By Tony Nicholl, Chartered Accountants Ireland President and CCAB Chairman.
The European Union and the place of both the UK and Ireland within it have been debated since 1973 when both countries became full members of the European Economic Community.
Polling seems to show that a clear majority of Irish people are happy to remain part of the EU but over the past year or so, debate about the UK’s place has intensified. It became a major issue in last year’s UK General Election and the word ‘Brexit’ has now become a household term.
Some in the UK see the EU as a valuable common market which enables free trade and encourages export. Some see it as an overeager regulator. Others see it as nothing more than a reckless and profligate spender of its members’ money.
CCAB, the combined group of the main UK and Irish accountancy bodies, commissioned research and in-depth interviews with business leaders across these islands on the effectiveness of the EU, highlighting five key areas for potential reform. CCAB represents over 354,000 professional accountants worldwide.
The resulting CCAB report, Business in Europe: Researching Reforms for Sustainable Growth, examines the priorities and concerns of senior business figures and comes as political leaders prepare for the EU summit in Brussels on 18-19 February.
The five key areas for potential reform which emerge as priorities for business leaders interviewed for the report are:
1. Single statement of EU and national responsibilities: with calls for a charter, operating model, or single document clearly setting out certain basic principles of the EU, as well as where responsibilities are shared by EU members or retained by national administrations. That would help address some misinformation about the remits of national governments and EU institutions.
2. Greater accountability and transparency at EU level: a perceived lack of transparency, democratic deficit and a belief that unelected officials in Brussels
may not make decisions in the EU’s best interests are key concerns within the business community.
3. Closer harmonisation of reporting regimes including taxation reporting regimes: hastened by the expansion of digital services, to facilitate strong demand across common markets for services and for capital, with the suggestion that the OECD’s Base Erosion Profit Shifting (BEPS) protocols could be transposed into EU legislation.
4. Portability of earned labour benefits: to facilitate free movement of labour with regard to qualifications, pension contributions, health insurance and other earned social benefits in an ageing Europe.
5. Vision for business in the EU: to further harmonise EU economic structures, including companies being able to submit tax returns to an EU clearing house that would distribute these proportionally to the member states in which the income was earned.
The respondents of the report also touched on Brexit, putting forward both conflicting and common opinions on the question ahead of the UK’s referendum on EU membership. While some respondents opined that UK businesses may be better placed to drive change by being in Europe, rather than trying to influence change from outside, others cited the downsides of membership.
There was, however, consensus that the role of the EU is not always widely understood among businesses and there is work to do to communicate this in the interest of balanced and informed debate in advance of the Brexit referendum.
We hope that the report’s clear recommendations on EU reform will assist in developing a new foundation for collaboration with our European neighbours on areas of mutual interest. We believe that the views of the respondents, and the detail of the report will help point political leaders to the business agenda for a more effective Europe.
Finally, on behalf of CCAB I would like to thank Brian Merriman and Bernie Coyne of Coyne Research for their work and dedication in producing the report. Business in Europe: Researching Reforms for Sustainable Growth can be downloaded at www.bit.ly/CCABReport. A summary is available at www.bit.ly/CCABSummary.