The European Union needs reform, and the best way to achieve it is with Britain's participation, argues British MEP Graham Watson.
Graham Watson is the president of the Alliance of Liberals and Democrats for Europe.
Nigel Lawson wrote recently that in his judgment the economic gains of leaving the EU would outweigh the costs. Is this the same judgement that gave Britain the runaway house price inflation which started in the late 1980s and ended up causing misery for millions? Is this the same judgement which promoted the UK's Financial Services Act, ushering in the casino capitalism which went pear shaped in 2007? The same judgement which pegged the pound to Germany's Mark at just under three Deutschemarks to the pound under the Exchange Rate Mechanism, with such disastrous consequences?
Following Nigel Lawson's judgement with regard to the EU this week would be even more catastrophic for the UK economy than following it in the 1980s. The damage to the UK economy would be felt immediately, with the loss of up to a third of foreign direct investment on which so many jobs depend. In the medium to long term, we would lose our say over EU economic policy, further undermining our position.
Lawson argues that joining the Common Market in 1975 was good for British business as it forced them to embrace the European export market, and that leaving now would be just as good because it would force British business to embrace emerging markets. His words suggest that businesses have got too secure, too comfortable, lazy almost. I would love to know what the one in ten British workers whose jobs depend on Britain's membership of the EU think of that.
The idea that we need to cut off our ties with Europe in order to increase those with Asia and America – choose one or the other – is ludicrous. A game-changing trade deal between the US and the EU, worth billions to the UK economy, is just around the corner. Major trade agreements with India and Japan are in the pipeline. And by the by, I am not at all convinced that the UK would get as good a deal if it tried to negotiate on its own. There is a reason why Obama's State of the Union address did not announce a brand new trade deal with the UK – the idea is almost laughable. A trade deal with the EU however is a big banana for the world's biggest economy, worth the investment of political capital.
Lawson claims that the loss of the single market would be only marginal. But the fact is that we export more to the Netherlands than to China, Brazil, Russia and India combined. Almost 90% of small business exporters rely on trade with the EU. In my constituency alone, Honda, Airbus and Agusta Westland have all been hit by the slowdown of demand in the eurozone – I shudder to think what would happen if they were denied access altogether. Three million jobs is an awful lot for Nigel Lawson to dismiss or gamble away.
What is interesting is how our former Chancellor of the Exchequer is in effect giving up on Cameron's renegotiation before it has even begun.
Let me be clear. I agree with David Cameron that the EU needs reform; it is not perfect and the way it works needs to be improved. I even agree on the need for some rebalancing of powers – there should always be a rebalancing to reflect changing times, the need for decision making to be as close to the people as possible, consistent with good governance. Having said that, globalisation means that the general (common sense) trend is to take decisions at EU level where this is most effective.
The best way to reform the EU is for all countries to do it together. And in some ways I therefore can't help but share some of Lawson's pessimism regarding Cameron's little project. The problem lies in the Conservative Party's entirely unilateral approach. Cameron went about it in the wrong way: give us what we want or we quit. He cannot just re-write the rules of a 27 member club to his advantage – and his tactics have done nothing to encourage sympathy and good will on the other side of the Channel. Nigel Lawson's party's renegotiation-referendum pledge was a reckless, unrealistic, dangerous and self-defeating ultimatum – and totally contrary to the national interest.