ANALYSIS: Business needs to flex muscles in Brussels

John Major’s ‘get tough with Europe’ stance may have helped him regain some credibility with the voting public, but its effect on British business doesn’t look quite so positive

John Major’s ‘get tough with Europe’ stance may have helped him regain

some credibility with the voting public, but its effect on British

business doesn’t look quite so positive



The Government’s policy of non-cooperation with the European Commission

in response to its maintenance of the beef derivative products ban has

brought relations with our EU partner states to a new low. The

distinctly undiplomatic ring to EC president Jacques Santer’s remarks

last week, when he talked of the UK acting in a ‘deplorable’ manner,

showed the strength of feeling against this country’s obstructionist

tactics.



While the Eurosceptic wing of the Tory Party and certain tabloids have

been rejoicing at Downing Street’s new-found get-tough-with-Johnny-

Foreigner approach, the reaction among Britain’s business community has

been of an altogether different nature.



The transparent political manoeuvring to cast the EC in the role of

villain in the BSE affair - to save Conservative hides as much as those

of a bovine variety - and the unpleasant whiff of xenophobia

accompanying some of the anti-European posturing, has dismayed many of

those at companies who need to deal with Brussels. Beyond the obvious

political fall-out, many fear the UK’s negative blocking tactics could

have a commercial impact.



‘It’s fair to say business is very nervous, very worried,’ says Dick

Eberlie, director of the CBI’s Brussels office.



The CBI has just launched its long-planned ‘Business in Europe’

campaign, calling for the Government to work more closely with the

Commission, and privately there is a feeling at the employers’

organisation that Britain’s business interests are being ‘sacrificed’

for political ends.



Dirk Hudig, president of the British Chamber of Commerce in Brussels and

manager of EU government relations at ICI, fears the Government’s

approach is ‘marginalising the UK considerably within the consultative

framework’ to the detriment of British business.



‘Whether you like it or not the UK is deeply entwined with Europe,’ he

says. ‘Fifty-three per cent of its exports are to the EU. If you mess

around with that it’s at your peril.’



Indeed, of all the business people and lobbyists whose views were

canvassed for this article, only one felt that the non-cooperation

policy would not be damaging.



‘I don’t think that businesses will be harmed because it shows the

British Government knows its mind and knows what’s good for business, as

do the sanctimonious French and Germans,’ argues Political Strategy

chairman Paul Twyman.



But Twyman’s is very much a minority opinion. One lobbyist went so far

as to suggest that the most effective means of getting your way in

Brussels at present is to secure the opposition of the British

Government to your proposals, thereby encouraging all the other member

states to adopt the contrary view. He was only half joking.



Margaret Daly, the lobbyist and former MEP who is the Conservative

candidate for Weston-Super-Mare at the next general election, says she

has been approached by concerned businessmen whose overseas partners and

colleagues have asked whether the UK will remain in the EU; disturbing

evidence of how the UK’s actions are being interpreted internationally.



EC officials have themselves expressed fears that potential inward

investors into the UK from Asia, the US and elsewhere may pull out

because of the uncertainty surrounding Britain’s attitude to the Union.

Added to this is the damage Britain’s reputation has sustained in its

key European export markets. Press coverage, once again, proving an

important factor here.



‘Intellectually, if you look at the media and public opinion it is

difficult to accept that the deterioration in the UK’s perception of

Europe is not matched by a similar deterioration in Continental Europe’s

perception of the UK,’ says head of the EC’s London press office Angel

Carro.



The cross-border nature of business today means that British companies

will, come what may, have their views listened to by the EC. Yet while

the door will be kept open for British lobbyists - the system would

surely be less effective without their input - the ramifications of non-

cooperation are likely to manifest themselves in less immediately

perceptible ways.



‘Where there could be change in the longer term is in the financial

awards given to British companies and to the chances of British

companies bidding for EU contracts,’ says Entente International managing

director Peter Verhille.



British companies may also find that in the short term they have a

diminished influence on the formulation of the EC economic and social

policies so vital to their future growth and profitability. And

companies such as BT, which had been looking to the Government to

champion a further opening up of European markets to competition, may

find their plans left on hold due to the British-driven impasse in

Brussels.



So is British business keeping a low profile in Brussels and waiting for

the crisis to blow over? Or are more proactive steps being taken?



‘There’s been a certain distancing by some members of the business

community from Government policy, and I think that’s wise,’ says Elaine

Cruikshanks, managing director of Hill and Knowlton’s Brussels office.



One cannot fail to see the irony in corporations looking to disassociate

themselves from the actions of the party of business. A party which has

chosen to wrap itself in the flag as it strives to save the livelihoods

of Britain’s plucky farmers, butchers and abattoir workers. Livelihoods

put at risk by its own mishandling of the BSE scare since 1989.



The Government plainly sees Brussels-knocking as a vote winner - anyone

thinking this is not the case should ask themselves when they last heard

a British minister making a fuss about America’s ban on British beef, in

place for years.



In these strained circumstances, British companies are working to limit

the damage to their prospects inflicted by a government voted in to

represent their best interests.



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