A Brexit could mean more regulation for small businesses, not less

Questions raised at a recent New Statesman roundtable challenge the ‘better off out’ argument.

‘Britain is shackled to the corpse of Europe’, wrote the MEP and polemicist Daniel Hannan last November. Often central to this argument is the notion that Brussels red tape is strangling the potential of small businesses, which could be a fundamental driver of our economic growth. If we left, we could dictate the terms of our trade with Europe. Recent tumult amongst the Conservative ranks would suggest that Hannan is not unique in this view. However, the idea is rooted in a fundamental misconception about our relationship with the EU- that exit would lead to less regulation for small businesses.

In a recent roundtable held by the New Statesman discussing the methods by which Britain might increase exports amongst small and medium enterprises (SMEs), Dr. Rebecca Harding, CEO of Delta Economics, suggested that exit from the EU will result in more regulation, not less. This is based on previous research conducted by Delta Economics in collaboration with UKTI, which shows that the amount of distance regulation would in fact increase. Non-UK companies outside of the EU but inside European Free Trade Association (EFTA), most notably Norwegian and Swiss companies, have complained of being treated as being both outside and inside of Europe, thereby increasing the amount of bureaucracy that they are forced to face. Further information about this research and the work of Delta can be found here.

Therefore, even if we accept the premise that our relationship with the EU is primarily about trade rather than the more utopian social democratic vision of Europe as a protector of rights and freedoms, it remains in our economic interest to stay in. This strikes at the heart of the economic pillar of the Eurosceptic ‘better off out’ argument. This also questions the oft-touted premise that Britain should, or even could, aspire to a ‘Norwegian-style’ relationship with the EU.

Instead, evidence suggests that small businesses stand to benefit from further economic integration. At the New Statesman round table, Helen Brand showed that even further removal of barriers to the achievement of the single market could provide invaluable trade opportunities for SME’s- potentially increasing trade by 45%. Findings from the progressive think-tank Institute for Public Policy Research (IPPR) further support this- suggesting that further integration of the single market could increase EU consumption by €37 billion, thereby providing ample opportunities for small business growth. Even the prime minister's newly appointed strategist Jo Johnson agrees, arguing in a recent essay that further integration would leave the average EU household £3,570 better off.

The more reasoned political voices on this issue remain oddly silent in the face of popular pressure, despite the fact that it marks a point of accord between the progressive Europhile and pro-trade business lobbies. As IPPR notes, neither the British government nor the EU itself have done enough to convince of its benefits, and myths have abounded. If the argument was centered around our small business economy becoming more competitive and the ceaseless ‘global race’, perhaps our discourse would be more measured.

Research suggests SME's could face more regulation if we left the EU. Photo: Getty Images
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Air pollution: 5 steps to vanquishing an invisible killer

A new report looks at the economics of air pollution. 

110, 150, 520... These chilling statistics are the number of deaths attributable to particulate air pollution for the cities of Southampton, Nottingham and Birmingham in 2010 respectively. Or how about 40,000 - that is the total number of UK deaths per year that are attributable the combined effects of particulate matter (PM2.5) and Nitrogen Oxides (NOx).

This situation sucks, to say the very least. But while there are no dramatic images to stir up action, these deaths are preventable and we know their cause. Road traffic is the worst culprit. Traffic is responsible for 80 per cent of NOx on high pollution roads, with diesel engines contributing the bulk of the problem.

Now a new report by ResPublica has compiled a list of ways that city councils around the UK can help. The report argues that: “The onus is on cities to create plans that can meet the health and economic challenge within a short time-frame, and identify what they need from national government to do so.”

This is a diplomatic way of saying that current government action on the subject does not go far enough – and that cities must help prod them into gear. That includes poking holes in the government’s proposed plans for new “Clean Air Zones”.

Here are just five of the ways the report suggests letting the light in and the pollution out:

1. Clean up the draft Clean Air Zones framework

Last October, the government set out its draft plans for new Clean Air Zones in the UK’s five most polluted cities, Birmingham, Derby, Leeds, Nottingham and Southampton (excluding London - where other plans are afoot). These zones will charge “polluting” vehicles to enter and can be implemented with varying levels of intensity, with three options that include cars and one that does not.

But the report argues that there is still too much potential for polluters to play dirty with the rules. Car-charging zones must be mandatory for all cities that breach the current EU standards, the report argues (not just the suggested five). Otherwise national operators who own fleets of vehicles could simply relocate outdated buses or taxis to places where they don’t have to pay.  

Different vehicles should fall under the same rules, the report added. Otherwise, taking your car rather than the bus could suddenly seem like the cost-saving option.

2. Vouchers to vouch-safe the project’s success

The government is exploring a scrappage scheme for diesel cars, to help get the worst and oldest polluting vehicles off the road. But as the report points out, blanket scrappage could simply put a whole load of new fossil-fuel cars on the road.

Instead, ResPublica suggests using the revenue from the Clean Air Zone charges, plus hiked vehicle registration fees, to create “Pollution Reduction Vouchers”.

Low-income households with older cars, that would be liable to charging, could then use the vouchers to help secure alternative transport, buy a new and compliant car, or retrofit their existing vehicle with new technology.

3. Extend Vehicle Excise Duty

Vehicle Excise Duty is currently only tiered by how much CO2 pollution a car creates for the first year. After that it becomes a flat rate for all cars under £40,000. The report suggests changing this so that the most polluting vehicles for CO2, NOx and PM2.5 continue to pay higher rates throughout their life span.

For ClientEarth CEO James Thornton, changes to vehicle excise duty are key to moving people onto cleaner modes of transport: “We need a network of clean air zones to keep the most polluting diesel vehicles from the most polluted parts of our towns and cities and incentives such as a targeted scrappage scheme and changes to vehicle excise duty to move people onto cleaner modes of transport.”

4. Repurposed car parks

You would think city bosses would want less cars in the centre of town. But while less cars is good news for oxygen-breathers, it is bad news for city budgets reliant on parking charges. But using car parks to tap into new revenue from property development and joint ventures could help cities reverse this thinking.

5. Prioritise public awareness

Charge zones can be understandably unpopular. In 2008, a referendum in Manchester defeated the idea of congestion charging. So a big effort is needed to raise public awareness of the health crisis our roads have caused. Metro mayors should outline pollution plans in their manifestos, the report suggests. And cities can take advantage of their existing assets. For example in London there are plans to use electronics in the Underground to update travellers on the air pollution levels.

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Change is already in the air. Southampton has used money from the Local Sustainable Travel Fund to run a successful messaging campaign. And in 2011 Nottingham City Council became the first city to implement a Workplace Parking levy – a scheme which has raised £35.3m to help extend its tram system, upgrade the station and purchase electric buses.

But many more “air necessities” are needed before we can forget about pollution’s worry and its strife.  

 

India Bourke is an environment writer and editorial assistant at the New Statesman.