Fifteen years ago, I launched the campaign against Britain joining the euro. Our concern was that giving up the pound and control of interest rates would be damaging to the economy. Yet we saw the advantages to business and jobs of being in the Single Market.
Staying outside the euro showed that Britain could negotiate arrangements to give us what we want, taking part in those aspects of the European project that suit us, while retaining autonomy where they do not.
That is a status which those who are determined to leave the EU refuse to accept. For them, it’s in or out, all or nothing. In their hot headed determination to rush for the Brexit, they haven’t stopped to consider the cold reality of life outside. They can’t even agree on the alternative.
Some want us to be like Norway or Switzerland, yet this would mean paying into the EU, accepting free movement, and having regulation imposed with no say – so when they promise that leaving would end these things, it’s a completely false prospectus.
Others pin their hopes on the mirage of a free trade agreement that isn’t on offer and which the EU would have little incentive to grant. The most misguided go so far as to say we should just accept trade barriers, despite the costs to business and consumers.
In the EU, we have unimpeded access to the world’s largest market. Within a few years, as the EU does more deals with other countries like the US, we will gain access to a wider market of almost a quarter of the world’s population, eventually taking 80 per cent of our goods.
If we leave the EU, we’d have to do 35 new trade deals involving more than 80 countries all at the same time and within a two year timeframe, on top of a deal with the EU – an impossible task. We would be likely to end up with worse arrangements than we have now. From driving a deal as part of a trading bloc of over 500m people, we’d be on our own as a country with a tenth of that number.
Nor could we expect a better deal with the EU itself. The idea that our European partners would give us a free lunch when we had just walked out of their club is naive. The UK is the market for just over 5 per cent of exports from the EU. The share of their economy which they export to us is far lower than the share of our economy which we export to them. We would be less powerful in any deal, not more.
We would not even be present at the top table to negotiate a new arrangement. A Brexit deal would have to be done within two years, during which we would forfeit our seat on the EU Council, putting Britain at an appalling disadvantage. As they say in Brussels, “if you’re not at the table you’re on the menu.”
Exclusion from the Single Market poses a clear and present danger to the City. Financial services need to be recognised by the EU to be sold there. Not only would British banks be restricted from selling to the EU, but international banks would be incentivised to move their European operations out of this country. Earlier this week, the chief executive of HSBC warned that 1,000 jobs in its investment bank would move to Paris if we vote to leave.
Why take this risk? The British economy is currently at the top of the world growth league and delivering record job creation. But the global recovery is fragile. The idea that we can separate our economic future from that of Europe is a fantasy. We need our principal export market to perform better, whether we are in the EU or not. Consciously destabilising that market would be an act of self harm.
By carving Britain out of ever closer union, and protecting the City and our financial services businesses from discriminatory legislation, the Prime Minister’s proposed deal gives Britain the special status in the EU which we want, and so the best of both worlds: outside the euro, and protected from deeper integration, but able to access the Single Market; in the world’s greatest trading bloc, but still outside Europe’s passport-free area and so able to maintain our borders.
We would have to be very sure of the alternative before throwing these advantages away. We should not gamble Britain’s economic success with a giant leap into the dark.