Vote remain, urges Cititec's chairman
Stephen Grant, chairman at Cititec, has declared he will vote to remain in the EU in tommorrow's referendum. Below he explains why.
I would like to declare my bias. I am for Remain. I am a committed European and emotionally attached to the idea of Europe as my home. We as UK citizens can live and work in 28 EU member states...quite marvellous isn't it Nigel? I also owe the European single market a debt of gratitude. The European Union is unique in its agreement for the free trade in services which is underpinned by the free movement of people. Over nearly 20 years my partners and I were able to build world-leading UK based companies with peak turnover of over £100 million and employing or contracting circa 1000 people for the financial technology sector. We took the best talent Europe had to offer and they were placed in critical European projects. In our first year we did more business in Frankfurt than London. We worked unimpeded by visas or borders.
There are many firms like ours. The UK technology sector now employs over 1.6 million people. It has grown over 50% since 2010 and is the most dynamic technology sector in Europe. There are now over 40,000 technology firms in London alone with nearly 5000 based in in EC1 and EC2. I went to a technology awards exhibition in Berlin and about half the attendees were based in Shoreditch. The UK is a great place to be a technology entrepreneur not only for venture capital availability and a good regulatory environment for new business but also because we have access to European talent and the single market. A fast growing data analytics firm that I recently invested in just received a favourable and large loan from a UK bank guaranteed by the European Central Bank.
I have read many articles recently by pro-Brexit campaigners that Britain will prosper outside the EU but if you take a look round we are prospering within it. I have asked everyone who favours Leave why they prefer to be outside the EU. My hairdresser told me regulation. I asked him what EU law has an overbearing and detrimental hold over his life. He couldn’t think of one and told me he would have to ‘study it’. Another was incensed that his car insurance costs had increased because his car was less secure due to the EU ending the car manufacturer’s monopoly on car keys. My dentist is annoyed about regulations over the concentration of teeth whitening solution. Many people refer to the state of the NHS or other UK public services, which have very little to do with the EU and more about UK government cuts. For many years the local racism over UK immigrants was expressed in terms of taking British jobs nowadays it's more about school places.
European leaders came together for The Treaty of Rome with one main objective, peace in Europe through common interest and free trade. On this most reverent of aims the EU has been supremely successful. The EU if treated as a single economy has a GDP of over €14 trillion and depending on how you correlate your statistics is the first or second largest single market in the world. From Caesar to Hitler the European people were at war. Since 1945 we have had 71 years of peace and my generation and that of my children have not been conscripted into the horrors of the battlefield to fight our nearest neighbours. If it is now unimaginable that we would go to war with our EU member states, then it is as a result of the EU that we enjoy peace in our time. As everyone seems to be quoting Churchill at the moment I will twist his word’s slightly and propose that ‘Peace is the EU's Finest Hour’.
The EU cost to the British Exchequer in 2015 was £8.5 billion after its rebate of £5 billion and EU spending on the UK of £4.5 billion. The net UK payments to the EU were £160 million per week not the £350 million quoted and represents just 0.35% of UK GDP or half the UK’s foreign aid budget. If government expenditure was measured on the logarithmic Richter Scale the UK’s contribution would barely measure one.
I have heard much about EU profligacy, vanity projects and pampered MEP ‘s. However it might surprise you to know that the total EU budget of 2011 was only €130 billion which is an amount similar to the UK government expenditure on health. It’s administration costs were just 6.5% of the total budget which compare reasonably with UK government administration costs of 5.1%. Its largest expenditure is the Common Agricultural Policy €44 billion (more later) and €39 billion on the EU’s Economic structure most of which goes to reducing disparities between member states and investing in infrastructure and businesses in Europe’s less wealthy members. To return to the 6.5% I think it is remarkable that the EU manages to administrate a €14 trillion market with just €8 billion of administrative costs or 0.0005% of its GDP.
I do not want to debate here the merits or inefficiencies of the CAP but an article in The Daily Telegraph of June 20, 2016 states that 55% of UK total income from farming comes from CAP support. If the UK does not continue subsidies post-Brexit then Consultancy Agra Europe suggests that UK land prices would crash and 90% of farmers would go out of business. Given British government opposition to the CAP it is unlikely that we would we maintain the level of subsidies the CAP offers. It is commonly quoted but dismissed by Brexiteers that over 50% of UK exports are sold to the EU.
The main British EU opposition today appears to be over sovereignty and migration.However it is worth noting that the British Government in 1952 opposed the European Coal and Steel Community because of fears that a resurgent Europe would eat into its trade with its collapsing Empire. The Labour Government of 1973 under Harold Wilson called a referendum because it largely feared that the EU would block its agenda of a socialist industrial policy. The missing support for Europe by our politicians was a very British agenda.
We have a ‘first past the post’ political system that gives a handsome amount of power to the party that wins a decent majority in Parliament. Our home-grown Trump, Nigel Farage, along with his usual political coterie complain of the impingement of UK sovereignty by the primacy of EU law. However is it 'sovereignty' or 'unfettered power' that our Farage's and Johnson's and Gove's seek? I propose that we the people benefit from the UK’s diminished sovereignty as the EU provides some checks and balances to the extremes of our political class.
And what would a UK sovereign state look like post-EU. If we take the example of Norway its still has to abide by 93 of the EU’s 100 costliest regulations and apart from agricultural policy it is bound by much of EU law and policy.’Open Europe finds that an outsider arrangement like the one negotiated by Norway would still cost Britain over £31 billionn a year, but with no vote on EU rules’. The Swiss model excludes financial services.
Sovereignty in the modern world is more illusory than in the past. Our ability to act alone is limited by the United Nations, The European Court of Human Rights, North Atlantic Treaty Alliance, The World Trade Organisation and many other international organisations. We live in a wonderfully complex interconnected world. If we don’t want to be in a club with other like-minded liberal democracies, our European neighbours, then who should we cosy up to? Putin’s Russia, Xi Jingping’s China or maybe Trump’s America.
The EU is a great geo-political and economic bloc that leads the world in free trade and free movement of people but also, human rights, LGBT, disability and gender equality. We need to work together on environmental protection and aim for a zero carbon world. We must preserve some mammalian wildlife other than our own for the next generation. We have to be ready to feed 11 billion people by the end of the century. These are some of the issues of our day not teeth whitening solution or car keys.The EU is not nirvana but our journalists are free to report without fear of assassination and we it’s citizens are free to debate the future. They are luxuries not granted in many parts of the world.
The other trump card of the Leave campaign is migration. My hairdresser who I referred to earlier admitted in the end his main issue was migration. I looked around the room and paused for breath. He was a Turkish Cypriot Muslim, the chaps cutting hair behind were Iranian and British-Caribbean respectively. We were all including me, children of migrants. I asked him why he would deny the same rights of a better life to todays’ migrants to those that had been afforded to our parents and grand-parents. There was no answer. We moved on to more mundane topics. EU migrants come for the most part to work in the UK. They contribute to our economy. They work hard in sectors like construction, technology, agriculture and across the UK economy. The UK economy is the most dynamic in Europe and migrants are part of our success