A lecture given by the Rt Hon Charles Clarke at the Munk School of the University of Toronto on Friday March 22nd 2013
I would like to begin this evening by thanking Randall Hansen for his very kind invitation to come here this evening and give this lecture.
I met Randall in late 2011 at an interesting seminar in Berlin organized by the Migration Policy Institute, which was addressing the range of issues and problems caused by the substantial movements of populations across the world and the need to build strong, tolerant and resilient societies.
I need hardly emphasize in this group that Canada is the recurrent example of a country which has taken really great steps towards achieving this and so it is a really great pleasure to be here now.
The question which I have been asked to address – “Will Britain leave the European Union?” – would have been unthinkable just a few years ago but today – I’m sorry to say – it is an eminently sensible question.
One of the first acts of the Government newly elected in 2010 was to pass the European Union Act which received its Royal Assent in July 2011. This Act requires that a national referendum be held on any proposal which might be deemed to move powers from the UK government to that of the European Union. It was a clear statement of attitude which prevents any constructive engagement of the UK in the development of the European Union.
On January 23rd this year the British Prime Minister, David Cameron, gave a long-awaited speech which set out a series of actions at the end of which, if the Conservatives form a majority government in 2015, there could be a referendum, in 2017 or so, in which the British people would be asked to vote, as they did 38 years ago in 1975 whether the United Kingdom would stay in, or leave, the European Union.
Leaving aside the wisdom of giving political and economic commentators a great subject of speculation for nearly 5 years – to the political and economic detriment of Britain – David Cameron’s speech is understandable.
In his own Conservative Party there are large numbers of MPs and others who are actively plotting on a day-by-day basis to get Britain out of the EU, and they are happy for David Cameron himself to go down with the ship. They are the basis of the almost constant leadership challenges and speculation which he faces.
In the Labour Party, too, there are a significant number, including some very senior figures, who are fed up with the problems of the UK’s membership of the European Union, are happy to go along with anti-European Union rhetoric and are certainly not inclined to join any serious campaign to promote British membership.
The accepted wisdom across all parties is that popular sentiment is hostile to UK membership of the European Union, and in particular blames that membership for migration into the UK from other parts of the EU, notably Eastern and Central Europe. The imminent arrival of migrants from Bulgaria and Romania, now permitted to move to the UK seven years after their countries joined the EU in 2007, adds further populist fuel to the fire.
The parallel difficulties in economies in Southern Europe and the problems in the Eurozone, sparked again only this week by the decision to take money which depositors had saved in Cypriot banks, reinforce those feelings.
The United Kingdom Independence Party (UKIP), campaigning for UK withdrawal, did very well in the 2009 elections to the European Parliament and came 2nd, pushing the Conservatives into 3rd place, in the Eastleigh Parliamentary By-Election on March 1st. They terrify many Conservatives who believe that a strong UKIP performance in 2015 could well split the Conservative vote and allow the Labour Party to return to office.
I see, by the way, that the UKIP leader, Nigel Farage, came 10 days ago to speak at the Manning Networking Conference in Ottawa and it is reported by the BBC that he hopes to learn from the experience of Canada’s Reform party and of Stephen Harper’s road to political success. It’s one of the reasons why British Conservatives all feel rather nervous of him and the UKIP threat.
That is the political background to David Cameron’s landmark speech, as it also explained his decision in December 2011 to remain in a minority of 1 out of 27 on a vote about banking regulatory issues which the EU was considering – the first time a British Prime Minister had every found themselves in that position.
So in these circumstances the question which I am asked to address this evening – “Will Britain leave the European Union?” – is both unsurprising and reasonable
But I have to tell you that my answer to the question, as I shall now seek to explain, is a resounding No.
I should begin with a small health warning about me – which is that I am fairly well-known in political circles in Britain as a strong supporter of UK membership of the EU and also as an advocate for a more positive UK role in the EU. I am thus not an objective commentator, though I hope that I am balanced and objective in my analysis. I hope that my outlook is based on a fair analysis of the national interest of the UK.
Fundamentals
The fundamental case for UK membership of the European Union is that the need for international co-operation to address the challenges of globalization is becoming greater with every year that passes.
That is the case for a far more effective and active United Nations than we have at the moment.
It is the case for a Commonwealth, with Canada and the UK as leading members, which stops posturing as a mini-UN and starts really working seriously on those things which unite us, including, education, our democratic and legal systems and the perpetual need to promote human rights.
And that is also the case for UK active membership of the European Union. I give examples just in the Economic and Fiscal, Justice and Home Affairs and International arenas.
Economic
The development of a Single European Market for goods and services, not only requires freedom of movement of capital and labour but requires common manufacturing standards for everything from cars to pharmaceuticals, common trade agreements with other counties, common consumer standards, common health and safety requirements, common environmental safeguards and approaches, common approaches to the regulation of business, including competition policy, common agricultural and fisheries policies and whole range of other common approaches.
Actually it should also require common approaches in areas where they either do not exist or have not been fully enough developed, such as energy and financial services, where in both cases a common approach would also be in the national interest of the UK because our industry in those areas is amongst the most efficient in Europe.
This long list of common approaches is very much in the interests of UK industry and trade, and also the UK consumer. It fits with the market-based economic approach which is characteristic of most of the British economy, like Canada’s, but is by no means universal throughout the European Union.
Of course as the precise common approach is each particular area is negotiated and discussed there will be issues, inevitable in a negotiation of 27, where the finally agreed standard is not precisely that which would have suited the UK. But that does not undermine the central point which is that common standards benefit us all, and also that in fact the UK does far better than most EU members in securing agreement to standards which suit the way in which we do things.
Fiscal issues are more controversial as they are often seen as a fundamental violation of the prerogatives of national governments. I don’t myself think that argument as anything like as clear as some believe.
The UK has already accepted the EU framework for setting rates of Value-Added Tax. I think that there is a good case for harmonizing rates of Corporation Tax across the EU. I can’t see any good argument for permitting competitive reductions of corporation tax to persuade company headquarters to move round the European Union. I am not particularly persuaded that the right to fix excise duties is a vital national interest.
And I certainly think that there is a very strong case indeed for European Union standards to attack corporate tax evasion, which permits Amazon, say, to avoid billions of pounds of UK tax payments by reporting European sales through a unit based in Luxembourg.
It’s true that a bit of the Budget theatre which the British Chancellor, George Osborn, showed us on Wednesday this week would have been removed but maybe that’s not such a bad thing.
But at this point I should re-iterate my health warning – my views are not at all typical of the British political classes as a whole.
Broader economic co-operation, the single currency and the eurozone, is a bigger question and one which really requires a lecture in itself. No doubt Mark Carney, the new Canadian Governor of the Bank of England will have some useful advice to offer.
So I am not going to address this in detail here, except to say that the problems that there have been are a classic illustration of the dangers of going half-way to achieve an ambition. Willing the ends of a single currency, which does have very real economic benefits, without the means – proper and properly enforced co-ordination of economic policy – carries very real dangers, some of which we have seen.
However in general I believe that the economic benefits for the UK of international economic co-operation within the European Union are clear. This is even recognized by opponents of UK membership of the EU who believe, wrongly in my view as I go on to discuss below, that the UK could leave the EU but retain the benefits of the European Single Market.
Justice and Home Affairs
International co-operation offers similar benefits in fighting crime and promoting human rights. Crime is now global. The major areas of criminal enterprise are organized by international syndicates, use international lines of distribution, and take advantage of differing national approaches to policing and criminal justice. These organizations offer major threat to our societies, as has been set out clearly in both the Europol Organised Crime Threat Assessment and UK police analyses.
These conclude that the greatest threats to our communities come from drugs, trafficked to Europe from throughout the world; organized immigration crime, including human trafficking and people smuggling; frauds of many different types including counterfeiting; and trafficking of weapons and cigarettes. And of course the threat of terrorism remains significant throughout Europe.
In these rapidly changing circumstances, the challenge for policing across Europe, including in the UK, is to bring together law enforcement in a way which brings these criminals to justice, makes it far more difficult for them to operate effectively and so directly reduces crime. The two core requirements for success in achieving this are enhanced high quality use of intelligence and effective operational partnership and co-operation both between countries and between agencies within countries. The European Union has established a framework for fulfilling these requirements.
Beyond purely policing issues, judicial co-operation is the final weapon which strengthens law enforcement against criminality including aspects such as the power of arrest, extradition and sentencing policy. The EU agency EUROJUST promotes such co-operation, for example through the European Arrest Warrant which has significantly speeded up the ability to bring suspected criminals to justice.
International
And in foreign policy and international relations too, the case for much stronger European international co-operation and world influence is very strong.
The certainties, unpleasant though some aspects were, of post 1945 are now gone. The bipolar Cold War world, dominated by the United States and the Soviet Union, was replaced after 1989 by a unipolar world in which many believed, including many in the United States itself, that the power of the USA alone could create stability across the planet.
9/11 rocked that view and I think that the illusion was ended at the US mid-term elections of 2006 when the American people rejected that idea.
So we have now moved to a world with many uncertainties but no superpower or group of superpowers which can address them. The US can no longer take the strain of sorting these matters out, for better or worse.
The European Union really does have a role to play, particularly in its own back yard, in North Africa and former Yugoslavia and perhaps even in the Middle East. The days when the conflict in the Balkans would be sorted out in Dayton Ohio are gone. The European Union has to take up its responsibilities, and become more active and more effective.
Europe really does have to step up to the plate and, through international co-operation show that it can be a force to help create stability and prosperity in place of the disharmony which is still far too dominant in many parts of the world.
For me the compelling and fundamental argument for active British membership of the European Union lies in the benefits and advantages, in all of the areas I have listed, of working within the European Union to strengthen our ability to defend our communities in an era when the challenges of globalization become ever greater.
This case will become stronger, rather than weaker, over time as the pressures and challenges of globalization intensify, as they most certainly will as enormous developing world economic powers become stronger and stronger.
The core arguments for UK membership, and indeed active membership, of the European Union stack up, are convincing and will become stronger.
However popular support for these arguments will only exist if the practical value of international co-operation can be demonstrated in a way which can be easily and directly understood. And that is where the difficulty lies.
In the past populations responded, almost without any critical assessment, to the terrors and atrocities of two world wars in Europe, by welcoming the fact of pan-European (in particular Franco-German) co-operation. Even Nigel Farage accepted this argument in his speech in Ottawa. But today, and not only in Britain, the proof of the pudding has to be in the modern experience of the European Union and not historical retrospective.
The Track Record
So, set against the fundamental case for co-operation and ambitions for its success, the next question – a legitimate one – is how well has the European Union used the powers of international co-operation which national governments have given it.
How successful has the European Union been in delivering these ambitions in practice and not in rhetoric?
You’ll no doubt be glad to hear that I do not think that this is the place for a comprehensive balance sheet (though in the field of international action, I recommend the ‘Scorecard’ published annually by the European Council on Foreign Relations (http://www.ecfr.eu/scorecard/2013), of which I am a member.
But I’m afraid that I do think that there is a charge sheet to be answered. Examples include that:-
– the essential rules of the eurozone, for example on limits to borrowing, have not been honoured;
– strategies to promote economic growth, such as the Lisbon process, have been unsuccessful;
– countries have not been ready to work together in foreign policy, even within Europe. For example EU member states are divided on whether or not recognize Kosovo;
– ambitions to work far more closely together in controlling migration into the EU, and establish common standards of asylum have not been progressed;
– development of mutual recognition of educational qualifications at all levels has made little progress;
– the resolution of civil legal disputes in other EU countries remains very difficult.
And such problems have been compounded by an often arrogant and elitist form of decision-taking by too many, a thoroughly patchy system of executing and implementing EU decisions across the continent, and an ineffective general political debate. No clear philosophy of ‘subsidiarity’, or a definition of appropriate spheres of responsibility, has been evolved. Too much time is spent on windy rhetoric rather than practical action.
No one is particularly responsible for this. In some cases member governments have been unready to act, in others the Commission has been too inflexible, in others insufficient attention has been given to the attitude of public opinion.
But the consequence has been a fostering of the growth of inward-looking and nationalist political parties, which define themselves in opposition to the European Union, which is presented as the main source of national problems, such as immigration. The whole tone of political debate is infected as mainstream parties and mainstream politicians adopt similar rhetoric. And in big votes like the referenda in France and Holland, an anti-EU majority has been mobilized to defeat the governments and main political forces.
This EU track record does to some extent mitigate the attitudes of mainstream national politicians like David Cameron who decide to play politics with UK membership of the EU and are guided principally by party political considerations rather than the UK’s national interest.
But it’s a pretty dangerous course because I don’t think such people have yet evolved a coherent alternative strategy for the United Kingdom. And it is to this that I now turn.
Alternative Approaches?
I shall argue in a few moments that the UK’s best, and I would say only realistic, option is to stay inside the European Union and promote changes which make the EU more effective in the interest of both the citizens of both the UK and the rest of Europe.
But before making that that case it is worth considering the alternative approaches.
The simplest to describe is that promoted by a number of Conservative Members of Parliament, and by the new UKIP political force.
They say, quite simply, that the UK should leave the European Union, and suspend all legal and other agreements into which we have entered in the last 40 years.
On this hypothesis, the UK would renegotiate such agreements as it considered in the best interests of Britain, such as much of the Single Market, and replace what is good for Britain and drop what is not in our interest.
The advocates of this course believe that the UK is such a significant and attractive economic partner that all of our EU partners would be desperate to negotiate new agreements with the UK.
But this approach is flawed at the core. Quite apart from the complexity of negotiating with 26 other countries, for any individual negotiation it takes (at least) two to tango. There is not the slightest iota of evidence that other countries would be prepared to make agreements with the UK. In fact the opposite is the case. Nor is there any evidence that the (hypothetically 26 member) EU would negotiate with the UK on these issues.
This situation is worsened by the fact that, by hypothesis, the UK would have left the EU in an atmosphere of extremely bad relations with the rest of the EU, in which positive negotiations would be very difficult indeed.
Norway is an interesting model from this point of view. It is outside the EU but, as a recent and very thorough report to their government has set out, Norway has been forced to accept a whole range of EU decisions, without any ability to influence, or even debate, them. Moreover Norway pays far more to the EU per capita than any EU member state, including the UK. Essentially European countries which are not members of the EU are forced de facto to accept EU decisions without amendment.
Switzerland is another example, though in a different legal framework to Norway’s. Their referendum decision not to join the EU was followed by a ten year negotiation which established a set of agreements which many in Switzerland still find extremely unsatisfactory, and give the Swiss very little flexibility. Even their famed banking secrecy is threatened by increasing EU regulation.
Some argue that the UK could rejoin EFTA, which, by the time any UK decision happened, may well consist only of Liechtenstein. This is not a real model for the UK.
Others seem to believe that UK does not need significant economic, political and international relationships and can just go it completely alone.
Again this approach ignores the importance for international investors of working within the European Single Market. Advocates of this approach have to accept, but in general do not, that the direct consequence of Britain ‘going it alone’ is a significant drop in our international trade and internal investment, with significant consequences, and an enormous loss of international influence.
The idea of ‘Commonwealth preference’ is now pretty much out of time though obviously it had its supporters before the UK joined the EU. It is very difficult to see how new life could be breathed into the idea.
And the old chestnut of the UK as the 51st state of the USA hasn’t been heard for a long time, probably because it always was entirely based upon illusions.
Whichever future these eurosceptics prefer their options are getting worse.
The readiness of other EU countries to ‘renegotiate’ is in rapid decline. Even states like Germany, which are extremely sympathetic to the UK’s active participation in the EU, are losing the will to bend over backwards to meet British preoccupations, which they have traditionally done. There are also plenty of examples of individual small member states blocking EU agreements, including on very important matters.
The position of the British government, and David Cameron, is different from that of those who simply want straight UK withdrawal from the EU.
Mr Cameron asserts that he wants to see the UK stay in the EU but he wants to renegotiate the terms of the UK’s membership. He says that if the Conservatives form a majority government after the 2015 General Election, they will present a series of demands for change, and after those have been dealt with there will be a referendum on UK membership.
The list of Conservative demands (it is important to note that the Liberal Democrats will not associate themselves with this approach) has not yet been elaborated and apparently work is proceeding at the moment.
An interesting illustration is now arising in the field of Justice and Home affairs.
By May 31st 2014, the UK Government has to decide, once and for all, whether to stay ‘opted-in’ to 133 European Union measures for police and criminal justice co-operation, or not.
UK policing and crime prevention would be significantly strengthened by full UK participation in the European intelligence databases, European operational co-operation and European judicial co-operation. UK withdrawal would significantly damage our ability to contest major criminality with significant implications for crime in Britain.
The Conservative government has stated that it wants to withdraw from all of these measures and then renegotiate entry into those it wants. It is already clear, whatever the merits of the overall policy (which in my view are zero), that this approach will not succeed and the government will soon have to set out how it intends to address this reality.
Ultimately David Cameron’s overall strategy will fall at the same hurdle as the out-and-out withdrawers. Renegotiation is a myth. In political folklore Harold Wilson pulled off just such a renegotiation in 1974, to keep the Labour Party together, and then won the subsequent referendum. That’s the model for David Cameron. The problem is that we’re now 40 years on, the politics have changed and the old tricks won’t work.
In short, the alternatives to UK membership of the European Union simply do not hang together. Advocates of withdrawal make their case without reference to the very real and problematic issues which a process of withdrawal would have to overcome, quite apart from the fundamental case got international co-operation in Europe, with which I began this lecture.
Promoting Change in the European Union
Though the arguments for withdrawal are weak and are not sufficiently thought through to offer real policy options, there is no doubt that the political mood in Britain on this subject is erratic.
Pollsters on balance think that a referendum would probably vote for continued UK membership of the view, mainly because most referenda tend to vote for the status quo and against change. Much would depend upon the circumstances of the referendum and the alignment of political forces.
However in politics accidents can never be discounted and David Cameron’s strategy is an accident waiting to happen.
So the most effective way of minimizing the risks of such an accident is for the European Union to become more effective in demonstrating its capacity to use international co-operation to address the concerns of average citizens.
Of course the most important area is economic.
The structural flaws in the construction of the eurozone still need to be sorted out. The operation of the banking system remains a major Achilles Heel and increasingly co-ordinated economic policy is inevitable.
I never agreed with those who felt that countries like Greece would leave, or be expelled from, the eurozone, and I now think that the eurozone is likely to increase, not decrease, in size. Of the 10 current EU members outside 7 still want to join at the appropriate time.
Britain needs to face up to the fact that the eurozone won’t collapse and so we need to find the best way of addressing that though as yet there is insufficient analysis of the impact upon the UK of a continuing eurozone and so the ways in which the UK should behave if we want to stay outside the eurozone, and where we should form our economic relationships.
Other areas are important too. We need to strengthen, not weaken, the EU’s ability to fight crime, control immigration and get fair justice across the EU. We need to demonstrate the importance of the EU in securing environmental improvement and protecting consumers.
And we need to change the way in which the EU works so it better reflects the concerns of regular citizens.
But most important of all it means that UK politicians and opinion-formers have to recognize that European Union is potentially a force for good in developing international co-operation to address the problems that we face as global change influences every part of our life.
The fundamental arguments for a powerful European Union remain strong, as I have tried to set out today.
But disaffection is high, mainly for bad reasons though sometimes for good.
The European Union does need to perform better in many different areas, but particularly in relation to the operation of the eurozone.
That said, any close examination of the real options for the United Kingdom, demonstrate that UK withdrawal from the European Union simply is not a realistic or beneficial option for the long-term interests of the country or its citizens.
Which is why I answer the question I was asked to address this evening – “Will Britain leave the European Union?” – with a resounding NO.
Thank you for the opportunity to make my case.
END
