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European union and business (politictal factors) (EU activities impacting…
European union and business (politictal factors)
UK trade
UK joined the EU in 1973
For many years the UK has been the EU largest trading partners
Contributes more than it recieves
Potential gains to UK from enlargement
Exploitation of economies of scale
Foreign investment
Export potential
More diverse and flexible European labour market
Downsides to UK from enlargement
New members may have to meet EU stricter environmental standards
Social concerns from increased labour migration
Extra budgetary costs for the EU
Single currency
Britain opted out of single currency
UK still affected by the euro
EU activities impacting business
Competiton
Agriculture
Environment
Fishing
Employment
Competition policy
Any business with more than 25% of market share is a monopoly. If proposed merger or takeover were to happen it would result in a monopoly
Some businesses collude through a joint and secret agreement
UK policy on monopoly's is allowed to exist but to prevent the use of restrictive practices that operate against public interest
Privatisation
Passing ownership from public to private
Happened in the UK in the 80s and 90s
Arguments for- private sector businesses are subject to market forces and need to operate efficiently and a privately owned business needs to be profitable
Argument against- sold too cheaply and had to cap price rises
Deregulation leads to an increase in supply
Labour market
Also removed some legislation that affected employment of workers. For example worker hours agreement must be met but can ask employees to work additional hours
Other intervention such as national curriculum and trade unions has an impact of the number of days lost
Government try to improve skills and quality of labour force and may take a long time to have an impact
Minimum wage
Pros- helps families, employee incentive and helps business budgeting
Cons- poorest don't benefit, high unemployment and could lead to high poverty
Guaranteed a minimum wage for low paid workers
The current minimum wage rates are
18-21 £5.90
Under 18 £4.20
21-24 £7.38
Apprentice £3.70
25+ £7.83 an hour