ELLIS news items

Richard Shaw Of ELLIS On The EU – SHOULD WE STAY, OR SHOULD WE GO?

richard shawRichard Shaw is the managing director of Ellis – a North Yorkshire-based SME that lays claim to being the world’s leading designer and manufacturer of cable cleats. The company employs 60-people, has annual sales of around £7million – 50 percent of which are export sales. Of this 50 per cent, 30 per cent is accounted for by the EU.

Richard has spent his entire career in the manufacturing industry and has over 25-years of hands-on export sales experience. This is his opinion on the EU Referendum and is not a direction to Ellis’ employees.

“It was recently reported that large companies were typically in favour of remaining in the EU, whereas smaller companies were keen to leave. The reasoning behind this sweeping generalisation being that smaller business owners feel they are being swamped by regulations.  As the MD of one of these exit-fancying smaller businesses, I’m keen to put on record how strongly I disagree with this supposed fact.

The UK is a trading nation and the EU represents a huge export territory in which it is easy to do business. Those, like me, who remember life before the EU will recall the customs challenges of exporting and importing goods to and from individual European countries. And, of course, let’s not forget the exchange rate issues that cropped up daily. Many people may well bemoan the EU as a bureaucratic nightmare, but how quickly they forget how difficult it was sell goods in Barcelona or Berlin rather than Birmingham.

Having a single market across so many countries does, of course, require a great deal of regulation, one aspect of which is the need for some degree of standardisation. For the public at large this often brings cries of interference from Brussels about the size of sausages and the curvature of bananas, but for industry it’s an absolute necessity. Just about every country in the world has some form of Norms or Standards, some of which are more widely used than others.

Before the EU there were several widely used standards. British (BS), German (DIN) and American (ASTM) Standards were all commonplace, but they weren’t just used as standards; they were often used as barriers to trade. The emergence of European Standards has done far more than simply simplifying trade in the EU.  It has had a significant impact internationally and, in some cases, European Standards have formed the basis of subsequent International Standards.

The idea that should we leave the EU we will no longer suffer the interference of Brussels in this particular arena is nonsense. European Standards will still exist and we will have to comply if we wish to sell into Europe and potentially elsewhere.

European Standards will also continue to have an influence on International Standards. The big difference being that a Britain outside of the EU (unless we join the European Free Trade Association - ETFA) will no longer have a seat at the table when these standards are drafted – a seat, incidentally, from which we currently punch well above our weight.

There are those that say leaving the EU will enable us to trade freely across the world without the influence of Europe holding us back. What they are really talking about are import tariffs – something that as exporters we deal with every day. Every country has import tariffs and some believe if we leave the EU, the UK will be able to negotiate more-advantageous tariffs with each of these countries. There are two major problems with this viewpoint.
1.    No one knows if it’s true.
2.    No one knows how long these negotiations would take.

There are tens of thousands of tariff codes in existence, and the process of renegotiation will be long and complex for each and every new agreement. What this would mean in reality is hundreds of hours and thousands, if not millions, of pounds being spent on complex negotiations, at the end of which there is no guarantee of our position being any better than it is at present.

Migration is another of the exit supporters’ bugbears – but you need to bear in mind that as the UK economy grows, the more people it needs. Net immigration in 2015 was 336,000 and in the same period, 50,000 people left public-sector employment due to austerity measures. Yet the private sector has absorbed all these and more. In fact, it might be surprising to learn that not only is our unemployment rateof  5.4%  at a 10-year low, but we also have the highest level of employment ever.

The UK has a significant advantage when it comes to the competition to attract the cream of European migrants. The reason? Almost half of the 500 million people in the EU speak English as either a first or second language. Oddly, there seems to be a view that these migrants are a liability, when in fact they’re a major asset. 62% of those who come here are graduates (compared to 24% of the UK population), and we haven’t even had to pay for their education.

On the other hand it seems that politicians like us to be confused about the difference between European migration and refugees and migrants from other parts of the world. The UK and Ireland are the only two countries in the EU that have opted out of the Schengen Agreement and therefore are protected from the issue of leaky external EU borders. There is no freedom of movement into the UK or Ireland for anyone who isn’t an EU citizen.

But there is a difference between robust border control and facing up to a massive humanitarian crisis on the scale we are witnessing at the moment. No country can be expected to deal with this issue alone and it is an ideal opportunity for the EU to demonstrate its effectiveness, and for each country to step up and share the load according to ability.

Parliamentary sovereignty is the linchpin of the out campaign, however there is a difference between sovereignty and autonomy. Sovereignty is a legal concept, but autonomy is our true freedom to act. If we leave the EU we might technically regain some aspects of sovereignty that we have voluntarily given up by being members, but our freedom to act would still be constrained by the EU (if we join EFTA) and all the other trade agreements we subsequently negotiate. Neither should we forget how much of our infrastructure is owned by foreign entities – it is France’s EDF that is deciding the fate of Hinkley C, and India’s TATA which has the fate of our steel industry in its hands.

Membership of the EU is also only one area where Parliament has passed laws that limit the application of parliamentary sovereignty; others include:
1.    The devolution of power to the Scottish Parliament and Welsh Assembly.
2.    The Human Rights Act 1998.
3.    The decision to establish a UK Supreme Court in 2009, which ended the House of Lords function as the UK's final court of appeal.

Neither membership of the EU, nor any of the other changes, fundamentally undermine the principle of parliamentary sovereignty, because ultimately Parliament is able to repeal any of the laws implementing these changes. In fact, the current debate and looming referendum clearly demonstrate that parliamentary sovereignty, far from being eroded, is alive and well.

A final point, which is probably more important than all the rest, relates to the continued existence of the EU. Europe has been in a state of flux for centuries and the EU is its most recent (and most peaceful) significant iteration. Neither the ‘ins’ nor the ‘outs’ think the EU is perfect (even after David Cameron’s renegotiation), but no mainstream politician seems to be saying we would be better off if it didn’t exist.

The position of the ‘ins’ seems quite clear: the world is a better place with an EU and, although not perfect, we are better being part of it, negotiating from within to change it.

The ‘outs’ (excluding the political extremes) seem to fall into two camps. The first camp would still like to be members of an EU, just not the one we have now. Within this camp opinion is split between those who hope a ‘no’ vote will lead to an immediate renegotiation, resulting in us remaining in, but on better terms. The remainder hope that out means out, but with the hope that this would lead to an even bigger renegotiation that would result in us being part of a radically reformed EU.

The second camp just wants out, aiming to regain our independence and sovereignty.This element of the  out campaign seems jingoistic in the extreme. If we pay any attention to the history of previous unions we should know that without significant restructure the chance of the EU’s long-term survival is slight. Even if we dismiss events such as the collapse of the Roman Empire as being irrelevant in a modern context, it’s hard to be dismissive of the collapse of the USSR. Even closer to home our own “United Kingdom” was threatened by the recent Scottish referendum. The fact is that we all have some degree of national sentiment and there is a natural urge for countries, or smaller groupings of people, to seek independence on the grounds of, amongst other things, language and culture. If the EU binds too tightly and our sense of uniqueness is threatened, the urge to be independent will prevail and the Union will collapse.

The EU itself has been in a constant state of change since its inception and, flawed though it is, it seems unwise to increase the risk of its fragmentation as a result of a UK departure. The UK has a history of facing up to challenging odds and has an obligation to society. We should take a responsible role in helping to shape that change, by keeping our seat at the table.

 

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