Lord Nigel Lawson has accused Lord Peter Mandelson of having an "astonishing lack of self-confidence" in the United Kingdom’s prospects if it left the European Union, in a showdown between the two veteran politicians.
Speaking to an audience at the Royal Albert Hall, Lawson, who was last week appointed president of Conservatives for Britain, a pro “Out” organisation, urged business to consider that "the United Kingdom can negotiate free trade deals with the countries outside Europe, which would be much easier than negotiating treaty change with the EU".
Would it be a disaster if we went out? No. We export a lot to the EU but exports to elsewhere is growing more.
We must not be little Europeans. We must realise our destiny is global – that is where markets are growing fastest and where our history shows we need to be.
Whatever reasons there might be for staying in the EU, they are not economic.
However, Mandelson, former business secretary in Tony Blair’s government, hit back, saying: "We are only an island of 60m people. If we try to negotiate with others, we will settle on China’s terms or India’s terms."
Mandelson added: "Nearly half our trade is with other EU countries, and provide supply chains and production networks."
I know anti-Europeans say we can have all the benefits and more outside the European Union, because they need us more than we need them.
But we need to get real. Only six per cent of their exports come to Britain, compared to nearly 50 per cent of ours to them. That’s not a great starting point for a negotiation. If we exited and asked for trade privileges back, it would be on their terms, not ours.
In the debate at the Institute of Directors' (IoD) annual convention which focused on what the UK’s membership in the EU means for business and Britain’s global leader status, Lawson stuck to his guns as he said "more Europe" is always considered a good thing, "but it almost always means more regulation. It costs the UK to the order of £25bn a year, which is constantly getting worse and which we cannot oppose".
Mandelson conceded he is not blind to the EU’s problems, and the EU tries to do too much, while it needs to do "less and better", but said the UK has to fight to make it economically more competitive and its whole operation less centralised.
Before the debate, IoD director general Simon Walker said he believed the outcome of the EU referendum was at least 50/50, and on "knife-edge".