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Peter Mandelson: London will lose its influence if we leave Europe

The elections in May are a vital opportunity for voters to show their support for Britain remaining within the EU
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Peter Mandelson
22 April 2014

With the bank holiday a pleasant memory, the countdown begins to the May elections, including for the European Parliament — another chance for Londoners to pass judgment on the parties and their leaders. For most, no doubt, it will be a negative verdict.

So, expect the opposition and the fringe parties to do well. Even if the Government has done some good things, why waste the opportunity to send a message that it needs to do better?

Ukip can expect to be a beneficiary of this boot up the backside for the Coalition parties. Nigel Farage and his party of unknowns escape detailed scrutiny because you would need a giant magnifying glass to discover what their policies are and because, for most they are a passing joyride for the protest voter.

This is despite the fact that, for most Londoners, there is a lot to dislike about Ukip. Their attitudes to women and maternity rights belong in the dark ages. They routinely insult gay people. Ukip’s London MEP, Gerard Batten, has said that all Muslims should sign up to a “Muslim code of conduct”. If anyone could do with a new code it is Batten: his attendance and voting record in the European Parliament are terrible (although, like his Ukip colleagues, he is no slouch when it comes to drawing the allowances and expenses). As their ad campaign launch today reveals, they are Britain’s ‘nasty party’, basing their appeal on prejudice and discrimination.

Farage likes to present his role in politics as good, clean knockabout fun (although he hates it when he is found out, as he was over his own personal money-making in the European Parliament). But his demand for Britain’s total exit from the EU is deathly serious. It points a dagger at our economic interests, no more so than in London.

The City of London remains a source of great wealth for Britain. It dominates European financial markets and is the eurozone’s largest financial centre. It is being so big in Europe that enables the City to be big in the world. Outside the EU, we would no longer enjoy unfettered access to Europe’s financial markets, and much of the City’s trade and clients would relocate to continental financial centres because, under current European legislation, you have to be located inside the EU to conduct many financial activities within its borders.

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This would be calamitous for jobs, not just in London but in other, smaller financial centres in the UK. The result would be less money in all our pockets and in the Treasury’s coffers to pay for the country’s health, education and other public services.

So voting for a party that wants Britain out of Europe is no joke. And where finance leads, trade follows.

Those who argue that we would not lose anything by exiting the EU contend that EU regulation delivers little market opening in Europe for British exporters, obstructs our trade with countries outside Europe and ties up our economy in red tape. But the EU has removed the national trade barriers of 28 member states, creating a vast single goods market of 500 million people to which British exporters have free, permanent access. Far from creating barriers to the rest of the world, British exports to the major emerging economies are growing.

And rather than having to accept unbearable regulation, Britain opts to have the least-regulated product markets in the developed world, after another EU member, the Netherlands.

Our level of employment protection is far lower than that of France, Italy or Germany. We can argue about whether this is desirable — but nobody in Europe is stopping us from exercising this choice. And it is one of the main reasons why Britain — in the EU — is home to more European and American direct investment than any of our partner economies.

True, just as many Britons choose to live or retire elsewhere in Europe, EU membership forces us to accept some migration. This coming and going balances itself out. And costs are outweighed by the economic gains through additional spending and business.

But what is economically good for London and the UK is not necessarily politically right — not if you think that any sacrifice is unacceptable in terms of our independence and ability to make our own laws as we see fit. This was at the heart of the clash between Farage and Nick Clegg in their TV debates which, in my view, Farage won on points but lost on facts.

It comes down to a fundamental choice: in Britain, do we want to compromise on some things with our partners in order to get the economic benefits and jobs that come with EU membership? Can we afford to give up the strength we get from being in a bigger bloc of nations and risk being sidelined by our neighbours if we opt out ?

It is not as if we are, in population or land size, a big country in the world. And we certainly no longer have the defence spending and armed forces to exist independently of our allies. When crises erupt, such as Russia’s annexation of Crimea and incursion into Ukraine, does anyone believe that Britain acting alone could make more of a difference than by acting with Germany, France and the rest of the EU?

This September, we face the possibility of becoming an even smaller and weaker nation after Scotland votes on separation. No doubt the Faragists imagine that a Little England could nonetheless still become a Greater Britain outside the EU. I know what the rest of the world would think: that we had completely lost touch with reality and ceased to have any sense of ourselves as a player on the world stage.

Ever since Europe started coming together after the Second World War, and yet further during the Cold War, Britain has been the reluctant partner. Dragging our feet at every opportunity, always holding back when Europe has chosen to deepen its co-operation, we have continuously given up our ability to shape events. Then we complain that what’s been created isn’t to our liking when, inevitably, we have to follow behind the others.

Yet again we are looking as if we are heading for the exit with the pledge of an in/out referendum in 2017. This self-indulgent gesture has neither overcome the divisions in the Tory party nor helped Britain’s economic recovery.

It’s time we grew up as a country and realised once and for all that our destiny is with the rest of Europe, not by ourselves in a rough, tough world. And the elections in May are a chance to say so.