| My Lord Mayor, My Lords, Ministers,
Aldermen, Sheriffs, Ladies And Gentlemen.
Let me thank you for your invitation here tonight.
This event is always a high point in my calendar. I recently overtook
Michael Heseltine as the longest serving Trade and Industry Secretary
since the 1950s – this is a Government that believes in ministerial as
well as macro-economic stability!
I want to start by paying tribute to you and the
City of London for the enormous contribution you make to British
prosperity.
As the report you’ve released tonight shows, the
City’s contribution to Britain and the wider EU is vital. If it didn’t
exist, 33 billion Euros of EU GDP would be immediately wiped out. Over the
long-term, 100,000 jobs dependent on the City would disappear as well.
Your responsibility to promote and nurture the
success of the City is a great one. Your work and that of the City of
London reinforce not just the City’s reputation as the world’s leading
centre for international business, but also the influence of Britain
itself on the global economy.
And where better than the City of London to remind
ourselves that Britain is one of the oldest and most open trading nations
in the world.
We export more than a quarter of our total GDP. We
are the second largest provider of foreign direct investment in the world.
We are good at globalisation.
But well over half our trade is with the rest of
Europe. Almost half the investment into Britain comes from the rest of
Europe. And it is Britain’s relationship with our European partners that I
want to talk about this evening.
Let me start with three frank admissions.
The European Union is unpopular.
Business leaders – including many of you here this
evening – are increasingly sceptical about Europe.
And we in government have not yet done enough to
persuade you in business, or the wider public, of the advantages to
Britain of our EU membership.
Thirty years ago - when Britain voted for the
first time in a referendum on our membership of what was then the Common
Market - continental Europe’s economy was strong, Britain’s was weak.
Not true today.
Britain - once derided as 'the sick man of Europe'
- is now enjoying stronger and more sustained growth than any other
leading industrial nation. We have the lowest interest rates for 40 years,
the lowest inflation for 30 years and the highest employment levels in our
history.
So it’s not surprising that we take such pride in
the fact that the UK has overtaken France to become the fourth largest
economy in the world.
Or that we remain the largest destination for
foreign direct investment into Europe.
Or that we are ranked by European business leaders
as number one for competitiveness in Europe.
We are right to be proud of all of that and of all
the achievements of the City and the entrepreneurs in the UK.
But that’s not to say it’s all bad news in the
rest of Europe.
When it comes to employment, Denmark, Sweden and
the Netherlands are doing as well or better than Britain.
On innovation, Finland leads the world - and
Germany remains well ahead of us on R&D investment.
On productivity, we've closed the gap with Germany
but not yet with France.
And on public transport... we still have some way
to go.
But whatever each country's performance on
different indicators, none of us can be satisfied with the overall
performance of the European Union.
The United States has grown at an average of more
than 3 per cent a year for every one of the past 10 years. Europe managed
it just once. At this rate, by 2045, the average US citizen will be three
times wealthier than the average European.
And one of the biggest frustrations for everyone
running a business today is the amount of regulation coming out of Europe.
The UK – on your behalf – has made real progress
in cutting back the worst excesses.
Our lobbying contributed to at least £6 billion
savings to business on EU chemicals regulations, regulations on which we
hope to make substantial progress in our Presidency later this year.
Regulations that are necessary and wanted by the industry but, in their
original form, would have imposed unacceptable costs on business and would
simply have resulted in the large part of our industry moving offshore.
We saved up to £1.5 billion by securing a
market-based alternative in the Electricity Security of Supply Directive.
Both the CBI and TUC welcomed what we did on
improving the Information and Consultation Directive which shortly comes
into force.
And we continue to stand firm on the 8th
Directive.
But alongside these examples, we all know that
without regulation there would be no Single Market with all its business
and consumer benefits, no slashing of air fares or benefit to the
environment.
But despite all this, red tape is still a huge
concern. And many of you feel the EU Constitution will tie you up further
still.
So Europe has to change.
Britain has led the way in arguing for that change
– and now we have the best opportunity for a generation to make that
change reality. To forge a new Europe that will work better for Britain -
and for the rest of the EU too.
We have a new European Commission determined to
put competitiveness, growth and, above all, jobs first.
In Jose Manuel Barroso, we have a new Commission
President who led difficult, often unpopular, economic reform in Portugal
and who is now offering similar vision to Europe.
A President who will be, as he put it, “undeterred
in our push for economic renewal.”
And a President who has appointed a Vice President
for Competitiveness, leading a team of commissioners to put every
regulatory proposal to the test.
“This time we have to get it right, join forces
and deliver on what our citizens care most about – jobs.” Not my words –
but Vice-President Gunther Verheugen’s.
So the Commission understands the need for change.
So too do more and more member states. The ten
countries that joined last year have already made enormous, often painful
changes. They have no desire to take on new regulatory burdens now. They
are natural allies and committed to reform.
But so too are many established member states. For
the first time ever, we have a three-year programme of regulatory reform,
agreed between the six nations responsible for the Presidency of the
Council of member states. It began with the Irish and the Dutch last year,
now Luxembourg, and, from July, Britain will build on it this year, with
Austria and Finland already signed up for next year.
So we have a Commission and a swathe of member
states committed to reform. But we have another opportunity, if we can
grasp it.
Within the next 18 months, the British people will
vote in another referendum on Europe.
Not a referendum on the single currency - that is
a decision for another day. But a referendum on the Treaty to establish a
Constitution for the European Union.
I know the Treaty hasn’t been high on the business
agenda. I know too there is much confusion about what impact the
constitution will have on our lives, if any.
But my message to you tonight is that the
Referendum directly affects every business in Britain.
A Yes vote would maintain Britain’s strong
position in Europe. Give us the framework for the kind of Europe we want -
a Union of free and sovereign nations.
A No vote would mean uncertainty, a crisis in
Britain’s relations with Europe, a stepping-up of the campaign for
outright withdrawal – and leave Britain isolated and weak in our dealings
with Europe.
In essence, the case for the Treaty is
straightforward.
The institutions and rules of the European Union
were designed for just six members. Fifty years on, we’ve had one Treaty
after another, all amending the original design.
But rules that worked for six or even fifteen
member states won’t work for 25 or more. We need to consolidate and
clarify the rules, we need to reform the European Union to make it more
effective, more efficient and more accountable.
We listened very carefully to the views of
business, trade unions and others before we negotiated the Constitution.
We set out our objectives. And we achieved every
one of them.
Limits on the powers of the European Union. Member
states firmly in control. Qualified majority voting in areas where we
would make no progress at all without it – like agricultural policy and
enforcement of the single market. But the national veto retained in every
area where we want it – tax, defence, foreign policy, the financing of the
EU.
A smaller European Commission. More power for
national Parliaments. And respect for established liberties of our
citizens rather than an open door to create new ones.
The Treaty means not more Europe, but a better
Europe.
No wonder German Government Ministers regarded the
Treaty as full of concessions to Britain, Le Monde called the Treaty “a
British victory”, and the Italian Corriere della Sera declared that “the
British have won the day”.
This is the Treaty which we have agreed and will
be recommending to the British people.
There is, of course, another Treaty – the one we
read about in most of the British press.
The Lord Mayor spoke earlier of the danger of
misinformation. Let me give just one example of the misunderstandings and
misrepresentations that abound.
Last week a respected columnist in a serious
broadsheet stated that the Treaty “would seem, at a stroke, to prevent
Britain (or any other member country) from acting unilaterally in military
or political alliance with the United States ever again”.
But what he did not say is that the language in
the Treaty committing members to support the EU's common foreign policy in
"a spirit of loyalty and mutual solidarity" is lifted straight from the
Maastricht Treaty and for ten years has not prevented Britain from acting
unilaterally with the United States where we have wanted to.
Nor did he say there will only be a common
European foreign and security policy on a particular issue if every member
state agrees.
That is what the national veto means.
So on the one hand we have a Treaty that is good
for Britain. On the other hand, look at what a No vote would trigger.
A crisis in our thirty-year-old relationship with
the European Union. Massive uncertainty about the future.
Part of that uncertainty stems from the division
in the No campaign itself.
One half want Britain out of the European Union
completely. For them, victory in the referendum would be the signal to
step up their campaign for outright withdrawal, a move that would be
disastrous for investment, for the City, for the 3 million jobs directly
linked to our membership, for our influence in the world.
Withdrawal would leave us – like Norway or
Switzerland – still trading with Europe. Still paying contributions to
Europe. And still bound by all Europe’s single market rules – yet with no
say in the rules that Europe adopts.
No wonder the Norwegians call it “fax democracy” –
because they get their new laws from Brussels by fax.
So. That half of the No camp are misguided. But at
least they’re honest.
The other half claim Britain can vote No, stay in
the EU and simply renegotiate everything.
It’s a fantasy. A false prospectus. There isn’t
going to be a renegotiation because no other country wants it.
Withdrawal from any of our international treaties
would require the unanimous support of all other signatories. But no other
government, no other political party in Europe is interested in
renegotiating a dozen Treaties stretching back thirty years, every one
under different Governments endorsed by the British Parliament.
I’m old enough to remember the days when my own
party was anti-Europe.
We stood in the 1983 election on a manifesto
promising to “renegotiate” Britain’s membership. It was just a way of
papering over the divisions between the people who wanted to stay in – and
the people who wanted to leave. It wasn’t a starter then – and it isn’t a
starter now.
A No vote would leave Britain isolated and
weakened. Our European partners, understandably puzzled, even angry, that
we had rejected a Treaty in which we got everything we wanted, would one
way or another move forward without us.
Our objections to new regulations would hold
little sway.
Our allies for reform would be weakened - allies
eager to make Europe more dynamic, more competitive - weakened because
their strongest partner would be sitting on the sidelines.
The result?
Worse regulation from Europe. Weaker growth in
Europe. Massive uncertainty about our relationship with the biggest single
market in the world.
A triple hit on British business, British
investment and British jobs.
Finally, isolated from the EU, we would be weaker
in the world.
Some say Britain could turn to a closer
relationship with the US. I don’t believe that for a moment. I say we
would be left on the sidelines as the EU and US brokered trade reform
without us. If we have no influence in Europe, we would have much less to
bring to our special relationship with the US.
Nor could we recreate in NAFTA the influence and
negotiating clout we enjoy in the EU. Just a fifth of our exports go to
NAFTA countries compared with over half to the EU.
In today’s global economy, every country is
looking to work closer with its neighbours – the US with NAFTA, and the
Asian economies with ASEAN – not only to increase prosperity, but to
sustain peace.
The great historic achievement of the European
Union has been to make war unthinkable in a continent devastated by war
for centuries.
Then came the fall of the Berlin Wall, the
collapse of the Soviet Union. For Poland, for the Czech Republic and the
other countries of central and eastern Europe, the European Union was a
magnet, a beacon of democracy and modernisation.
Now that same process is being repeated with new
countries on Europe’s borders.
A few weeks ago, at the World Economic Forum, I
listened to the Polish President, Aleksander Kwasniewski, who helped
negotiate the second, democratic elections in Ukraine.
Poland – a new member of the EU, anxiously needing
to see the benefits of membership for its own people – could be forgiven
for wanting to keep some distance from Ukraine, its big, agricultural
neighbour.
But not a bit of it. “Ukraine – a country that
kept its culture, language, history alive through all the years when it
was not independent. Let us bring Ukraine, this wonderful country, into
the European Union”.
At that same Forum I listened to Viktor Yushchenko,
the new President of Ukraine, set out his programme for the new
government. Reform taxes. End corruption. Deliver economic stability. And
join the European Union.
And I heard President Erdogan of Turkey describe
his vision of a modern Turkey.
Asked how he would respond in some future
referendum on joining the EU to a sceptical Turkish citizen, he said: “I’d
need to know more about why they were opposed. But then I would say: what
is there to fear? We are all human, and we are all of value simply because
we are human, whatever our religion or race.”
What a contrast between the humanity and the
idealism of these European leaders, their courage and commitment to the
hard slog of economic reform – and the cynicism, the pettiness, the
xenophobia of the anti-European movement in Britain.
I can put my case no clearer than this.
Do we need to be in the European Union?
In a world increasingly shaped by trading blocs,
when Europe takes up more than half our trade - of course we do.
Is the European Union today good enough?
Of course not.
Will we make it better by leaving or sitting on
the sidelines?
Never.
Can we win this referendum? Yes.
Just one in four business leaders have made up
their minds how to vote. The wider public is divided, millions of people
waiting for more information - information they feel they can trust -
before they decide.
So we have all to play for.
We in Government will step up the campaign for
Britain in Europe. I ask you now to join us - because a ‘No’ vote would be
devastating for business, and devastating for Britain.
I know I’ve delivered a stark message to you
tonight. But it’s a message that I believe is vital to the future
prosperity of our country. And where better to signal a renewed
determination for Britain to seize this opportunity and to lead in Europe,
than here in the City of London.
Let me end by proposing a toast to our hosts, the
Lord Mayor and the Lady Mayoress.
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