David Cameron was right to say No

 
Allister Heath
THIS column is often critical of David Cameron – but not today. The prime minister was at his best on Friday; his decision to veto the European treaty was inspired. It will be remembered as a turning point: the day the UK started a long journey towards a more global, more prosperous place in the world, increasingly detached from a declining and ever more closely centralised and undemocratic Europe.

Ever since anybody can remember, the UK has been battered by regulations not of its own choosing (and that other countries that trade with the EU, such as China or Japan, don’t have to impose on their own domestic economies). Time and again, and of course with exceptions, these rules have been bad for jobs and the competitiveness of the UK. Recent ones include rules on hedge funds and private equity and on agency workers; forthcoming ones include an assault on accountants.

Typically, after much lobbying, the final compromise turns out slightly less badly than the original, deadly version – but nevertheless damages the economy. Invariably, we are told the rules would have been another degree less bad (but still damaging) had the UK been more engaged in Brussels. It is assumed it is obviously in Britain’s self-interest to swallow this constant stream of pain and job-destroying red tape – on threat of being excluded from the nirvana that is meant to be the single market. We are meant to happy that the regulations weren’t even worse. Supposedly, the cost of red tape can never be greater than the benefits of the single market; and the UK has all to gain from trading with the EU, with Europe not gaining anything. Crazy.

Many trade bodies and lobbyists are aghast at Friday’s outcome. They are hysterically warning of “isolation”; together with a handful of ideologically pro-EU CEOs, they will desperately be trying to portray this as “bad for business”. This is nonsense. The imploding Eurozone is the biggest danger to the world. How is that good for business? Most of those whining are the very same people who dismissed sceptical economists when the euro was about to launched, smearing them as nationalists. Yet the sceptics were right and the Europhiles dangerously, shockingly deluded. It makes no sense for the UK to accept bad rules that destroy jobs. Only in Europe do people believe they have to share political institutions to trade together.

And how can anybody believe the UK needs to deepen its trading links with Europe, the part of the world most affected by stagnation and demographic decline, at a time when Latin America, the Middle East, Asia and growing parts of Africa are booming? It is time to readjust the UK’s foreign and economic policy. We need to be global, not parochially and inwardly European. One argument that has been making the rounds is that the City is only attractive to global banks because of the UK’s membership of the EU. But then why does non-EU Switzerland have such a large financial and business sector, and why does everybody agree that non-EU Singapore, Dubai, New York and Hong Kong are London’s biggest rivals?

So far the prime minister has emerged as an accidental Eurosceptic; his dramatic shift in UK policy came about almost by chance and partly as a result of incompetent civil servants. But that doesn’t matter. History only remembers great decisions – it never asks why they were taken.

allister.heath@cityam.com
Follow me on Twitter: @allisterheath