The European Union is not working – or so its detractors claim. No one can deny the extent of the strains that give weight to their argument. The perennially shambolic conduct of Eurozone business threatens to undermine the Union’s claim to create prosperity and respect democracy. Meanwhile, the refugee and migrant crisis that has spread so rapidly through the Schengen area challenges one of the EU’s founding principles in its suggestion that free movement of labour and secure borders may indeed be mutually exclusive.
The UK government’s commitment to hold a referendum on continued EU membership by the end of 2017 surely comes at the best possible time for the ‘Outers’, who will make the case for Brexit with renewed vigour as the gap of time narrows between each wave of continental calamity. Britain is neither a member of the Eurozone nor party to Schengen but that will not prevent both crises being used to whip up toxic and emotive responses to the question of our membership.
Naturally it is the instinct of both Remain and Leave camps to condense their analysis of our EU membership into black and white. But Britons do not need to be panicked or lured into their ultimate decision with wild predictions on job losses or gains, scaremongering about corporate exodus or misty-eyed visions of a rejuvenated Commonwealth and secure borders. A more successful tactic would be to accept that the UK’s national interest lies in our having a mature, sober and honest debate about the pros and cons of membership, and then to trust Britons to come to their own mix of rational and emotional judgement. The truth is that life will go on whether we remain an EU member or not. Which path we now choose will for many be a finely balanced call that takes into account the merits and flaws of each route.
The Prime Minister’s renegotiation attempt recognises that truth by implicitly acknowledging the EU as neither an unalloyed good nor a power-grabbing superstate, but an international forum in desperate need of greater flexibility and reform. A Europe which cannot bend will break, so the renegotiation needs to result not just in a retail package of specific reforms to present to voters pre-referendum, but a clear demonstration that the EU is capable of maintaining the pace of change needed to address today’s realities and tomorrow’s challenges. Whatever the Prime Minister negotiates must be seen as a down-payment for future reform, the start of an ongoing process that seeks to benefit all EU members not simply secure further UK exceptionalism. If he manages to pull it off, it will be yet another example of the critical role Britain plays when it actively engages with European allies.
It is abundantly clear that the European Union is a flawed institution that struggles to deal nimbly with the challenges thrown at it by the modern world. It was designed to provide peace to a continent in the aftermath of two catastrophic wars in the first half of the last century, an acknowledgement that prescriptive cooperation was preferable to conflict. Indeed we Britons consistently underestimate just how much our European partners value the EU as a vehicle for seven decades of lasting peace, to the extent that their dedication to the institution seems sometimes to defy logic. But we also underestimate how successfully the UK has itself shaped the EU and the opportunities it continues to provide our own citizens.
It took some Swedish counterparts to remind me recently just how crucial Britain’s role in the EU is to fellow members who believe in the Anglo-Saxon values of free trade and competition, and share our desire to resist ‘ever closer union’. The notion of Brexit is terrifying to Northern European allies who look to the UK as an essential bridge between the EU and the English-speaking world, a critical counterweight to the Franco-German axis and the asker of awkward but essential questions over reform. They see an EU which Britain has been instrumental in shaping, citing the expansion eastwards into pro-western countries like Poland, the promotion of the single market, open competition for goods and services, new trade deals and English as the dominant language. Their view of the UK as an influential EU player is quite removed from the view of commentators here, who tend to portray the EU as an alien institution imposed from afar while overlooking the tangible membership benefits that we have ourselves helped bring about.
Let us not forget, for instance, that the single market provides one of the finest examples of international cooperation in global economic history. This vast economic zone is larger than the combined GDPs of the US and Japan, and provides a level playing field in which UK businesses can trade. This has allowed the City of London, in my constituency, to develop a role as Europe’s offshore-onshore financial centre, supplying legal, financial and professional services with ease to our European neighbours while providing a base to foreign firms seeking access to the continent. It has been a recipe for enormous success as the biggest market around for UK exports of financial services, responsible for a third of the UK’s surplus in financial services in 2012. But it has been sustainable only because the UK has also vigorously fought to shape the rules of the market to its advantage, despite its safe haven outside the Eurozone.
It means too, for example, that UK start-ups are able to access markets swiftly without complying with 27 different sets of regulations. British car manufacturers have been able to enjoy a resurgence with the investment that has flowed from foreign firms seeking a base from which to access the continent. Consumers are able to obtain a much wider choice of products at a cheaper price and, through the Open Skies policy, Britons have been able to fly at low cost across the continent. It is via the European Union too that the transatlantic trade and investment partnership (TTIP) is being negotiated that could bring enormous benefits to British consumers and businesses.
Post-Brexit, my working assumption would be that the UK would seek to continue its well-established trading relationship with the EU rather than follow the ‘Swiss model’ of countless bilateral agreements. However that would see us facing a tough choice between access to a single market over whose rules we would have no influence or regulatory autonomy with tariffs galore. When I recently explained to a Norwegian parliamentarian the enthusiasm of some Brexit advocates to mimic Norway, Liechtenstein and Iceland in their trading relationships with the EU, she implored the UK not to go down that route. ‘We have all of the rules’ she explained, ‘but none of the influence’. Indeed EU officials might be inclined to make market access even tougher for the UK, lest other countries be tempted to follow suit and exit the EU themselves.
Meanwhile, I am unconvinced that our standing apart from the EU makes it easier to face the international and domestic challenges ahead. On freedom of movement, to give one example, I suspect French border police would be virtually incentivised to relax Calais controls if the UK were no longer a member of the EU, making the migrant crisis far harder to handle. I also fail to see how the anti-immigration message that will likely form a key pillar of the Leave campaign marries up with the idea of the UK as an open, global trading nation.
Britons would be forgiven for worrying that too much European energy is now being expended on solving the problems in the Eurozone, to the detriment of measures that might improve Britain’s future wellbeing. However the single market is far from finished and there remains much more that we can achieve in close alliance. Work is well underway, for example, towards an ambitious digital single market where individuals and businesses can access and exercise online activities under conditions of fair competition, and a high level of consumer and personal data protection.
Politics is a messy business that can be slow to deliver results. The EU is not a commercial entity which can implement solutions quickly and without regard for detractors. Equally, for the EU to demonstrate intransigence during the Prime Minister’s renegotiation will play straight into the hands of those who portray it as an organisation unfit to govern in the modern world. It is vital not just for the confidence of the UK but the 27 other member states that the EU shows itself open to reform.
Once the renegotiation process is over, however, it is for Britons to ask themselves – in participating in this imperfect enterprise, what is our return and what compromises are we willing to accept as the price? No matter the attempts of the Remain and Leave campaigns, for most voters the answer will not be clear cut and therefore the outcome of the UK’s renegotiation will be crucial in helping them weigh up the value fellow member states place on Britain’s contribution and the extent to which the EU is willing and able to adapt.
I am optimistic that the Prime Minister’s renegotiation of our relationship with the EU can prove the opening salvo in a process of European reform. In this way our nation will be at the forefront, advancing a free trade and competitiveness agenda that promotes growth, jobs, security and stability long after the referendum. If he is successful, it will be the latest in a long line of British achievements at European level, ultimately helping the EU accept change and challenge at a time when its very survival depends on flexibility.