1 July 2013 Community, Guest Column

Guest column: Peter Mandelson

Membership of the EU is about compromise, but the decision to remain part of it should be clear-cut. Britain has an international outlook and we need our European neighbours to succeed – as much as they need us. 

As a former EU commissioner you would expect me to write in favour of Britain’s continued membership. 

But I do so not for ideological or selfish reasons but because I believe strongly that it is in our national interests to remain fully part of Europe’s economic and trading bloc.

During my years in European trade, I became aware of three things. First, Europe is in danger of becoming uncomfortably squeezed between continued American power and the rising strength of the world’s fast-growing economies. We need to close ranks in order to maximise our interests. 

Second, combining our weight in a single bloc involves making compromises – sometimes more than we wish – in return for the unity we seek with our partners. Third, our European partners need us as much as we need them and that’s why they are prepared to cut us some slack and, up to a point, indulge Britain’s island mentality.

There is nothing wrong with Britain being a bit different as long as our attitudes do not degenerate into Little Englandism. We have always been present in the world, as traders, colonialists, investors and, latterly, as hard-nosed economic globalisers.

For all UKIP’s infatuation with the idea that we can stop the world and get off, Britain has always known where business is to be won, not just in our own relatively small backyard but in our real domestic market in the rest of Europe and beyond, in North America and increasingly in the emerging economies of Asia, Latin America and Africa. That’s why it is important to look outwards to the world, not be isolated from it.

It’s all in the balance

The prime minister is right, for this reason, to place emphasis on the importance of Europe’s prospective trade and investment agreement with the US. It is one of a number of negotiations the EU has launched on our behalf around the world. Some in Britain mistakenly believe that we could simply dispense with Europe and make a living on our own in the fast-growing BRICS – Brazil, Russia, India, China and South Africa.

But the key point is this: only the attractiveness of our combined European market to much bigger continent-sized trading nations is sufficient to bring them to the negotiating table. They would be much less interested in opening their markets further in return for access to Britain alone.

But Britain not only contributes to Europe’s global weight; our export oriented and internationalist instincts also help to keep the EU as a whole looking outwards. It’s why I have heard many businesspeople and politicians – from countries such as Italy and Spain as well as Germany and the Netherlands – expressing their strong preference for Britain remaining inside the fold: we are an important counter to the more protectionist attitudes of some other EU states.

Europe cannot afford to cut itself off from global markets. But, by the same token, it would be a mistake to focus so much on the rest of the world that we overlook the importance of strengthening our home European market. This is not only for trade reasons (around half Britain’s trade is with the rest of Europe), but because there are increasingly important supply chains and production networks in Europe offering opportunities for our small and medium-sized businesses to expand. The ability of businesses to add value in the production of goods is just as important as the finished products they export.

The same goes for services: we need to deepen Europe’s single market and extend its opportunities to the provision of services so that businesses and consumers alike benefit from a reduction in cross-border barriers, both in terms of quality and cost.

A question of doubt

Are these important goals helped or hindered by the demand in Britain to hold a referendum on our EU membership? I am not afraid of giving the public a chance to express their views on any important issues of principle concerning Europe or major treaty changes.

On the contrary, having more of a real debate about Europe increases the likelihood of people being persuaded of the arguments in favour of EU membership.

But we need to consider the uncertainty that a referendum proposed in five years time creates for investors. Many will think twice before investing in Britain if there is doubt about their future access to the EU’s single market. 

The threat of withdrawal also does not help our cause when negotiating – with one hand on the doorknob – over our vital interests in Brussels. No one wants us to leave and they will wish to accommodate us as much as possible, but not if we are demanding a special membership status for ourselves while holding a pistol to others’ heads.

We now need to clearly establish our relationship – our rights and prerogatives as an EU member not using the euro – with the currency zone itself. But let’s use our undoubted influence to concentrate on the issues that really matter to our EU membership rather than continuing to squabble over whether we want to remain members at all. Instead of picking endless fights, let’s win battles that really count.