Staying in: the UK must be at the heart of a competitive Europe

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FORMER UK premier Sir John Major has intervened once again in national political discourse, perhaps sensing something of a vacuum on important matters of state. The wise ex-Prime Minister, who suffered from his party's internal battles over Europe, has echoed EEF's warnings that Britain will pay a “severe price” if it ever votes to leave the European Union. And so the debate on the UK's membership of the EU rumbles on. In recent weeks there has been a welcome and united voice from much of business and industry about the importance of staying in Europe. EEF has led the charge with the publication of Manufacturing: Our Future in Europe in early October with the overwhelming message that the UK must remain part of the EU, no ifs, no buts.

EEF's message is clear. The EU is critical to manufacturers in the UK – and, ergo, important to UK plc. Not only does the EU represent a major export market in itself, it is also the gateway to other markets through comprehensive trade agreements, such as the South Korea FTA and the current negotiations on the Transatlantic Trade and Investment Partnership (TTIP). Access to innovation funding was also seen as a positive advantage of EU membership.

So as MEPs gear up for the hustings ahead of next May's crucial parliamentary elections, UK candidates must turn their mind to shifting the campaign away from diversionary debates about the impact of immigration, and back on to the meaty and far more critical discussion about our economic future. As Sir John said, as well as the UK being isolated if it rejects Europe, the EU itself would also be diminished. It would be a “lose:lose” scenario.

In the UK we all want the same thing: we want growth, we want jobs and we want prosperity. We, and our members, feel the best way to achieve this is by driving the growth agenda from the heart of the EU. This will be a central theme in EEF's manifesto which will be published ahead of the European Elections next year.

This doesn't mean that the EU does not need to change, quite the opposite, we have a number of challenges in Europe; we have the highest taxation of any major trading block, the highest energy costs and the highest employment costs.

Europe has shown some progress in structural change, in the energy market, and the labour market, all good, but not enough. Europe needs policies for growth; there needs to be a focus on the real economy, on competitiveness and Europe must change in how it operates.

On Monday the EU Competitiveness Council of Member States will meet to discuss, amongst other items, preparations for the European Council of Heads of State in February on industrial strategy for the EU.

We need to re-industrialise Europe. This does not mean subsidising industry, but Europe must promote industry and rebalance the economy. The focus must be on global competitiveness.

European policy is also an important part of the policy mix for manufacturers in the UK. Much of the regulation that our member companies are subject to originates from Brussels, but it is nonsensical to think that if the UK left the EU we would a) not have legislation of our own and b) not need to confirm to this legislation anyway without any influence over its development.One of the other key issues to be addressed in Brussels is the distance between policy makers and the impacts of their policies. Often the Commission plays little or no role in the implementation or, importantly, the enforcement of the directives they develop or the monitoring of the impacts of European legislation on businesses. Industry needs to work with the Commission to help them understand the reality of business and understand how policies can be developed which work with the grain of business and constructively highlight where it is going wrong.

European politics is still dominated by a stark division between policy makers and industry. This is clear in debates on labour market reforms, climate change policy and health & safety regulations. We need to seek common ground and debate the areas where we have less agreement.

This constructive, evidence based debate from EEF has led to a number of significant policy wins in the UK, such as the Energy Intensive Industry package, reforms of capital allowances, a constructive debate on skills and the on-going deregulation agenda.

Competitiveness must be at the heart of policy development across the whole Commission. The EU have committed to a competitiveness test, this must now be delivered, but not just following the impact assessment of Commission proposals, but this test must be also run after the Council and EU Parliaments have changed the legislation. If at either of these points the Competitiveness test is failed, then the policy must be reconsidered. In addition the Commission should establish a formal mechanism to regularly assess competitiveness impacts of all policy, including policies already in place, such as REACH.

Ahead of the European Council meeting in February, the Competitiveness Council must focus on how we deliver a competitive, robust and prosperous industrial base in Europe. We must focus on smarter regulation and competitive energy and climate policy as well as an industrial policy framework that provides innovation support, enables access to markets, addresses access to finance, and skills and training.

And politicians and prospective MEPs should keep their focus on the size of the prize as well. Not just being elected, but shifting the debate to properly position Europe as key to our long term prosperity and influence across the globe.

Author

Director of EU Affairs

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