20 October 2011
Dear Roger
Thank you for your email and for posting it as an open letter on your blog, I have also posted my reply there.
I am sorry that you were disappointed with what I had to say on Sunday, but I am afraid that I must disagree with you that being in the EU for the sake of trade is a discredited position.
Whilst I have no doubt that you have gained a great deal of experience in this issue as an MEP over the last 12 years, I spent the 10 years before my election in 2010 building a multinational business. In that time I took it from 2 people in a shed to a listed company trading across the world, with offices in three European countries and a significant presence on two other continents, so feel I also have an insight.
Since being elected I have continued my interest in business, and have been committed to improving opportunities for UK business, with a particular interest in rebalancing the economy towards greater exports. As a result I speak frequently to businesses of all sizes, who whilst frustrated by ever increasing regulations and bureaucracy, much of which I do not disagree originates in Europe, show no interest in us leaving the EU and risking our access to this important market.
As you well know the EU represents roughly 40% of all UK exports, and whilst trade with non EU countries is increasing, it is still our single largest market and with a GDP of $16trn will remain so for some time to come. Being within the EU gives not only our own businesses easy access to this market, but also helps attract foreign direct investment FDI. I understand for example that one of the reasons Nissan chose to site their new manufacturing in the UK is our EU membership giving them the ability to export to the EU with reduced barriers.
Whilst countries like Switzerland and Norway may export more per capita than the UK, they are simply not comparable, with significantly different demographics and key export industries. Additionally Norway is a member of the EFTA and Switzerland has bilateral treaties, both of which require them to implement elements of EU law and contribute to the EU’s budget. For example the EFTA countries have already implemented 1,803 directives with more in progress. Indeed in 2006 the EFTA consultative committee on “a new strategy for the internal market” stated that “it is necessary to adopt as soon as possible the revised working time directive, the temporary agency workers directive and the services directive, which will also help maintain the social dimension of the Internal Market.”, implying that two of the directives which are seen as significant costs to business here in the UK are actually supported by EFTA members and businesses within them.
With regards to the FTAs currently in negotiation, I am afraid that you have rather weakened your own argument by referencing them. Were we to leave the EU the UK would have to negotiate it’s own FTAs with these countries, potentially withdrawing our preferential access to markets with which EU FTAs have been agreed, and needles to say having to start over again with those 60 countries with which the EU is currently in negotiation. We would also undoubtably have to look at any WTO agreements in a separate light.
As I stated on the Today programme this morning I also feel that even if withdrawal was the correct choice, now is not the right time to be discussing it, or to force a referendum on it. In business I have found that the best strategies can still fail if executed at the wrong time. With markets already jumpy over the eurozone and global growth slowing, the uncertainty introduced by a UK withdrawal from the EU would be of no help in delivering the growth and deficit reduction we all know we need.
I also find your dismissal of my views as not eurosceptic and that there is such a thing as a “real eurosceptic” unhelpful. Eurosceptisim is not a binary choice. Unfortunately for many it appears to have become focused on the method rather than the outcome we want to achieve. Ultimately I am sure you will agree that the outcome we are all looking for is a relationship with Europe that works for us, in the national interest.
I firmly believe that the method with which we can do this is to renegotiate to repatriate powers over social, employment and justice issues. This would then allow us to act on the regulations that are holding back business. The current crisis in the eurozone will undoubtably have to end in a paradigm shift in European structures, giving us an opportunity to open renegotiations, and thanks to the referendum lock, put to the country any new treaty that results.
In conclusion, a repatriation of powers, combined with controls on the EU budget, and coupled with the referendum lock will, I’m sure you agree, provide us with the relationship with Europe we are both seeking. One that works for us, not against us.
Warm regards
Nadhim Zahawi MP