Below is the text of the speech made by Chris Grayling, the Leader of the House of Commons, on 31 May 2016.
Good morning Ladies and Gentlemen.
For the past few weeks you have been hearing regularly from the Remain campaign about how they believe we should stay in a “reformed” European Union.
This morning I want to set out for you the reasons that they are right about the fact that the European Union is going to reform, but how the inevitable reform that is coming our way is very different to what they are claiming.
The Remain campaign keep challenging us about what they call the risks of leaving the European Union. This morning I want to set out for you in detail the risks of staying in, and what lies ahead of us if this country votes to remain in the EU on June 23rd.
And I want to stress very clearly to the people of this country that on June 23rd they are not voting on staying in, or leaving the EU as it is today. They are voting for or against being part of the EU as it must become over the next decade. And that new look EU will be very different.
The seminal moment for the European Union came seventeen years ago with the creation of the single currency. In my view the countries that joined the euro created the economic equivalent of the San Andreas fault. They tried to create a single economy in a geographic area where there was no single government, no common culture or commonality of performance, and where the traditional escape valves when things went wrong in underperforming nations simply disappeared.
So the countries of Southern Europe ran up massive deficits, leading the life of Riley off the back of a strong currency, whereas in the past the drachma and the lire would have fallen sharply on the exchange markets, forcing those countries back to a degree of rectitude. At its simplest, the Greeks didn’t pay their taxes, retired at 55 and hoped someone else would pay the bill. And in the end they did – the Germans, the European Central Bank, and the IMF stepped in to prevent an all-out collapse.
But you can’t go on doing that. In a single currency area, if things look doubtful, the wealthy transfer all their money to safe havens in places like Frankfurt. The run on local banks brings them down, and the resulting collapse affects all. So no rescue is not an option.
That’s where the Eurozone finds itself now. And it cannot carry on that way. They’ve managed to stabilise things once, but it’s hard to see how they could withstand another major shock.
But there’s no easy solution either. You can’t just kick a country out of the Eurozone without creating that massive collapse either. If Greece had been forced out of the Euro, it would have been left with a devalued currency, unable to afford to pay its Euro-denominated debts. It would have defaulted and left massive losses across the continent.
So the inevitable future is beginning to take shape. As my former Government colleague, the former UK Foreign Secretary William Hague once said, the Euro is like a burning building with no exits.
They have to make it work.
And that means political union. There is no other way. There has to be a single Government structure for the Eurozone. There has to be a United States of the Eurozone.
The plans are already taking shape. Angela Merkel, the German Chancellor, her deputy Wolfgang Schauble, the Italian Finance Minister, the French President Francois Hollande, the Speakers of the biggest Eurozone Parliaments, the Presidents of the big EU institutions have all called for political union.
It’s not idle chatter. It’s become a recurring theme of speeches, articles and interviews across the European Union.
Political Union means, according to Hollande, a Eurozone Parliament, a common budget and a common cabinet. Inevitably it means giving up independent nation status. “It’s not an excess of Europe but a shortage of it that threatens us,” he’s said.
Angela Merkel has said: “We need more Europe, we need not only a monetary union, but we also need a so-called fiscal union, in other words more joint budget policy,”
“And we need most of all a political union – that means we need to gradually give competencies to Europe and give Europe control,” she added.
Last summer the Italian Finance Minister Pier Carlo Padoan called for a common budget and a common unemployment insurance scheme, perhaps even an elected eurozone parliament alongside the existing European Parliament and a euro zone finance minister.
Then the Five Presidents Report, produced by the Presidents of the European Commission, the Council, the Parliament, the Central Bank and the Eurogroup started to set out what would happen in much more detail and with a clear timeline over the next ten years, aiming to complete the work by 2025. The report is very broad ranging and all-encompassing.
“Progress must happen on four fronts: first, towards a genuine Economic Union that ensures each economy has the structural features to prosper within the Monetary Union. Second, towards a Financial Union that guarantees the integrity of our currency across the Monetary Union and increases risk-sharing with the private sector. This means completing the Banking Union and accelerating the Capital Markets Completing Europe’s Economic and Monetary Union 5 Union. Third, towards a Fiscal Union that delivers both fiscal sustainability and fiscal stabilisation. And finally, towards a Political Union that provides the foundation for all of the above through genuine democratic accountability, legitimacy and institutional strengthening. All four Unions depend on each other.”
It’s a view shared in many of the national parliaments of the Eurozone. Last September the Speakers of the Parliaments of Italy, German, France and Luxembourg combined to agree a vision statement for the future of the Eurozone and the EU. It called for a rapid progress of integration, and a broad ranging one at that. They recommended that….
“The on‐going integration process should not be limited to the field of economic and fiscal matters, or to the internal market and to agricultural policy. It should include all matters pertaining to the European ideal ‐ social and cultural affairs as well as foreign, security and defence policy. “
Now each time I talk about this renewed drive towards integration in this campaign, those on the Remain side tell me it will never happen, that there is no political support for it, that it is just a scare story, and in any case we won’t be affected.
Well let me tell them how wrong they are.
The process is already under way. And we will be affected whether we like it or not.
The Commission in Brussels is now embarking on a process that will lead to much deeper integration than we have even seen before now. Don’t believe me? Then listen to the man driving this next stage of change. Jean Claude Juncker. In his so-called State of the Union Speech last autumn.
“As part of these efforts, I will want to develop a European pillar of social rights, which takes account of the changing realities of Europe’s societies and the world of work. And which can serve as a compass for the renewed convergence within the euro area.
This European pillar of social rights should complement what we have already jointly achieved when it comes to the protection of workers in the EU. I will expect social partners to play a central role in this process. I believe we do well to start with this initiative within the euro area, while allowing other EU Member States to join in if they want to do so.”
Fine, so it only applies to the Euro member states. So we aren’t affected. Are we? Well actually we are…
The Social Pillar consultation was launched in Brussels in February. It’s clear where it is designed to end up.
“The pillar of social rights should be a self-standing reference document, of a legal nature, setting out key principles and values shared at EU level.”, it says.
And the Commission has set out the areas covered by the process.
Among these are many areas where we already have protection or would want better protection in the UK.
A right to minimum pay;
Minimum measures to ensure awareness of rights and access to justice;
Access to lifelong learning and skills; and
Access to basic social services, including health care.
Let me make clear that I do not want to see social rights and protections diminished if we vote to leave the EU.
The point however is whether it is for the EU or for the people of the United Kingdom to control our rights and protections.
If we vote to remain in the EU then it would be EU rules that would determine our minimum wage, EU rules that would say how our pensions work, it would be EU rules to govern our skills system and even EU rules that would tell us how health services should work.
But that’s the Ever Closer Union that we are supposed no longer to be part of.
And this package is only for the Eurozone.
So what’s the problem.
Well Ladies and Gentlemen, the problem is this.
We have an opt-out from the Euro.
We have an opt-out from the Schengen Area
We have an opt-out from some Justice and Home Affairs measures.
But on everything else we have no opt out. We are subject to every law introduced by the EU and in the Eurozone.
On banking and financial services.
On business regulation.
And on EU social policy, on the so-called Social Europe, we have no opt out.
So we have a new list of EU social policies which will deepen integration across the Eurozone. But these will be EU laws passed in the normal way. There is no other method of doing so right now. And we have no opt-out from them.
Many of these measures will be things we already do well; some may be measures we would want in the UK. The point is that it should be up to us to control what happens to the NHS, to workers’ rights and to social protection and control over these areas should not lie with Brussels.
So when there are new EU rules on pensions, skills and health, they will apply to us too. It means the EU starting to set the rules for our NHS. With no opt-out. And millions more people able to access our free at the point of delivery service as countries like Albania, Serbia and then Turkey join the EU.
And this is why we are not at all exempt from Ever Closer Union. Because the nuts and bolts of integration will come from new EU laws passed under the terms of the Lisbon Treaty.
The Lisbon Treaty itself is a huge part of the problem.
It is vaguely worded, and gives both the Commission and the European Court of Justice free rein to expand their brief and take over competences from the member states.
It’s already happened. Under the Treaty individual countries are supposed to be responsible for social security. But the European Court decided that the free movement rights of the European Citizen were more important, and now the EU controls more and more aspects of our benefit system. A treaty we signed in good faith is being rewritten by a Court whose president made a speech saying the job of the European Commission is to resist Euroscepticism.
So what happens now then?
Well, nothing until after June 23rd. We know the Commission is on its best behaviour right now. Everyone in Brussels is under strict instructions not to rock the boat. Frankly I am surprised that they have even started the consultation on the Social Pillar now.
But the decision to delay anything controversial in Brussels until after our referendum is an open secret there. Legislation is being held back. The budget is being held back. The EU institutions are in lock down until the British decision is done and dusted.
But if we vote to remain, the plans move full steam ahead.
And just remember. This is not a political flight of fancy. They have no choice. The Eurozone cannot be confident of its survival unless they follow down this road. It was the Italian Finance Minister last year who said a move “straight towards political union” is the only way to ensure the survival of the common currency.
And Britain? What happens to us?
Our influence will diminish.
Our sovereignty will diminish.
Our ability to look after our own national interest will diminish.
There will be no “reformed European Union”, British style.
Instead we will be subject to most of the integration that the Eurozone is poised to embark upon whether we like it or not. We will have little or no say in what they decide is necessary to pursue their goal of political union.
Ladies and Gentlemen, that is not for us.
I want us to live in an independent sovereign country. I want us to take back control of our democracy.
If we all want that, there is no alternative for us. On June 23rd we have to Vote Leave.