The following is the transcript of speech delivered by former Chancellor of the Exchequer, Alistair Darlingin Central London supporting the campaign to remain in the EU
This referendum presents our country with the biggest decision we will make in a generation.
The question in front of us is what’s best for Britain. Whether to take a leap in to the dark and leave the European Union, or build a Britain with a confident, more secure and stronger future.
The decision will have profound consequences for our national character, our security, global influence and our economic strength.
The decision we make will affect generations to come. And remember this: the decision is final. If we’re out, we’re out. That’s it. 48 hours after Britain Stronger In Europe was designated the official campaign to remain, I am delighted to be here to outline what I see as the core economic case for Britain remaining in Europe.
For the second time in four years I am facing a question that will determine the future of our country.
Today I am setting out the case for remaining, but my experience shows that you have got to look at both sides of the argument and ask searching questions of your opponents, especially when they are asking you to take a leap in to the dark.
And let’s be clear, this campaign is not about our sovereignty. Britain is a sovereign nation and we will remain so. It is for us and us only to decide our relationship with Europe. But I believe that if we choose to leave we will send an unequivocal signal that we are a country in retreat. It will put jobs at risk. It will weaken us. Leaving is not a cost-free, risk-free experiment.
The world is watching with incredulity that our country, which has left an indelible mark on history and given the world some of its greatest scientific, artistic, intellectual and industrial achievements, is seriously considering to leave rather than to lead, choosing isolation over influence.
Why on earth take on so many risks, so much cost, when we don’t need to do so? Hoping for the best isn’t good enough for a country like ours. We can and we must do better than that. If we choose to remain, we will retain our ability to shape international co-operation over development, human rights, intelligence-sharing and security, climate change, global commerce, peace-keeping, the behaviour of multinational companies and working people’s rights.
In a complex and fast-changing world, when the defining decisions are taken, Britain will be at the table.
There is, as yet, no credible case for relinquishing such power and influence. No economic evidence which shows we could replicate the advantages we currently enjoy. And merely a fantasy where there should be an alternative credible proposition.
Now, our starting point for this debate is an uncertain economic outlook. Our economy is growing, but it is fragile.
The final quarter of 2015 was the 12th consecutive quarter of growth, but growth forecasts have been revised down, with OBR forecasts cut for this year from 2.4% to 2.0%, and for every subsequent year of the forecast period. We remain over-reliant on the buoyancy of house prices, our service sector and debt-driven consumer spending.
The current account deficit is now at its greatest since records began and manufacturing output is down last year on the year before.
This underlines the need to rebalance our economy, curb falling growth in business investment, which is forecast to almost halve this year, and to increase our exports.
Add to this the context of downward revisions to world GDP forecasts and slower growth in China and Emerging Markets, there are dark clouds gathering on our horizon. These global headwinds the UK is experiencing make the option of leaving Europe riskier than ever. We don’t need any more risks. We’ve got enough already.
Trade is a key contributor to a growing economy and productivity, and our exports challenge can only be met with full and unfettered access to the world’s largest single market of 500 million. Our domestic businesses need certainty, an investment climate and access to new global markets, which EU free trade deals deliver now and in to the future.
And in or out of the EU the Eurozone will remain our largest trading partner. So, a decision to leave that hits Eurozone growth would in turn hit demand for UK exports. If we left, the big question is on what terms would we then trade with Europe. Uncertainty over the prospect of leaving is already delaying business investment and causing volatility for sterling.
Only this week the IMF said “the planned June referendum on European Union membership has already created uncertainty for investors.” Confidence is vital and it is being hit by the risk of leaving.
We know what happens when confidence plummets. We saw that in 2008 and we are still living with the consequences of the global financial crash. Confidence remains low and uncertainty over the referendum is making that worse. When the IMF single us out as facing what will be a self-inflicted wound, we can’t ignore it.
Now, we have no idea what out of Europe looks like. We all have to make difficult choices in life. Inevitably there are unknowns, but we owe it to ourselves and our children to make our decision based on the evidence we have, and I haven’t seen any evidence whatsoever of what the world is supposed to look like if we go.
You can’t leave a gaping hole like that. The IMF have said “a ‘Brexit’ could do severe regional and global damage by disrupting established trading relationships.”
The Bank of England’s Financial Policy Committee has said it considers “risks around the referendum to be the most significant near-term domestic risks to financial stability”. These follow similar warnings by the CBI, the OECD, major employers, trade bodies and many independent economists, all of whom say our economy is stronger in Europe.
What’s the response to this wall of evidence? They play the man not the ball. They cannot compete on the substance of the message, so they attack the messenger. The Nationalists did this in Scotland. It didn’t work then and it won’t work now.
People will make their own minds up as to what’s best, but you can’t ignore the evidence. Simply abusing your opponents doesn’t get you anywhere. We know the evidence on what Europe brings us. The EU is destination for almost half of UK exports. Over three million jobs are linked to UK-EU trade. We receive £66m investment a day from Europe and over 200,000 UK businesses trade with the EU.
The competition of a wider market and tariff-free trade drives down the cost of goods at the shops for families. Of course we contribute, but we benefit through additional economic growth. And the benefits outweigh the costs. Of course the EU needs reform, and we must continue to put the case for reform, but let’s not do ourselves down: we have allies and influence and can drive reform when we seek to.
But what if we leave – what would happen? In truth, nobody knows. Indeed, that’s the problem. Though we can form a judgement on what’s likely to happen. Assess the risks before we make a decision. The economic challenge is to judge the evidence on the impact to our economy and people’s livelihoods and living standards if we leave or remain.
Three major reports, all released last month, show that Britain leaving would lead to a severe slowdown. PWC have warned of a potential cost to UK GDP of £100 billion and 950,000 jobs lost by 2020. Oxford Economics has estimated over £40bn in cuts could be needed, devastating public services. The LSE has shown that the long-term cost to the economy could be a hit to the tune of up to £6,400 per household.
Others have warned of damage to inward investment, credit ratings downgrades, substantial losses for sterling and rises in inflation. Collectively these warnings should sound alarm bells. You can’t ignore them. You need convincing answers.
And many studies show the only way of reducing the risk is to continue with current levels of immigration from the European Union – the very thing the leave campaigns have set themselves against.
As Open Europe have said, “the path to prosperity outside the EU lies through: free trade and opening up to low cost competition, maintaining relatively high immigration…pushing through deregulation.” This may sound desirable for some within the leave campaign who have opposed the social chapter, the national minimum wage, NHS spending and climate change legislation, but it is not an alternative that serves the interests of UK businesses and workers.
Those campaigning to leave need to come clean about what would happen if we do so. In any election, the test of a credible candidate is a credible economic alternative, but they have, as far as I can see, given up all pretence of running a campaign with a convincing competing argument about the future of the UK economy. At times, they have advocated Norway, Switzerland or the WTO as models to follow. So let’s be clear what they mean.
Following Norway or Switzerland means you cede sovereignty, continuing to pay in to the EU budget, accepting free movement and EU legislation, but you’ve got no say over EU rules.
Relying on World Trade Organisation rules would result in higher tariffs on UK trade with Europe, which would push up costs for businesses and consumers. Each of these alternatives would leave us weaker and worse off. Vote Leave claim that Britain “will have a new UK-EU trading relationship”, but no-one knows what they actually mean.
It is a fantasy to suppose that the day after we leave other European countries will give us everything we want and ask for nothing in return. It is a fact that you are either in the single market or you’re not. Outside, we would be able to trade with Europe, but we would not be within Europe’s single marketplace, and it is this which brings the benefits I have described.
Outside the single market, we would be forced to accept any rules Brussels chose to impose in future years, with no voice when decisions were made. That’s not in our interests. When our Continental competitors decided to change regulations to suit their industries not ours, British manufacturers would not have a Ministerial voice at the table.
Outside the single market, we could not guarantee zero tariffs on all goods and we would not have access to the whole marketplace, in particular in services, which make up four fifths of our economy.