As published in The Times:
The single market only benefits big firms and lobbyists
If the Common Market was good, the single market must be better, right? Wrong. It is the most misleading piece of conventional unwisdom in this EU debate.
There is no doubt that entry into the Common Market was beneficial for Britain in 1973 but for the past two decades or so our performance has been no better, and sometimes even slightly worse, than our non-EU competitors.
When in 1992 the EU started to create the single market, it required all EU nations to accept decisions on trade matters by majority voting, so Britain had no veto. Big European companies seized on the nature of the single market as a way of protecting their own. Instead of promoting mutual recognition, of regulation, standards and health and safety requirements, the EU has instead pursued harmonisation, issuing directives that impose standards upon the varied economies of the EU. And this harmonisation works, on the whole, to give large companies a competitive advantage over their smaller rivals.
The best example is that of the big vacuum-cleaner makers trying to stymie the British entrepreneur Sir James Dyson. The big manufacturers ensured that vacuum cleaners, absurdly, are tested for energy efficiency in dustless laboratory conditions. The reason is that the German manufacturers, which use large motors and disposable vacuum bags, are far less efficient when used in real-life conditions than under test conditions, unlike their Dyson counterparts.
The continental response to competition is, rather than trying to compete, to make sure that regulation tilts the playing field in their favour. And it is not just today’s industries that are handicapped. Tomorrow’s are too. Studies show that e-cigarettes are 95 per cent less harmful than smoking traditional tobacco products. These products have helped people to quit smoking.
Despite this, there is a major campaign under way, championed by big pharmaceutical companies worried that their products are being squeezed out of the market, to have e-cigarettes taxed across the EU as if they were actual tobacco cigarettes. The price of a £32 vape pen would rise to £74.42.
So, while the single market may seem like a good idea, in reality it has distorted market incentives, reduced competition and burdened European economies with unnecessary regulations. The simple fact is that the single market benefits the lobbyists and big companies to the detriment of small businesses. And it is small firms that account for most of our economy, and the majority of new jobs created in recent years.