EU: UK Membership

Lord Watson of Invergowrie Excerpts

Thursday 24th October 2013 Lords Chamber

[Lord Watson of Invergowrie (Lab)]

My Lords, I, too, congratulate the noble Lord, Lord Shipley, on initiating this important debate. I am absolutely clear that membership of the EU is very much in the best interests of the UK—in economic and social terms, and in terms of the influence that the country can bring to bear both within the EU and globally. I would be very concerned about our isolation in relation to all of those aspects should we walk out on the family that is the European Union.

The EU and our place within it really are too important to be used as a means of dealing with a little local difficulty within the Conservative Party, which is what is happening with regard to the increasingly shrill voices that the PM eventually answered with his plan for a referendum by 2017. The Prime Minister claims that it will be to decide on changes that he hopes—somewhat fancifully, I suggest—to negotiate. However, if that fails to materialise then pressure from within his party would surely mean that we would be stuck with a “Should we stay or should we go?” vote. I would characterise that as the Clash option, for those of a certain age and musical tastes. It is also an uncertain road down which to travel. Fortunately, the Prime Minister first has to clear a certain hurdle in 2015, which gives us some hope of this vital matter being taken out of his hands.

When those of us who are in favour of retaining, and indeed strengthening, our place within the EU cite the dangers inherent in disengaging, we are characterised rather disparagingly as scaremongers, as the noble Baroness, Lady Noakes, has just done. If that is the case, it is a label that sits rather uneasily on some rather significant public figures. Sir Nigel Sheinwald spent five years as ambassador to Washington and three years as permanent representative in Brussels. He has said that a Britain on the sidelines is not in anyone’s interests, and that a Britain on the sidelines of Europe—and even more, out of Europe—would not be in the US interest or in the interests of our other major European partners. The noble Lord, Lord Browne, a former boss of BP, one of the most senior non-executive appointments by the coalition, has warned that years of uncertainty about whether the UK will remain part of the EU will put off investors, leading major companies to place major job-creating projects elsewhere in Europe.

Expanding on that last point, Sir Andrew Cahn, vice-chairman of Nomura, spelled out how a major company might react when considering a billion-dollar investment in Europe. Its advisers, he said, would tell the company that they,

“do not know if the UK will be in the single market in five years’ time and have no idea what their access terms will be”,

should the UK leave, as there would be no way of knowing whether the UK would find a sustainable relationship with the EU or find itself involved in fractious exchanges. He said that those advisers would say:

“Indeed, we have no idea what Britain’s EU strategy is”.

He then said that while the CEO of that company may well still be tempted by Britain, the balance would have shifted and he or she would now,

“examine the European alternatives more closely”.

Moreover, Martin Sorrell, chief executive of the global company WPP, has said:

“At the very best it”—

a referendum—

“will be neutral in impact; at the worst, negative”,

on foreign direct investment. As the noble Lord, Lord Shipley, said, the CBI has also said that it is essential that we stay at the table to bang the drum for businesses and defend our national interest.

These are not insignificant individuals and they are not bound in any way by party political interests. They unquestionably know what they are talking about. Those of us who are in favour need to start making the positive case for remaining within the EU. We should not just counter the negatives of the doomsayers; we need to talk the case up. Indeed, there is a good, solid case to be talked up.

The noble Lord, Lord Shipley, has already quoted the CBI/YouGov survey announced last month, which demonstrated that eight out of 10 firms say that the UK must stay in the EU. Surely that level of support cannot seriously be questioned. Furthermore, significant numbers of those surveyed believed that the current relationship had a positive impact on their own businesses on issues such as the ability to buy and sell products without taxes and tariffs on trade flows in the EU markets and, indeed, outside those markets as a result of trade deals. Having common product standards across the EU was also cited as being of considerable importance. That is hardly surprising because, of course, the EU single market is the world’s largest trading bloc, worth some £10 trillion a year. It is home to 500 million consumers and is the destination of half of the UK’s exports. Surely being part of this large single market makes our entire economy more competitive. Even firms that do not export face more domestic competition, which benefits consumers. In addition, EU membership gives access, through trade agreements, to 37 other economies around the world. If we were to leave the EU, we would have to negotiate each of these deals again, but this time as a country of 60 million people rather than a continent of half a billion people.

Surely the biggest challenge facing the UK today is not Europe; it is the economy, and the priority is to deliver jobs and growth. I repeat my opening remarks that the UK’s interests clearly lie in remaining at the heart of the EU and I believe that that view should be increasingly argued at every opportunity. At the moment in Scotland, we are involved in a campaign to, we hope, keep the UK together. Those in favour of that position are campaigning under the name Better Together. I suggest that that slogan should also be used in terms of the UK’s relationship with the EU.