Below is the text of the speech made by Iain Duncan Smith, the Conservative MP for Chingford and Woodford Green, on 10 May 2016.
Today I want to briefly explain why the EU, particularly for the UK has become a force for social injustice and why leaving provides a vital opportunity for us to be able to develop policies that will protect the people who often find themselves at the sharp end of global economic forces and technological change. My plea to better off Britons who have done well in recent years is to consider using their vote in the referendum to vote for a better deal for people who haven’t enjoyed the same benefits as them. Because the EU, despite its grand early intentions, has become a friend of the haves rather than the have-nots.
Take the euro, for example. It has greatly favoured already wealthy Germany and its export industries at the expense of southern Europe. The euro has meant serious unemployment for millions of young Greeks, Portuguese, Spaniards and Italians and has produced political extremism. The EU is also working well for big banks. The bailouts being financed by extreme levels of austerity in countries like Greece have largely benefited financial institutions that lent irresponsibly before the crash. The EU is also working for big corporates that benefit from mass immigration. Businesses that have under-invested for decades in the productivity and training of their own and local workforces have no reason to mend their ways so long as cheap labour can be imported from abroad.
But if the EU is working for Germany, for banks, for big corporates and for the public affairs companies with large lobbying operations in Brussels, the EU isn’t working for over regulated small businesses and lower-paid and lower-skilled Britons. They now have to compete with millions of people from abroad for jobs and a wage rise. The Government’s own Migration Advisory Committee reported that for every 100 migrants employed twenty three UK born workers would have been displaced.
The construction of the Olympic Park was a powerful illustration of the way in which immigrants undercut UK workers through their willingness to endure family-unfriendly living conditions. Visiting job centres in East London at the time I met both skilled and unskilled workers who struggled to get work on the site. When I asked why they said that people from Eastern Europe, often living in bedsits, without UK housing and family costs, hugely underbid them for their work. Since then those stories have been borne out by the facts. Despite the all the statements about the Olympic Park helping British workers, we now know that nearly half of all the jobs on the site went to foreign nationals.
Given this evidence, I find the Labour party’s current position ironic. As Frank Field has pointed out, in saying they are now in favour of staying in the EU they are acting against the interests of the communities they purport to serve. Even Stuart Rose of the Stronger In campaign has admitted that immigration cuts the pay of the poor in a rare moment of candour – and acknowledged that wages will go up for many Britons if immigration is restricted.
The downward pressure on wages is a trend will only get worse if we continue to have open borders with the EU – and would get most difficult in a recession. A Bank of England study in December 2015 concluded: ‘the biggest effect is in the semi/unskilled services sector, where a 10 percentage point rise in the proportion of immigrants is associated with a 2 percent reduction in pay’.
This significantly affects British workers – especially those on low wages.
We know that EU migration has increased by 50% since 2010. If the number of EU jobseekers entering the UK over the next decade remains at current levels, some 690,000 people would be added to the UK population as a direct result. And with 5 more countries due to join, that number looks conservative. This would be the equivalent of a city the size of Glasgow.
Another big negative economic effect of the level of immigration that the British people have never voted for – and do not want- is on house prices. Young people are the biggest losers from this. They are being forced to pay an ever larger share of their incomes on accommodation, are suffering longer commutes and often have to move far away from their families. We need to build around 240 houses every day for the next 20 years just to be able to cope with increased demand from future migration. Of course there are a number of issues in the difficulty to get housing in the UK but the impact of uncontrolled immigration make it a major factor in the demand for housing. Official data shows that over the last fifteen years, over two thirds (66%) of the additional households created in the UK were headed by a person born abroad.
The struggle to get on the housing ladder is one that affects families up and down the UK. Such is the pressure that the average age for a first time buyer is now 31.
Everyone should have the opportunity to own their own home, but as the EU continues to expand to other countries such as Macedonia, Albania, and Turkey, the population pressures that remaining in the EU would bring can only make that prospect less likely.
And as the Government’s own recent figures show, to cope with the kind of pressure that immigration is placing on the schools system the taxpayer is having to find extra school places equivalent to building 27 new average-sized secondary schools or 100 new primary schools. So my Vote Leave and Conservative colleague Priti Patel was correct when she highlighted the fact that as always, when public services are under pressure, those without the resources to afford alternatives are most vulnerable. In short, getting a place in your local school gets more and more difficult.
The heavy burden of EU regulation is particularly hard on the smaller businesses that, all evidence shows, are the best route back into the workforce for the unemployed. Even though the vast majority of these businesses never trade with the EU they are subject to EU red tape at the cost of tens of billions of pounds. Those regulations don’t just mean lower profits for small entrepreneurs, they also mean fewer new businesses starting up and fewer jobs created.
Then there are the higher grocery prices that the EU’s Common Agricultural Policy has produced. The independent House of Commons Library has concluded that EU membership actually increases the cost of living, stating that the EU’s Common Agricultural Policy ‘artificially inflates food prices’ and that ‘consumer prices across a range of other goods imported from outside the EU are raised as a result of the common external tariff and non-tariff barriers to trade imposed by the EU. These include footwear (a 17% tariff), bicycles (15% tariff) and a range of clothing (12% tariff)’.
This may not sound a lot for better off British families – but for many it might be the difference between paying the rent or not paying the rent.
And this takes me back to my central appeal to what I think are the best, compassionate instincts of the British people. When you vote on 23rd June – even if you believe what you are being told by those who want to remain in the EU; that you may have done ok from the EU – think about the people who haven’t and, just as importantly, think about the economic changes that are coming fast down the track and ask, very seriously, whether a Britain in charge of all policy levers will be better equipped to cope with those changes than a Britain that is still part of what, all evidence suggests, is the dysfunctional, declining, high unemployment EU.
Because this EU vote is happening at a time of enormous global economic upheaval. We are at a point in the development of the world economy where, if we are not careful, we are going to see an explosion of have-nots. We are going to see increasing divides between people who have a home of their own and those who are, to coin a phrase, at the back of a queue – a lengthening queue – to ever get on the housing ladder. People who have jobs that aren’t threatened by automation and people who live in the shadow of the impact of technological innovation. People who benefit from the immigration of cheap nannies and baristas and labourers – and people who can’t find work because of uncontrolled immigration.
I have always wanted people to be able to own their own home but that gets more difficult particularly for young people through our inability to control the scale of migration.
We are entering a long period of much slower growth than we’ve been used to. We are entering a period when white collar jobs are going to be replaced by technology on the same scale that innovation has already replaced many manual, industrial and other blue collar jobs. In the coming decades the populations of China and India and other developing countries will be increasingly educated and will compete more directly with us. In this world we need to be nimble and we need to do everything we can to ensure that those likely to be most affected by these changes are, ideally, equipped to meet them or, if necessary, are cushioned from their worst effects.
Britain avoided the high unemployment and savage austerity that many Eurozone nations suffered because we wisely ignored the advice of groups like the CBI and retained sterling. The principle that it is better to be in control of our own destiny can and should apply to all areas of national life, starting with our borders. It should cover the design of agricultural and environmental policies and the implication of those policies for grocery and energy bills. To the design of trade agreements. To fisheries policies – another regressive EU policy that has devastated some of our coastal communities. And, of course, to budget and tax policies.
If we want to cut VAT on fuel to help families afford to heat their homes, we should be free to do so. We should be able to choose how we spend the £350 million that we currently send to Brussels every week. It would in any normal world be a strange choice to make for a British government that whilst bearing down on welfare spending and other budgets since the election we continue to send to this wealthy EU hundreds of millions of taxpayers money. This is money that could help fund the NHS. It could fund extra training and infrastructure to help every Briton to thrive in the coming economic age.
The EU is fast sliding to economic irrelevance. Just look how it’s losing its share of world trade at twice the rate of the US. There are many reasons for this but one key reason is that its institutions have become irredeemably unwieldly. EU leaders and the Brussels army of bureaucrats can’t agree on how to fix the euro. They can’t agree on what to do about refugees. They cannot agree on what kind of transatlantic trade partnership they want with the USA – such that it is very unlikely that it will ever happen. They cannot agree on the kind of steel and industrial policies that will ensure that Europe doesn’t lose even more of its manufacturing base. The EU can only move as quickly as its slowest member states and that means it can only move very slowly indeed. And in today’s global economy it’s not speed that kills but indecision. EU leaders and ministers spend so much time in Brussels, not agreeing decisions, that they aren’t focused on the challenges back in their home nations.
This is the key point. No matter what those who want to remain say about the EU as a market place, the reality is that it is first and foremost a political project; the aim of which is the creation of an overarching federal power, above the nation states. It is the reason why economic common sense cannot prevail and why many Greeks are now living in third world conditions, Italian banks are becoming insolvent and terrible levels of youth unemployment have become, for the EU a terrible price worth paying.
Yet outside of the EU an independent Britain can design migration, agricultural, environmental, budgetary and trade policies that the rest of Europe seems sadly incapable of agreeing upon.
I hope I’ve persuaded you that leaving the EU is in the clear interests of social justice within Britain. Let me end by saying I I also think it could also advance social justice across the whole continent. A vote to Leave by the British people might be the shock to the EU system that is so desperately needed. Perhaps I’m being unrealistic. The EU does not have a good track record of changing course after member states have voted against the EU project in referenda. But Brexit – coming after the Greek crisis, after so much impossibly high youth unemployment, after the election of so many extremist parties –should be the moment when Brussels finally decides to give member states more freedom to design economic, social and migration policies that reflect the democratic will and particular needs of each individual state. Given we are so uninfluential inside the EU, our maximum moment of influence might be in leaving. Confronting the rest of the EU with the need and opportunity to radically change its structures is the most socially just and, indeed, European-friendly service that Britain can provide to our neighbours across the Channel.
Surely like me you believe the UK can do better. Why should we set such a low vision about our future by tying it to this failing project.
Inside the EU our politicians can only talk of what we would like to do to change things knowing they will achieve very little. Outside the EU we can change our destiny and dare to believe in the greatness of all our citizens.
Britain deserves better than this which is why on 23rd June we should take back control and vote for our own British independence day.