Wednesday, 20 May 2015

Why do some business want UK in the EU, others out?

The EU promise was that standardisation (the single market) would make selling everywhere in the EU would be as easy as selling to your neighbour. However what the EU standardisation has done is made selling to your neighbour as complicated as exporting to the other side of the world.

There are three types of business to consider regarding the UK leaving the EU:-

1) UK only businesses
2) EU only businesses
3) International businesses

Unlike continental Europe, the UK has a long history of small business and industry - the French even held us in contempt for it, calling us 'a nation of shop keepers' and meaning it as an insult. Like the USA with its numerous 'Mom and Pop' businesses acting as a cheap and easy 'nursery' for small business and startups generating income for the owners, and maybe leading to development into a much larger business.

UK only businesses have to apply full EU red tape to all their transactions - even if selling a product/service to the person next door to them. Small businesses and service companies are hugely impacted by this, business that should be simple requires huge, inappropriate administration, jumping through EU hoops in the name of 'standardisation' or 'the single market'. To start any business in the EU, you have to act like an international company from day one.

Outside the EU all the EU red tape could be scrapped, saving time and money for businesses and consumers/customers - freeing up resources to develop and expand at a sensible rate and simplifying the creation of new business in the UK, creating jobs and opportunities here.

EU only businesses - businesses that aren't purely domestic, so work in several EU countries but not outside the EU. Like domestic businesses, these companies have to comply with the full gamut of EU regulation, to trade with the EU they will have to continue to do so, so for these companies leaving the EU will not benefit them regarding administration. However as they have already jumped through the hoops to do EU trade, they have made an investment that other, new companies may not be able to -  so the EU over regulation acts as barrier to entry for competition, in this way they benefit from continued EU membership.

Outside the EU they would still need to comply with EU red-tape to trade with the EU,  so that offers no benefit, but to leave would allow UK only business to compete with them without the disadvantage of EU regulations, they may consider this undesirable.

International businesses that trade in the EU and elsewhere are already used to dealing with different regulatory compliance, to them it will make little practical difference whether one particular country is in or out of the EU. The UK's membership (or otherwise) of the EU may make a difference to them in other ways, but that will be purely pragmatic for the individual company.

1 comment:

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