Leading economist Professor Tim Congdon, CBE, discussed whether or not Brexit was here to stay, and if re-joining the European Union was ever an option. Below is a transcript of his speech.
Good afternoon, ladies and gentlemen, it's a great honor and pleasure to be talking at a Bruges Group meeting again. Thank you very much for inviting me.
I have prepared a presentation, it isn't really about um next year's election, I have to confess. Nevertheless I think you're interested. This is the first picture and in making this presentation I thought I'd just go back to a previous presentation at the Bruges Group and this was the format of something I gave in March 2020 and I just kept the flag and the Bruges Group sign. I'm going to just slightly digress this is what I said in March 2020.
By the way, try to find my views: I'm basically a monetarist, Thatcherite, Eurosceptic. Those are the three things that, all through my 50 year career, I was involved with. In early March 2020, I was very worried about the way in which monetarism had declined, and I said that there's this risk of large deficits and inflation. You don't play your own trumpet nobody else will! I'm really concerned about question of whether Brexit will be reneged on, will we rejoin the European Union? My basic answer is 'no' but I want to give you some ideas and some thoughts because the arguments that the public debate goes on and the better arguments we present, the more we'll make sure weretain our sovereignty and independence. I'm going to spend about maybe seven or eight minutes talking about Britain, Europe and the world in the early 21st Century, and then I'm going to come on to the six points you can always bring up on why we must stay out of the European Union.
Now, let's just go back to when we joined the then Common Market back on the 1st of January 1973, and it's important to recognise that in the previous 20 or so years our neighbours had enjoyed a lot of economic growth, a lot of success, and we thought that the case of joining this group - some people thought the case was very strong because of the success that that had economically. The Common Market plus the UK was about over a quarter of world output, even higher as we show, World Trade, and the first thing to say here is that this has changed. In the last 20 to 40 years (the Common Market became the EU in 1993) and the last 30 years since then, basically, the EU has been an economic failure so the share of the EU World output is about 13 to 14 percent, and the rest of the world has had much faster growth from the European Union in that period.
This is a chart where the red line is the share of the EU in world output. If you see, it's falling sharply and then there's this green line, which is the CPTPP - also going down I'm afraid - but
that is this Comprehensive and Progressive Trans Pacific Partnership - I hope they find some other phrase as its a mouthful at the moment. This is the grouping that we joined in July last year and um it contains most your members in the Pacific area, about half of whom are members of the Commonwealth. They have had somewhat faster economic growth in the last 20-30 years than the EU. They do include Japan and Japan has had stagnation since the 1990s. At any rate, we've joined this bloc and its share of world output is similar to that of the EU and, certainly with us joining it, it's come back on. Its share of world output is about the same as that of the European Union. We haven't yet had much discussion of what we've done with this group; it contains care about contains Australia, Canada, New Zealand, Singapore and roughly half its members are members of the Commonwealth.
There is no plan to form a political union, nothing like that - this is a group of Nations that have come together to trade more. That's it.
In thinking about all these things, obviously the the demographics, which is fundamental and when we're looking ahead say 25-50 years and we need to think in those terms. We're talking about a nation for our children and our grandchildren. It's very important to realise that the European Union share of the world population is falling. If the trends that I showed you just a couple of slides ago were to continue, the European Union's share of world output when our grandchildren are in their prime in say 2075 will be about 7-8%.
I hope that makes you think about what kind of world we're living in. So, it seems to me this reorientation towards the Pacific, towards the growing world is a very sensible thing that we've done. The debate is utterly different from that in 1973. The opposition to Brexit from the Treasury, for example, was very much about how we would have less prospects of trade in the future and this would mean
slow growth and trade, slow growth and low productivity, and lower living standards and so on. I put it to you but that's going to turn out to be completely wrong; the European Union is goingprotectionist.
We want to be open to the rest of the world in terms of our trade relations and our financial relations. Outside the EU can do that we have made this commitment to the Trans-Pacific Partnership and in spite of that, we still do have a free trade relationship with the EU. We are in a far better position than we were in 2014 or 2015 to grow our foreign trade in the 21st century. When we have a debate about this subject in the next few years under Labour or whoever, these are the kind of things we must always highlight and emphasise.
Now, for my my six points. To some extent the last point I've made is the most fundamental because membership of the Common Market back in 1973 was about trade and economics. I'm
trying to get over to you that the debate today is in a very different context from that of 50 or so years ago. We come on to my six points; Suppose that you're Keir Starmer, suppose you really do
believe in UK membership of the European Union, and at some point he certainly did. I'm not sure what he really thinks nowadays but he has in fact said that Labour doesn't intend to open negotiations about the European Union - he has said that. That's what he said.
Let's suppose that he was thinking about starting renegotiations:
- Cost: Do we recover the divorce bill? The divorce bill of £39 Billion what is the entrance fee? There'd be an entrance fee because Britain remains relatively rich by European standards. It'd be a continued membership cost how much would you get back, and what for? Back in 1973 there was an argument that we were joining was very successful bloc of nations. It's not like that now: looking 25-50 years, their share of world output is just 6-8%. So, I put it to you that Keir Starmer wouldn't want to negotiate about the cost of rejoining the European Union
- They're this question of the currency. I don't see how, given the fact that when the Eastern European joined the joined the European Union some years ago now, they were all required to adopt the single European currency at some point. They were required to do so. That, too, would be a condition for us: we'd have to replace the Pound with the Euro. This rather technical diagram shows you the relative debts that Germany (the big creditor, the blue line), the debts of Italy and Spain in the red lines beneath it see it sort of scissors, moving away from each other. There's tension within the European Monetary Union, within the Single Currency Area. We wouldn't want to get involved in the endless rounds between us and the other major countries if we did get involved this is barely thinkable at the moment.
- Europe as a whole has an immigration problem. If we were to rejoin we'd have to have discussions with the Italians and the other Mediterranean Nations about what proportion of the asylum seekers we'd have to take because there's negotiations at the moment between the Italians and the Germans and the French. So, we wouldn't have control of our borders. I know that net immigration last year and this year has soared but we don't want that.
- Then there's this question of the Single Labour Market in the European Union; there's also Ukraine as when the war is over so that's also something to bear in mind.
- We need to think quite hard about who we are, what a nation is, a nation must defend itself so it has an Army, a Navy ,and an Air Force so let's just be clear what's going on. In the European context the member states have made a commitment to common defence forces, common defence procurement and a common foreign policy, etc. What does that mean over next 10-30 years for the continued existence of the British Army, the Royal Navy and the Royal Air Force if we rejoin. Imagine asking that question of Keir Starmer at a public meeting: "What do you intend to do about the Royal Navy and Royal Air Force to have a continued existence if werejoin the European Union. This is not a secret by the way, they're perfectly open about what's going on.
- We have these questions about ourultimate loyalty and identity. As Barry (Legg, Chairman of The Bruges Group) said, we are a nationwhich has a distinctive legal tradition as a common law jurisdiction which is very different from the European Traditions that vary between the different countries but again there's this attempt to harmonise these legal systems with a very different basis from common law. What will happen to our royal family and then I want to get to a really critical question which is about intelligence services and to whom their loyalty really lies. I thought I'd do a bit of research on this and I found this quote: "Since 2015, security cooperation between European Union member states has progressed at an accelerated pace. For the Union's foreign, security and defence policy, there is the prospect that increased cooperation and enhanced arms cooperation will create more international capacity to act." Now, ladies and gentlemen listen to this, "In the shadow of these developments is the question of the extent to which European Intelligence Cooperation should also be promoted. In this particularly sensitive area, no steps towards integration that would attract public attention are to be expected." My word! So basically, they're going to get rid of the Army, the Royal Navy and the Royal Air Force and the rest of it and not tell us about it! That would be what would happen if you were inside the European Union. So where was this from? This is a German Think Tank, the Stiftung Wissenschaft und Politik, by the way I've spoken at German them tank meetings - they're nice people, I have German friends. They have a different history from us, different identity, different loyalty and this was actually subsidised by the German state.
These are the six points I've given you: there's the cost, there's the trade relations, there's the fact that we don't control our borders anymore, a common labor market, we give a our military capacity to EU control, there's the fact we'll be giving out foreign policy some EU functionary rather than the King. So, let's just be clear: I want us to be friends with our neighbours, I enjoy traveling to Europe, I enjoy visiting Europe, and I invest in European companies - fine. By the way I enjoy traveling to Australia and Canada and investing in Australian and Canadian companies - they're not special. The fact
they're close doesn't make them special, we have to unify, we don't have to be in a Union so you know, ultimately we want to govern ourselves and so I hope today ladies and gentlemen I've given you some arguments to present public debates in the next two years if there's any suggestion about rejoining the European Union, thank you very much.
Professor Congdon's speech took place at The Bruges Group's Conference in the DemocracyZone on the 2nd October 2023 at the Friends' Meeting House, Manchester. The video and slides for his speech can be found below: