 23 June.
In the late 1960s and early 1970s the European Economic Community’s (EEC) looked a dynamic organisation. Regional trade blocks seemed a good idea – freight costs were high and food refrigeration was expensive, and it seemed sensible to establish a trading union with the UKs immediate neighbours for future economic growth.
However, that world has gone. The EU model is redundant. In today’s world, shipping costs are cheap and we live in a globalised age of Skype, the internet and low cost flights. It is arguably easier to do business with companies in the US, New Zealand or Australia, than mainland Europe, because they are English speaking and often have common law legal systems.
Many East Midlands businesses trading internationally tell me this. Jon Valentine, the Institute of Directors’ East Midlands ‘Young Director of the Year’ in 2015 and founder of Impero Solutions, a successful technology business trading in 80 countries globally, told me “It is easier to get a cheque cut in India, than in France.”
I can understand why. The red tape and regulatory burden imposed on businesses is endless. The architects of the EU want a pan-European, utopian, political animal and its institutions desire only to regulate and legislate to bring this about – but this is now doing our economy damage.
It is no surprise that Spotify, one of the few successful European digital start-ups, is on the verge of abandoning Europe for America, due to complex and crazy EU internet rules. And the EU’s Clinical Trials Directive destroyed the UK’s clinical trials industry. (Where the UK once conducted 12% of the world’s trials, since that directive most of the business moved to India and we now have 1%). Chemicals giant BASF (which gave us the marvellous BioCity facility in Nottingham) is abandoning Europe for North America, and Syngenta is also known to be unhappy and considering a move.
This is an organisation that manages to come up with 12,653 separate EU rules, directives and regulations governing the production of milk! Well known for its anti-competitive protectionism in food and agriculture, forecasters estimate that the average price of a family’s food shop would easily be reduced by 5-15% if the UK left the EU, and we were permitted to import tariff-free food from developing Africa and other non-EU producers. (Being part of the EU customs union we are required to impose their high tariffs on non-EU imported goods). This would disappear instantly if we left the EU, and help developing nations find new markets and grow.
The EU’s protectionism and over-regulation now actively threaten our economic growth.
In the last 10 years the economies of China, India and even Ethiopia have doubled in size. In the same period, Europe’s economy has remained the same size. Every continent on the planet has seen economic growth since 2006, except two: Europe and Antarctica.
The deep-seated problems in the Eurozone economies are delivering up 50% youth unemployment and real hardship – are we surprised that we see the very troubling rise of extremist political parties in Europe?
So why on earth would we tie ourselves to the one part of the planet that is not growing? To remain in the EU is to shackle ourselves to an economic corpse. Remain campaigners warn that ‘almost half our trade’ goes to Europe. Ten years ago it was over half. Today it is around 40% and dropping. But regardless, that trade only represents about 4% of the UK’s GDP. Most of the UK economy is in services, and there is still no complete EU single market in services – my law firm would still have a regulatory nightmare if we wanted to open a branch in Vienna or Budapest.
The balance of trade is such that the UK is the biggest customer for most EU economies (including Germany, our biggest importer at $92.6 billion per year). We know Mercedes, Audi, Bosch and others will not tolerate the EU imposing tariffs on that trade if we leave, and that is why we will negotiate a fair, healthy, two way trade arrangement.
And what do we pay for the privilege of belonging to the world’s only stagnant customs union? £19 Billion gross per year (the rebated money always comes back with strings and further regulatory burdens, and we don’t get to spend it on our priorities). And we know that amount will only rise.
But it is not just the financial price – it is the democratic price we pay. Since the English Civil War, we have established that we shall not live under laws or have taxes levied upon us, other than by our directly elected representatives.
The EU legal system is expressly designed to be unaccountable. Supreme legislative power is held by people we did not elect, and cannot remove. They appoint the judges in Luxembourg who exercise judicial function over us and may never even step foot in the UK. The system is not transparent, and its constitution offends all first principles in public law about how, at foundation, a healthy, functioning, liberal democracy should be constructed.
Whilst the EU may not seem sinister or threatening today, we surely trade away those most basic democratic rights to control our own lives most foolishly.
I hope the UK votes to leave the EU on 23 June and I believe we would see a free, outward looking, internationalist UK blossom on the world’s stage, and maintain good co-operative relations with our European neighbours.
