By Pater Tenebrarum
A Truism Dies
Hitherto it has always been assumed that Britain's business community would be a monolithic bloc arrayed against the possibility of the much-dreaded "Brexit." It seems however that this is not entirely true. We have always thought that a British exit from the EU would be bad for the remaining EU, or rather, its citizens. This is so because a British exit means that a voice arguing in favor of the subsidiarity principle will be lost, which in turn is likely to hasten the erection of a socialist superstate in continental Europe.
However, we could never see why the UK business community in its entirety should be in favor of Britain staying with the EU. After all, the UK isn't using the euro, so there will be no costs in terms of currency reconversion. If the UK were to simply become a member of EFTA (the European Free Trade Area), it would retain all the advantages of being a member of the common market, while getting rid of the absurd bureaucratic dictates emanating from Brussels. Why on Earth should UK businesses be happy with the flood of regulations spewing forth from the EU Commission every year?
As a rule, the only businesses in favor of an increase in regulations are very big established companies, mainly because they rightly expect that more regulations will destroy competition from upstarts. Moreover, since they can afford to employ lobbyists, they are also able to get regulations enacted that will directly fatten their bottom lines to the detriment of consumers (see e.g. the EU ban of incandescent light bulbs as a pertinent example; it isn't going to "save the planet," but it is definitely good for Osram and other lighting manufacturers).
As Reuters reports, the notion that the UK business community is united in its support of Mr. Cameron's pro EU campaign has just expired - although "questions" have allegedly been raised about the list of exit supporters. Still, the argument forwarded by the exit support group is logical and perfectly congruent with what we have outlined above:
The campaign for Britain to leave the EU has been backed by 250 business leaders including the former chief executive of HSBC, the Vote Leave group said on Saturday, hoping to counter the view that UK businesses back staying in the bloc. The camps arguing for and against Britain staying in the European Union ahead of a referendum on British membership on June 23 have both made the economic impact of a 'Brexit' a cornerstone of their campaigns.
Last month, the bosses at more than a third of Britain's biggest companies including major oil companies Shell (NYSE:RDS.A) and BP (NYSE:BP) and its largest telecoms group BT (NYSE:BT) said leaving the EU would put jobs and investment at risk.
On Saturday, Vote Leave, one of the groups supporting a British exit, unveiled its own list of backers including Michael Geoghegan, former Chief Executive of HSBC Group and Tim Martin, the boss of pubs group JD Wetherspoon (JDW).
"With our growing list of business supporters, Vote Leave will make that case that whilst the EU might be good for big multinationals, for smaller businesses it acts as a job destruction regulatory machine," Matthew Elliott, Chief Executive of Vote Leave, said.
However, the Sunday Times newspaper reported that two of the well-known names on the list, John Caudwell, founder of Phones4U, and David Ross, the co-founder of Carphone Warehouse, had not signed up. "You have to question how this list has been compiled," the paper quoted a spokesman for Caudwell as saying.
Vote Leave also said it was forming a Business Council to argue that EU membership was holding back business. That group will be headed by John Longworth, who quit as director general of the British Chambers of Commerce (NYSE:BCC) lobbying group after he spoke out in favor of leaving the EU, accusing Prime Minister David Cameron of trying to scare voters into backing his case to stay in the bloc.
In addition, we learn - as a small aside at the end of the article - that the exit campaign has so to speak received an ISIS boost:
The odds of a Brexit narrowed on Tuesday as the Brussels bombings were seen boosting the 'Out' campaign.
Judging from what we have read so far about the network of "homegrown" Islamist terrorists who were involved in the Paris and Brussels attacks, a number of the attackers did in fact make use of the wave of migrants to move around in Europe undetected. Given the deterioration in social mood we have discussed on previous occasions, the recent attacks would likely have boosted the UK exit campaign even if that were not the case.
The probability of a British exit from the EU keeps rising. We are not surprised to learn that the assumption that every UK businessman would automatically be in favor of staying with the EU is suddenly revealed as erroneous. Most small to mid-sized businesses are already barely able to cope with domestic regulations in modern regulatory democracies. Being subjected to an additional layer of regulations from a distant, faceless bureaucratic Leviathan hardly makes this situation any better.
To be fair, there have also been instances in which EU regulations have overruled domestic cronyism in a number of European countries. Still, many probably recognize by now that the eagerness of EU bureaucrats to regulate everything from shower heads to toasters to death under dubious pretexts (see "Saving the Planet One Slice at a Time" for some of the gruesome details) represents a burden that it would be best to get rid of asap.