A recent visit to Brussels brought back mixed memories of my time as a minister in the last Government.
In my roles in both the Treasury and the Department of Work and Pensions, I had to negotiate with the European Commission, other member states and MEPs. My first visit was a culture shock, but over time I came to understand how Brussels worked. Whilst I could never say I enjoyed visiting it, there were moments of triumph as well as frustration. My scepticism about the “European Project” hardened, but I also appreciated the importance of membership of the EU to jobs and growth both at home and abroad.
I saw for myself how the failure to think through the requirements for monetary union had left the Eurozone vulnerable to the financial and fiscal crisis in 2008. Whilst I was at the Treasury, I took part in discussions on the fiscal and banking unions which were a vital part of restoring stability to the Eurozone whilst ensuring that the UK was not caught up in this deeper integration.
But it was also clear that this integration posed a challenge if the single market was subordinated to the interests of the Eurozone rather than meeting the needs of all 28 member states.
The UK is Europe’s financial centre precisely because we are part of the single market. London is the point through which capital flows across Europe. Capital moves freely from the pension funds of workers in Stuttgart and Seville through asset managers and banks based here providing equity and debt finance for investment opportunities from Manchester to Madrid and from Budapest to Barcelona. Whether that capital is denominated in euros, sterling, Danish krona or zlotys, transactions can all be initiated, processed and settled here; creating jobs across the UK.
The integrity of the single market in financial services is vital to many of the 2.2m people in the UK employed in financial and related professional services. It is vital to livelihoods of families in Bournemouth, Birmingham and Belfast where major international banks have located their back offices employing many thousands of people. This is not just, therefore, an issue of importance to London: over two thirds of jobs in financial and professional services are outside the M25.
There were occasions when the integrity of the single market in financial services was put at risk by attempts to discriminate against those countries who did not use the euro. If the UK government had not won the battles to protect our domestic industry, UK jobs would have been put at risk.
As the Eurozone continues to integrate, there will be other moments when the integrity of the single market is put at risk. Whilst the government has shown you can win these battles, the right approach is to ensure there can never be discrimination against non-Eurozone countries.
I applaud, therefore, the safeguards that David Cameron has won in his re-negotiation of Britain’s relationship with the EU. His success in protecting the interests of the nine member states outside the euro is important for safeguarding jobs in financial services across the country and protecting the interests of savers and businesses across the EU.
He has achieved that success because we are inside the EU. If we were to leave, who would stand up for the interests of the United Kingdom the next time a proposal came forward that would discriminate against those not using the euro? Who would stand up for those whose jobs in financial services that are dependent upon our role as the European centre for financial services? Do we think Paris or Frankfurt would be content with a European centre of finance, as London is currently, being outside the EU?
My time as a Treasury minister gave me a keen appreciation of the benefits the EU brings but also of the challenge from the potential subordination of the single market to the needs to the Eurozone. It was right for David Cameron to renegotiate our relationship to preserve the benefit of membership of the EU and ensure that it works for all 28 members.
The Prime Minister’s proposed reforms give the UK the best of both worlds: economic partnership that brings jobs, trade, investment and lower prices, but control over our national interests. This success means that we can confidently vote to remain a member of the EU safeguarding our economic security.