| Pure Politics |
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| The sceptics have been vindicated. |
This time they have been caught red handed. Leaked minutes from the CBI Economic Affairs Committee reveal that members were reluctant to conduct a comprehensive poll of business opinion in case there were difficulties "in reconciling the survey results with the existing CBI position if the outcome turned out to be less pro-EMU". The sceptics (in every sense) have been vindicated. For years, they have accused the CBI of contriving to portray industry as far more enthusiastic about the euro than it really is.
Three specific complaints are made against the CBI's polls. First, the questions are loaded. It is no good asking businessmen whether they would be in favour of EMU "if it were working successfully", or "if the conditions were right". The whole argument is about whether the conditions will be right. Second, the respondents are self-selecting and often few in number. It may well be that supporters of EMU are keener to reply; and in many firms, surveys of this nature will land on the desk of whoever is in charge of European affairs. Third, the CBI is not wholly representative of British industry. Its members tend to be large firms, often multi-nationals: exactly the kind of companies, in other words, that can afford the costs of EMU. | The firms which produce 85 per cent of our wealth face all the costs of EMU without even any notional benefits.
A corporation that conducts the bulk of its business within the EU but outside the United Kingdom might conceivably benefit from the euro - although even a firm in this category would lose out if EMU were badly managed, or if it led to harmonised taxes. But only 15 per cent of British output is sold to the euro-zone. A further 15 per cent is sold to the rest of the world, and the remaining 70 per cent is not exported at all. Thus, the firms which produce 85 per cent of our wealth face all the costs of EMU without even any notional benefits. Businessmen whose trade is largely domestic or extra-European would be burdened by higher corporation tax, higher borrowing costs and increased regulation - not to mention the cost of the transition itself - with nothing whatever to gain in return.
| The CBI has traditionally represented a cautious, consensual approach to business. It was tripartite in the 1960s, anti-monetarist in the 1970s and pro-ERM in the 1980s. Many of its members choose to be represented by their corporate affairs men, who are naturally most comfortable when agreeing with ministers. But there is another kind of businessman: the risk-taker. Opponents of EMU, such as those who recently formed Business for Sterling, tend to be of this second type: entrepreneurs in the mould of Sir Stanley Kalms, who turned Dixons from a one-store family firm into Britain's largest electrical retailer. We suspect that they are in a majority, but there is only one way to prove it. If the CBI cannot be relied upon, Business for Sterling should commission an impartial survey. It has less cause to fear the result. |
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