Opinion from Lord Digby Jones

Europe - The Facts

Published Wednesday 16 January, 2013

As I neared the end of my time at the CBI some six years ago now, I remarked privately to politicians of all parties and to various CBI members that I was finding it increasingly and frustratingly difficult to see where the added value was in the UK's continuing membership of the European Union as presently constituted.

The big stuff had been banked:

  1. The EU's most spectacular achievement:  peace. Not often properly appreciated in the UK (after all, we didn't have the jackboot marching up our streets) but if anyone doubts the unique enormity of the contribution to the UK of seventy continuous years without any two European countries banging the living daylights out of each other, (never been achieved before, ever) just pay a visit to the War Cemeteries of Northern France. 
  2. The democratic and economically-progressive safe haven provided for the newly-liberated former Eastern bloc countries, cementing democracy and freedom into the communities and lives of millions of people. 
  3. The ability to negotiate globally from a position of strength on free trade issues with the clout of a market of 520 million getting-richer people; of enormous help when up against protectionist America or controlled-economy China.
  4. Shining a light into the problems of a polluted, carbon-emission-ridden world, by negotiating and legislating as a powerful bloc of manufacturing countries. Pollution doesn't respect national borders. The EU set an example to the World, especially in incentivising technological solutions to environmental issues.   

But, back in 2006, I couldn't see how the structure, the philosophy, the direction, the sheer arrogance of the "we know best" eurocrats and the differing and diverging vested interests and aims of the various member states in the European Union were going to address the big issues of the 21st Century. I couldn't see how our Country was going to perceive, or actually enjoy, some future global competitive advantage and benefit in return for all the hassle, the expense of compliance, the morale-sapping attitude of ignoring a democratic deficit and fighting yesterday's socialist inward-focussed struggles instead of tomorrow's global battles, the competitiveness-destroying dead hand of regulation and the cash contribution that goes with our EU membership. 

I was disillusioned by the failure of Blair and Schroder to keep their word regarding the Lisbon Agenda; their Declaration back in 2001 to make the EU the most competitive place in the World to do business by 2010 and to hold regular monitoring meetings of EU meetings to check on progress had come to nought. It was frankly a joke; again, watch what politicians do (or don't do!) Not what they say!

And nothing was being done to tackle the age-old problem of many, mainly Mediterranean, countries ignoring the rules when it suited them and gaining an advantage over more compliant nations.  

Well, seven years on and things have, frankly, only worsened. Moving the deckchairs around on the Titanic comes to mind.

Global competitiveness is all; I make no apology for repeating my oft-expressed warning: "India wants your lunch and China wants your dinner".

Yet instead of focussing on driving us all forward to be globally best in class, we have an EU that:

  1. Criminalises you if you work more than 48 hours a week! Destroys incentives to employ people on flexible contracts at every turn. China must think it’s their birthday.
  2. Spends your and my money on subsidising the production of a commodity (where someone else sets the price, out of your control) called the Common Agricultural Policy rather than developing Europe's education, training and Universities to build globally-competitive, knowledge-based, value-added economies throughout the member states.
  3. Insists on mind-numbing amounts of expensive time to be spent on compliance with staggeringly large piles of regulation in virtually every part of our lives yet …
  4. … tolerates blatant non-compliance by several countries giving them an unfair advantage in what is meant to be a single market.
  5. Insists on an increase of the sums paid into the club by (some of) its members when every Government from Riga to Rome, from Dublin to Denmark is cutting spending and attempting to live within their means.
  6. The grotesque situation in a so-called single market where only in the past few days, the boss of Fiat announces 1500 redundancies at its most productive car plant in Tychy in Poland purely "to protect people employed in Italy". A so-called independent car manufacturer, competing every day in a global marketplace is forced to sack productive Poles to keep unproductive Italians in a job. What a race to the bottom! Try telling Poland that the EU has a functioning single market where everyone operates on a level playing field. No wonder politicians fight shy of giving people a say in their Europe; after such treatment, they know the answer they'll get! And if anyone thinks the Italians will become more productive through such action, I suggest they take a long, hard look at the British Leyland socialism of the 1970's.

I could go on … and on.  

What do we get in return?

  1. Access to a tariff-free, single market; but such is the entwining of investment and trade between member states that a UK outside the EU would have trade and investment agreements in place covering all areas before sun-up on the first day of "independence". No inward investor would have need to worry.
  2. A say in the formulation of legislation and regulations affecting the goods and services we sell to our biggest market. Who are we kidding? In my time at the CBI I saw this so-called influence in (in)action. 

    Just ask the construction component industry about the barriers to selling into Germany; 

    Just ask any service sector business about trying to complete the single market decades after so-called negotiations opened; 

    Just ask any business that has lost precious, competitiveness-enhancing labour market flexibility (and thus one route to growth, more jobs, more tax-yielding profits) by the UK constantly being on the wrong end of majority voting in matters involving the Social Chapter of employment regulation.
  3. When faced with a European elite (socialist politicians, trades unions, copious numbers of civil servants) more interested in keeping those in work, in work rather than getting those out of work into a job, the UK has the same influence being inside or outside the EU club; i.e. zilch. 

    What does it say about understanding the 21st global competitiveness battle when one of the so-called motors of 21st Century Europe, France, reduces the retirement age to 60 from a draconian, exploitative 62 and drives out wealth creation with a top rate of tax of 75%?!
  4. The Financial Services Sector will suffer if we're not "at the heart of Europe", we're told.  Wasn't that what they said when we didn't join the Euro?
  5. America, we are told, wants us to stay in the club as is. Presumably, as the central core of the Eurozone moves ever more closely to the formation of a Country, if we were inside it, that would include eventually accepting a Brussels (aka Berlin/Paris) decision on when and where our troops are deployed; would America's enthusiasm remain that way inclined? Can you really see Paris agreeing to support the USA militarily around the World? The UK would have to do what the EU decreed. Washington have not thought that one through.  

So what is to be done?

There is no earthly reason why we cannot be part of a European Union that has, as one, large, member, a new Country "Euroland" which has one currency, one fiscal policy, one banking union, one set of rules for public spending, one National Anthem, one flag, one capital where sits one President and one Parliament. After all, one out of every two under-25's in both Greece and Spain is paying the price with their joblessness for the maintenance of the totem of this nascent Nation, the Euro, so they'd better hurry up and call the Eurozone for what it is so they can all get on with sorting out the mess to the benefit of democratic capitalism around the World, but especially for themselves. Hospitals with no drugs, soup kitchens on the streets, these are the components of a fertile reservoir in which fish the purveyors of hate, prejudice and extremism; the re-emergence of that cancer in Europe, flavoured this time with religious fundamentalism, would be a catastrophe.

There is surely no objection to the UK being part of the drive for the wider EU (where we would be a major, indeed probably the major, player) to have much less regulation, greater investment in education (as Gladstone said over 130 years ago, you will never set the poor free by giving them money, but by giving them an education), less government, with one singular purpose: not to build a Nation but to liberate member states from cradle-to-the-grave regulation, cost-building compliance and self-interested barriers to productivity enhancement.

One member, Euroland, would be a Country with a different mind-set for itself, among its member states, but the EU itself would not constantly be trying to get everyone into a single country. Indeed, the opposite would be true.

Leaving the EU would create for us a tremendously damaging perception (probably wrong but that is not the point in the perception, value-judgement investment game) that the UK was "not worth the risk", "not a safe bet", and would not be in our interests. To lecture other nations on what should be done, apparently from afar and in a demand-led mode is arrogance in the extreme. Appearing to cherry-pick bits we like is a non-starter.

But to lead a clear, open, easily-understood drive for a new EU, just as new as Euroland would be; a loose union of countries with just a few common, conjoined interests and purposes would position our Country where not only it wants to be but where so many of EU member states want to be, if only they had the strength to say so. In fact, an EU that is what the British people thought they were getting the last (and only) time they had a vote on the matter.

Something must happen. We face three choices:

  1. Change the EU. Not as a sop to a domestic political imperative but as a clear policy with a pro-active drive for clear goals. Go for a brand new EU.
  2. Join a fully-integrated Euroland and put everything into help run the show, currency an' all.
  3. Allow things to muddle on; 2. above is not politically, economically nor constitutionally possible. 1. above will not happen by chance; and therein lies the rub. 

    If you constantly take away people's freedom of action; if you constantly charge them a shedload of money whilst you do it, to pay for what you're doing to them; if you deny them any say in any of this; if all parties promise them a say but then none of them deliver, don't be surprised if at the first opportunity to have a say the people glory in the chance and throw it all out, baby and bathwater. That would please a few but would not be where the British people want to be; that would "teach 'em" but what a Pyrrhic victory it would be. We need a Referendum, but not yet. The question must be clear and the timing must be committed to now. But it should not be an "in or out" issue; it should be about the sort of Europe we want to be part of; and as a Nation we need time to get there. Not to ask the current members to let us repatriate powers (why would they? France have shackled us with their wealth-destroying regulation, why on earth would they give us a competitive advantage?) but to say "we're starting again".

Reform is not possible; it may be promised but it just won't happen. Not from London, not from Brussels, not from Berlin or Paris. But a clear vision of what the UK wants and how it can be achieved and actually to stop carping from the sidelines but to help Germany and others, that is the way.

Europe should start again. The UK should confidently lead the group for a Europe fit for purpose in a brutally-competitive global economy in a 21st Century that belongs to Asia.

Let Euroland form; invite it to join the new European Union but not impose its stultifying, uncompetitiveness on others. You can promise increased spending of other people's money all you like; but you have to earn it first and in this new world, that calls for a new Union, a new way, a journey where the UK can lead.

These are incredibly important times; the peoples of Europe are crying out for leadership. Britain can give them thought-leadership, working with (not shouting at) Germany to solve the issues. A paucity of leadership, a vacuum of ideas, a "rabbit-in-the-headlights" attitude, allowing extremists attractive oxygen, all led to awful consequences in the lifetimes of many; nowadays the battles are thankfully economic but their consequences can be very harmful and frighteningly real. It falls to this generation to grasp the opportunity and not fail the people of Europe.