Red Tape

Just heard businesspeople debating the EU issue.  Unlike most of the crap we’ve been getting from both sides, this discussion aimed to be somewhat informative.

It was chaired by the BBC’s Evan Davis, with a panel comprising two business leaders from each side, and a guest from the Swiss business community to bring insights from a prosperous European non-EU perspective.

The pro-EU panellists basically said what I’d expect: their businesses benefit hugely from not having to deal with red tape in their everyday dealings with the rest of the EU.  One of them was in manufacturing, and drew the contrast between just shipping something vs having to fill tedious forms for every item exported outside the single market.  Whether and to what extent brexit would affect her business surely depends on politics (of 27 countries), and if you take the Gove vision of out-of-the-single-market, hassle-free exports would look like an early casualty.  The other was in financial services, on which subject the most interesting observation came from the Swiss guest: Swiss companies have to establish EU-based subsidiaries to export their financial services!

The Anti-EU panellists were more interesting: their gripe was with EU red tape.  Between them they provided three examples:

  1. Data Protection rules constrain the first speaker’s business of direct marketing.  Hmmm, Americans in his line of business complain of that too.  Perhaps he imagines brexit will exempt us from rules that bind US companies doing business in Europe (even if lobbyists could persuade a UK government to adopt rules more spam-friendly than our current ones)?
  2. The other speaker is a financier, and one of his investee companies struggled with an inordinately long approval process for a new drug.  Well, he may have a valid point, but how could brexit help him?  Pharma research involves big investment (that’ll be why they needed a financier), and needs to sell into big markets.  So I would imagine their top priorities will be EU and US[2] approvals, regardless of brexit.  If the UK process departs from the EU one, that’s just more red tape and expense.
  3. A health-and-safety rule: executive office chairs have to have five legs/wheels[3] at the base to give them stability (yes, four swivelling legs with wheels really is hazardous).  Hmm, well, they all do have that, everyone in the industry works to that standard.  Is anyone realistically going to try and change it?  We can of course still get a four-legged chair without wheels.

So, that’s the red tape that bothers them.  Is there a developed country anywhere in the world without broadly similar rules?  Oh yes, the US lacks data protection, and one or two states[4] are safe havens for spammers.

A particularly interesting nugget came when the chairman asked the Swiss guest about having to abide by EU standards without legally having a say in them.  He replied that in fact swiss business does effectively have a say.  Like anyone else, they can lobby, and if they present a reasonable case for something, the EU is receptive to it.  One might almost conclude that only the Brits get obsessed with legal niceties over reasonable practicalities.  On the other hand, he also pointed out that domestic politics within any of the EU countries may get in the way of them doing any particular deal you might expect – and that the brexit campaigners are assuring us will happen.

[1] (footnote removed, I thought better of it).

[2] I wonder if the much-feared TTIP might help with that, perhaps with a streamlined or even unified process to get approval both sides of the Atlantic?

[3] I wasn’t quite clear on the details.

[4] Notably Florida, unless I’m out-of-date or misremembering.

Posted on May 28, 2016, in EU, uk and tagged , . Bookmark the permalink. 2 Comments.

  1. Howard Stokoe

    It is impossible to imagine the UK and its domestic medicine licensing agency, the MHRA, leaving the EU umbrella arrangements of the EMEA. The implications cannot be imagined. Approvals for UK medicines to be prescribable and available for use in the rest of Europe would have to be sought separately. All the benefits of collaboration and patient safety would be lost. It would increase the administrative burden on the Pharma industry no end.

    As a fence sitter I am amazed at the lack of coherence and how poorly informed the exiteers are. To my mind the argument boils down to a successful economy with free movement of people or a weaker economy without. An exit in itself will not deal with wider global immigration. What is now being dealt with in the Med will build up on the coast of France just across from us on the other side of the English Channel. Politicians and a Civil Service that cannot manage, and argue for, our national case within Europe will be as equally inept if we leave. And I say this as a former civil servant.

    Overall I thought this programme excellent and you have interpreted it quickly and accurately.

  2. I didn’t hear the programme, but I deal with small businesses regularly in my day job. Despite the west country’s reputation for Euroscepticism, the manufacturing and food processing businesses that I have been working with recently all cite the lack of red tape as being an advantage of the Single Market. In the case of the food manufacturer, who sends 30% of his production to Belgium and the Netherlands, all he has to do is translate the packaging into the local languages. By contrast, when he exported to Norway he had to provide weekly hygiene certificates from a qualified chemist, hardly easy for a small business in rural North Devon. Needless to say, he’s firmly in the “in” camp and doesn’t deal with Norway anymore, as the cost of the red tape outweighed the small profit on his sales. He fears similar barriers being erected if we choose to exclude ourselves from the Single Market.

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