I Agree With What Sajid Javid Used to Say About the EU

John Longworth, Chair of the Vote Leave Business Council said:

‘I agree with what Sajid Javid used to say about the EU – before he changed his mind for reasons we can only guess at. EU rules damage all British businesses, and smaller businesses in particular – and hold us back from trading freely with the rest of the world.

‘These Government figures are extremely questionable. The reality is that only 6% of British firms export to the EU, but 100% are caught up in red tape and costs from Brussels. If we Vote Leave and take back control of our economy, our businesses will thrive.

‘I hope that Sajid Javid’s priority is not his political career – rather than helping British businesses.’

• Latter day pro-Brussels campaigner Sajid Javid used to say that the EU damaged the British economy.

• The claim that 1.2 million SMEs export to the EU or are in the supply chain of businesses which do export to the EU is based on dubious assumptions and false statistics.

• Their main calculation is based on an extrapolation – they simply assert that 60% of businesses (those not registered) will act in a similar way to the other 40% (those that are registered).

Latter day pro-Brussels campaigner Sajid Javid used to say that the EU damaged the British economy.

Today, Sajid Javid claims that: ‘Britain’s small businesses are stronger, safer and better off in Europe. If we leave the EU, small firms are on the front line and that’s a gamble with people’s livelihoods I’m not willing to take. Small businesses are the backbone of our economy. Let’s not break that backbone with a leap into the dark.’

This is in stark contrast to his previous claims from just a few weeks ago: ‘As I’ve said before, a vote to leave the EU is not something I’m afraid of. I’d embrace the opportunities such a move would create and I have no doubt that, after leaving, Britain would be able to secure trade agreements not just with the EU, but with many others too’.

In 2013, Javid said that: ‘If the British people decide the decision is they want to leave the European Union, then that isn’t something I’d be afraid of. I’d embrace the opportunities that would create‘.

In November 2015, he said: ‘Currently costs of EU outweigh benefits. Unless we get major reform, nothing’s off the table’. Nonetheless, Javid today backs the pro-EU campaign despite the Prime Minister’s failure to achieve reform.

Last year, Javid claimed that: ‘The likely effect of many of Brussels’ current proposals will be to damage the UK’s prospects for growth.” That was John, speaking in 2011. “We don’t want a situation where smaller firms are saddled with poorly thought-out EU regulations which impede their ability to grow.” So said Katja in 2013. “The European Parliament’s decision … is bad for business … it will make it harder for firms to grow and export across Europe”. That was Sean McGuire, your man in Brussels, in a statement made 4 years ago. These are all valid complaints, all concerns I share. They’re exactly the kind of points the CBI should be making to defend the interests of its members’.

He also claimed that: ‘We must be unafraid to say that we could walk away if Brussels refuses to compromise‘.

The claim that 1.2 million SMEs export to the EU or are in the supply chain of businesses which do export to the EU is based on dubious assumptions and false statistics.

This claim is based on tenuous research from the Department for Business, Innovation and Skills.

The note uses data which excludes 60% of British companies. It does this by wrongly extrapolating data from the ONS Annual Business Survey (ABS) to unregistered businesses. The note states that: ‘unregistered businesses they are assumed to behave in the same way as the smallest category of registered businesses‘. The ABS produced estimates for just 2.05 million enterprises in 2014. In 2014, there were 5.24 million businesses in the UK. This means the study has no hard evidence for 60% of British companies.

BSE is therefore being extremely misleading when they claim this data is comprehensive. In the BSE press release, the pro-EU campaign claims that the reason these estimates diverge so much from previous published estimates is because those estimates ‘exclude the very large number of the smallest businesses, including non-employers, which don’t have to register to pay VAT, and are therefore underestimates. In contrast, these new figures are drawn from the entire business population, over 5 million businesses, and are therefore a more comprehensive estimate’. This is false, since the BIS data simply assumes unregistered businesses behave as registered businesses do.

The note inaccurately claims that HMRC data show that 82% of SME exporters export to the EU and 78% of exporters export to the EU. This claim is said to derive from data published by HMRC in November 2015. It is important to note that, once again, ‘These estimates do not cover all businesses. They do not cover… unregistered businesses‘. The data show that 110,807 (59.9%) businesses exported to the EU, and 74,077 (40.1%) businesses exported outside the EU. The data also show that 106,596 (62.9%) SMEs exported to the EU and 62,845 (37.1%) SMEs exported to the rest of the world.

The note itself accepts its figures are ‘indicative estimates‘. BIS admits that: ‘this paper brings together data from a variety of sources many of which use populations and definitions that do not entirely align, requiring certain assumptions to be used. Therefore the results should be considered indicative estimates’.

The pro-EU Britain Stronger in Europe (BSE) campaign is now relying on estimates which contradict previous figures published by the BSE campaign.

BSE claims on its website that: ‘200,000 UK businesses trade with the EU’.

This amounts to just 3.7% of the UK’s 5.39 million businesses and includes those businesses which import from the EU as well as export to countries in the EU

Nonetheless, the campaign today cites Government estimates that ‘8% of UK SMEs export to the EU’. This amounts to 430,000 SMEs, over double the figure cited by BSE.

The publication of the research relied on today is an attempt to circumvent purdah by the Government.

The Business Secretary today relies on research that was sneaked onto the Government website on 23 May.

The Government’s intention was clearly to use this material exclusively during the last twenty eight days of the campaign: hence BSE refer to the Business Secretary using ‘new figures’.

This is an attempt to circumvent statutory purdah rules which prevent the Government publishing material during the final twenty days of the campaign which relates to the referendum.