By “Tony E” a.k.a The Brexit Door
In the Sunday Mail (or at least on its website), Richard Branson described EasyJet and Ryanair as “Shitting themselves” over a possible Brexit.
There isn’t any real reason for this fear, and despite one of these carriers now actively campaigning for remain, their concerns should be of a different nature entirely. They certainly won’t be stopped from flying all their internal routes in Europe.
The United Kingdom is party to an agreement called the Single European Sky, which essentially manages and regulated European airspace. This is essence, is not a bad thing. When you have a high level of integration over this physical area, then the objectives that the SES is intended to achieve are much better served: Increasing safety standards, reducing delays, improving efficiency.
One of the most important elements of this set of EU agreements and regulations, is that they are EEA applicable. So leaving the EU and continuing to participate in the EEA, which seems to be the mostly likely outcome, would see no change at all. Even if were not part of the EEA, or moved to a different arrangement in the future, the SES is a sensible agreement and it is unlikely that either the EU or the UK would wish to see a large swathe of airspace removed from it.
So what does the EU directly say about Single European Sky?
The Single European Sky initiative was launched in response to delays incurred as a result of air navigation, which had reached a peak in Europe in the late 1990s. The SES is aimed at reducing the fragmentation of European airspace (between Member States, civil and military usage, and technologies), thereby increasing its capacity and the efficiency of air traffic management and air navigation services. By its nature, the initiative is pan-European and open to neighbouring countries — as shown by the important role played by Eurocontrol
So the initiative is ‘Pan European’ and therefore open to neighbouring countries. Not only that, Eurocontrol is the leading body here – and this is what the same EU website has to say about Eurocontrol:
The Organisation for the Safety of Air Navigation (Eurocontrol) is a pan-European civil-military intergovernmental organisation created in 1963 for the purpose of maintaining safety within the field of air traffic management. Eurocontrol is made up of 41 contracting states and the European Union. The Commission has designated Eurocontrol as ‘performance review body’ and ‘network manager’ of the SES
So it’s clear that this has very little to do with Brexit. The ability to order our commercial aviation links with the European mainland will remain unaffected by leaving the EU. So what is all this really about?
Well of course there could simply be a degree of unthinking EU enthusiasm at play here, or simply Branson being connected to the political sphere might just be engaging in a little groupthink. But I think there might be something more significant at play here.
Ryanair is based largely in Dublin, and pays much of its corporation tax there (when this is not totally offset by capital spending). Being inside the EU, it is fairly easy for the company to base itself in any of the nation states for tax purposes. Ireland’s corporation tax rate is 12.5% for most normal transactional business.
In the event of the kind of Brexit Vote Leave, Leave.EU and GO are focussing on (a non EEA Brexit), the ability to remove money from the UK to the ROI for tax purposes might be seriously compromised. In short, the United Kingdom might be able to force the profits made in the UK to be taxed here much more exclusively. That might seriously leave O’Leary worried.
As late as last year, Ryanair has been involved in an investigation into what looks like tax evasion on a commercial scale through its use of a third party company to reduce employment taxes and VAT in the UK (and elsewhere). Ryanair seem to be fairly assertive in looking to minimise their tax liabilities.
So what can we learn about about the noises made by business on both sides of the argument from this particular story. I think it is that we should for the most part ignore all the cries from business in the EU referendum debate, whether it is for either side. (I have long taken the stance “None of your Business”). Most of it is ill researched nonsense, especially on the side of Brexit regarding the relaxation of regulations.
Of course, some regulations will be relaxed or simplified, if the political will in the UK is there to do so. But the idea of a massive bonfire of regulation is pure speculation and incredibly unlikely, because most trade regulation is now set above the EU level anyway, and much of what remains EU competence is enshrined in UK law and accepted as useful by the majority of the general public.
When it comes to scare stories on the Remain side, there is ample reason to suggest that much of this is simply a reflection of direct financial interests, a closeness to government and a willingness to scratch its back. And there is going to be one big story to break on this, and whether it really breaks before or after the referendum is anyone’s guess. It’s been a long time coming.
Back in 2010, David Cameron warned that lobbying was likely to be the next large political scandal to rock the UK establishment. If that is the case (and it hasn’t quite hit yet), then an eye should be cast to Brussels. 30,000 lobbyists inhabit the Brussels sphere of influence, pressing the seat of European power for their powerful corporate masters.
It makes Westminster look like an amateur operation. And so it leads one to wonder why the CBI, representative as it is of the large corporations is so supportive of the EU?
The views expressed in this article are that of the author and do not necessarily reflect the views of Conservatives for Liberty