Danny Alexander: “Leaving the EU would be catastrophic”

We saw Defence Secretary Philip Hammond give Nick Clegg a hard time on the Snoopers’ Charter the other day. Now our own Danny Alexander has given Hammond and Michael Gove something to think about by trashing their view on leaving the EU. It is a measure of how much the media have got used to Coalition that this isn’t being played up as a huge split. It’s accepted that there are radical differences in approach between the two parties on certain issues. It would be nice to think that this would lead to more intelligent public debate between members of the same party without the papers screaming “Split…” but we won’t hold our breath on that one.

Danny was talking to Reuters about the economy and the EU. He said that if Britain were to leave the EU, we’d be in the same position as Norway:

Look at the Norwegians for example, where in order to maintain access to the single market they basically receive the new rules on the fax machine from Brussels and they have to implement them without changing them.

On the subject of an EU referendum, Danny was pretty scathing of the Conservative position:

It’s not only irresponsible it is completely wrong to be saying actually of all times now is the time to be contemplating leaving Europe when we’ve got this wonderful opportunity to lead in Europe.

Arguments about calling a referendum on British withdrawal, sort of apropos of nothing, are a huge distraction. Britain leaving the EU would be catastrophic at every level – for our economy, for our ability to attract investment, for trade, for jobs and for political influence.

You can read the whole interview here.

It’s supposed to be a holiday week, but Liberal Democrat ministers have been very visible. We’ve had Nick ace his Call Clegg session, Vince talking about immigration and women in business, and Jo talking about the importance of giving the right messages to kids on appearance and body image.

As well as his Reuters interview, Danny gave a speech to the Greater Manchester Chamber of Commerce on the principles behind the Government’s economic policy and progress to date. He emphasised key Liberal Democrat themes. Yes, he used that “stronger economy, fairer society phrase and talked about tackling tax avoidance, infrastructure investment and the need to rebalance the economy so that the whole country, not just the south east of England, benefits. He sees HS2 as a critical part of this straregy:

In fact, I’d like to use this opportunity to thank the Chamber of Commerce for its support on HS2.

We know that this project has caused some political controversy.

But I can reassure you, that delivering HS2 is another of those tough decisions that we will stick to.

It will connect eight of our biggest cities once it opens, re-shaping the UK’s economic geography in the process, and support 100 000 jobs across the nation.

On tackling tax avoidance, he said:

But nothing makes people angrier than the fact there are still some businesses that seem to think they should be able to get away without paying their fair share of tax.

That anger is justified.

When everyone else in this country is making a contribution to dealing with the deficit, our message to the small minority of companies that seek to dodge paying their fair share is clear.

Aggressive tax avoidance and evasion are wrong at the best of times, but in times like this they are totally unacceptable.

And the government, on behalf of the British people, will not tolerate it.

Tackling this problem has been a big priority for me since I joined the Treasury. And we have made a lot of progress.

Closing loopholes, clamping down on offshore havens, investing more in HMRC to raise an extra £9bn a year by 2015.

We have put tougher global rules to counter tax avoidance at the top of the agenda for our G8 presidency this year.

There was more to do, he said, including the action to stop offshore payrolls that he announced at Scottish Conference in March.

You can read his whole wide-ranging speech here.

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35 Comments

  • Would Danny Alexander leaving the EU be really THAT catastrophic/? 😉

  • nuclear cockroach 1st Jun '13 - 4:22pm

    @jb

    Don’t be silly. We are a sovereign nation within the European Union.

    “Sanjak”??? Gordon Bennett, man. Wise up and stop blethering nonsense.

  • The long term progression of leaving would be isolated irrelevance.

    It is very unlikely anyway.

    Hague’s ‘red cards’ are another idiotic idea. Red cards would stop any further reform of the CAP, the workings of the institutions and many environmental issues dead. Perhaps Hague thinks the UK should have a red card and everyone else should have white flags.

  • Jedi, do you think that the likes of Airbus would manufacture as much as they do here if we weren’t in the EU? Or that the company would even exist without the EU? They are a fairly good example of a company that could never have competed against a huge state backed competitor without EU support, regardless of the quality of their products. These brands are just the end of a massive supply chain, similarly for auto manufacture. What would replace these industries?

  • I think the question is, given where the EU is going, will we be forced out of it? Unfortunately, the EU is heading in a direction which is not one wanted by most people in the UK and further integration is simply not acceptable to most voters.

  • @ Martin “The long term progression of leaving would be isolated irrelevance.”

    I’m not saying we should leave the EU, but its advocates are never helped when they make their case by denigrating or downplaying the UK, which is a trap into which they fall all to often, something they have in common with Scots Nats.

    I’m not sure the second largest consumer market in Europe will ever be “irrelevant”. Nor would one of its two military powers, or the second largest exporter of services in the world.

    Do you think that Brazil is “irrelevant”, perhaps? Given that it has an economy the same size as ours, presumably it is.

  • Paul in twickenham 1st Jun '13 - 6:45pm

    The UK is the largest trade partner for the Eurozone. It is their largest export market. Bigger than the USA, China or Japan. Do people seriously think that the EZ will put barriers in the way of that trade if the UK left the EU? As for the “look at Norway” statement, OK I’m looking. What I see is a very prosperous nation with per capita GDP that we can only dream about. Obviously leaving the EU won’t result in Norwegian living standards in the UK but equally I do not see why it would it result in diktat by Europe.

    The EZ remains mired in recession/depression even as global markets start to stutter. If equities take a large tumble at this point then heaven help the citizens of the Europe. And given that “it’s the economy, stupid” it may be hard to persuade the great British public that the EU is a desirable place to live in.

  • nuclear cockroach 1st Jun '13 - 6:50pm

    @jb

    There isn’t much point debating politics with someone who raves “sanjak”, as soon as the topic concerns the EU. What next? EU/USSR? North Korea?

    In a broader sense, though,, that’s the problem with the EU debate. Those in favour of EU membership start with a rational discussion about GDP, trade, international standing, et cetera, whereas those opposed just froth on with the most absurd language imaginable.

  • Paul in twickenham

    Erm. invested wealth from oil perhaps instead of allowing the proceeds to be spent on hiding the failings of the 80s economic miracle perhaps explains the success of Norway.

    I am sure leaving the EU would not break of all the ties between us and them but it will also have more implications than you suggest

  • Jedi, nip over to France and Germany and you’ll find that there are plenty there who dont want tighter integration. Its simply not true that Europe’s fate is preordained. Merkel wont be around forever.

  • Paul in twickenham 1st Jun '13 - 8:36pm

    @bcrombie – apologies, I often elide too much. I know exactly why Norwegian GDP is so high and completely agree with you about the virtue of the Norwegian approach to managing their good fortune. The point was that just as Norwegian GDP owes nothing to membership (or otherwise) of the EU and leaving will not give us their GDP, it is equally preposterous to suggest that we would become enslaved by EU diktat if we were to leave. The arguments I see offered all appear to be premised on the notion that the EZ is doing us a favour by exporting to us.

    I want the UK to remain in the EU but I simply don’t believe that the econonic arguments withstand the least scrutiny.

  • I think the inanity of the responses demonstrates Danny Alexander’s point. It’s absolutely idiotic to suggest that Britain would have any chance whatsoever of a decent future outside the EU.

  • Paul In Twickenham 2nd Jun '13 - 9:04am

    A few weeks ago I posted on this forum that nobody in the financial markets wanted to call top on the equities bubble (and improved sovereign bond prices due to the carry trade) created by the Bernanke Put, Abenomics and the Draghi Put. Nobody wanted to be first out for fear of getting the timing wrong and losing on further upside.

    Well now that sentiment has shifted. There might still be some upside over the next month or two, but now even the central bankers are talking about an overbought market, and fund managers are trumpeting that they are either getting out or are already out of certain asset classes.

    The EZ is in the grip of a recession. In many places it is in depression – the unemployment numbers tell you all you need to know – and GDP forecasts are constantly being revised down. Is anyone going to dispute that statement? And that’s just as global markets peak. If the markets now suffer a serious correction, then what will the EZ look like in 2017?

    I don’t believe that a “yes” campaign premised on the trade benefits of being part of an economic bloc that is mired in permanent depression will win much support.

  • Peter Chivall 2nd Jun '13 - 9:11am

    It becomes more obvious that those who oppose Britain’s continued membership of the EU have an emotional attachment to the notion of a ‘sovereign UK’. But we abandoned that when we subsumed our most basic state function, defence, when we joined with others in forming NATO. We are comitted by treaty to going to war if called on by other NATO members. This is far more costly and intrusive of our national life than anything the EU Commission could dream up.
    The other argument, that the Eurozone, and by extension the EU generally, is an economic basket case, is a popular piece of propaganda used by our largely American/ tax exile-owned popular press. Leaving aside the locally disastrous but globally minor case of Greece (less than 3% of EU’s population), the eternally corrupt (in the south) but economically dynamic (in the north) Italy, and the sad case of Spain with the Costa building bubble burst, the Eurozone has actually outperformed the UK over the last ten or more years.
    When the Euro was founded, it was worth just 63p to the £. Now it is still worth a steady 85p /£, although it did reach nearly parity after our Anglo/ US banking crash in 2008.
    What we need is to say loudly and consistently that the EU ain’t such a bad place to be, that most anti-EU media propaganda comes from right-wing Americans, and tax exiles, and it’s time bodies such as the BBC started to return to the ‘education’ aspect of its charter as far as our neighbouring countries are concerned. At the end of the day, despite what UKIP and many Tories would wish, you can’t jack Britain up, put waterwings underneath and tow it 2,000miles across the Atlantic!

  • Well said Peter Chivall! What we need NOW is a plan to tell the truth about how Britain benefits from the EU, and a steady drip of that information between now and the elections. It’s good to see that Nick has appointed our president to make sure this happens. With the election reform fiasco I felt we were left wondering what happened: THIS time we need to make things happen for everyone’s benefit. AND I feel we need to show up UKIP for what they are: Regardless of their EU withdrawal agenda, I can’t forgive Fromage for insulting the whole Belgian nation (which he did as an MEP). I want Britain seen as constructive and forceful, not plain rude. Nuff said!

  • nuclear cockroach 2nd Jun '13 - 10:37am

    @jb

    “Yes, I can see that you are a fount of disinterested logic bent only on the achieving the fundamental interests of the British people, how foolish of me to err from your enlightened path. Apologies, sincerely. ”

    Good to get that of your chest?

    Or no new facts, just more blether?

  • nuclear cockroach 2nd Jun '13 - 11:28am

    An individual veto on all aspects is nonsense. It would ruin the Single Market just to start. French farmers don’t like a directive harmonising cheese production? Veto by France. Volkswagen doesn’t like a directive harmonising catalytic converters? Veto by Germany. Und so weiter.

    If you believe in free trade you simply have to oppose a veto system in the single market. If your motives are appeasing swivel eyed nationalism, naturally the damage you cause free trade is of no consequence. And the ironic thing was that Margaret Thatcher, the heroine of the Swivel Eyed, understood this. The Single Market, without national vetoes, is her lasting monument.

    A veto might be quite sensible outside of core areas of EU competence. Strangely enough that’s what we already have.

    What might be genuinely useful would be co-decision by national parliaments. You could even get rid of the European Parliament, replacing it with a sitting of all the individual national parliaments. However, such ideas were howled down by the Conservative and Unionist Party over a decade ago.

  • nuclear cockroach 2nd Jun '13 - 11:36am

    An individual veto on all aspects is nonsense. It would ruin the Single Market just to start. French farmers don’t like a directive harmonising cheese production? Veto by France. Volkswagen doesn’t like a directive harmonising catalytic converters? Veto by Germany. Und so weiter.

    If you believe in free trade you simply have to oppose a veto system in the single market. If your motives are appeasing irrational nationalism, naturally the damage you cause free trade is of no consequence. And the ironic thing was that Margaret Thatcher, heroine of irrational nationalism, understood this. The Single Market, without national vetoes, is her lasting monument.

    A veto might be quite sensible outside of core areas of EU competence. Strangely enough that’s what we already have.

    What might be genuinely useful would be co-decision by national parliaments. You could even get rid of the European Parliament, replacing it with a sitting of all the individual national parliaments. However, such ideas were howled down by the Conservative and Unionist Party over a decade ago.

  • nuclear cockroach 2nd Jun '13 - 12:04pm

    “You had better hope he succeeds, because if britain cannot remain within a post-convergence EU as an essentially sovereign nation then we will be heading for the exit, whether you like it or not.”

    That is just piffle at so many levels. You had better hope he fails because if Britain cannot remain in the EU then we will suffer a catastrophe of national irrelevance, whether you like it or not.

  • Does anyone seriously think that the renaissance of the motor industry in Britain – very largely of course based on companies from outside the EU – is explained by the UK market alone and would persist just as enthusiastically if the UK was excluded from the EU?

    Some of these motor manufacturers are already postponing further investment here because of the doubt now surrounding UK’s long term EU membership.

  • Jedibeeftrix –

    The information was given as a private comment to me and I believe it to be correct. – including the reason for it.

    Now please answer my first para. – will all this investment and the associated jobs survive a UK exit from the EU?
    If the answer is “yes” some credible reasoning for such a view would be helpful.

  • Toyota and Volvo have both publicly stated that they will close their factories in the UK should we leave the EU because they will no longer have any reason to be here. These are just two high-profile examples of companies which are withholding their investment and even considering leaving the UK altogether due to the mad and selfish ravings of what is actually a minority.

    Many of the British people seem quite happy to indulge in the luxuries they gain as Citizens of the EU. All the pro-side need to keep doing is reminding the British public how much they as individuals stand to lose should we leave.

  • Well said, Liberal Al, except for the rather complacent last sentence. Would that referendums (or is it referenda) were decided by an informed public exercising their votes on rational lines. Right now we pro-Europeans are on the way to losing this thing in the midst of an anti European cacophony of lies and half truths.

    There needs to be a coherent pro-Europe campaign consistently waged by people with some clout in the community (not solely politicians of any stripe) and it needs to start very soon.

  • David John Tough 22nd Sep '13 - 6:56pm

    Wake up Britain we are a European nation and stop living in the past

  • Celebrating the results of the German election seems a curious thing for a Liberal Democrat to do, considering that for the first time since its founding, the German liberal party will be entirely shut out of the Bundestag.
    Of course, this will be after they made themselves virtually a junior adjunct of the German conservatives, and having drifted steadily to the right for decades. If Nick Clegg wants to see the future of a permanent Lib Dem alliance with the Tories, he can look to Berlin.

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