The Single Market has always been held up as one of the major benefits of the UK's membership of the EU. In fact, over that last ten years, the UK's balance of trade with the EU has been 150 billion pounds in the red - the UK has bought 150 billion pounds more from the EU than they have bought from us. The UK's politicians have been able to over look this fact because the UK has had a healthy surplus with the rest of the world that has broadly counter-balanced this deficit. There are a number of reasons for this trade imbalance:

The EU is not a Free Trade Zone. The EU is now the most heavily regulated market in the world. Far from just sweeping away national restrictions the EU has implemented, by is own admission, at least 1368 directives (these are 'high level' diktats) and associated legislation tying up European businesses in red tape. As with most centrally planned economic rules the affects are not always what was planned and the rules tend to ignore physical realities and differences that occur in real life. For example, the legislation that closed down so many of the UK's small abattoirs was supposed to be defining standards for exporting meat - these new rules were then applied to all abattoirs regardless of whether they were ever going to export anything. These sort of rules have been applied to huge sectors of industry, even defining things like the correct design of a windscreen wiper or the correct height of office desks and chairs.

The UK has different Trading patterns from the rest of the EU. The UK does, on average, just over 50% of its business with the world outside the EU. The continental countries trade mainly with each other. The UK is a major oil producer and its economy is therefore affected by the price of oil. The continental countries are not major oil producers. The City of London is a major world finance centre with no equivalent on the continent. The UK's method of debt finance, in particular the use of building society mortgages for house purchase, is radically different to the continental countries. All these and other factors mean that the UK is always out of step economically. The price of oil, for example, will even have a diametrically opposite effect when high prices can mean more money to a oil producing country but higher cost to non-producers and vice versa. Any harmonisation of business regulation, taxation etc. will therefore always bring the UK in line with the continent and not the other way round, damaging the UK's businesses in the process. A recent example of this is the UK Art Market, which has a £2.2 billion turnover and generated £450 million in taxes for the UK. In the name of the Single Market, VAT at 2.5% was imposed on art sales in 1994 which has resulted in a 40% reduction in imports. Now the UK is being forced to raise this figure to 5% and restrictive rules of copyright which mean that royalties have to be paid every time a piece is sold are about to be imposed. There are no large international markets on the continent, in fact in France it is illegal for foreign auctioneers to hold sale - which is also against Single Market laws but this is ignored. So these rules will only make a real difference to the UK a move which is likely to drive the business overseas to Switzerland and America.

The true cost of EU membership. The Institute of Directors issued a detailed 50 page report in 2000 on the costs of the UK's membership of the EU entitled 'EU Membership - What's the bottom line?'. This report concluded that the net cost of the UK's membership of the EU is a minimum of 1.75 per cent of our Gross Domestic Product or £15 billion per year. The affect of the Single Market, which Gordon Brown and Tony Blair claim is responsible for tens of thousands of jobs, comes out neutral in effect - its benefits are outweighed by its regulatory costs. This is only the middle position however. If you compare the current situation with that of the UK if it withdrew from the EU, the report calculates that this cost is in fact about £25 billion or 3% GDP because, among other things, there wouldn't be the cost of enforcing all the EU laws and red tape. Looking the other way. If the UK went on to participate in the Euro single currency and fiscal policy harmonisation then the cost to the UK goes up to more than £50 billion or 6% of our GDP.

These numbers are colossal and are a conservative estimate. To put this into prospective £50 billion is one and a quarter times the entire annual NHS and Social Services budget. £50 billion would allow the UK to abolish VAT altogether or build five hundred new NHS hospitals a year.

Unequal application of EU regulation hampers the UK. It has always been an ironic anomaly that the more Euro-Sceptic member nations of the EU, e.g. the UK and Denmark, are usually the most rigorous in applying EU law while other, more enthusiastic, members take a much more relaxed attitude. Many examples of this exist. Compare the rigor and resources of the UK fisheries inspectorate with that of the Spanish who are a much smaller body with far fewer resources. Compare the ability to sell goods in the UK that bear the CE mark with Germany where they insist that local standards must still apply and UK products must be re-tested and certified all over again. This enforcement of local standards was one of the main obstacles to trade that the Single Market was supposed to correct. Another glaring example is procurement law. Large projects are supposed to be advertised in the European Journal so that businesses across Europe can bid for work in say Rome or London, rather than the work just going to local companies. Proportionally, far more UK business is advertised in the European Journal than other nations so the result is that businesses on the continent get access to UK projects while the continental work stays where it is.

'Big' government favours 'big' businesses. The EU likes to pretend that it consults businesses in the relevant sectors before introducing legislation. Unfortunately this usually means that it listens to the representatives of organised big business and not to the views of the less well organised small business. The ensuing legislation therefore usually hits small businesses harder than big ones. Again for example, the legislation concerning the new standards for abattoirs was as a result of consultation with the Federation of Fresh Meat Wholesalers, representatives of the large industrial abattoir companies. As a result the legislation helped the big companies, who wanted to export their goods and could afford the start up costs to apply the new standards to their factories, but bankrupted the small companies. There are probably no malicious undertones to this process - it is just a simple fact that it is easier for the central planners to deal with a few major companies (who will account for a large percentage of the economic activity) than thousands of small companies with differing requirements.

Examples… The problem with documenting the activities of a bureaucracy is that there is so much information to sift through and there are so many examples, quite often small ones, that have to be pieced together to form a true picture. There follows some more examples, but for a more up-to-date and complete picture, publications like 'Eurofacts' and newspapers articles (e.g. Christopher Booker's column in the Sunday Telegraph) should be referred to.

(1) The Recreational Craft Directive 94/25. This directive divides all boats into four crude categories and its intention is to ensure that all boats sold in the E.U comply with 49 principle safety standards. This sounds all well and good (a large amount of regulation is justified by the words 'safety' and 'hygiene' although in reality they often actually make these things worse) but again the costs of compliance are huge. Builders must either pay £15,000 to have each type of boat certified by an approved body or must undertake 'self certification', a lengthy process of form filling which takes about a third of the time required to build the boat. Again these regulations are a minor overhead to large companies with economies of scale but are likely to put out of business the small builder for whom each boat is a unique creation. Again there are no indications that these rules will produce safer boats, just more expensive ones with less choice (according to a Yachting Monthly survey). [Sunday Telegraph - 14 June 1998]

(2) Towbars - Transport Directive 94/20. This directive introduced new tests that towbar manufacturers had to apply to be able to continue selling their products in the EU. The rules were draconian in themselves but the way that they were implemented in the UK is a classic example of the overkill frequently employed by UK government agencies when implementing EU legislation. The UK applied the law retrospectively to all towbars on sale. Most EU countries only applied it to new models of towbars and some have no plans to introduce the directive at all. Minimum testing fees are 50% more in the UK than on the continent, etc. etc.. [Eurofacts - 7^th August 1998]

(3) Passports for cows - Regulation 820/97. This regulation introduces 3/4 inch thick passports for each cow a farmer owns, charges to enable a butcher to label locally produced beef as 'British' and complex notification procedures for the movement of cattle. [Eurofacts - 3^rd July 1998]

(4) 'Euro-seeds' - 600 assorted pieces of legislation. Regulations have been introduced that require all plant seeds for sale to be 'approved' with an initial fee of up to £3000 plus an annual fee of up to £700 per variety. 95-98% of the 2500 varieties of tomato were banned overnight as it would not have been economical for anybody to have them approved! [The Castle of Lies - p132].