The corporatist CBI blusters on about the EU

The corporatist CBI's supportive position on UK membership of the EU makes no sense at all from a broader economic point of view or for entrepreneurship, but it makes a great deal of sense for the vested interests of its main constituency, big business

CBI'S John Cridland batting for big business
the commentator
On 29 June 2014 07:57

Both the BBC and the Observer (broadcasting arm and Sunday outlet respectively for the Guardian) are falling all over themselves today to highlight the latest scaremongering about the consequences of any British exit from the European Union.

This time it's the turn of the Confederation of British Industry (CBI) to ramp up the volume about how we'd supposedly be cut adrift from our own economic future should we take the plunge, and quit. This all pegs off Friday's decision by EU leaders to slap Britain, and hundreds of millions of ordinary Europeans, back and forth across the face by naming Jean-Claude Juncker as the next president of the European Commission.

"The EU is our biggest export market and remains fundamental to our economic future," CBI Director General John Cridland was quoted in the Observer as saying. (The same remark was faithfully parroted by the BBC.)

Cridland added: "Alternatives to full membership of the EU simply wouldn't work, leaving us beholden to its rules without being able to influence them."

Oh, yes. So that's why Norway and Switzerland who do even more business with the EU than we do are, um, two of the richest and most successful economies in the world, despite not being members of the EU.

What's behind this bluster from the CBI?

You have to understand something about the CBI itself, and also something that goes beyond Britain and right to the heart of what the European Union has become.

The CBI is primarily an organisation of and for big business. It is quintessentially corporatist. Just take a look at its own website. Its primary mission statement is as follows:

"The CBI is the UK's premier business lobbying organisation, providing a voice for employers at a national and international level."

Precisely. It uses the power of its enormously wealthy and powerful core members to form a binary relationship with the state, influencing the regulatory and tax environment in its collaborators' favour. Corporatism.

And corporatism, of course, is the guiding principle of the European Union. That is why big business likes it. The EU is nothing short of a disaster for the self-employed and entrepreneurs. It's also harmful to medium sized businesses for whom, like the self-employed and entrepreneurs, red tape chokes many of their ambitions at birth.

Ever tried employing someone, even as a one off contractor, from another country in the EU? It's a total nightmare, as the owner of any small business will tell you. Ever tried to make a contract between a company in one EU country with a company in another? If you don't have an international VAT number you're breaking the law.

The default position in the EU is that business is a criminal offence unless you can prove otherwise. But this sort of thing doesn't bother big businesses since they have legal and accounting departments to deal with it. In fact, the red tape works strongly in their favour since it squashes the competition from start-ups. And there's the rub.

The CBI's position makes no sense at all from an economic point of view, but it makes a great deal of sense from the point of view of its main constituency.

In closing, you can get a sense of the delusions that are necessary for the CBI to sustain its position by looking through its website, as we have done this morning. Here's a gem of a quotation from CBI Deputy-Director General Katja Hall:

"The recent election results were an unmistakeable call for change and a better working Europe, so the new Commission leadership will need to be as good as their word on reforming the EU with jobs and growth top of the agenda."

As good as their word? Does Ms. Hall even know who Jean-Claude Juncker is? We're not sure we want him to be as good as his word. Here are some of his words:

"When it becomes serious, you have to lie," he has said.

If the CBI is banking on Juncker for genuine reform, they're more deluded than we thought.

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