The UK government has not done enough to prevent control of parts of the economy being handed over to the EU, the Institute of Directors (IoD) has claimed.
Although British ministers secured their ‘red lines’ by keeping a veto on matters such as tax, treaty change and employment law, the IoD said that concessions on other areas will badly affect UK businesses.
Business groups have warned that handing greater power to Brussels will increase the amount of red tape that small firms have to deal with.
It’s estimated that around a third of regulations currently binding British small businesses originate from the EU.
The IoD said it was concerned that the EU has been given the power to set energy policy, a move which could see many small firms penalised for not being environmentally-friendly.
George Cox, director general of the IoD, said that the government’s achievement in securing its red lines is very welcome, but is does not go far enough.
“Although Britain keeps the veto over matter such as tax, treaty change and defence, the government has had to make concessions on issues such as the new EU power over energy.
“The Charter of Fundamental Rights leaves many crucial matters open for decision at a later date by the courts. Far from clarifying employment rights, this leaves businesses facing worrying uncertainty,” he said.
The Confederation of British Industry (CBI) also warned the government not to cede further control to Brussels, for the sake of UK businesses.
Digby Jones, director-general of the CBI, praised the prime minister for keeping the veto over matters such as tax and employment law.
“There are still some worries as we all fight to maintain the UK’s competitive position. It is vital that the UK government remains in control of UK business policy,” he said.
