Lord Howard to the CBI: The lack of democracy in the EU is hurting business

In a speech to the Confederation of British Industry (CBI) this evening, former Home Secretary, Lord Howard of Lympne, will make a number of points including criticising the CBI’s record on the EU. The full speech is in the notes to editors.

Lord Howard will:

 

Criticise the CBI’s record on the EU

‘In 1987 the CBI called for full UK membership of the European Monetary System. British membership of the ERM led to interest rates hitting 15% in 1992 and millions of homeowners going into negative equity. After the UK crashed out of the ERM in September 1992, on Black or White Wednesday, depending on your outlook, it enjoyed a sustained period of economic growth.

‘And in 1999, the CBI argued that joining the Euro would “deliver significant benefits to the UK economy”, including allowing British companies“ to participate fully in a more complete and competitive single market“ ( Sound Familiar?).

‘And there were dire predictions that, if we didn’t join, inward investment would dry up and the City would lose its place as a leading financial centre.

The arguments are all too familiar.’

 

Argue that the lack of democracy in the EU is hurting business

‘But if a government, having made its promises to the electors, is unable to keep those promises, not as a result of any conscious decisions on its part but as a result of the decision of some extraneous unaccountable body, such as the unelected European Commission or the unaccountable European Court of Justice, that crucial connection is broken. The lever which gives our people control doesn’t work.’

‘And because that increases the feeling of alienation which I described earlier it is a threat to us all, including business.’

 

Warn that the European Court of Justice has made us less safe

‘It is further increased by decisions of the European Court of Justice which make us less safe than we would otherwise be.

‘Among many such decisions, the Court has ruled that the Home Secretary is not allowed to refuse entry, or to deport, citizens of European countries who our courts have concluded are involved in terrorism.’


Reminds the CBI that they are ‘citizens of our country as well as businessmen and women.

‘You are citizens of our country as well as businessmen and women.’

You want to be safe just as the rest of us do. And if you cannot carry out your business in a safe environment you will suffer the consequences, as business people as well as citizens.’

 

Set out the economic gains of a Vote to Leave

‘At the moment, every UK business must comply with “single market” legislation, even though just 5% of British firms export to the EU. This is a system which has an inherent tendency to produce disproportionate burdens on small companies, impeding their competitiveness.

‘And if we Vote Leave we can take back the power to make our own trade agreements. At the moment we have no trade deals with India, China, Brazil-or even Australia and New Zealand. We have to wait for 27 other member states to agree before we can arrange a single trade deal.

‘And to those who say that that trade with the EU will fall off a cliff if we leave I commend the words of the Prime Minister. “If we were outside the EU altogether…” he said “….of course the trading would go on.

‘You could look at it this way.

‘If we left the EU with no trade deal-inconceivable given the tariff free zone from Iceland to Turkey- our exports would face EU tariffs averaging just 2.4%. But our net contribution to the EU budget is equivalent to a 7% tariff. Paying 7% to avoid 2.4% is mis-selling on a scale that dwarfs the scandal of PPI.’


The full speech:

** Check against delivery**

May I begin by thanking you for your invitation to address you this evening.

I congratulate whoever was responsible for selecting the date because today is the anniversary to the day of the naming of Napoleon Bonaparte as Emperor of France in 1804.

Less happily it also coincides with the Europa League Final so I assure any of you who, like me, is a Liverpool fan that I shan’t in the least mind if you interrupt my speech by roaring your approval every time news of a Liverpool goal reaches you.

Let me hasten to assure you that my reference to Napoleon does not mean that I intend to follow the historical analysis of the development of Europe which was recently undertaken by my friend and colleague Boris Johnson.

But I do want to start by saying a few words about the world in which we live.

In many respects it’s a good news story.

Over the last 25 years or so we have seen the greatest reduction in poverty in the history of our planet. There are hundreds of millions of people, mainly but by no means exclusively, in China and India, who are no longer poor. That is a remarkable achievement which is not recognised as often as it should be.

It is a result of the spread of free enterprise, free trade and the international division of labour.

But it has a flip side. One of the reasons why those people are no longer poor is that they are making things which used to be made in the developed world.

Huge numbers of relatively well paid jobs in the advanced countries of the world have disappeared. People who were accustomed to an ever increasing standard of living find that it has stalled. They have come to believe that their children will be worse off than they are.

And all this has happened at a frightening pace. The old certainties are no longer there. Instead there is growing insecurity. And in some countries this has been exacerbated by large scale immigration.

It has left many people feeling bewildered, confused, lost and angry. They feel they have lost control of their destiny.

They feel increasingly disillusioned with their politicians whom they see as remote and out of touch.

And we see their frustration working itself out in the votes they cast. In the votes for Trump in the United States, for the Front National in France, for Alternative for Deutschland in Germany. We see it in the recent triumph of a far right candidate in the first round of the Presidential election in Austria and in the rise of the fascist Golden Dawn in Greece.

I think there is a common thread linking these votes even though their beneficiaries obviously differ widely in the prescriptions they offer.

That common thread is a feeling of helplessness, of loss of control, of loss of faith in their mainstream politicians.

I think this is a very dangerous phenomenon-dangerous for mainstream politicians and moderate policies, and dangerous for business, too. I think we ignore it at our peril. And I think the lessons for our politicians are clear.

They should do everything they can to strengthen the extent to which people feel they have control over their own lives and their own destiny. And they should be wary, very wary, of action which would weaken this sense of control even further.

How do these lessons measure up to the debate about our membership of the European Union?

Of the many gifts which our country has given the world the gift of democracy, of democratic self government, is the greatest.

At the heart of that democracy is a connection between the votes cast at our general elections, the governments they elect and the accountability which comes from the ability of voters to turf out a government which fails to keep its promises.

That is the system which has evolved over the centuries for giving the British people the control over their destiny which those who came before us argued for, fought for and died for.

But if a government, having made its promises to the electors, is unable to keep those promises, not as a result of any conscious decisions on its part but as a result of the decision of some extraneous unaccountable body, such as the unelected European Commission or the unaccountable European Court of Justice, that crucial connection is broken. The lever which gives our people control doesn’t work.

And because that increases the feeling of alienation which I described earlier it is a threat to us all, including business.

It is further increased by decisions of the European Court of Justice which make us less safe than we would otherwise be.

Among many such decisions, the Court has ruled that the Home Secretary is not allowed to refuse entry, or to deport, citizens of European countries who our courts have concluded are involved in terrorism.



And in some ways most seriously of all, it decided that the UK’s opt out from the Charter of Fundamental Rights, which Tony Blair assured us he had achieved and which David Cameron promised to negotiate, had no effect and does not exist.

One consequence of this is that part of the Data Retention and Regulatory Powers Act of 2014, which the Home Secretary said was “ crucial to fighting crime, protecting children and combating terrorism” was struck down by the Divisional Court as being inconsistent with the Charter. The surveillance regime provided by the Act has now been referred by the Court of Appeal to the European Court of Justice.

So the validity of a measure deemed crucial to our security by the Home Secretary, and fully scrutinised and approved by our democratically elected Parliament, now depends on the decision of the entirely unaccountable European Court of Justice.

You are citizens of our country as well as business men and women.

You want to be safe just as the rest of us do. And if you cannot carry out your business in a safe environment you will suffer the consequences, as business people as well as citizens.

You will have noticed that I haven’t said anything yet about the effect on our economy if we decide to leave.

That’s not because I don’t think it’s important. It obviously is.

But the truth is that none of us can predict the future.

I find the arguments of the more than 300 business leaders who wrote to the Daily Telegraph on Monday very persuasive. They referred to the red tape from Brussels that stifles every one of Britain’s 5.4 million businesses and claimed that leaving the EU would allow them to create more jobs.

It was an impressive list-including Peter Goldstein, a founder of Superdrug; Steve Dowdle, a former European Vice-President of Sony; Tim Martin, the Chairman of Wetherspoons; and Michael Geoghan, the former Chief Executive of HSBC.

Let me set out some of the gains which I believe would result from a decision to leave.

At the moment, every UK business must comply with “ single market” legislation, even though just 5% of British firms export to the EU. This is a system which has an inherent tendency to produce disproportionate burdens on small companies, impeding their competitiveness.

And if we Vote Leave we can take back the power to make our own trade agreements. At the moment we have no trade deals with India, China, Brazil-or even Australia and New Zealand. We have to wait for 27 other member states to agree before we can arrange a single trade deal.
And to those who say that that trade with the EU will fall off a cliff if we leave I commend the words of the Prime Minister. “ If we were outside the EU altogether…” he said “….of course the trading would go on.”

You could look at it this way

If we left the EU with no trade deal-inconceivable given the tariff free zone from Iceland to Turkey- our exports would face EU tariffs averaging just 2.4%. But our net contribution to the EU budget is equivalent to a 7% tariff. Paying 7% to avoid 2.4% is mis-selling on a scale that dwarfs the scandal of PPI.

But can I put my hand on my heart and promise you with absolute certainty that we will be better off if we leave?

Of course I can’t.

But neither can those of you who argue that we should remain be certain of the consequences.

Economic forecasting is a mug’s game. The only safe forecast to make is that all forecasts will turn out to be wrong.

As the great American economist JK Galbraith said:-

“ The only function of economic forecasting is to make astrology look respectable.”

I hope I won’t be accused of breaching the rules of hospitality if I remind this most distinguished audience of the perils of forecasting, based on your own form in these matters.

In 1987 the CBI called for full UK membership of the European Monetary System. British membership of the ERM led to interest rates hitting 15% in 1992 and millions of homeowners going into negative equity. After the UK crashed out of the ERM in September 1992, on Black or White Wednesday, depending on your outlook, it enjoyed a sustained period of economic growth.

And in 1999, the CBI argued that joining the Euro would “ deliver significant benefits to the UK economy”, including allowing British companies “ to participate fully in a more complete and competitive single market “ ( Sound Familiar ? ).

And there were dire predictions that, if we didn’t join, inward investment would dry up and the City would lose its place as a leading financial centre.

The arguments are all too familiar.

I have no doubt that we can come to a perfectly sensible trading arrangement with the EU if we decide to leave.

Our trade with them is at a substantial surplus to them and deficit to us and it is surely “ for the birds “ to suggest that the Germans would not want to continue to sell us their BMWs and the French would not want to continue to sell us their wine and their cheese.

As for the argument that our erstwhile partners would be so consumed with hate and spite if we exercised our constitutional right to withdraw, that has always seemed to me bizarre.

Let’s stay friends with them because otherwise they’ll cut off their nose to spite their face in order to punish us? It’s not going to happen.

What we need is a bit of self-confidence; a bit of self- belief.

We are the 5th biggest economy in the world. We have the best armed forces in the world. We have more Nobel Laureates than any other European Country. We have more world class universities than any other European country.

Everyone will want to have access to our market. We will not be the supplicant. It is absurd to suggest that we will not be able to thrive outside the European Union.

I want to end by referring to President Obama.

I was very frustrated that no-one, while he was here, asked him the following question:-

If, in the current Presidential Election, a candidate suggested that the U.S. Supreme Court should be subordinate to a North American Supreme Court sitting in Mexico City, and that the U.S. Congress should be subordinate to an unelected North American Commission sitting in Ottawa and that the U.S should give up the right to decide who could enter the country and who couldn’t, how long would that candidate last?

I think we all know the answer.

Yet that is precisely the position in which we find ourselves.

We have a long and illustrious tradition of democratic self government. There is no reason why we should be regarded as less capable of governing ourselves than the people of the United States of America.

Those are some of the reasons why I believe that, on June 23rd, we should resolve to recover control of our destiny and once again become an independent self- governing nation. We should Vote Leave.

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