Articles:
Thatcher understood the pro-market case for Britain staying in the EU

My response to Daniel
Hannan’s article “Pro-EU propaganda film is a disaster for the
BBC” about the film by Annalisa Piras, “The Great European
Disaster Movie”, will avoid addressing his ad hominem remarks or
questioning his merits as a film critic. Rather, I will respond to
his assertions about the nature of the European Union and about the
case for British withdrawal from it. Those, after all, are what
matters: they are strategic issues that will affect Britain for many
generations to come.

I
will separate my argument into two parts, though of course the parts
are related. The first part concerns the case for a strong British
influence in what happens on the continent of Europe. The second
concerns the pro-market case for the European Union.

On
British influence in Europe, I believe that patriotism, history and
geography combine to make it imperative that those who govern the
United Kingdom and purport to act in the country’s long-term
interests should always act to ensure that Britain has at least a
powerful say, at best a chance to lead, in matters of international
politics, security and economic stability in the countries that are
our nearest neighbours, across the North Sea, the English Channel and
the Irish Sea.

This
has been recognised by British statesmen for centuries. They may not
like it. They might prefer to avert their gaze from what is going on
and to avoid getting involved. But from the days of Castlereagh and
Palmerston to those of Churchill, Thatcher and Blair, such statesmen
have known that British interests are always at stake in the
continent of Europe. Geography alone would dictate that, just as it
is a main reason why more than half our trade is with the other
countries of the EU today, and why we trade more with Ireland alone
than with China and India combined.

Small
countries such as Norway and Switzerland know that their interests
are also at stake in Europe, but they also know that they will always
remain largely passive victims or beneficiaries, retaining even some
ability to duck and weave. That is not true of a country with the
size, wealth and reputation of Britain. We can influence what happens
in the rest of Europe. So patriotism and self-interest dictate, in my
view, that we should.

This
is what Margaret Thatcher, in her notorious to some, noble to others,
Bruges speech of 1988 recognised above all. She was no lover of the
European Union. But she had a powerful instinct for where Britain’s
interests lay:

Britain
does not dream of some cosy, isolated existence on the fringes of the
European Community. Our destiny is in Europe, as part of the
Community.

That
is not to say that our future lies only in Europe, but nor does that
of France or Spain or, indeed, of any other member.

The
Community is not an end in itself.

Nor
is it an institutional device to be constantly modified according to
the dictates of some abstract intellectual concept.

Nor
must it be ossified by endless regulation.

The
European Community is a practical means by which Europe can ensure
the future prosperity and security of its people in a world in which
there are many other powerful nations and groups of nations.

Let
her inspiring words lead to the second part of my argument, the
pro-market case for the European Union, something to which British
influence should be, and has been, directed.

A
failing European economy will always be bad for Britain. A
prospering, dynamic one will always be good for Britain. This,
incidentally, explains why in all polls, a clear majority of British
businesses come out in favour of continued British membership of the
EU, and why the City of London is also overwhelmingly in favour. They
are not being selfless. They know they stand to benefit from European
markets and European capital.

Many
of them also probably know, at least in their sectors, that the
notion that the EU is throttling them with regulations is about as
false a myth as can be found. If it were, they might indeed want to
leave. But it isn’t. What holds business back, in the countries of
the EU, are national regulations.

The
World Bank every year does a survey of “Doing Business In”
different countries around the globe, in which it assesses the
regulatory climate and how it facilitates and holds back business.
What is remarkable about this survey, as also about a more detailed
assessment by the OECD of its 34 member countries, is how different
are the rankings given to members of the EU. The UK scores well,
ranked 8; Finland is 9 and Sweden is 11. But France comes 31^st,
Spain 33^rd and
Italy an unsplendid 56^th.

So is
“the EU” the chief throttle of business? It can’t be: the
explanation lies at national level. And, in fact, in the failure of
the EU to fulfil the aspirations laid down in the 1957 Treaty of Rome
and in the Single Market programme launched in the mid-1980s. The EU
has done too little to unravel national red tape, not too much.

Yet
the EU is easy to blame. In Annalisa Piras’s film, Jane, a
hotel-owner in Margate, provides a perfect illustration. She
complains that a local inspector has told her to stop serving fresh
“butter curls” because “of some EU directive or other”. I
checked. There is no EU directive or regulation barring her from
serving butter curls. In fact, such fresh, unwrapped butter is served
freely in restaurants all over Europe. But no doubt a meddling local
inspector chose to use Brussels as his excuse for interfering.

I bow to no one in my scepticism about government.
Ronald Reagan was correct when he said “the nine most terrifying
words in the English language are ‘I’m from the government and I
am here to help’.” But this is true of all levels of government:
local, national, European. And although “Brussels” is certainly
more than capable of interfering and making things worse, most of
what it does is what economists call “rules rather than
discretion”. In other words, by agreement a common rule is set for
everyone. Then, no bureaucrat or politician can meddle and decide he
favours this industry or that firm.

The
pro-market case for the EU is that to work well, markets need rules
and they benefit from scale. Adam Smith recognised the former. Scale
has become available thanks to the EU now being the largest combined
economy in the world. So the more the EU can stop national meddling
and self-harm – subsidies, cartels, local regulations, crony
capitalism – and replace them with clear, common rules, the better
the market will work.

That
is what makes the EU frustrating too: it should do this, but hasn’t,
in the crucial areas of services (which account for 70-75% of GDP),
digital commerce and indeed energy. National interests have blocked
the spread of the single market in these areas.

So
should we just give up and withdraw? I say not. We should stay,
should promote fixes to the calamity of euro-zone sovereign debts,
and should vigorously promote the building of a true, full single
market.

I
believe that that is what Margaret Thatcher would want, too, critical
though she would be of all the follies made by the constructors of
the euro. Her Bruges speech can have the final words:

If
Europe is to flourish and create the jobs of the future, enterprise
is the key.

The
basic framework is there: the Treaty of Rome itself was intended as a
Charter for Economic Liberty.

But
that it is not how it has always been read, still less applied.

The
lesson of the economic history of Europe in the 70´s and 80´s is that
central planning and detailed control do
not work
and that personal endeavour and initiative do.

That
a State-controlled economy is a recipe for low growth and that free
enterprise within a framework of law brings better results.

The
aim of a Europe open to enterprise is the moving force behind the
creation of the Single European Market in 1992. By getting rid of
barriers, by making it possible for companies to operate on a
European scale, we can best compete with the United States, Japan and
other new economic powers emerging in Asia and elsewhere.

And
that means action to free markets,
action to widen choice,
action to reduce government
intervention.

Our
aim should not be
more and more detailed regulation from the centre: it should be to
deregulate and to remove the constraints on trade.

So
let’s make it happen.