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European Union: Single Market

Volume 769: debated on Thursday 17 March 2016

Question

Asked by

To ask Her Majesty’s Government what assessment they have made of the Civitas publication, Myth and Paradox of the Single Market: How the trade benefits of EU Membership have been mis-sold, and what discussions they have had with the Governor of the Bank of England about that report.

My Lords, in order to inform policy-making, the Government review and note the wider evidence, including the Civitas publication, on an ongoing basis. The UK will be better off in a reformed Europe because British businesses will have full participation in the free trade single market, bringing jobs, investment, lower prices and financial security. The Government’s new settlement confirms that there will be a new focus on further extending the single market.

I regret that the Government are so dismissive of this ground-breaking report, which shows that four smaller non-EU countries —Chile, Korea, Singapore and Switzerland—have been able to make vastly more free trade deals than has the EU, with its pretended clout, on our behalf. Can the Government tell us why, as the world’s fifth largest economy, we could not do as well or better if we left the EU? Secondly, do the Government accept that the single market would want to continue its free trade with us, because we are its largest client?

That is a fact, my Lords. Would Brexit be not so much a leap in the dark for our overseas trade as a leap into the light?

My Lords, I think that I said in my opening reply that the Government took into account all evidence, although that does not mean to say that they agree with it. The Government’s view is clear. We believe that any other alternative to EU membership would leave Britain worse off. No free trade agreement, including the Canada-EU free trade agreement, is as successful in removing the non-tariff barriers to trade as a single market. This is particularly important for Britain, which relies less on goods, which are hindered by tariffs, and more on services, which are hindered by the non-tariff barriers. No country outside the EU has agreed full access to the single market without paying into the EU and accepting free movement. As far as the trade imbalance that the noble Lord mentioned—he is right about it—he talked of a leap in the dark, but he must also recognise the fact that, while half the goods that we exported went to the EU, when you look at it from the EU’s point of view, 7% of the EU’s goods came to the UK. I hardly think that that is a strong negotiating stance to get all 27 countries to agree unanimously to a new trade deal in two years.

My noble friend the Minister referred to a reformed European Union. There is no reformed European Union. Indeed, the European Union has proved itself to be unreformable. If the single market is such an economic miracle, why does he think that the European Union is widely recognised as being something close to an economic disaster zone at the present time? Why does he think that in the latest opinion poll in France, published in Le Monde a few days ago, 53% of the French people said that they would like a referendum so that they could leave the European Union?

My Lords, when the noble Lord says that the European Union is not reformed, he ignores the fact that we are out of the parts of the Union that do not work for us. We will not have to join the euro. That is agreed. We will not have to be part of eurozone bailouts. That is agreed. We will not be part of the European army. That is agreed. Importantly, we will not be part of a EU superstate. We have the best of both worlds—and the one thing that we have is a market of 500 million people on our doorstep without any trade barriers at all.

My Lords, I have not assessed the Civitas report, but I have read quite a lot of it. I think that the former Business Minister, Edward Davey, might be a little surprised to see that he had been a catalyst for a whole 213-page document about the single market. We were told earlier that it was a ground-breaking document, but even the author of the Civitas paper says that,

“non-member countries pay nothing for exporting to the Single Market, other than the tariff and trade costs of individual exporters”.

Would the Minister not agree that that is the very reason that the United Kingdom needs to be in the single market, precisely so that our individual exporters are not subject to the tariffs that third countries are subject to? Can the Minister tell us—

I agree. The question is whether a genuinely free trade area of 500 million people on our doorstep is a good thing to be part of.

My Lords, the noble Lord spoke of lower prices in the single market. However, since this organisation is a protectionist one, is it not clearly the case that consumers within the EU are paying higher prices than they would otherwise be paying?

My Lords, as we are on this subject, could my noble friend clear up a little matter of fact? Were those letters that were published over the names of distinguished former military personnel and leading industrialists drafted by people being paid by Her Majesty’s Government who subsequently importuned those gentlemen for their signatures?

My Lords, I am afraid that my briefing did not cover that. What I can do is commend to the House the speech made in the debate on 2 March by the noble and gallant Lord, Lord Stirrup, who made it very clear why it is preferable to remain in the EU.