Its a pleasure to be here at one of our leading international law firms. Before I was elected I used to work at one myself, Herbert Smith, and I know what a great export this sector is for our country.
It is clear the legal profession would be disproportionately affected by a change to our membership of the European Union. In the short term, yes, extra client work may be generated by the need for advice on the different scenarios and their implications
But in the medium to long term, your ability – as businesses in your own right – to offer advice across Europe would be impacted, as would your ability to establish offices across Europe. So this matters. But, of course its significance goes far beyond this sector – this will be the biggest decision in a generation that we make as a country.
It will be irreversible. It has the potential to redefine our position in the world. It will have profound consequences for our economy at home and the opportunities available for future generations.
I believe the result will be very close. I know that many of my constituents have yet to fully focus on the issue which is only just now coming into view. So there is all to play for and no room for complacency.
For me the choice we are being asked to make at this referendum is whether we acknowledge the “Great” in Great Britain, our ability to punch above our weight abroad, and adopt a big view of who we are and what we can be, delivering better outcomes for our people. Or we can talk down our country and adopt a minimalist view of Britain’s history and what we can be going forward.
Let me explain why I put it like this.
By remaining in the EU we can marry the gains of economic partnership with control over our national interests.
This unique arrangement gives us the best of both worlds: increased jobs, trade and investment alongside global reach and influence; but balanced by the ability to control the pace and depth of our co-operation according to our national priorities and our national identity. It is not that we cannot achieve things outside of the EU; it is that we have already achieved so much more by operating smartly within it, and can continue to do so.
The alternative view is of a country that is habitually trampled over by our European partners and can never marshal a majority behind our position.
This talks down the achievements of British Governments of different political persuasions and what we have been able to achieve for British people. And, though I call it an alternative view, those who advance it cannot spell out what their alternative would look like if we were leave – it would be a step into the unknown.
In this context, I will today set out what I see as the core economic case for our remaining in the EU, looking at the benefits we gain from our membership now and into the future.
I will also assess the importance of the Government’s ongoing renegotiation of our relationship with the EU and the principal questions those who want us to leave must answer.
The economic case
Of course, Europe is not perfect – no partnership is – and it needs reform. But we believe the benefits clearly outweigh the costs.
And there is a clear progressive case for our membership that is too rarely heard.
The EU, as a bloc of half a billion people and 28 countries, acts as an amplifier for Britain’s voice over issues ranging from climate change to peace-keeping to international development.
As a collective, the EU is more than the sum of its parts, for example in security, where intelligence-sharing helps fight terrorism and imposing sanctions has helped us respond to aggressive nations such as a resurgent Russia.
The leader of my party will be making an intervention this week in Brussels about the importance the social dimension of what the EU does. He is right to do so. The EU has been the central driver of workplace protections in the UK, particularly when we have had Tory governments at home.
Thanks to EU legislation, employees’ rights over annual leave, protections for women in the workplace and guaranteed pay levels have all been strengthened. Because these rights apply across the EU, it helps prevent a race to the bottom on conditions at work. This is something around which there is now mainstream political consensus as the Prime Minister has not indulged in the weakening of social protections we feared in his proposed reforms – a victory for our entire labour movement.
Of course, protections at work are worth nothing if you don’t have a job. This brings me to the core of the economic case for Bremain (as it were). As the world’s largest single market, the EU enhances economic opportunity for communities and businesses large and small across the UK.
The EU is our largest trade partner. Full access to the single market means our trade with the EU brings £133bn in additional trade we would otherwise not benefit from. It is no wonder that three million jobs are linked to our trade with the EU.
And, the benefits of the single market are such that countries from around the world want to share in them, meaning international firms invest in the UK as a gateway to Europe.
There is simply no single alternative UK-EU trading relationship which has been shown to be able to replicate – let alone improve upon – these enormous benefits.
Often the pursuit of opportunities in the EU and the pursuit of opportunities with the rest of the world is set up as a choice by those who argue for Brexit. It is a false choice. The truth is it is not just Britain’s trade with Europe that is boosted by EU membership, it boosts our trade with the rest of the world too.
The collective clout of 500 million consumers speaks loudly in the negotiating rooms of global capitals – and secures terms that may evade a country of 65 million.
Yes, our trade with other countries is rising as a proportion of our overall trade. But the fact is that our exports to the BRIC nations represent 7% of our total, whereas 44% go to the EU. So while our trade with the rest of the world is growing and vital, the EU remains our primary customer and must be protected, particularly given the uncertainties in the new emerging markets, with slowdowns in China, Brazil and Russia.
As successful business people, ask yourselves this: would you sever ties with your biggest customer to chase new leads? No, you would protect your customer base while nurturing new opportunities. And that is what Europe gives us: access to the world’s largest free trade area combined with over 50 global free trade deals that open up global markets from South Korea to Mexico to Canada.
It is the best of both worlds.
CEBR Research
Don’t just take my word for it. Today we have released a report by the respected, independent Centre for Economic & Business Research which shows how the benefits to us of the EU’s free trade deals.
According to the CEBR the value of our goods trade with the 55 countries with whom the EU has trade deals amounted to £97 billion in 2014. Trade between the UK and these economies is fast-growing – doubling in the past two decades.
So, when you take the trade with the rest of the world which the EU opens the door too and add that to the value of goods we trade with the EU itself, the total share that would be affected by a change in the UK’s EU membership would be around 64% of our goods exports. That’s £466 billion in trade that would be put at risk by our leaving Europe.
Despite the trade benefits we already derive from our EU membership, we know that we need to rebalance our economy, so we manufacture and export even more. The official trade statistics released last week laid bare the scale of this task.
If we stay in, we stand not only to keep our existing trade benefits but there will be further substantial additional gains to come. Future trade deals with world powers will enhance economic opportunities here at home and help boost exports. Taking in to account all EU deals that are currently being negotiated, the CEBR forecasts that 80% of UK trade will either go through the EU or through EU-facilitated trade deals.
For example, the EU’s deals with Canada and, when they are finalised, the US and Japan will alone bring an annual combined additional value to UK GDP of £16.3 billion.
And these future gains need to be considered alongside the future benefits of deepening the single market.
Greater trade co-operation in sectors, such as energy, digital, financial services and transport, will increase trade openness and trade flows, which in turn will increase productivity and employment across the UK economy.
The CEBR estimates this could bring almost £60 billion to the UK economy and a further 800,000 UK jobs by 2030. A very positive story.
Helping Britain to rebalance
To service a growing export market, our firms need to be able to tap into a work force with the skills they need; to compete they must invest in R&D and innovation; and we must improve our infrastructure, essential to their businesses. Here again, our membership of the EU, will help going forward.
Through billions in structural funds, the EU will invest in our workforce, providing skills training, apprenticeships and new opportunities.
This is increasingly important for our young people. Over 200,000 UK students – myself included – and 20,000 UK university staff have spent time abroad through the EU’s Erasmus exchange programme, enhancing their employability and promoting understanding between people and cultures.
Working across borders, UK and European university researchers will continue to pool their knowledge, data and resources to achieve more together than they could do alone. The cutting edge research that will result from all this will lead to advances, discoveries – innovation.
And, whether it’s millions of pounds in grants for the rollout of superfast broadband, investment in railways in Northern Ireland, or the rebuilding of roads in South Wales, the EU will provide direct investment in UK infrastructure.
It is also worth noting that increased competition in the EU drives productivity, and the ability to access larger markets allows domestic firms to exploit economies of scale and improve supply chains.
No wonder 9 out of 10 of the fast-growing businesses want us to stay in.
At the heart of this vision of Britain’s continued membership, is collaboration – collaboration and trade with European partners that will dive the transformation of our economy so it is one fit for the 21st century.
What is the alternative relationship that will foster collaboration on this scale that does so much to strengthen our economy? The leave campaigns have no answer to this basic but fundamental question.
Renegotiation
And what of the Prime Minister’s renegotiation – where does it leave us?
The principle running through the reforms sought by the Prime Minister in his renegotiation are clear: economic partnership to bring prosperity, balanced with economic control to protect our national interests.
Despite having previously supported many of the proposals, those campaigning to leave made their minds up before pen was put to paper.
Now, I hold no flame for the Prime Minister and would much rather have a Labour occupant in Downing Street. It would be far easier for me to join the ranks of those slamming the deal and proclaim him a failure – that is the default setting of our ridiculously tribal political system.
But I believe the proposals outlined two weeks ago are meaningful and deserving of our support.
Older generations I speak to about this say they believed, when they voted to remain in 1975, that they were being asked to sign up to an economic arrangement and not a political union.
This is why the legal clarification of “ever closer union” that has been put on the table matters for many of them: it is a formal codification of a commitment to the EU managing different degrees of integration. It would represent a redefinition of European co-operation, elevating national interests to sit alongside collective objectives.
Guarantees about the future of the single currency are also vital. The last Labour Government was right to keep us out of the Euro and now we are clear: it is not on the ballot paper – and it is not on the horizon.
Furthermore, guarantees that agreements to strengthen the functioning of the Eurozone will not constitute a barrier to cross-EU trade or discriminate against non-Eurozone members shows that the EU’s financial decision-making architecture is being morphed around Britain’s priorities.
Lastly, on renegotiation, we must never engage in rhetoric or a mindset which undermines the contribution made by EU immigrants who come to work and contribute – indeed such a view is incompatible with a belief in a free market economy.
But the way in which freedom of movement operates in the EU cannot remain static when the EU has grown from 6 to 28 member states. The answer is not a rejection of the principle altogether, which amounts to a rejection of the single market and economic self-harm, but reforms to the operation of free movement from within. Enshrining greater reciprocity in to our welfare system would be a significant change in this area.
We await the final outcome of the proposed package. If agreed, their importance would transcend partisan interests.
I hope those that value our EU membership will campaign tirelessly for a reformed Europe that gives us the best of both worlds.
Leave campaigns arguments dismantled
Of course, there will and must be scrutiny on these proposals. But our gaze must also turn to proposals from those campaigning to leave.
Their central claim is that the economic gains Europe offers today and tomorrow can be matched outside
Putting aside the interventions from credit ratings agencies, economists, major employers, small businesses, leadinguniversity Vice Chancellors, scientists, environmentalists, entrepreneurs – all of whom have made clear that Britain is stronger in Europe – perhaps most damaging for the Leave camps has been their inability to outline what out looks like.
Some have advocated following Norway or Switzerland, but this would remove Britain’s influence over rules we would be forced to adhere to, including free movement, while still paying in to the EU budget. We would pay but have no say.
Others pledge a new UK-EU Free Trade Agreement.
They promise that we can leave the EU and end free movement, end all contributions to the EU budget, repatriate control of all economic regulations and retain full access to the single market.
But if we want to retain full access to the single market, as we currently enjoy now, then budget contributions and a degree of free movement are part of the package.
To claim that a deal which gives us all of the benefits and none of the costs would be on the table is deliberately misleading.
The leave campaigns want you to believe that EU countries would give us access to the whole EU marketplace for free and allow us to opt out of its central, most defining rules when all other member states have to pay and abide by the rules.
But why would they give us a better deal than they have themselves?
This is not only unprecedented. It is illogical. They say we have little influence and regularly get trampled over by our European partners whenever we want to advance the UK position whilst we are in the club; they then say that, paradoxically, once we leave those who have trampled over us whilst we were in the club will suddenly give us all we ask.
If you join a club, doesn’t everyone expect to play by the same rules, and don’t you have more power from the inside than standing on the fringe?
Conclusion
And, let me finish by saying this.
Some try to shut down debate by labelling any highlighting of the risks involved in leaving as “Project Fear.” It is perfectly legitimate to point out the positives that would be put at risk if we leave.
But that must be and will be balanced with a positive story of what we stand to gain, which is what I have sought to do today.
If you want a symbol of the kind of economy I envisage if we stay in, look at Airbus. A European company that invests in the UK, creating around 100,000 UK jobs through a supply chain of over 400 companies.
The first aircraft the company made, the A300, saw the wings made in the UK, the cockpit, the control system and the lower section of the fuselage made in France, the rest of the fuselage and parts of the centre section in Germany, and further sections in the Netherlands and Spain.
Airbus benefits from the advantages of EU-wide collaboration, which has improved innovation, boosted growth and increased employment. We all benefit.
Stronger, more influential, better off. That is what our future economy within Europe will be – and that is why, for the sake of all Britons, I am determined we keep Britain in Europe.