Speech by Pat McFadden MP to Institute of International and European Affairs (IIEA), Dublin, 1pm Wednesday 27 January 2016.
It is a great pleasure to be here at the Institute of International and European Affairs. This organisation has a well deserved reputation for high quality debate and publications on European and broader international issues.
It is therefore to be expected that you would take a close interest in the debate over the United Kingdom’s future in the European Union.
We know this debate is being closely watched in Ireland. A number of reports have been written about the potential consequences of Brexit and speeches made by Irish Government Ministers, most recently by the Taoiseach on Monday.
And no one should be in any doubt about the importance of the decision the UK will take in the referendum. It will chart our future for many years. It will say a huge amount about how we view ourselves and how we view the world around us. And it could have a profound impact on the European Union itself.
The economic case for staying is central and voters will want to know what both staying and going will mean for them, their jobs and their family’s prospects. But I don’t believe that this is only about trade and jobs, vital as these issues are. It is also about values and where we stand in the world.
The world faces major challenges. Are we to meet them by working with our partners or are we to retreat in a combination of nationalism and nostalgia to a very different future? The answer to this question matters not only to us but to our friends here in Ireland and throughout the European Union.
Today I want to set out the background to how the UK got to this point, to say why I believe it is very much in both Britain’s and Europe’s interests that we vote to remain part of the EU and to raise some important questions about the implications of this debate for the UK and Ireland.
Our two countries joined the EU at the same time and over the forty plus years of membership we have had, relationships between us have been transformed for the better.
When I think back to my childhood the relationship between Britain and Ireland then was often one of suspicion and distance. Today that is certainly not the case. We are neighbours, friends and partners. There is a high and valuable degree of trust between our two countries and very often a common view on the direction Europe should take.
This transformation is not entirely down to joint membership of the EU. There have of course been other factors. But it has certainly helped. Together our politicians have sat round the same table at the council of Ministers discussing everything from the single market to finance to EU enlargement and more often than not we have been in broad agreement.
But although we often agree on specifics, it would be a mistake to assume that we view the European Union through the same eyes.
While Ireland has never seriously questioned its EU membership since joining in 1973, in the UK the story is different.
And a major part of that difference in recent years is down to how globalisation has affected different parts of the UK in different ways.
Britain has been one of globalisation’s boosters. We have seen the advantages of open markets, the tearing down of walls and barriers and although we are a medium sized country, in economic and cultural terms we still try to exercise a global view with global reach.
Walk around our capital city and you can see the successes of that stance. Gleaming new towers stand as monuments to London’s ability to attract investment. A global financial centre. A fertile ecosystem for start-up businesses of all kinds. An international population with over 100 languages spoken in the city. A diversity and religious freedom that is precious and envied around the world. An openness that serves as a great foundation for creativity. London is a great global city that has done well in taking advantage of globalisation.
But globalisation is uneven in its impact across the country. Walk around parts of my Wolverhampton constituency or other small cities elsewhere in the country and you see a different picture.
Here, and in places like it recent decades, the story has often been of painful economic change, huge factories which provided thousands of jobs closed down and gone. Many smaller cities searching for a new purpose. Instead of a sense of excitement about globalisation’s possibilities there is often a sense of loss, not only about employment but also about pride, identity and purpose.
For many people in parts of the country such as I represent globalisation did not seem an unalloyed good. It looked like a force that took work away and brought competition for the work that remained. It could seem like a competition that the local population was not winning.
And when I look back to the time from the mid-1990s until the Labour Government of which I was a part left office in 2010 I can and do take great pride in many achievements but I also I wish we had done more to respond to that sense of loss. We cannot stop the tide of change. We can’t just wish it would go away. But we can and must equip people to succeed when change is happening. We can reassess what we want and expect from our education systems. We can remove barriers to opportunity. And on that front our problem in Government was not that we changed too much and somehow forgot our roots. It was that we changed too little and should have done more.
Into this sense of loss and concern about economic change stepped UKIP with a message that aligned EU membership with immigration and the accusation that the political elite did not care about those who felt they were losing out from change.
I reject the politics of fear and anger as a response to concerns about globalisation. Simply amplifying grievance doesn’t create a single job or help a child pass a single exam. But it is incumbent on those of us who reject these views to do a better job of equipping people to cope with change and giving them hope for a better future.
And getting the best answers to these concerns is at the heart of the battle over Britain’s future inside or outside the EU.
These issues of globalisation and attitudes to the EU have also played themselves out inside our main political parties.
In the early years of membership in the UK it was my party, the Labour Party, which was the Eurosceptic party. We fought the 1983 election - and lost it terribly - on a platform of withdrawal from the EU.
Labour changed its attitude to the EU during the long modernisation path that led it back to power, begun by Neil Kinnock and John Smith and completed by Tony Blair. Instead of withdrawal we had a different analysis which saw Britain as a key player in an interconnected world, where on issues from climate change to trade it made more sense to work together rather than retreat into individual nation state responses.
In the post Thatcher era it is the Conservatives who have been the more Eurosceptic party. The fissure over Europe has scarred the Conservative Party for at least two decades, from the John Major government to the present day.
Yes, there is a group of consistent pro European Conservatives. But in recent times it has become harder and harder to be selected as a Conservative parliamentary candidate without expressing strong Eurosceptic views. And one of Mr Cameron’s pledges to appease Eurosceptics in his Conservative leadership campaign was to pull the Conservative Party out of the EPP, the main centre right grouping in the European parliament.
For a time the Prime Minister resisted the calls for a referendum and indeed led his MPs to vote down the proposition in the last Parliament. But in the 2013 Bloomberg speech he gave in to the pressure and set us on the path we now find ourselves.
Mr Cameron’s strategy is to renegotiate the UK’s terms of membership with the EU in four specific policy areas set out in his letter late last year to president Donald Tusk, and then to put the results to an in/out referendum.
Some believe we have been here before with Prime Minister Harold Wilson setting out a plan for renegotiation followed by the referendum which took place in 1975. But while that referendum was more or less a ratification of entry, this time the poll will take place after forty plus years of membership.
If the Government gets an agreement at the European council next month most people expect the referendum to take place in June of this year, though of course if there is no agreement until later, the referendum itself will be later. The legislation stipulates only that the referendum be held by the end of 2017.
On the content of the package, most of the leading voices campaigning for Brexit have already made their minds up. It won’t be enough and it never could be enough. It is clear from just about every debate on Europe I have attended in the House of Commons over the past couple of years that there is nothing the Prime Minister could negotiate that will satisfy many of his own backbenchers. They are desperate to be disappointed. They made their minds up long ago and will campaign for out.
Some don’t quite put it in those terms. They say that all they want is an end to free movement of people and an individual parliamentary veto over every EU decision and if they get that they will be happy. The Prime Minister is learning the meaning of the old Trotskyist transitional demand and the Conservative Eurosceptics have become its modern day advocates.
For those of us who want Britain to stay in, we await the outcome of the renegotiation but we do not rest the whole case for Britain’s continued membership upon it. The issue of most substance in the package is the future for countries which will not become members of the Eurozone. It is important that countries like the UK in this position do not become second class citizens in the EU and that the currency choice we make does not lead to our economic disadvantage or damage to our national interests.
On the issue of migration there is a legitimate discussion to be had about the basis upon which people pay in and draw down from welfare systems, particularly in a world where people move around more than they did in the past, but we should be clear that the vast majority of people who come to the UK from elsewhere in the EU do not come to milk the welfare system but to work hard, pay their taxes and make a positive contribution to our country.
There is a bigger broader case for EU membership, far beyond the specifics of the Prime Minister’s renegotiation package. The question on the ballot paper is leave or remain, not just what we think of the renegotiation. And it is that broader question which will be in voters’ minds when the referendum comes.
I believe that the core case rests on our economic interests.
Almost half of UK exports go to the EU – over £200billion of goods each year.
Around half our inward investment comes from elsewhere in the EU, helping to create jobs and boost incomes for families throughout the country.
And much of the inward investment that comes from elsewhere in the world is encouraged by the fact that we provide a gateway to the European single market. This is an important factor for example in our thriving automotive industry and in our international finance sector.
If we take only the trading relationship between the UK and Ireland, in 2014 the UK exported £28 billion of goods and services to Ireland and imported some £17 billion. Or put another way, as the Taoiseach reminded us in his speech on Monday, we do a billion euros of trade with one another every week.
Ireland is our fifth biggest export market. We do more trade with you than we do with China. And of course the trade between Northern Ireland and the Republic is extremely important to the Northern Irish economy.
I reject the idea that somehow we should make a choice between trading globally or trading with the EU. Of course we should be trying to grow trade in emerging markets but it is not a choice of one or the other. We should be doing both.
And important as trade, jobs and investment are to continued EU membership, I do not believe the case for remaining in begins and ends there.
We forget at our peril that the EU is a partnership of values as well as interests. Membership entails commitments to respect human rights, to democracy, to the rule of law and to resolving differences peacefully. Not only has the EU helped keep the peace between the leading protagonists in the old Europe of nation states - it also helped embed the path from tyranny to democracy for the former communist countries of central and eastern Europe.
And this commitment to common values is being tested in Europe right now as the EU struggles to cope with the twin crises in the Eurozone and over refugees. Both of these problems call into question assumptions we have made about solidarity and openness.
For most of recent decades the success of the EU was not in doubt. It was growing economically and in size and influence.
Here in Ireland you know well the struggle to overcome the economic problems of recent years. And now Europe faces an unprecedented flow of refugees from Syria, Iraq and North Africa that has put the Schengen system under great strain. And some have also voiced fears about the religious and cultural diversity that follows from greater movement of people.
Beyond the EU’s borders, we have Russian aggression in Ukraine, a terrible civil war in Syria and sometimes within the EU attacks on the pluralism and openness that we hold dear.
It’s the easiest thing in the world to say this is all too difficult, that we should pull up the drawbridge. And in many countries there are voices saying precisely this. But that is not the leadership which these challenges demand.
The truth is these problems require more co-operation, more partnership and a greater exercise of co-ordinated leadership and we should be strong enough to say so. I want to see the United Kingdom play a part in that leadership task, not walk away from it. So this referendum is also about what kind of leadership we will exert over the problems we face today.
The implications of Brexit
The referendum campaign has in effect begun. Polls suggest a population evenly divided between staying and going. It could go either way.
So the third and final issue I want to turn to is the implications of Brexit itself.
The first thing we need in this debate is confidence. Too often, the European Union is discussed in the UK as a forum which always does things to us, rather than a forum where we can decide things which are in our interests. Our involvement with Europe did not begin in 1973. It goes back centuries. And Britain has enjoyed considerable success in shaping the modern EU. We pushed for the single market in the first place. We have pushed for its extension to services and digital commerce. And both Conservative and Labour Governments pushed for enlargement. We need more confidence in ourselves and what we can achieve if we choose to lead in Europe rather than constantly fearing it.
After forty years of membership, we know what being In entails. But what about being Out?
A referendum is not an opinion poll on one future. It is a choice between two futures.
It cannot simply be about the merits or otherwise of the EU. The EU certainly has its flaws and faults, and it faces serious challenges as I have set out. But the question is to remain or leave, and what being out would mean must play a greater role in our debate. Those who advocate leaving have a duty to set out what leaving would mean.
First the economic implications. Those who advocate leaving tell us we can have our cake and eat it. They want to keep our current access to the single market. They want us to pay no fee for such access. They want to end free movement and pick and choose what regulations they will obey and not obey.
Such a deal does not exist for any country currently outside the EU. Market access comes with a price and in terms of adherence to common rules and standards. The question for a great trading economy is, what price will be paid and will you have a say over what the rules and standards that your economy must live by?
Norway, not in the EU but part of the EEA, has to pay substantial sums to EU coffers, obey the rules of the single market, do so without having any say in the Commission, Council of Ministers or the Parliament and is part of the Schengen agreement on free movement.
In a similar way Switzerland, through a series of bilateral agreements that took years to negotiate, has to update its laws “autonomously” to comply with EU law, to pay substantial fees for the privilege and is in a stand-off with the EU over free movement.
I believe the Norwegian and Swiss arrangements would be bad deals for Britain. We would be swapping the position of rule maker for that of rule taker – a passive recipient of decisions made by others which we had to accept to maintain our access to the free trade area.
And if leave campaigners don’t want the Norwegian or Swiss arrangements they have a duty to tell people what it is they do propose.
The other alternative of opting out of the single market and trading under WTO rules implies tariffs of, for example, 10% on car exports and other tariffs on components. What are going to be the trade implications of no longer being part of the single market? What would it mean for a manufacturing area like my own constituency which needs to trade to survive?
What will be the implications for our exporters, and their supply chains who may not export themselves but whose order book is dependent on companies who do?
What are the implications for our financial services industry?
Or to the employment rights agreed at EU level and enjoyed by millions of British workers? Rights such as access to guaranteed paid leave, equal rights for part time workers, fair pay for agency workers. What is the fate of these protections when the cost of them is constantly attacked by those who would take us out?
If the future is to stay in the single market with no say over its rules you have to ask, what is the point? And if the future is to leave the single market you have to ask, what is the price?
Then of course there are the constitutional implications of leaving.
The Scottish referendum in 2014 came close to breaking up the UK. The issue has certainly not gone away and the SNP is dominant both in the Scottish parliament and in terms of Scottish representation in the House of Commons.
They have made clear that if Scotland votes to stay in the EU but the rest of the UK votes to leave there may well be a second referendum on independence. Indeed the SNP developed their policy of independence in Europe precisely to counter the accusation from opponents that Scottish nationalism was a separatist isolationist impulse.
Coming soon after independence for Scotland was rejected in the referendum of 2014, the prospect of Brexit once again throws open the question of the future integrity of the UK.
Then there is the position of Northern Ireland. I don’t want to overstate the role the EU played in the peace process. That process was in the main the result of patient and far sighted leadership from the Governments in both the UK and Ireland and the various players in Northern Ireland. But the fact that both Ireland and the UK were in the EU helped. And the EU has supported the peace process through specific funding to help Northern Ireland recover from the economic damage of the troubles.
But none of us can say with certainty what it would mean for Northern Ireland if the UK voted for Brexit. This is the only part of the UK which shares a land border with another state, a border that at the moment has thousands of people crossing freely in each direction every day. Between Northern Ireland and the Republic there is easy and productive trade and because of EU membership a lot of common rules. If Brexit happens, and happens in large part because of a desire to restrict the free movement of people, what will happen to that border?
Ireland will still be a member of the EU. It will still be abiding by the free movement rules that are a condition of membership. But what kind of border will there be if Britain no longer has such rules?
What would the effect on Northern ireland be if its neighbour to the south is in the EU but it is not, and Scotland, the part of the UK with which it has the closest links, is pushing for independence in part so it can remain part of the EU while Northern Ireland is not?
I have no doubt both governments would do their best to overcome these issues but the economic and other implications of such a situation are unknown. At the very least they pose a set of questions that are not there now.
The point is, it is complacent to assume that we can walk out of the European Union and believe that everything else will stay the same. A Brexit raises major questions about economic and constitutional arrangements that Leave campaigners have so far failed to address.
I hope it does not come to any of this. I hope that we can persuade the people of the UK to vote to remain in the EU and to play a leading role in its future. I want to see a UK that is confident, engaged in the world, outward looking and determined to make the most of that stance.
This battle is a test of leadership. Can we set out a path for the future which explains the world and how we can make the most of it?
I want to see a Britain that plays to its strengths in the world, that seeks new opportunities and does not seek solace in trying to recreate a country that is not coming back.
Stumbling out of the EU would not be the exercise of strong leadership. It would signify its absence. That’s why leadership is so important on this question now.
The Government of course has its leadership duty. But in a referendum situation where every vote counts, so do many others, including the opposition party. And even when my party is further from power than we have been for many years I believe we have a duty of leadership on this issue, to speak to voters in every part of the country, to say this is bigger than Labour versus Tory or any other party battle and say it is in the interests of our country and of Europe itself that we stay in.
That’s why I will be doing whatever I can to advance the cause of the UK staying in the European Union.
Pat McFadden is Co-Chair of the Labour In group of Labour MPs.