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Trading Relationships with Europe

Volume 594: debated on Tuesday 10 March 2015

Motion made, and Question proposed, That this House do now adjourn.—(Harriett Baldwin.)

Across each generation during the long march of our country’s history, we the British people have always had to choose how we engage with the world. In particular, we have had to decide, century by century, how and on what terms we engage with our nearest neighbours in Europe. This generation is no exception.

I acknowledge the current strength of anti-European sentiment in the country and I believe passionately that there is no way forward for Europe other than through reform. I have always insisted on reform of the Commission and its bureaucracy, the Parliament and its accountability, and the flawed economic model of the euro, which I recommended that we should refuse to join, just as we should refuse to Europeanise everything—we should certainly not Europeanise our armed forces, as was recently suggested by my old friend President Juncker.

I asked for this debate not just because we must never allow sections of our country to indulge in the delusion that we can discount the 3 million jobs, 200,000 British companies, £200 billion of annual exports and £450 billion of inward investment that are linked to our trade with the continent, but because we must resist defining every part of our relationship with the continent in confrontational terms that pit Britain against Europe and that wrongly make the issue Britain versus Europe, asking, “Are you for Britain or are you against Britain?”, as if to be patriotic one must reject Europe in favour of Britain.

Up against the view, which I see is represented by some Conservative Members, that sees Britain as wholly separate, defiantly independent of others and standing to gain strength from a European exit, there is another strongly patriotic view, which I believe in passionately, that affirms that Britain is not the Britain we know unless we are outward-looking, unless we are engaged with the continent and unless British values—tolerance, liberty, fairness, social responsibility—play a leading role in shaping Europe and helping Europe to lead in the world.

Let me state three maxims that sum up what I believe is the patriotic view of Britain’s future. The first is the belief that:

“Our links to the rest of Europe, the continent of Europe, have been the dominant factor in our history.”

The second is a desire that we should

“let Europe be the family of nations…doing more together”,

a Europe that is more united, with a greater sense of purpose. The third is to have

“a Europe which plays its full part in the wider world, which looks outward not inward”.

I know that many Conservative Members may find some of those statements challenging or difficult, but they are exactly the statements that Lady Thatcher set out in her seminal Bruges speech in the late 1980s.

Does the right hon. Gentleman agree that many Conservative Members could agree with everything he has said so far, and also recognise that the opportunity in the renegotiation with Europe is to improve Europe for the whole of Europe, not just for Britain, so that this great continent goes forward progressively?

My view is that the hon. Gentleman does not speak for many Conservative Members, some of whom are present, and he should accept that Britain is linked geographically, historically, economically and culturally, as set out in the Bruges speech, to the rest of the continent. We cannot meet and master the challenges of the future for a country like ours unless we accept that co-operation was always desirable and advisable. Now, in the ever-more interdependent and integrated world we live in, that is even more essential and imperative, not as a surrendering of the British national interest, but as the best way to realise it in the modern world.

Cross-border trade used to be one fifth of the world’s economic activity and it may soon rise to being one half of it—evidence that we can be an island geographically but we can never again be an island economically or geopolitically. Like all Europe, Britain is engaged in the same fiercely competitive struggle for global markets, not just with America but now with Asia, which will soon be what Europe once was—half of the global economy.

Just as the US, the biggest economy in the world, needs its economic union, the North American Free Trade Agreement, and the rising Asian nations need to be part of the Association of Southeast Asian Nations, how much stronger is Britain, which, at her peak, captured nearly 20% of the world’s economic activity but now has only 2.5%? How much stronger will we be in future when competing and negotiating with China, India and the rest of the world to secure the best deals in trade, address pollution, deliver financial stability and set the rules for tax, patents, action on money laundering and corruption, and to protect our basic security, most recently against Russian aggression, as part of Europe?

If we look further ahead, how much stronger will we be in exploiting the economic and employment benefits of modern science, from the human genome to the semantic web to space—projects too big for one country alone—if we, the Britain of 60 million people, have alongside and around us the strength of our neighbours, a Europe of 500 million people? If anyone is in any doubt about the wisdom of co-operation with our nearest neighbours, they should think of how young people today see the world as interconnected and think nothing of linking up and communicating with friends across Europe and the world.

Whether it was our indispensible role in the defeat of Napoleon, the containment of Germany, the defeat of fascism, the resolution of the cold war, or more recently the response to the global recession, Britain is not truly Britain if we are anything other than engaged. Looking at our history, there was never for us, I believe, any long period of splendid isolation, tempting as retreat may sometimes appear. It is never the British way to be anything but in the vanguard in Europe at the continent’s decisive moments. In doing so, we help make Europe the biggest instrument for peace that the world has ever seen, as vital to ensuring stability now against Russian aggression in the east as it was against Nazism at the heart of Europe.

There is not one single shred of evidence that our engagement with Europe has made us any less British, any less true to ourselves, and any less patriotic. What sort of message will the British people send to the world if we, Britain, the most open, outward-looking, seafaring and trading country the world has ever seen, gives up on centuries of ever-growing co-operation with our nearest neighbours, casts aside the London-Paris-Berlin axis that we have painstakingly built up over decades, and surrenders our rightful influence over future events on the continent, even though it is directly on our doorstep?

What message do we send if, in a betrayal of our history and of our future, the Britain that did more than any single nation to spread liberty across Europe and stood resolutely for democracy, the Britain that helped take on fascism, communism, totalitarianism, anti-Semitism, and is now working with others to defeat extreme Islamic fundamentalism, simply walks away from and abandons our historic role of standing with Europe against ideologies that threaten to deny opportunity and spread prejudice, discrimination and intolerance around the world?

The real challenge is to convert a far too inward-looking, self-obsessed Europe not into some federal superstate—all the European nations that I have visited are proudly independent, with their own traditions—but into an outward-looking, globally oriented Europe with a reach and influence spanning every hemisphere. What message do we send if, by abandoning not only our history of engagement but our history of being at the forefront of Europe, we give up on the opportunities and obligations of a central leadership role in shaping the next stage of our continent’s destiny?

This is the fundamental truth about Britain in Europe. Given our history, the question for Britain can never just be whether we are in Europe; it has to be whether we lead in Europe. Our destiny can never be to be some kind of bit-part player on someone else’s stage or a bystander hectoring from the wings. We must at all times be setting the agenda, bringing people together and championing change. Indeed, Britain makes more sense to the British people, and will enjoy more popular support, if we are more than just part of Europe and we are at its heart, leading from the front and charting the way forward.

The way to reconcile what has too often seemed irreconcilable—in Hugo Young’s famous words, the British past we cannot forget and the British future we cannot avoid—is to see our leadership in Europe not as an abandonment of our patriotism but as the truest modern expression of it.

I have given way once, and I have to get through this.

There is no doubt that millions of our fellow citizens now feel more insecure than ever because of the bewildering pace and destructiveness of what seems to them to be an out-of-control and uncontrollable global economy. They are looking for someone or something to shelter, insulate, protect and cushion them from these bewildering and often alien forces that are on occasion taking their livelihoods from them. They are looking for someone to hold responsible, and they are now being urged to turn what started off as an economic protest, rather than cultural prejudice, into a culture war whose main weapon is to blame foreigners, target immigrants and engender a siege mentality against the outsider.

In this culture war, arid statistics on exports and investment from well-meaning, London establishment-led, corporate-financed campaigns by the great and the good, who will be accused of being elites who do not understand Britain, will appear to many to be no match for the cultural charge from the right that Britain has ceased to be the Britain that they know and love. We cannot win in a culture war which asserts that Britain is no longer a country we recognise just with factsheets about the percentage rises and falls in business investment. Technical arguments are not enough to trump cultural grievances. When we are fighting back in a culture war that others have started, we must take on one strongly felt set of beliefs with another strongly felt set of beliefs.

If we are to win hearts as well as minds, our core message must be bigger than the business case and bigger even than the principled case for engagement in Europe. We must tell the British people not just about our patriotism and our historic role at the hinges of history but about how, through putting our enduring progressive British values to work, we will lead in, and shape the future of, this continent. The Britain that has consistently championed toleration, liberty and social responsibility before any other country in Europe—and that, as far back as the days of Adam Smith, invented the idea of civic society and mutual obligation, influencing Europe massively in the process—is ready once again to lead a progressive movement mobilising Europe towards the greatest challenge we face: to make the global economy and global change work for people by tackling their injustices, their inequities and their unfairnesses, and by giving globalisation what it most needs now—a human face.

Let no one tell us that the Britain that changed the world in every century in modern times is today some powerless, hapless victim unable to wield power in Europe for good. And let no sceptic tell us that we need to be an impotent bystander when we are, by our history, our values and our temperament, the country that is best equipped to lead Europe forward.

So let us deal confidently with the argument that the European single market somehow hobbles our trade with the rest of the world and undermines London. Let us show that London’s unique role, essentially one of bringing together financial services for the continent, could not now so easily be performed outside the European Union. Let us in championing European reform avoid another trap of representing pro-Europeans as the status quo and anti-Europeans as change. Let us be honest with the British people that those who say that if we exit we can retain the benefits and ditch the burdens have not thought through the alternatives, including the folly of the Switzerland or Norwegian alternatives to membership— even the Norwegians warn against the Norwegian option—which leave us subject to European rules but with no vote in shaping them. To rephrase the aphorism, we would be out of Europe but still run by Europe.

Let me end by saying that positioning ourselves half in, half out, as a Britain that is somehow semi-detached and disengaged, the Britain of the empty chair even when we are in the room, is already making us weaker than we have been before. We have been irrelevant on the Greek crisis, a fringe player on climate change and a mere spectator in the debate that could have shaped a European growth policy. We are marginal on Ukraine, with Ministers looking faintly ludicrous as, in one and the same breath, they say, “Russia must be confronted with a more united Europe,” and, “By the way, we are thinking of leaving Europe.”

In a few years’ time, as the German population falls, Britain can once again become Europe’s biggest and most powerful economy. It would be a terrible irony if, just at the moment we are in an even stronger position to lead in this more interdependent world, Britain were to opt out, leaving Europe divided, Russia empowered, the United States bypassing us for a French-German axis and Scotland threatening to leave a non-European UK. An England that glories in isolation is not the England that I know and love.

Instead we must stand up for a Britain leading Europe, not leaving Europe, and for a Britain that has always seen the English channel not as a moat but as a highway and the North sea not as a defence against engagement in the world but as the route to it. In doing so, we have shaped the destiny of Europe and the world and it is only those defeatists who claim to be championing a patriotic future but who have, in fact, given up on British leadership in Europe who will say that we cannot make leading rather than leaving Europe our mission again.

I stand for Britain in Europe because just as I came into this House believing in Britain, I leave it believing in a Britain that can lead in Europe. I will never stop believing in that vision of Britain’s future.

It falls to me to respond for the Government on this historic occasion of what might be the last speech in the House of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). Before I respond in detail to his case, it is only right that the House acknowledges that moment. Since the right hon. Gentleman entered the House in 1983, he has been a warrior for social justice, a master at the Dispatch Box, a Chancellor who dominated both the Treasury and this House, and a Prime Minister who never gave less than his all in the service of his nation.

The right hon. Gentleman has been a brilliant debater, besting Nigel Lawson in his prime and humbling a long series of opponents throughout his career. This House exists to ensure that the great issues of our time are debated, that progress is secured and reforms are made through the vigorous exchange of views and a vote to settle matters. That is why it seems so odd for him to make the case today against vigorous debate, open argument and a vote to settle matters.

The right hon. Gentleman was a champion of the referendum to give Scotland its Parliament, and he spoke movingly and from the heart during the referendum to keep Scotland in the United Kingdom, but he stands steadfast against giving the people of the United Kingdom a debate and a vote on our membership of the European Union. I agree vigorously with him that such votes are won with a fight for hearts and not just heads and bank accounts, but for his party to deny the British people a say in a debate of such central importance to this country is surely to make exactly that mistake. We need that debate and that vote, because no one can be happy with the status quo. We want the whole of Europe to work better, and we want to resolve once and for all our relationship with it.

We must see a more dynamic, entrepreneurial and innovative Europe, with more jobs, investment and growth. The right hon. Gentleman made that case and it is something of an irony that now, towards the end of his long and distinguished time in this House, he makes the impassioned plea to stay in Europe when he was first elected in 1983 on a party platform to leave it. In this age of global competition—what the right hon. Gentleman coined as the new global economy—we need reform of Europe in order to compete with an increasingly open, connected and competitive world.

These past five years have seen Britain transformed from a country lacking in confidence that suffered the greatest banking collapse in history and in which youth unemployment and our deficit were rising even before the great recession. That was the Britain we found five years ago and it has been the task of this Government to reverse that inheritance with all our energy and all our means and with difficult reforms, which we stuck to even while others told us to turn back.

Now we can see a record number in work—including 6,500 more in work in the right hon. Gentleman’s constituency, where unemployment is also down by a third—as well as 2 million more apprenticeships, 750,000 more businesses, rising living standards and the fastest growth in the G7. We on the Government Benches want to see the whole of Europe reformed for the better prospects and opportunities of people across that continent.

My right hon. Friend is making a series of extremely valid points about our role in Europe today. Does he not think it symbolic that, just at the moment when this country will have created more jobs than all the rest of Europe put together, the right hon. Member for Kirkcaldy and Cowdenbeath believes that, somehow, ours is the party that advocates leaving Europe and is no longer at the level of competing with Europe? Surely we are in a position to lead it forward into a much better era of growth.

Our country has been and is being turned around, but it will prosper whatever the institutional arrangements of our relationship with Europe. We are a brilliant country with the most enterprising and innovative people in the world, and it ill behoves anyone, least of all the right hon. Member for Kirkcaldy and Cowdenbeath, to compare Britain’s future to a brutal dictatorship such as North Korea. For him to compare Britain to North Korea shows a perverted sense of reality. Indeed, he loses heads and hearts when he makes such a comparison

There is nothing God-given about the prosperity of our nation or our continent, but with the right policies there is nothing to stop us becoming the most successful major nation upon earth. That cannot be done, however, without reform.

Those who argue against a referendum make the following case. They speak of the risk to investment, which the right hon. Gentleman has mentioned. However, since my right hon. Friend the Prime Minister announced our policy of a referendum before the end of 2017, investment to the UK has increased by 14%. We have attracted the most inward investment since records began in the 1980s and business investment has risen by 6.8%.

They speak of the dangers of uncertainty, but this referendum does not bring uncertainty. That uncertainty already exists, because we live in a democracy with an unhappy relationship between the British people and the European institutions. Many of us have never even had the chance to vote on the question. The uncertainty is there because in the past politicians repeatedly signed over yet more powers to the EU and repeatedly refused to ask the British people for their consent.

Just as we were left in 2010 on the verge of bankruptcy, so our credit with the British people on the issue of Europe had run out; and just as we on this side of the House are turning around our nation’s economy, so we plan by this renegotiation and referendum to restore trust in our relationship with Europe by putting the final decision to the British public, whom we are here to serve. The referendum does not create uncertainty; it will resolve it and give the British people the say that they have been for so long denied.

The right hon. Gentleman speaks of jobs, but there are record numbers of jobs, and unemployment has been coming down at a record pace. He speaks of British influence in Europe, but our influence is strengthened, not weakened, by taking a clear-eyed view of the British national interest. I ask this: where was the influence in Europe in the past when red lines were printed in such faint ink that they were stepped over again and again, when rebates were surrendered and powers handed over with so little in return?

The Minister speaks of red lines. Is he in a position to outline tonight the Government’s red lines in the European renegotiation?

I will tell the hon. Gentleman what we do with red lines. Shortly after his election in 2010, the current Prime Minister threatened to veto a proposal that would have damaged Britain, and our European partners were so used to those threats being made and then abandoned by previous Prime Ministers that they did not believe he was serious. But he was serious and he vetoed the proposal. Now when Britain speaks about the need for reform, we are listened to. That is leadership in Europe: no longer on the hook for eurozone bailouts; no longer increasing the regulatory burden but reducing it; and the European budget no longer rising but being cut. That is our policy.

Let me be clear about our policy in the next Parliament: it is not the narrow vision that sees Europe as the centre of the universe at a time when we export more to the rest of the world than to the EU for the first time in my lifetime, but a patriotic, outward-looking vision of reform and a referendum.

My right hon. Friend will note that this country has turned its back on the policies left behind by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), just as he has now turned his back on a Minister answering a debate that he himself brought to the House, which is no way to behave—and it was no way to leave the country when he left office.

I am grateful to my hon. Friend. It makes clear, does it not, the choice for the British people for the first time in a generation. We on the Government side reject the pessimism that says we can have influence in Europe only by subordinating our goals. Instead, we have influence through the steadfast pursuit of our national interest. We must drive those reforms that are in Britain’s national interest, and in the interests of every member state; a long-term plan for Europe, with free enterprise at its heart, so that the whole continent can rise, compete and thrive in the 21st century. We will stand up for businesses on red tape, for exporters on free trade and for industry on the free movement of capital, and we will restore fairness to the free movement of people, for work rather than benefits. Before the end of 2017 we will put that reformed Europe to the British people in a referendum so that they may decide our future. That is the policy our country needs: reform, vigorous debate and then a vote to settle the matter, putting our trust in the decision of the British people.

As the right hon. Gentleman bows out from this House, and with the best wishes of the House to him and his family, it is that better future that we must surely follow the path to, so that Britain once again can be among the most prosperous nations upon earth.

Question put and agreed to.

House adjourned.