Memorandum by CBI
1. As the UK's leading business organisation,
the CBI speaks for some 240,000 businesses that together employ
around a third of the private sector workforce, covering the full
spectrum of business interests both by sector and by size. Member
companies, which decide all policy positions, include 80 of the
FTSE 100; some 200,000 small and medium-size firms; more than
20,000 manufacturers; and over 150 sectoral associations. The
CBI has offices across the UK and in Brussels, Washington and
Beijing.
GENERAL COMMENTS
2. The CBI welcomes the opportunity to provide
written evidence to this wide-ranging Inquiry. The evidence is
the result of consultation with members from across the CBI, who
have provided a very clear mandate as to the stance the CBI should
take on this issue.
3. CBI members have constantly emphasised
that any new institutional reform of the EU should be focussed
on improving the EU's ability to deliver a more business-friendly
environment, and the CBI has worked hard to ensure that any changes
do not threaten the UK's business competitiveness.
4. However, it remains clear that there
is very little in the Treaty of Lisbon which would actually enhance
the business landscape, and to that end we strongly believe that
the attention of the EU should now be focussed fully on ensuring
it creates and maintains a competitive environment for businesses
and citizens alike. In particular we believe its energies should
be directed towards full realisation of the Single Market (with
proper implementation and enforcement at member state level),
getting its derailed Lisbon Strategy back on track, and crucially
establishing the EU position on the world stage so as to properly
tackle the challenges and opportunities afforded by globalisation.
The EU should move away from this period of sustained introspection,
to become more outward-facing as it seeks to deal with the challenges
of the early 21st century.
SPECIFICS
5. The CBI welcomes the UK Government's
success in securing all six of the key "red line" issues
within the new Treaty, and during subsequent negotiations.[1]
These were the six areas of greatest importance to CBI members,
when discussing both the Reform Treaty and its failed predecessor,
the European Constitution.
6. During the recent deliberations on the
Reform Treaty, CBI members expressed particular concerns regarding
two key elements: the Charter of Fundamental Rights, and the principle
of free and undistorted competition.
Charter of Fundamental Rights
7. Whilst most of the Charter deals with
fundamental human rights, elements within it also deal with key
aspects of employment policy. The most notable of these from an
industry perspective are the rights it would confer on issues
such as collective bargaining and the right to strike—both
of which are already covered by the UK's extensive employment
legislation. These, if conferred, could have an adverse impact,
and threaten the flexibility of the UK's labour market which is
crucial to continued economic success.
8. The CBI has analysed the implications
of the UK opt-out or protocol on the Charter, and has taken independent
legal advice. This has concluded that the risk is relatively low
with regard to whether the Charter could be used to broaden the
existing UK law, subject to a few caveats. To that end we are
less concerned that the Charter could confer additional employment
regulations on the UK labour market.
Competition
9. The CBI has expressed continued concern
at the significance of the decision not to include "free
and undistorted competition" as an objective of the EU, with
members extremely worried at the attempted weakening of the commitment
to the competition principles.
10. Despite assurances that this will not
change the EU's commitment to competition, we remain nervous about
the real impact this will have in practice, particularly in the
face of increasingly protectionist rhetoric from some member states.
CBI members will remain vigilant on this issue moving forward.
11. It appears to us that there is now a
new legal framework and we are struck by the new objective of
a "competitive social market economy". We are still
unclear as to how the courts will balance this objective against
undistorted competition, when considering the effect on employment
in mergers and in state aided companies.
12. Therefore uncertainty remains around
the commitment to free and undistorted competition. Uncertainty
is never helpful to investment and the CBI still believes more
needs to be done in this area to rebuild confidence. One suggestion
is for the Commission to issue an explanatory memorandum, interpreting
the changes and making clear the commitment to competition.
13. The CBI is developing its own programme
of work promoting the values of competition, and we believe it
is the UK government's duty, as a strong proponent of free trade
and open markets, to do the same.
CONCLUSION
14. In conclusion, whilst the Reform Treaty
has occupied the minds of many of the EU's policy-makers and heads
of state in recent times, it is important now that the EU moves
on from internal reforms, focussing instead on issues of real
substance to its businesses and citizens.
15. CBI members feel strongly that the EU's
attention should now turn to proper completion of the Single Market,
achievement of the Lisbon goals on jobs and growth, and responding
to the challenges and opportunities of globalisation.
16. The EU should also concentrate its efforts
on addressing the necessary steps to ensure that there is labour
market flexibility within the EU; proper market liberalisation—particularly
in the network industries; and that it delivers on its stated
goals within areas such as environmental, consumer, financial
services and SME policy, so as to create a truly competitive Europe.
21 December 2007
1 These include: maintenance of the principle of unanimity
for tax and social matters; no new powers in the Treaty to extend
the competencies of the European Court of Justice in tax matters;
preventing the Charter of Fundamental Rights from interfering
in national employment and social traditions and practices; blocking
the extension of competencies in areas of economic policy co-ordination,
financial services and energy; ensuring the UK's international
profile would not be damaged; and ensuring national parliaments
could still scrutinise Treaty changes. Back
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