November 2022, Virtual
21 November 2022, Hilton London Metropole
Despite its many faults, the UK’s union with Europe is worth saving
My firm impression from talking to business travel professionals is they believe overwhelmingly the UK should stay inside the European Union (EU). I agree with them. Like most business travel folk, I work with people in other EU countries every day. The issues we handle are pan-European, rarely UK-only. In my working life I no longer consider myself a Brit; I think of myself as a European. And I like it that way – I feel not only my business but also my intellectual, cultural and social lives are all far richer for daily exchanges with friends and colleagues beyond our own small island.
And look what business travel has achieved in a single European bloc: deregulated air routes and fares; an Open Skies agreement with the US and others; curbs on mobile roaming charges; some harmonisation of air traffic control; protections for traveller data; restrictions on biased fare displays by global distribution systems. What has the EU ever done for us? Quite a lot, actually.
However, I have certainly seen enough of Eurocrats at work to know they can make a right pig’s ear of things at times. Given where my sympathies lie, I should probably shut up now, but here’s a bit more ammunition for all you ‘Brexiteers’ out there.
Let us consider the EU Interchange Fee Regulation, effective December 2015, which I write about in the Corporate Cards Supplement enclosed with this month’s issue. The main purpose of the regulation is to cap the amount card issuers charge merchants’ ‘acquiring’ banks at 0.3 per cent for credit cards and 0.2 per cent for debit cards.
To say the regulation’s path to enactment was tortuous is like saying Siberia is a touch nippy in winter. It was always intended that commercial cards should be excluded from the regulation because they cost issuers more to service (the expense of offering management information,for example). However, in February 2014, the European Parliament stunned everyone by voting to remove this exemption. It emerged the result was a cock-up. The whips’ office of one of the main voting blocs had instructed its MEPs to vote in a particular way it thought was exempting commercial cards. In fact, the complicated wording led to them accidentally voting en masse the other way.
SIN OF OMISSION
Several months of engagement with the European Commission and member states followed, and in December 2014 everyone tried again. This time, the exemption for commercial cards was reinstated. Trebles all round... except when card companies looked at the small print, they found that at the 11th hour, two words had been deleted from the final text.
The upshot of removing those two words (“or indirectly”, should you be interested) is that if your company uses individual pay corporate cards, where cardholders pay the card company and then reclaim expenses from the employer, you are not exempted.
I am told this change was made because most Eurocrats have individual pay cards – and the Commission saw too much funny stuff going on, such as using business cards for personal expenses, under this arrangement.
MAKING THE LAW
It wouldn’t be the first time I have seen Brussels mould laws in its own image. I broke the story some years ago that the European Commission was going to launch the air passenger rights regulation now known as EU261, which makes airlines compensate customers for delayed flights. I was interviewing the late EC energy and transport commissioner, Loyola de Palacio, when she dropped this bombshell, and she made it quite clear she was introducing the fines because she and her Spanish cabinet were fed up with frequent delays on their weekly shuttles between Brussels and Madrid.
Such episodes often lead to unintended consequences, but I still believe checks and balances mean Europe usually gets the key issues right in the end. Airlines are more careful now about flying passengers to their destinations on time. Equally, it makes sense to limit the cut that increasingly automated card companies earn from trillions of transactions every year.
Brussels is currently poking its nose into other issues, ranging from Lufthansa’s Distribution Cost Charge to submission of air spend data to third parties to achieve negotiated deals. Travel managers may soon have more cause to thank the EU.