Our EU membership is holding us back from trading with the rest of the world and awful EU regulation is to blame for struggling small businesses in the UK. Sound familiar? It’s the broken record of the Leave campaign’s business message. This group of politicians wants to portray the UK like a child who needs to have the umbilical cord cut, in order to be set free and conquer the world. In reality, leave or stay in the EU, there is plenty we could be doing to help business and trade, all of which is within our power today.
Lets start with tax. Current UK tax law runs into a total of a staggering 10 million words. Every Chancellor for the last 20 years has added to the problem and only recently has an office for tax simplification been set up, so far with little effect. Small businesses find it impossible to get through to HMRC on the phone while large corporates have easy access to HMRC officials in order to do deals like the one Google struck. Fixing the complexity in our tax system would really help our small business owners to thrive much more than repealing EU legislation actually designed to ensure the single market works for all.
When it comes to the internet, the UK’s slowest recorded broadband speed is slower than at the base camp at Everest. This is like a 1900’s steam train compared to Korea where speeds 25 times higher have been recorded. It is the lack of willingness to invest by government and industry in broadband infrastructure and not the EU which are to blame here.
Thirdly why are we even talking about expanding Heathrow ? Other big European cities like Paris, Madrid and Frankfurt, realised long ago that big airports and large urban areas do not mix.
Even if the much contested third runway gets the go ahead, there is the prospect of a 20 year legal battle plus the need to physically remove Boris Johnson from the runway before the bulldozers start work . Maybe I have missed something but I do not remember any politician in Brussels telling Cameron or Osborne where to locate a new runway. Gatwick could have its second runway, cheaper and faster than Heathrow should the government make that decision.
Finally, if the EU is so terrible how come Germany runs a trade surplus ? I have been to China twice since 2014 and the streets of Beijing are awash with Porsches and Audis, not cheap Japanese cars like those produced in the UK. Germans have long since valued apprenticeships and skilled trades rather than obsessing about half our school leavers having degrees as Tony Blair did. Only in recent years has the UK finally woken up and realised the critical need for a vocational education system that has helped to make Germany so successful.
In summary, rather than complain about the EU, why do we not take a long hard look in the mirror and get on and make our own lives easier? After all despite what Boris and Nigel might tell you, in many cases it’s not Brussels telling us what to do.
* Chris Key is dad of two girls, multilingual and internationalist. He is a Lib Dem member in Twickenham who likes holding the local council and MPs to account.
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14 Comments
Part of the reason the UK has the fifth largest economy is because we are in the EU.
There is no doubt the institutions of the EU are deeply flawed. I’m persuadable of the case for leaving. But what I’ve heard from the Brexiters so far is neither credible nor reassuring. They seem, by and large, to imagine that the only reason we are not the superpower we were in the 19th century is because we are members of the EU. They seem to be people who are angry with reality.
“Finally, if the EU is so terrible how come Germany runs a trade surplus ?”
Because euro membership suppresses the natural strength of the ‘german’ currency, combined with the hartz labour reforms that suppress labour reforms at the same time peripheral economies used the strength of the euro to borrow rather than invest in their own productivity measures.
The result, german efficiency hollowing out the industrial capacity of their neighbours, just as those neighbours were building an unsustainable debt burden borrowed on cheap euro credit.
Chris Key: “When it comes to the internet, the UK’s slowest recorded broadband speed is slower than at the base camp at Everest. This is like a 1900’s steam train compared to Korea where speeds 25 times higher have been recorded.”
In 1994-ish, countries like Liberia had a multi kilobit link to the internet. For a nation of thousands. Nobody in Africa had a fast internet connection. A few rich people, perhaps.
The world internet connectivity thing is a difficult problem, something that matters, but it is not the only problem.
Chris Key I completely agree with your post.
If you take a look at the BricPartner website you will see that:
“German Companies are increasing their exports to the Bric Countries, as exports to the Euro Region decline the Bric countries Brazil, Russia, India and China are increasing their share of German Imports. In 2000 Germany exported 45.5% to the Euro region and 3.9% of the 4 key Bric countries, now in 2012 exports to the Euro Region are 38.1 % a decline of – 7.3% and to the Bric Region 11.7 % which is an increase of 7.8%. It’s predicted by 2020 Germany’s exports to the Euro Zone will be 33.9% and to the Bric Region 24.3%.”
In short, Germany has a “long term economic plan” to development export markets. Meanwhile the illustrious leadership of the UK concentrates on “rearranging the deck chairs” for a better yesterday. What is it that Germany is doing that we cannot? Germany seems to have no problem trading outside the EU. If you look round at those who favour Brexit very few of them export anything anywhere, though they know all about why the EU stops them doing it.
Jedibeeftrix, yes Germany has had most benefit from the Euro currency. But you still have to be making/doing things that other countries want to buy.
As an example 30 years ago German cars were no better than British ones, their companies have gone from strength to strength while ours nolonger exist, we assembly foreign designs.
We do excel in some areas but the breadth of our industry has shrunk. The service industries just “take a cut” from the activity of others.
“leave or stay in the EU, there is plenty we could be doing to help business and trade, all of which is within our power today.”
@Chris – thanks for this great piece with its call to action and its spirit of challenge.
We spent 10 days in Austria not long ago. Everyone we spoke to (or over heard) was talking about ‘change’ and ‘reorganisation’. There was a great sense of the exploitation new ideas and new technologies.
I realise this is difficult to appreciate given the size of the first round vote for Norbert Hoffer. But what seems to be going on is a huge drive for investment and modernisation, often marketing led.
I assume something similar is going on in Germany. These countries are going to come out of the present recessionary climate totally transformed.
Why can’t we? Why aren’t we? Out capitalism is exploitative, mean spirited. Selfish. Short-term. Dare I say it, it’s economic liberalism in action. And it is the cause of our worsening productivity.
Look at the RedBull site: “Giving Wings to People and Ideas”. That’s not hype.It is what they are doing. It’s their raison d’etre.
@Bill Le Breton – perhaps the problem is that there is not even an English word for “mittelstand”?
@ Chris Key,
You ask
“Finally, if the EU is so terrible how come Germany runs a trade surplus ?”
The short answer to that question is that Germany uses a currency which is too weak for its economy. The surplus it generates sucks euros out of its trading partners in the EZ forcing them into debt.
We need to ask ourselves why any country should supply another country with goods and services. The answer is that this enables that country to receive different goods and services in return. So if Germany produces cars and Britain produces chemical products (or whatever Britain does produce these days) then it makes sense to swap cars for chemicals. Obviously.
It may make some sense for a country to swap more goods and services for fewer goods and services one or two years running and take IOUs in return. The IOUs (ie money) can then be spent so that the balance is restored over say a five year period. But it makes no sense at all to consistently swap more for less and build up IOUs which cannot be spent. The debtor countries simply wouldn’t have the capacity to repay with real goods and services if those IOUs were spent.
To put it bluntly, the Germans are very good at engineering cars and trucks but they are clueless when it comes to understanding macroeconomics. They are making themselves poorer than they need be and wrecking the EZ by their wilful refusal to recycle their unspent surpluses.
Peter Martin
Germany exports more to China because it has top quality cars and other engineering products which are wanted. Your argument on exchange rates simply does not hold water given China has deliberately kept the RMB undervalued.
@ Chris Key,
Both China and Germany ensure that their currencies are undervalued – to the detriment of their own populations. If you’d care to check the figures you’ll find that China is one of the few countries to run a surplus (euro 20 bn) in its trade with Germany: http://tinyurl.com/kop3xcs
This compares to a Britain which has a net deficit of euro 51 bn in its trade with Germany.
Not that this is of any real significance. Any country can run a surplus simply by keeping its currency too low. I agree that Germany does produce some good stuff. I’ve just ordered a German van for my business, for example, and I don’t begrudge them being able to sell their wares on world markets.
But they should accept that they should spend what they earn and balance their trade. If they did they wouldn’t be net sucking euros out of the economies of their EZ trading partners and wrecking the ideal of European Union in the process.
“Part of the reason the UK has the fifth largest economy is because we are in the EU”
I agree that it not fair to entirely blame the EU for the UK falling to fifth from fourth! 🙂
Chris Key – these are exactly the sort of questions we should be asking. I would differ from you in detail but wholeheartedly agree with the thrust of where you are going.
It should by now be pretty obvious that the British establishment doesn’t know how to revitalise the economy – or perhaps doesn’t want to know since it works fairly well for some just as it is. It’s an open goal for the Lib Dems if the party has the ambition.
And it’s not even terribly difficult to find answers once you start asking the right questions. It’s no secret how to build a successful economy as there is an immense amount of academic work plus any amount of practical experience and case histories to draw on. But you do have to start by asking the right questions.
“Only in recent years has the UK finally woken up and realised the critical need for a vocational education system that has helped to make Germany so successful.”
Sadly, I don’t think that the UK has yet woken up and realised that.