Ten Questions for the CBI and Corporate Bosses who talk about Britain’s place in the EU

On 2nd November 1992, 27 luminaries of the Confederation of British Industry (CBI – an association of corporate bosses of companies in the FTSE 100 and 250 lists) wrote to the Times of London newspaper urging ratification of the Maastricht Treaty of the European Union.

Ratification of this Treaty by the British Parliament in 1992 has been the most important single step on the way to obliterating Britain as an independent country since the European Communities Act of 1972, which the most senior British judges claim to be the legal basis for the continuing supremacy of EU law over Britain’s laws[1].

The Maastricht Treaty is made up of a set of so-called “Common Provisions” (Articles A-F) plus a long series of amendments to the then existing Treaties written in Dutch, French, German and Italian (Coal and Steel 1950, Rome 1957, Euratom 1957) to none of which Britain was actually a party.  The Treaty document is a massive and highly complex affair of 306 pages of Titles and Articles to which are appended 17 protocols and 33 declarations.  See the highly readable and accurate 24 page pamphlet “The Meaning of the Maastricht Treaty” by S F and G M Bush, presented in the House of Commons by the MP for Grimsby (Austin Mitchell) and commended to MPs by the late Peter Shore MP, in the absence of anything comparable produced by the British Government[2].

By far the most important provisions of the Treaty relate to Economic and Monetary Union (EMU) in Article G, Title VI.  This sets out the three stages to Monetary Union (the Euro) which duly came into existence on 1st January 1999.

These realities did not prevent the CBI panjandrums in their letter from advocating Britain’s going back into the European Exchange Rate Mechanism (ERM) from which the UK had crashed out only 2 months before in September 1992, having raised bank rate to 15% at one stage in a futile effort to hold the pound sterling within its ERM limits.  All the usual fear words were deployed: isolation, loss of influence, etc.  As the Times editor allowed me to say (November 4th 1992) it was clear the CBI 27 had not read the Treaty on which they so confidently pronounced[3], [4].

Following its removal from the ERM straight jacket, the British economy grew rapidly in the remaining eight years of the 1990s.  This undoubted reality did not stop another corporatist, Sir Patrick Sheehy, then chairman of British-American Tobacco and member of the President’s committee for the CBI, weighing in with a long article (Sunday Telegraph Business, 12th February 1995) in which all the fears being expressed today about Britain’s leaving the EU were rehearsed regarding the consequences of our not joining the single currency (the euro):

“The economic centre of gravity will move inexorably into the heart of the Continent.”

“The pound will face damaging speculation.”

“The City will lose business to Continental rivals, and American and Japanese firms will turn away from us and relocate inside the new currency area.”

Britain and its citizens will be “left as ever more bewildered spectators”.

“Factories will move, or be attracted away from the UK”.

Sheehy added the extraordinary comment that “as a member of the new central bank [of the euro] we will have more control of interest rates that we now have”.

As I was able to point out in the Sunday Telegraph of 19th February 1995, “far from having more control, we would have no influence whatsoever.  Article 7 of Protocol 3 [of the Maastricht Treaty] says that ‘when exercising the powers and carrying out the tasks conferred upon them by this treaty and this statute, neither the ECB nor a national central bank [i.e. the Bank of England in this case] shall seek or take instructions . . . from any government of a member state or from any other body’”.

The CBI again returned to the subject, this time in the Financial Times of 5th September 1996.  Here the dread word “isolation” of which we hear so much, made once again its portentous and doom-laden appearance.

According to Mr Tony Hales, CEO of the drinks company “Allied Domecq” and 14 other CEOs and chairmen of blue chip corporations, “Many aspects of monetary union remain to be resolved” and that views of people like this writer were based on “serious misunderstanding of the process of monetary union”.  Thankfully the Editor of the FT allowed me (September 7th 1996) to point out that “all the important provisions of monetary union are set out in black and white in  Articles 2, 102-109 and in 12 protocols.  Protocol 3 alone runs to 53 articles in nine chapters.  Only the name of the currency [euro] and location of the central bank [the ECB in Frankfurt] were left open [by the Treaty] and these have now [September 1996] been decided.”

Now the CBI is at it again

(1)  Here is John Gridland, Director-General of the CBI, at their annual conference this month saying, “We [the UK] can’t end up on the fringes of the world’s largest trading bloc, following and paying for all the rules, and have no say in making them”.

(2)  The current CBI Chairman, Sir Michael Rake of BT, in an address to the Foreign Correspondents Club of Japan on 4th October 2013 said:

  • “The UK must remain in the EU” [Why? Proof by assertion?]
  • “ . . . UK’s influence is needed to reform of the EU” [Still trying after 40 years]
  • “Japan sees the UK as a reliable free trade partner” [True – but what exactly has that to do with the UK in the EU?]
  • With the failure of the Doha WTO round there is now “real momentum on bilateral trade agreements.”[So why cannot the UK negotiate a bilateral trade agreement with the EU? – like Canada has just done[5] and Korea did in 2007-11 (entered into force 1st July 2011)]
  • Regarding Japan itself, Rake commented that the third round of the EU-Japan talks on their free trade agreement would start in November [i.e. now] and that the EU projected 400,000 new jobs would flow from reductions in tariffs and non-tariff barriers.
  • He added that the EU predicts an increase in EU exports to Japan of 32.7% [suspiciously precise forecasting – don’t their economists understand about significant figures?] and that Japanese imports into the EU would rise by 27.2%.

The Ten Questions for the CBI

1.  Why do you think the UK and the EU could not negotiate a Free Trade Agreement, given that both parties start from a zero tariff position and non-tariff  matters like mutual recognition of professional qualifications?

2.  Do you realise that the EU is publically committed to lowering tariffs with its trading partners[6]?  It is also committed under Article 7a of the Lisbon Treaty to developing “special relationships with neighbouring countries” of which the UK will be by far the most important.

3.  Does Carlos Goshn, President of Nissan-Renault who recently intruded himself into the CBI debate and British politics realise this[7]? As Philip Foster in the Sunday Telegraph of November 17th pointed out, he had just bought a FIAT car made in Turkey. So what’s Goshn’s problem?

4.  Are CBI members content with the CBI’s scaremongering about trade with the EU, particularly with suggesting that the EU would introduce tariff barriers when these would be:

  1. illegal in its own terms (i.e. against Article 7a of the Lisbon Treaty);
  2. against the EU’s own interests (they sell £202 billion of goods to the UK and import £160 billion from us);
  3. massively against the provisions of the World Trade Organisation of which each member of the EU is individually a subscribing member?

5.  Why does the CBI publish studies which pose UK access to the Single Market against the UK having no access at all, when the real issue is the Single Market versus a Free Trade Agreement? Are CBI members frightened of fighting for their own and Britain’s interests in a UK-EU free trade negotiation?

6.  Why do CBI spokesmen repeatedly praise the UK’s supposedly unique access to the so-called Single Market when Canada (soon to be followed by the USA) will have virtually the same access and yet pay no money whatsoever to the EU, while the UK pays a gross figure of £18 billion (rising) and £13 billion net per annum?

7.  What in fact, in the CBI’s view, are the precise beneficial differences between the Single Market for which the British taxpayer pays so much and a Free Trade (zero tariff) Agreement?

8.  Even if there were unique trading benefits to the businesses represented by the CBI from the Single Market, why should the generality of British taxpayers pay for these benefits, particularly as a large proportion of the dividends paid by these businesses flow to foreign investors outside Britain – e.g. in the USA?

9.  Why are the CBI bosses apparently so afraid of fighting for an independent Britain outside the constrictions of the EU?

10.  Does anyone in the CBI realise that the EU is not primarily a free trade organisation, as they seem to believe, nor is it a “club”.  It’s an organisation set up to achieve “Ever Closer Union” – a political project ardently desired by its founding members, the EEC 6, who call the shots – to end in a single United State of Europe[8]?

That being so, none of the reforms they talk about is possible as EU officials have repeatedly told the British government and politicians: referring to the CBI and others of like mind, one has to say “There are none so deaf as those who won’t hear”.


[1]  E.g. the Factortame judgement 1989.

[2]  Members of the House of Commons had to vote on the Treaty without an English language copy of it available to them.

[3]  A similar group of CBIers had written to the Times in November 1991 strongly advocating staying in the ERM.

[4]  Nor had the British government either.  As Douglas Hurd, Foreign Secretary, in his best de haut en bas fashion frivolously remarked at the time of the 3rd (approving) reading of the Maastricht Treaty bill “Now we have signed it, we had better read it”.

[5]  Called the Comprehensive Economic and Trade Agreement (CETA) due to come into force on 1st January 2014.

[6]  E.g. (1) EU closing statement at the Doha closing session on May 2012.  E.g. (2) Memo 12th September 2011 to the European Commission by K D Gucht, the EU’s Competition Commissioner.

[7]  Goshn made recent comments to the effect that if Britain were to leave the EU, Nissan might somehow remove their Sunderland factory, which he admitted was one of the best performing in the world.

[8]  Jean Monnet, progenitor of the EU and its secular saint, said in 1968, “The EEC [now EU] is a process not a product” and “We are not forming a coalition between states, but a union among people”.

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