Small businesses can't afford any more EU meddling

Far from representing just 'a few disgruntled hedge fund managers', those who want a 'Brexit' are listening to the fears of thousands of British SMEs

Protestors take part in a demonstration calling for a referendum on the European Union (EU) Lisbon Treaty, outside the Houses of Parliament in central London, on February 27, 2008
The Conservatives are the only party with a realistic aim of giving the voters a say on Europe Credit: Photo: Getty Images

This election has been heavy on rhetoric and short on facts. Despite all the photo ops and media events, there has been a constant detail deficit - especially with regards to the EU.

All parties have promised reforms, but the promises of change have varied little from the same lists unveiled twenty five years ago. Sadly, the one thing we haven’t been short on is predictions of doom and economic apocalypse should the public be given a vote on our relationship with the EU. Heaven forbid we trust people during an election campaign!

Step forward British Influence, whose director Peter Wilding wrote here yesterday that Business for Britain, and the 1000+ businesses who support us, were merely “moaning”. I’ll give it to Peter: it takes chutzpah to complain that someone is demonising business while attacking and cynically misrepresenting them, characterising us as “a few disgruntled hedge fund managers”. Of course we are nothing of the sort, but we are clear that the EU needs to change fundamentally, and we're not afraid of pointing out the flaws in the arguments of those who claim otherwise.

What British Influence fail to see is that EU red tape is not simply a political soundbite. For British firms, particularly SMEs, it can be the difference between profit and loss, between job creation, and business prospering, or shutting down and innovation being smothered. Ill-thought-out regulations might just be a nuisance or the cost of doing business for larger firms used to spanning continents, but for others it can define their success or failure.

Nor are the costs involved small beer. The Regulatory Policy Committee, an independent government body, recently revealed that new EU rules have imposed £2.3 billion in net costs to businesses since 2013, wiping out the £2.2 billion the UK Government saved cutting domestic red tape during the same period. No wonder independent polling shows that business leaders want a looser, trading relationship with the EU rather than the increasingly regulated political union we are in today.

Interactive: EU link

Of course there are business leaders who believe that the UK should remain in the EU come what may, and there are those that fear the supposed “uncertainty” of a referendum. But business opinion is split. It’s vital that any deal reached is in the interest of all businesses, including the 95% of firms who don’t export to the EU. As even Nick Clegg (hardly a noted Eurosceptic) has pointed out, “we need to end any unnecessary meddling”. He has proposed making sure that “small firms which don't export, such as hairdressers and newsagents, are exempt from EU regulation unless there's a cast-iron reason”. Clearly, criticisms of how the EU works span the ideological spectrum.

And in some cases, we should question the credibility of those making the arguments that any change in our relationship with the EU would result in monumental job losses with firms upping sticks and leaving the UK. Many of the same people made the same arguments if we didn’t join the euro a decade ago. They were wrong then and they are wrong now. A history of repeated errors of judgment on the EU shouldn’t simply be swept under the carpet.

Seat projection by pollster Nate Silver
Party Seats
Conservatives 283
Labour 270
SNP 48
Lib Dems 24
DUP 8
Ukip 1
Other 16

Regardless of who wins the election next week, the need to change our relationship with the EU will remain. The EU of today is not the EEC people voted for forty years ago. Moreover, the future direction of the EU, and the changes it must embrace, mean the idea that a referendum with a clear timetable is somehow increasing uncertainty is pure hokum.

Before that referendum comes we need to have a debate about what type of relationship Britain wishes to have with the EU. That will involve listening to the concerns of businesses fed up with the "regulate first, ask questions later" attitude of Brussels. Simply ignoring those concerns, or worse still, telling people they are just wrong, will only drive people to the conclusion that the EU and its supporters are simply incapable of pursuing any changes to the status quo.

Matthew Elliott is Chief Executive of Business for Britain.