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Nadhim Zahawi portrait

Nadhim Zahawi is a member of the Foreign Affairs Select Committee and MP for Stratford On Avon.

The British people have heard many fantastical stories in the last few weeks, as the Remain campaign seeks to win over the minds, if not the hearts of the voters. Unfortunately, however, they don’t seem to give the intelligence of those minds much credit.

We’ve been bombarded with warnings about the potential for genocide, and the possibility of a new world war ravaging Europe. Revelations have come forth that those who wish to leave are ‘extremists’ and ‘not British’; that we want to turn our back on the world and become Little Englanders. And, swathed in glorious irony, Gordon Brown, our never-elected former Prime Minister, has told us that we must stay because the EU hasn’t made universally bad laws, and we can’t trust the British electorate not to throw it all away!

But amongst this frothing hyperbole, there have also been some arguments that are intended to sound more reasonable. One example is the claim that some businesses have said we must vote to remain, and that we should listen because they must know what they’re talking about. But who is it actually saying this, and should we really listen to them this time?

The CBI are regularly mentioned when business opinion is discussed, and it grandly states that “British business wants the UK to remain in the European Union”. Oddly enough, the CBI was saying much the same about joining the Euro. At the start of the millennium they were telling Tony Blair they were ‘disappointed’ with his wait and see approach, and that he must get off the fence and campaign to join the currency. Even as late as 2010 the former President of the CBI, Sir Mike Rake, was saying that ‘the Euro is a great success, and in today’s global economy, the pound is no longer an important currency’. I think it’s fair to say that the CBI does not have the best record when it comes to considering the EU, which it has almost never seen fit to criticise.

And does what the CBI says really represent British business? In their most recent survey 73 per cent of respondents had over 250 employees, compared to just 0.1 per cent of businesses having more than 250 employees.  SMEs represent the other 99.9 per cent of businesses in the UK, as well as 60 per cent of employment, but the CBI has claimed a position for ‘British business’ based on the opinions of an unrepresentative sample.

The British economy is not built upon large multinationals but on hard-working small business owners, the men and women who employ just a handful of staff or, like 76 per cent of businesses, only themselves. The reality of doing business for most of Britain is taking on every role yourself, and fighting hard to survive and succeed. You open up in the morning, do the buying, do the marketing, do the sales – and then shut up shop in the evening to work on the accounts.

Unlike these small business owners, the large multinational companies which the CBI is speaking for can afford to employ hundreds of staff to ensure compliance with EU rules and regulations. These laws create inefficiency in the system for everyone, but the large companies can absorb it. For an SME, trying to compete inefficiency, unnecessary regulation and inflexible rules means losses, closure and redundancy.

Not only can big businesses employ large compliance departments, but they can also engage lobbyists to try and influence both new legislation and the enforcement of current ones. Both of these facts, as a direct result of the heavy hand and complexity of opaque EU law, provide these massive multinationals with a perverse form of competitive advantage against smaller employers – regardless of whether they provide better products or services. This not just entrenches the position of the largest companies, but it can strangle at birth innovative businesses that could have challenged this hegemony, and prevents potentially world changing products from coming to fruition.

What is even worse is that these swathes of SMEs are forced to comply with every EU law. This is despite only six per cent of UK businesses exporting to the European Union, 100 per cent are still required to undertake the cost of compliance. We should not stay because big businesses say we should. The burdens and costs of membership are affordable for them, but they destroy SMEs.

If we take the option to seize control and vote to leave the European Union, we can create a well-targeted, agile regulatory system that provides protection for consumers while avoiding unnecessarily tying up our SMEs in red tape. Our economy is built upon and depends SMEs; they hugely outnumber and provide more employment than these multinational corporations. We have to make the choice that protects them, helps them thrive, and gives our economy the best chance.

113 comments for: Nadhim Zahawi: Leave is not about choosing ‘Little Britain’ – it’s about backing small businesses

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