Europe, be careful what you wish for Mr Cameron
With employment in Europe being the way it is, there are no clear-cut solutions, and it is important for Cameron to consider his position on the matter very carefully, explains Rowan Dartington Signature’s, Guy Stephens.
David Cameron has wasted no time after the election in lobbying his European counterparts with regard to EU reform. He needed to shift the debate from one regarding potential exit, as used by the Labour party as a scare tactic, to one where he has the backing of UK industry to remove red tape and cost.
There have been several high profile declarations from business leaders giving mixed messages and a very partisan view based on the effect on their particular businesses. JCB were not concerned as they have limited exports to Europe compared to those nations with big infrastructure spending projects, such as India, and a recovery in their markets in the UK and US. However, there are also mixed messages from the City of London, with some saying that our membership of the EU is crucial, and others being more agnostic and citing the level of regulation as a more influential factor.
It is important to consider the reasons why a business chooses to locate itself in the UK and whether the often trumpeted benefits of being part of a European trading bloc really do exist. The various mixed partisan comments so far demonstrate it is highly specific and dependent on the type of business, its customers and its markets. One major influence is the cost of employment in the country of location and the annual Global 50 Remuneration Planning Report from Towers Watson is likely to grace the desk of many Global CEOs when considering this.
In 2013, the UK had the lowest costs per employee anywhere in Europe, with France having the highest. This was a measure of the amount that employers are required to contribute in taxes and mandatory pension contributions. This was also the same when considering entry-level professionals with additional employer costs amounting to 11.2% of salary, whilst in France the figure was a staggering 43.5%. Not much has changed since.