Andrew Duff MEP

Why Essex Business should back the Constitution

European business has given the new Constitution a less than wholehearted welcome. At one level there are companies whose affiliations are less European than American, and whose reactions to the striking new pace of political integration in Europe reflects that of US neo-conservatives who imagine that the Convention which drew up the Constitution (and all who sailed in her) was a clever anti-American machination. The CBI and, even worse, the Federation of Small Businesses have lunged towards such a negative position.

More sensibly, certain trade associations and employer organisations including the Engineering Employers Federation numbering Ford of Brentwood among their members have tried to keep tabs on and influence the constituent process. Others have found the whole exercise incomprehensible and have taken refuge in the belief that, in contrast to the single currency, constitutional questions do not, in any case, matter much to business.

As governments and parliaments across the Union now embark upon the tricky campaign to ratify the Constitution and to bring it into force, it is high time that European business sat up, took notice and engaged itself in the wide public debate that needs to take place if the Constitution is to attain the legitimacy it deserves.

The key question that needs answering by advocates of the Constitution is what it does to improve the quality, and perhaps reduce the quantity, of regulation affecting enterprise and commerce. Much attention - perhaps too much? has been paid to the enhanced role of national parliaments in verifying the correct application of the principle of subsidiarity. However, whereas the Constitution merely permits the intervention of national parliaments in the early stages of the EU legislative process, it lays down new specific obligations on the role and function of the European Commission. In this respect, the Constitution helps greatly to improve the EU's regulatory environment.

Important for the competitiveness of the East of England is that, under the Constitution, the Commission will have to take into account the regional and local dimension when it drafts new laws. It will have to assess the financial, regulatory and environmental impact of its proposals, and, not least, it will have to explain and justify itself on all these grounds more fully and systematically than it does at present. The Commission's success in carrying out these obligations is a very much more important factor in ensuring compliance with the principles of subsidiarity and proportionality than is the role of national parliaments.

The Constitution will also help business and industry by making the system of government more rational and less opaque. Notably, there is a new category of secondary legislation called the 'delegated regulation' which enables the Council and Parliament to leave to the Commission elements of legislation that do not comprise essential political choices. Building on the EU's experience in the area of financial services, both branches of the legislature will have to monitor the Commission's use of the delegated regulation and, if necessary, call back the delegated law. This leaves ministers and MEPs to concentrate on the politics of law making, relieving them of the duty to become engrossed in minute technical details.

Although the Constitution does not go as far as many of us would like in separating out the executive from the legislature, one important step forward is the reform of the EU's machinery for managing the implementation by member states of EU law will be set out in a new law, jointly agreed by the Council and Parliament.

The Constitution promises better legal certainty and stronger compliance. In a modest, but for business significant, widening of the scope of judicial review, companies will be able to seek redress in the EU Courts against regulations which directly and adversely concern them.

The position of the euro is maintained as the single currency for the whole Union once the necessary political and economic convergence criteria have been met. Britain's now declining inward investment will surely bounce back once the UK takes the decision to adopt the Constitution.

These and other constitutional reforms, such as the extension of democratic voting in the Council of Ministers, are of huge potential importance for Europe's business. Making a success of the Constitution will improve Europe's competitiveness. Business should come out fighting for the Constitution.

Andrew Duff is the Liberal Democrat MEP for the East of England and is the spokesman on constitutional affairs for the Alliance of Liberals and Democrats for Europe. He served on the Convention which drafted the Constitution.