The CBI’s anti-Brexit rhetoric gets ever more detached from the views of SMEs

The CBI’s anti-Brexit rhetoric gets ever more detached from the views of SMEs

If you ever heard a speech delivered by the late Lord Leach of Fairford, who answered to Rodney, you’ll know he was a great man and probably one of the most influential non-politicians of our time.

Rodney founded Business for Sterling, which kept us out of the disastrous euro, he was instrumental in thwarting the ambitions of Nick Clegg with his NO2AV campaign (alongside the Editor-at-Large of this site), and he founded Open Europe which set out to change the EU from the inside – an ambitious task.

Rodney died only a few weeks before the 23rd June vote, but a year earlier he was lamenting to an audience at the Banqueting House whether he should be an active campaigner in the referendum or the impartial observer that Open Europe had chosen as its course.  According to Charles Moore, he had concluded that “it has to be exit” so I think he would have been pleased with the outcome.

Rodney was also a businessman, and we’ve been hearing quite a bit recently about business leaders apparently not liking what they hear about Brexit.

Last week, Carolyn Fairbairn, the head of the CBI, set out her stall, calling for delays to the processes of Brexit to prevent what she called a ‘cliff-edge’ regulatory regime, and repeating the rhetoric of the referendum campaign that any thoughts about falling back on the WTO option would do ‘serious and lasting damage’ to the economy.

Carolyn, who calls herself a business leader (which she is), but likes to pretend she speaks for all business leaders (which she doesn’t) clearly had not heard the Prime Minister say, just days earlier, that we’d have to incorporate EU law into British law to remove the cliff-edge threat.  She may not have seen the memo from other business leaders to say that just repeating the referendum ‘expert’s view’ about damage to the economy probably wouldn’t get her any further than it did on 23rd June.

Mind you, she’s probably smarting from being told that the CBI President is no longer welcome to give regular ‘high level advice’ as part of the Prime Minister’s Business Advisory Group, alongside leaders from Airbus, BAE Systems and GSK.  They, in turn, are probably wondering whether the Project Fear letter they signed to the The Times back in February had anything to do with their dismissal.

Carolyn may also be fearful of the anti-business rhetoric that reportedly came from the Prime Minister at her party conference speech.

As a businessman myself, I am also concerned about any anti-business rhetoric, but I can see the Prime Minister was talking about big business taking advantage of market failure, rather than a general war on the economic vitality of the economy.  SMEs are the life blood of the economy and the new Conservative Prime Minister surely recognises this.

Indeed, SMEs are by definition in competitive markets and need a light-touch regulatory regime.  It’s these companies which are disproportionately affected by every new regulation (and there are 2,500 every year) which come from the Single Market, and which will welcome the UK Government being accountable for new regulations when we leave.

That’s why the call from John Longworth, Mark Littlewood and others for a sunset clause in the Great Repeal Bill, whereby EU laws will fall by a certain date, will be welcomed by SMEs in particular.  Civil servants will then have to spend their time justifying why we should keep EU legislation, rather than dreaming up new and complicated ways to regulate the economy.

And that’s why SMEs will be pleased to see the demise of the EU’s influence, which several years ago made it mandatory for all regulation to apply to all businesses, no matter how large or small.  Some – but by no means all – big businesses like regulation, because they have the resources to employ compliance officers, and they know it’s another barrier to entry for their SME competitors.

Renewing the small business exemption for regulations would mean the hairdresser or shopkeeper employing just a handful of people would not be subject to the same regulation as Airbus, BAE Systems and GSK.  It would mean hard-pressed and over-worked small business owners would not have to spend their evenings trying to comply with the regulations, at the same time as paying people and calling in their debts.  And it would have the added benefit that big business will think twice before lobbying for a regulation which does not apply to smaller start-up competitors.

Business dislikes uncertainty – that much is clear, so getting on with Brexit can only be beneficial.  But to say that business opposes hard or clean Brexit is just wrong, and for the CBI to ignore the ‘overwhelming evidence’ that this is the case just means it becomes more isolated, less relevant and increasingly out of touch than it was before.  JCB will not be the only member who quits in disgust.

One person who knows that is Open Europe’s new chairman, Lord Wolfson of Aspley Guise, who also runs Next.  Together with his new acting director, Stephen Booth, they have re-established Open Europe’s role to recognise that Britain is no longer an insider, if indeed we ever were. They will find the SME business community keen to work with them to come up with concrete Brexit policy recommendations, and to adopt the free market and liberal principles of a newly energised UK.