Skip to main content

EU: UK Membership

Volume 697: debated on Tuesday 18 December 2007

asked Her Majesty’s Government:

Whether they have made an assessment of what the impact would be on the United Kingdom’s trade with the European Union and the jobs which depend on it if the United Kingdom were to leave the European Union and continue in free trade and intergovernmental collaboration with the remaining member states.

My Lords, membership of the European Union is central to the pursuit of stability, growth and employment in the UK. Membership of the EU provides significant benefits for UK business and employment. Britain’s trade with the European Union has grown from just over 40 per cent of our total trade in 1973 when we joined to around 55 per cent today.

My Lords, I am grateful to the Minister for that reply, although it does not go quite as far as the Lord President did on 5 December when she admitted that the jobs depend on our trade with the European Union rather than on our membership of it. I ask the Minister to come one easy step further and agree that none of those jobs would be lost, and indeed that millions more would be created, if we were to escape from the EU’s regulatory regime, which Commissioner Verheugen himself has said costs some 6 per cent of GDP annually. Does he also agree that if we spent on our services the many billions of pounds that we send to Brussels, that would also create a lot more jobs in this country?

My Lords, the noble Lord is seductive, but it is not a simple step further. I would add that the single market, which is a product of Brussels, boosted the EU GDP by €225 billion in 2006 alone, and we were major beneficiaries of that.

My Lords, has the Minister made an assessment of the increased bureaucracy that would be involved in our country negotiating with the remaining 26 European Union countries, or indeed of the disadvantageous position that this country would have in negotiating with the remaining EU 26?

Fortunately, my Lords, I have not had to make such an assessment, because membership of the European Union is firm and therefore this contingency plan has been unnecessary, but I completely affirm the sentiment of the question. We would create a huge bureaucracy. Beside Whitehall, there would be the Pearson bureaucracy for managing bilateral relations with all these countries.

My Lords, I think that I did. Does the Minister agree that the noble Lord, Lord Pearson, is not being in the least seductive to most of us? Is not one of the major points of the Union that together the countries of Europe can do more than any one nation by itself? Should we not be more concerned about how we can increase United Kingdom influence rather than the battier concepts of the United Kingdom Independence Party?

My Lords, I stand corrected; the noble Lord was not seductive. Last week, the meeting of European leaders took a critical step away from internal institutional architectural matters to precisely those issues on which Europe works together, as we did at Bali on climate change and on securing for Europe a bigger stake in the global economy. It is those big issues on which Europe can help us to deliver, which the UK alone would never be able to do.

My Lords, does the Minister agree that there is a certain contradiction when the noble Lord, Lord Pearson, rubbishes any figures that the Government give for benefits from EU membership, but then asks for a confirmation of benefits from leaving the EU? You cannot have both at the same time. Will the Minister correct the noble Lord, Lord Pearson, in his belief that we would escape from the regulatory reach of Brussels if we had a free trade area agreement? Perhaps he might like to visit Norway and ask why it applies all EU internal market legislation.

My Lords, the noble Lord is of course correct that there is no wonderful golden place on the hill where we escape the bureaucracy of international trade. There are lies, damned lies and statistics, as has often been said. We are all much too selective in wanting statistics to support our own side of the argument and not the other. I would suggest to the noble Lord that we look at the statistics to see that they benefit membership of Europe.

My Lords, does the Minister agree that the United Kingdom tends to have a visible trade deficit with other leading EU countries, but that that is more than adequately made up by substantial surpluses on the invisible and services account? Is not the key to this what the Minister said just now? It is the two-way trade that counts. Literally millions of jobs in this country are dependent on our full-hearted membership of the EU. So, although the Minister is not responsible and does not want now to be seduced by the noble Lord, Lord Pearson, can he explain to the House why the noble Lord is so worried about Europe and our membership, a bit like the Prime Minister was in his pathetic Statement yesterday?

My Lords, we believe that 3 million jobs in the UK are linked directly and indirectly to the export of goods and services to the EU. There is a massive inward investment into the UK from the European Union. I certainly am not ashamed, nor is my right honourable friend the Prime Minister, of asserting the very real benefits of Europe to this country.

My Lords, does the Minister agree that if we were to repeal the 1972 Act, we would still remain members of the European Economic Area and, therefore, would be in the same position as Norway, which, despite, what the noble Lord, Lord Hannay, said, exports more per capita to continental EU countries than the United Kingdom?

My Lords, the noble Lord must understand that history is not so easily reversed. We are where we are. We are a very successful member of Europe, gaining enormously from the relationship. I do not think that it can be undone without costs, not just politically, but to economics and trade as well.

My Lords, does the Minister agree that he made a groundbreaking statement in his answer to the noble Lord, Lord Dykes, when he said that 3 million jobs in this country depend on our trade with the European Union, not on our membership of it?

My Lords, again, let me be clear. The two are not as deeply separated as the noble Lord wishes. Trade comes from the political relationships we enjoy from being inside Europe. Many of those who look to us as a home for financial services and so on because of our access to Europe would take a second look if we were no longer part of the European Union.

My Lords, is the Minister not worried that the EU may cause the City’s wholesale markets to migrate elsewhere, causing incalculable damage to the British economy? If not, why not?

My Lords, we will do nothing deliberately to compromise the competitiveness of the City of London. It is a major part of our economy and we do not want to lose its competitive advantage.