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Now it is more about dear friends collective weight and Europe's clout in the Ladies and Gentlemen, world - power rather than peace. It is an honor to address you page 2 today, at the Chamber's 70th Anniversary. More about the Chamber's history and future will be disclosed during the 70 Year Landmark Reception that the Chamber will hold to accommodate, along with over 350 members, several hundred of friends and partners. More will be recorded in the 70 year Chamber's Commemorative Continued on page 10 February 16, 2015 THE EU AND THE BIGGER PICTURE European politics have changed dramatically. Now it is more about collective weight and Europe's clout in the world - power rather than peace. It is also about core beliefs, moral standards, an open, international outlook and the ethics of government that unite us, and our ability to project these values, and protect our interests as Europeans, both at home and in the rest of the world. By The Rt Hon Lord Mandelson PC President, Policy Network and former UK Cabinet Minister and European Commissioner 2 February 16, 2015 hose who oppose Britain's Tmembership of the EU want to make the issue of Europe a ques- tion of identity. This, and a sense of control over our political lives are important issues. The UK Independence Party (UKIP) asks identity questions with a narrow sense of 'Britishness' under the guise of honesty and straight talk- ing, making 'Britishness' an exclu- sive and insular concept, rather than an open and multi-dimen- sional one, with an outdated idea of the realities of a global econo- my and globalised society. It reduces our interests to our iden- tity, and our identity to a carica- ture of ourselves. I do not see why Peter Mandelson believes that regulatory convergence in Europe has the Europhobes should define our delivered more for British economic interests than European identity. More importantly, identi- regulatory burdens have taken away ty politics puts people in boxes and misses the most important ment. They contributed a third the EU could be recreated from thing; learning to live with and more in taxes than they received the outside with a free trade work with people who aren't in benefits between 2001 and agreement, on our terms. This is exactly like you. This is why UKIP 2014. And 1.8 million Britons live an illusion. As the new CER report likes to mix identity with immigra- elsewhere in the EU, with 400,000 'The economic consequences of tion. Migration within the EU is in Spain and 150,000 in Germany. leaving the EU' * notes, about half driven by employment opportuni- We therefore need a sense of of UK exports go to the EU while ties and income. The new report identity big enough to take in the only about a tenth of EU exports by the Centre for European fundamental economic realities come to the UK. In other words, Reform (CER) notes that the evi- and interests of our interconnect- we need them more than they dence is that A8 (Central and ed lives and world, and how we need us in straight trading terms, Eastern European) migration has make our living in it. Otherwise, all and this would directly impact our had little discernible impact on we'll be left with is our identity, negotiating strength when it British workers' wages. The report and a pretty impoverished one at comes to securing access for the also concludes that more highly that. The difference between UK. Our economic integration skilled immigration from non-A8 being in and alongside There is a with Europe is not just about pay- EU countries is likely to have big difference between being in ing tariffs on finished products at slightly increased the productivity the EU and merely alongside it. borders. More and more trade is in and wages of British workers. EU We need to think about our eco- components and parts of finished immigrants are net contributors to nomic relationship with the EU in products. The issue is regulation, public finances because they tend dynamic, not static, terms. The standards, licensing, authorisa- to be younger than average and Europhobic argument is that tions, and professional qualifica- are more likely to be in employ- much of what benefits us about tions - all the individually small 3 February 16, 2015 but cumulatively big obstacles ent when you are in, as opposed ulatory burden. Regulatory con- that have been stripped away by a to simply alongside (ask the vergence in Europe has delivered single European framework. It Norwegians and the Swiss if in more for British economic inter- enables British business to have doubt). Trying to align the ways ests than European regulatory predictable and unhindered two or more interdependent mar- burdens have taken away. European supply chains and distri- kets regulate is the toughest prob- Of course, the EU could regulate bution networks. It makes our lem in trade policy. Europe, inter- less and regulate better, but one country an attractive location for nally, has succeeded. Leaving the rule is generally better than 28. trading into the single market. EU would recreate that problem And a rule you have a say in devis- That framework is a living political for Britain. It would also remove ing is always better than one you agreement, evolving as regulation the leverage that the EU gives us don't. Do not imagine other EU does, and at the moment we have to tackle that problem in other countries are always demanding a strong say in every change. The countries. Regulation in perspec- new regulation. Britain has for decision-making benefits of tive We must not get carried away many years been pushing for Europe are fundamentally differ- with the idea that Europe is a reg- more ambition on climate change, and we have taken a tougher approach in many areas of finan- cial regulation. We should also bear in mind that EU or no EU, the UK is among the most deregulat- ed of markets. Only the Netherlands has more deregulat- ed product markets. We can debate the virtues of that, but being in the EU does not remove our freedom of choice in these matters. Launching pad and lever- age This brings me to the argu- ment that if we separated our- selves from Europe, we could have a bonfire of red tape, and would be free to grow as we wish. But this misses something very fundamental about business growth, and that is scale. A large and easy-to-access market matters for more than just its spending power on our doorstep; it is a plat- Lord (Peter) Mandelson is currently President of the international think-tank form for scale. Big domestic mar- Policy Network. He is also Chairman of Global Counsel LLP. He was Labour kets allow their companies to Member of Parliament for Hartlepool from 1992 to 2004, serving in a number grow quickly and take a strong of key cabinet positions under Prime Ministers Tony Blair and Gordon Brown. global position - big in Europe, big These included First Secretary of State, while serving as Secretary of State for in the world. The tech/digital sec- Business, Innovations and Skills from 2008 to 2010. He was also the European Commissioner for Trade between 2004 and 2008. tor is an interesting case study as few of the new giants have a 4 February 16, 2015 European base. Most innovation mean political compromise, but because we need greater eco- occurs in the US, and US compa- that compromise is the price of nomic convergence for growth to nies are dominant in many fields. opportunity, scale and strength. be sustained. We need to build a Their fiercest competition is We recognise this every time we political bridge for those millions increasingly from China. What the share in political decision making, of voters who have started to con- US and China have in common is that the scale of their home mar- kets is their launching pad. Our version of that growth model - our EU immigrants are net contribu- home market - is Europe, but only if we are in it. Europe needs to go tors to public finances because further in breaking down its mar- ket barriers, most clearly in servic- they tend to be younger than es and e-commerce as both are growth areas globally, and impor- average and are more likely to tant for the UK. The answer is not to assume we can do better in iso- be in employment lation, but to grow in Europe, in order to become bigger in the world. The costs of disengage- even if it means blurring our social flate Europe with the fallout from ment 'Reasserting' British control and political identities a little - just global economic change, the is misguided if we are simply con- as we do within the UK.