Posted: Wed 11th May 2016
John Longworth, business council chairman at Vote Leave, outlines his argument for why small business owners should vote for Britain to leave the European Union in the referendum on 23 June.
You can see the argument from Britain Stronger in Europe for why entrepreneurs should vote 'remain' here.
To hear arguments on both sides of the debate and share your views come to the small business EU debate in London on 23 May. Book your free place here.
If you can't make it to London, the event will be live streamed during a small business meet-up in Birmingham. Book a place here.
As an entrepreneur I know what it feels like to sweat blood to create and grow a business. The last thing that you need is red tape to tie you up and hold you back. In 2010 the British Chambers of Commerce published a report showing that EU regulation was costing British business Â£80bn per year. They have not published once since because the UK government was, and will continue to be, powerless to do anything about it if we stay in the EU. The initiatives that UK business department have introduced to cut red tape ignore the constant stream of costly EU regulation. Effectively, ministers have failed to stem the tide and have sacrificed UK business on the altar of the EU religion.
But of course big business, in which I also have plenty of experience, loves EU red tape. It helps to erect barriers to entry so that smaller enterprises cannot afford to compete. As a consequence multi-nationals swallow up our best 'gazelle' businesses and our best ideas, never to be seen again.
The bureaucracy of public procurement rules created by Brussels make it practically impossible for small and medium sized businesses to bid in the face of multi-nationals who have entire departments devoted to navigating the thicket of complexity, even though SMEs could greatly benefit taxpayers with innovation and reduced costs.
But Whitehall and ministers do not care about this. Multi-nationals are a safe bet and they recognise themselves in the mirror, in the bureaucracy of corporations.
EU rules pervade every aspect of our lives, from control of the VAT on tampons through to restrictions on the overtime people can work, inhibiting the income of British workers and holding back the productivity of British companies. It prevents the flexible working which would better suit many people and businesses. It depresses the wages of workers while depriving businesses of the skills they need through an "out of kilter" and out of control immigration regime: unlimited cheap labour from within the EU but a restriction on skilled labour from outside the EU. Last year Australia was granted only 2500 work visas for example.
Around 99% of businesses in the UK are SMEs and almost 87% of the UK economy is not dependent on exports to the EU (only 13.3% of the UK economy exports to the EU) and yet this vast engine of growth, innovation and job creation, the 87%, is burdened by EU regulations and costs. Think how much more productive we would be without these costs. How much stronger our economy would be.
Even if we had no trade deal with the EU, the effect on exports would be very marginal indeed, a rounding error in a currency movement. After all the average external tariff imposed by the EU is 3% , most tariffs are less than 5%. However, as important EU countries such as Germany, Denmark, Ireland, Netherlands, Spain and France export so much more to us than we do to them it is very unlikely their businesses and people would allow the Eurocrats to impose any tariffs when we leave the EU.
In any event, the fundamentally flawed, so called EU 'single market' was not designed for the UK, whose economy is 80% services, and after all, there is no EU single market in services to speak of and the EU has no appetite to create one.
Without the drag anchor of an EU in relative decline, the UK will be able to make our own trade deals and join a growing world economy, which we are currently prevented by the EU from doing. Australia, whose economy is less than half the size of the UK's, negotiated separate bilateral trade deals with China, South Korea and Japan, all in little over a year. Whereas the EU has failed to get deals with large economies around the world and is unlikely to do so any time soon.
The money the UK pays over to Brussels (over Â£500bn since we joined the European Project) could fund tens of thousands of extra nurses, doctors, policemen, teachers and soldiers. It could provide road bypasses, lower business taxes and better digital connectivity. It could fund apprenticeships. It could reduce business taxes such as business rates. But only if we leave the EU.
At the same time, the uncontrolled free movement of people is putting an intolerable strain on public services; the NHS, schools and infrastructure. And this set to get worse with a net migration into the UK of 250,000 people per year and new countries like Turkey, Montenegro, Macedonia, Serbia and Albania to all join the EU in the coming years.
Liberating our domestic economy from the technocratic dictatorship of an unelected Brussels bureaucracy is exactly what SMEs need. If we want to be the best place in the world to do business; a prosperous, high productivity, high wage economy, with the most secure jobs, then Britain must Vote Leave on 23 June. There might never be another chance.
To hear arguments on both sides of the debate and share your views come to the small business EU debate in London on 23 May at 6pm. Find out more here and book your free place below.
If you can't make it to London, the event will be live streamed during a small business meet-up in Birmingham on 23 May at 6pm. Find out more here and book free a place below.