The Staggers

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It is time to stand up to Tory euroscepticism

Disengagement or withdrawal would be disastrous for British influence and interests.

By Emma Reynolds Published 24 July 2012 15:23

David Cameron speaks at an EU press conference. Photograph: Getty Images.

David Cameron speaks at a press conference following a European Union summit at the EU headquarters. Photograph: Getty Images.

Something fundamental has changed in the nature of the British debate about Europe over the last 15 years. The last time the Conservatives were in power the division in the party was between those, like John Major, who wanted to remain “at the heart of Europe” and those who sought to renegotiate our membership in order to repatriate large areas of policy from the EU. Today, the dividing line is between those who want to pick apart even the foundations of the single market and those demanding complete withdrawal. Damaging disengagement is the new consensus within the Conservative Party – the only disagreements are about scale and timing.

The need to restate the case for our membership of the EU has therefore never been more pressing. It has also never been more difficult. The eurozone crisis has undermined confidence in Europe’s ability to act as a force for stability and prosperity, and the instinctive and understandable reaction of many is to pull back. But the crisis has also revealed the extent of our interdependence with Europe. The idea that political disengagement will insulate us from the economic problems of our continental neighbours is pure fantasy. Our national interest lies in arguing for a reformed EU from the inside.

Globalisation has provided many opportunities for businesses and individuals alike, but it has also brought new challenges that even the largest and most powerful countries cannot solve on their own. Climate change, global economic instability, cross border crime, nuclear proliferation, terrorism and energy security all pose significant risks for our society and our way of life. Dealing with these issues requires international cooperation on an unprecedented scale.

What is needed is joint decision-making and legal enforcement of the kind pioneered by the EU given that global agreements have fallen woefully short of the mark. Compare the success of the EU in driving up environmental standards in Europe with the failure to get sufficient agreement on halting climate change at a global level. Compare the deepening of trade ties within the European single market with the more limited progress made through the World Trade Organisation.

That is why the anti-European arguments espoused by different wings of the Conservative Party deserve closer scrutiny than ever before. The extreme wing of the Conservative Party advocates complete withdrawal from EU membership and the negotiation of separate bilateral trading relationship that would provide access to European markets. The two examples most commonly cited are Norway and Switzerland. Both countries certainly have strong economic ties to the rest of Europe, but neither enjoys anything like the freedom from EU laws and regulations that anti-Europeans want us to believe.

Norway belongs to the European Economic Area, which gives non-EU countries access to the single market. But in exchange for that access, Norway has to adhere to the rules of the single market, including those relating to social and employment policy. The only substantive difference is that its government has no say over how those rules are formed. It even has to contribute to the EU budget.

Switzerland has a little more flexibility with its mix and match approach defined through a series of bilateral agreements. But the essential principle is exactly the same - the more access it wants to the single market, the more EU legislation it has to transpose without having any say over its content. For both countries the "democratic deficit" and loss of influence are a result of their non-membership.

The supposedly more moderate and modern wing of the Conservative Party would like to reduce our membership of the EU to a purely trade-based relationship. In this vein, Liam Fox recently argued for a return to the Common Market arrangement the UK first joined in 1973. Taken literally, this would mean unscrambling the entire single market programme and allowing our competitors to re-impose non-tariff barriers against us.

More broadly, there are great dangers in unpicking the largest internal market in the world. If we asserted as a matter of principle that countries only have to stick to the rules they like, some might choose to opt-out of limitations on state aids, the requirement to offer public contracts to competitive tender or any among thousands of other market-opening rules required by the EU. The single market would start to unravel and British exporters would suffer.

The UK is a large member state and should be a strong proponent for an open and reformed EU. That can only be achieved by being at the heart of the Europe, not stranded on the sidelines. Even against the backdrop of the eurozone crisis, it is vital that pragmatic, pro-reform, pro-Europeans now make their voices heard and underline the risks of damaging disengagement or withdrawal that would undermine British influence and interests.

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25 comments

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Tue, 2012-07-31 20:32 — Sofi (not verified)

Excellent article, at last some sense!!

Thu, 2012-07-26 06:32 — Stuart Eels (not verified)

Why Thank you Tedmundo for asking me for my vision of Europe, one that is free from meddling bureaucrats, who don't really know what they are doing but think they do and we will swallow the medicine even if it kills us!

My vision is of free trade area of democratic nations trading with the rest of the World and realising that the World has advanced rapidly since 1956. A Greece that is not in a worse recession than the 1930s. A Europe where most of the population work rather than riot! A Europe where tens of thousands of unelected officials don't try to govern our very thoughts. A Europe where the dreaded Euro is just a nightmare.

I realise this will never chime with your Europe but it appears to with most of the others on this blog

Wed, 2012-07-25 18:05 — Tedmundo (not verified)

Thanks Stuart. Another constructive contribution.

But seriously, what is your vision for Britian and Europe that deals with all the points I raised in my 'rant'? Do you have one?

Wed, 2012-07-25 15:33 — Stuart Eels (not verified)

Do you feel better now Tedmundo? ironic that as you rant two German Econmists break cover and say they don't expect the Euro to be around in 2014, go and lay down.

Wed, 2012-07-25 14:08 — Tedmundo (not verified)

Well done Emma! I for one completely agree.

The thought of our country's future place in the world being determined by the self-deluded, Spitfire pyjama-wearing hard right of the Tory party/ UKIP-ers fills me with complete and utter dread!

What I've never quite understood about the hard Eurosceptics is their argument that the European economy is in relative decline and so we should therefore be rid of it - SO IS THE UK'S!!! GET OVER IT!!!!!!!! It is true that the EU economy will become a smaller share of the global economy in the future, but it is currently the largest single market in the world and will remain in the top 3 global markets for decades. The British economy, by contrast, is destined to slip lower and lower and pretty soon out of the top 10 rankings.

Do we really think that the US, Russia, China, Brazil or India will give a monkey's cuss about the defiantly independent views and interests of a single small/ medium-sized economy in rapid relative decline in the future? Or will they be more likely to listen to the collective views of 500 million Western citizens and consumers. Hmmm, tough one.

What you Eurosceptics don't realise is that the US, which you repeatedly claim to be the UK's no.1 ally now and forever amen, thinks that a UK withdrawal out of the EU would be complete and utter madness, and that it will turn us into an irrelevant pip-squeak of a power, ignored on the continent, in Wahsington and beyond. Obama more or less said as much when he met Cameron at the last G20 meeting.

What else can I say that will really annoy you people. Err, Hague loves going to Foreign Affairs Council meetings because Britain is the leading voice there and shapes the foreign policy of the entire EU - i.e. it maginifies our influence and power in the world not squashes it. Just look at EU positions on Iran, Syria, Burma etc... which show a striking resemblance to UK positions prior to the Council meetings that agreed them don't you think

Oh yes, and Cameron says he will never campaign for the UK to leave the EU: i.e. if he does get a majority at the next election (highly doubtful on current polls), and seeks to renegotiate our membership, if that fails, he'll campaign for us to stay in anyway, Marvellous!

And the EU has free trade agreements with 48 out of 54 of the Commonwealth countries. In other words, our whole modern economic and political relationship with the Commonwealth is built on and around our EU membership (queue sharp in take of breath from the right side of the room). If we pulled out of the EU, we would lose all of the terms of those free trade agreements (and all other FTAs for that matter) and have to renegotiate new ones all over again, taking years and causing serious damage to UK trade and FDI in the process, which in turn will dilute our negotiating capital during those free trade negotiations. Well done, that's really standing up for Britain!

Why do we need to have both full access to the single market, AND influence over single market rules? Here are two City of London related examples:

(i) we've already seen attempts by some more protectionist countries to write into EU legislation rules that would require clearing houses dealing in large volume Euro trades to be physically located inside the Eurozone - the City is the heart of such trades in Euros. In other words, if these rules were agreed, substantial chunks of the City of London would need to move to Paris or Frankfurt. The fact is that the UK has resisted all of these efforts so far (but only because we have a seat at the table) and we also have ECJ court cases ongoing to comfirm that any such rules would breach the principles of non-discrimination embedded in the single market (again, something we can only do as a Member State). So if we weren't a member of the EU, we could do nothing to stop these sorts of rules from being written without us allowing UK interests and economic assets to be slowly carved up between other more protectionist European countries.

(ii) remember the Hedge Fund Directive? Sure, it wasn't a great piece of legislation to start with but by the end of it, the UK had done a pretty good job in making it workable, so much so that the Government voted in favour. But those former UK-based hedge funds that saw the first drafts and legged it to Switzerland believing they could avoid it are now finding the Swiss Govenment passing precisely the same legislation right now (plus some Swiss gold-plating to boot). Why? Because the Swiss Government has wisely noted that it can only retain full market access in financial services if they adopt EU financial services legislation, all of which they have had precisely zero influence over. A pretty good insight into what life would be like for the UK, and especially the City of London, on the edge of the EU. We may as well just blow up our Parliament and replace with a massive fax machine wired to Brussels ready to receive the next pivce of legislation that we must implement to retain full market access and on which we have had no say.

Another thing that annoys me about the absurd Eurosceptics is the point they often make about vote share. The UK has 8% of Council votes, they say, and so we are constantly outvoted on things that matter to us. Err, Germany, France and Italy also only have 8% of the votes, it's the largest vote share for the largest member states and every other member state has fewer votes. This makes us one of the most influential EU member states. And so we very rarely lose a vote in the Council. Besides, part of the unwritten agreement of the EU is that you keep negotiating until you have come to a deal that all countries support.

Finally, can we get over this completely ridiculous and dangerous idea that if we weren't in the EU, we would be sheltered from the Eurozone crisis. What utter BS! Our exposure is a simply fact of global finanaicl markets and our physical location just off the European mainland. We are arguably more exposed to the EZ crisis than any other member state. Certainly when you look at bank exposures, British banks are at the top of the list. So a collpase of the EZ would be an unmitigated disaster for the UK economy (and gloabl economy for that matter): think severe recession for many many years. Anyone who argues that it would be a good thing is advocating putting a gun to the head of the British economy and pulling the trigger, apparently to prove a point?! Err, the point that you're a moron? A point well made.

Thu, 2012-07-26 06:31 — Red Rain (not verified)

The fact of the matter is that the EU project has warped the minds of its supporters so they can't think of any other way to do things. The public has never been asked if it wants a United States of Europe yet its political apologists can think of nothing else. The prestige, the glamour the absence pay checks. They had their dreams the Euro would replace the US dollar. They saw themselves as masters of the globe. How many articles in the New Statesman have commentators said "we must do it the way they do in Europe" as though the EU were some miraculous template. Well it now has feet of clay and the sooner countries can go back to being sovereign nations the better.

Wed, 2012-07-25 13:24 — juliet (not verified)

How blissfully ignorant of history are our Ministers, MPs and their advisors? Or does ostrich-like arrogance continue to blind us to the fact that neither our GDP nor our standard of living are higher than that of our major EU partners. The UK has had nearly 40 years to influence the direction of EU policy. Tory (and other) Eurosceptics would have us believe that the UK is the only major EU state to have failed to influence EU policies throughout that period. MPs may like to be gullible but how crass a message is that to send to the world?

Wed, 2012-07-25 13:18 — MouthOfTheUmber (not verified)

I'm sceptical about the Eurozone. Basically it is a good idea, but the details need improving.
Most of the Tory Party and all UKIP are Europhobic Isolationists

Anthony (Little Englander and Proud)'s picture

Wed, 2012-07-25 14:39 — Anthony (Little Englander and Proud) (not verified)

Wow how original, you go dude !

Wed, 2012-07-25 06:58 — Red Rain (not verified)

Factory output in Germany and France is felling at the fastest rate for more than three years. Spain edges closer to disaster as the euro crisis keeps spreading and Greece is facing a 1930s-style depression. Italy is teetering at the edge of economic stagnation.
This ill conceived European political Union doesn't work never will. It's time to batten down the hatches, pull the plug and cut and run. With all the will in the world and all the wishful thinking no Nation or Nations on earth can keep pouring money down a bottomless pit: which is this ill conceived European Union. It was always a dream of the elitists but never embraced by the masses. This isn't just about a split in the Tories it also eats at the heart of Labour asked Tony Benn.

Wed, 2012-07-25 01:06 — Phil W (not verified)

"Did Barrosso pay you to write this ?"

My money's on Tony Blair.

Tue, 2012-07-24 20:02 — Indu Pendent

The Labour Party is split on Europe the same as the Tories - it is not party political. It is about people's values. By suppressing it the Labour projects itself as arogant and biggotted seeking to force its minority dinosaur views on people.

The large majrotiy of people see the value of Europe as a trading partner but dont want to be controlled by Europe - the very British question people think generally is how can we exploit them more then they exploit us. The very Labour question is what can we concede to show loyalty to the Europe project even if we are not rewarded for it in the long run.

Focusing the Europe issue on the Tories has successfully embeded deep in the Labour brand that the party is staunchly pro Europe. It will take years to rid the party of the stigma. Take for example Miliband making unabmiguously clear he would make any consession possible to be "friends" with the Europe leaders for his personal career development. We can see with hindsight just how badly wrong he got it with the Euro treaty.

Tue, 2012-07-24 19:59 — soapy (not verified)

Being sceptical about Europe is not just a phenomom of the Tory party.Many of us have decided to sign
http://www.peoplespledge.org/

to vote for a referendum,in or out,one way or the other.

I voted for a peoples' Europe not a bankers' Europe.

Tue, 2012-07-24 19:56 — rtrghr (not verified)

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Tue, 2012-07-24 19:53 — Stuart Eels (not verified)

Yes Antony, just two weeks after Jack's lad Will Straw burbling on about mobile phone benefits now this twaddle, ptiy that she posted on the same day that Standard and Poor were talking about downgrading the mighty Germany's credit rating.

It seems that most people have stopped believing anthing they try to say in favour of the EU.

I guess we are Eurosceptics now! wonderful!

Tue, 2012-07-24 19:47 — Anthony (Little Englander and Proud) (not verified)

However, Switzerland does not have the ties with the Commonwealth that the UK possesses. As pointed out by Dan Hannan, the English-speaking markets which Heath and Wilson wrote off in the early 1970s have solidly outperformed those in the EU.

Furthermore, according to the IMF, the Commonwealth is projected to enjoy annual economic growth of over 7 percent in the next five years in comparison to the Eurozone’s projected 2.7 percent growth.

This gives the UK the opportunity to capitalise on international trading and cast its net further than just its neighbours in the EU.

However, the UK is currently restricted in building its trading relationships abroad. Because of its membership to the EU, the UK cannot negotiate free-trade deals unilaterally and is obliged to follow what is best for the EU’s other member states. On the other hand, countries such as Switzerland, Norway and others that are outside the EU can conduct their own arrangements.

The result of this is that countries like Switzerland have been able to build economies where exports amount to 50 percent of GDP in comparison to the UK’s 29 percent of GDP.

It is true that because of its size the UK is one of the largest trading nations in the world. However, it is also true that the UK’s inability to act as its own advocate might allow other countries to build their links where the UK should have an inbuilt advantage.

If the UK were independent of the EU it would be free to capitalise on its relations abroad. Like Switzerland, it would also be able to negotiate a free-trade agreement with the EU whilst being free from the EU’s regulatory burden.

This move would not just negate the competitive advantage that Switzerland and countries like it have but also allow the UK to reform its Commonwealth connection and take advantage of growth for future generations.

In short: if made free from the EU, the UK would not be restricted in taking full advantage of international growth, creating jobs and future prosperity for the British people.

Being outside the European Union would not just make Britain “a sort of greater Switzerland”, it would make it better

Tue, 2012-07-24 18:53 — Anthony (Little Englander and Proud)) (not verified)

I forgot to add that i,m only curious becuse Will Straw wrote a piece a couple of weeks ago banging the E.U drum regarding mobile phone roaming charges but failed to mention that his think-tank had recently received £800,000 from the e.u..

Tue, 2012-07-24 18:29 — Anthony (Little Englander and Proud)) (not verified)

well said and a comprehensive dismantling of Emmas points., i think the writer has just been ripped a new one.

Tue, 2012-07-24 18:21 — Anthony (Little Englander and Proud)) (not verified)

Jesus christ, i have read some pages regarding the E.U but this one really takes the biscuit. Did Barrosso pay you to write this ? or is there some hidden agenda you would like to tell us about but can't., i'm just curious bacause it takes some balls to write such tripe and post it for all to see !

Tue, 2012-07-24 17:50 — Tesco Shelf Stacker (not verified)

'Something fundamental has changed in the nature of the British debate about Europe over the last 15 years.'

Yes a change brought about by political spin, lies and misdirection from a political class that seems to have lost all trust and confidence in its own people to decide for themselves what they want to do regarding membership of the EU. After years of colluding and fibbing to the public via their media chums - is it no wonder there is such widespread mistrust and growing hostility in the the UK toward not only our own political class but those political elites of the EU too - a hostility I might add that is not targeted toward the good people of Europe - but towards the remote pro-EU political classes who wish to continue with their pet EU project at any cost.

The British public fully understand the implications of leaving the EU a lot better than you think - so why not let them have their say on the matter once and for all. If you don't like the end result - then tough, your argument for remaining in the EU failed to convince the people of the UK and was rejected - its called democracy. So give us our referendum - we either cut the EU apron strings or remain tied to a dying EU project? Simples! ;-)

This 'renegotiation' stuff while still in the EU is a con-trick. While we remain part of the EU it is not possible to renegotiate anything without the approval of other European members - and that will never happen! We must leave first - then negotiate

Btw: This climate change stuff has run its course and most people now see it for what it really is - complete and utter (tax raising) baloney - so you can forget it ... nobody is buying into that 'man-made global warming' alarmism cr@p anymore.

Tue, 2012-07-24 17:32 — Boudicca (not verified)

"Dealing with these issues requires international cooperation "

Cooperation with our continental neighbours - yes. But we're not talking about cooperation, we're talking about a supra-national organisation which now effectively governs the UK in a very wide range of policy areas and which is completely unaccountable to the electorate.

The British people never agreed to outsource their Sovereignty and governance to a European Bureaucracy and Kommissariat. All we agreed to was a Common Market - 'sold' to us as a free trade zone, although it was anything but free. FCO documents from the time show that the electorate was deliberately deceived by the politicians and Establishment of the time because they knew they would not achieve a Yes vote any other way.

Following the Lisbon Treaty (which Labour said was just a tidying-up exercise) in 2014 a huge range of issues move from requiring unanimity to Qualified Majority Voting. We lose our veto and will be subject to the laws which a group made up entirely of foreign Kommissars may decide are appropriate for the EU area. THAT isn't cooperation - its a slow-motion coup d'etat.

The list is here and includes Immigration, Criminal Law, a Common Defense Policy, Social security. WHEN did the British people agree to outsource these - or any other policy areas - to the EU. The answer is NEVER.

http://en.wikipedia.org/wiki/QMV#Policy_areas

I do not want to belong to a United States of Europe, run on the lines of the Soviet Union. I do not believe this is in the interests of the British people (although I can understand that our Quisling political class and the FCO do). We have a separate history, culture and outlook to most of continential Europe - we do not belong in their corrupt little club and we should get out now.

Tue, 2012-07-24 17:32 — Boudicca (not verified)

"Dealing with these issues requires international cooperation "

http://en.wikipedia.org/wiki/QMV#Policy_areas

Tue, 2012-07-24 17:26 — Will Gilpin (not verified)

What utter, self-deluding, wishful tripe.

Your article, in summary, states: Being in the EU is good, therefore being in the EU is good.

1. Europe is less important in relative terms than it has ever been. The EU's share of world GDP is in decline and forecast to continue to decrease.

2. No one intends us to be "a Norway" or "a Switzerland". Britain is ten times the size of either, and one of the top 10 economies in its own right however you measure it, though as it happens the top 10 states for GDP per head all have populations under 7 million. Size does not predict wealth.

3. Your scaremongering with regard to unpicking the Single Market is irrelevant. The EU has free trade agreements with a large proportion of the world, and given the size of the balance of trade deficit we run with them it is inconceivable we will not be able to negotiate similar. The Germans will continue to be keen to sell us their cars, after all. Let's not unpick, let's walk.

4. To say that Britain leaving the EU will generate a 'democratic deficit' is either a joke or an astounding example of Stalin's "Big Lie". Trade with the EU represents around 5% of our GDP, yet EU rules apply to 100% of our business. These rules and regulations are not democratically decided, rather a group of 'wise men' in the form of the unelected commission holds the power. Can I vote them out? Westminster regaining control of these will necessitate us complying with EU rules for that 5%, yes, just as we have to comply with US law when we sell to them, but it's a fraction of our economy. We pay a heavy price for a seat at the QMV table, and the whole of our economy has to pay it.

5. International cooperation is important, and that is why it is better for us to have a vote in each international forum rather than be merely one twenty-seventh of a vote. The areas in which we have a veto in the EU, and therefore our vote actually counts, are diminishing with each treaty revision - an inevitable consequence of our long-standing belief in our own weakness, encouraged by articles like yours, combined with the EU dream of 'Ever Closer Union'

If your arguments were true, the same thinking would have led to Ireland still being part of the UK, and I have met few Irishmen who regret independence.
Stand on your own feet, make your own allies and take your place, a free and forward thinking nation of the world.

Tue, 2012-07-24 18:31 — Anthony (Little Englander and Proud)) (not verified)

well said and a comprehensive dismantling of Emmas points., i think the writer has just been ripped a new one.