Why should Britain continue to be a member of the EU? Apr99

Why should Britain continue to be a member of the European Union?

Europe was shattered by two world wars.  Millions lost their lives, their families and their homes. Conflict, in Europe, did not end in 1945. Since then, we have witnessed the tyranny and murder in Russia, Eastern Europe, Cyprus, Chechnya, and Bosnia.

In Kosovo today we see children and women  slaughtered, villages and towns destroyed. Milosovich & his army use terrror, rape and murder for ethnic cleansing on a scale that we have not seen since the days of Hitler. We must not tolerate such genocide and inhumanity in the heart of Europe.

Britain’s role in NATO and its leadership in Europe show clearly the importance of Britain’s membership of the EU. Whilst some member states hesitate to support NATO Britain stands up for humanity and justice. We should all be proud of our armed forces as they risk their lives to give Britain this strength, influence and respect.

In the EU, Britain is the only country with a record of peaceful, democratic government for many centuries.  It is a major oil producer and the only oil exporter in the EU.  It has the largest non-EU trade. London’s financial market is the biggest in Europe.

Therefore, it should not surprise us that Europeans acknowledge our cultural and historical ties to Europe; they respect our political maturity; they envy our international influence; they value our economic strength.  Above all they trust our sense of fair play and civic responsibility.

Many EU member states, particularly the smaller states who fear German-French domination, expect us to lead in Europe.

Let us not be isolated on the periphery of Europe.  Let us promote our vision of Europe and shape its future to suit us.

What should we do to reform the European Union?

1.      We should help achieve a true single market in Europe such that Britain is the engine of global free trade.

2.      We should promote free and flexible labour markets to create real jobs in the EU.

3.      We should facilitate enlargement to the East so that we have a Europe of nation states.

4.      We should insist on reform of the Common Agricultural Policy (CAP) and the Fisheries policy so that our farmers and fishermen have a fair deal.

5.      We should strengthen the role of national parliaments to scrutinise EU documents, draft legislation and cases of fraud so that there is zero tolerance on waste and fraud.

6.      We should resist interference from Brussels with respect to withholding tax on savings, tax harmonisation, frontier controls and treaty changes as these matters are best left to national parliaments.

7.      We should seek more co-operation – but NOT integration – in areas of common interest e.g. environment, transport networks, telecommunication etc.

It is time for the faceless men of Brussels, living in their ivory towers, to stop invading our lives.  They should be, like our civil service, responsible only for implementing legislation in an impartial manner.  They should, when required, be accountable to national parliaments, and in cases of proven fraud, forced out of office with severe penalties.

Should Britain adopt the Euro?

There are four benefits in adopting the Euro:-

1.      Price transparency:-

Competition, across Europe, will be open and intense.  Prices will be lower, and the strong companies will be better placed to compete globally.

2.      Efficient capital markets:- The Euro will create a single European debt and equity market.  Savings will flow to highest return investments.

3.      Reduced risk to business of exchange rate volatility:-

The Euro will eliminate exchange risk from trade and investments within Europe, allowing companies to focus on their actual business, rather than managing financial risk.

4.      Lower interest rate:-

The interest rate for borrowing in Euro is half the rate for the pound Sterling.  This means lower cost for existing and new investment in all European industry and trade.

The 11 countries in Euro-land enjoy these benefits now. Greece, Denmark and Sweden will do so when they join in 2002.

60% of our trade is with the Euro-land.  British companies, especially our exporters & manufacturers, will face higher costs for borrowing and managing exchange risk as the pound fluctuates.  The Social Chapter, forced upon us by Blair’s Government, now imposes extra costs on employing labour here.  These extra costs will erode our competitive advantage and discourage foreign investors from investing here; they will force our manufacturers to re-locate in Euro-land precipitating job losses in our industries in Britain.

 
So why has Britain not adopted the Euro?

There are good reasons for our caution.  Let me give you just a few.

1. Economic convergence criteria for the membership of the Euro were agreed to ensure its stability.  Some member countries have NOT complied but have secured membership!  Italian and Belgian public debt levels exceed 120% of their GDP, against a maximum permitted level of 60%!
2. Unemployment varies from 2% in Luxembourg to 18% in Spain with an average of 10%.  How will they comply with the ECB criteria if they need to maintain an appropriate level of unemployment in their country?
3. Labour costs, technology and working practices vary widely across Europe.  How will industries and businesses compete using a single exchange rate?
4. There is a wide difference in personal and corporate taxes – 10% in Ireland to 35% elsewhere.  Will these converge?  If not, will investors go to those countries with the lowest tax rates?
5. The European Central Bank can issue the Euro but it cannot determine the fiscal policy of any member state.  How will it ensure compliance of economic criteria?  How will it manage financial crisis in any member state? 

Lack of labour mobility, disagreement on fiscal policy between industry and government, and Trade Union fear of further unemployment from privatisation of state-owned industries will continue to put pressure on the Euro. It has already weakened substantially against Sterling and the Dollar.

Unfortunately, Blair & Brown wish to abandon the pound and they quote widespread support in the country for such policy.

It is true that larger companies in Britain - including exporters - with investments across Europe – like the major car manufacturers, banks, pharmaceutical, engineering & insurance companies, wish to adopt the Euro.

But smaller companies, especially those operating strictly in the UK, tend to be reluctant or opposed.

The CBI and the British Chamber of Commerce favour the Euro.  But the Federation of Small Businesses and the Institute of Directors are opposed.

The British public remains confused, uninformed and undecided.  This is why there are different views in all political Parties. Let us monitor our business cycle and the stability of our exchange rate over time so that we can see the impact of the Euro on our economy. Let us consider both the constitutional aspect of sovereignty and the economic arguments. Only then, should we decide what is in our best interest.

How can we play our full part in Europe?

We know that ordinary citizens in Europe reject a super federal European state.  They have suffered enough from the dead hand of bureaucracy, high taxation and inefficient centralised services.  Every European country cherishes its distinct culture, identity and national interest.

All Conservatives support a Europe of nation states and reject any political integration.  We wish to be “In Europe, but not run by Europe”.  Let this principle guide and unite us, so that we can persuade the public to support us. Therefore, ladies & gentlemen, let us make this distinct principle the hallmark for a successful Conservative Europe – a Europe where national identity thrives to strengthen peace and prosperity for all!