Leader of the Liberal Democrats in the European Parliament Fiona Hall has responded to former Chancellor Nigel Lawson’s call for Britain to leave the EU.
Writing in the Independent, she spelled out some of the economic consequences of such a move:
We are currently on the cusp of a game-changing trade deal between the EU and the US, which will bring billions of pounds to the British economy and create tens of thousands of jobs. The US has also made it quite clear that our ‘special relationship’ would cease to be special were the UK outside the EU. Major trade agreements with India and Japan are also in the pipeline. To leave the EU now would mean turning our back on the global economy and jeopardising crucial trade and investment.
Not only would we lose our potential market, but we would have fewer companies setting up shop in this country and creating jobs:
Meanwhile, those companies from outside the EU which choose to invest in the UK do so largely because of its role as a gateway into the single market. If we were no longer a member, we would rapidly lose our position as the top destination for companies establishing their European headquarters. Investors in Britain’s booming car industry would also look elsewhere if they no longer had tariff-free access to the European market. Earlier this year two of Britain’s biggest car makers, Ford and BMW, warned that exiting the EU would be disastrous for the UK’s economy.
She suggests that Lawson may be motivated by a desire to protect bankers from curbs on bonuses and by his views on climate change:
Lawson’s arguments suggest he is perhaps less worried about Britain’s economy as a whole and more about the potential threat that EU rules pose to his friends in the City, for example the recent cap on bankers’ bonuses. Yet even senior banking figures have repeatedly warned that leaving the EU would be utter “lunacy” as it would have a catastrophic impact on the UK’s financial sector. London currently deals with around 40% of global euro-denominated trading, more than anywhere else in the world. Outside the EU, the UK would have no way to influence European financial legislation and ensure its economic interests are protected.
As a long-standing climate change sceptic, it is perhaps no great surprise that Lawson opposes the EU, which has put the fight against global warming high on its agenda. His climate sceptic thinktank has consistently questioned overwhelming scientific evidence, apparently choosing instead to promote the agenda of its handful of wealthy backers. He confirms the notion that Conservatives will only pursue the narrow vested interests of a rich elite, while ignoring the needs of the population at large.
You can read the whole article here.
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29 Comments
Let’s be absolutely clear about this. Britain does not have a future outside the EU. It’s perfectly possible for a country to cease to be first world and that would be where we’d be going.
The city, in any case, is finished. Outside the euro zone it’s an irrelevance. As a nation we need to think about rebalancing the economy, for a time when the financial markets have moved elsewhere.
“She suggests that Lawson may be motivated by a desire to protect bankers from curbs on bonuses and by his views on climate change:”
And I suppose, a scaremongering and nonsensical piece written by someone with MEP at the end of their name would, of course, hold no personal motivations, to keep the EU gravy train on its tracks?
Nonsense article.
Trade with europe would not cease, and it is our continued membership of an anti-London EU that is a threat to our services.
But this is beside the point, for the only question that actually matters is:
Will it be possible for britain to remain a sovereign nation when economic independence is undermined by caucused QMV decisions foisted upon us via the managed consensus of the ECB/EBU?
To quote Gladstone:
“The finance of the country is intimately associated with the liberties of the country. It is a powerful leverage by which English Liberty has been gradually acquired … It lies at the root of English Liberty, and if the House of Commons can by any possibility lose the power of the control of the grants of public money, depend upon it, your very liberty will be worth very little in comparison …That power can never be wrenched out of your hands… That powerful leverage has been what is commonly known as the power of the purse – the control of the House of Commons over public expenditure – your main guarantee for purity – the root of English liberty. No violence, no tyranny, whether of experiments or of such methods as are likely to be made in this country, could ever for a moment have a chance of prevailing against the energies of that great assembly. No, if these powers of the House of Commons come to be encroached upon, it will be by tacit and insidious methods, and therefore I say that public attention should be called to this.”
Regarding caucused voting via the EBU:
“De jure incentives to take common position: This incentive is reinforced by the way the Commission’s ECB/EBA Regulations are currently drafted. For example:
• The ECB Regulation envisions the ECB acting as a coordinator of eurozone national supervisors, with the view for them to take a common position. The ECB has already dropped hints that it intends to actively discourage dissenting opinions amongst eurozone national supervisors.
• Through a eurozone caucus, some member states will indirectly boost their influence as their voting weight amongst eurozone countries is proportionally much greater than in the EU-27 (EU-28 with Croatia). This is particularly true of the larger eurozone member states.
• The safeguards proposed by the European Commission (see Section 5 below) leave the eurozone with the upper hand. Given that the 17 eurozone countries already constitute a simple majority, these countries would only need to seek the support of three ‘outs’ – whereas non-euro countries would need at least four countries.
De facto incentives to take a common euro position: To avoid banks free-riding on taxpayers in creditor countries, the ECB, Germany and others could well insist on putting into place perfectly harmonised eurozone regulations before moving to financial backstops. This could include single-target capital requirements, rules on leverage or bonuses – and could even spill over to market access issues. In turn, this would heavily shape decisions at the EBA, as the eurozone is unlikely to accept an uneven playing field within EU financial services as a whole.De facto incentives to take a common euro position: To avoid banks free-riding on taxpayers in creditor countries, the ECB, Germany and others could well insist on putting into place perfectly harmonised eurozone regulations before moving to financial backstops. This could include single-target capital requirements, rules on leverage or bonuses – and could even spill over to market access issues. In turn, this would heavily shape decisions at the EBA, as the eurozone is unlikely to accept an uneven playing field within EU financial services as a whole.
Taken together, the EBA structure will therefore significantly shift the balance of power in favour of the eurozone, at the expense of the UK and other ‘outs’.”
We do not have an answer to that question yet, but unless Cameron plays a blinding hand the answer is; most likely not!
A nation is either:
1. a broadly sovereign state within the EU (As Britain might hope to be by retaining sovereign powers-of-the purse in a post-convergence EU)
2. a functioning part of a larger sovereign entity as the euro-core will become (As members of the post-convergence eurozone will become)
The only other alternative is being a dependent adjunct to a larger sovereign entity. A Sanjak, in short, much as Greece was and is again today.
Becoming an EU Sanjak is neither liberal nor democratic, so propose me a solution because otherwise we will be leaving…………
This EU debate is all wrong: it won’t be a disaster if we left and it won’t be Utopia either.
The business model for surviving outside the EU is low tax and low regulation.
The business model for the EU should be harmonisation of laws and building a genuine single market. We also need to stop moving in an anti business direction.
The EU also needs to stop expanding beyond Europe – giving politicians too much power is not in the people’s interests.
Finally, the nail in the coffin to the fanatics: check out the top richest countries in the world according to GDP per capita (OK this doesn’t include inequality):
Qatar
Luxembourg
Singapore
Norway
Brunei
Hong Kong
United States
I’m Pro EU but we should not be pro EU regardless.
A good article. One point though that is rarely stated is that UK trade with non-EU countries relies on an extensive network of trade agreements negotiated by the EU on behalf of its member states including the UK obviously.
Should the UK withdraw from the EU, obviously the non-EU UK would no longer be able to avail of those EU trade agreements when trading with non-EU countries.
The UK would need an entire new set of trade agreements with BOTH the EU member states AND non-EU countries in a “withdrawal” scenario.
Such trade agreements typically involve long (multi-annual) negotiations and it could take years to put in place comparable trade arrangements again presuming, that is, that the other parties involved are willing to offer comparable terms. If not, the UK may have a serious reality check coming its way.
@John Dunn: I don’t think you can reasonably accuse an MEP of having a vested interest in the existence of the EU any more than you can accuse a Westminster MP of having a vested interest in the existence of the UK. When you are a member of a legislative body, you have your own ideas about how the entity for which it legislates should be run (you are there to seek to change it, after all), or even if it should exist at all in its present form (e.g. UKIP MEPs, Plaid/SNP (and Sinn Fein) MPs). If being a parliamentary representative automatically means you have a vested interest, then we shouldn’t listen to any parliamentary representative, in any legislature, ever.
Alex :
If we [UK], came out of the EU, we wouldn’t need MEP’s. And those redundant MEP’s would have to fall on other ‘skill sets’ to make up the shortfall on their (salary + various expenses) of about 200,000 euro’s per year.
That would motivate anyone to protect and preserve their career plan, don’t you think?
An exceptional and refreshingly bellicose article sticking it to those who would have us leave the EU.
Britain would suffer an enormous loss of influence politically and economically if we were to leave the EU. As the only English speaking country in the largest single market in the world we are a natural home base for companies wanting access to the single market. Many such companies would choose to base themselves elsewhere if we were to leave. What I find even more worrying however is the threat to British industries including financial services should Britain forfeit the right to have a say in making EU laws – e.g. over financial trading.
It’s about time that those of us who believe the EU is good for Britain to take the fight to our opponents so forcefully.
So thank you Fiona Hall!
@John Dunn: That is a ridiculous line of argument. You might just as well argue for abolishing the UK to save the cost of MPs’ salaries. Whatever costs are incurred by the existence of EU, the cost of maintaining the legislature is pretty insiginficant.
@Julian Tisi: “the only English speaking country in the largest single market” — er, what language do you think 97% of the citizens of Ireland speak? (The correct answer is not “Gaeilge.”)
So according to some people no matter how anti business and unstable the EU gets, and no matter how many people want out, we should stay in because it’s big. Great victory for reasoned argument.
I suspect Fiona understands the negatives of the EU, she just doesn’t want or is able to say them.
Also, if you go into any negotiation with the attitude that you are not prepared to walk away then you’ll get a rubbish deal. Plus, it’s the right thing to do.
@ES
“no matter how anti business and unstable the EU gets”
Errr – except the EU is pro-business, it always has been.
You might call it “pro business” but whatever it is it’s not pro enough at the moment because capital is fleeing to Asia. After the financial crisis we should have focused on rebuilding the banks, not sending them off to Singapore so we can say “We kicked the bankers!”.
Banking has been fleeing to Singapore several years now, even if they haven’t all packed picked up their sticks yet, cash flows generated in London and especially the City have been getting reinvested into Asia for some time. You just have to see where the jobs are for financial services now.
But I suppose that wouldn’t bother you, because you are prepared to stick your head in the sand and cling to your ideology.
Banking wage control and financial transaction taxes should never have happened. As Jedi says, we’ve become a Sanjak unable to defend our national interest. They even do this when Euroscepticism is ripe, so it goes to show just how much they really care about us.
I’m sorry to defend David Cameron here, but it’s about time someone stood up for our national interest in the EU.
‘You might call it “pro business” but whatever it is it’s not pro enough’
I call it pro-business, because it is. Its core function is the removal of barriers to trade within its member states.
“Banking has been fleeing to Singapore several years now”
Perhaps some banking has, but perhaps the adage, “once burnt, twice shy” applies, too. Too much of the trading that took place in London damaged our economy; none of those who were paid enormous bonuses on top of enormous salaries paid for the damage they caused out of their personal wealth. Instead, they socialised the losses, the very antithesis of the free markets that they would have us believe that they seek. Let Singapore undergo a banking bubble, if it wishes, and see how keen its people are to sacrifice long-term economic stability for short term gains after it inevitably blows up in their faces.
“stick your head in the sand”
I wouldn’t like to imagine where you have stuck yours.
It wasn’t the trading going on in London that caused the financial crisis, it was mainly the US housing bubble caused by the US lowering its interest rates to ridiculously low levels. There were plenty of other factors but if it wasn’t for the availability of cheap credit there wouldn’t have been a credit boom followed by a credit bust.
If you don’t want their money, they’ll take it elsewhere, it’s simple. We’ve got an NHS struggling to operate and a huge deficit to pay, so I don’t think we should be being fussy about where the money comes from.
I’m not someone who thinks we should wrap the rich in cotton wool, but I don’t think we should bite the hand that feeds us either. It’s about being fair but firm.
I suppose I would say that we’re a good deal for the rich too, so we can afford to ask for more at times, which is something the Conservatives don’t seem willing to do.
@ Eddie Sammon
“This EU debate is all wrong: it won’t be a disaster if we left and it won’t be Utopia either.”
So true but so often ignored in these arguments. I think perhaps because those on the extremes don’t have the capacity to defend their positions.
@ Alex Macfie
“I don’t think you can reasonably accuse an MEP of having a vested interest in the existence of the EU any more than you can accuse a Westminster MP of having a vested interest in the existence of the UK.”
I didn’t notice John Dunn claim the MPs done have a vested interest in the continued existence of the UK but that is not the topic here.
“If being a parliamentary representative automatically means you have a vested interest, then we shouldn’t listen to any parliamentary representative, in any legislature, ever.”
Not it doesn’t. Someone can have a vested interest and still put coherent arguments in favour of their vested interests, the arguments just need to stack up. Fiona Hall has a vested interest that doesn’t invalidate her opinion about the EU, however that should (but apparently hasn’t) make her sensitive to making claims about the motivations of others (such as claims about Lawson’s motivation and using phrases as “his friends in the City”).
Fiona Hall’s article reads like a shrill defence of here own interests because she doesn’t put here case well and reports to personal attacks on others motivations. There is an intelligent defence of the EU (which require acknowledgement of the shortcomings as well as success) sadly this article doesn’t make it.
@ David
“er, what language do you think 97% of the citizens of Ireland speak? (The correct answer is not “Gaeilge.”)”
Ha Ha, so true.
@ nuclear cockroach
“Its core function is the removal of barriers to trade within its member states.”
It is supposed to be but it keeps getting distracted interfering in things it has no business getting in to, I am told (by an article on LDV) that the European Parliament has a position on what speed people should drive down my road, I have some strong views on that but don’t see how it is the business of any one from Athens or Bern.
“Too much of the trading that took place in London damaged our economy”
Really? Do you actually understand the crisis or is that just what you and your mate in the pub sit around telling each other so it must be true?
“none of those who were paid enormous bonuses on top of enormous salaries paid for the damage they caused out of their personal wealth”
Well I can’t disagree with that the central bankers and politicians haven’t been forced to cough up for the damage they caused (though I don’t think they exactly had large bonuses).
“I wouldn’t like to imagine where you have stuck yours.”
Wow, there is the killer intellectual argument that can’t be defeated. Perhaps you should lead with that in future so people can see you for what you are and not bother reading the rest of your comment.
@ Eddie Sammon
“it was mainly the US housing bubble caused by the US lowering its interest rates to ridiculously low levels”
Err, I don’t think we can claim purity on that one. The US may have suffered a credit boom but so did we.
Bang on with most of that Psi, yes I know we can’t blame one thing or one person on the crisis, I just don’t think the central banks get enough criticism. Hindsight is wonderful of course.
I’m not claiming intellectual or moral superiority, but I am worried that the central banks are inflating another bubble.
@Psi:
My point is that that it is the logical extension of what he was claiming, namely that an MEP has a vested interest in the continuing existence in the EU. By his logic, ANY member of ANY legislature has a vested interest in the continuing existence of the administrative entity for which it legislates. Never mind that the legislature could well include members who do NOT support its continuing existence (e.g. UKIP MEPs and the EU party group to which UKIP belongs, whatever it is calling itself these days).
@Psi
Yaaaaaaawwwwn.
“Really? Do you actually understand the crisis or is that just what you and your mate in the pub sit around telling each other so it must be true?”
Perhaps you might like to start with speculation based on the illusion that property prices could continue to rise without any underpinning economic basis … and many other forms of bull market group think? Or bonus schemes that encourage excessive risk taking, as financial institutions which could not offer rates of return that only excessive risk taking could deliver could not compete for investment funds during a bull market. Or automatic trades using financial instruments whose outcomes even expert traders or academics couldn’t predict in a way that matched reality? Or trading exposure in London several times greater than the entire national economy?
Perhaps you might like to give us the benefit of your “lofty” wisdom instead?
Nothing is for ever – not even the EU. I do hope LibDems are not going to be caught in a timewarp about it. Being open minded means being not being afraid to consider changing our existing viewpoint when it has become untenable.
Surely, Judith, we support the EU, not because it is “for ever”, but because we support supranational democracy? We recognise that the world is becoming “a smaller place”, that problems are increasingly international, and we need our democracy to stretch wider than an old fashioned nation state. It is the nation state that is “not forever”. A democratic UN anyone?
“Surely, Judith, we support the EU, not because it is “for ever”, but because we support supranational democracy?”
Hmmmm, I wonder how that would go down on an election manifesto………?
@jb
Sounds good to me. I would vote for that.
Not everyone wants to tow the UK into mid-Atlantic just to watch it sink under the waves.
how many seats do you think the party would end up holding?
A lot more than if it tries to appeal to people like you whose views are already well served by UKIP and the Tories.