A New Direction for Britain in Europe

By Lord Blackwell, Chairman, Global Vision 

17th October 2007

The letter from business leaders published in the Financial Times this morning (Wednesday, 17th October)heralds a significant new direction for the debate about Britain’s relationship with Europe.

Up until now the prevailing wisdom has been that the UK’s economic interests were best served by playing along with the EU project, seeking to influence its direction as a core player. That presumption is now under serious challenge. As business faces up to the impact of globalisation, it is becoming increasingly apparent that the inward looking, protectionist instincts of the EU social model are out of step with the competitive realities of the 21st Century – and that, far from winning the arguments in Europe, the UK is in danger of being swamped by the tide of high cost Single Market regulations. What started out as a liberalising measure has turned into a source of bureaucratic rigidity.  As a major global trading nation – the world’s third largest – Britain’s future imperative is to participate in the fast growth markets of China, India and other emerging economies rather than to protect outdated structures in slow growth Europe.

Nowhere is this conflict more apparent than in the City, where a truly global market has been attracted by the UK’s light touch regulatory regime. Yet this is now under serious threat from harmonised EU regulations and a relentless march towards a single EU regulator that would replace the FSA with a regime more concerned with regional rivalries than serving global market needs.

The Reform Treaty that is about to be agreed by Heads of Government has acted as a wake call to look again at our options – ringing alarm bells with the further transfer of competences to the EU institutions, the near universal adoption of majority voting and the increased power of the ECJ to interpret the Charter of Fundamental Rights in a range of social and industrial policy areas where the Treaty gives the EU a new mandate. As never before this Treaty makes clear that our EU partners are still set on the project of political and economic integration, notwithstanding repeated assurances from UK governments over the years that this process had reached its limits. Faced with these threats, many are starting to think again – and recognise that the UK does, after all, have the option to take a different course.

For too long the arguments have been represented as a polarised choice between going along with the full European project or pulling out and breaking all our ties. But at last the realisation is growing that there is a middle way that does not imply turning our backs on Europe and walking away. Instead we can and should negotiate a constructive new relationship where we maintain the benefits to both the UK and our European neighbours of free trade – and free movement of capital – across our large common market. We can and should also continue to participate in pan-European programmes in areas such as the environment and security where we have common interests. Yet we can do all of these things while opting out of the process of political and economic  integration and the endless stream of EU legislation and regulation it imposes on our economy. Switzerland provides one model of a prosperous European economy that has done just that.

Will our European partners allow us to negotiate such a course? If we are clear about our objectives, they will have no choice. So long as we are members they cannot proceed with their desired EU Treaty changes without our consent, and our price should be a settlement that gives the UK the relationship that serves our needs. Given that the UK represents the largest market for other EU members, it is in any case strongly in their interest to preserve good relationships and wider cooperation.

After decades of conditioning, many still find it uncomfortable to entertain such thoughts – but opinion polls conducted by Global Vision, the new campaign group, demonstrate that the option of negotiating a new free trade relationship is now moving from the shadows and has already become the mainstream view of the public at large.  If Britain is to succeed and prosper as a global trading nation in the 21st Century, this alternative vision of Britain in Europe is one that the politicians must now grasp.