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ARTICLE - EU Bureaucracy Kills Business in UK

EU Eurozone Debt

 The EU bureaucratic organisation wastes a fortune, and stifles business throughout European members.  This article examines its adverse impact in the largely Euro-sceptic United Kingdom (UK).  

How European Union Bureaucracy is Killing Business in the United Kingdom.

Top Panel - EU Kills UK businesses

The European Union (EU) is an organisation that emanated from the aftermath of the Second World War.  Its initial intention was honourable, to avoid a repeat.  However, it has grown into a undemocratic bureaucratic monster.   It shares the features of all out of control bureaucracies, where its sole purpose appears to be for continual expansion and power.  The United Kingdom (UK) is largely a euro-sceptic country, and thankfully is not in the Euro zone, which currently appears in the process of imploding to euro currency destruction.   It is in the area of business this essay focuses on; the EU and its myriad of regulations has long lost sight that it doesn't create business, but puts ever increasing obstacles in the way of companies to create wealth.

Summary Panel - Eurozone Imploding

The United Kingdom joined what was portrayed as a European Free Trade organisation on 1 January 1973; this was called the ‘Common Market’. Thereafter the organisation was generally referred to its more European name the European Economic Community (EEC).  Almost immediately the UK sampled examples of incredible bureaucracy such as the Common Agricultural Policy which appeared to reward inefficiency and a glut of overproduction which lead to the infamous ‘butter mountains’ and ‘wine lakes’.    

The mantra sold to the general UK public was a free trade organisation not a political union, but already some maverick voices in the UK were warning of an ulterior motive of creating a United States of Europe.  Indeed, over the subsequent years the EEC has evolved into ever closer political union and increasing bureaucratic interference into everyday and business life in the UK.  The Common Market was re-named European Union (EU) in 1993 following the Maastricht Treaty signed in 1992; this in effect took more rights from member nations over matters relating to foreign policy, military, criminal justice, and judicial cooperation to the central bureaucracy of the EU.  The treaty saw European ‘democracy’ in force, Denmark were asked to vote again as the people had not provided the correct affirmative answer in their referendum at the first attempt.  The UK’s acceptance of this treaty was controversial, to say the least, and in true EU fashion the public were not asked for their views. 

The Maastricht Treaty just over ten years ago led to the creation of the Euro common currency, which was adopted by many, but not all member states.  Significantly the UK with a British public opinion largely against joining the Euro negotiated an opt-out from this part of the treaty. It is also to former Financial Chancellor and Prime Minister Gordon Brown’s credit that he resisted attempts for the UK to adopt the Euro currency.  It is generally accepted that the UK would be in an extremely precarious position, given the current Euro-zone crisis had it adopted the Euro. 

The continuing trend within Europe has been ‘ever closer union’ whether the people like it or not.  The European Union behaves like any other bureaucracy, with its prime function to grow and become more powerful, which is not the same as being more efficient or even wanted.  This was classically shown by the disgraceful Lisbon Treaty.  This started life as the ‘EU Constitution Treaty’ which in short grabbed significantly more rights from member nations. This was put to a referendum in France and Holland, and was decisively rejected by the people of these countries.  The EU simply rebranded the rejected Treaty as the ‘Lisbon Treaty’ and bullied nations into not having a referendum on it - Republic of Ireland was an exception due to its inherent constitution.  The Irish people rejected the treaty by referendum - not the right answer for the EU so they were bullied and bribed to vote again.  All these shenanigans’ by the EU demonstrates this is not a political democracy in any shape or form, but more akin to a bureaucratic dictatorship - hence the nickname EUSSR given by some to the EU!   

Without going into fantastic detail, the Euro as predicted by former UK Chancellors of the Exchequer Dennis Healey & Nigel Lawson together with man others across the political spectrum, is doomed and will more than likely falter in the near future; possibly this year (2012) with at least Greece - possibly others leaving the Euro.  In the absence of complete political, taxation, banking unity the single currency is destined to fail.  Very simply the European Union has been driven by political ideology rather than sound financial management.  The EU has collectively spent/wasted far too much money and markets have cottoned on that some countries have borrowed more than they can afford to pay back.  The inefficient countries in the Euro zone cannot independently devalue their currency or change interest rates, so are snookered whilst they stay in. 

The UK Prime Minister David Cameron in a recent European summit in December 2011 to try and save the Euro (again), resisted the bullying tactics designed to extract more rights and money from the UK by unilaterally exercising a veto to their latest treaty amendment, effectively taking yet more powers away from member countries.  This was certainly a popular stance with the people of the UK, and may well catalyse a detachment of the UK away from the ideological facet of the European Union, to concentrate purely on business trading links.  Albeit much of this strong stance; appears to have been subsequently watered down, in the light of the usual Euro pressure. 

As the author runs a business, he finds it rather ironic some of the rubbish that comes out of the mouths of various European Leaders concerning trade.  It is clear that most of these people do not have that slightest idea of what business is about or indeed of working in a business environment.  What is often cited is that the UK needs the European Union to promote trade, and hence jobs.  Utter tosh, the EU in common with other bureaucracies actually hinders business efficiency - often to the total destruction of companies.  This article will cite a number of examples from the personal author’s business of how the EU actively hinders enterprise, but first an analogy. 

Imagine a school playground where the boys (and to be a bit PC a few girls as well) are trading Football Cards.  This is all quite simple, any duplicates are swopped for the players they are seeking - no doubt with players from Charlton Athletic Football Club being particularly popular.  In other words trading is going on, no rules - no bureaucracy - all very simple.  Until the staff of the school get involved to regulate the trade.  It is decided that cards should only be traded at certain times, and that there should be an equal gender and ethnic mix of pupils trading, the cards are vetted and any the teachers don’t like are banned.  This is all getting a bit complicated, so they introduced forms to be signed by everyone, and an inventory of everyone’s cards need to be kept.  The governing body decides that each pupil now needs to submit a monthly return of the cards traded.  In the end the pupils find all this too much, and just give up trading cards.  These is an extreme example, but replace pupils with traders and the school staff with the European Union - and this is effectively the scenario imposed on businesses located within the Europe Union.  In the same way the bureaucracy, time wasted, and cost of the EU actively hinders trade not encourages it.    

The EU Working Time Directive was introduced in 1993.  A little later than planned - this appeared to have been deliberately delayed to be pushed through when majority voting was allowed rather than the former unanimous voting.  This became law in the United Kingdom 2009, the maximum 16 years transition time was utilised, which gives a fair idea of how popular this diktat was.  In short the EU laid down a maximum of 48 hours in a working week, and a raft of other definitions.  This has a profound adverse effect on working practices, and it is worth reiterating at this point that such ‘rights’ actually takes away rights for both employers and employees.  

In the National Health Service (NHS) in the UK the Working Time Directive has effected the time doctors can be on call - as even sleeping time at employer’s premises counts within the 48 hours.  It is ironic that the self employed, particularly when starting up can have work directly imposed by EU/government at no pay which can push them in to working well beyond 48 hours a week!   However, the employer has to provide a plethora of rights to employees, which the EU/government does not accommodate to the provider! 

The EU is in essence a bureaucracy, and its behaviour is akin to a living organism to basically grow and survive.  To grow, the organisation needs lots of money, and where else to turn but to the virtually religious ideology of ‘Climate Change’ (formerly ‘Global Warming’, terminology apparently dismissed due to 15 years of continual cooling if anything).  The author has consistently argued that pollution in a general sense is not good, and much of this is driven by over population.  However the thing with carbon emissions (specifically CO2 - Carbon Dioxide) it can be measured - and hence taxed!   These extra costs are passed on to businesses, and hence customers; but the EU is operating in a global economy and hence time after time companies in EU member countries are consistently handicapped in competitiveness.

The ideology of Climate Change has proved a goldmine for the European Union.  The popular incandescent light bulbs have effectively been banned, notwithstanding that the ‘low energy bulbs’ are not really that efficient when considering that heat emitted by incandescent lighting (and hence heating savings) were not taken into comparison account, produce a poor and harsh light.  Furthermore energy saving dimmer switches are unusable at a sensible price, and the low energy light bulbs invariably use the poison Mercury which requires evacuation should a breakage occur.  From a business perspective, the market would really go for a true low energy light bulb that quickly produces a pleasant light - the current low energy replacement does not offer this.  Therefore Supply and Demand has to be manipulated by EU law to force consumers to use an inferior product.   

The EU’s Landfill Directive is a classic example of demonic bureaucracy in action.  Rubbish EU LandfillThis directive came into force in 1999, with an implementation of 2001.  Basically the result for the United Kingdom is that the EU dictates how much land fill of biodegradable waste goes into landfill, with virtually impossible to meet reduction targets, with of course large fines for the UK amounting to billions of pounds for failing to meet these ridiculous targets.  The author does not remember anyone voting for this, and it begs the question of why politicians signed over sovereign powers to the EU to do this, when a reverse Winston Churchill two finger salute would have been a more appropriate response. 

The Net result of the landfill tax, as in many EU directives is that the over burgeoning EU Super state gains more money to waste.  This has adversely affected businesses and the general population alike.  The old chestnut of reducing CO2 ‘climate change’ has been cited as a reason, and to encourage recycling.  On examining the USA’s experience of such matters, it appears that all the extra lorries and extra resources utilised for recycling circumvents any supposed savings.  Basic rubbish collections in most of the UK is now fortnightly, but with additional collections for such items as food waste and recyclables - with twice the lorries used for effectively half the service.  All for recycling materials that often are at maximum required supply capacity anyway.  To use the newspaper columnist Richard Littlejohn’s words ‘You couldn’t make it up’.  Incidentally the author’s company Datalite UK Ltd does recycle card and paper as packing materials - but this is purely for  business efficiency reasons, not the result of some European diktat. 

Another area, well beyond the scope of the original ‘Common Market’ concept is how the EU infringes into matters of ‘Equality’.  It is a truism that inequality exists from the moment of birth, and ultimately equality can only be achieved by treating everyone equally bad!  The nearest to an ‘equality’ environment is a prison!  Equality of opportunity is in the author’s view a desirable concept, but equality of outcome can never be achieved.  This makes ‘Equality’ a bureaucratic organisation’s dream - there will always be conflict and an excuse for the organisation such as the European Union to increase their influence, size, and ultimately income in dealing with matters of ‘Equality’.  The mass of EU inspired legislation adversely affects business, and lets face it businesses are largely driven by profit - they would employ green with pink polka dot Martians if this resulted in a 5% increase in the bottom line!  Also the ideology tends to treat people as groups rather than individuals, and can end up with reducing individual choice.  The valid option of stay at home mums for example, is not really supported in politically correct circles. 

The EU has also played havoc with any sensible control of immigration.  With open borders, an illegal immigrant only has to sneak into any part of Europe (a favourite spot being via Greece) to be allowed unfettered access to every member state, with the exception of the United Kingdom which still has border controls, albeit not as strong as they might be.  Nevertheless the UK has seen a huge influx of immigration since the late 1990s and continuing, whether illegal or legal.  Supply and Demand and infrastructure pressures, circumvents the supposed benefits of uncontrolled immigration to a country with scarce resources.  Inevitably wages are driven down, with an ever burgeoning welfare bill.  

The bureaucracy emanating from the EU is immense.  By way of example a business can sell VAT free to a VAT registered business in another EU country.  Sounds fine on the face of it, but the onus is on the supplying company to check the full validity of details supplied - in the absence of a central point to do so.  In other words if a company outside the UK but within the EU supplies duff details, you can end up being responsible for their VAT bill!  It gets worse HM Revenue and Customs require a separate VAT EC Sales Return - in addition to the full VAT return due at the end of the period.  However the EC Sales Return needs to be submitted by the 21st of the month following the end of the period.  This gives just two weeks (most company’s need to wait around a week before commencing a VAT return, as some transactions are still going through the bank system) to complete what can be a time consuming task - all under threats of penalties from HMRC.   To be frank it is in practice far easier to supply VAT free outside Europe, all this needs is a simple custom declaration.   Also the reduction in bureaucracy and of course the lack of VAT requirement, explains why many items are despatched to the UK from the non EU Channel Island countries of Jersey and Guernsey!   

Companies in the UK are required by law to produce accounts, and generally if a company gets their sums wrong, the company goes bust.  However, the European Union appears to disregard every sound business practice, its own accounts have consistently failed audit, and in common with most large bureaucracies wastes money.  The EU is in absolutely no position to dictate on how companies should run their businesses.  The difference between the EU and a good business is that the later invests in success, and rapidly eliminates areas that fail.  This is the opposite of the EU which invests in failure (such as Greece) at the expense of areas that succeed, such as Germany.  

And of course the myriad of rules emanating from the EU appears at even a cursory business glance, designed to make European commerce as inefficient as possible, compared to the rest of the world.  Such an example is the EU Cookie diktat.  This was effective from 26th May 2012, and meant that around 90% of EU websites needed to have an opt in for collecting information or the web owner will face a fine of up to 500,000.  A great detraction for the user's experience, and directly affects an organisation's ability to monitor performance of commerce websites.  If fully complied with, web users will avoid EU websites like the plague - who wants to be bothered with continual nag boxes as they surf.  Like so much nonsense that comes from the EU, this has not been thought through, ironically the majority of government websites are currently non compliant.  I expect the EU wishes to take pot-shots at Google who provide Analytics will technically be illegal or useless if the diktat is followed.  This seems similar to the European Union attack on Microsoft - the EU (unelected) leaders seem to be adverse to efficient companies. 

Top of the list of ‘bonkers’ concepts is the European currency.  It is difficult to know where to start with this.  The Euro has been instigated purely for political ideology, pure financial considerations appeared to have been totally disregarded.  The idea that such diverse countries as Germany and Greece could share the same exchange rate and interest rate is deluded beyond belief.  A staggering amount of countless billions of Euros has been wasted on trying to keep the Euro together, but to be frank the game is up.  Nobody in their right mind would invest in a currency, where the European (unelected) leaders have already reneged on their commitments (Greece bond 'haircuts', in non 'Orwellian Double-speak' is a pure and simple default).  Greece will be out of the Euro soon, and no doubt the rest of the PIIGS (Portugal, Italy, Ireland, Greece, & Spain) will follow suit - this needs to happen so that some sort of sanity and sensible economics resumes within the Euro zone.   The United Kingdom the author predicts will actually be in quite a powerful position when this happens, once the initial shockwave subsides.

Much of what the European Union has undertaken appears crazy, but the EU behaves as any large bureaucracy behaves.  The organisation has a vested interest in becoming ever larger and more encompassing, whether efficient or not.  This provides greater employment and promotion prospects for those within the bureaucracy - because the organisation is funded by taxpayers, money is seen as virtually unlimited.  Certainly financial effects of bad decisions are not as rapidly apparent, but eventually economical reality can catch up.  This has happened in spectacular fashion within the European Union - which is on the point of financial meltdown - and unfortunately will take down many businesses with it.  The adage goes that ‘Turkeys Do Not Vote Christmas’; this does not mean that Christmas won’t come anyway for the EU Turkeys!

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About The Author
John D Henry BA BSc, Managing Director of  DATALITE UK LTD
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