Tag: Tony Blair

Below is the text of the speech made by Tony Blair, the then Labour MP for Sedgefield, in the House of Commons on 29 January 1986.

The question whether the United Kingdom should join the EMS is not an ideological argument but a practical one. Although the present level of the exchange rate makes the argument for joining stronger than it has been for some time, the balance of advantage still lies against our joining.

One reason for saying that is that we think that insufficient attention has been paid to the obligations of ​ membership of the EMS. We should treat with extreme caution claims about the stability which membership would bring to our currency. The EMS is essentially a means to an end and for it to succeed there must be a clear and common area of agreement between members on economic policy and objectives. We are not convinced that policy objectives that are currently pursued in the EMS converge sufficiently with those which we would want to be pursued domestically.

The first thing that we should do when discussing the EMS is to debunk some of the mythology surrounding it. There is a risk of it being seen not as a palliative, which is what it would be at best, but as a panacea that can cure the problems of instability in the exchange rate. It is important that our choice is informed and not a careless embrace of anything with the word “European” in it.

We should start by examining what the EMS is. It is a club that can yield benefits to the participants, but only at the expense of certain obligations. The stability arises not by natural process but by the agreement of the members to keep their exchange rates within agreed boundaries. It is essentially a statement of intent to act individually or collectively to ensure that the value of currencies is maintained within agreed margins of a set of bilateral central rates.

Three types of action can be taken. It can be done collectively through mutual support from the pool of reserves—it can also be taken under various short-term financing facilities—it can be taken through members intervening individually and it can be taken through the use of interest rates. France virtually controls its exchange rate by the use of interest rates. The latter two methods of control might be chosen by countries outside the EMS, but they are methods of obligation within it.

The proponents of the EMS say that those obligations are worth carrying because of the stability that will accrue to our currency. Stability can be long-term or short-term. I do not believe that there is compelling evidence that long-term stability has been brought to the exchange rates of currencies in the EMS. The long-term stability will to a considerable extent be contingent upon policy convergence. Such stability as there has been would equally have occurred if the exchange rates had been outside the EMS.

It is worth remembering that, when we talk about the medium term, because there are several realignments in the EMS, it is still possible to get considerable variations in the exchange rate. It is worth examining the two major realignments of the past few years—that of the French franc in March 1983, and that of the Italian lira in July 1985. When the French franc came under sustained speculative pressure in March 1983, there was a realignment, but it occurred as a result of the French agreeing much tighter budgetary fiscal measures. We can disagree about whether that was right or wrong, but it is important to emphasise that it was part of a package.

Mr. David Howell (Guildford)

Has the hon. Gentleman understood that, whatever might be the arguments for or against membership of the EMS, currencies that are in it and that are exposed to speculative pressure have the support of the entire monetary authority system of the member countries? That is why the speculators were seen off against the French franc in ​ March 1983 and why the devaluation was relatively controlled. I do not think that the hon. Gentleman has quite grasped that point.

Mr. Blair

With respect, I have grasped it. I said that one of the courses of action available to members of the EMS was collective action from the pool of reserves. France effectively keeps its median line against the deutschmark through the use of interest rates, so the pool of reserves alone is not sufficient to ensure against currency speculation. More important is the fact that the realignment, took place in conjunction with other policy measures. Exactly the same thing happened when the Italian lira was subjected to an 8 per cent. devaluation in July 1985. The price for the realignment was considerable other measures demanded of the Italian Government.

The two lessons to be learnt from those examples are, first, that realignment can occur, but only when combined with other policy packages — that means yielding up some freedom of action in the EMS — and, secondly, that, although short-term fluctuations in currency might be smoothed out by membership of the EMS, some companies say that that short-term risk can be borne by covering oneself in the forward market whereas a much greater risk, to which one is subjected in the EMS, is realignment where volatility can be intense, sudden and unpredictable.

The only compelling argument in favour of membership of the EMS is that it provides a hedge or some certainty against short-term instability in the currency. There has been considerable short-term instability in Britain during the past few years. I accept that there is a strong argument to the effect that being in the EMS might cut such speculative pressure, but I would put qualifications even on that claim. There is no clear evidence, for example, that day-to-day volatility of exchange rates damages trade flows. There have been numerous attempts to find such evidence, but it has not been found.

Mr. Ian Wrigglesworth (Stockton, South)

What about the Confederation of British Industry?

Mr. Blair

I shall deal with its stance shortly.

The level at which we fix the exchange rate is obviously extremely important, and there is still tremendous disagreement about what its level should be. The most important qualification on our ability in the EMS even to withstand short-term pressures is that Britain has a petrocurrency. With great respect to the right hon. Member for Glasgow, Hillhead (Mr. Jenkins), he has not dealt fully with the consequences of that provision.

The first consequence is that the EMS is essentially a deutschmark bloc. It could be said that we would be putting Herr Pöhl of the Bundesbank in 11 Downing Street. He might be preferable to the present incumbent, but we should yield our freedom of action. With regard to Britain as an oil exporter, cheaper oil for Germany would put up the deutschmark. If there is a drop in oil prices, cheaper oil prices mean that the deutschmark lifts and, conversely, that the pound is subject to downward pressure. That tension would be built into the system once sterling joined the EMS.

Perhaps most important of all is that we do not prevent speculation as a result of oil price fears by joining the EMS. Much of the clamour for joining the EMS during the past few months results from people thinking that the ​ exchange rate crisis in January last year and the flutters of the past few weeks would be cured by joining the EMS. That is quite definitely not so.

The alliance says that we should go into the EMS forthwith. It said that we should go into the EMS forthwith last year. It has been saying that we should join the EMS forthwith for years. If we had joined the EMS last year, the best rate that we could have got in against the deutschmark was DM 3·60 or DM 3·50. Many suggest that we would not have been able to negotiate such a rate.

The current rate is DM 3·33. When the oil price exerted pressure on the pound last week, the Government, as a member of the EMS, would have been shoving up interest rates and I guarantee that if interest rates had gone up last week, we would have had an alliance motion criticising the Government for raising interest rates. They cannot have it both ways. Penalties are involved and those penalties should be clearly understood.

The problems is not merely the lack of a guarantee that we will not have interest rate crisis of that type. I would go further than that. If the price of oil falls, it is rational that our exchange rate should be allowed to fall, because the price of a major export item is falling. That difficulty, which faces Britain because of its petrocurrency status, does not fit into the circumstances of the other nations in the EMS.

Contrary to what has been said, criticisms of the Government’s interest rate policy could be made irrespective of membership of the EMS. January 1985 is the obvious example. The Government appeared to be giving the lie to the market that they would not intervene to prop up the exchange rate. Currency speculators had a one-way bet against our currency. The exchange rate plummeted and the Government had to compensate for that initial period of inaction by jacking up interest rates by 4 per cent. The Government can be legitimately criticised for not cutting rates last summer. They had the opportunity to cut them and their starting base would have been that much less.

When we consider the Government’s policy during the past week, we cannot criticise them for not being in the EMS and also for allowing the exchange rate to slide. In many ways is is easier to understand the case for the Government, rather than the Opposition parties, wanting us to join the EMS. Joining the EMS implies a fiscal and monetary policy convergence. The fiscal and monetary polices of the German Bundesbank are tight. One would have thought that the alliance, which proposes a fiscally expansive policy, would be the last party to want to join the EMS. There is a clear argument for the Government wanting to join the EMS.

The argument for the EMS is much stronger if there is an agreement, or the prospect of an agreement, on the fundamentals of macro-economic policy between the member countries. The exchange rate is important, but it is a residuary, not a fundamental. If we join the EMS, it is much better to be certain of the agreed, common policy objectives between the member countries. In relation to the importance of international monetary stability, the initiatives of the Group of Five are of greater significance than what has happened within the EMS. The G5 initiative that forced down the dollar was more important than what was happening in the EMS. The G5 countries criticised Germany for pursuing too tight a fiscal policy, but that is the fiscal policy with which we would be aligning ourselves if we were to join the EMS.

Whether it be the EMS or the G5, acronyms are no substitute for analysis of Britain’s economy and its problems. The central and fundamental problem is how to prepare for post-oil Britain. Flutters of speculation against our exchange rate are warning signals. We either build up our manufacturing industry to generate the wealth that we shall need when oil production declines, or we face a poor and unstable future. No amount of juggling at the margin will eliminate the central dilemma. The Labour party, and only the Labour party, has the political will and economic sense to address the dilemma.

Below is the text of the speech made by Tony Blair, the then Labour MP for Sedgefield, in the House of Commons on 16 July 1985.

It is obviously not possible to give a detailed response at this stage, but we hope that there will be a full debate on the White Paper in due course. In general terms, we would, of course, support the abolition of unnecessary bureaucracy in the interests of small businesses, but the test that will be ​ applied to the White Paper is whether it deals with the real problems of the economy and unemployment or whether it is just another Government gimmick designed to distract attention, and in particular whether we are talking about cutting unnecessary bureaucracy or about subordinating vital protections for the consumers and employees in the interests of ideological obsession with deregulation.

Turning to the substance of the White Paper, why do the Government identify the one major problem of regulation and then proceed to deal only with the minor ones? Is it not the case that the only area of regulation mentioned by more than one in five of the Department’s own survey was value added tax? Is not that the main problem faced by small businesses? Is it not correct that the White Paper proposes no new action of any substance on that? Why, in particular, did the Government block Opposition amendments to the Finance Bill that would have eased the bad debt relief on small firms?

Secondly, will the Minister undertake that there will be no less environmental protection from the changes in planning procedure? Will he tell us why they are given such prominence when only a minute percentage of his survey said that they were a major factor?

Thirdly, any loss of standards—and I think there may be—in fire regulations or health and safety regulations would be a wholly unacceptable and wrong price to pay. How on earth can it be right for the Government to impose different rights and duties in regard to safety for the public and employees based on the size of the firm? Is the Minister saying that the risk of mishap is less with small businesses? If so, may I tell him that all the evidence indicates the contrary, and that small businesses give rise to the most safety risks?

We shall oppose vigorously the suggestions about unfair dismissal law and wages councils. What philosophy is it that says that fair play and fair rights of employment are a constraint on proper business activity?

Many of the proposals seem to have been derived not from business experience but from political doctrine. Why is it that the scrutiny which gave rise to the White Paper received views from the organisations representing employers but not from a single organisation representing employees? Why were the Institute of Directors and the Adam Smith Institute so closely involved with the proposal? Is it not the case, as the survey itself found, that

“most small businesses see problems with finance and sales as more serious than problems with compliance costs”?

The same survey said:

“The main reasons for business being good are individual effort and good demand.”

If those are the main problems, why have not the Government dealt with them? Why create an agency to cut red tape but not agencies for industrial development? Why do we end planning protections but cut back on local authority initiatives which would create more jobs? Why do we cut back on unfair dismissal but not give proper training in the face of skill shortage? Why do we worry about the cost of meeting health and safety regulations but decline to lower interest rates?

At first blush, the White Paper is a shabby and irrelevant document from a Government whose ideology is unable to solve the real problems of our economy. Will a single job be created by the scheme? If not, of what use is it?

Below is the text of an article by Tony Blair, the former Prime Minister, published on 22 May 2018.

We publish today a comprehensive guide to the issues around the Customs Union or Customs Partnership as a means of unlocking the deadlock of the Brexit negotiation. It is the work of Dr. Andy Tarrant, a recognised expert on EU affairs.

It shows conclusively that:

There is no Customs Partnership which will deliver the same benefits as staying in the Customs Union, even if the EU were prepared to accept such a Partnership.

However, the Customs Union will not, on its own, deliver frictionless trade between the UK and the EU and therefore is neither good enough for British business nor a full answer to the Ireland question.

Only membership of the Single Market or signing up to EEA comes close to genuine frictionless trade.

Even that unless combined with a Customs Union would still have some friction attached.

The ‘freedom’ to pursue trade deals is unlikely to result in any substantial benefit to Britain, involves very difficult choices, and in any event if it worked, would take a decade or more before any benefit was realised.
The Government now know this. So, they’re again reverting to postponement rather than resolution of the Dilemma.

The Dilemma, as I have described previously, is whether we stay in a close economic relationship with Europe to avoid economic damage, in which case one way or another we will end up abiding by Europe’s rules; or whether we break from Europe decisively, to have ‘freedom’ from those rules, in which case the economic damage at least short and medium term will be considerable.

There is no way round this Dilemma. These are the two competing versions of Brexit. They aren’t ultimately capable of fudge. The Customs Partnership is just the latest failed attempt at fudging.

Therefore, the Government have reverted to postponing the decision by agreeing to extend the period by which we will keep to Europe’s rules after the transition should that prove necessary.

This is a very dangerous strategy. If this Dilemma is not resolved prior to March 2019, then Britain will be leaving Europe with no clear idea of what the future economic relationship entails. After March 2019, we will have no negotiating leverage. We will have left. We will be completely dependent on what we are given by the EU, with no say in Europe, no representation, no bargaining power.

The Government should be obliged to decide which version of Brexit they want for any vote in Parliament to be meaningful before March 2019.

But what is also now clear is that the leadership of both main political Parties are engaged in the same sleight of hand, namely pretending that we can have frictionless trade whilst leaving the Single Market.

As our paper shows, this is simply wrong. The Single Market is a unique trading area where not only is trade tariff free, it is free of non tariff barriers, through regulatory alignment. It therefore allows complete freedom of trade for goods and a substantial amount of free trade in services where Europe has adopted common sets of rules.

Membership of the Customs Union alone does not solve the problem of friction, because if Britain wants freedom to diverge on product regulation then there will still need to be checks. And, of course, if Britain is part of a Customs Union then it cannot make its own trade deals.

The Customs Union option in any event does not at all address the question of services, particularly financial services where we have a huge surplus with the European Union.

At some point the Dilemma must be resolved by a choice. And here is where the case for sending the issue back to the people is now overwhelming. Either option is a form of Brexit. Supporters of Brexit are to be found on both sides of the Dilemma. Brexit could mean either of these two very different outcomes. How then can it be said that the British people in June 2016 decided for one option over the other?

The only right method of resolution is to give to the people who made the original choice to leave Europe, the choice of which Brexit they prefer or whether given that choice, in the light of what we now know, they want to proceed with Brexit or stay in Europe.

Here is the challenge to both Party leaderships.

The Conservative Party believes that if they ‘deliver Brexit’ they have fulfilled their mandate and the British people will be grateful that at least Brexit is done.

This is a fundamental strategic error. The so-called ‘soft Brexit’ which will see us still tied to European rules in some form or another, will not satisfy the most ardent Leavers. They’re already shouting betrayal.

So, if the Conservative Party thinks it has solved its European problem if it goes for a mishmash of theoretical freedom from, but practical alignment with, European rules, it is profoundly mistaken. It is just another route to disillusion.

For the Labour Party the position is even more stark. As was entirely predictable and predicted, we now find ourselves in the worst of both worlds.

The Leavers think we’re not really for Leave because we want to stay in the Customs Union and as I say for many Leavers that is an unacceptable compromise.

The Labour Party position is also contradictory. If the reason for being against EFTA or the Single Market is we don’t want to be merely rule takers, then the Customs Union solution has the same objection. We will be taking the trade rules Europe negotiates. Go and talk to the Turks. They are bound by Europe’s trade agreements, and they are forced to align with a lot of European rules to minimise friction. Even so, their arrangement doesn’t work well.

The Remainers, however, have now cottoned on to the fact Labour is not really for remaining either, except in the very limited sense of the Customs Union, and so, unsurprisingly, they’re losing faith in Labour as a route to avoid Brexit.

The Labour Party will pay a heavy price for the leadership’s closet Euro-scepticism.

The tragedy is the price the country will pay for Labour’s failure to lead.

It would be a straightforward and in my view electorally winning position if the Labour Party were to say: we accepted the referendum verdict; we gave the Government the opportunity to negotiate a good deal; it is now apparent they can’t; it is equally apparent that this is not only because of division and incompetence but because there is no resolution to the Dilemma; therefore, we reject the deal but you, the British people, should have the final decision. You began Brexit, you mandated the negotiation and you should decide how it ends.

45 years of European membership with all the intricate trading arrangements born of geography, common interest and then the Single Market means that Leaving Europe is economically painful. Look at the chart in our paper of how in 50 years our export relationships have been transformed.

Labour cannot argue for a ‘jobs first’ Brexit and then oppose what is plainly the only way of protecting British jobs which is to remain part of Europe’s economic structures. It is greatly to the credit of those MPs both Labour and Conservative that they are prepared to put the country’s interests before their Party whip and support an EEA type amendment.

The reality of the choices we face is what we now know in a way we did not in June 2016. It is a choice of two futures. They contrast starkly. There is no ‘having our cake and eating it.’ We must choose as a country in the light of two years of – let’s face it – inconclusive and unsatisfactory negotiation.

We can all speculate as to which future the British people would now choose once they know the outcome of the negotiation.

But there is only one sure way to find out and that is to ask them. The Labour Party should be leading that case.

Below is the text of the speech made by Tony Blair, the former Prime Minister, at an EPP Meeting in Wicklow, Ireland on 12 May 2017.

There is a consensus, fortunately, within British politics that the consequences of Brexit on the border between the Republic of Ireland and the UK and on the peace process should be minimised as far as possible.

Such a consensus will be crucial.

Brexit uniquely impacts both the Republic and Northern Ireland. There has never been a situation where the UK, including Northern Ireland, and the Republic of Ireland, had a different status in respect of Europe. We have either both been out or both been in.

The Common Travel Area has meant ease of going back and forth across the border, vital for work and family connection has been in place for almost 100 years. And the absence of customs controls – both countries being in the Single Market and Customs Union – have meant a huge boost to UK-Irish trade.

Some disruption is inevitable and indeed is already happening. However, it is essential that we do all we possibly can to preserve arrangements which have served both countries well and which command near universal support.

A hard border between the countries would be a disaster and I am sure everyone will and must do all they can to avoid it.

In addition, the Good Friday or Belfast Agreement was formulated on the assumption that both countries were part of the EU. This was not only for economic but also for political reasons, to take account particularly of nationalist aspirations. Some of the language will therefore require amendment because of Brexit. Again, with goodwill, including from our European partners, this should be achievable with the minimum of difficulty.

If the UK and the Republic were able to agree a way forward on the border, then we would have the best chance of limiting the damage. It is in the interests of us all, including our European partners, for this to happen.”

The truth is that the sentiments and anxieties which gave rise to the Brexit vote are not and never were limited to the Britain.

I am delighted that there will be President Macron and not President Le Pen. But the doubling of the far right vote compared to over a decade ago, plus the surge of support for anti-European parties across Europe should make us all think. Back in 2005 I gave a speech to the European Parliament in which I warned specifically that Europe was moving further away from the concerns of its citizens, all the time whilst proclaiming that it was moving closer. This was in the aftermath of the referendums on the Lisbon Treaty in France and the Netherlands.

Since then, following the global financial crisis and then the Euro zone crisis, this challenge has only deepened.

The world is changing fast through technology and globalisation. This poses an economic challenge.

Large scale migration from Africa and the Middle East poses cultural challenges, particularly with the refugee crisis. People see their communities change around them with bewildering speed, they worry about their identity and they’re anxious also over security.

Now the reality is that none of these challenges are more easily dealt with by nations alone or by a Europe which is weak.

But it is the obligation of mainstream politics – centre left and centre right – to provide answers otherwise those on the far right and left will successfully ride the anger.

During the course of the Brexit negotiation Britain will be evaluating its future relationship with Europe; Europe has an opportunity to evaluate its own future.

The European Commission White paper is a necessary start.

I remain totally convinced that nations such as ours, coming together as we have done in the European Union, goes with the grain of history. As the new power brokers of the world emerge in the high population countries, particularly China and India, all those comparatively smaller in size will need to form alliances to protect not only interests but values.

But we need to show that necessary integration does not come at the expense of desired identity, that Europe can deal firmly and expeditiously with the challenges upon it, and that it is both sensitive enough to understand the concerns, cultural and economic, that our people feel so strongly, and capable enough to overcome them.

An open and honest debate about how Europe reforms can play a positive part in how Britain and Europe approach Brexit. Whatever relationship the future holds for us both – as you know I was and remain a passionate supporter of Britain staying with our European destiny – we have too many mutual interests, too much shared history, too profound a sense of common values for us to do other than strive for success for that relationship.

So let us keep lines of communication intact. Let us explore together the options as we go forward. Let us – where possible – always choose flexibility over rigidity and solutions which are about the long term flourishing of the people not the short term exploitation of the politics.

We are only at the beginning. There is a long way to go to, particularly for the negotiations.

Below is the text of the speech made by Tony Blair, the former Prime Minister, at the Shimon Peres memorial service at Mount Herzl, Jerusalem on 17 September 2017.

We miss him don’t we? I know I do. I miss the sense of anticipation before each meeting; the insights; the wit; the brilliant one liners, even the ones I heard before; the crazy genius of being able to speak English better than the English when it wasn’t even his second language; and of course most of all the wisdom, the supreme ability to take the most complex developments – economic, political, technical – and translate them into words we could understand and visions we could aspire to.

Because Shimon was such a magnetic personality it is easy to forget that his principal quality was not his way with words but with deeds. He was a man of action, whose wellspring was nonetheless a deep and coherent philosophy.

The description in his autobiography of his interaction with the French Government to secure the know-how for nuclear power, or the account of the raid on Entebbe, read like passages from a thriller. But through each line, we are aware that nothing he did was without purpose.

He was determined to defend his fragile young country against the hostility of a region all too willing to find an external enemy to divert attention from internal challenge.

But for him that was but one step towards the ultimate goal of an Israel secure and at peace with its neighbours in a region of tolerance and justice. His patriotism did not require an enemy; it did not need to conquer. It was not born of a sense of superiority but a sense of hope.

For Shimon, the State of Israel was never simply a nation, and was more than just the homeland of the Jewish people; it represented an ideal.

The country he wanted to create was to be a gift to the world. It drew upon the best of the Jewish character developed over the ages, sustained through pogroms, persecution and holocaust, often battered but never subdued. This spirit is the spirit of striving: to make oneself better, to make the world better, to increase the sum of knowledge and understanding; to examine the variegated flotsam of human existence and the contradictions of the human condition and see not a cause for despair but a path to progress.

This was what animated Shimon Peres.

He never gave up on peace with the Palestinians or on his belief that peace was best secured by an independent State of Palestine alongside a recognised State of Israel. One of our last conversations was on how to change the plight of the people of Gaza.

Despite all the frustrations of the peace process, in his last years he could see the Middle East changing and the possibility opening up in the region, with its new leadership, of a future partnership between Arab nations and Israel.

He grasped completely the extraordinary potential there would be if Israel and the region were working together not simply on security but on economic advance, technological breakthrough and cultural reconciliation.

His Annual President’s conference brought together figures from round the world to discuss not the past or the present but Tomorrow. This was a man who was born when horse drawn carriages were still in use and lived to see a driverless car.

He was fascinated by the future, loved science, delighted in innovation and was younger in mind at 90 than most people at 30.

I once tried to define Shimon in three words. I chose Compassionate, Courageous, and Creative. But I spent a long while asking which virtue came first.

I settled on his compassion.

I know he took difficult decisions as all in positions of leadership do. Some of them had painful consequences.

But in the final analysis, Shimon Peres wanted to do good, strived to do it and by and large did it, motivated by a profound compassion for humanity.

At the core of that compassion, was a belief in the equality of all human beings across the frontiers of race, nation, colour or creed. He would defend Israel to his dying breath. But he was a citizen of the world also and proud to be one.

For him, every new possibility technology or science gave us was not to be harnessed for the profit of a few but for the welfare of the many.

For him the world growing smaller was not a harbinger of fear but an achievement.

For him if Israel did well, it was a chance for the world to do better.

The memories of great people who help shape history, like Shimon, do not fade but clarify over time. We see what they stood for when they were alive and what they mean for us who live on today.

In his best moments, Shimon embodied the success and hope of a nation and in doing so, touched and educated the wider world.

So yes I miss him. And I thank him and his wonderful family – Tsvia, Yoni and Chemi – and his fabulous colleagues Yona, Nadav, Efrat and Ayelet and all the team – for the magnificent support they gave him.

But I won’t forget him. For me and for so many others here and round the world, he is and always will be a thought in our minds and an inspiration in our hearts.

Below is the text of the speech made by Tony Blair, the former Prime Minister, to the European Policy Centre on 1 March 2018.

Brexit is momentous and life-changing for Britain. The British people should be given a final say on whatever deal is negotiated. If they are allowed that say, then Brexit can be averted.

I and many others will work passionately for that outcome.

But today I want to say here in Brussels why Brexit is also bad for Europe, and why European leaders share the responsibility to lead us out of the Brexit cul-de-sac and find a path to preserve European unity intact.

For the first time since its inception, a nation, and a major one at that, will have disrupted the onward march of European cohesion, left the European Union and will have done so apparently for reasons of principle at odds with the whole rationale for the Union’s existence.

Britain without Europe will lose weight and influence. But Europe without Britain will be smaller and diminished. And both of us will be less than we are and much less than we could be together.

In politics, there is a kind of fatalism which can often overwhelm what is right by making the right course seem hopeless or even delusional.

So it is with Brexit. In the UK, we are told ‘the people have spoken’ and to interrogate the question further is treachery. The ‘will of the people’ is deemed clear and indisputable, though what that ‘will’ means in practice given the complexity of Brexit, the multiple interpretations of it, and the differing consequences of each version, is – with every day which passes – not clear at all.

But nonetheless we are told we must just do it.

And in Europe there is often a sorrowful shaking of heads and a shrugging of the shoulders, when what we need is strong engaged leadership to avoid a rupture which will do lasting damage to us both.

I understand European reticence. Until Europe sees real signs that there could be a change of mind in Britain, why should it contemplate the possibility of change in Europe?

However, the argument in Britain is far from over. It is in flux. See the speech of Jeremy Corbyn this week.

What I call the ‘Dilemma’ of the negotiation – close to Europe to avoid economic damage but therefore accepting its rules or free from Europe’s rules but therefore accepting economic damage – is finally prising open the discourse.

It is a binary choice. The cake will either be had or be eaten but it will not be both.

The Dilemma divides the Brexit vote. Many of those who voted Brexit want a clean break from Europe even if there is economic difficulty as a result and even if it soured the politics of Ireland. But many others would not want it if there were an economic cost; and would certainly believe that peace in Ireland should be protected.

Outside commentary under-estimates the fact that at some point this year the Government have got to put a vote to Parliament and win it. They will of course try to fudge, but as we are seeing this cake is quite resistant to fudge. After last June’s General Election, winning this vote will be much tougher than is commonly understood. For once, Parliament in this equation can be more decisive than either Government or Opposition.

There are three legs to the stool upon which could sit a reconsideration of Brexit. The first is to show the British people that what they were told in June 2016 has turned out much more complex and costly than they thought. This leg is looking increasingly robust as time goes on.

The second is to show that there are different and better ways of responding to the genuine underlying grievances beneath the Brexit vote, especially around immigration. This leg is easy to construct but needs willing workers.

The third is a openness on the part of Europe to respond to Brexit by treating it as a ‘wake-up’ call to change in Europe and not just an expression of British recalcitrance. This is the leg to focus on today.

The stool needs all three legs.

For Europe, the damage of Brexit is obvious and not so obvious.

In obvious terms, though the economic pain for Britain, especially of a clean break Brexit, is large, the cost to Europe is also significant and painful.

One in seven German cars is sold in Britain and goods exports in total are worth 3.5% of its GDP; the figure for Ireland is 14% of GDP and for Belgium over 7%; Britain is a huge market for French produce of many kinds; and a top three export partner for 10 EU members including Italy and Spain.

Around 200,000 Dutch jobs are involved in trade with the UK. There are around 60 direct flights between London and Amsterdam every day. According to the Dutch Government agency CPB a hard Brexit could make every Dutch person around 1000 euros poorer.

A Europe in which Britain finds it harder to be a financial centre for European business will be deeply damaging for Britain but it will also impede the economy of Europe.

Estimates of the long term effect on European growth vary depending on the version of Brexit chosen, but they vary from bad to very bad.

In short, no one I have spoken to in the investment community from the USA to China thinks this is a good idea for Britain or for Europe.

Because of these effects, some in Britain believe that therefore Europe will bend in its negotiating stance and allow Britain largely unfettered access to Europe’s Single Market without the necessity of abiding by Europe’s rules.

This won’t happen because quite simply it can’t. To do so, would risk unravelling the Single Market and a return to precisely the system that was in place before Europe wisely and in the interests of its economy and with of course the full urging of successive British Governments decided to create the Single Market.

But the damage to Europe of a political nature is to my mind more deleterious.

For Schuman and other founding fathers, the project of European unity was a project of peace, cooperation in Europe being the alternative to the wars which had ravaged Europe and the world in the first half of the 20th century.

They looked back at the long history of European nations and saw centuries of conflict punctuated by all too brief epochs of relative harmony. From the time of Charlemagne, Europe had come together periodically, but mainly through religion, force or transitory necessity.

There had been an uneasy balance of power arrangement towards the end of the 19th C but then the rivalries of the great European nations pitched them into a war no one ever thought would prove as devastating as it did. The attempt out of it to produce a new political settlement fell victim to the competing totalitarian ideologies of communism and fascism and the descent into the darkness of World War Two.

Then, standing on the rubble of destruction, they decided to approach European unity with renewed vigour and vowed to give it institutional and practical meaning.

Thus, began what has now become the European Union.

The rationale for Europe today is not peace but power.

For almost 300 years, the world has been dominated by the West. At the beginning of that time the great powers were European, with colonies and Empires. Japan and China were of course major nations, but they were not shaping the world.

By the end of WW1, the United States had emerged as the most powerful nation, steadily eclipsing the United Kingdom and stayed that way through the 20th century.

But today, the world is changing again. China is today the second largest economy, the biggest global trader and as holder of huge amounts of American debt intimately important to global prosperity.

If we look back at the top economies in the year 2000, Europe dominates the top ten. Germany’s was 4x the size of India’s and larger than China’s. Mexico, Brazil and Indonesia were distant specks on the horizon far behind.

By 2016, the situation changes dramatically. India is now almost as large as the UK and France.

By 2030, India’s economy will be larger than those of Germany or Japan. Brazil, Indonesia and Mexico are narrowing the gap. China becomes the largest global economy and 7 or 8 times the size of the UK.

Look ahead to 2050 and India is several times the size of the German economy and no European economy is in the top 6.

With this economic change, will come political change.

The West will no longer dominate. And Europe, to retain the ability to protect its interests and values, will need to form a strong bloc with the power collectively to do what no European nation alone will be able to do individually.

Regard the regions of the world today. Everywhere, in reaction to this fundamental shift in geo-politics, countries are banding together: from South East Asia to the continent of Africa.

Nations are in a desperate scramble to find their place in a world in which no one wants to be forced to choose between the big powers or unable to withstand their demands.

For Europe much more is at stake than trade or commerce.

Take defence. Yes, NATO remains the cornerstone of Western security policy. But in an era in which the United States (and not only under this Administration) is signalling the limits of its appetite for military commitment, and where current events in Turkey show the fragility of some of the assumptions of alliance within NATO, it is foolish, indeed dangerous, for Europe not to have the independent capacity to protect its interests.

If the SAHEL erupts who will bear the brunt of the eruption? Europe. But who will we be obliged to call upon? The USA.

Of course, Britain can maintain a close relationship on defence even outside the EU. It still represents 25% of European defence spending. I welcome the British PM’s speech to the Munich conference and the excellent paper recently from the German Council on Foreign Relations.

But how much more effective would such cooperation be if we were still part of Europe’s decision-making structure? Instead we are in the surreal position of proclaiming our desire for tighter European cooperation in defence just as we withdraw from Europe’s political framework for doing so.

How can we police our borders except through common strategy; or fight terrorism but through enhanced integration of intelligence and surveillance; or protect our privacy from either foreign Governments or corporate behemoths other than by the strength which comes from size?

Do we seriously believe that if we had approached negotiation on climate change as individual countries, rather than as Europe, we would have driven the agenda in the way we did?

Our values are also in play.

Brexit is happening at a pivotal point in Western politics. Parts of our politics are today: fragmented, polarised, occasionally paralysed, with visceral cultural as well as economic rifts; with politicians who strive for answers swept aside by those riding the anger; a sterile policy agenda focusing on who to stigmatise, and barely touching the real forces of change which are technological; and conventional media locked in an ugly embrace with social media to create a toxic, scandal driven, rancorous environment for debate which risks destruction of democracy’s soul.

Meanwhile there are new powers emerging who look sceptically at Western democracy today and think there may be a different, less democratic model to follow.

For the first time, not just our power but our value system is going to be contested.

We need at this moment for Europe to regain its confidence, take courage and set a course for the future which re-kindles the spirit of optimism.

I believe firmly in the trans-Atlantic alliance. Despite what it may sometimes seem, so do most Americans.

In the new geo-politics, we need each other for reasons just as compelling as those which thrust us together in the early 20th century.

Especially at a time when America appears pre-occupied with its own political upheaval and is hard to read and easy to parody, Europe should be far-sighted enough to keep the alliance strong, to be determined in defending our values from those who would de-stabilise us, and to send a message to the rest of the world that Europe will grow in power in the 21st century precisely because of those values.

None of this can in any way be advanced by Britain’s departure from Europe.

It rips out of Europe one of the alliance’s most sustained advocates.

It weakens Europe’s standing and power the world over.

It reduces the effectiveness of the Single Market by removing from it Europe’s second largest economy.

And Britain out of Europe will ultimately be a focal point of disunity, when the requirement for unity is so manifest. No matter how we try, it will create a competitive pole to that of Europe, economically and politically to the detriment of both of us.

More contentiously, I believe it risks an imbalance in the delicate compromise that is the European polity.

Britain supports the nation-state as the point of originating legitimacy for European integration. Others are more comfortable with the notion of ever closer Union leading over time to a more federal structure.

The truth is that the anxieties which led to the Brexit vote are felt all over Europe. They’re not specific to the British. Read the latest Eurobarometer of public opinion. In many countries, similar referendums might have had similar results.

I know from experience that Britain is often the argumentative partner who speaks up, but there is frequently a large group of others sheltering behind us, glad there is a voice in the room articulating what others think but are shy of saying.

Even the famed Franco-German motor can need British spare parts and lubricants even if they come with the odd bit of grit; and from time to time, British mechanics can work with others to create a back-up engine.

President Macron has sensibly proposed a series of Europe wide debates on Europe’s future in recognition of the strains in Europe’s politics.

These will not work, however, if they become merely a way of explaining to Europe’s citizens why their worries are misplaced.

It should be a real dialogue.

The populism convulsing Europe must be understood before it can be defeated.

Immigration is a genuine fear with causes which cannot be dismissed.

Many feel the European project is too much directed to the enlargement of European institutions rather than to projects which deliver change in people’s daily lives.

There is much good work done by this and the previous Commission to reduce regulation and bureaucracy, unfortunately usually ignored or over-shadowed. But we should recognise this is still an issue for people all over Europe.

The things Europe is doing to build its capability to make the lives of Europeans better – in energy, digitalisation, infrastructure, education, defence and security need to be driven forward with much greater intensity.

And the difference between those in the Euro zone and those outside it will require different governance arrangements.

Europe knows it needs reform. Reform in Europe is key to getting Britain to change its mind.

There should surely be a way of alignment.

A comprehensive plan on immigration control, which preserves Europe’s values but is consistent with the concerns of its people and includes sensitivity to the challenges of the freedom of movement principle, together with a roadmap for future European reform which recognises the issues underpinning the turmoil in traditional European politics and is in line with what many European leaders are already advocating, would be right for Europe and timely for the evolving British debate on Brexit.

If at the point Britain is seized of a real choice, not about whether we like Europe or not – the question of June 2016 – but whether on mature reflection the final deal the British Government offers is better than what we have, if, at this moment, Europe was to offer a parallel path to Brexit of Britain staying in a reforming Europe, that would throw open the debate to transformation.

People will say it can’t happen.

To which I say in these times in politics anything can happen.

In any event, it depends on what magnitude of decision you think this is.

There are errors in politics of passing significance.

And there are mistakes of destiny.

If we believe and I do, that this is of the latter kind, we cannot afford passive acquiescence.

Those whose vision gave rise to the dream of a Europe unified in peace after centuries of war and whose determination translated that dream into practical endeavour, their ghosts should be our inspiration.

They would not have yielded to fatalism and neither should we.

We have months, perhaps weeks to think, plan and act.

Let’s be clear. Even if Brexit is Britain’s future, and yours is a European Union without Britain, we can’t alter our geography, history or manifold ties of culture and nature.

This is a divorce that can never mean a physical separation.

We are consigned to co-habiting the same space, trying to get along but resenting our differences and re-living what broke us apart, awkward silences at the breakfast table, arguing over the rules with no escape from each other.

But – and here is the supreme irony – with so much in common and still liking each other.

Better to make our future work together.

If we don’t, a future generation will; but their verdict on ours will be harsh for time wasted and opportunity spurned.

It doesn’t take a miracle. It takes leadership. And now is when we need it.