Liam Fox Speech on EU

Monday, 10 December, 2012

 

CHECK AGAINST DELIVERY

 

BRITAIN AND THE EUROPEAN UNION - AN EMERGING CONSENSUS

 

Speech for Open Europe at the Royal United Services Institute, Monday 10th December 2012

 

It is fittingly ironic that with the Euro crisis rumbling on, the EU economy stalling and the continuing inability of EU leaders to reach a budgetary agreement, that today, Jose Manuel Barroso is taking time out to accept plaudits for half a century of success when the EU receives the Nobel Peace Prize. As the unelected bureaucrats bask in their reflected glory in Oslo, they might want to spare a thought for the millions of Europeans, especially young Europeans, who find themselves with no other prize to show for the EU project than unemployment and fear for the future.

 

PRETENSIONS IN A PARALLEL UNIVERSE

 

Today’s spectacle is as clear an example as you can get of the parallel universe that the Commission and the unelected political class of Brussels live within. As they take their balcony bow like some latter-day mediaeval monarchs, they will be in full self congratulatory mode.

 

This is the same Commission that, in the Prime Minister’s words, “did not offer a single euro in savings” at the EU budget talks, while over a half of young Spaniards joined the dole queues.

 

Complacent, conceited and with pretensions that show how little they have understood the changes in the rest of the world, they have made “ever closer union” a rigid ideology to be implemented whatever the will of the peoples of Europe  and at whatever the cost. The Nobel Peace Prize simply plays in to this otherworldly mindset.

 

Of course, it would be churlish not to acknowledge the way that the EEC, then the EC, and then the EU helped the transition in Spain, Portugal and Greece from military dictatorships to liberal democracies. Or indeed the beacon of hope for political reform that was seen by the former East European nations dominated by the Soviet Union during the Cold War.

 

But to credit the European Union with keeping the peace on the European continent since World War II, is an unacceptable distortion of history that should not go uncorrected.

 

If there is one institution that made this happen, it is NATO - not the European Union. It was  the NATO military alliance that held together not only the European powers, but vitally, the United States, whose willingness to bankroll under spending European nations, eventually persuaded the Soviet Union that they could not win.

 

It was NATO, whose political creed of liberty, law and democracy saw off the wicked ideology of communism. We did it because we believed in our values, that we were better than and not just different from the Soviets; we did it because free markets triumphed over state planning and we did it because courageous leaders took the necessary risks to ensure a better future.

 

So perhaps the Nobel committee might want to think again for next year.

The EU is not an instrument of security. The EU’s pretensions in defence and security verge upon little more than a vanity project.

 

 With no money spent on top of NATO commitments, the entire process risks duplication and the diversion of funds earmarked for NATO, leading to a weaker not a stronger European continent and the undermining of the Alliance.

 

Too many European leaders say that they are better suited to be peacekeepers than war fighters. This is to ignore a basic truth – you can only keep the peace if there is a peace to keep. The bitter and brutal lesson of history is that peace, like freedom, sometimes has to be fought for, and sometimes even died for.

 

The European Union’s CSDP is not only a triumph of pretensions over practice, it is a world away from the common market that the people of Britain voted to join.

 

The EU itself is so increasingly dislocated from the realities of globalisation that it threatens the economic well-being of not only its own citizens but those beyond its borders.

 

THE EURO OBSESSION

 

The Euro crisis continues to be the dominant issue in European politics and this is unlikely to change anytime soon. Despite all the evidence to the contrary, European leaders continue to treat the problem as a fiscal one, when in reality it is merely the fiscal symptoms of an economic and cultural problem. The economies inside the Eurozone are no closer to convergence today than when the currency was created.

 

 There is as much chance of realising the alchemist’s dream of turning base metals into gold, as there is of turning economies like Greece into Germany.

 

 Of course it is true that the Euro did not create the deficits and debt that so bedevil the economies of Europe – we can see how many countries outside the system did the same – but the fact that certain fiscal and economic policies were permitted  exacerbated the gap between member states, ensuring that the unstable architecture became even more unbalanced.

 

The Euro crisis is not over, and sooner or later, rationality will have to prevail. The question is how much damage will have been done in the interim.

 

It seems that, in order to pursue this ideology of ever closer union, the hopes and dreams of a generation of young Europeans will be sacrificed on the altar of the single currency.

 

We are lucky that John Major’s government had the foresight to keep us out of the Euro at a time when the Labour Party and many Conservative Europhiles were urging us to join.

 

It is from this position outside the Eurozone that the UK should take stock of what we really want from the European project.

 

WE ARE DIFFERENT

 

The United Kingdom has always had a different relationship with the European Union than most of its other members and these differences are becoming increasingly apparent today.

 

The first is political.

 

The British people are deeply embedded in their historical and geographical lineage. As an island nation with a long trading heritage and historical experience of the gain and loss of empire, we have never perceived the southern border of Greece as the end of the world – in fact we have tended to see it as the beginning.

 

 Our close relationship with the United States, both in economic and military matters, means that we occupy a unique position. I don’t believe that we have ever felt truly European in the way that many of our continental neighbours do.

 

Moreover, unlike so many of our European friends, we have never felt the need to bury our 20th Century history in a pan-European project - a project where the integration of European nation-states is designed to sap them of their unique identity in order to minimise the risk they might pose to one another.

 

The second difference is economic.

 

UK exports of goods and services to the EU are well under 50% and falling. Taking into account exports that are rerouted through Rotterdam and Antwerp the figure is closer to 40%.

 

In fact, 2010 figures show that out of the 27 member states, the UK is the third lowest total goods exporter to the EU, only slightly above Cyprus and Malta.

 

In terms of trade, the EU depends more on Britain for exports than Britain does on the EU. In September 2012, the EU exported some £16.7 billion worth of goods to Britain, whilst we exported only £12 billion to the EU.

 

The countries where Britain’s exports are growing fastest are India, Russia, Australia, South Africa and Turkey. What is more, the UK is set to increasingly utilise the potential of these growing markets with £45 million for UK TI announced by the Chancellor in his Autumn statement.

 

All of these examples contribute to a growing sense amongst the British people that the direction of travel of the European Union is not in our national interest.

 

This is of course exacerbated by the fact that - not since 1975 - have the British people been able to express a clear view on the European project. The fact that the major parties have in general taken a more or less pro-EU position at each general election has ensured that voters have had no clear opportunity to make their voices heard on this most important of questions.

 

Only 27% of today’s electorate were eligible to vote in the 1975 Referendum. That is a real democratic deficit which puts the debate on House of Lords reform into perspective.

 

A NEW CONSENSUS?

 

I believe that a new consensus is beginning to build inside the United Kingdom. Incrementally, but increasingly, politicians are beginning to catch up with the public’s attitude which points towards a new, looser and largely economic relationship with the European Union. I, for one, hope to see “back to a common market” as the Conservative slogan on Europe at the next general election.

 

Increasingly, debate has centred on the need for a defined negotiating period over the EU issue ending in a much needed referendum.

 

I believe that this would be a sensible course to take.

 

We should set out what our relationship ought to be and make clear to our European partners that if a consensus can be reached, our continued membership of the EU could be the recommended course of action.

 

Equally, if we were not given such assurances, then we have to be clear that the British people might well decide to leave.

 

There are those who tell us that renegotiation is not an option or it cannot be done. Well, they would, wouldn’t they? Their power depends on our belief that we are powerless. It is bad enough when the message comes from the self-interested elites of Brussels but when it comes from their apologists here at home, it is particularly depressing.

 

They are actually telling us that we must accept whatever Europe allows us to have and there is nothing we can do about it. It is a craven surrender of any notion of real national sovereignty.

 

To be frank, if the choice is between the current trajectory towards ever closer union and leaving, then I would choose to leave, albeit reluctantly. If the choice is between a looser, more economic relationship and leaving, then I would choose to stay. It is a view that, I believe, is gaining ever greater traction with the British people.

 

Do we need to have this debate now? The answer is yes, because a number of our European partners are pushing for greater integration as part of their perceived solution to the Euro crisis.

 

It is they who are moving the goal posts not us.

 

I do not believe that “more Europe” is the answer to their problems unless they are willing to tackle the fundamental structural imbalances that lie in the economies of individual member states. Nor do I believe that the means of achieving this – what will effectively be perceived as external austerity programmes imposed by Berlin – can happen without a further rise in nationalist or extremist political sentiment.

 

It would be a tragedy if an institution that was initially set up to counter the threat of nationalist danger in Europe was, as a result of its own inflexibility, to reignite such notions.  If they break, it is because they will not bend.

 

Any transformation is likely to require treaty change to achieve it, and if “more Europe” is the remedy they seek, then “less Europe” is what is right for Britain. It is not we who are fundamentally altering the European dynamic but the integrationists. Nonetheless, it is an opportunity that we should grasp.

 

Those who are totally wedded to the concept of ever closer union -including most of the Foreign & Commonwealth Office for whom integration into the EU is virtually an article of faith- are likely to tell us that there is no point in asking for a new relationship because we will not be offered one. On this point, Britain needs to regain some self-confidence.

 

As I have already said in terms of trade, our EU partners export more to us than we export to them. That puts us in a strong position. What is more, we are becoming less dependent on the EU for trade as we increasingly export to the parts of the world with expanding economies. That puts us in a strong position also.  We are better placed than most to take advantage of the parts of the global economy that are still growing, away from the indebted west.

 

And all of this does not even begin to take into account the fact that many of our EU partners are also NATO partners who depend hugely on both the UK’s defence capabilities, with the fourth biggest defence budget in the world, as well as the close relationship with United States and our permanent seat on the UN Security Council.

 

THE IMPORTANCE OF TIMING

 

But if we are approaching a new consensus, at least in the Conservative party and amongst our natural supporters- who number many more than our recent voters- then we need to be aware of the dangers and constraints that time places upon us.

 

If Conservatives are to have credibility on the European issue in the eyes of the electorate, then we must have a settled position that is clear, concise and consistent. And we do not have an infinite length of time in which to set it out.

 

We will be fighting European elections in 2014 and we cannot allow the contents of our 2015 general election manifesto to look like a reaction to that most unpredictable event.

 

We must have a clear position before 2014.  I believe that if we are to maximise the political benefit of this we need to have it in place by the time of the Conservative Party Conference in 2013. The longer we hold a clear position, the more likely we are to be credible and thus be able to both take advantage of a growing trend amongst the British electorate and to see off parties such as UKIP by supplanting them rather than accommodating them.

 

Some have suggested that there would be a tactical advantage for the Conservative Party in having a permissive referendum in this parliament as a way of underpinning the commitment to a new relationship while simultaneously strengthening our negotiating hand and making the seriousness of our claim clear to our EU partners. Such a referendum would set out the type of rebalancing we seek and ask for a public endorsement. I have always been somewhat sceptical of this proposition but the shifting political patterns of recent times have made it something worth seriously considering.

 

CONCLUSION

 

Britain’s relationship with the EU may not be at the top of voters’ concerns but when asked their views they express clear preferences.

 

I believe that the new consensus developing around us offers a chance for Britain to forge a different relationship at a time when the tectonic plates of Europe are shifting as a result of the Eurozone crisis.

 

Today’s EU is a world away from what the British people believed they were signing up to.

 

Far from a Common Market, it is a voraciously centralising entity- bureaucratic, expensive and wasteful- that is increasingly indifferent to if not contemptuous of ordinary Europeans.

 

We should not for one moment accept that we are powerless to forge something new or that we are simply one of the cash dispensers to an ever greedier machine.  

 

It is time to challenge the conventional wisdom on Europe. It is our country and its future should be ours to decide.