I was asked to speak for 10 minutes to a primarily Muslim audience on why the UK should remain in the European Union. I focused on the importance of the EU to our economy. I pointed out that the most vociferous anti-EU voices are often also anti-Muslim.
Delivered 28 April 2016 Posted 29 April 2016
Over the last few years I have got to know Dr Muhammad Farmer, Vice Chancellor of the British Institute of Technology England (BITE).
Like me, Dr Farmer believes that the UK should remain in the EU and he is anxious that all citizens make an informed decision in the EU referendum that the UK will hold on 23 June 2016. Accordingly he was planning to hold an event at BITE on 28 April 2016. I changed my diary so that I could attend.
Given the demographics of the area and the promotion of the event, of the audience of 30-40 the great majority were from an ethnic minority background, mostly Muslim.
The speakers were:
I was using a prepared script, so I have reproduced my speech below with the minor amendments needed for something that is to be read rather than heard.
I want to start with a preliminary point. I am the Chairman of the Conservative Muslim Forum. However, as our website makes clear, the CMF has no position on the referendum. Accordingly, I’m speaking purely in a personal capacity.
We are not being asked if we think the EU is perfect. Like everything created by man, it is very imperfect. I can think of many things about the EU I would like to improve.
We are not being asked if we like David Cameron or the Government. The Conservative government will continue regardless of the referendum result.
There is only one question in the referendum. Should the UK remain in the European Union or should the UK leave?
If enough of us vote to leave, under the EU treaty the government will give notice of departure and in two years we will be out of the EU. That happens regardless of whether we have negotiated a new deal with the EU within those two years, unless every single one of the 27 other countries agrees to an extension of the negotiation period. I have read the treaty and I have a copy of the relevant clause available. [See EU Treaty Article 50 reproduced lower down on the page]
If we stay in, our government can decide that the UK will leave the European Union any time it wishes. We can always change our minds if we want to leave in the future. However, if we decide in this referendum to leave, we leave.
Its rather like being married. If you decide to divorce your spouse today, and file for divorce, its permanent. The two of you get divorced. If you decide today to stay married, you can always change your mind and get divorced in the future!
There are many reasons:
As I’ve only got a small amount of time, I will concentrate on the first point.
Everybody always talks about the single market, but nobody explains what it really means. Let me give you two concrete examples.
America is a federation of 50 states. Each state has many laws which are different from other states. However, they have a single market in the USA. Inter-state commerce, that is commerce which crosses state boundaries, is decided by the Federal Government in Washington, not by individual states. States are not allowed discriminate against good from other states.
Before foreign companies set up their factories in the USA, there were just three big American car companies. General Motors, Ford and Chrysler. All of them had big factories in Michigan near Detroit. The USA has a single market, so cars made in Detroit could be sent anywhere in the USA.
Compare that with Europe.
Every major European country, Britain, Spain, France, Italy, Germany, Holland, Sweden, Czechoslovakia to list only the ones I can remember had its own car companies, often more than one car company. All these companies were much smaller than the American giants. Their factories were much smaller than the American factories. That is much less efficient.
Having many smaller companies is one of the main reasons why Europeans were poorer on average than Americans. There are of course other reasons for being poorer we can discuss separately if you want.
The EU started by eliminating tariffs. If a French car company wanted to sell cars in Germany, Germany could no longer impose import duties. However, the single market is much more than that.
The biggest barrier to trade is not tariffs but technical standards. What are the specifications a car has to meet before it is safe to be sold in Germany? As long as Germany had different technical standards for a car from France, there was no single market. The EU allows us to set common technical standards all across Europe.
The final barrier to trade was the hassle of taking goods through customs. If there is a customs duty check at the French/German border, that slows down trade and creates extra costs. We abolished customs inspections inside the EU in 1992. Now the French company makes the car, packages it and just sends it to the German customer.
That is what a single market is about.
When Nissan of Japan wanted to set up a car factory in Europe, it knew that the factory would be able to sell cars throughout the EU. They came to the UK for many good reasons. However, if the UK had been outside of the EU, I do not believe they would have come to our country.
Let me give you a different example of the single market.
I own some shares in an exchange traded fund. That is a kind of collective investment scheme quoted on the stock exchange. The one I own is quoted on the London Stock Exchange. It was created by a French bank. The fund is legally incorporated in Luxembourg. The people who did the thinking and created the fund are based in London. They get paid here and pay UK taxes.
All of this relies upon the single market. The EU sets standards for collective investment schemes which this fund meets. After meeting the standards, it can be sold to customers throughout the EU.
As a separate example, Deutsche Bank which is a big German bank has all of its investment banking activities based in London. From London, it can easily serve investment banking customers throughout the EU.
If the UK was not in the European Union, these financial services jobs would drift away to other places like Paris and Frankfurt. I can guarantee that. Some Europeans have already talked about requiring all clearing in euro denominated securities to be handled inside a country which is inside the eurozone. As a member of the EU, we can stop that happening and have stopped it happening. Outside the EU, we would not have a vote on the question.
I don’t know. However, I don’t want to leave.
What frightens me is that the people who do want to leave also don’t know what leaving looks like. Some of them want the UK to be like Norway. Others want the UK to be like Switzerland. Michael Gove has even suggested the UK be like Albania!
Norway has full access to the single market. It has to agree to full free movement of labour, just like the UK. In relation to population, Norway has more EU migrants working there than does the UK. Norway pays into the EU budget, per head, almost as much as the UK pays in. Norway has to implement EU regulations. However, Norway does not have any say in what those EU regulations are because Norway is not in the EU.
Switzerland has single market access but also has to agree to free movement of labour, just like Norway and the UK.
Albania, I haven’t bothered to look up! I don’t want to be like Albania.
Really important things, such as changes to the EU treaty, letting in a new EU member, etc. are decided unanimously. None of those can happen without the UK agreeing.
Personally I want Turkey to join the EU when the time is right. However, it cannot happen without the UK and every single one of the 27 other members of the EU agreeing.
Most things are less important and decided by what is called Qualified Majority Voting. That applies to things like the technical standards for what is a car or detailed financial services market regulations. There is a simple reason for using qualified majority voting. Otherwise nothing would get done because some country or the other would always block it.
When it comes to qualified majority voting, the UK is a big player. The system from the Nice Treaty, which we can insist on until next March gives us 29 votes out of 352. That is the same as Germany, France and Italy, and gives us 8.2% of the voting power. Under the Nice Treaty system, a decision needs a majority of member states, and 260 votes out of 352 which is 73%
Under the Lisbon Treaty system, which works by population, the UK has 12.7% of the voting power, making us the third most powerful country after Germany with 15.9% and France with 13.0%. A decision requires 72% of the countries (I make that 21 countries out of 28) and 65% of the EU population.
We are a big player in the EU and this is a club that we have chosen to join, and chosen for the last 40+ years to remain a member of, because being in the European Union is good for the UK. Any time we change our minds, we can leave.
As most of the audience are Muslims, I have been thinking about this, and believe there is a Muslim angle. Just take a look at who is against the EU.
In the UK, we have UKIP and Nigel Farage. Despite what they say, I don’t see UKIP as friends of people like me.
In France, the National Front led by Marine Le Pen is against the EU. You know what they think about Muslims.
In Holland, Geert Wilders is against the EU. He is the man who wants to ban the Quran from Holland.
I don’t want make the list any longer. I would need to be very, very certain before I went into a voting lobby to vote the way these people want me to vote.
A consolidated version of the Treaty on European Union is available from the EU website. Article 50, reproduced below, sets out the process for leaving the EU. Emphasis has been added by me.
1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.
2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.
3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.
4. For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it.
A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union.
5. If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49. [This is the provision for new members joining, and requires unanimity for the admission of a new member.]