I beg to move, That the Bill be now read a Second time.
Madam Deputy Speaker, I apologise on behalf of my hon. Friend the Member for Wellingborough (Mr Bone) for his being unable to participate in this debate. He has been waiting for the opportunity for a long time, and it is only because of a series of supervening events that he cannot be here to move the Bill’s Second Reading himself. In those circumstances, he asked me, as a co-sponsor, to move it on his behalf, which it gives me great pleasure to do.
You may be aware, Madam Deputy Speaker, that this Bill, or a Bill very similar to it, has had a long gestation. It was back in the 2007-08 Session that I brought forward a Bill, supported by my hon. Friend the Member for Wellingborough and other colleagues. It was entitled the European Union (Audit of Benefits and Costs of UK Membership) Bill to
“establish a Commission to carry out regular audits of the economic costs and benefits of the UK’s membership of the European Union; and for connected purposes.”
That Bill had almost a full day’s debate here on 20 June 2008.
As we start today’s debate it is worth recalling some of the comments I made when opening the previous debate. The Bill was narrower than this one, in that it dealt only with the economic costs and benefits of the UK’s membership of the European Union. I started by referring to the preface to an excellent work by Ian Milne, “A Cost Too Far?: An Analysis of the Net Economic Costs and Benefits for the UK of EU Membership”. In the foreword to that pamphlet, which was published in July 2004, the former distinguished and late Speaker Lord Weatherill stated that when he was the Conservative Government’s Deputy Chief Whip in 1972, he supported entry into the European Common Market
“on the assurance of the Prime Minister, Mr Edward Heath that ‘joining the community does not entail a loss of national identity or an erosion of essential national sovereignty.’”
Lord Weatherill went on to say that things had moved on a bit since then, and that what was important was that
“Parliamentarians now have a sacred duty honestly to explain the pros and cons of our developing relationship with the European Union. Only then can the people make an informed choice.”
I congratulate my hon. Friend on putting forward this magnificent Bill and I thank him for giving me the privilege of being one of his co-sponsors. In the debate of 2008 and in the research by Ian Milne, was any prediction made that in 2016 we would be faced with a £62 billion annual deficit of trade with the European Union?
The short answer is no. I do not think it was ever envisaged that the European Union would be such a manifest failure as an economic entity and would be unable to maintain its share of world trade. We know that since 1972, the EU share of world trade has declined significantly. We know, too, that the EU has not been growing in economic terms in the way people thought would be possible—even to the extent that we now face a situation in which half the new jobs being created in Europe are being created in the United Kingdom, while the other half are being created in the 27 other countries of the EU. When we first joined, the share of trade that the EU had with the rest of the world was significantly higher than it is now, despite the fact that at that time it had many fewer member countries. As the EU has got larger in numbers, its influence over trade in the rest of the world has declined. I do not think that any of that was anticipated by Mr Milne in his pamphlet.
Does not the Bill have a serious drawback if it is seeking to educate the public? Clause 6 seeks to set up a commission that will report within 12 months. If we are supporting this Bill, is not the inescapable conclusion that we are, in effect, arguing for the referendum to be put back two years?
My right hon. Friend is a lawyer, so he knows that he is absolutely correct. The Bill was brought forward back in June and we did not know then what would happen. We did not know when we would get a referendum. Now we know that we are going to get a referendum so I will not ask the House to give the Bill a Second Reading today. It has been overtaken by the welcome fact that we are getting our referendum on 23 June. I hope that when that happens, we will be able to have an objective assessment of the costs and benefits of our membership, although I must say that on the basis of recent events, I am rather concerned about whether there will be such an open and objective assessment by the Government. Still, I live in hope.
Is my hon. Friend proposing to withdraw the Bill or is he going to carry on with it?
The answer to my hon. Friend is, as always, that I am going to wait and see what the Minister says in response to my Bill. I am not going to anticipate that. Discussing the Bill provides us with a chance to look at the various issues surrounding information, or lack of it, on the costs and benefits of our membership of the European Union.
Today, I am delighted that Lord Howard—Michael Howard, as he was when he was a Member of this House—has decided to join the leave campaign. I had the privilege of serving with him as a junior Minister for several years in the late 1980s so I know what a great supporter he is of the idea of Europe. What he has shown today by his decision, however, is that he is very much against us continuing to be members of a European Union that is increasingly out of touch with the needs of the people of Europe. That is a really important move, following so soon after the decision by Lord Owen to join the leave campaign.
As a further response to the point raised by my right hon. Friend the Member for East Yorkshire (Sir Greg Knight), let me say that I tabled a parliamentary question to the Chancellor of the Exchequer on 1 June 2015. It said:
“To ask Mr Chancellor of the Exchequer, if he will commission an independent audit of the economic costs and benefits of UK membership of the EU.”
Do you know what answer I got, Madam Deputy Speaker? I shall read it to the House. It said:
“The Government has a clear mandate to improve Britain’s relationship with the rest of the EU, and to reform the EU”—
I emphasise that point—
“so that it creates jobs and increases living standards for all its citizens. The Government will hold an in/out referendum on the UK’s membership of the EU by the end of 2017.”
What was the answer to the question—I hear you saying, Madam Deputy Speaker—about the economic costs and benefits of UK membership? There was no answer. Why was there no answer from the Treasury Minister? Why did the Treasury not want to answer the question? It knew that if it said “no”, it would be ridiculed; and it knew that it did not want such an audit, so it was not prepared to say yes.
Is it not the case that Her Majesty’s Government have always been frightened of an independent objective analysis of the costs and benefits of our membership, which explains why they were so worried about the answer to my hon. Friend’s question? Only today, we have heard the latest spin from Her Majesty’s Government that, were we to leave the European Union, the pound would fall and holidays would be more expensive for those going to Europe. I always thought it was the convention of Her Majesty’s Government, and in particular the Chancellor of the Exchequer, not to comment on the future direction of exchange rates, so does this not demonstrate that we are now in an era of spin because they are frightened of independent objective assessment?
As ever, my hon. Friend has made an important and, indeed, fundamental point. I would just add that it is even odder that the Government should comment on sensitive issues relating to exchange rates at the same time—on the very same day—as saying that they were not prepared to answer questions about the disparity between the number of people from the European Union who registered for national insurance numbers last year and the number of people who are alleged to have come here from the European Union to work. I believe that more than 600,000 asked for national insurance numbers, but the Government say that only about 250,000 came here in that year. When the Government were asked to explain the difference between the two figures, their answer—it is in the papers today, so it must be correct—was that it would be wrong to answer the question, because it might influence the forthcoming referendum. I am sure that the Chancellor, the Prime Minister or whoever it was who said that we would all have to pay more for our holidays did not do so in order to try to influence the outcome of the referendum.
I disagree with my hon. Friend. They said that deliberately to try to mislead people into thinking that their holidays would become more expensive. The truth is that exchange rates go up and down, and are very difficult to predict. However, if the Government are going to start commenting on the future direction of exchange rates, should not they at least do so in a balanced way, and point out that were the pound to decrease in value, that would be extremely good news for hard-pressed British exporters who are seeking to sell more of our products abroad?
Absolutely. That is another side of this very important argument.
I referred extempore to what the Government were reported to have said yesterday about the disparity between the figures, but let me now give the exact figures. A total of 630,000 EU citizens registered for national insurance numbers entitling them to work or claim benefits in Britain last year, yet it is said that there were only 257,000 new EU migrants. Incidentally, 209,000 of those national insurance number registrations came from residents, or citizens, of Romania and Bulgaria.
Jonathan Portes, of the National Institute of Economic and Social Research, sought an explanation for this extraordinary disparity, but was told that the Government were not prepared to give more details because
“it might prejudice the outcome of the EU referendum.”
Well, it depends what the answer was, does it not?
This illustrates the problem that we have with the unequal use of resources and statistics. Having refused to answer the simplest of questions from me last June, the Treasury is now refusing to inquire further into what is, on the face of it, an extraordinary disparity, while at the same time making the scaremongering assertions to which my hon. Friend the Member for Kettering (Mr Hollobone) has referred.
The purpose of my Bill is to introduce some objectivity and independence into the whole process of evaluating the costs and benefits of our membership of the European Union. My right hon. Friend the Member for Chichester (Mr Tyrie), the Chairman of the Treasury Committee, has launched an inquiry into the economic costs and benefits. He is doing a lot of good work, and I look forward to the publication of the report, but, having read much of the oral evidence, I note that the answer given by a great many experts, whether pro or anti-EU, is that it is extremely hard to be sure one way or the other.
During the forthcoming referendum campaign, we might be well advised to note the information that is set out so ably in House of Commons Library briefing paper 06091, which was published in January this year. According to chapter 6,
“There is no definitive study of the economic impact of the UK’s EU membership or the costs and benefits of withdrawal. Framing the aggregate impact in terms of a single number, or even irrefutably demonstrating that the net effects are positive or negative, is a formidably difficult exercise.”
Why is that?
“This is because many of the costs and benefits are subjective or intangible. It is also because a host of assumptions must be made to reach an estimate. If the UK were to leave the EU, assumptions must be made about the terms on which this would be done and how Government would fill the policy vacuum left in areas where the EU currently has competence. If the UK were to remain in the EU, assumptions would need to be made about how policy in the EU would develop.”
That is a very important point. We often hear—and we heard from the Prime Minister this week—words to the effect that there will be no leap in the dark if we decide to stay in the European Union; it will all be as plain as a pikestaff. However, the House of Commons Library briefing clearly states that we do not know how policy in the EU would develop if we chose to remain:
“Estimates of the costs and benefits of EU membership are likely to be highly sensitive to such assumptions.”
If the Government, whose current robust line is that we must at all costs stay in the European Union, start presenting figures and data, how shall we be able to assure ourselves that those figures and data are objective? I think the answer is that we shall not be able to do that, because the figures and data will come from a biased source.
It seems to me that, rather than trying to present independent and objective statistics and data to the British public, Her Majesty’s Government are putting increasing emphasis on spin. For example, the claim that 3 million British jobs depend on our membership of the European Union is trotted out by all those who are campaigning for us to remain in the European Union, although any objective, independent assessment demonstrates that it is a complete myth.
My hon. Friend is absolutely right. That is only one of the figures that have been strongly criticised in evidence to the Treasury Committee. It has now been ridiculed, but can we be sure that it will not be replicated in the Government propaganda leading up to the referendum?
The House of Commons Library briefing states:
“Open Europe (2015) The Consequences, challenges & opportunities facing Britain outside the EU estimated the effect on UK GDP in 2030”—
some 15 years from now—
“of leaving the EU could potentially be in the range from -2.2% to +1.55% of GDP. However, the study argued that a more realistic range was between -0.8% and +0.6% of GDP.”
In other words, there is no significant difference either way. Yet between now and 23 June, I predict the Government will be suggesting that it is all one way and it will be an economic disaster if we have the courage and conviction to take responsibility for our own lives and our own destiny and leave the EU.
The other part of the Library paper I want to mention is a reference to a May 2014 report by Civitas on trade advantages of the EU. It found that the trade benefits of EU membership were exaggerated. Based on a study of UK exports since 1960, Civitas found that UK trade with European nations outside the EU had increased dramatically, while the UK’s trade with other EU members accounted for no more of its trade with leading economies than in 1973. That goes back to a point we were making earlier.
Yes, we were making that point earlier, and when we joined the EU—the Common Market as it then was in 1972—we did not have a £62 billion annual trade deficit with our EU partners. Over the 44 years of our membership, the trade deficit has grown. To put this in simple terms, the EU nations are selling to us £62 billion-worth every year more than we are selling to them. So our trade with our EU partners has deteriorated over the past 44 years, not improved.
My hon. Friend is absolutely right and the figures he quotes are almost identical to those in this House of Commons Library briefing paper, which quotes figures from the Office for National Statistics balance of payments statistical bulletin. They show exactly the effect my hon. Friend describes. I wonder how much of that information we will see in the Government’s leaflets in the forthcoming campaign.
Can my hon. Friend also confirm that, as a result of our EU membership, we have lost Britain’s seat at the World Trade Organisation? That means that we have lost our sovereign ability to negotiate friendly free trade arrangements with other countries around the world. So, for example, a country as small as Iceland has negotiated a friendly free trade treaty with an economic superpower like China, yet we are forbidden to do exactly the same thing because of our membership of the EU.
My hon. Friend again makes a telling point. I was going to come to it later, but as he has raised it now, let us put on the record, for example, the concern many of our constituents have about TTIP, the Transatlantic Trade and Investment Partnership being negotiated between the EU and the United States. A legal opinion has been circulated to a number of us over the last 24 hours saying if TTIP goes ahead as proposed, it would potentially be disastrous for our national health service. I do not know whether that is correct or not, but there is an opinion saying that that could be the impact. Why are we relying on the EU to negotiate a trade deal with the US? Why do not we, as the fifth largest economy in the world—English-speaking, committed to free trade—make our own trade deal with the US? The short answer is that we are not allowed to do so until we leave the EU.
I wholeheartedly agree with what my hon. Friend is saying. On TTIP, does he agree that the following is an interesting factor in any cost-benefit analysis? We are always told that if we want a free trade agreement with the EU, we will have to accept free movement of people. Does he think America will accept the free movement of people—of all EU citizens—into the United States when it signs its free trade agreement with the EU?
As my hon. Friend the Member for Gainsborough (Sir Edward Leigh) suggests, North America has its own North American Free Trade Agreement, which brings Canada, Mexico and the United States together. However, as Donald Trump and many others would bear witness, under that there is no free movement of people between Mexico and the US or between Canada and US, but there is still a free trade agreement.
My hon. Friend makes an extremely good point about TTIP. He will have received letters and emails from constituents, as have I, expressing very real concern that the 28 additional words we need in the agreement to protect our NHS are not in the draft TTIP terms. Just to make it crystal clear, were we to leave the EU, we could negotiate such an agreement with the US and include in the agreement, under our new sovereign capabilities, those crucial 28 words that all the TTIP campaigners would like to see.
That is interesting. I was at a meeting the week before last with a group of people from the US Senate and Congress who were interested in the subject of TTIP. I was invited to take the chair of this gathering, and one of the first questions I asked was how many of these people thought TTIP was going to be resolved by the end of this year. The answer was zero.
What we were told when the Prime Minister launched this initiative in 2013 was that we would get this sorted out before the end of the Obama presidency; it is absolutely clear we are not going to get it sorted out before then. So I then asked the same gathering of people how many of them thought it would be sorted out by the end of next year. Again, nobody thought that. Basically, the message coming from these people who are very well connected on Capitol Hill was that TTIP is very much in the long grass as far as the US is concerned because of the difficulties being put in the negotiations by the European Union, which is trying to maintain the protectionism that is still espoused by so many members of the EU and that is not compatible with what the US wants. So in answer to my hon. Friend’s question about how long a resolution would take, my view is that we would get a bilateral trade agreement between the UK and the US one heck of a sight quicker than we are ever going to get a trade deal between the EU and the US.
To extend that principle into a future where Britain is outside the EU, given that we are already 100% compliant with all the EU obligations, should it not be possible to negotiate a free trade agreement between Britain and the EU in double-quick time after our EU exit?
Absolutely. The fall-back position if we did not negotiate such a deal would be that we would have a continuing relationship on WTO rules, which are signed up to by the EU. So any suggestion that there would be a complete curtailment of trade between us and the EU when we leave is absurd. Why would the EU not want to sign up very quickly with the UK? They are selling us more than we are selling them, so it must be in their interests to try to maintain those connections. Tellingly, and disappointingly, in addressing this point in Monday’s statement the Prime Minister did not talk in absolute terms. Instead of facing up to the fact that we sell less to the European Union than it sells to us, he started talking in percentage terms. That is completely misleading because we are but one of 28 countries in the EU, so if we start talking about the percentage of EU exports that come to us compared with the percentage of our exports that go to the EU, we will present a distorted picture. It was very sad that the Prime Minister chose not to use the absolute figures and instead resorted to such misleading percentages.
We are also told that if we had a free trade agreement with the EU, we would still have to have all our laws decided by the European Union. When my hon. Friend had his discussions with his American friends, did he become aware of whether the Americans were going to accept their law being changed for them by the European Union, by qualified majority voting, when they entered into their free trade agreement with it?
We did not get down to that sort of detail, because the feeling was that we are a long way apart on this. There is also a feeling that there is a lot more commonality between the British people and the people of the United States; we share a common language, the common law and a common heritage, and that is very different from the approach of so many other EU countries. On the basis that we have this special relationship with the US, we would be able to prosper and develop our trade together through bilateral open trading arrangements far more effectively than is being done at the moment with the EU. That is an important factor to take into account when assessing the costs and benefits of membership.
I am conscious of the fact that a number of other people wish to participate in this debate, so I will not say much more now. I merely wish to point out that the Bill proposes terms of reference, whereby the independent commission that would be set up to examine the current costs and benefits would be
“taking into account the impact of membership on the UK’s—
(a) economy (including consideration of public expenditure and receipts resulting directly from membership”).
Of course, we know that in round figures we are paying in about £10 billion more than we get back every year. Interestingly, in yesterday’s statement on the EU solidarity fund and flooding the Minister made much of the fact that we would be applying to get some money back from the fund, but he did not think this would amount to anything more, at best, than about the equivalent of one day’s net contributions to the EU. He admitted that even getting back one day’s net contribution would involve an enormous amount of bureaucracy on both sides, which typifies the costs at the moment and how unfair it is that our people should be paying £10 billion net a year to the EU.
My hon. Friend made a prediction earlier. Will he comment on my prediction that if this country is misguided enough to vote to remain in the EU, within a few months our contribution to the EU will go up, because it is totally incapable of keeping within existing programmes and budgets?
I agree absolutely with my right hon. Friend, who brings an enormous amount of experience, not only as a former trade Minister, but as a former Deputy Chief Whip. I am delighted that he is playing a key part in the leave campaign. What is happening in Europe to deal with the migration crisis is breath-taking in its incompetence. We are talking about a major cost; this crisis will potentially cost the EU a fortune. Who will have to contribute to those costs if we remain in the EU? It is none other than the British taxpayer. I think my right hon. Friend’s prediction is right, but I hope we will never see whether it comes to pass because by then we will have left the EU.
Ten billion pounds sounds like an enormous figure, and it is, but people often struggle to deal with figures when they get so big, so let me place it into a local context. In Kettering, we are struggling to get £30 million for an improvement to Kettering general hospital and the development of an urgent care hub on the site there. That sum is less than one day’s subscription to the EU but we are having a really difficult job getting even that small a sum out of the Treasury. Imagine what we could do with £10 billion to spend on important public services across our country, providing hospitals, schools, doctors, police officers and nurses.
I am not commenting on that, but we will have plenty of £30,000 sums to spend when we leave.
Clause 5(b) talks about taking into account our
“competitiveness and ability to trade freely (including consideration of the UK’s restricted ability to negotiate trade agreements and to engage in free trade with other countries)”.
I have already covered that. Subsection (c) then deals with the issue of
“national security and defence (including the UK’s ability to decide which non-nationals should be allowed to reside in the UK)”.
That is a very big subject and I suspect some of my colleagues will wish to go into it in a bit more detail. At the moment, we do not have any control over non-nationals from the EU coming into our country. The figures published yesterday show a massive increase in net migration—it was again more than 300,000 in the year to September 2015.
We all supported the Prime Minister and the Conservative party manifesto on the promise in 2010, in a pledge repeated during the last election campaign, that we would bring net migration in the UK down to the tens of thousands. I looked today in the press to see what the Prime Minister’s response was to the latest net migration figures, which show that more than 300,000 people came in that year period, 257,000 of whom came from the EU. If we were going to get the figure down to the tens of thousands and even if we prevented anybody from coming to this country from anywhere other than the EU, we would still have to reduce the number of people coming from the EU by about two thirds—from 257,000 to just less than 100,000. With the most heroic assumptions, how is it possible to say that the very modest measures contained in the package that came back from the negotiations in Brussels could ever deliver a reduction of 157,000 EU migrants a year?
Is this not the crucial point for people who voted Conservative at the last election on the basis of that manifesto pledge to cut immigration to tens of thousands? The truth is that that objective will simply be unattainable while we remain a member of the EU, so the only way to solve this is to vote to leave on 23 June.
Exactly. If we ask whether the Government have any idea how we could achieve that without leaving, I am sure we will be told that we cannot have any more information because it might prejudice the outcome of the referendum.
It is not just the numbers; there is also an associated cost. I refer to the document called “The best of both worlds”. There is a problem with the title of that document. I believe in one world, and the people who are defending our position in the European Union seem to be under the illusion that there is more than one world. There is just one world, and we can be the masters of our own destiny in that world if we are released from being in the European Union.
My hon. Friend makes the point in his own inimitable way. Perhaps that should be the subject of a parliamentary question in due course.
The document entitled “The best of both worlds” refers in paragraph 2.103 to the costs of the migration coming in. It has been pretty difficult to get hold of this information, but it has at last been wrung out of the Government. The document states:
“On average, families with a recent EEA migrant claim almost £6,000 per year in tax credits”.
If a million EU migrants have come in during the past four or five years, as we know from the latest figures, and over 40% of those are claiming tax credits, the cost of that is 400,000 multiplied by £6,000 per year. That is a lot of money, and that is just the cost of in-work benefits to non-UK citizens from the European Union. That creates pressure on our public services, such as health and schools. I saw in the Evening Standard last night how many people will not be able to get their children into the school of their choice in London in the coming year because of the increased population.
All the issues have a bearing on the question whether it is in our best interests to leave the European Union. Having done research such as I have, I am in no doubt that it would be in the best interests of the United Kingdom to leave the European Union. The purpose of this Bill is to ensure that the Government put forward objective figures in relation to the issue, rather than figures that are based on prejudice.
It is a pleasure to follow my hon. Friend the Member for Christchurch (Mr Chope) who, as ever, has put his case persuasively. I did not need much persuasion, as it happens, but if I had, he would certainly have persuaded me of the case that he made.
I shall focus on a few aspects of the Bill. One part that needs stressing is the independence that the Bill asks for any cost-benefit analysis. My fear is that over the next few months we will hear the Government say—we may even hear it from the Minister today—that they will do a cost-benefit analysis of our membership of the European Union, and, as we have been calling for that, we should be placated by that assurance. But we are not asking just for the Government’s cost-benefit analysis of our membership of the European Union. We already know the Government’s view of that, and I have no confidence at all in the Government producing an objective cost-benefit analysis. They will resort to all kinds of dodgy figures, spin, presumptions and so on, and we will no doubt end up being told that the benefits of being in the EU are enormous and the costs are negligible, and vice versa were we to leave.
I have no doubt that that is what the Government would do. We have only just started the referendum campaign and already some rather strange arguments have started to develop. I will come on to some of those shortly. The key part of the Bill, which I hope the Minister will take away with him for when the Government pull their cost-benefit analysis out of the hat, relates to the appointment of the commission that carries out the analysis. The Bill calls for a balance between those members of the commission in favour of remaining and those in favour of leaving the EU, with an equal number on either side. The chairman should be broadly neutral, and no member should be or have been a Member of the European Parliament or an employee of the European Commission, whose pension would therefore be dependent on our membership of the European Union.
Those are not unreasonable proposals. Most people would say that that is a reasonable basis for carrying out a cost-benefit analysis. If the Minister thinks that saying that the Government intend to conduct a cost-benefit analysis will satisfy us, it will not. We want some guarantee of the independence of the people involved, and only at that point will I be satisfied.
I was intrigued by what my hon. Friend the Member for Christchurch said about the questions that he has posed to Treasury Ministers, and not getting an answer to the question, but a different answer altogether. Funnily enough, I asked the Chancellor a question in the Chamber a while ago. I thought it was quite a patsy question. As far as I could see, I was giving him a great opportunity to sell the benefits. I asked him in June last year to outline what exactly we get from our £19 billion membership fee to the European Union. Here was a great opportunity for the Chancellor to stand at the Dispatch Box and reel off a huge number of benefits that we get for our £19 billion membership fee. I could not have asked a more helpful question.
Does my hon. Friend agree that £19 billion is an inaccurate figure? It has recently been reported in the press that our membership of the EU costs up to £120 billion. The point of this debate is to try to find out exactly what our direct membership fees are to the EU and what benefits we get back from it.
My hon. Friend is right. I have taken the figure from the Office for Budget Responsibility, which publishes the figures in the Treasury Red Book. It states that our gross contribution is around £19 billion a year. The EU generously gives us back some of that money—a very small amount—as a rebate. That has been a diminishing amount since the Labour Government gave up much of our rebate for nothing in years gone by, but the gross figure that we hand over each year is £19 billion.
In answer to my question, the Chancellor said:
“I certainly commend my hon. Friend for his consistency. I remember that in his maiden speech he made the case for Britain leaving the European Union, and he will of course have his opportunity in the referendum. I would say that this is precisely the judgment that the British people and this Parliament have to make: what are the economic benefits of our European Union membership, such as the single market, and what would be the alternative? That will be part of the lively debate, and as I say, the Treasury will be fully involved in that debate.”—[Official Report, 16 June 2015; Vol. 597, c. 165.]
As far as I could see—people can make their own interpretation of the Chancellor’s reply—he could not give one single example of what we got back for our £19 billion membership fee. He knows, presumably, as he is a canny kind of fellow, that he could not say that we get free trade for our £19 billion a year, because he presumably knows, just as the rest of us know, for the reasons set out by my hon. Friend the Member for Christchurch, that given that we have a £62 billion trade deficit with the EU, we would be able to trade freely with the EU if we were to leave.
I suspect that, in the short term, not a fat lot would happen to the £62 billion trade deficit with the EU, as we would pretty much carry on in the same way. We would keep trading with it, and it would keep trading with us. I tried to check that out. I asked the Prime Minister, after one of his European Council meetings, whether he had had any discussions with Angela Merkel that would indicate that, if we were to leave the EU, she would want her country to stop selling BMWs, Mercedes, Volkswagens and Audis free of tariff to the UK. The Prime Minister did not say anything at all about that, so I presumed that he had not heard anything. Given his determination that we should stay in the EU, I am sure that, if he had had any inkling at all that the Germans were not going to continue selling us their cars free of tariff, he would have been more than happy to put it on the public record. As people can see from his answer, it appears that he had had no such indication from the German Government that they would stop trading freely with us.
My hon. Friend is absolutely right. At the end of the day, what this boils down to is people’s confidence in their negotiating abilities. I used to work for Asda, and I fear that, if some of my hon. Friends had been our buyers and had used their negotiating skills, we would have gone bust. In effect, what many of my colleagues are saying—and what Labour Members are saying—is that we have a £62 billion trade deficit, but we do not think that we can negotiate a free trade agreement without handing over a huge membership fee every single year. That is the easiest negotiation known to mankind. If they cannot negotiate that deal, what on earth can these people negotiate? If the Prime Minister were to claim that he could not negotiate a free trade deal with the EU based on that trade deficit every year—I am sure that he will not say that because he claims to be a good negotiator—he would not be fit to lead this country into those negotiations. That is what I would say to anybody who aspires to such a role.
Is not my hon. Friend’s point exactly right and enhanced by the fact that we already by definition meet 100% of the EU’s requirements for a free trade deal because we are part of the single market? Once we are outside the European Union, it should be relatively straightforward, given that we are the fifth largest economy in the world, to come up with terms.
My hon. Friend is absolutely right. The point he makes is self-evident, and I am sure that it will be self-evident to the British public.
When we look at the terms of reference of our cost-benefit analysis, the areas that the Bill asks the Government to consider are the economy, trade, national security, further regulation, and sovereignty.
It is not a question of “if”—we are the fifth largest economy in the world. That is a matter not of hypothesis or aspiration, but of fact. We are the fifth largest economy in the world, and therefore, clearly, we are in a very good position to negotiate trade deals. I am not sure that there is any country in the world that would not want to have a trade deal with the fifth largest economy in the world.
Interestingly, the people who are so anxious for us to stay in make what they think is the killer point that 44% of our exports go to the European Union and that only a very tiny proportion goes to the emerging economies of the BRIC—Brazil, Russia, India and China—nations. We should not boast about that; we should be deeply concerned. The fact is that we have got ourselves shackled to a declining part of the world’s economy. That is the problem for the remain campaigners. According to figures from the House of Commons Library, when we joined the European Union, the countries that make up the EU now account for a third of the world economy. By 2020, that will be 20%, by 2030 17% and by 2050 13%. We should bear in mind, too, that we are 4% of the world economy. If we were to leave the European Union we would take off the 4% that we represent, which would mean that the EU would be 9% of the world’s economy. Some people think that it is great that so much of our trade is dependent on being shackled to such a group, but I think that is something that we should be deeply concerned about. It is a matter of great shame that we have such a low proportion of trade with the growing parts of the world economy, which is why it is so important that we leave the European Union. We need to leave this declining market and start building up our trade with all the growing parts of the world economy. That is what we should be doing.
The world’s largest economies in order are: China, America, Japan, Germany and Britain. Were we to leave the European Union, there is every chance that we could overtake Germany and move into fourth place. We could negotiate on our own terms, with our seat back at the World Trade Organisation, friendly free trade agreements with growing economies such as China and India, and all those old Commonwealth countries that we effectively abandoned in 1972.
My hon. Friend is absolutely right about that. We are always told that the EU is the biggest single market in the world. What is not said is that it would not be if we were to leave. It is only the biggest single market in the world largely because we are a member of it. If we were to leave it, it certainly would not be. Nobody ever mentions that particular point.
Interestingly, a briefing from the House of Commons Library said that if we were to leave the European Union, the UK would be the EU’s single biggest export market—bigger than China, America and anywhere else in the world. Why on earth would the EU not want to do a free trade deal with its single biggest export market? Of course it would. Anybody who tries to suggest otherwise is either completely crackers or is deliberately misleading people. It is palpably clear that that would not be the case.
The case in terms of the economy and trade is very clear. Competitiveness is one of the key points. My hon. Friend the Member for Christchurch touched on that when he said that staying in the EU was a leap into the dark. Of course, it is just that. We pool our sovereignty in many areas because we sign lots of treaties, but when we sign treaties with other countries, that treaty agreement tends to stay the same; the nature of it does not change in any shape or form unless we agree to it. That is how treaties tend to work. But our membership of the European Union is based on a treaty that does not work like that. What happens is that, every so often, the European Commission, which is completely unelected and unaccountable to anybody, proposes new legislation. We think that it is completely ridiculous. In any other normal kind of treaty relationship, we would not be susceptible to it unless we agreed to it. With the EU, we are being asked to sign up to changes on a monthly basis based on qualified majority voting where we get outvoted in the Council of Ministers. If we vote to remain in the EU, we are not signing up to the status quo; the European Union does not do the status quo. The EU is always trying to introduce new regulations, new burdens on business, and new protectionist measures to protect its failing businesses, to protect French farmers and all the rest of it. Effectively, we are signing up to something about which we know little. We have no idea where it ends and what measures will be introduced as a result of it.
As far as I am aware—I have been out to Brussels and done battle with the bureaucrats there—the problems are to do with not what Europe gives to us, but how ineffectively it is scrutinised when it comes here. A lot of the problems that we have are lost in translation. For example, there was a proposition to stop women wearing high heels in hairdressing salons, and that legislative measure spread to town halls, and perhaps even to shiny floors here in Parliament. When we drilled down into the detail, however, it was a mis-translation that eventually got the whole thing thrown out. Does my hon. Friend agree that more scrutiny should be given to European issues in Parliament and in Committees, and that more Committees should be set up should we vote to stay in the EU at the referendum?
There is not much point in spending hours and hours scrutinising legislation that we have no ability to amend or change in any way. It does not matter how much time we spend scrutinising it; we are still susceptible to it, so I cannot see that there is a great deal of point in doing that. If my hon. Friend is right and a lot of the problems in this country are created by bad translations of European legislation, that is another good reason why we should leave the European Union, so that all our laws can be decided in this place and written in English so that we understand them. I am pleased that he has given us yet another reason—one I had not thought of—for leaving the European Union. His intervention is welcome.
An extension of that argument is the imposition of VAT on key products in this country, and a lot of fuss has been made about the fact that we cannot cancel the 5% VAT on domestic fuel, which has a big impact on low-income households. Recently, a very big fuss was made about VAT on women’s sanitary products. The British Parliament and Government are unable to remove VAT on those items without the consent of the European Union. If people want such situations to change, surely the message is clear: vote to leave on 23 June.
My hon. Friend is right, and we have a ridiculous situation. We are supposed to be a proud nation, and in that debate on sanitary products, everybody in the House agreed that it was inappropriate for VAT be levied on them. If we were a properly sovereign nation outside the EU, that could be mended in a flash in the forthcoming Budget. In mid-March, the Chancellor could announce that VAT on sanitary products will be ended, and that would be the end of the situation. Instead we are left as a proud nation that resorts to a Treasury Minister saying, “I will commit to go and ask the EU if it will give us permission to do something. It will be hard. It might not want us to do this, so I cannot promise anything, but I will do my best and have a word.” What a situation we are in when we in this country are unable to make such decisions for ourselves.
My constituency suffered terribly from the floods over Christmas, and one of the worst affected places was the Bradford rowing club, which has to spend tens of thousands of pounds repairing the damage. It has to pay VAT on those repairs. I wrote to the Chancellor of the Exchequer and said that given the extenuating circumstances, it would be a decent gesture for him to waive VAT on the repairs caused by that flooding. What was the answer? That the Chancellor’s hands are tied and he does not have the ability to waive VAT because that matter is decided by the European Union. Therefore, 20% will be added to the bill of my rowing club for the repairs from the flooding, and we cannot make decisions on VAT ourselves because they are decided for us by the European Union. It is funny how we never hear that from the remain campaigners. Perhaps my hon. Friend the Member for Morecambe and Lunesdale (David Morris) will defend that situation.
I will defend that because VAT is the sole domain of HMRC and not the Chancellor of the Exchequer—I know because I had a similar problem in my constituency. Perhaps my hon. Friend will consider the point about sanitary products. I agree that we should not be paying VAT on them, but because of our special relationship in Europe, my hon. Friend the Member for Colchester (Will Quince)—sadly, he is not in his place today—found a way around that VAT going to Europe, so that it now goes to charities. Does he agree that that was a good move?
That had nothing to do with a special status, and neither does it benefit the consumer who still has to pay VAT on the sanitary products that they buy. Where the money ends up is of no benefit to the consumer whatsoever; it just means that it does not benefit the Treasury directly.
My hon. Friend makes his point well, as always, but we should not be in this situation. Such decisions should be taken in this House for the benefit of our constituents, but they are not.
We are signing up to a treaty, and the EU is saying to us, “You sign the treaty, and if we want to change things against your wishes, we have the freedom to do so through qualified majority voting.” If I said to you, Madam Deputy Speaker, “Let’s sign a deal on something, but by the way, I can change the terms at any time, and there is nothing you can do to stop me”, I do not think you would sign up to it—nobody would sign up to such a deal, but that is in effect what we are being asked to sign up to in the EU referendum if we vote to remain.
My hon. Friend has not mentioned the part of the deal that states that we will now lose the little influence that we had in the past in relation to the deeper integration of the eurozone. For example, we will not be able to argue that Greece would be better off outside the eurozone, or have any influence on the consequences of a sclerotic eurozone being uncompetitive, and the result that that leads to of more people from the eurozone wanting to work in our country.
My hon. Friend is right. I have already covered economic and trade matters and regulations, and I know that other people want to speak so I shall not go on for too long. National security and immigration are crucial issues that are mentioned in clause 5 of the Bill. National security is a key area, and the remain campaign seems to think that it is one of its trump cards, and that we are more secure and safer from terrorist attacks within the European Union. I would love them to go and tell the people of Paris how much safer they were from terrorist attacks as a result of being in the European Union, but I suspect they would not get particularly far.
Last night in a debate at York University we hit a new low in the tactics of the remain campaign. I was making the point that we cannot stop people coming into the UK from the EU if they have a valid EU passport, and that that applied to everybody, whether law-abiding people or criminals. But would you believe what the remain campaign announced last night? Perhaps the Minister can confirm it. I am on the Justice Committee, but I was not aware of it. It emerged last night during the debate that, apparently, when an EU national comes to the UK, our robust border controls mean that we check who people are. Apparently, when passports are scanned—this was a new one on me—it flags up whether or not a person has criminal convictions in their home nation, which enables us to stop them entering the United Kingdom. If only that were the case. The most generous thing I can say about that claim is that it is an absolutely blatant lie, because no system exists across the European Union to scan passports, trigger a huge list of criminal convictions and enable us to stop people coming into the country. That claim is simply untrue—I cannot be any clearer than that. The Minister may want to confirm or deny that when he comments, but let us please have an honest debate about these things. That system does not exist.
I invite people to look at the transcript of what I said—I am not sure I did say that terrorism came only from other parts of the European Union and that it could not be home-grown. Of course it can be—it is both. We cannot stop British people from living in Britain, and I do not think that anybody has ever proposed that we should, but the fact that we have home-grown terrorists is surely no reason to let in people from other countries who may want to cause us harm.
If people think that this robust system is in place, perhaps they would like to explain why so many crimes in the UK each year are committed by EU nationals and why the UK prison population of EU nationals has gone through the roof since we had free movement of people. The reason why it has gone through the roof since we had free movement of people is that a lot of those people have taken advantage of that arrangement to come here to commit their crimes. That is the fact of the matter; it may be an inconvenient fact, but nobody can deny that that is what has happened.
Every quarter, the Ministry of Justice publishes the prison population figures broken down by nationality. I invite anybody to look back over a few years at the figures for each nationality, because they will see a huge increase in the number of EU nationals in our prisons. That is because these people are coming to the UK under the free movement of people to commit crimes. As a result, we are creating lots of unnecessary victims of crime in the UK. People who want to remain in the EU should be honest about the fact that that is one of the downsides. They should not pretend that there is some miracle passport control system that stops these people coming into the UK, which, as I say, is a blatant lie.
I wish there were a passport control system that could vet these people coming into the country, but does my hon. Friend not agree that the Prime Minister, in his renegotiations, has secured easier ways to deport these criminals and, may I add, to stop them coming into the country?
No, I do not accept that at all. The Prime Minister has done absolutely nothing to stop these people coming into the UK—literally nothing. There is nothing in place to stop them; there are a few people on a watch list whom we can stop coming into the UK, but they would be on a watch list whether we were in the EU or outside it. We need to develop a watch list for people from around the world, because this is not an EU issue. We can already stop those people coming to the UK, and we would always be able to stop them coming to the UK, if they are on a terrorist watch list. I am talking about the thousands and thousands of criminals who are unknown to the British authorities, who come through every week on an EU passport to commit their crimes. When I was out with West Yorkshire police a few years ago—this might seem fanciful, and it seemed fanciful to me when I first heard it—they told me they had a problem with people getting a short-haul flight from other EU countries to Leeds Bradford airport, going out into Leeds city centre and committing high-value crimes and robberies, and then being back on the plane out to their country of origin before the police have even finished investigating the crime. I had not even thought that that type of thing could happen, but West Yorkshire police told me that that was a serious concern for them.
Of course, it is easy for people do these things while we are in the EU—there is nothing to prevent them from coming here. They are known to their own national law enforcement agencies, so they are at risk of being apprehended in their own countries. It is much easier for them to commit crimes in the UK, where they are not known to anybody—they can come in and go out in a flash. We have to be aware that these are problems.
Yes, indeed. My hon. Friend is absolutely right. The problem is that there are much richer pickings in the UK than in some of the countries these people come from.
The other aspect of this is that, even if these people run the risk of being caught, they would, I suspect, much prefer to spend their time in a British prison than in a prison in their home nation. So this is a win-win, given their chances of being caught and what happens when they are caught. I am afraid that that does not quite work the same in reverse.
When I visited Denmark with a Select Committee in the last Parliament, we heard directly from the Danish about the problem they have with eastern Europeans coming into Denmark and committing crimes. If those people are convicted of those crimes, they will earn more in prison than they would have been able to earn in their home country, so there is no deterrent.
That is another interesting point I had not factored in. I will bow to my hon. Friend’s superior knowledge. I have visited prisons in Denmark, and that is not something I was aware of, so I am grateful to him for putting that point on the record.
Suggesting that our national security is enhanced by being in the EU, when we let thousands of EU criminals in every year, is fanciful in the extreme. Being susceptible to crime from such individuals is doing nothing at all for the security of my constituents.
May I give my hon. Friend an example of where our security is much worse as a result of being in the European Union? People from outside who come into the European Union at the moment often do not give their fingerprints, as they should. I suggested that we take DNA samples from people coming from outside, but I was told that that is unlawful under the Eurodac regulations, so we cannot take that precaution.
My hon. Friend is absolutely right about that. I very much agree that people wanting to come and live in the EU should have to give their fingerprints and DNA, so that if they do commit a crime, it is easy to track them down, convict them and deport them. As he says, however, that is not what happens. The best the Government have come up with so far is that if somebody comes into the UK and commits a crime, the police can go through some burdensome procedure of asking other EU countries whether they have a fingerprint match for a crime that has been committed there. If those countries ever manage to get back to us, which they probably do not half the time, Lord knows what may happen on the back of that. However, that is not the same as stopping people who are criminals coming into the UK.
I am listening intently to my hon. Friend’s eloquent arguments about letting people into the country. Will he clarify whether these are people coming into the EU from nations outside the EU? As I understand it, the security systems between the EU bloc and Great Britain are seamless and can interface with, say, the databases of the French and the German authorities, but where people are coming into the EU, we have to get the co-operation of the country they are coming from. If we came out of the EU, would we have to do the same procedure in reverse?
I am not entirely sure what my hon. Friend is driving at. At the moment, if somebody comes to the UK from outside the EU, we do not have to let them in, whereas if they are an EU citizen, we pretty much do have to let them in. It does not matter how suspicious we are of their motives—that is irrelevant. I want the more robust immigration policy that we are allowed for non-EU nationals to apply to EU nationals too. Nobody is saying that we do not want anybody to come into the UK from the EU, but I would rather we had some choice as to who we allow in. It is a great privilege to come into the UK. We should make sure that it is indeed a great privilege and that we are not just letting any old person into the country, which is the situation at the moment.
On sovereignty, it cannot be right that people making so many of our laws are unelected and completely unaccountable to anybody. The remain campaigners say, “Well, of course we have a European Parliament to scrutinise all these laws.” First, Members of the European Parliament who represent the UK are a tiny proportion of the total, so even if every single UK MEP voted against something, there is no guarantee that it would make any difference whatsoever. Secondly, if, in this country, the Government were permanently in office and the only people elected were the MPs scrutinising the decisions they were making, that would be a bizarre situation and there would be uproar. Yet the justification for having the European Commission, unelected and unaccountable, initiating all the legislation, which is the role of Governments in most national Parliaments, is that MEPs are elected. It is unbelievable that anybody can justify that kind of democratic situation. When we sign treaties with other countries, that is the end of it—the position does not get changed every five minutes by qualified majority voting, with things being imposed on us against our wishes. That is not how treaties work, but it is how our relationship with the European Union works.
We are told that we have a lot of influence in the EU. That argument was completely demolished by my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) in his contribution to the Prime Minister’s statement on Monday. He pointed out that a freedom of information request showed that over the past two decades there had been a definitive vote in the European Council 72 times and that we had been outvoted 72 times. So on Monday the idea that we are wielding this huge influence in the European Union was clearly demolished. It was shown to be a complete load of old codswallop. It is an illusion of influence. We do not have any influence; we are having discussions around a table and being outvoted at every single turn, as Ministers who attend these things know to their cost.
We are told that the US wants us to stay in the EU and that that is a reason why we should. I do not doubt that it is in the United States’ best interests that we stay in the European Union, because we add a bit of common sense to it and it does not want the French, who are very anti-American, having even more power. If it is so important for the Americans that we stay in the European Union, perhaps they will pay our £18 billion membership fee each year for us. I look forward to President Obama making that offer when he comes to campaign in the referendum. I am sure that amount would be a drop in the ocean for the United States.
Let me bring to my hon. Friend’s attention the fact that the person representing the United States Government who has called for us to stay is John Kerry, a former senator, who in the 1980s showed himself to be no friend of the United Kingdom but a sympathiser with the IRA when he held up a treaty allowing for the deportation of IRA activists from the United States to the United Kingdom, saying that the justice system in Northern Ireland did not work effectively. He is no friend of Britain and has been in the past a terrorist sympathiser.
I am very grateful to my hon. Friend for bringing that to the House’s attention. With friends like that in the United States, I suspect we do not need many enemies.
I am prepared to accept that it may be in the best interests of the United States that we stay in the European Union. I am not going to question that for one minute, and I am sure that if I was an American I would probably be arguing the same. However, we should be making decisions that are in the best interests of the United Kingdom, not of the United States, which is big enough and bad enough to look after its own interests.
I look forward to a truly independent cost-benefit analysis that takes into account the points that my hon. Friend the Member for Christchurch has made and some of the points that I have made. Any cost-benefit analysis that ignores those points that have been raised today is not worth the paper it is written on. I say to the Minister that, if anybody in the Government is working on some bogus cost-benefit analysis that they think is going to work in hoodwinking the British public, I hope he will insist that it takes into account the points we have raised today.
Crucially, the membership of any committee that puts together a cost-benefit analysis must correspond to that insisted upon by this Bill, which calls for a balance of people who are in favour of and people who are against the UK’s membership, a neutral chairman, and for none of them to be a current or past Member of the European Parliament or the European Commission. Only if those criteria are met will we have a truly independent and worthwhile cost-benefit analysis. However, given the Government’s reluctance over many years to publish such a cost-benefit analysis, I am afraid that any decision to rush one through now will be treated with a great deal of cynicism and scepticism, not just by me, but by many people across the House and, more importantly, by the British public.
I pay tribute to my hon. Friend the Member for Christchurch (Mr Chope) for promoting the Bill. This is an interesting debate. I am not sure that anybody could rationally oppose the idea of an independent cost-benefit analysis run by independent people. If somebody, including the Minister, wishes to intervene on me and deny the rational basis of that argument, I would be interested to hear what they had to say.
We had a debate about Europe yesterday. I apologise, Madam Deputy Speaker, because this is the third time this week I have wearied the House with my views: I spoke yesterday, I questioned the Prime Minister on Monday and I am also speaking today. However, this is such an important issue and, frankly, it is our job to be here, even on a Friday morning, to hold the Government to account. I make no apology for that.
You were present for some of yesterday’s debate, Madam Deputy Speaker, but I recommend that you read it in its entirety in Hansard, because some very interesting arguments were made. I knew that my hon. Friend was going to promote this Bill today, so I asked the Foreign Secretary directly why we could not have an independent cost-benefit analysis of our membership of the EU so that we could decide whether we should stay. He said that that would not be possible because there were so many uncertainties involved in what leaving the EU would amount to. That is an interesting point of view, but it has not stopped many groups—I will refer to them in a moment—feeling that it is possible to have, or at least possible to make a decent fist of having, an independent analysis of what the decision either to remain in or to leave the EU might mean.
It is extraordinary that, while the Government tell us, quite rightly, that this is the most important decision we will take in our lifetime, constituents are already writing to me, asking, “Please can we have all the arguments laid out?” Most people in this House know their views, but millions of people in the country want an informed debate and would welcome some independent analysis of what this most important decision would mean. Apparently, unless there is going to be an announcement today—I doubt that that is going to happen—we are not going to have an independent analysis.
The question we need to direct to the Minister, therefore, is whether the Government are going to produce their own analysis. He and the Prime Minister are completely honourable people—they would never, ever wish to deceive the British public—but they are arguing for a certain point of view. Therefore, civil servants produce documents that argue a certain case. As the Minister has indicated, the Government’s viewpoint is absolutely clear: under its rules, the civil service works according to Government policy. Government policy is that we remain in the EU, so civil servants will defend that policy and produce briefing papers, analysis and all the rest in terms of that policy. Of course, civil servants would not consciously lie or deceive in any way, but we want to know from the Minister exactly what analysis the Government intend to produce over the next four months, what form it will take and what will be the nature of its independence.
The question that I put to the Foreign Secretary was this. I said that during the years when we were in opposition, we accused Gordon Brown, when he was Chancellor of the Exchequer, of making assumptions before the Budget that were influenced—let us put it as gently as we can—by the direction in which he wanted to go. That is why we created the Office for Budget Responsibility, which is one of our foremost achievements, apparently. I agree that it is an achievement. The assumptions that lie behind the Budget are now in the hands of a genuinely independent body.
When I was Chair of the Public Accounts Committee during those years of Labour Government, the moment the Chancellor stood up and started his Budget speech, a messenger would deliver to me on the Back Benches a fat envelope containing all the assumptions on which the Budget was based. The trouble was that they were assumptions written by civil servants who were working towards Government policy—the policy of the then Chancellor of the Exchequer, Gordon Brown. That is why we created the Office for Budget Responsibility. The question that I put to the Foreign Secretary, which he did not answer and which I repeat to the Minister, is: if this is the most important decision that we are going to make, why can we not depute the OBR to produce an analysis?
My hon. Friend the Member for Christchurch has suggested a different format. Because this is a private Member’s Bill, it is, as we know, for all sorts of reasons unlikely to become law, but he has at least raised the question. It is now incumbent on the Minister to answer my hon. Friend. I am sorry, but I think that my hon. Friend’s creation is unwieldy, calling as it does for us to find an equal number of people who are in favour of leaving and of remaining. There may be perfectly justifiable arguments for that, but the Government already have independent bodies, such as the OBR and the National Audit Office, which could do the work. The NAO, which is well respected, would perhaps not be expert at dealing with issues of sovereignty, but it could certainly deal with other issues mentioned by my hon. Friend such as “burden of regulation”,
“economy (including consideration of public expenditure and receipts”
and “competitiveness and ability”. The Government already have in their hand a body or bodies that would be capable of producing such an analysis.
It is deeply worrying that Ministers who have decided to campaign to leave the EU are denied any civil service briefing on the matter. They are immediately thrown into purdah this week, and yet Ministers who are campaigning to remain in the EU have the full benefit of the civil service, which can apparently for weeks churn out propaganda. I do not use that word in a derogatory sense; propaganda simply means putting one’s point of view forward. The situation seems to me to be fundamentally unfair. Surely, the British way of doing things, particularly in referendums, is that we are fair.
We had a vote on purdah in the autumn, and my hon. Friend and I got into a bit of trouble for voting in favour of it, but we thought it was important. We thought that once the referendum campaign started, the Government should not be able to use its machine—its civil service—to argue for a point of view, because that does not happen in a general election. Perhaps we will learn from the Minister today when that purdah will actually start. Obviously, the Government are not in purdah at the moment. Civil servants are fully briefing, and the whole machine is churning out papers all the time.
All this is important because the referendum is supposed to bring a degree of closure to this subject, is it not? To do so, it must be seen to be absolutely fair. It is very important that both sides of the arguments are properly aired. Speaking for myself, if the British people decide by 55% to 45%, or whatever the figures are, to remain in the EU—after all the arguments have been properly put, and the no and yes campaigns have spent broadly the same amount of money—I will just have to accept that point of view.
However, this is a very complex area and the whole nature of the Government’s case is that leaving is all too risky. I made this point yesterday, but it is an important one: we should bear in mind that the Government are not approaching the referendum campaign with the sense of a great visionary movement in favour of the EU. The Prime Minister is saying, “Look, I am as great a Eurosceptic as you are, but I’m sorry, it’s all too risky.” When he says it is all too risky, he presumably means the costs of leaving in terms of national security, which is mentioned in the Bill, and particularly the very detailed debate on our competitiveness, the decisions of European Council meetings and the rest of it.
I want to emphasise that I see no rational argument against the Government commissioning a genuinely independent cost-benefit analysis. As I said in an intervention on my hon. Friend the Member for Shipley (Philip Davies), our membership of the EU means paying a subscription of £10 billion a year in order to have a £70 billion a year deficit with the EU. Normally, when someone pays a subscription to a club, they do so to have a benefit: they are prepared to pay the cost because they get something back. Frankly, given that there is a deficit of £70 billion—I agree that it exists now and will almost certainly remain if we leave the EU, because of the strength of German engineering products or French food and drinks products and all the other reasons—that is quite a big subscription to pay for it.
We want an independent study. To go back to yesterday’s debate, the Minister for Europe said in his summing up, “I’ve sat through this debate, and those who want to leave the EU have not given any sense of their vision.” That is quite true, and it is incumbent on us—it could be done as part of such a study—to give the people and the House some sense of where we want to take the nation if we leave the EU. I accept that argument—the Minister for Europe kindly added that he said that “with the exception of my hon. Friend the Member for Gainsborough”—and I tried to give an alternative vision yesterday.
Such alternative visions need to be tested. I just have a point of view—I believe it is reasonable, but other people may say it is a prejudice—but there is no point my standing up in the House of Commons and articulating my alternative vision if there is no independent analysis of it. That is surely what the British people want and demand. I am asking them on 23 June to take the risk of leaving, and they therefore have the right to come back to me to ask such questions.
If we left the EU, I believe it would be quite exciting—I represent a rural area—to reclaim control of the common agricultural policy. In that context, I recommend the speech by my right hon. Friend the Member for North Shropshire (Mr Paterson), the former Secretary of State for Environment, Food and Rural Affairs, to the Oxford farming conference. He made a detailed analysis of what leaving the EU would mean for farming policy. He made the point that although food and agriculture is a huge and massively important industry—it employs more than 3.5 million people and accounts for £85 billion of GNP—agriculture policy is entirely determined by the EU. On that, this House has very little, or virtually no, independence from the EU. He was putting forward his view and arguing that alternative subsidy arrangements could be made. For instance, he argued that we should broadly spend on subsidies what we are spending now, but create a different subsidy system. He argued that we could divert more agricultural subsidies away from lowland farming to hill farmers in difficult farming environments.
I have been trying to wrestle with an understanding of farming policy for the 30 years I have been in this place. It is immensely complex, but again we have had virtually no detailed debate or analysis to inform our farmers on how they should vote. This is desperately important to them. There are hundreds of farmers in my constituency and tens of thousands of farmers throughout the country who want an answer, because they, for better or for worse, depend on the subsidy system.
I will come to the fishing industry in a moment.
Farmers are genuinely worried. I suppose the Government have got quite an easy task. They can just say, “Don’t worry. You don’t like the present system. You’ve been complaining for years that it is regulatory and burdensome, and that for years you were paid by the EU to rip out hedges and now you’re paid to put them back. You have to spend all your time not out on the land but sitting in your office in your farmhouse dealing with farming subsidies. It’s regulatory, burdensome, late and difficult but,” I suppose the Government would argue, “at least you are supported.” There is an implication on the part of the Government that if we were to leave the EU, the subsidies would vanish.
The Vote Leave campaign is absolutely explicit about that. I am absolutely explicit about it and I give this pledge. One should be quite careful what one says on the Floor of the House of Commons, but if we leave the EU the level of subsidy to the farming community will remain exactly what it is now. That is a pledge. I cannot give a pledge on behalf of the Government, but I cannot believe that anybody would resile from that. We have no idea. We have no independent analysis. We have had no real attempt, apart from by a few right hon. and hon. Friends, at detailing how the subsidies would change.
My hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) mentioned fishing, which is even more important. I referred to this subject yesterday. I think I was the only one to mention it. This was the great debate we had on Europe this week with the Foreign Secretary and the shadow Foreign Secretary: we were limited to very short speeches and I had time to say perhaps one sentence about fishing. There was no detailed analysis yesterday of what leaving the EU would mean for our fishing industry, yet it is of absolutely massive and crucial importance.
People forget that in the final days of the negotiations conducted by Mr Heath, way back in 1971, he was worried that the talks were stumbling. In the final days, he handed control of our fishing industry to the European Commission with disastrous results for the port of Grimsby, which is close to my constituency, and for our entire fishing industry. I would argue that if we left the EU, it would be extraordinarily exciting to reclaim control of our fishing fleets and fishing industry, given that we are an island and that we sit surrounded by some of the most productive fishing grounds in the world. Again, there has been virtually no intelligent, thorough and informed debate of how we could manufacture or create an alternative fishing policy.
I would be delighted to visit my hon. Friend’s constituency. Perhaps I could sail there in my boat from the constituency of my hon. Friend the Member for Christchurch, where it is moored. But obviously we are deeply serious about this, because the last 30 years have been a traumatic experience for our fishermen. It is a matter of immense importance. Again, we need an independent audit.
Bearing in mind what my hon. Friend said about Ministers, is there not an issue with the fact that the fishing Minister, who has all this expertise and is keen that we should leave the EU, will not have the support of his civil servants in doing what needs to be done to ensure a strong and independent UK fishing industry after we leave?
Exactly. It is extraordinary, given that we have this great industry and are a proud island race, and that much of our past and present is tied up in our fishing fleets, that the fishing Minister has already been put in purdah by his own civil servants and cannot talk about this subject at all. It beggars belief.
Apparently, the Government are not going to do any independent analysis over the next four months of what leaving the EU would mean for fishing. Presumably, at some stage or another, a Minister will make a claim—perhaps a fairly wild claim—and there will be no comeback, because the fishing Minister has been put in the corner, like a naughty boy with a dunce’s hat on his head, and told to keep silent. It is amazing. This is the most important decision we are going to make—yet silence.
In trying to answer the Minister for Europe, who asked, “Why don’t the leave people give an alternative vision?”, I have talked a bit about fishing and agriculture, but what about trade? I have quoted Winston Peters, a former Deputy Prime Minister and Foreign Secretary of New Zealand—no slouch—who has talked in public about leaving behind the “betrayal” of 1973. Yes, we did betray them. We betrayed our friends in New Zealand and Australia, who, in two world wars, had come to our aid. He says there is the exciting prospect of recreating free trade between Australia, New Zealand and the United Kingdom. It is an exciting prospect. My hon. Friend the Member for Shipley made a good point about the declining proportion of world trade taken by the sclerotic, over-regulated and overtaxed EU. There is another world out there—the world of the burgeoning growth of China and India.
I will go into more detail about the Government’s case in a moment, but I would be quite happy for them to say, “This is all just pie in the sky—a romantic illusion—and it’s not going to happen. You wouldn’t have any influence on the world trade body, because you’d just be one voice out of 130.” Well, we have very little voice at the moment, because we are one vote out of 28—at least we would be there on our own—but I accept that the Government can make these arguments. Given the importance of this issue, however, surely we want at least some independent analysis, so that the people, before they cast their votes, know what the realistic prospects are of a United Kingdom outside the EU being able to negotiate good trade deals with the rest of the world. But we have nothing.
That was my introduction, Madam Deputy Speaker. I now want to go into more detail about the history of this independent audit and analysis. People now argue—there is some lazy thinking on this—that way back in 1957 when the treaty of Rome was being signed, we were casual in our decision not to join it. A sort of myth has been created, particularly by my personal friend, Michael Heseltine, now Lord Heseltine, and others that this was an enormous wasted opportunity. Actually, people in government at the time were attempting a reasonable audit and analysis of what joining the treaty of Rome would mean. This debate has therefore been going on for a long time.
One cause of worry in 1957 was article 3 of the European Community treaty, which would
“eliminate…customs duties and quantitative restrictions on imports and exports”
between member states, establish a common tariff and “common commercial policy” and
“abolish obstacles to freedom of movement for persons, services and capital”.
When we were having these debates in 1957, the view taken by the then Conservative Government was that that was a risk too great and particularly, showing the importance of objective analysis, too great a risk to the Commonwealth.
My personal view is that that was a right conclusion. Unfortunately, during the 1950s and ’60s, there was a lack of confidence in our future as an independent nation. We should bear it in mind that we were dealing with a generation scarred by the second world war—I accept all the arguments about that. The hon. Member for North West Durham (Pat Glass), who is going to reply to this debate on behalf of the Labour party, spoke most movingly yesterday about the scars of two world wars, and I can understand how that was an influence on people at the time. As I said, there was a lack of confidence, not just about peace in Europe, but about our own nature and the resilience of our manufacturing and service industries. That led directly to Harold Macmillan’s failed bid to join the then European Economic Community.
As we know, of course, we eventually joined the European Economic Community. What then happened after we joined it? We were told at the time that it was going to be primarily a trading mechanism. The British people were never really made to understand and appreciate that under articles 2 and 3, it was much more than that. This was effectively the end of the sovereignty of this House. It was completely different from any other treaty that we had ever signed. Those arguments were made by Tony Benn, Michael Foot and Enoch Powell at the time. To its credit, Labour tested this in the referendum, and the British people decided to join.
Let me move on to the treaty of Nice. Although there had been a reasonably detailed debate, as I mentioned, in the mid-1950s about the benefits or otherwise of joining, this is where I believe the debates got rather weaker and there was less and less independent cost-benefit analysis of whether we should take this ever closer union further.
Article 3 of the treaty of Nice created an explicit common policy in fisheries, when it had previously been included under agriculture. An environmental policy was also created. Under the guise of strengthening competitive industry through the promotion of research and technological development, the EU acquired competence. The EU was authorised to establish and develop trans-European networks. I was here and I may be wrong, but although I certainly know that no independent analysis was done, I am not aware how much analysis of any kind was done on the costs and benefits of these very important matters that furthered the integration of Europe and our involvement in it. The treaty of Lisbon completed the process by making all remaining pillar three matters subject to EU justice-making procedure.
There was a steady increase in the area of EC and EU activity, and thus a steady increase in the number of pieces of legislation until the 1990s. Until we set up the Scrutiny Committee—which is now under the distinguished chairmanship of my hon. Friend the Member for Stone (Sir William Cash)—there was very little analysis of the vast plethora of legislation that was pouring out.
In a paper published by the Robert Schuman Centre, Professor Carol Harlow, of the London School of Economics, noted:
“On the regulatory side, an average of 25 directives and 600 regulations per annum in the 1970s rose to 80 directives and 1.5 thousand regulations by the early 1990s”.
In a study of the evolution of European integration, EU academics Wolfgang Wessels and Andreas Maurer observed that the increase in legislation had been accompanied by an increase in the EU’s institutional structures and sub-structures. While all that was proceeding apace, there was virtually no debate in the House of Commons or, I suspect, within the Government.
My hon. Friend the Member for Christchurch and I were Ministers at the end of the Thatcher Government and in the Major Government. We remember going to the Council of Ministers, and we remember, as we sat there all night, a vast tide of more and more pieces of legislation which was subjected to very little, if any, independent analysis. Output peaked in 1986 with the single market legislative programme. It fell slightly after that, but it continues apace. Meanwhile, apart from the analysis conducted by the Scrutiny Committee, very little detailed analysis of what the directives involved mean for our country is available to Members of Parliament—if, indeed, they are interested, given the complexity of many of those directives.
I agree with that entirely. If we were to remain in the EU, we would need—and this would require the sort of analysis that would arise from a measure such as this Bill—to create much more impressive, comprehensive structures in order to deal with the continuing tide of legislation. People who want to remain in the EU assume that it is a static organisation. We apparently have an opt-out from ever closer union, but the European Court of Justice does not refer to ever closer union because it does not need to. If we remain in the EU, this wave of legislation will go on and on and on.
Rulings by the European Court of Justice have also given rise to a number of amendments to United Kingdom laws. One of the most significant cases in this regard was the Factortame case, which concerned the UK’s obligation under EC law, and the terms of the 1985 Act of Accession whereby Spain joined the European Community, to allow Spanish fishermen to fish in UK waters within the prescribed EC quotas.
We need much more analysis, much more control, and a much more intelligent debate about what is going on, because most people in the House of Commons are blind to it. Naturally, as Members of Parliament, we are all much more interested in the great debates about assisted dying, gay marriage or hunting, or even about whether to stay in the EU or leave it, or whether to bomb Syria. We are much more concerned about those issues than about the detailed nitty-gritty of what is going on under our noses. However, it does not stop. It does not rest. The machine keeps grinding on, with very little control from Ministers and virtually no control from the House of Commons.
Let me now deal with the cost of EU membership.
Before my hon. Friend does that, may I ask whether he recalls—this is an example of what he has just been talking about—that in October 2000, the right hon. Member for Leicester East (Keith Vaz), who is now the Chairman of the Home Affairs Committee, assured the world that Europe’s new charter of fundamental rights would have no greater legal standing before EU judges than a copy of the Beano or The Sun?
That sort of casual statement is quite worrying, and I am grateful to my hon. Friend for telling us about it.
I was about to deal with the cost of EU membership. The following information is taken from various papers that I have been studying. The cost is set to be £3.1 billion higher over the next five years than forecast before the 2015 general election. This is not a static process, therefore. That change is due to a reassessment of the size of Britain’s economy relative to the rest of the EU, thus penalising the UK for its economic success. The bigger and more successful we get, the greater a magnet for migrants we become and the bigger the sub we have to pay, despite the fact that the deficit carries on much the same as it always has done.
I am astonished that in this great negotiating triumph no attempt has been made to address the issue of the rebate, and I will give a few details on that in a moment. This was considered to be one of the most important issues—such as when Mrs Thatcher secured the reduction—but no attempt has been made to deal with it.
For 2016 the UK will pay £9.5 billion. It was only expected to pay £8.2 billion. Everybody casually rolls off the figure of £9 billion now as if we always thought it would be £9 billion, but it was not always going to be £9 billion; it was going to be £8.2 billion. It has suddenly gone up and nobody in the Government or elsewhere complains about that to our partners. I remember that when my hon. Friend the Member for Christchurch and I were Ministers everybody talked about our “European partners”. This Government seem to have dropped that; they have dropped all the visionary case for Europe in terms of partnership and so forth. They all claim they are great Eurosceptics, but they do not tell us the casual little fact that we were expected to pay £8.2 billion and that has now gone up to £.9.5 billion. We are now estimated to pay just under £250 million per week for EU membership.
Civitas has debunked the Government claim that the EU makes each household better off by £3,300 per year. The Government can argue against Civitas and have an analysis of its case, but they do make that claim. It would be nice to have some analysis of where they get those figures from, but we have not been given that.
According to Open Europe, the top five costliest EU regulations enforced in the UK are: the UK renewable energy strategy, with a recurring cost of £4.7 billion a year; the capital requirements directive IV package, with a recurring cost of £4.6 billion a year; the working time directive, with a recurring cost of £4.2 billion a year. I appreciate that one of the cases made by the Labour party is that it rather likes the working time directive. That is a perfectly logical, good case to make, and I have no argument with them making it, but I would like to know—perhaps the Labour party, the Government and the people would like to know—whether this figure of a recurring cost of £4.2 billion a year is right.
The next cost in the list is the EU climate and energy package, with a recurring cost of £3.4 billion a year. I am quoting Open Europe, which may be wrong, but the Minister can debunk these arguments if he wishes. Then there is the temporary agency workers directive, with a recurring cost of £2.1 billion a year. These are not insignificant sums—£4.7 billion, £4.6 billion, £4.2 billion, £3.4 billion, £2.1 billion—but how much detailed analysis are the British people being given about any of this?
My hon. Friend is absolutely right. Is it not also ironic that the Labour party seems to be so enthusiastic for our membership of the EU, yet it comes to the House every month and asks that the Government do more to help the steel industry and the coal industry when it is the policies of the EU that are doing most to obliterate the steel and coal industries in the UK?
I have mentioned Grimsby and fishing, but my constituency also abuts Scunthorpe. What about these poor people there? They are also going to be allowed to vote on 23 June, and are being encouraged to do so. They would rather like to know the detailed costs of what the EU means for their jobs and what the possible alternatives are. This is serious stuff for them—it is not just a debate in the House of Commons; it is about their whole way of life and their town.
We are impotent; it is not a question of cosying up to the Chinese, as we have no control over this. Whether we like it or not, China will be the greatest, biggest and most important economy in the world within the next 10 or 20 years. Whatever the Minister’s views, the fact that we are part of the EU means that he could do nothing to defend Scunthorpe. I accept that the Government may argue that we get other advantages, perhaps in steel, but let us have an analysis of what it all means.
Open Europe is not some sort of purely ideological campaigning group; it produces fine studies, some of the most voluminous available, and it attempts in a reasonably intellectual way to work out what staying in and leaving the EU involves. Open Europe says that according to the UK Government impact assessments,
“these regulations also provide a total benefit of £58.6bn a year.”
Open Europe is trying to be fair. It goes on to say:
“However, £46bn of this benefit stems from just three items, which are vastly over-stated. For example, the stated benefit of the EU’s climate targets (£20.8bn) was dependent on a global deal to reduce carbon emissions that was never struck…Open Europe estimates that up to 95% of the benefits envisaged in the impact assessment have failed to materialise.”
Where is the Government’s response to that?
Open Europe continued by saying:
“Taking the regulations individually, the impact assessments show that Ministers signed off at least 26 of the top 100 EU-derived regulations, despite the IAs explicitly stating that the costs outweigh the estimated benefits. These regulations include the UK Temporary Agency Workers Directive and the Energy Performance of Buildings Directive.
A further 31 of the costliest EU-derived regulations have not been quantified. Between the over-stated benefits, the regulations that come with a net cost and the ones with unquantified benefits, it remains unclear how many of these EU-derived rules actually come with a net benefit in reality, showing that there is plenty of scope to cut regulatory cost to business and the public sector.”
I would echo that. I may be wrong and if the Government want to argue these points in detail, I, for one, would be delighted.
Open Europe went on to say:
“Although the cost of EU regulation too high in proportion to the benefits it generates, it is important to note that these rules can bring benefits including by facilitating trade across the single market, for example in the case of financial services”.
That is an argument in favour. I fully accept that and Open Europe accepts it, but we need a genuine impact assessment of the costs and benefits of all these regulations. Where does this leave us in the total picture? My view is—[Interruption.] I would be grateful if the Whip would not speak too loudly while I am speaking. She is not supposed to be heard, unlike me. She has the real power; I can just speak.
My contention is that people are worrying too much about this decision in terms of the impact on the economy. Again, there have been many studies on this, but I do not believe that the impact on the economy of whether we stay or leave will be as dramatic as has been made out. That is “Project Fear”—that we are all going to lose our jobs and so on. According to Open Europe,
“In a worst case scenario, where the UK fails to strike a trade deal with the rest of the EU”—
thereby having to fall back on the World Trade Organisation rules—
“and does not pursue a free trade agenda”—
fairly unlikely, I would have thought, but this is the worst case scenario—
“Gross Domestic Product (GDP) would be 2.2% lower than if the UK had remained inside the EU.”
So 2.2% lower, which is quite significant, but I am not sure that we would all suddenly lose our jobs.
The figure of 2.2% is near enough as much as the economy is expected to grow in the next 12 months. I am certain that if we leave the EU in the next few months, especially with an oil crisis on our doorstep, we could face financial catastrophe. Does my hon. Friend agree?
Does not my hon. Friend want me to go on with the best case scenario? Then I will give way to him.
According to Open Europe,
“In a best case scenario, where the UK strikes a Free Trade Agreement (FTA) with the EU, pursues very ambitious deregulation of its economy and opens up almost fully to trade with the rest of the world, UK GDP would be 1.6% higher than if it had stayed within the EU.
However, these are outliers. The more realistic range is between a 0.8% permanent loss to GDP in 2030 – where the UK strikes a comprehensive trade deal with the EU but does nothing else; and a 0.6% permanent gain in GDP in 2030 – where it pursues free trade with the rest of the world and deregulation, in addition to an EU FTA.”
These arguments about disaster and millions of jobs being lost are, I think, overstated, but I may be wrong. I keep making this point: the Government have vast resources, such as the National Audit Office and the Office for Budget Responsibility. We would like to know before we cast our vote.
The Treasury now acknowledges that 3 million jobs depend on trading with the EU, not on being a member of the EU. If that is the case—I am sure there is a lot of truth in it—given our substantial trade deficit with the European Union, does that not mean, therefore, that about 5 million jobs in the EU are dependent on its trade with the UK?
Yes, that is the point that was made time and again during the debate yesterday. I am not sure the Government have entirely answered it to my satisfaction.
The Government seem to argue that were we to vote to leave the EU, that would be such a catastrophic snub to our EU partners that there would be a degree of vengeance. I think that is a childlike view of how policy is created in Paris and Berlin. Many people in France—I take a bit of an interest in this—have argued for many years that it would not be an absurd state of affairs for Britain to leave the EU, for all sorts of reasons. However, the Government argue that a dramatic vengeance game would be initiated.
By the way, if our European partners acted in that way, would we want to have anything to do with them? It is a ridiculous argument anyway. They would not behave in that way, because of the point made by my hon. Friend the Member for Shipley (Philip Davies)—because of our trade deficit with them, particularly with our German friends. They are intimately bound up with us in terms of trade and there is every incentive to conclude a reasonable deal.
It is not just about the trade issue. The Baltic states, for example, are very dependent on our NATO presence in helping them to defend themselves against the Russian threat. They would never countenance the rest of the European Union taking it out on the UK, when the UK is doing so much to defend their interests.
Perhaps I have banged on a bit too much about the economy, and should briefly touch on defence and security, as it is in my hon. Friend’s Bill and is a matter of acute concern. Apart from “Project Fear”, which is based on this false premise of a loss of millions of jobs—Lord Mandelson appears to have made that up on the back of a fag packet—which no one has ever quantified in any great detail, although we wait to hear what the Government say about that, there are all these arguments about security. David Owen, a former Labour Foreign Secretary, who has now come out in favour of leaving the EU, dealt with that matter and debunked it very well on his interview on the “Today” programme yesterday. He asked how the European Union has improved our security by creating, in an imperialist and expansionist way, a new trade association deal with Ukraine, which led directly to Russian fears of being encircled and to the annexation of Crimea and eastern Ukraine. By the way, I do not countenance, approve or support in any way what Russia has done. The fact is that the EU gave President Putin that opportunity.
In a direct answer to my hon. Friend, is it really conceivable that, if the UK decided to leave the EU, our friends and allies in the Baltic states would want to throw us into some appalling doghouse and have nothing more to do with us when their freedom and security depends so much on us? We do have the strongest armed forces in the European Union. France and Britain are the only two countries that are capable of deploying world power. The Minister who is summing up this debate has considerable expertise in this matter because, as a Back Bencher, he spent years talking about it.
Although I cannot speak for the French Government, I do regularly speak to people in France, and I can assure Members that France has no interest or desire in not continuing to co-operate in an ever closer way, in terms of an ever closer union of sovereign states, in military policy. This whole argument that, somehow, the peace and security of Europe would be endangered if we were to leave the EU does not hold water. I will not repeat all the arguments that have been made many times before about our peace and security depending not on remaining in the EU, but on NATO. That is not a point that can be directly summed up in any cost- benefit analysis, but it needs to be articulated. We Eurosceptics are not nationalists. We love Europe; we love Europeans; we love European culture; and we want to have the closest possible relationship with our friends in France and Germany.
Let us go back to some of the detailed studies of the cost-benefit analysis. I am very grateful to the Library of the House of Commons for this. In fact, we should pay tribute to it because it is one of the few bodies that has actually attempted, with its limited resources, to collate all these studies. The study by the Institute for Economic Affairs—Minford et al, 2005—“Should Britain leave the EU” estimates a range of 3.2% to minus 3.7% of GDP in ongoing costs. I have dealt with Open Europe. The 2014 study by Gianmarco Ottaviano “Brexit or Fixit? The Trade and Welfare Effects of Leaving the European Union”, the Centre for Economic Performance and the London School of Economics estimated the trade-related costs to the UK of leaving the EU as being in the range of 2.2% to 9.5% of GDP. That is their argument, but it would be nice for it to be tested. In the literature review for “Our Global Future”, the CBI—again, I am not citing people who are naturally friendly to my point of view, but we need to test the arguments—found that the net benefit arising from EU membership is somewhere in the region of 4% to 5% of UK GDP.
We should have had more independent analysis of that. Conservative Members often criticise Gordon Brown, but we should never forget that he kept us out of the euro, against the wishes of his Prime Minister, Tony Blair. We were told that disaster would strike by some in the City of London, the CBI and so on, and they used precisely these arguments. Now the Prime Minister goes to the Dispatch Box and says as a great virtue that we are out of the euro, but we were told by all the powers of the establishment that not joining the euro would be a disaster, and many of the arguments used were exactly the same.
Roger Bootle told the Treasury Committee on 27 October last year:
“A large number of supposedly very highly qualified people argued that there would be a mass exodus of the financial services industry if Britain were not in the euro. It did not happen. In fact, the reverse happened: it was the provincial continental financial centres that suffered, as business concentrated on London”.
The Mayor of London and the Conservative mayoral candidate represent, or hope to represent, the powerhouse of the British economy. Presumably they deal with and talk to businesses in London every day, and significantly they have both decided that London would not be disadvantaged by leaving the EU.
I am not necessarily quoting people who are friends of mine, but in evidence to an inquiry by the Lords EU Committee into relaunching the single market on 27 July 2010, the Department for Business, Innovation and Skills stated that
“EU countries trade twice as much with each other as they would do in the absence of the Single Market programme”,
That is based on the argument that increased trade with Europe since the early 1980s may be responsible for UK income per head being around 6% higher.
That is fair enough. We accept that we want to recreate the single market in some form. However, the Government immediately replied, “Well, I’m sorry but the rules of the EU are absolutely clear. If you want to be part of the single market, you have to accept free movement of people.” But that is not necessarily true. For example, it does not apply to Canada. As I understand it, Canada has created a good trade deal with the EU, but I am not aware that EU nationals are allowed to travel freely to Canada without a visa—I have some knowledge of this because my wife has a Canadian passport as she was born in Montreal.
The argument about what sort of access we would have in the single market is so crucial that we must have some independent analysis. Otherwise, we are making a decision based not on facts, but on prejudice. Those of us who argue from a Eurosceptic point of view are not in any way trying to convince the British people that they should make this choice in terms of nationalism, although many will, and that is their prerogative. We are arguing that there is a perfectly good, legitimate, intellectual, rational case for leaving the EU, but we want it to be tested by the Government.
I had better sit down as I have probably wearied you, Mr Deputy Speaker. I want to end with a study, which people here will not be aware of, commissioned by the Bertelsmann Stiftung of Munich—so this is not, as far as I am aware, some sort of UK Independence party front organisation, but a well-respected German institution. It is interesting that people around Europe—Stiftung in Germany and think-tanks elsewhere in Europe—are starting to take seriously the prospect of the United Kingdom leaving the EU. They are also writing studies that could form part of the independent cost-benefit analysis we want the Government to do.
In the second and third columns of its detailed analysis of what countries pay into and get out of the EU, the Stiftung demonstrates that Germany, the United Kingdom and France are the biggest absolute net contributors, paying in about 0.5% of their gross national income. Eleven of the 28 member states were net contributors in the 2013 budget, and the Stiftung gives various detailed figures for member states’ gross contributions. In terms of net contributions as a share of GNI, we always come second to Germany.
The Stiftung says:
“Because the United Kingdom benefits relatively little from CAP expenditures (for example, it received only €3.16 billion in 2013 compared to France’s €8.58 billion), Margaret Thatcher negotiated the introduction of a ‘UK rebate’ in 1984. At its core, this contains a refund of approximately 2/3 of the United Kingdom’s annual net contributions to the EU budget. For the years 2011-2013, the rebate averaged around €4.1 billion. A correction in how the rebate is calculated was introduced in 2008, which reduces the rebate depending on the costs of the EU expansion. According to forecasts by the UK’s economic and finance ministry…the rebate will hover around an average of €6 billion”.
The Stiftung provides various detailed figures and illustrates how the UK’s net contribution has risen. It says:
“One key element of the Brexit debate is that net payments have increased sharply since the global financial and economic crisis in 2008…If the United Kingdom exits the EU on January 1, 2018, this will change how the EU budget is financed”—
that must be the understatement of the year. It continues:
“According to estimates by the UK’s economic and finance ministry”—
Her Majesty’s Treasury—
“the United Kingdom will pay a net contribution of £8 billion for fiscal year April 2017-April 2018.”
These arguments are therefore being set out in detailed papers by think-tanks throughout Europe, but here—in the most important decision this country will make, in just four months’ time—the Government are apparently telling us that they do not believe there should be any independent cost-benefit analysis of what that decision will mean for the United Kingdom. Shame on them!
This is the first time I have intervened in the European debate, and hon. Members can rest assured that one thing I will not be talking about is the future of the hedgehog, or le hérisson, as I think it is called in French.
This is probably one of the biggest, most controversial issues we will deal with as a country, and I am acutely aware that a number of my hon. Friends take a completely different position from the one that I will espouse during my speech. I would also say that this issue—like the corn laws, free trade and imperial preference—is one of the big issues in British history. Of course, this, too, is a big trade issue, and we have to take that into account.
Over the last 15 years, as the parliamentary candidate for the Plymouth Sutton seat and, more recently, as the Member of Parliament for Plymouth, Sutton and Devonport, I have always sought to take a rather pragmatic attitude to what our relationship with Europe should be; I do not start from the basis of a set view of how we should proceed. I very much support what the Prime Minister has been able to do in the way of bringing back reform. The big issue of Europe kicked off when Jacques Delors said how important it was that the single market was not just about money but employment regulations and stuff like that too. I want the UK to be in Europe but not run by Europe. Now that the Prime Minister has finished his negotiations and presented his new plan for Europe, I have decided that I will vote to remain in the EU in the referendum on 23 June. I want to make it abundantly clear that I have exactly the same influence as every single one of my constituents or, for that matter, anybody in the whole of the United Kingdom. I have one vote, no more and no less.
To my mind, Britain’s role in Europe is to maintain the balance of power, and that is utterly crucial. Over the course of history, when we have walked away from Europe, we have had to go back in and sweep up the whole mess. We have invested time, money and blood in that relationship with Europe, and now is not the time for us to wash our hands of our allies and turn back.
Well, that is the whole business of politics, isn’t it? My hon. Friend is right to raise these issues, but ultimately this is about the future of our country within Europe and whether we are led back into having wars and things like that. I very much want to avoid that. Believe you me, my heart is for coming out, but my head says that it is not a clever thing to do.
Last week, during the recess, I spent a few days with the Royal Marines and the Royal Navy in Norway doing a survival course. We ended up building a shelter and a fire, and then we had to go and kill a chicken and eat it. Needless to say, I did not get too involved in the killing of the chicken, because I think I would have found that incredibly difficult. I heard at first hand the Norwegians’ real concerns, shared by the Baltic states, about the whole business of Russia potentially invading their country and coming through the north and the Arctic in order to do so. That made me very concerned as well. I therefore believe that our national security should not be weakened at a time of global insecurity.
I am intrigued by my hon. Friend’s view that everything in the EU is about peace and harmony. Has he seen the rise of the far-right parties across the EU in recent years, including the largest party in France, and the record amounts of barbed wire going up around the EU? It does not strike many people as being about peace and harmony but quite the reverse in many cases.
I fully agree with my hon. Friend that that issue must be looked at and taken into account, and I do, but I am talking about my personal view. This is about trying to make sure that we can maintain peace within Europe. I recognise, though, that other people have significantly different views—some even more extreme than his position might end up being. I have a great deal of time for my hon. Friend.
The EU is far from perfect, but this is not the time to throw away the good progress that the Prime Minister has made in reforming it. I am pleased that we have managed to secure an opt-out from being dragged into an ever closer union with the other 27 member states. In the previous Parliament, he managed to secure a deal that would bring the EU’s budget down for the very first time, and we should most certainly welcome that. I am, however, keen for further reform of the EU, including bringing UK fishing waters back under UK control, for which I will certainly continue to campaign. That would significantly improve the conservation of our fisheries, which I am very happy to support.
I believe that the Prime Minister’s deal will go a long way to restoring British sovereignty and reducing migration to the UK. On future immigration, if we are going to put up the shutters—we do need to control it—I am concerned about what would happen to my local Derriford hospital. If we found ourselves without any nurses from abroad, that would be a significant issue.
Does my hon. Friend not understand that controlling immigration means that we would be able to allow into the country those we want to allow in and that we could keep out those we want to keep out? If we leave the EU and his hospital needs some nurses from abroad, there would be nothing to prevent us from allowing them to come here. We just would not have to accept everybody from the EU who wants to come here.
I am afraid not.
Businesses in Plymouth rely on the UK’s deep links. My constituency has a global reputation for marine science and engineering research. Representatives from the Plymouth marine laboratory and from maritime organisations have told me that it is important that we continue to have links to Europe. University students in my constituency also want to be able to travel abroad. I am afraid that I have doubts about what the alternative would be if we were to leave.
Babcock, which runs the dockyard in my constituency, signed a letter to The Financial Times, saying that it is very important that we stay in. One of the big boat manufacturers in my constituency explained to me a couple of weeks ago how difficult it is to sell boats to south America. The company has to pay a 15% premium and it is very concerned about what would happen in France and Greece if we left. They would want to protect their own businesses and boat-building industries. That is another reason that I find it difficult to deal with this whole debate.
Britain has a proud history of playing its part in Europe, and I want it to continue to play an important role in reforming Europe while also promoting its interests worldwide. The terms Europhile and Eurosceptic are thrown about quite a bit, but I am neither. I am not Euro-suicidal but a Euro-realist, and that is why I will be voting to remain in the EU.
I thank the hon. Member for Wellingborough (Mr Bone), who is not present but whose Bill this is, for giving us the opportunity to once again debate the merits or otherwise of the European Union.
I think we should have a cost-benefit analysis of this debate, given that right at the beginning—it has been going for some three hours—we were told that it was highly unlikely that the Bill would be taken any further, because that would require the referendum to be delayed. It is, therefore, a complete waste of everybody’s time and of taxpayers’ money.
No, but I think it is worth saying. We have sat here for three hours, and we have heard Members talk for at least an hour about a Bill that they do not intend to take any further. As the Bill is about a cost-benefit analysis, perhaps we can have a cost-benefit analysis of this morning for the taxpayers of this country.
That is helpful. As the hon. Gentleman has spoken about his great grandfather, I will talk about mine a little later. [Interruption.] Would the hon. Member for Shipley (Philip Davies) like to say something about my great grandfather? I will talk about him later, and perhaps the hon. Gentleman would like to intervene then.
I will do so later.
We had a long debate on European affairs yesterday. I am sure we would all agree that it was an excellent debate, with many outstanding contributions. The debate has felt a little flat today, because we have returned to the usual suspects with the usual very narrow arguments. However, it gives me an opportunity to talk once again about the benefits of being a member of the European Union. I do not think—this is one of our criticisms of the Bill—that the benefits of being a member of the European Union can be narrowed down to simply an economic cost. The question is much bigger than that.
Labour, as hon. Members know, are united on this issue. We believe that Britain is stronger, safer and more prosperous as part of the European Union.
No; just a second. We are a proud nation, with almost half our exports going to European countries. Those exports were worth £227 billion last year to the UK economy. We receive, on average, £26.5 billion of investment every year from the EU. Jobs and businesses, large and small, depend on our trading with the EU. Future EU trade could create 790,000 more jobs by 2030 by opening up markets in digital services, energy and tourism.
I will talk a little about my part of the country. The north-east is the only part of the country that has a trade surplus. Proportionately, we are the biggest exporting region in the country. We make things in my part of the world and we export them, largely to Europe. As I said yesterday, we make more cars in one city in the north-east in a month than that great car-building country, Italy, does in a whole year. I invite Conservative Members to go along to Teesport or the port of Tyne and see the lines of cars that are made in the north-east and exported to the European Union. In my region, 75% of our trade depends on being part of the European Union. Hundreds of thousands of jobs in the north-east are directly or indirectly linked to being part of the European Union. That is just one aspect of the benefits.
I will talk about the peace dividend later, but I want to talk a little about the fact that we live in a global world where we face issues such as international terrorism, international crime, war, migration and Russian expansionism. Listening to the debate today, I have not heard anything from Conservative Members that gives me any answers to the big questions facing us. It is not possible to reduce those huge issues to a cost-benefit analysis or an economic cost.
TTIP has been mentioned. I have to say that my blood runs cold at the thought of negotiating a TTIP arrangement outside the European Union. I am quite clear that our public services and our NHS need to be protected in any negotiations about TTIP. Having listened to the libertarians opposite, I am sure that that would not be the case.
In such negotiations, it is clear that we are much more likely to get a TTIP agreement with red lines around our public services and the NHS as part of the European Union. If we were outside the European Union and negotiating such a treaty directly with the USA, I would not be so confident that that would be the priority of the current Government.
We agree that if there is to be a TTIP agreement, it is much better to negotiate it with Britain as part of the European Union.
We have talked a lot about sovereignty in recent weeks. Many of us would agree that we have in various ways negotiated on our sovereignty in order to be part of something bigger. We have given up part of our sovereignty in defence to be part of organisations such as NATO, and we have done the same with the UN. On a personal level, when I married—I have been married for 30 years—I gave up some of my sovereignty over decisions that I would have made myself to be part of something that I accepted was bigger and better for both of us. The principle is very clear: in order to be part of something better, we sometimes have to give up things we want to hang on to. That is true of our sovereignty. I do not believe that this country has given away our sovereignty. It is very clear that whenever decisions are made in the European Union, they come back to and come under the sovereignty of this House.
On immigration, one of the huge strengths of this country—it has made us one of the strongest, richest, most powerful and greatest countries in the world—has been our ability, over centuries, to absorb and integrate millions of immigrants, migrants, people fleeing oppression and economic migrants. My family were economic refugees who came to this country during the Irish famine in the mid-19th century. Such people came to this country and worked hard for it. They brought up their children in this country, and paid their taxes. They fought for this country and, frankly, some of them died for this country. That is part of what makes this country the great country it is. To the idea that we can close the doors to people who will work in our NHS or our schools, I would say that that is part of what has kept this country rich. This country has got rich and stayed rich on immigration. We need to be very careful when talking about closing the doors to people, particularly those from the European Union.
I do not think anyone has talked about closing the doors. We have talked about giving equal access on the basis of merit to foreigners regardless of whether they are from the EU or from outside the EU. For example, the hospital in my area tried to recruit nurses from the Philippines because they are well qualified for its needs, but it was unable to do so because priority has to be given to EU nurses.
If we look at EU immigration, we can see that it is almost the same: 2.3 million people from the European Union are in Britain; and 2 million Brits live in the European Union. Many of them are working in and contributing to European countries and some of them, having worked hard all their lives, have retired and are now living in the European Union. We must be absolutely clear about what “out” would look like for those people. At the end of this debate, I want us to be very clear about that. We know what “in” looks like—we have had 41 years of what “in” looks like—but we absolutely no idea what “out” would look like for jobs and the economy, or for people from the EU working in this country and people from this country working in the EU.
I am rather interested in the Labour party’s views. I urge the hon. Lady to look up the meaning of net migration. Net migration means the number of people coming in after we have taken out the ones who have already left, and that figure is 325,000. Is her party happy with the net migration figures as they are? Is she not prepared to take any measures to reduce them?
Once again, another opportunity to tell us what “out” would look like and we do not get it.
We had an excellent debate in the Chamber yesterday, a lot of which centred on the peace dividend. I have not heard anything about that from Conservative Members today. The first aim of the European Union was peace. It was created not as a project or a political union, but to ensure peace in western Europe after the ruins of 1945. We committed genocide on one another in western Europe every 30 years up until 1945. As I said in the Chamber yesterday, for me this is personal. It is not just about politics. I accept that the European Union is not the only reason why young men and women are not lying in graves outside Thiepval and Ypres today, unlike my great grandfather and his brother, two young men from this country aged 22 and 25 who died within six weeks of each other and are lying in unmarked graves in Belgium and France. Great though the loss was to my family, it pales into insignificance alongside the loss suffered by other families. Mrs Smith from Bishop Auckland, a town just over the hill from where I live, lost her husband and her five sons. How can we put an economic cost on that? At the end of the awful wars in western Europe, when we regularly turned our continent into a killing field, the victors and the vanquished said never again will we allow this to happen. I believe that by voting to remain in the European Union we will ensure that this never happens again to the young people of this country.
If debating European affairs is your thing, Mr Deputy Speaker, you will have had a great week.
The starting gun to the core of what we are debating today began with the Prime Minister’s Bloomberg speech in January 2013. That was the first indication, by any Prime Minister, to say that he intended to take the opportunity to have a serious conversation with Europe; to say we are not content with our relationship with Europe, that we believe too many powers have been ceded to Brussels and that the EU is not transparent or competitive enough. That culminated in the Prime Minister last weekend debating with other Heads of State and Prime Ministers to establish the changes that he feels need to take place if Britain is to be justified in staying in the European Union.
The Prime Minister returned from those discussions on Saturday. On Monday, he made a statement, saying that his principal recommendation is to remain in the EU. He said, however, that it would not be for politicians but the people to decide on our long-term relationship with the EU. This generation gets to choose. As we now know, the referendum will take place on 23 June. If that was not enough, the issue was raised at Prime Minister’s questions, and there were the launches for the various in and out campaigns, with all their gusto and vim. Then, yesterday, we had a full day’s debate, in Government time, opened by the Foreign Secretary and closed by the Europe Minister. I agree about the repetition in some of our Europe debates—I remember many times just printing off my speech from my hard drive, with the bullet points ready to go, and coming here to give a similar exposé of my views on Europe—but, despite seeing the usual suspects committed to debating Europe, I think that today’s subject matter is different.
I disagree with the hon. Member for North West Durham (Pat Glass). Although it is clear that, should the Bill get anywhere, the date of the referendum would have to shift, I believe the debate is useful. Every time we have a debate, in the House or elsewhere, on Europe, more details emerge and more questions arise, and that is healthy. We saw it in the debates leading up to the Scottish and alternative vote referendums. That is important because these are difficult matters for us to get our heads around—there are questions to be raised and challenges to be made. In fact, new questions have been posed today, on both sides of the argument, and, if it helps, I will try to answer some of them.
I agree that this place has not always been brilliant at understanding the EU at its heart. I recall writing a pamphlet in opposition entitled, “Upgrading UK Influence in the European Union”. I think there are only two copies left: the one I have in my hand, and the one proudly owned by my mother, who is the only other person I know who has definitely read it. I flicked through it to remind myself of my frustration that the country did not scrutinise enough of what was going on in Brussels—this was before 2010, when we were in opposition.
The pamphlet asked what Parliament could do to better understand what was happening in Brussels. We spend a lot of time in this place arguing and complaining about the results of legislation coming from Brussels, but how much time do we invest in understanding the mechanisms and processes in order that we might challenge or stop it coming through in the first place?
My hon. Friend is absolutely right. I would argue that the civil servants we send there are among the best in the world. It is a huge privilege and honour to work in the Foreign and Commonwealth Office, although many of the civil servants in Brussels come from other Departments.
I must say, however, that we are granted 12% of the jobs in the EU, in the various Commission roles and so forth, but, of late, we have not taken them, because there are language exams to be taken, and the language school in the Foreign Office was closed down. There were important top jobs to be had, but because our civil servants could not pass the two language courses required—one at a higher level, one at a more subsidiary level—we could not fill the very roles that would have allowed us the necessary influence in the EU, in the bowels of Brussels, to change, affect and advance legislation.
I am pleased to say that we are changing that—the language school is back in place and able to train civil servants to the correct levels—but when I wrote the pamphlet, before the 2010 election, we were filling only 3% to 4% of those jobs, meaning that 8% of the jobs to which Britain was entitled were going to other countries. One is supposed to relinquish one’s passport—metaphorically—when one becomes a civil servant in the EU, but of course one remains British at heart, or Italian or French, or whatever it is. It was a waste of an opportunity to scrutinise, understand and affect what was going on in the EU. I am pleased to say that the civil service situation has changed, and that we are now far more immersed in Brussels.
Let us look at some of the big ticket items that have been agreed—I shall come on to them in more detail later, if I may—such as the trade deal with Korea or the patent agreement that protects any invention. You might have a small invention that you have pocketed away, Mr Deputy Speaker, and not yet told us about, but you can be assured that you will be able to present it and it will be protected right across the European Union. It was British civil servants who were able to pilot this measure through, and it provides an example of the sort of work they are doing.
To answer my hon. Friend the Member for Christchurch (Mr Chope), our understanding of these matters is important. When I was the Parliamentary Private Secretary to the Minister for Europe, I remember organising cross-party visits for Members of Parliament to make the trip to Brussels so that they could learn about the EU, meet civil servants and understand how the European Parliament and various parts of the Commission work. Most of them were so delighted to get back on the Eurostar at the end of the day that they never wanted to see Brussels again, such was the scale of the bureaucracy. That highlights a challenge, but it perhaps also reflects the absence of a determination to say that we should be turning the situation around. We should not simply turn our backs on it and accept everything that happens; we should try to enhance British influence over what happens in Europe.
That is exactly what our Prime Minister has done in working with our allies and trying to effect change for the better. There are many countries, many Prime Ministers and many statesmen who agree with our free market liberal views on how the European Union should be conducted. They agree with us that it has become too politically empowered and not sufficiently transparent, and that although it is the largest single market in the world, it is becoming overburdened with red tape and bureaucracy. From a social perspective, furthermore, it is the most costly area in the world. Some 50% of social services in the world are found on our own doorstep in the European Union. That means that we are uncompetitive in comparison with other places in the longer term, which is exactly what the Prime Minister was trying to determine in his negotiations at the weekend. He explained what he returned with in his statement on Monday.
I am pleased that we have had yet another opportunity this week to debate these matters, and I am sure it will not be the last time. I am most grateful to my hon. Friend the Member for Christchurch for stepping in for our hon. Friend the Member for Wellingborough (Mr Bone), who was originally going to articulate his views on the Bill. My hon. Friend the Member for Christchurch has done so with the same gusto that he has always shown in previous debates on the European Union. It is a matter of record and knowledge that he is my parliamentary Dorset neighbour, and I look forward to him donning one of the amazing ties that the leave campaign is promoting and going on the campaign trail in Dorset in the run-up to 23 June.
We heard contributions from other Members, including from my hon. Friend the Member for Shipley (Philip Davies), who articulated important questions about the merits of the European Union which need to be answered by those who want to remain in the EU. That is important for the public, many of whom are yet to make up their minds on the merits or otherwise of continuing our membership of the European Union.
The speech of the day was, I thought, given by my hon. Friend the Member for Gainsborough (Sir Edward Leigh)—not simply because of its length, but its quality as well. He made some erudite points, and I thought he was extremely honest about what the British nation might expect from the leave campaign when it comes to articulating what it would mean if we did leave. He was honest in raising some question marks over what might happen to the common fisheries policy and the common agricultural policy. Many people support these policies now, so it is important for them to understand the consequences of leaving. It was very honest of him to pose those questions, and the nation must hear the answers in a proper debate.
The “Project Fear” label has crept into the discussion many times. We want to win the arguments because people have decided on the merits—the whys and wherefores—of both sides, rather than because they were unclear about the position, or because one side had decided to scaremonger. What worries me is that this might descend into something like an American presidential election campaign, in which the negative overshadows the positives and the educated points of view.
My hon. Friend also raised a number of specific questions, and I shall come to those later.
I am pleased to say that that my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) managed to get hedgehogs into yet another debate, although he was not intending to talk about a subject for which he has become famous. He also made the point that this is one of the biggest debates that we will ever have, and that it is therefore right for us to devote time and energy to looking at all the details.
I am saddened that more Members have not taken the time to join us on a Friday. I do not know where the Scottish nationalists are, but at least the Labour Front Benchers have made it, and I am pleased about that. In any event, I am sure that Members will have further opportunities to debate these matters in due course.
As I said earlier, we had a full and wide-ranging debate on Europe yesterday, opened by the Foreign Secretary. One speech that was pivotal, and stood out, was the speech made by my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames). It was a powerful oration, not least because my right hon. Friend mentioned his grandfather. As Members will know, his grandfather, looking at the mess of Europe, was concerned about how countries could integrate to the point at which they were no longer independent but interdependent, and would therefore never go down the road towards war again.
May I take up that point about history, for the sake of the record? In his own very good speech, my right hon. Friend did indeed refer to his grandfather’s speech. Winston Churchill was always a robust defender of European unity, but he made it absolutely clear that what he foresaw was continental European unity. No one has ever been able to find any quotation from Winston Churchill suggesting that Britain should join a European union.
My hon. Friend has made my point for me. What I think our right hon. Friend was trying to articulate was, “Please do not try to second-guess what would be the view of someone who is not alive today and able to understand the issues of today.” He made the point, very powerfully, that it was disingenuous to try to judge in that way. He was frustrated that people had taken the famous Zurich speech—of which we are now in the 70th anniversary year, and in which Churchill talked of a continental Europe—out of context, and had reinterpreted it in order to make their own points. In fact, it has already been used by both sides in the debate leading up to 23 June. Similarly, people have said of Margaret Thatcher, “I am sure that, if she were alive today, she would say this, that and the other.” I think it unhelpful to lean on great statesmen who are not here today, because today’s circumstances are very different.
It is, however, worth reminding ourselves that from the devastation of war-torn Europe has emerged a union of 28 nations, which are living in peace now, and which have also lived through a ragged period of dealing with the growth and subsequent demise of communism. We have become part of the biggest and most powerful single market in the world, and it is important for us to remember that.
My hon. Friend the Member for Gainsborough also gives me licence to touch on how this is playing out in other European capitals. Things can be quite parochial in the Chamber, and sometimes the things that we say here do not reach much further, but we are being watched, registered and monitored in other capitals across the world as we have this debate. I have to say from my role as Foreign Minister responsible for the middle east, north Africa and south-east Asia that there is some puzzlement about this debate, as Britain has a legacy of being at the forefront of decision making—being a P5 UN Security Council member, a leading member of the Commonwealth and playing such a pivotal role in NATO, and given that in every international organisation from the World Trade Organisation to the International Monetary Fund to the World Bank, Britain is at the forefront.
Other countries hesitate and look at us to see which direction Britain is looking in, knowing that we have a powerful, strong and important relationship with the US, that we have experience, and that we have an interest in, and understanding of, much of the world around us, yet they also look at us and see that we might want to opt out of one of the largest organisations in the world. The Prime Minister also articulated that point on Monday.
We do not make any reference to the fact that the UK could survive outside the EU. We are a great and powerful nation—the fifth biggest trading nation in the world. The question is the degree of that success. That is what we need to debate up until 23 June. Are we better off out and making decisions separately, or are we more powerful as part of this organisation and collectively exerting more influence from inside? That is pivotal in the debate we will have in the next three months.
Much has also been made about the security concerns and whether Britain’s security status and competence would rise or fall were we to leave the EU. When the starting gun was fired, and the debate opened up and people declared their position, some comments were made about the Paris attacks, saying that they would be more likely to take place in the UK if we were outside the EU. I think those comments were disingenuous; I will not go further than that. We need to have a sensible and measured discussion about security. I certainly do not agree with that sentiment at all, and I urge those on both sides of the argument to be very cautious about making flippant comments and scaremongering. We are of course subject to the pressures of the media and the sensationalism they seem to encourage so that they have soundbites for the evening news or the Twittersphere, but our allies are looking at this and it does not bode well for Britain if we scaremonger in this way.
However, we are living in a very dangerous and complex world, one that is far more complex today than it was a couple of decades ago. The consequences of the Arab spring are still with us, we have an emboldened President Putin—far more unpredictable than ever before—and we have the growing concern of extremism. When the Bali bomb went off in 2002 there were just over 20 listed extremist groups—listed groups of terror. Today there are over 50. These are registered, listed groups recognised by us as organisations of terror. That means that at the moment we are not winning the battle to contain them. Daesh is obviously the biggest, and it is a franchise; other organisations, such as Boko Haram, Ansar Bayt al-Maqdis and Ansar al-Sharia in Libya, are joining forces and gaining a franchise from Daesh. We need to think about how we collectively defeat that, and there is a question about the role of the EU in dealing with that.
Much has been said about the role of NATO—it was mentioned today. It is, of course, the cornerstone of our security endeavours, and we also have our strong relationship with the United States, but along with the growth of the European Union comes soft power. These things complement each other, and one does not replace the other. In certain areas where other countries are wanting to pursue a European-style army, we have made it clear that we would not support that, and neither would many other countries. Everybody has recognised that from a kinetic perspective NATO is the cornerstone of our security, but soft power comes with the ability to provide political leverage in introducing sanctions, and it is the work of the European Union that started the ball rolling in getting sanctions built up against Iran. Those sanctions eventually forced Iran to curtail its nuclear programme, come to the table and agree a long-term solution which denies the Iranians the ability to build a nuclear bomb. EU sanctions and EU discussions led to the P5+1 talks, which involved other countries such as China, Russia and the United States. That gives us an indication of the role the EU can play, and the counter-piracy operations off Somalia are another great example of this work, which can complement what NATO is doing.
We also need to consider the bilateral operations that work underneath the umbrella of the European Union, for example, the Border Force capabilities in Calais. One could argue that if we step out of the European Union, we could negotiate these things one by one, but carrying out bilateral talks with a number of countries is a lot more complex. The question is: would such an approach be as efficient as going to a single organisation—Interpol, Frontex or the European border forces—and at these meetings having a say not just in bilateral arrangements, such as those we have with France, but collectively? Internationally, what is the European Union’s view on the situation in Libya, with the movement of refugees and with the criminal gangs exhorting funds from refugees who wish to make the perilous journey across the Mediterranean? My hon. Friend the Member for Shipley posed the question as to the impact of extremist parties in Europe, as it could be argued that that has been a consequence of the movement of refugees. But the only way we are going to sort that is by dealing with the problem at source—by addressing what is happening in Syria. Again, I would argue that the EU can put far greater emphasis and might into providing a challenge and looking for solutions by working collectively, not only on managing the refugee crisis, but on addressing the challenges at source in order to mitigate what is going on.
Everyone would agree that the Minister is making a balanced and good speech, but I am surprised that he seems to be talking down the ability of the mighty Foreign Office, of which he is a part. Is he really saying that if, after we had left the EU, the UK and the EU thought that sanctions should be imposed on Iran, the Foreign Office would have no mechanism for discussing that with the European Union, and coming to that decision and agreement? Is he saying that those discussions can take place only from within the EU? Since when has the Foreign Office been so pathetically powerless around the world?
It is not my description. Provocatively, my hon. Friend is putting words in my mouth. We can step back from this particular issue to all the other issues, saying that in each case Britain would have the ability—in fact, we would have the obligation—outside the EU to step up and do all that work as well, whether it be on sanctions on Iran or any other relationships. The question is: on our own, can we exert greater leverage on a country such as Iran, which continues to have a proxy influence in Bahrain, Damascus and Syria, Baghdad and Iraq, and Yemen and Sana’a, or would we have more leverage and power by leading from within the EU? That applies right across the board.
I am grateful to my hon. Friend for the way in which he is responding to the debate. May I ask him about the Syrian refugees? I think our Prime Minister and our Government have the right idea in saying, “Let’s take the refugees from the area of the theatre, rather than encouraging them to make the dangerous journey to Europe.” Why does my hon. Friend think the European Union has not been prepared to listen and respond positively to that common-sense approach from our Government?
I am not sure that is quite correct. Federica Mogherini, who leads on these matters for the European Union, is very much in alignment with that view. We discussed these things in Rome recently when we looked at Syrian and Iraq matters. My hon. Friend is right to say that there are a number of challenges—first, the genuine Syrian refugees caught up in the region. We should pay tribute to Lebanon, Turkey, Jordan, Saudi Arabia and other countries, for the massive burden that they have taken on. We have chosen to support those refugees who are most vulnerable. The challenge that has come across Europe comes not just from Syrians. Mixed in with them are Afghans and others from Africa, taking advantage of the patterns of migratory flow. We have said that if we open our doors to them, we are likely to encourage more. That is why we have been very firm.
The consequence is that thousands are still coming in across Europe every day and we need a solution to deal with that. If my hon. Friend visits Greece now, he will see the scale of the challenge there. On beaches that should be for holidaymakers, there are migrant camps and individuals everywhere, some in transit and some having put up a temporary home. EU countries are affected by that, which is why collectively we need a better solution.
Central to that is solving the problem so that people do not feel they want to turn their back on their country, thereby making it all the weaker. Many of the people who can make it and are making it to Europe are the ones with mobile phones, the ones who are fed and have a family. I do not doubt that they are going through an horrific time, but many of them are educated and if they depart from Syria, they deny it the doctors, nurses and engineers that will be needed once the guns fall silent and the country starts to rebuild itself.
May I say that the Minister is replying to the debate extremely well? It just shows that sometimes there is an advantage in having to wait a bit before one gets on to the Front Bench because one understands this place better.
May I ask my hon. Friend a serious question about the refugees from Syria? I put this point to the Prime Minister and I am not sure I got an adequate reply. I want the Minister to try and deal with it. I am not so worried about east European migrants to this country because they work hard and integrate. I am extremely worried about the millions pouring in from the middle east, including Syria. I said to the Prime Minister that Merkel’s million would all have a right to come here once they get passports. The Prime Minister said that only 2% of people coming into Germany get passports.
The Minister cannot give me an answer now, but will the Foreign Office do some more work on this? Based on history, I think a much higher proportion of those pouring into Germany now will get passports. I would like the Foreign Office to keep an eye on this because those people would have a right to come here and it is an important issue.
The first thing that has to be acknowledged is that the normal processes in place across Europe for dealing with refugees applying for status are going to be tested, because of the scale of the migration that we are dealing with. Under Germany’s current rules, they would have to wait a number of years—eight years, I think, but I stand to be corrected—before they can gain a passport. If they have a criminal record, they will not get a passport. So there is automatically a delay in the process of securing a passport. The German analysis is that in such a time frame, many will hope to return home or to remain in Germany. We need to keep the problem in context. If they are in Germany, have a German passport and receive benefits there, why would they want to come to the UK? These are big questions, but they are for further down the line. They should not be ducked. The scale of what we are dealing with is unprecedented since the movement of populations after the second world war.
I should just mention that much of the focus of the Syria conference that took place in the Queen Elizabeth II Conference Centre was on some of those questions as well. We raised an unprecedented amount of money—$11 billion was pledged in one day—from the international community. I spoke at one of the non-governmental organisation conferences, and much of the energy was focused on how the European Union deals with such challenges. If I am honest, the EU could be regarded as a fair weather organisation: when economies are doing well, that is all fine and good, but when something such as Ukraine comes up, that is when the mechanics of bringing countries together to achieve consensus has yet to be tested. That is where the European Union is having to learn far faster than NATO, which, from a security perspective, had the machinery in place to be able to react to these events on a more regular basis. None the less, my hon. Friend raises an important point.
I just want to talk a little about the consequences of exit, which is what this Bill is all about. In fact, as I mentioned earlier, we would have to delay the referendum. There is a trigger notice in article 50, which would prompt negotiation. A country cannot simply walk out of the European Union, nor can it tear up its membership card as one can do, presumably, with a political party. It needs to apply to leave, and in the good old European Union way there is a process to be followed. That process can last up to two years. It also requires the support of the 27 members, and that can take time. With all this, there is a question for those who are advocating departure: if the process were to last more than 24 months, what happens to businesses and where do they fit in? What will happen to deals, negotiations and reputations? How does the City of London continue to attract business if there is a question mark over the departure date—and that is before we have even considered what we might be entering into.
Michael Howard’s comments were referred to this morning. He talked about renegotiating to get back in. So, let us say that a country manages to get out of the EU in two years, it then might have to begin negotiations to get back in again. It took Switzerland eight years to consolidate its deal. That is time consuming. Arguably, the process can be faster. We are a far bigger country than Switzerland or Norway, so the process could be expedited. Again, there will be delays. There is a question mark over where we actually stand and what our relationship is.
It is just worth mentioning article 49, which does not get as much press as article 50 in the European treaty. It says:
“Any European State which respects the values referred to in Article 2 and is committed to promoting them may apply to become a member of the Union.”
Article 49 is all about what a country does to regain its membership. It says:
“The European Parliament and national Parliaments shall be notified of this application.”
All the national Parliaments then have a debate and discussion about a future British application.
“The applicant State shall address its application to the Council, which shall act unanimously after consulting the Commission and after receiving the consent of the European Parliament”.
So the country needs unanimous support. If one country were to say to us, “No, you can’t come back in on those terms” then we are stuck. Also, anybody who knows the European Parliament knows that it has myriad views.
It goes one to say that the European Parliament
“shall act by a majority of its component members…The conditions of admission and the adjustments to the Treaties on which the Union is founded, which such admission entails, shall be the subject of an agreement between the Member States and the applicant State.”
I could go on, but I think that the message is clear. There are an awful lot of hurdles to clear to complete the process. It is not a simple process.
My hon. Friend seems almost pleased to paint such a grim and complex scenario, but does he accept that that is only one possible scenario? Can he tell us what contingency plans the Government are making at the moment so that leaving the European Union after the vote on 23 June is much more straightforward and that there will not be all the problems that he is talking about?
We will have to wait until 24 June to see whether what that crystal ball says is correct. I am not painting a scenario; it is in article 49 of the Lisbon treaty. That is what we must honour and what we signed up for. We do not have a choice in that matter—that is how it is.
I will contemplate and reflect on what my hon. Friend has said, but my immediate reply is that we must honour the international law to which we have signed up. A nation must first consider article 50—that is about departure and getting out, which I always said is not an easy process—and then article 49, which states how we can get back into the treaty.
Let us pause for a second and think of the countries that are queuing up to join the EU. I was involved a little in encouraging Bosnia to meet the necessary requirements to be accepted into the European Union, and there is also Serbia and other countries. There is a long list of countries that want to become members of the European Union, or have some kind of status—it does not have to be full membership; it could be something similar to the arrangements of Norway or Switzerland. One argument could be that Britain has to get into line—
My hon. Friend shakes his head. I hope that were that horrible scenario ever to take place, recognition would be given to Britain’s place in Europe, but other countries could quite rightly say, “Hang on a minute, We have dedicated teams looking at us. Why should Britain jump the gun?”
Because as I understand, the heart of the argument from the leave campaign recognises that some aspects of the European Union are welcome, such as the single market and some aspects of the security situation, and that there would be a desire for re-entry so that we could have that relationship. [Interruption.] What I heard on the radio this morning is that we would renegotiate aspects of our relationship with the European Union—I have heard that again and again. If my hon. Friends are saying, “No, we will have no truck with the European Union whatsoever”, that is a new direction of travel that I have not heard before, so I am grateful that the debate has clarified what the leave campaign has been after for all this time.
Is the Minister aware that many countries have free trade agreements with the European Union without being members of it, an example being the agreement that America is seeking to make at the moment? The future for the United Kingdom is to have free trade with the European Union from outside it, in the way that many other big countries do. Does the Minister understand that?
I will heed the advice and encouragement, because other issues have been raised that we must also touch on. Let me be clear: there is a fair bit of bureaucracy to be gone through, but even securing a free trade agreement with the European Union would require a process to be followed and would not happen overnight.
Let me come on to free trade, because those issues were raised in the debate and perhaps I can answer my hon. Friend’s point. The European Union is our main trading partner and, as has been said, that trade is worth more than £500 million a year. That is half our total trade in goods and services. However, we can still trade with the rest of the world as well, and the EU has free trade agreements with more than 50 countries—that is alongside the 28 countries in the single market. Around 45% of Britain’s exports are designed for the single market itself, while 56% go to the single market and to countries the EU has free trade deals with. [Interruption.] I will give way to somebody if they would like to give me a break so that I can clear my throat.
I am grateful for that intervention—from a number of angles—and my hon. Friend makes an important point.
We have dealt with the delays, so I will move on to TTIP’s impact on the health service, which hon. Members raised. Many hon. Members have received emails on this subject questioning what the situation is. I should make it clear that TTIP poses no threat to the NHS whatever. It cannot force the UK to privatise public services, and any suggestion to the contrary is irresponsible and, indeed, false. The Prime Minister, the European Commission and the US Government have made that clear. The NHS—indeed, public services—will not be privatised through the trade deal, nor will the deal open NHS services to further competition or make irreversible any decisions on the provision of NHS services that are taken by the UK Government. I hope that that makes the position clear in answer to the many emails many of us have had on this issue—in fact, there might even be a 38 Degrees campaign on this.
That is why these debates are helpful. I can only make clear what the Government’s position is. I can also ask the Minister for Europe to place a letter in the Library to set out in more detail what the consequences would be. Given the number of emails, there is clearly huge interest in this matter across the country, so I am pleased to have this opportunity to address it.
Guidance to the civil service was mentioned. The example was given of the fishing Minister’s dilemma in being unable to participate fully in the debate on the European Union. Of course, he can participate fully, but to clarify—the Prime Minister also responded on this issue at Prime Minister’s Question Time—the Government have a clear position, which is to recommend to the country that people vote to remain members of a reformed European Union.
Quite exceptionally, Ministers are being allowed to depart from the normal rules on collective responsibility, in order to dissent from the official Government position on the referendum question. However, the civil service exists—we cannot get away from that—and it is there to support the Government of the day and the policy agreed by the Government of the day. The letter published by my right hon. Friend the Prime Minister, and subsequently extended by formal guidance from the Cabinet Secretary to civil servants, does no more than give effect to that.
The Government’s view seems to be that we should stay in the European Union. I presume that even they would concede that being a member of the EU is disadvantageous in some ways, although their view overall is that it is better for us to remain. If their view on fishing, for example, is that it may be to our disadvantage to be in the EU, and the fishing Minister wanted to use the Government machinery to come up with something better, would he be allowed to do so, or are we in the ridiculous situation where every Minister has to pretend—whether it is true or not—that every aspect of EU membership is in our interests?
The Prime Minister returned from the European Council having managed to secure the changes necessary for him and the Government to confirm the position that a reformed European Union is in the interests of British membership. From that perspective, there is a collective responsibility to support it. The reason for the change is the unique situation of having the vote. It is absolutely the case that individual Ministers can dissent, but people cannot pick and mix—they cannot take out a slice and say, “I don’t agree with that”, because that would make a mockery of participation and involvement in the European Union.
I was going to wait until the part of my speech dealing in detail with the timetable before I answered the question on purdah, but because of the lack of time, I am pleased to confirm that it will begin 28 days before the vote. I hope that helps my hon. Friend the Member for Gainsborough.
Several hon. Members have discussed VAT on sanitary goods. In our view, EU member states should have the flexibility to apply a zero rate of VAT to sanitary products. The Financial Secretary to the Treasury has written to the European Commission and other member states setting out the Government’s view that EU member states should have full discretion over the rate of VAT they should apply. The Financial Secretary has been informed by the Commission that its action plan may put forward options to allow member states greater flexibility in the application of the reduced and zero rates of VAT. I am sure that he will make more statements on this in due course.
We have touched on the trade deficit, which is an important issue. The Office for National Statistics’ “Pink Book” with data for 2015 and 2014 confirms that UK total exports to the 28 nations of the EU were £229 billion, and UK imports from the 28 states were £291 billion. The UK’s trade deficit with the EU 28 was therefore £62 billion. However, it would be disingenuous to use that figure on its own because of the difference between goods and services, of which hon. Members will be aware. We are far stronger in the services aspect. With the reforms that are coming through, that is where the single market is likely to grow in future, and where we are likely to be in surplus rather than in deficit. It is very important to recognise the opportunities for Britain in remaining in the European Union as a result of that.
Passports have been mentioned. My hon. Friend the Member for Shipley talked about what happens when an individual from the European Union enters our borders and has their passport swiped. There is a watch list system used by Home Office staff for the purposes of border and national security, and the detection and prevention of crime. During business as usual, 100% of passengers arriving in the UK have their identity documents scanned against the watchlist, so somebody on it will be identified and can be detained if need be. The Government’s strategic objective to enhance border security and militate against organised criminality and terrorism risks has led to a requirement to check arriving passengers against the Schengen information system at the border. This is another great example of “what if?” If we were to depart from the European Union, would we have to renegotiate ourselves back into the ability to use SIS II, as it is called?
Will the Minister confirm that, contrary to the assertions made in yesterday’s debate, when somebody comes into the UK from the European Union their entire criminal record does not flash up before the Border Force, and we do not then cart them off to kick them out of the country on that basis? Will he confirm that that was a wholly false assertion?
I feel an element of consensus breaking out in the Chamber, which is a rare thing.
As I bring my introductory remarks to a close, may I congratulate my hon. Friend the Member for Christchurch on promoting the Bill, and my hon. Friend the Member for Wellingborough, who has been an astute advocate of debating these matters in more detail? The issue of Europe is not only topical, but of the utmost importance. It received a full day’s parliamentary debate yesterday and we will have further debates leading up to 23 June.
The British public made it clear that they were not happy with the status quo, and the Prime Minister sought to address that, so last November he wrote to Donald Tusk, the President of the European Council, setting out in detail the four areas in which he sought change to the European Union, namely economic governance, competence, sovereignty and immigration. At the February European Council he achieved a deal covering each of those areas.
As the Prime Minister has said, we said that we would get Britain out of ever closer union and give national Parliaments the power to work together to block unwanted EU laws. The deal we have delivered means that we will never become part of a European Union superstate.
We said that we would make Europe more competitive, and we have delivered that in this deal as well, with commitments to cut red tape, in particular for small businesses. That means we can create more jobs and security for working people in Britain.
We said that we would protect Britain as the eurozone continues to integrate. We have delivered that in this deal, which means that British taxpayers will never be required to bail out the eurozone and that British businesses can never be discriminated against because we are not part of the euro.
We said that we would put an end to the “something for nothing” welfare culture for EU migrants so that we can control immigration from Europe, and we have delivered on that as well. EU migrants can no longer claim full in-work benefits for four years, which some people said would be impossible to achieve, and child benefit will no longer be sent overseas to Europe at UK rates. We have already delivered our commitments to require EU migrants to leave Britain after six months if they have not found work and have no genuine prospect of finding a job, and to stop EU migrants being able to claim universal credit while looking for work.
This is a legally binding and irreversible deal that delivers for Britain. It means that we will never join the euro, never join a European army and never be part of the Schengen borderless zone.
Soon the people of Britain will have their say on the UK’s membership of the EU. The Prime Minister has announced that he intends to hold the referendum on Thursday 23 June, and that must now be agreed by both Houses of Parliament. We have already published information on the outcome of the Government’s negotiations on the UK’s membership of the EU, as required by the European Union Referendum Act 2015. In time, we will publish information on the rights and obligations resulting from the UK’s membership of the EU, as well as examples of countries that are not members of the EU but have other arrangements with it.
This will be a once-in-a-generation moment to shape the future of our country. Ultimately, it will be for the British people to decide, but the Government have made it clear that we support continued membership of a reformed European Union. I want to set out in more detail the Government’s thinking on renegotiation, but first I will explain some of the benefits—I am sure that Back Benchers will appreciate this—of our membership of the EU.
The Government’s long-term economic plan is delivering economic security for families and businesses, underpinned by sound public finances, by investing in the UK’s future, addressing the productivity challenge and rebalancing the economy towards trade and investment. With turbulence in the global economy, membership of the EU supports that plan by giving British businesses access to the free trade single market and dozens of trade deals across the world. The Government’s deal keeps the EU moving firmly in the right direction. It hardwires competitiveness into the decision making of the EU and commits the EU to pursuing more trade deals with non-EU countries. We contribute a huge amount and get a huge amount in return. We cannot be a force for good in a reformed Europe if we are not at the heart of what is going on. We are a major player—
The debate stood adjourned (Standing Order No. 11(2)).
Ordered, That the debate be resumed on Friday 4 March.