The EU Is An Absurd System Of Government – No Benefit In Remaining!


Posted by:
Greg Lance – Watkins




Charlie Morris, who wrote the Brexit story for ‘Money Week’, did a great interview with Steve Baker MP as part of his research for the piece.

Baker is co-chairman of Conservatives for Britain, a EUroSceptic group of MPs and party members, with close links to some other EUroSceptics, including Business for Britain.

And here is the first part of the interview, from ‘Money Morning’ for readers of this site:


“This is an absurd system of government”

Charlie Morris: What has struck me is that the Outs are more passionate than the Ins. Why?

Steve Baker: Those of us on the side of leaving the EU and taking control are passionate believers in self-determination, which you can call liberty. Those who wish to stay, it seems to me, are of noble intent but are often being merely conservative.

One of the fundamental things to absorb is that there is no status quo on the table. We know the eurozone will need to federate to make the euro work. That means there is going to be fundamental change in our relationship because we will not be joining the euro. So even if people are merely conservative they have got to face up to the reality that the European Union is going to change in ways which are hard to predict.

Charlie: It strikes me that the Ins on the left like the social chapter and the working time directives, whereas the Ins on the right think the risks of leaving too high.

Steve: Yes, I think that caricature is about right. The Ins that want to stay in on the right are typically optimistic about state power. They see the European Union as entrenching their third way politics of a market economy with heavy state intervention and therefore it’s a very good thing and we should continue to advance this integration.

They necessarily have faith in collectivism and the state. I think those who wish to leave on the left are typically much stronger on democratic accountability for political power. Although I might disagree with them profoundly on the kind of policies they adopt, I do agree with them that power should be under democratic control. So somebody like Kelvin Hopkins sees the EU as a neo-liberal project entrenching market economics and so forth. I disagree with him about that.

Charlie: The left-wing Outs see the EU as too capitalist and too right-wing?

Steve: I think that’s true. It’s one of the unique achievements of the EU that it seems to be capable of upsetting democrats on both sides of the free market argument.

Charlie: Many believe we could, given time, succeed on our own. It’s a matter of time. In terms of pain, would there be a ten-year transition, a short transition or no transition at all?

Steve: When it comes to talking about pain, I think one of the great reference points on this comes from Lord Rose, who is the chairman of ‘Britain Stronger in Europe’ campaign, who made a speech and spoke to The Times and said that if we left there’d be no change at all. That it would be years before we noticed the difference.

Now this is one of the problems that the In side of the argument have. It is that their chairman has explained that the transition process would be relatively straightforward. They have really neutered their own side of the argument there, by Lord Rose making the comments that he did. I think, realistically, everybody involved wishes to make sure that we have the least possible pain. But those who wish to stay in think that the way to win is to scaremonger.

We have heard all of these arguments before over the euro. The sky was going to fall in and the world was going to end if we didn’t join the euro. Nobody would join the euro now who isn’t in it already.

Charlie: Describe ‘Business for Britain’ and its roots with ‘Business for Sterling’ in the late 1990s.

Steve: Some of the same characters are involved. Business for Britain was a creation of Matthew Elliott at a time where it became apparent that there was going to be negotiation. He created it for business people who wanted to see profound change or exit.

Charlie: What were you expecting from the prime minister’s letter?

Steve: It is thin gruel.

When you look at what I set out when we launched Conservatives for Britain, I was always pretty clear that the EU wouldn’t give us anything that was really fundamental, like the ability to unilaterally block EU laws with which we disagreed. I knew we wouldn’t get that. We need the ability to conduct our own free trade deals but there’s a common EU commercial policy, so I didn’t think we’d get that. And we need the ability to have British migration policy made in Britain on the basis of British citizenship rather than EU citizenship. I didn’t think we’d get that either.

In many ways it is disappointing but it meets my low expectations. It feels like the government has retreated in order to come up with a negotiating position where they can deliver anything. The reality is that it is not in any sense a fundamental change.

Charlie: Mark Fields MP described the letter as the ‘art of the possible’.

Steve: This is mere conservatism. I am a Conservative MP and we like to avoid discontinuities and radical changes. But when something is profoundly wrong as the EU obviously is now, you do need sometimes to say – actually, we aren’t going to tolerate this.

The foreign secretary said that the status quo was not acceptable and not in Britain’s interests. We could trot out a whole range of senior members of the government who were saying that the EU as it is, isn’t in our interests. But now that fundamental change isn’t possible, we seem to be capitulating and giving in.

There does come a time occasionally in our history, where you have to say: “No, that is not how we wish to conduct our international relations”.

The art of the possible is all very well. I wish to be reasonable and pragmatic. But look at the EU. Look at the levels of youth unemployment in a place like Spain. We don’t want to get in the way of them doing what is necessary to make it all work, but that requires a political, economic, fiscal and monetary union of those countries in the eurozone. The prime minister’s policy is that we want to get out of that ever-closer union, so it is actually the government’s policy not to be wrapped in to what the EU needs to do.

What I think we‘ve got here is a battle between hearts and heads. The hearts of most Conservatives tell them not to have anything to do with this project of ever-closer union, but to govern ourselves. The heads are all about saying: “what is the minimum we can do in order to make everything fine?”

Well, I think the minimum is quite substantial now. Boris Johnson has said he wants a unilateral veto for Parliament over EU laws we don’t like. The foreign secretary has said that’s tantamount to leaving. I’m afraid we need a little bit more clarity about this, and I’m trying to bring it by saying it’s time to for us to end the automatic supremacy of EU law in the UK, and Parliament should be able to set the law in the UK.

Charlie: The letter discussed governance?

Steve: Many of the things the prime minister is asking for are either meaningless or trivially easy to achieve.

Charlie: The letter discussed competitiveness?

Steve: That’s a point Lord Lawson has made. We heard all that before.

Charlie: The letter discussed sovereignty?

Steve: Heard it all before. John Major came back from Maastricht talking about subsidiarity, but what you discover is that the EU simply doesn’t believe in subsidiarity. It believes in centralisation, directives and regulation and conformity – that is, harmonisation.

Charlie: The letter discussed Immigration?

Steve: There is no chance of change in the free movement of people. I must say this is critically important. People talk about discrimination, but they are conducting policy and the terms of their debate on the basis of EU citizenship.

The reality is that in a constituency like mine, where a large minority of people have family outside the EU, they see the present immigration policy as discriminating fiercely against them and their families and in favour of people from within the EU. They don’t identify with the common European citizenship, and they would like British migration policy not to advantage people from elsewhere in Europe.

The old liberal dream of the free movement of people is a wonderful, noble ideal but it’s increasingly obvious today that it’s impractical, naive and incompatible with the security threat that we face. Incompatible with the state provision of welfare, which is why the prime minister is going after benefit changes, and therefore we should be realistic and make British migration policy in London. And do it for the sake of the large number of British people whose extended families are outside the EU.

Charlie: Please explain the justice and home affairs comment?

Steve: One of the things that defines a nation state is a common system of law and justice. That is the direction of travel of the EU, to have a common set of justice and home affairs policies. Common human rights and so on.

Again if you are in favour of European political integration, these are noble ideals, but many of us object to the European arrest warrant because standards of justice in Eastern Europe are not at the levels they are in the UK. Yet you can have an arrest warrant issued elsewhere in the EU.

I don’t think it’s right that you can be arrested in the UK and taken for trial in another country, potentially for something that is not an offence in the UK. That presently could happen. There have been miscarriages of justice where people have had to campaign.

It is important that there is international judicial cooperation. Bearing in mind we are talking in the context of this disaster, this atrocity in Paris. It’s obviously critically important that there is international police cooperation. It is obvious that it needs to be on a global basis. But it’s not adequate to conduct it on a European basis. I’m not willing to have an arrest warrant that allows you to be extradited to say, a North African country, on the say-so of a North African court. You have to draw the line somewhere and say this is not acceptable.

I think we should have British courts, British judges, and British laws made by a transparent and accountable parliament. I’m only slightly paraphrasing what the PM said in the Commons about the EU Charter of Fundamental Rights.

Again, Conservatives do believe in our parliament, our democracy, our judges and our laws. We do think it’s important that the British people are able to control those laws and that parliament at the ballot box, and not find themselves subject to arrest and extradition on the say so of a foreign court. It’s a fundamental issue of our liberties.

Charlie: Does anyone in Conservatives for Britain think that the euro project can survive?

Steve: My own view is that there is a problem with the way the currency is constructed. The euro is more likely to survive if it was combined with a fiscal union, which is what the chancellor has said.

Our view is that we do not want to get in the way of the eurozone doing what is necessary to make the euro work. It is not in the UK’s interest to see high unemployment and economic failure in the eurozone, therefore we would like them to have the opportunity of doing what is necessary to make it work.

Instead of us being foot-dragging members of the EU, constantly pulling away from doing what’s necessary, we think we should leave and get out of those arrangements. Let them do what is necessary and then trade and cooperate with them on a new basis.

I’m a bit reluctant to pronounce on the survival or otherwise on the euro. I think it’s important that all these currencies work well and that people are able to flourish and prosperous. But personally, I’m pretty pessimistic about the euro.

Charlie: Can you name a Swiss prime minister?

Steve: No, I can’t.

Charlie: No one can, because it’s a little role, not a big role. In that sense, we are not Swiss are we?

Steve: There’s an interesting conversation to be had about diversity and constitutions. The Swiss system does seem to me to be profoundly decentralised. It seems that most of us who believe in liberty want decentralised power.

Somebody like me wants government to be limited and, in so far as it’s necessary to exercise power, we need to exercise it as close to people as is practical in order that it be held properly to account at the ballot box. This is simply something you cannot do in the EU. It’s something they are much better at doing in Switzerland where they have referendums on important questions much more frequently.

I understand from talking to [Conservative MEP] Dan Hannan – who gets around these nations much more frequently than I do – that the campaign to join the EU is basically dead in Switzerland and Norway. There are a few people who would like to be in, in order to have a greater degree of influence over the EU rule-setting process. But if you want power to be close to the people, don’t join the EU.

Charlie: The Norwegians voted ‘no’ in 1972, didn’t they?

Steve: When I have sat down with our sister party in Norway, I get the impression that they still would quite like to join the EU and they would like us in it, to help drag it in a direction they approve of.

I’ve been over and spoken to our sister party in Iceland, which ironically is the Independence Party. Icelanders are much more pragmatic. They are much more on our side about this.

I don’t want us to have to be in an organisation that we cannot control, where we are consistently outvoted, and in which very often we cannot win because qualified majority voting often means we are not in a position to win. I don’t want to be in an organisation simply in the hope that we can somehow drag it in the direction we prefer, for the benefit of other sister parties around Europe.

I have an awful lot of sympathy for them if they feel they are locked into an organisation which they don’t support, but this is madness. To find democratically-elected politicians across Europe profoundly objecting to the nature of the EU project, but demanding that we remain in it in order to try and defray its worst tendencies – this is an absurd system of government.

What we need is a system of co-operating nation states, where power is accountable to the people, where there is a degree of diversity in what they do, and where that experimentation can show what kind of government leads to the greatest human flourishing.

Instead what we’ve got is this demand that we stay in a centralising system of government, which evidently can’t deal with either the consequences of its currency or the consequences of the free movement of people. We’re being asked to stay in it in order to try and prevent it from being even worse.

When I look at Norway – I love Norway. I’m going there shortly and I’ve been there many times in the past – but I’m not willing for us to be in a system that we cannot control, which is positively anti-democratic, just because it suits other people because of the shortcomings of their own arrangements.

Charlie: If the EU was built around the decentralised Swiss model, where Germans, French and Italians have coexisted for many years, presumably it would be more effective?

Steve: If you and I were sitting here redesigning the whole of the international structure of the EU, I would probably wish to have something much more on the Swiss model that expanded to all Europe. But that is not the direction of travel of the EU.

I would love to live in a system of society where nobody had to care who the prime minister was because government left us alone sufficiently that it did not matter. But at the moment, both in the UK and across other countries in the EU, you have to care very much. If you are interested in public policy at all, you end up caring very much who the prime minister is and what they think – and that’s wrong….

If Britain leaves the EU, will Scotland leave Britain?

Charlie Morris: Surely there’s a part of you that’s terrified about leaving the European Union (EU)?

Steve Baker: Absolutely no part of me is terrified about this. I think we can be strong, confident and optimistic about the UK’s future outside the EU. The EU has not existed for very long in terms of history.

I sat at a banquet for the City of London. I’ve only been once. At the one I went to, they were proudly explaining how for hundreds of years the City of London has been at the centre of a global network of financial services. There’s no reason that would change in five, ten or a hundred years after leaving the EU. It’s not in anybody’s interests. Our entrepreneurial flair, our commitment to liberalism, to free markets under the rule of law, is such that we would undoubtedly flourish outside the EU.

Of course, any reasonable person should hold onto their views provisionally and challenge them and test them. I think that, bearing in mind that the EU must centralise and federate to make the euro survive, there is uncertainty on both sides of this question. What I think I can place great faith in is our parliament, our tradition of liberal capitalism, our tradition of the rule of law and the good sense of the British public to hold their politicians to account at the ballot box.

The safer choice is to rely on the institutions that have served us so well for so long, which have evolved over the course of hundreds of years and a great deal of pain in our country, and that is what I feel safe relying on.

I don’t feel safe relying on a great cloud of politicians and officials who nobody elected. MEPs – and we’ve got some wonderful MEPs – are elected on a list system. They end up serving an entire region of the UK. If they’re a London MEP, they’re serving millions of people.

They are elected on a list system and, with the best will in the world, your priority as a politician on a list system is to be popular with party members and then when the electorate go and vote for a party, you end up popping out because you’re high on the list. Whereas I have to appeal to individual men and women voting in my constituency.

If you are elected on the system we have in parliament, you have to be connected to your electorate and they are normal men and women. If you are an MEP, you have to be connected to party members. They are wonderful people who I adore, but they are a self-selecting, small subset of the overall electorate. That must mean that if you are an MEP, you are far less accountable to the people. I do not place my faith in the European Commission, the European Parliament, the European Court of Justice or the other institutions because they are not accountable to the good sense of the British people.

Charlie: Will we have pre-negotiated trade deals and will there be fear if we leave?

Steve: One of the duties of a politician is to see forward to potential difficulties in the future and to take actions today to defray them. One of the difficulties one might foresee is any kind of trade barrier. The reality is that we are in the World Trade Organisation (WTO) and so is the EU. Being in the WTO means they must offer us ‘most favoured’ nation trading status, and Business for Britain (a eurosceptic group for businesses) has been through and done the numbers.

Even if they instituted tariffs, we would still be better off compensating people instead of making a net contribution to the EU. Our membership of the WTO defrays even the worst-case scenario of trade barriers being imposed under WTO rules if we left. Trade barriers aren’t actually in anybody’s interests, so I think we shouldn’t expect the worst-case scenario. We should get the British option, which would be better. We should be optimistic that even under WTO rules, we can still be better off outside an unreformed EU.

Charlie: If we vote for Brexit, does the prime minister have to resign?

Steve: The reality is that David Cameron has a profoundly difficult job to do, not just on the EU, but on security, on the economy, on the welfare state, on NHS reform, and on migration generally. He has a profoundly difficult job to do. We are a very, very long way indeed from anybody challenging his authority as leader.

What we have is a constitutional question on whether we are satisfied with our institutional arrangements of our membership of the EU. It is of course a profound question. It is difficult to see any major figure in the government being able to be PM, having been on the wrong side of this question. So you asked a profoundly important question. Whether or not the PM continues will be a matter for all Conservative MPs at the end of the process. It will be highly dependent on how the whole process evolves.

It is an extremely serious matter. David Cameron is a good PM who will long be remembered by history, for governing in coalition when the country needed it, and then for winning an overall majority against all the odds. He’s a good PM who will long be remembered by history. His noble intent is to minimise the disruption of any changes in our relationship with the EU. You can see that in his actions.

But if you look at what he has said, particularly about British courts, British judges, British laws and a transparent and accountable parliament, David Cameron’s heart is to have a sovereign parliament which can determine the law of the UK. I’ve reason to believe that he would like British migration policy made in Britain. You can see with our relationships with China and India, clearly we would like to be concluding our own trade deals.

I have been pretty careful in everything I have said over the course of this journey, to be close as possible to what I think the PM wants. But the PM is a pragmatist. He’s not going to be insulted by me saying that. The PM is a pragmatist and he will adjust what he does in order to be pragmatic and do what is possible. The big question each of us must decide individually, at the ballot box, because we all have an equal vote, is whether that pragmatic proposition to the British people is the right one.

If the British people decide, resoundingly, that the PM’s proposition is the wrong one for the overall governance of our country, it is quite difficult then to see how he could continue as PM. What we need to do though is to make sure that our country is governed responsibly, so even on that issue, we need to behave with great caution.

The PM may end up saying, “We can’t get out of ever closer union. I can’t actually do anything about people not being allowed to send child benefit home. I can’t stop people coming over and claiming tax credits. Even these modest proposals, I can’t change”. The PM might end up finding himself, however reluctantly, recommending to the British people that we leave the EU so we can take a grip on these fundamental issues that people care about.

I think it’s quite conceivable the PM will see this coming – a complete failure to achieve anything meaningful, anything that is consistent with what he and other senior members of government have said over a long period of time – and therefore could recommend exit. It is a small possibility, but a real possibility.

Charlie: Is Hadrian’s Wall a risk?

Steve: It is a great pity that the Scottish Nationalists wish to be so bitter about it. We are giving them most of what they want. The Scottish people did just reject independence from the UK. When you listen to someone like Lord Michael Forsyth, who has long experience in Scottish politics, with all of the challenges involved, you find he thinks that the Scottish people will vote with the rest of the UK when the day comes. It is generally thought that it is one of the issues where the SNP are out of touch with their electorate.

The SNP are very keen in parliament to be known as the Scottish National Party and not the Scottish Nationalists. They don’t wish to be seen as nationalists. One of the aspects of their positioning is to say that they are pro-EU in order to be seen as internationalists, not as narrow, inward-looking, nationalists. Bearing in mind that they are both socialists and capable of being accused of being nationalists, you can see why they wish to avoid it.

It is so meaningless to leave the UK but to be within the EU, in terms of sovereignty. It is impossible to see how any logical person would think it’s a good idea. The SNP are not fools. There must be an element within the SNP who understand that leaving the UK to be in the EU is madness. It would mean adopting the euro, if they did it as a sovereign independent country. Anyone since Lisbon has had to adopt the euro. The currency of the EU is the euro.

Charlie: Wouldn’t the British Isles look strange from space with England, Wales and Northern Ireland trading in pounds, whilst Scotland and the Republic of Ireland trade in euros?

Steve: Yes, it would look strange. If we look back at what went on in the days when they were first thinking about a common European currency, Hayek thought that having competing national currencies across all of Europe was a more practical proposition than the utopian ideal of a single currency.

He wrote the book The Denationalisation of Money to explore the idea. Now we have all got these smart phones and technology – something that Douglas Carswell has pointed out – technology means we could easily have competing currencies across Europe. We don’t have to have monolithic single currency zones. For reasons Hayek explained, competing currencies would probably drive up the quality of money.

Charlie: The free market would replace the rules?

Steve: Free markets have rules, it’s just the extent to which those rules are flexible and determined by the choices of individuals versus imposed by authority. Europe would look odd if Scotland and Ireland were on the euro and the remainder of the UK were on the pound. I don’t think it’s realistic to expect Scotland to vote the opposite way to the rest of the UK.

Charlie: Would the Scots have a second referendum?

Steve: They would certainly make the case for a second referendum. Whether or not one would be granted remains to be seen. It would require a law to be passed in Westminster. The fundamental issue is that we can’t say until we see the result of the referendum.

When I listen to Michael Forsyth explain in some detail with some passion and force that the Scottish people are highly likely to vote with the rest of the UK; when I look at the futile absurdity of Scotland choosing to join the euro, because it has left the UK – I don’t think it’s realistic that Scottish people will vote to join the EU.

Charlie: If the current front bench were sitting on the back bench, would they be members of Conservatives for Britain?

Steve: Yes I think they most certainly would. It is not now a secret that some members of the government are now on my mailing list. There are some members of the government who, if I approached in an appropriate way, would wish to be kept up to date with what’s going on.

It is not a secret. Chris Grayling addressed Conservatives for Britain at the Conservative Party Conference. Boris Johnson has said that he wants Parliament to have a unilateral veto over EU law. The weekend I launched Conservatives for Britain, the foreign secretary said that was tantamount to leaving the EU.

Boris Johnson is not saying we should leave the EU, but what he is saying is that we should have unilateral veto over it, which the foreign secretary says is tantamount to leaving. This is the kind of language you get in politics.

Most Conservative colleagues feel most strongly that we should be able to set our own laws in our own country, but also that we should be able to cooperate and trade with the rest of the nations of Europe. The fundamental problem for almost every Conservative is this fundamental clash between heart and head; the wish to be friends, but on an entirely different basis.

What I see happening progressively is that Conservatives are coming to the conclusion that a completely different basis is not being offered to us and therefore we must leave in order to establish that completely different relationship. The trick is going to be establishing a completely different basis for constitutional relationship without going through a painful divorce.

We all love Europe. Europe is cool. That doesn’t change. Europe will continue to be cool. We’ll all still love Europe. I’ll still go skydiving in Spain. We’ll still go skiing in the Alps. We’ll still love Europe; we just won’t have to obey the European Court of Justice.

Charlie: Any final comments?

Steve: London is in a unique position. If Britain voted to leave the EU, London would continue to maintain most of its attractions and qualities. Large financial markets, a predictable common law system, which is one of our best exports, good quality tax and regulatory environment, we’re at the centre of global markets time wise, English will remain pre-eminent and we’ve got a brilliant labour market.

There is every reason to believe that London and financial services would continue to thrive and prosper in the UK as a hub for the world. The rest of our economy would follow along. It’s in all of our interests to trade and cooperate with Europe on a friendly basis, and I am optimistic and upbeat about our prospects if we choose to leave the EU rather than staying shackled to an organisation which must change, and which at the moment is failing by its own account.

Charlie: Steve Baker MP, thank you very much.

John here:

It’s stirring stuff, I’m sure you’ll agree – I have to say that Steve’s comment, questioning the point of staying in a flawed system “because everyone else wants us to make it less flawed”, strikes me as a particularly valid rebuttal of a lot of the ‘In’ camp’s fundamental arguments.

John Stepek
Editor, MoneyWeek


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