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EU Referendum

My advice for pro-EU firms: don’t do politics

The central issue of where political power should reside should be decided by the public in the privacy of the voting booth, not by corporate interests

The British Union flag and European Union flag are seen hanging outside Europe House in central London

Turning our back on globalisation would be a disaster Photo: Reuters


 Allister Heath
Such a plea is right and proper, and it would be remiss of you not to campaign for this – but if you retain this access, and are still able to operate freely, then you shouldn’t care about any of the myriad other aspects of our membership of the EU. In fact, you shouldn’t really mind whether we are technically part of the EU at all, or whether we adopt a different status, as long as economic integration, trade and market access aren’t jeopardised.

Even more radically, you should really care about your overall, international position: if you sell all over the world, and trade with China and India becomes freer, you may be able to put up with some slight restrictions in Europe.

 

Yet the two elements – free trade and global economic integration on the one hand, and European political integration on the other – are endlessly conflated by the more vocal pro-EU firms and business organisations. That is unhelpful for the overall cause of business and capitalism: it is legitimate for US investment banks and UK and European multinationals to lobby for their own interests, and it is legitimate for them to have a view on economic, trade, tax, regulatory, commercial and other related matters. They quite rightly want the best possible business environment in which to operate; they may also have views on the education system, for example, and other related areas. They should definitely share these with the rest of us.

 But if a PLC wants to become genuinely partisan – for example, if it wants to endorse a particular political party at an election or an In or Out vote at the referendum – it should at the very least have to ask for shareholder approval first. Ideally, listed companies – and their trade representatives – would almost never engage in direct political activity of that nature: they would stay out of what I’m defining here as pure politics.Thisapplies even more strongly to foreign firms, though of course in all cases corporate employees should be free to speak their own mind as private individuals. Privately-held, non-listed firms should do as they please.

  Photo: EPA

The economic case – as opposed to the political, geopolitical or cultural case – for the EU is only about trade and economic integration. It is not about defence co-operation, or the Common Agricultural Policy, or policies that deal with refugees, sport or culture. The central issue of where political power should reside has no direct bearing on the economics: it should be decided by the public in the privacy of the voting booth, not by corporate interests.

 It is possible to argue, of course, that we need to remain part of everything the EU does or else we would lose our trade and economic access. I don’t believe that for a minute, but it is a respectable argument. What nobody can claim is that the UK no longer being part of Europe’s fisheries programme would in any way impact negatively on the City of London.

Morgan Stanley or Bank of America, both of which have just put out pro-EU membership reports, need to rethink their approach: rather than taking sides so explicitly in a domestic political debate, they should focus on explaining the importance of passporting to their business, while reminding their readers that all European Economic Area (EEA) countries (not just the EU) are able to sell financial products freely across Europe under this scheme.

It would also be fair for them to worry publicly about what may happen if the City is subject to EU rules but can no longer influence them at all (and Eurosceptics must address this point more forcibly).

For the record, I agree with the pro-EU camp that turning our back on globalisation would be a disaster. But I disagree with them that the European Union, as currently constituted, is the best way of harnessing globalisation in an increasingly diverse world.

allister.heath@telegraph.co.uk

http://www.telegraph.co.uk/finance/economics/11980696/My-advice-for-pro-EU-firms-dont-do-politics.html

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