If there is one lesson to be drawn from the European elections, it is that if ever a public debate needed an injection of rationality, it is the one on Britain and the European single currency. The election’s depressingly low turnout is just one indication that people in this country do not feel properly informed about European issues, in particular the European single currency.
Britain’s future rests on the outcome of a national referendum to decide whether or not we should join our European Union partners in a shared economy with a common currency.
But the great majority of people who will take part in this crucial plebiscite know very little about what will be expected of them in the polling booths. In a recent opinion survey, 86% of respondents said they were `not informed’ or `not very well informed’ about the single currency; and 89% said they wanted an information campaign to help them understand the facts.
Britain in Europe is responding to that demand. The organisation is positively in favour of Britain joining the single currency, but not at any price. There must be economic convergence with the `Eurozone’ countries and Britain must pass the five stringent tests set out by the Chancellor of the Exchequer.
Otherwise, our message is simple: Europe has become Britain’s most important market and now accounts for 58% of all goods exported from this country. The 370 million consumers in the EU have a direct influence on the fortunes of British businesses and the jobs they provide. We must have access to them through the level playing field of a truly open market. And the only way to build a European Single Market is through economic and monetary union which eliminates all forms of protectionism and promotes transparency at every commercial turn.
Inside the single currency, British consumers will benefit from lower prices, cheaper mortgages and a lower level of inflation. In a recent analysis, a typical shopping basket was 27% cheaper in France than in the UK – and even lower in Germany.
Economic union will allow British companies to thrive, with more scope for investment and lower unit costs. The goods we sell in Europe (worth £95bn a year) remain subject to exchange rate fluctuations, while our `Eurozone’ competitors have become free of risk and removed the expensive burden of cross-currency transaction costs.
A feature of our economy is the growth in inward investment, as more and more overseas companies choose Britain as their preferred gateway into the European single market. Some 34% of all overseas investment in Europe now comes to this country. Investment from the US is even higher.
But there is growing evidence that these investing companies are nervous about Britain’s attitude to Europe. Many of them could well move on, taking their investments and jobs with them.
My belief is that if we do not commit to the single currency, when the right circumstances permit, there is every danger of serious decline in the British economy.
An important, but often overlooked, consideration is that the single currency is being built on the British model of a competitive, enterprising economy, sustained by low inflation, low costs of borrowing, a flexible workforce, sustainable growth and less government interference. Because we have already achieved the necessary economic reforms and shown the way towards an enterprise-led economy, Britain would have significant influence and powers of leadership inside the single currency. Outside, we would be unable to influence and shape these developments and decisions.
The facts are compelling. Membership of the European single market is working well for us and we have not ceased to be British, any more than the French have ceased to be French, or the Germans given up being German. Enhanced, long-term benefits are waiting for us in economic and monetary union. The choice is either to take them, or to exclude ourselves permanently from them.
Whatever the outcome of the referendum, we must be sure that the decision is made with all the evidence available. Britain in Europe will be working hard to ensure that, when the referendum goes ahead, British people can decide with confidence, fully understanding the likely consequences of their votes.
Lord Marshall is chairman of Britain in Europe, the national campaign for a single European currency, and chairman of British Airways.