Big business and the Euro

 

When I was committed to arguing the case to keep the UK out of the Euro I found the interventions of senior corporate representatives of some large multinationals  far from helpful.

Some car companies  for example were in those days committed to our membership of the Euro. They   told us we should  join otherwise it would adversely affect their investment in the UK.  They  forecast an erosion of the competitive position of their UK operations over time if the UK stayed out. They  told us or implied  that out of the Euro the UK would lose investment and jobs as they7 would need to place new capacity  and new models elsewhere.

Fortunately the main manufacturers   changed their  minds . The leading overseas companies  continued to invest in the UK, and still believe  the UK to be an excellent manufacturing base for some of their  operations. I was very glad to several of  them announce yet more investment for the UK recently . I am pleased they agree that the UK outside the Euro is a good place to make cars, in contrast to what some of them predicted during the Euro debates.

Other senior business people speaking for their large quoted multinationals got the Exchange Rate Mechanism totally wrong. They urged government to join it, which the UK  foolishly did. Predictably it did great damage to our economy, causing first a rapid inflation then a recession. The businesses in the UK which had urged membership were often badly damaged by the results.

Before commenting on our future membership of the EU, it would be good to have an explanation  from these large multinationals who got the past big European issues so wrong. They usually enlist on the EU side of the argument, whatever damage  EU policies do to  our economic progress.
It would be useful to have a critique from big business of the EU;’s dear energy policies, for example, or of the EU’s Euro austerity policies which have hit jobs and prosperity in many continental countries. When I led a large quoted industrial company I did not express political views as its Chairman, even though at the time I personally thought EU monetary and exchange rate polices would be very damaging and said so as an individual. Had I issued bad advice politically with my company hat on , I would have felt I should correct it for the sake of the company at a later date.

 

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89 Comments

  1. Lifelogic
    Posted October 28, 2014 at 5:52 am | Permalink

    Indeed but it was not just big business it was the BBC, the EU, all the main parties a sort of group think, fashionable nonsense. The dreadful thing is everyone goes with the establishment fashion and no one actually thinks. You do not get rewarded for being consistently right on most issues when everyone else was following the group think lunacy – as JR can testify. John Major has still not apologised for his stupidity and the jobs destroyed, homes repossessed, suicides and lives destroyed by his entirely predictable ERM disaster.

    What fools would vote for the proven wrong John Major against JR. Resulting in the burying the party for 3+ terms so far at the next election but they nearly all did. An experiment Cameron seem to wants to repeat.

    We have the same group think now in the establishment. Cameron is hooked on the green religion and over priced intermittent energy and the great CO2 exaggeration scam. Almost everyone voted for the absurd climate change act, they nearly all want to keep open EU borders and low skilled/low tax/low paid immigration, they nearly all wanted Bliar’s pointless/counter productive wars.

    They still think trains, buses, bikes, walking are good but planes, cars, trucks are bad for CO2 as a religion – they are largely deluded. They still think paying people with other’s money to buy electric cars, put up wind turbines and PV cells on their roof is a good plan when it clearly is just pissing money down the drain. They think importing scrap wood to Drax is a good plan, they support CAP and the common fishing policy. They think gender neutral pension and insurance are sensible and that government should decided how powerful you vacuum should be.

    Above all they still cannot accept that the best use of money is usually to leave it with those who earned or made it. They still think raising tax rates and wasting the money on say HS2 is a good plan.

    Rather like some doctors who make £10,000 from doing an unneeded operation they will find a good “medical” reason to justify doing it. Even if it is clearly wrong and immoral. Just look at variation in different operations/treatments around the world

    • Lifelogic
      Posted October 28, 2014 at 6:06 am | Permalink

      No one, but a deluded fool or a charlatan would put up a wind turbine on a house in windless Notting hill, or build the millennium dome, plan HS2, send men to the moon or pay people to install intermittent “renewable” energy that costs up to 20+ times its true value. Who, but a complete idiot or charlatan, would think having the same annuity or insurance rates for different genders (with totally different life expectancies/risk profiles) was sane, or that daft laws that prevent you firing incompetent staff were a good plan?

      The nation grid warning of power cut outs today I see, surplus at 7 year low due to EU rules closing plant down. Only about 4% surplus capacity it seems. Let us hope an outage will result in Davey & Truss being fired and Patterson returned.

      What fools would think that absurdly complex and high rate tax and employment laws were a good plan?

      • A different Simon
        Posted October 28, 2014 at 9:55 am | Permalink

        You know that if there are outages it will just be spun as being to reliant on fossil fuels and used as justification for more windmills .

        Energy demand side management by smart meters etc is just too big a temptation for Big Brother to resist .

        The authoritarians must be salivating over the prospect of being able at the click of a mouse cut off the supply to a member of the awkward squad to teach them a lesson .

        • Mike Wilson
          Posted October 28, 2014 at 10:51 am | Permalink

          I don’t understand why wind turbines don’t have a pulley at the top with a big band going down to a treadmill at the bottom. When the power goes off we plebs could go on the treadmill to generate power and keep warm into the bargain. Definite lack of vision.

          • Denis Cooper
            Posted October 28, 2014 at 12:57 pm | Permalink

            The only advantage of that would be that they could keep the blades turning for PR purposes, otherwise a treadmill in every building would be better.

            I’ve no idea why they haven’t already been re-introduced into prisons, and it would be safer and more useful for schoolchildren to get healthy exercise on treadmills rather than injuring themselves in playgrounds.

            My father-in-law used to talk about the three heats he got from the fuel that he collected from the two acres* of woodland attached to his house: first collecting it, then chopping it up into grate sized pieces, and then burning it.

            That made more sense when we lived in primitive ignorance of the damage we were doing to the planet and hadn’t realised that the most important thing in our lives must be to reduce our emissions of carbon dioxide, as Cameron himself confirmed in the Commons yesterday when he was talking about the EU’s new targets for combatting climate change in accordance with the EU treaties as amended by the Lisbon Treaty which he opposed for several years but then decided to swallow whole because really it no longer existed anyway; now no doubt my father-in-law would be told very firmly that the last step, burning the wood, was environmentally undesirable and he should stop doing it.

            * The “acre” was an old unit of land area, related to ploughs and oxen and strips and furrows and a day’s work for a good ploughman. It was about 0.4 of the EU’s hectare that we all use now, which was originally much more rationally related to the circumference of the earth insofar as that could be ascertained at the time of the French Revolution, when the revolutionaries had a bit of time to spare from the mass slaughter of their opponents, and now related to the distance that light travels in a vacuum during 1/299,792,458 of a second.

          • Brian Tomkinson
            Posted October 28, 2014 at 1:33 pm | Permalink

            Mike,
            Careful, Liz Truss might well think that is a really good idea.

          • lifelogic
            Posted October 28, 2014 at 3:09 pm | Permalink

            Sounds about as sensible as most of the green crap this government propose and cross subsidise with others money.

          • alan jutson
            Posted October 29, 2014 at 8:36 am | Permalink

            Mike

            I have already suggested in previous posts that running machines, cycles and rowing machines in Gyms should be connected to a generator to produce electricity.

            Then those who wish to keep fit could do something productive for the rest of us, instead of viewing an overhead television whilst they sweat it out.

            Why is it that those who go to the gym always want to park close to the entrance ?

            Seems a mismatch of thought !

          • Lifelogic
            Posted October 29, 2014 at 9:39 pm | Permalink

            Indeed and why do joggers cut corners when jogging for exercise?

      • oldtimer
        Posted October 28, 2014 at 3:11 pm | Permalink

        I recommend a new paper called “Wind Power Reassessed” by Capel Aris, published by the Adam Smith Institute and the Scientific Alliance. It demonstrates the utter futility and inadequacy of wind power. Perhaps JR will publish a blog on the subject, which seems relevant now that power cuts are a few steps nearer.

        There is a short piece on it over at the Spectator`s Coffee House blog and also at Bishop Hill`s blog.

        • Rods
          Posted October 28, 2014 at 11:03 pm | Permalink

          Thank you for the reference, it is a very good, well researched and thought out paper.

  2. Brian Taylor
    Posted October 28, 2014 at 6:04 am | Permalink

    Why do we pay vast sums of money to the EU when most people just want a Free Trade Area?
    The EU as it is now is an expensive Quango and all it is doing is passing on regulations from World bodies that set the agenda, and on these world bodies we are represented by the EU if we left the EU we would have a seat on these bodies and more influence than through the EU!!!!!

    • Chris
      Posted October 28, 2014 at 9:04 am | Permalink

      You are quite right, Brian. We would have our own seat at the top table and be in a far stronger position to influence policy than at present. We would be fighting the UK’s case, just as Norway, with its own seat, managed to protect its fishing industry. We unfortunately were represented by the EU which put forward a common position for all Member States, a position which clearly was not in our interests and resulted in the collapse of our fishing industry. I think you are already well aware of R North’s eureferendumblog, B T!

      • William Gruff
        Posted October 28, 2014 at 10:05 pm | Permalink

        Article 50.

  3. Mark B
    Posted October 28, 2014 at 6:08 am | Permalink

    Good morning.

    Business goes wherever a profit can be made. Cheap energy, low regulation and taxes are more important than the currency the host nation. Remember, many things, such as oil, are priced in Dollars, not Sterling, Euro’s or Gold.

    Off topic. I see our new Environmental Secretary has got off to a flying start – NOT !

    • APL
      Posted October 28, 2014 at 8:19 am | Permalink

      Mark B: “Business goes wherever a profit can be made.”

      There is still a profit to be made in the European Union, if a business is big enough and corrupt enough to wine and dine the huge cadre of Eurocrats, Euro parliamentarians, National parliamentarians, National bureaucrats, there is still some cream left to be squeezed out.

      T

      • Mark B
        Posted October 28, 2014 at 8:42 am | Permalink

        In the Grand-Scheme of things, the EU is fast becoming and irrelevance. Overly regulated, taxed, inefficient and anti-entrepreneurial. I once spoke to a lady from Spain and, she told me how that back home that; “they do not want you to get on.”

        Further, more and more regulations are being made and approved elsewhere outside the EU. Outside the EU, we will be free to use those organizations, just like the Norwegians do, to create international regulations and legislation that better suits us.

        • Margaret Brandreth-J
          Posted October 28, 2014 at 6:14 pm | Permalink

          That is not just Spain ;it is here in the UK. There is the big boot on top of us. It isn’t socialism, conservatism ;it may be big business . One wonders whether people are bribed to keep, the very straight and honest go getters down.Stupid really;if those with talent , nouse and intelligence, have skills and aptitude are put from the top to the bottom of the pile they will be influencing from the bottom and their word will still be heard and grow collectively even if it ‘s not directly spoken ” the unheard word still whorled”

    • Richard1
      Posted October 28, 2014 at 11:58 am | Permalink

      This is of course correct, business will make up its mind on the attractiveness or otherwise of the UK post any EU-exit depending on conditions at the time. If we have a stable economy, low taxes, low threat of union militancy, competitive energy prices and sensible regulation we might be more attractive – assuming we can cut a free trade deal with the EU.

      But there is a strong pro-EU argument that the uncertainty of exit isn’t worth the risk – and this will be the main argument for the Ins if there’s a referendum, Its also of course why big business prefers the devil it knows.

      Liz Truss’s interview with Andrew Neil was a joke. Neil is the only BBC presenter who would have questioned a politician on the green ‘consensus’ in the thorough way he did. Ms Truss was I suppose doing her best to trot out the official line – but it was clear she cant believe a word of it herself.

      • Lifelogic
        Posted October 28, 2014 at 5:49 pm | Permalink

        Indeed Andrew Neil is the only decent interviewer the BBC have. He is intelligent well prepared and in the middle of the political spectrum and fair. All the rest are way, way off to the left, ask idiotically loaded and very dim questions are rarely even listen to the answers given before asking the next idiotic lefty question.

        Truss is just yet another “Cameron think”, green crap, Oxford PPE, (ex?) Libdem.

    • lifelogic
      Posted October 28, 2014 at 3:25 pm | Permalink

      Indeed a Cameron person to her very core, a Oxford PPE, A Libdem president at uni and with no understanding of energy production, the science of climate or very much else it seems etc ed

  4. Mondeo Man
    Posted October 28, 2014 at 6:40 am | Permalink

    Well said, John.

    Not only was staying out of the Euro right it has proven to have been a stupendously good move for us.

    Might leaving the EU altogether be even better ?

    They describe us sceptics as negative campaigners ? All I ever hear from the pro’s is fear mongering.

    • Mondeo Man
      Posted October 28, 2014 at 8:21 am | Permalink

      “We are absolutely clear”

      Clear

      That word again ! From the Energy Minister just now on the looming energy crisis.

      Update: clear = bullshit to the public these days.

    • Lifelogic
      Posted October 28, 2014 at 5:50 pm | Permalink

      Exactly the Cameron types dare not even make the case for the EU at least Clegg is openly daft on his love of the EU.

  5. Lifelogic
    Posted October 28, 2014 at 6:52 am | Permalink

    Now in another group think “equality” lunacy we have the Sports Minister drivelling on about equal gender pay in sport. How on earth can you pay women the same in say football when so few actually want to pay to watch it? What part of supply, demand and market value do these group think idiots not understand?

    So power outages now quite likely and yet oil and gas prices are falling dramatically. Was oil not going to run out years ago according to the fake green, doomsday loons? Factories being paid to shut down too – must be great for UK productively, efficiency and jobs.

  6. Mike Stallard
    Posted October 28, 2014 at 7:13 am | Permalink

    What we need is not a huge vague argument about whether or not we should stay in “Europe”. We need some alternatives which work.
    Nobody in their right minds wants the UK to be part of the eurozone with the accompanying federal statehood which the Commission are demanding and have been demanding for several years now.
    Nobody wants us to stop trading with Europe either. We are not a trading nation for nothing. And we also need free trade agreements with the rest of the world too, especially with countries which speak our language – which the EU is at present preventing.
    We could go down the Swiss route and throw ourselves into interminable negotiations with people are paid to prevaricate and postpone and whose deliberations move at glacial pace.
    Much better to join EFTA and the EEC before we start negotiating. Then our trade will be secure immediately and we can start to agree on how we can live at peace with our geographical neighbours without being run over by them.

    • Denis Cooper
      Posted October 28, 2014 at 8:33 am | Permalink

      “Much better to join EFTA and the EEC before we start negotiating.”

      You’ll have to explain what you mean by that.

    • Mark B
      Posted October 28, 2014 at 8:45 am | Permalink

      Mike, totally agree. But it is EEA, not EEC.

    • a-tracy
      Posted October 28, 2014 at 10:26 am | Permalink

      Excellent post Mike Stallard. 100 years ago our grandparents fought for our freedom we should find a peaceful solution.

      We should say we’re happy to take productive immigrants from all nations of the world we just want proper quotas and the right to turn away EU criminals and claimants we did not choose a United States of Europe but it seems that’s what we’ve got. I also strongly believe that if Europe stopped us trading with them and then we retaliated they’d be much worse off.

  7. Iain Gill
    Posted October 28, 2014 at 7:25 am | Permalink

    It’s the same with immigration though John isn’t it.
    The head of the CBI has been in the newspapers defending high levels of immigration, complaining that Brits are not trained or skilled enough, and other such.
    Ignoring that many work visa holders are taxed far less than Brits (allowed things tax free as supposed expenses that Brits away from home are not, tax allowance not being pro rata with the amount of the tax year you are in the country, large outsourcers acting as their gang masters paying corporate taxes in tax havens rather than here, and so on), get free healthcare and schooling for their children despite coming from countries where no such perks are offered to Brits working, often end up staying indefinitely, and so very much more.
    Big business needs incentives to train and hire Brits, not be fed by constant large numbers of new immigrants.

    • Mondeo Man
      Posted October 28, 2014 at 2:23 pm | Permalink

      Iain – Big businesses supporting mass immigration are demanding that the taxpayer subsidise it whilst minimising their own exposure to taxation.

      Tax take down – debt up.

      Not working, is it !

      • Iain Gill
        Posted October 28, 2014 at 6:19 pm | Permalink

        Correct.

        The current situation where hiring a work visa holder attracts less tax than hiring a local is a complete reversal of common sense or the wishes of the population.

  8. bluedog
    Posted October 28, 2014 at 7:27 am | Permalink

    A topical post in view of a remarkable threat from an EU budgetary functionary – if the UK doesn’t pay its recently announced € 2.1 bn surcharge, it may lose its budget rebate from the EU.

    In which event, the UK simply deducts the imputed value of its budget rebate from any further membership payments made to the EU.

    HM Treasury should have little trouble in doing the rebate sums, giving the EU a practical lesson in sovereignty.

    • Denis Cooper
      Posted October 28, 2014 at 8:42 am | Permalink

      Apparently HM Treasury does have trouble doing such sums, and even when its officials are told the answer by EU officials they don’t pass it on to the officials around the Prime Minister, who only finds out once he is sitting down at the top table with other EU heads of state or government … but as I posted last week:

      “If this really came as a complete surprise to UK ministers than one or more UK official(s) should be sacked. However it is beyond belief that officials at the Commission should have been working on these adjustments in complete secrecy without UK representatives at the EU having the slightest idea that it was even going on, so the question is why UK ministers have chosen not to publicise it as something coming along the pipeline.”

      • Anonymous
        Posted October 28, 2014 at 5:39 pm | Permalink

        Denis – I’m not sure it was such a surprise.

        “WE’RE NOT PAYING THIS BILL… in December” seemed rather well thought through for someone supposed to be angry.

    • Mark B
      Posted October 28, 2014 at 8:52 am | Permalink

      I think they can do more to us, than we could do to them. Cameron knows this, even if you do not. That is why he WILL pay. It will probably after December the 1st, and it might be slightly less than 1.7 billion pounds. But he WILL pay.

      • bluedog
        Posted October 28, 2014 at 9:45 pm | Permalink

        ‘I think they can do more to us, than we could do to them. Cameron knows this, even if you do not.’

        I must disagree, the EU, or more specifically the Eurozone, contains its own WMD in the form of the ECB.

        Without exception the countries of the Eurozone are in budget deficit to the extent that the national governments’ capacity for fiscal stimulatory measures has been exhausted. All now depends on the ECB where the capacity for monetary stimulus through QE is inhibited by the legacy of the Weimar Republic. There is little doubt that Mario Draghi will find a way, but what is the true credit rating of the ECB? A currency such as the Euro cannot exist in perpetuity without a sovereign, and the EU is not truly sovereign as it has limited direct taxing power. The Euro is therefore a bluff, and at some point the financial markets will call that bluff. It is only a matter of time.

        So what is the catalyst that might cause financial markets to experience a change of sentiment towards the Euro? The answer is a perceived contraction in the already tenuous tax base that notionally supports the Euro.

        And how might that happen? The disorderly departure of the UK from the EU would be of some importance in so far as the budget of the EU would contract. But the UK is not a participant in the Eurozone so Euro optimists would not panic. The collapse of optimism, crucial in causing financial panics, would come if a key member of the Eurozone such as Italy were to suddenly leave both the EU and the Eurozone and reinstate its own currency. This would be the death knell of the Eurozone.

        So what would be the catalyst for Italian departure? Most likely Brexit.

        In short, this writer sees the balance of terror as being tilted strongly in favour of the UK. The EU can take initial retaliatory measures against the UK, but the structural weaknesses of the EU and the Eurozone can be ruthlessly exploited by the UK in a second round offensive.

    • Mike Wilson
      Posted October 28, 2014 at 10:47 am | Permalink

      I struggle to understand how we ever got into the position of paying eight and a half thousand, million pounds to other countries – as the price of membership of a club. When I join a club I expect my subscription to buy me something. I don’t expect to pay £100 to join a tennis club and give the club another £100 so that they can give the money to a tennis club in another country.

  9. alan jutson
    Posted October 28, 2014 at 8:03 am | Permalink

    Just like politicians who have never had a proper job, we now seem to have some CEO’s who are likewise unqualified in the real world.
    Having arrived on a fast track management system where they have by passed the shop floor, they seem equally out of touch with the very basics on which their business has been built.

    No substitute for real experience, with real people, with real problems to resolve.

    The World is full of professional talkers, who have never actually done anything themselves.
    These people often engage expensive management consultants/advisors to resolve problems for them, little realising that the answer usually comes from those in house, who are lower down in the pecking order.

    All the management consultant/advisor has done is to facilitate a pathway for that information, often making out at the same time that they themselves were the experts, in order to justify their large fees.

    No substitute for walking around the grass route areas of your business on a regular basis, from time to time, and engaging with those who are at the sharp end, to find out what really is going on.

    • agricola
      Posted October 28, 2014 at 8:39 am | Permalink

      One of the things that impressed me when visiting and doing business with the Japanese car industry was the fact that all their directors had worked their way through the factory. Even the financial director could explain machining processes because years ago he had done them himself. One of the essences of their success was the internal feeding of productivity ideas from the shop floor.

    • turbo terrier
      Posted October 28, 2014 at 10:51 pm | Permalink

      Very impressive Alan. Walking the talk now that is a clever thing. That is the trouble with 500 odd of our so called representatives at Westminster. They hear but do they listen? Not a diddly squat of what the real world is about

  10. oldtimer
    Posted October 28, 2014 at 8:16 am | Permalink

    Back in the 1960s, before the UK joined the EU, UK car and truck companies faced significant tariffs when trying to sell their products into Europe. Ford of Britain, for example, absorbed losses in order to build a market position in France and Italy – a policy that came to an abrupt halt when de Gaulle said No to UK membership. There followed a distinct shift in Ford`s European strategy thereafter with the bulk of its new manufacturing capacity being located in Germany, France and Belgium.

    UK domestic demand was not helped by the practice of successive UK governments of manipulating purchase tax rates in order to regulate consumption. This caused significant swings in the size of the UK car market with unhelpful consequences for UK manufacturers. It is not surprising, therefore, that they wanted the tariff free access to the growing markets in the EU to offset the uncertainties of their domestic market.

    What this demonstrates is that businesses will argue the case for their business interests, either privately or publicly; this should be no surprise, though like you I think that such views should be conveyed privately, especially by foreign owned companies. What they do not do is argue the case for the voter worried, for example, about immigration. Voters need their MPs to do that for them.

    • DaveM
      Posted October 28, 2014 at 10:14 am | Permalink

      I wish de Gaulle was still the French president!!!

  11. Ex-expat Colin
    Posted October 28, 2014 at 8:19 am | Permalink

    Car companies…I think (I know), thats a gang I’d never heed. Along with Banks/Financiers. They exist largely due to subsidies and preferential loans….. same as anything green.

    Baroness Sandip Verma – Conservative

    “Baroness Sandip Verma said the rate of warming might have decreased, which could support the effectiveness of green policies” H/T GWPF

    CO2 still rising? Might have? And we pay people for this?

    More money down the drain at the Met Office…more accurate forecasts….LOL

    • lifelogic
      Posted October 28, 2014 at 3:35 pm | Permalink

      Garbage in gives garbage out with computers. The new met office multi million pound one will give it out more quickly one assumes. One imagines the program will be written by people looking for a PC output suitable for the green crap BBC and their annoying arm waving and over acting weather girls and boys.

      • Mark B
        Posted October 28, 2014 at 7:34 pm | Permalink

        That is exactly what I thought. All they have achieved, is find a way of telling us something wrong a bit quicker.

  12. agricola
    Posted October 28, 2014 at 8:29 am | Permalink

    Big business does not come to it’s decisions for political reasons. They act in a way that gives them the greatest advantage in the market place. It is the bottom line that drives them.

    If they are big enough they can demand to sit at the table when standards are decided. Given this opportunity they will gear standards to their own ends. Many years ago I can remember the market leader in a particular field, for whom I worked, decided to go metric. In their eyes this meant putting metric dimensions on existing imperial sizes. They drove it through the BSI, they and the rest of the industry were on the standards committee, because it suited them as the most cost effective way of going metric. It was of course a total farce. When you bewail obesity in the UK, look at who controls the food industry. It is added sugar and salt in added value TV dinners for one that is the source of the problem all controlled by the food industry to enhance the bottom line of the food industry.

    When big business takes up a political stance, you should ask yourself, ” What is in such a stance for them”. You will find that they are driven by the bottom line. If big business now wants us in the EU, which would ultimately mean the euro as well, you are right to demand that they make their case in public and open it to scrutiny.

  13. Edward2
    Posted October 28, 2014 at 8:36 am | Permalink

    Big business love the EU and will always argue in favour of it for three main reasons:-
    1. The EU increases their chances of large subsidies and grants.
    2. It layers vast numbers of regulations and laws on business which impact disproportionately on small companies, thus reducing their competition and securing their market leading position.
    These big companies have many staff who can spend their days complying and their lack of competition means they can then just pass the extra costs onto their customers in higher prices.
    3. The EU gives them lucrative corporate tax avoiding abilities by allowing big businesses to register their HQ in some obscure nation of their choice, which smaller companies find very difficult to do.

    • Edward2
      Posted October 28, 2014 at 8:39 am | Permalink

      Oh and I forgot one other reason big business loves the EU
      4. An endless supply of cheap labour.

      • john robertson
        Posted October 28, 2014 at 7:58 pm | Permalink

        And maybe 5

        If it goes wrong then they will just up sticks and go to the non EU countries where the business went.

      • bluedog
        Posted October 28, 2014 at 8:44 pm | Permalink

        ‘An endless supply of cheap labour’

        Indeed, and when the largely Turkic populations of Far Eastern Europe have migrated to the industrial core of the EU there is always Turkey proper.

  14. Denis Cooper
    Posted October 28, 2014 at 8:54 am | Permalink

    It was often said that “trade follows the flag”, in fact in practice it was often the other way round; but in either case the EU has its flag for trade to follow, or to be followed by trade, and those whose profits depend on trade facilitated by the EU have an incentive to salute its flag in preference to that of any one of its member states.

  15. Douglas Carter
    Posted October 28, 2014 at 9:22 am | Permalink

    I suppose it’s like one of those Chinese finger-trap tricks. You can push easily in one direction but the weave of the structure closes around you if you try to withdraw.

    It’s known that many industrialists who were public champions of the Euro in its early inception became ‘favoured’ with certain types of advantageous consideration when bidding for EU attentions. Presumably, even where their words of two decades ago can be proven to have been built on shifting sands, an understanding has evolved that they may not retract their sentiments and admit the fault due to the generous previous award of those ‘advantages’.

    .I’m more concerned that the pro-EU political side of the project have been using these unaccountable industrialists as their official mouthpieces and thereby adopting a convenient and strategic silence on the matters at hand.

    The pro-single currency campaign never explained themselves all the time during the most active phases of their attempts. To date they’ve never offered a proper, structured, considered and coherent pro-single currency debate, beyond offering a referendum, the wording of which, and the terms of reference of which they would never discuss. One of the strangest political phenomena of the European post-war era.

  16. Kenneth R Moore
    Posted October 28, 2014 at 9:22 am | Permalink

    Net #UK Contributions to the #EU Budget:
    2013 £8.6bn
    2012 £8.5bn
    2011 £8.1bn
    2010 £7.4bn
    2009 £4.4bn
    2008 £3.3bn

    It just seems that as far as the |Eu is concerned, sense and reason are left behind.
    David Cameron would like us to believe he secured a cut in the Eu budget.
    The truth is that against a backdrop of recession, massive indebtedness and a failing economy, EU payments have been quietly rocketing.
    You cannot trust politicians or big business corporations to tell us the truth.

  17. acorn
    Posted October 28, 2014 at 9:34 am | Permalink

    SMMT already said it JR. (The UK Automotive Industry and the EU by KPMG).

    • The attractiveness of the UK as a place to invest and do automotive business is clearly underpinned by the UK’s influential membership of the EU.

    • Access to the Single Market is fundamental for securing investment into UK vehicle and engine manufacturing and across a highly integrated supply chain.

    • Access to the EU market is reflected in the fact that 49% of UK-produced vehicles are sold across the largest Single Market in the world, unhindered by any tariffs or costly regulatory barriers.

    • The EU’s bargaining power in trade negotiations around the world is immense; paving the way for the UK to export over 50% of locally-manufactured vehicles to growth markets across the rest of the world.

    • Defining technical regulations and product standards at a European level enables the UK to remove complexity and costs and influence the way vehicles are made around the globe.

    • Innovation in UK automotive is boosted by significant EU R&D funding. In total approximately £3.5 billion has been awarded to UK businesses and universities across all sectors to encourage growth.

    • Free movement of labour within European borders gives automotive businesses the ability to blend UK and international talent at all levels of the industry.

    “All of the Renault Nissan Alliance plants are ranked annually across a series of efficiency and Total Delivered Cost measures. Nissan’s Sunderland Plant is consistently in the top three highest ranked plants globally, which gives it a competitive edge when bidding for NEW MODELS SOLD IN THE EU. Today, the Sunderland plant produces over 500,000 vehicles annually employing over 7,300 staff, a record high. This follows significant inward investment of over £1 billion since 2010, supporting more than 224 suppliers in 22 countries.”

    • Roy Grainger
      Posted October 28, 2014 at 1:18 pm | Permalink

      “Innovation in UK automotive is boosted by significant EU R&D funding. In total approximately £3.5 billion has been awarded to UK businesses and universities across all sectors to encourage growth”.

      You talk as if the EU has money of its own. It doesn’t. As UK have been for many years amongst the biggest two net contributors to the EU then if we withdraw we’d have money available to make up this funding gap AND MORE.

      • Hope
        Posted October 28, 2014 at 4:14 pm | Permalink

        The EEC was meant to be a trading block not become a superstate by stealth. Hence the sentiment in your blog would be valid if it was only a trading block. Therefore if it remained as it was labelled on the tin there would not be the catastrophic Eurozone today. We do not want monetary or political union. Economics is NOT the sole reason to be a region of the EU superstate.

        • Anonymous
          Posted October 28, 2014 at 5:41 pm | Permalink

          Agreed, Hope. And these cars are being made for trade in Europe – which is dying on its arse.

        • Ted Monbiot
          Posted October 28, 2014 at 7:57 pm | Permalink

          Indeed Hope.
          A good strapline for the EU in the UK would be:-

          “Giving you your own money back less 65%% for our admin costs”

    • acorn
      Posted October 28, 2014 at 2:35 pm | Permalink

      If you get a chance JR, can you give Ed Davey a poke and remind him of the need to get connected. http://www2.nationalgrid.com/WorkArea/DownloadAsset.aspx?id=32371

      “Analysis undertaken by National Grid has estimated the impacts on wholesale electricity prices resulting from doubling Britain’s current capacity to align with the European Commission benchmark. It is estimated that each 1GW of new interconnector capacity could reduce Britain’s wholesale power prices up to 1-2%. In total 4-5GW of new links built to mainland Europe could unlock up to £1 billion of benefits to energy consumers per year, equating to nearly £3 million per day by 2020.”

    • Mark B
      Posted October 28, 2014 at 7:39 pm | Permalink

      The EU does not set all the regulations regarding standards. A lot comes from CODEX, BIS WTO etc. All the EU is, is a middle man.

      Outside the EU we will stand alongside the EU.

  18. Kenneth
    Posted October 28, 2014 at 9:39 am | Permalink

    Big business likes regulations, especially as it often helps to write them. Regulations standardize current practice and specifications, keeping out competition and innovation.

    An example is the banking industry which managed to regulate itself into a cartel of inefficient giants which were effectively arms of the state.

    The way the eu is going the same will happen across all industries culminating with Soviet style too-big-to fail super-large factories churning out a limited choice of products to the ‘European’ specification. The ultimate resting place for these giants will be as giant state-owned leeches.

    It’s a recipe for mass unemployment where the rich get super rich and the poor get super poor.

    • oldtimer
      Posted October 28, 2014 at 3:05 pm | Permalink

      Businesses will get into the business of regulation if they are able to (a) to write rules helpful to them and (b) to fend off rules that are unhelpful to them. The EU is now a regulation monster machine and is the target of every savvy pressure group there is, whether that is a business pressure group or a green lobby. Even worse, the EU Commission itself has taken to funding favoured lobby groups to promote causes and issues that the Commission itself wants to regulate. This unholy alliance has been responsible for much of the damaging regulation purported to deal with “climate change”.

  19. Mike Wilson
    Posted October 28, 2014 at 9:42 am | Permalink

    And which, fantastic, political party took us into the ERM? And had a house price boom and bust? And a recession where hundreds of thousands lost their homes. Blast this getting old lark … which party was it? Because, whichever party it was should have disbanded and never tried to win power again.

  20. DaveM
    Posted October 28, 2014 at 10:13 am | Permalink

    Well stated again John.

    Once again, it’s a matter of shouting loud enough to be heard over the clamour of those who don’t want to pay tariffs when exporting. I’d suggest a simple summary of what you’ve written published in the Sun, the Mail and the Guardian (that last one was a joke by the way).

    The way people are making it sound, it’s as if an exit from the EU means war, not just a political divorce! That scenario’s more likely if we stay in.

  21. Alexis
    Posted October 28, 2014 at 10:57 am | Permalink

    Perhaps a list of vocally pro EU companies needs to be compiled.

    If these individuals want to be politicians, perhaps they should enjoy the full benefits of being politicians.
    Letters. Questions. Protests. Boycotts. Tweets. Blog comments.

    Are they ready for that?

  22. Sam
    Posted October 28, 2014 at 10:58 am | Permalink

    Isn’t it the case that the circular nature of big business lobbying the EU and the EU passing regulations that help big businesses to close out market entrants amounts to naked self interest?

    Isn’t it also true that, such is company directors’ fear of uncertainty, they would probably rather do away with general elections if that was in prospect?

    I would hope that the Sword of Damocles represented by the Financial Transactions Tax would at least make the City think twice before throwing in its lot with the Eurocrats.

  23. CHRISTOPHER HOUSTON
    Posted October 28, 2014 at 11:56 am | Permalink

    Sometimes one feels certain global companies which nevertheless are in fact say American or Australian or Russian in essence invest to bring about political or economic change in countries of their governments’opponents even if at first sight their investment appears to create jobs and prosperity in the target country.

    There can be a wiping out of fledgling manufacturing and services in the country and even though infrastructure is created because of and in some cases built by the international company it is an infrastructure that depends for its economic justification in the continued presence of the corporate behemoth.

    Perhaps as is accused of Russian oil and gas firms who have small countries dependent on their supplies though in this case I find some suddenly anti-Russian Baltic and European states more like spoiled children who always took for granted Mother Russia’s virtually give-away energy and despite very uncomfortable joint foreign policies to which they obligingly acquiesced, are now trying with American lip-smacking assistance biting the hand that fed them for so long when their economies even in a theoretically neutral political environment would have been quite incapable of standing on their own two feet.

    The USA, are our close allies and friends, though they would be the first to admit they like every other country put there own national interest before all others.

  24. Rods
    Posted October 28, 2014 at 12:27 pm | Permalink

    Unfortunately, the sort of people that advocated bad political policy like the Euro, are normally the sort of people who prefer to remain unaccountable, when the policy doesn’t work, so everybody else carries the can as they fade away, onto their next fad, which is currently plant food emissions (CO2)!

    Although, I agree that it is better for businesses to avoid politics, if the directors do enter the political arena, then they should be accountable for doing so.

    Which brings me to another fad, energy. With 4% generating capacity margin for this winter, a reduction from 17%, that your Government has presided over, they are suggesting rather than blackouts if they can’t meet demand, that they will pay industry not to manufacture the goods and services we need and can export. So along with even more expensive electricity where the energy companies have an emergency policy of paying companies not to use it at our expense, with our current dire balance of payment situation, I don’t think this is sensible industrial policy, although your Government obviously does!

    This leads to the question, why have all UK Governments since the early 1990’s pursued a policy of making the absolute essentials of water and energy, scare expensive commodities and also other importance things for day-to-day living like transport and road capacity?

  25. John E
    Posted October 28, 2014 at 12:27 pm | Permalink

    Speaking of the energy policy, I see National Grid have put out another warning/reassurance about our energy supply this winter. I assume the warning bit is theirs and the “nothing to worry about ” spin has been laid on by the politicians adding their usual value.
    The thing no-one has yet come to grips with fully is how they re-start the grid after it goes down. I’m old enough to remember learning to drive during the three day week and having all the lights go off as I drove through town. We are a lot more reliant on technology these days and it will be a lot more complicated than it was then to re-start. We built our systems with very little thought as to the “what-ifs” like a solar flare event or other catastrophic outage.

  26. John E
    Posted October 28, 2014 at 12:30 pm | Permalink

    This is a smart new message when posting a comment. “Duplicate comment detected; it looks as though you’ve already said that!”

    It’s quite right – I was commenting on National Grids latest warning about power outages this winter. And I have been saying that for some years now!

  27. bigneil
    Posted October 28, 2014 at 12:31 pm | Permalink

    not for the column – -just seen you on Daily Politics john – well done for standing up for us against this ridiculous demand.

  28. Roy Grainger
    Posted October 28, 2014 at 1:15 pm | Permalink

    I agree. To go off on a slight tangent, similar voices are saying that as immigrants overall contribute more to the economy than they take out then immigration is a good thing and (by extension) immigration controls are a bad thing. Even if that were true it is only a small part of the argument – money is only one of the issues involved and not necessarily the most important. Likewise for membership of the EU. It is odd to heard the left-wingers making this purely profit-related capitalist argument.

    On an entirely unrelated matter I see the Met Office are “investing” in an expensive new computer which will make their forecasts “more accurate”. This is not strictly true, it will simply make it faster for their program models to calculate the wrong answer.

    • Vanessa
      Posted October 28, 2014 at 4:10 pm | Permalink

      What is astonishing about this headline is that it implies that all previous forecasts have been a “lie”. Not far from the truth !!

  29. Brian Tomkinson
    Posted October 28, 2014 at 1:45 pm | Permalink

    You know that you won’t get any response to past failings by big business in relation to the EU and the Euro.
    If you were unequivocally determined to see the UK throw off the shackles and leave the anti-democratic EU, you could set out the case for leaving and the optimistic view of the future that we would have as an independent, self-governing country trading with the world. However, because, for party political reasons, you have totally signed up to the charade of re-negotiation with the EU prior to a possible referendum in 2017, you have constrained your own ability to argue the case for leaving the EU. Party still seems to trump country.

  30. Vanessa
    Posted October 28, 2014 at 4:08 pm | Permalink

    This is the “community” which said we had to join the ERM otherwise we would be left behind and it would be a DISASTER for business.

    This is the “community” which was telling us it would be a DISASTER if we did not join the Euro.

    Now – this is the “community” which says it will be a DISASTER if we leave the EU.

    This “community” KNOWS NOTHING !!!

    • Mark B
      Posted October 28, 2014 at 7:49 pm | Permalink

      Hear, hear !

  31. Lindsay McDougall
    Posted October 28, 2014 at 4:31 pm | Permalink

    It would be good to hear from young, dynamic companies and from companies whose main area of business was outside the EU; also from Eurosceptic business umbrella organisations.

    • Lindsay McDougall
      Posted October 29, 2014 at 1:47 pm | Permalink

      Following on from this, can John Redwood give chapter and verse to the idea that the CBI doesn’t represent most British business? Enoch Powell used to do it regularly; he really loathed self appointed umbrella organisations (not to mention unelected ‘community leaders’).

      My favourite Enoch story in this area regards a talk he gave to businessmen. During the question time that followed, Sir Hector Laing, head of Jacobs biscuits and high up in the CBI, asked the most tortuous ‘question’, mixed in with all sorts of dirigiste gobbledygook and assertions of the need to cooperate with Harold Wilson’s Labour government. “Stick to biscuits” was Enoch’s reply.

  32. Atlas
    Posted October 28, 2014 at 4:33 pm | Permalink

    Given the role of these corporate characters is to benefit their shareholders one wonders why those who came up with bad foresight should be trusted again.

  33. Mike Wilson
    Posted October 28, 2014 at 6:10 pm | Permalink

    According to many parrots, 3 million jobs in Britain are at risk if we pull out of the EU. Generally we import 50% more from the EU than we export. Presumably, 4.5 million jobs in the EU are ‘at risk’ if we leave because, of course, we would refuse to export to them. Oh no, wait a minute, that’s nonsense.

  34. Margaret Brandreth-J
    Posted October 28, 2014 at 6:21 pm | Permalink

    I simply cannot understand why the majority of people in politics think we are all better together.There are so many liars, twisters, con artists and just rather dense folk that we all have to share in this way of life as well.The bigger, the better? the more languages to communicate simply and get things correct the better? Of course not it is obvious. Is the lack of perspicacity real or synthesised to let power and money dwindle in a muddle?

  35. Margaret Brandreth-J
    Posted October 28, 2014 at 6:28 pm | Permalink

    Of course they will invest in the UK if it pays and brings good and safe returns.Why should they not invest ?Can you imagine a statement like so ‘ I will not let this big multinational survive , I will lose all my investments,I will not get my big executive salary , bonuses , pay rise and pension , because Mrs Merkel and Brussels say so’

  36. john robertson
    Posted October 28, 2014 at 7:44 pm | Permalink

    I can think of an advertising guru who supported the euro and the EU to a religious extent but can and has taken flight when it goes wrong.

    The point for the rest of us non international wealthy people is we will stay, its our home, so its a much more important thing.

    I want a reformed EU but these internationals don’t have deep roots in any country, they will stay for the fair weather but leave if it goes bad, still sipping a pauillac wherever they are. Not a bad thing, London certainly benefits from that. Doesn’t mean their opinion carries the weight it’s given.

  37. forthurst
    Posted October 28, 2014 at 7:48 pm | Permalink

    JR is arguing that the CBI is wrong in their commercial judgment of the consequences of withdrawal; however, the proper point, whether the CBI are right or wrong, taking into account that they are not concerned with the social cost or financial costs not born directly by them, is stated by Thomas Jefferson:

    “The selfish spirit of commerce knows no country, and feels no passion of principle but that of gain”

    Another quote:

    “There is…an artificial aristocracy founded on wealth and birth, without either virtue or talents…. The artificial aristocracy is a mischievous ingredient in government, and provisions should be made to prevent its ascendancy.”

    Let’s do what is right for our country and not what we are instructed by Wall Street spivs or their subordinates in the City who drive big business toward increasing profits through each quarter without regard to any concept of the sustainability of the businesses or that of the host communities.

  38. Alexis
    Posted October 28, 2014 at 7:57 pm | Permalink

    The CBI should pay the £1.7bn demand from the EU.

    So should any other industrialist who supports the sacrifice of British sovereignty, because it happens to suit their business model.

    Let them foot the bill. They can afford it.

  39. David Tomlinson
    Posted October 28, 2014 at 8:44 pm | Permalink

    Back in the ’90s I used to refer to the CBI as the ‘Confederation of Branch Industries’. Most of its bigwigs were simply local branch managers doing what Head Office (or in Ford’s case the regional office in Cologne) told them. Not much has changed I am sure.

  40. Robert Taggart
    Posted October 29, 2014 at 11:23 am | Permalink

    Business in general and Big Business more particularly be amoral at best but immoral all too often.
    In their world dog eats dog, only the fittest survive, or, the devil takes the hindmost.
    Any nation that allows Business to determine its future will have no future – not one worth working for anyway.
    Corporate Creeps are as much a bane on decent society as any other undesirable group – they also make for bad company – at parties !

  41. Kenneth R Moore
    Posted October 29, 2014 at 11:56 am | Permalink

    Yo Redwood!

    Dr Morgan seems to echo your views that the interests of large corporations are narrow (ie making money) and do not necessarily coincide with those of the wider community.

    http://surplusenergyeconomics.wordpress.com/

    Morgan’s analysis seems to be :-

    -Corporations are supposed to be politically neutral but spend vast sums on ‘lobbying’ so they are anything but.
    – They are in favour of Eu membership and open borders as they need cheap labour and can amend legislation in their favour
    – ‘Corporate welfare’ for example in the form of subsidised worker pay such as family tax credits’ is rife
    – There is a lack of accountability at the director level to shareholders.

    We should be asking is it wise for the relationship between politicians and corporate companies to be so close. All of the Pro Eu fantasists saying the chairmen of X or Y company saying we need to stay in the union need to be taken with a very large bag of salt.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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