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Morning Briefing for pub, restaurant and food wervice operators

Fri 17th Jun 2016 - Friday Opinion
Subjects: Brexit special – last orders please on EU membership, should we stay or should we go, the case for remain, and let’s not be afraid 
Authors: Tim Martin, Keith Knowles, Paul Chase, and Paul Charity 

Last orders please on EU membership by Tim Martin

It’s déjà vu all over again. Those arguing in favour of “Remain” are mostly the same characters that urged us to join the euro. Tony Blair, Ken Clarke, Michael Heseltine, Peter Mandelson, and so on, are all at it. As before, the CBI and the FT, supported by the majority of big-company boards and economists, are also in the club. 
What the great and the good misunderstood the last time was you can’t have a properly functioning currency if you don’t have a government, as I repeatedly said. You need a government that has the authority to raise taxes from wealthy areas and to redistribute the proceeds to those who are less well off. So money raised from taxing London can be transferred to Port Talbot and Redcar, for example. 
The absence of a central government with these tax-raising powers is creating hell in the Eurozone, with no proper method of distributing money from Germany and Holland to Greece, for example, in the absence of a democratic mandate to raise the necessary taxes. In weighing up the pros and the cons in the current referendum, the great and the good struggle to understand that democracy, prosperity and freedom are inextricably linked. 
Democratic West Germany was more prosperous than communist East Germany and South Korea is more prosperous than North Korea. The US, with democracy enshrined in its constitution, has far outshone South America, which has struggled to introduce democratic systems. The problem with the EU is it is becoming increasingly undemocratic. The elite politicians and bureaucrats, who rule the roost in Brussels, are trying to create a country without the democratic authority of the peoples of Europe. 
This has led to chronic inefficiency, corruption and resentment. The EU’s accounts haven’t been audited for more than 20 years, the Eurozone is in a mess and much of Europe hates the Brussels bureaucracy even more passionately than the British. Unemployment is rife, with youth unemployment at or approaching 50% in a number of southern European countries. What an indictment of the masters of the universe in Brussels. 
The pub trade will be better off leaving this disintegrating union. The EU charges high tariffs on food from non-EU countries, so our food prices will fall after Brexit. Wine from the Antipodes and from some South American countries will also reduce in price, as EU tariffs fall away. The EU creates a plethora of regulations covering many areas of our businesses, which are largely invisible to us (just watch “Brexit, the Movie”). 
We stand a far better chance of controlling future regulations and eliminating the most vexatious by voting to leave. Publicans worry about finding good staff – what is certain is all existing EU staff, who are resident in this country, will be permitted to stay. The “Leave” camp is committed to continued immigration through an Australian points system, which gives control to the government, yet will help to secure a supply of labour for the future. 
Personally, I feel countries in the EU now should be permitted to allow their residents to work in the UK without a work permit and I will campaign for this outcome in the future. All in all, businesses like pubs and restaurants depend on the overall success of their economies. Democracy always brings more economic success than autocracy, so it has to be to the UK’s benefit to increase the level of democracy here by leaving the EU. 
As Eric Burdon and The Animals sang in those far off pre-EU days: “We’ve got to get out of this place, if it’s the last thing we ever do.”
Tim Martin is chairman and founder of JD Wetherspoon

Should we stay or should we go by Keith Knowles

On 23 June, the UK faces one of its most important electoral decisions – ever. Do we stay in Europe, or leave? Britain joined with Europe in 1973 when it was known as the European Economic Community. Since then the original nine members have become 27 and the community has taken on a different look – now encompassing political as well as economic ties – and a new name, the European Union.
Whilst some fear a loss of British independence because of our membership, there can be no doubt as to the advantages of being part of the EU, and remaining a part of the EU will continue to serve our hospitality trade an endless list of benefits that will endeavour to encourage the industry’s growth and uninterrupted success as it has done over the past three decades – one of the fastest growing economies in the western world, in fact.
An open market place for Britain to sell its goods and services is a plus for UK jobs and businesses – and Europe is just that. A tariff free zone allows us to trade freely within a market place of well over 500 million. Withdrawal from the EU could well mean our access to this market is severely limited – even denied completely – and goods imported from Europe would be more expensive.
The free movement of people that comes as a condition of EU membership has enabled workers from all occupations to relocate in countries other than their own. Where would our businesses be without a young, hard-working, multilingual pool of talent keen to make a life in the UK? Incoming European labour has meant low-skill jobs within the UK can be filled more easily, especially when British workers lack the flexibility that such roles often require. Young European workers are noted for their hard-working attitudes. Brexit could well deprive UK commerce – especially the hospitality industry – of such a valued workforce at a time when the industry is growing and posts are hard to fill.
Leaving the EU is fraught with uncertainty. We just don’t know what trade agreements our government can make – in Europe or the wider world – and to leave could well put the stability of our nation at risk.
In addition to providing a good climate for business, the EU has heralded more than 71 years of peace and stability in Europe, increasing the living standards of those on the continent and leading the world in finance, technology, manufacturing and leisure. Britain’s retreat from Europe would mean us leaving all of this behind. Is this what we want? Is this what we can afford?
Keith Knowles is chief executive of pan-European hostel company Beds and Bars

The case for remain by Paul Chase

My starting point in the EU referendum debate is the burden of proof is with those who advocate change. It is for them to convince the rest of us the change they propose would be beneficial. For me the most important issues are the economy and access to the single market; and democracy and political stability in Europe. I believe both are better served by staying in rather than leaving the EU.
But I’m a believer in small government, less meddling, less red tape and bureaucracy, so why would I support membership of the EU? In one word – globalisation. That’s the elephant in the room in respect of this whole debate. Margaret Thatcher and president Reagan didn’t invent globalisation, but they gave it a hell of a push off the side when they abolished currency controls and controls on the movement of capital. These changes let the genie of globalisation out of the bottle and we cannot now stuff it back in. Money and capital and are now traded in global currency and stock markets around-the-clock, and the globalisation of business ownership, which was already well under way when these changes happened, has accelerated apace ever since.
When I hear the “Leave” campaign talk of “taking back control” and “regaining our sovereignty” it seems to me they are in denial of globalisation. Their view of sovereignty is that it’s a zero-sum game; a bit like virginity – either you’ve got it or you haven’t! They’re living in a 19th century world when capitalism was nation-state based and the British cabinet was a committee of British businessmen who owned big factories, mills, shipyards and mines; their hands directly on the levers of economic power. And we had an empire on which the sun never set. That world has vanished and capitalism is now global.
Vast quantities of money and capital swirl around the global financial system; recent decisions about our steel industry were taken not in Westminster, or by faceless bureaucrats in Brussels, but by businessmen sitting in a room in Mumbai. If we are to have any chance of “taking back control” of the global forces that impact our economy and prosperity we are better able to do so as part of something bigger than ourselves – an EU of 28 nations that pool their sovereignty and act together – rather than as a single country acting on our own. Sitting in a boat in the middle of the Atlantic singing “Rule Britannia” whilst sailing off into the sunset isn’t an exercise in sovereignty, but in futility.
The “Leave” campaign has moved the goalposts on the economy. At the beginning of the Brexit debate they advanced a “cake and eat it” argument – that it was possible to resign our membership of the EU club, but negotiate retention of the terms of trade benefits conferred by the single market – whilst at the same time not having to pay the club’s annual membership fee or abide by its rules. The notion we can ditch the costs whilst retaining the benefits has always seemed to me to be a fundamentally improbable proposition.
The “Leave” campaign has now abandoned that position and stated it wants to leave the single market and become part of the European free trade area or revert to World Trade Organisation trading rules – that would result in our goods being subject to tariffs of up to 10%. In terms of democracy and political stability, I remember when Spain, Portugal and Greece weren’t in the Common Market because they were ruled by fascist dictators. I remember when a host of former Soviet satellite countries weren’t able to join because they were communist dictatorships. Now they are all functioning democracies and all members of the EU. The EU has held the political centre together.
On the “Leave” side the one argument that is cutting through is immigration. Again, this is couched in terms of taking back control. And you hear members of the public in some of the televised debates saying things like “we should put up the shut sign”. Have these people been to an international airport recently? Take Heathrow as an example – 75 million passengers arrived or departed that airport in 2015. On its busiest day, 17 August, 257,312 people arrived or left – and 69% of them were international passengers, not domestic ones. You see how this works Boris? How exactly do you “put up the shut sign” or “take back control” in an era of mass travel?
My father visited France for the first time on D-Day – with a Bren gun strapped to his chest – as did many members of his generation. Now anyone can jump on a plane and visit Paris or another European destination for £50. 200,000 British families now own houses in France; 300,000 Brits have retired to, or work in Spain; there are some 50,000 Brits living in Italy. Immigration isn’t something done to us by foreigners whilst we all stay in dear Old Blighty watering our spider plants. We’ve moved on. 
Ultimately the issue of immigration is another state versus the market argument. No matter what the state does it is ultimately our jobs market that will determine the immigration volumes – unless we’re prepared to sacrifice economic growth and trash our economy on the altar of public incomprehension of what it means to live in a globalised world.
I’ll be voting for “Remain”!
Paul Chase is a director of CPL Training and a leading commentator on UK health and alcohol policy

Let’s not be afraid by Paul Charity

A once-in-a-generation vote looms on 23 June. Should the UK vote to remain in Europe or choose to go its own way? So far, uncertainty has been the chief characteristic of the debate. As poll results veer wildly, most people I speak to complain of an information deficit. As Association of Licensed Multiple Retailers (ALMR) chief executive Kate Nicholls said recently: “Much of the concern from operators appears to be the sense of uncertainty as to what will actually happen following the vote, particularly should Brexit actually occur. Unfortunately, the uncertainty surrounding the potential EU exit is creating a lack of clarity and, as we know, nothing undermines confidence and hinders potential investment like a lack of certainty.”

Employment minister Priti Patel has perhaps argued the case to hospitality companies for leaving the European Union most cogently. Speaking at the ALMR spring conference in London, Patel argued the economic benefits of “standing tall as a free, independent and sovereign country”. She said: “The UK has not managed to block a single proposal from becoming law through the EU Council, costing this country £2.4bn each year. Not only does this undermine our democracy, as we are unable to hold European decision-makers to account, it has devastating consequences for our economy. In 2005, the Treasury estimated the costs of the ‘single market’ could be over £125bn per year, the equivalent of 7% of GDP, £4,639 per household, or £23,236 per company. 

“By getting rid of some of the EU rules that make it so difficult to create employment, we could deliver a £4.3bn boost to our economy and 60,000 new jobs. Cutting EU red tape on business – starting with small and medium-sized businesses – will be a valuable boost to productivity, growth and job creation. 

“History also tells us the prosperity of our businesses cannot be left in the hands of the EU. Last year, it turned its fire on small-scale cider producers demanding the removal of tax exemptions. Your business and interests could be next. Voting to leave the EU will also give us back control over our borders and our immigration policy. This does not mean we will close our borders – I know how important migrant labour is for your businesses and the hospitality, leisure and retail sector – but it means we can put in place robust controls that enable us to bring in the brightest and the best from around the world and recruit to fill shortages in the labour market.

“Our choice on 23 June is a clear one. We can choose to remain in an unaccountable, unreformed EU that damages British business, takes our money, and puts our future prosperity at risk. Or we can vote for a positive and secure future as a free, independent and sovereign country, where we can spend our own money on our own priorities, make our own laws, take an axe to EU red tape to free enterprise, and make the most of the potential and talent our great country has to offer.”

My own views are in line with Patel’s. For me, this is a common-sense issue. What sensible business would hand over far-reaching powers and pay for the privilege? The EU has not been an economic success, leading to extraordinarily high rates of youth unemployment in member states that have fallen victim to the centrifugal effects forecast by former eurosceptic MP Richard Body in his book A Europe of Many Circles – he argued forcefully 25 years ago the EU would cause economic power to gravitate to the centre of the union to the cost of countries on the geographic edges. I believe the UK has only escaped these powerful forces because this country kept its own currency. The compelling logic of this is we take the next step to recoup the powers required to chart our own way in the world.
Paul Charity is managing director of Propel

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