Staying in Europe is about staying prosperous – but it’s also about who we are as a country

Labour Party

Based on a piece originally featured on the Huffington Post.

Earlier this week, at The People’s Pledge’s ‘Real EU debate’ in Westminster, I spoke in favour of Britain remaining in Europe. It was a lively event. Membership of the EU is an emotive issue, presented by Europhiles as a lifeline for the UK, and by Europhobes as a noose.

I believe, like countless others, that staying in Europe is the only way of securing Britain’s future prosperity. But for me these economic arguments run deeper, to the core question of what type of country we want to be.

It might be possible (if infinitely more difficult) for Britain to achieve prosperity outside the EU. But it would come at an enormous cost. To survive we would have to become more economically unfair and less globally significant – a poorer, more marginal country with narrower horizons.

The most immediate consequence of leaving Europe would be to effectively seal the fate of British manufacturing. As Nissan CEO Carlos Ghosn said last month, being part of the common market – to whom we sell around half our exports – is integral to businesses based in the UK. Outside of it we would become an “unattractive option” and companies like Nissan (which currently employs 6,500 at its Sunderland plant) would have to “reconsider” their strategy. It is likely that other firms, such as Airbus, would follow suit.

The financial sector, too, would struggle, and according to some commentators it would be difficult for The City of London to remain Europe’s business capital. Places closer to the heart of EU decision-making – such as Paris or Frankfurt – could take its place. Sir Martin Sorrell calls leaving Europe “disastrous”. He points out that Japanese investment in the UK is contingent on us staying in Europe. Trying to remain a trading centre while economically isolating ourselves would leave us permanently compromised.

In the longer term, with the EU currently working with the US to create the world’s biggest free trade area, Britain could become further marginalised. The CBI’s Director General John Cridland argues that being in Europe gives us a “springboard”, through unfettered trade agreements, with which to reach 500 million people and £15 trillion in profits. “We’d struggle to pull off deals of this scale on our own,” he says.

On top of this, the negative impact on higher education of Britain leaving Europe could be very serious. As Professor Paul White points out, this year we received 23% of EU Research Council Grants – more than any other country. Without this funding universities might have to downscale or increase fees – a move which would affect young people (the group, according to polls, who are least in favour of an EU exit) the worst. The insularity that withdrawal would bring could, White says, undermine our reputation as the second strongest higher education system in the world.

I therefore believe the notion we could leave the EU but carry on as normal is flawed. We would have to adapt. The only way I can see of doing this would be through a relaxation of tax rules and an effort to move from hub to haven. Big companies might be replaced by ‘boutique’ avoidance specialists and businesses enticed here by the chance to use the UK as a low tax trading base. The pressure on the government to reduce taxes – combined with the loss of the EU funding many of Britain’s regions receive – could create worse public services and more inequality. As David Marquand puts it, to survive Britain would have to become “a market state…a harder, more selfish and, above all, nastier society”.

So for me the Europe Question goes beyond prosperity; it relates to the deeper issue of who we are as a country. Do we want to embrace a fairer, more modern world or will we consign ourselves to narrow-minded irrelevance? I believe this is a no-brainer; as I will continue to argue all the way up to the European Elections in May, Britain needs to be confident and outward-looking enough to see the wood for the trees when it comes to Europe.

Making the business case for Europe – the UK must side with pragmatism over prejudice

Labour Party

Last week’s comments by Nissan CEO Carlos Ghosn expose the flaws of Euroscepticism. In terms of current government policy it is the tail that wags the dog.

Ghosn suggested Nissan’s Sunderland factory is European first and British second. He said his company would need to reconsider its “strategy and investments for the future” if Britain leaves the EU.

His words hit on an uneasy fault line within the coalition government – between economic rhetoric which promises jobs and industrial investment, and social policy which is nationalist and populist in tone. The former can only be achieved through global engagement; the latter relies on a sentimental vision of ‘Little England’. With Tory backbenchers, led by Adam Afriyie, now pushing for an early EU referendum – a demand which is, by Afriyie’s own admission, driven by the short-term political goal of warding off Ukip – the gap between the two is becoming ever wider.

Last week’s disagreement between the Confederation of British Industry (CBI) and Eurosceptic campaign group Business for Britain shows how the Europe issue comes down to a straight choice: pragmatism or prejudice.

The CBI, which represents 240,000 UK companies, describes the case for staying in Europe as “overwhelming”. It values the annual benefits of Britain’s EU membership at as much as £78 billion – £3,000 a year for every family. As CBI Director General John Cridland points out, EU membership provides a “springboard” for reaching 500 million Europeans and gives access to trade agreements worth £15 trillion. “We’d struggle to pull off deals of this scale on our own,” he says.

Cridland’s point is very clear: in the face of big global economic changes our best chance of remaining economically relevant is through working with our neighbours.

Business for Britain’s approach, by contrast, illustrates how difficult it is to make economic sense of an argument which is at its core myopic and knee-jerk. The group’s co-chair John Mills drew a blank when asked on the BBC’s Today Programme how redundancies at plants like Nissan tie in with the ‘job creation’ EU withdrawal would supposedly bring. Even Mills’ own organisation’s polling cannot disguise the fact that big businesses – those most likely to generate large-scale employment – say the benefits of being in Europe outweigh the costs. Everything about Business for Britain, from its emotive language to the sepia wistfulness of its website, emphasises nostalgia rather than logic.

The contrast between these two mindsets was summed up nicely by David Marquand last month, when he wrote that “Europhiles speak to the head, Europhobes speak to the heart”. For me these are two approaches which cannot be reconciled; yet by succumbing to backbenchers’ Euroscepticism David Cameron has tried to let them coexist. He has strapped himself to two horses which will never run in the same direction. This is not just the case in terms of business, but also on issues like security, where isolationism threatens the UK’s ability to tackle organised crime.

With senior business figures continuing to speak out in favour of Europe it is important that those on the progressive wing of politics are staunchly and unapologetically pro-European. As the business case for the EU builds the misty-eyed vision of times passed which sustains Euroscepticism (the “never never land” spoken of by John Major) will be exposed.

Regardless of when or if there is a referendum, this is an issue which cannot be thrown into the long grass. Those of us who want a more prosperous Britain must seize the impetus on Europe and ally ourselves with the forces of reason.