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UK GDP: EU Membership

Volume 604: debated on Tuesday 19 January 2016

The Government are fighting hard to fix aspects of our EU membership that cause so much frustration in the United Kingdom, so that we get a better deal for our country and secure our future. We are confident that the right agreement can be reached.

Jaguar Land Rover recently announced that it will double investment in the brand-new engine plant on the outskirts of my constituency, creating hundreds and hundreds of additional jobs on top of the 1,400 already announced. Does the Minister agree that unfettered access to the single market drives this sort of investment and that if we were to walk away or sacrifice that access, those jobs and that investment could well be put at risk?

I too welcome the new jobs being created in and near the hon. Lady’s constituency by Jaguar Land Rover. Indeed, my right hon. Friend the Chancellor visited that site recently. On our relationship with the European Union, the Government’s position is very clear: we want the benefits of access to the single market, but there are aspects of our relationship with the EU that can be improved. That is what we are seeking to do in our renegotiation.

Given that we had a £62 billion trade deficit with the European Union last year, and given that if we left the EU the UK would be the EU’s single biggest export market, does the Minister think we could have a free trade agreement with the EU from outside it, without handing over £19 billion a year in membership fees?

I am sure that will be one of the issues discussed at length during the referendum debate. The point is that under this Government the British people will have an opportunity to express their views on where our future lies.

Britain has been a significant and, in recent years, a substantial net contributor to the EU budget. For over 40 years, this has had a negative impact on UK economic growth and GDP, the cumulative effect of which has been very large. Would leaving the EU not take that particular brake off UK GDP growth?

One point I would make is that thanks to Margaret Thatcher’s renegotiation of the rebate and thanks to the current Prime Minister’s negotiation of the EU budget resulting in a real-terms cut, we are paying less than we otherwise would have done.