Comment and Opinion

There is one central question at the heart of the current debate about both the euro and European convention and it is this: what should Britain's relationship be with Europe in the 21st century?

Last month, when I told the CBI that we would base the decision on the euro on Britain's long-term national economic interest, I also said that we should put aside the soul-searching about Europe that has been so much part of Britain's post-war history.

When The Daily Telegraph appears to suggest that, to be pro-British, we have to set ourselves apart from the rest of Europe, I totally disagree: there is a British national interest case for being strongly pro-European.

There were, of course, good and understandable historical reasons why, at the end of empire and then of the Cold War, Britain, forced to redefine its role in the modern world, was anxious about its national identity. With the fall of the Berlin Wall, all countries had to rethink their role in the world.

In the early 1990s, some defined Britishness as being anti-European. But to define Britain by what it is against - and Britishness by what it is not - is a disservice to the positive enduring qualities that make up the British character, define the British identity and make us the country we are.

For, while the days are gone when Britain was defined by its empire, Britain today - anchored in stability, enjoying securely founded economic strength - is, in fact, well placed to restate its mission for the modern world.

Indeed, I believe British people can and should be far more explicit and confident about our shared vision of the future, about what defines our purpose as a nation.

The essence of Britishness is the enduring values we share, values that have passed from generation to generation, values that have shaped our institutions to meet whatever challenges in war and peace we have had to face.

What Orwell called our national genius has been - and is - our enterprise and inventiveness, our tolerance and belief in liberty, fairness and public service - and our internationalism.

These shared beliefs in tolerance, liberty and fairness also mean that there is a golden thread that runs through British history, of men and women standing firm against the encroachment of arbitrary power and of their common endeavour in villages, towns and cities: citizens with a strong sense of fair play, doing their duty by their neighbours.

This neighbourliness and generosity generates civic pride and underlies popular support for, for example, the values of the NHS.

Britain has moved beyond the old days of industrial relations conflict, corporatism and rigidity, and we can all unite around a British agenda that sees enterprise as both an engine of wealth creation and equal opportunity. Indeed, I believe Britain can become a beacon to the world for advancing enterprise and fairness together.

For, despite all the disagreements between supporters of equality and liberty, there is also a British consensus in favour of welfare reform and matching flexibility with fairness as we create full employment.

These British values have an important part to play in shaping the more enterprising, more flexible, more open and outward-looking Europe we want to create. Of course, the nation state is and will remain the focus of our British identity and our loyalty.

Those who believed that national political and cultural identities would wither away have been proved wrong. Indeed, the test of any institutional change - the test that Britain will apply in Europe's Inter-Governmental Conference - is whether it is good for Britain's national interest.

That is why we reject the flawed assumption that the single market should lead inevitably to tax harmonisation and to a federal state, an outdated assumption that reflects neither political reality nor economic necessity.

Today, globalisation is moving Europe from the old vision of some - a trade bloc looking inwards, erecting barriers to the outside world, taken up with its own internal rules and ambitions of harmonising tax, a vision that made many uncomfortable with Europe.

Instead a consensus can be built in Britain and Europe for a new vision for Europe: that, as a trade bloc, Europe is superseded by the Europe of the global era, Europe's institutions are having to be reshaped and in line with long-held British values - internationalism, enterprise, fairness, political accountability.

In the enlarged Europe there is a growing consensus favouring the view of Britain, the pioneers of free trade and the authors of the single market, that Europe be far more open to new trading arrangements, not least with America; and that, to compete globally, Europe must liberalise and be flexible.

The more Europe and America work closely together, the more Europe reforms, and the better it is for Britain, Europe and the world.

British values also have much to offer, persuading a global Europe that the only way forward is inter-governmental, not federal; mutual recognition, not one-size-fits-all central rules; tax competition, not tax harmonisation, with proper political accountability and subsidiarity, not a superstate.

Even as Europe is changing to meet the challenges of the new global economy, some would still seek to see being British as being anti-European. Yet Britain's national interest is inextricably linked to Europe by history, geography and economics.

At no point, either in peace or war, have we been prepared to walk away from our role in Europe's future. History shows we are no less British for being strongly pro-European.

The British way is not to retreat into a narrow insularity and defensive isolationism, but to be confidently outward-looking and to lead by example. And it is by being confident about what Britain is and can offer - standing up for what we believe is right - that we can shape the road ahead.

So to those who argue that the future means Britain submerged in Europe, I say: emphasising the importance to Europe of British values - our commitment to enterprise, opportunity, openness and internationalism - will benefit both Britain and Europe.

Britain leading - the right way to express British identity and interests in the modern world - means a serious agenda for reform to build a modern Europe for the global era: British ideas shaping Europe and Britain's European destiny, too.