CBI Urges UK Government To Defend Business 'Red Lines'

by Jason Gorringe, Tax-News.com, London

02 December 2003

The Confederation of British Industry (CBI) on Monday set out its business ‘red lines’ regarding the European Constitution, as the British government prepares for the next round of negotiations at the forthcoming Intergovernmental Conference later this month.

"We fully support the drive for an efficient EU but not at any price,” explained CBI Director-General Digby Jones, warning that: “The draft constitution includes serious threats to British business, hidden in a fog of bureaucratic language that leaves so many questions hanging in the air. It is imperative that the text is unambiguous and absolutely watertight.”

To prevent the potential erosion of the UK’s and the EU’s international competitiveness, the CBI is urging the government to hold fast on six key points:

- To strengthen national parliaments’ ability to block European Commission initiatives by allowing them to ‘red card’ proposals that are opposed by one-third of member states. Such proposals should then progress only with unanimous approval of all national assemblies.

- To retain the UK’s national veto regarding decisions on tax administration and fraud and social policy. The CBI argues that Qualified Majority Voting on these issues will lead to higher taxes and “endless disputes” on tax matters.

- To include in the treaty protection from European Court of Justice decisions which the CBI argues undermine the UK’s tax veto.

- To guarantee that inclusion of the Charter of Fundamental Rights, giving the document legal status, will not allow ECJ reinterpretation of UK employment law.

- To resist new EU powers on economic policy, energy and financial services. The CBI says the Treaty must clarify that only the Council of Ministers can constrain national budget deficits.

- To make clear the EU will not weaken UK international representation on bodies like the United Nations, World Bank and International Monetary Fund.

“As drafted, the constitution could be bad for UK business and UK jobs,” observed Mr Jones. “We are confident the government understands our concerns but I am worried by what might be bargained away in exhausting late night negotiations."

"The worry is we will get nothing to add competitive advantage and plenty to make matters a good deal worse. We have set out the basis on which British business will judge a new Treaty. The government must have the strength to deliver," he concluded.

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