European Communities (Finance) Bill

My Lords, my noble friend Lord Waddington has already done a magnificent job of exposing the history and folly of our increased contributions to Brussels. I imagine that my noble friends Lord Stoddart and Lady Noakes will continue the good work and I would not like to queer their pitch. Therefore, I hope it will be helpful to place the Bill against the broader economic background of our EU membership, which is even more expensive and destructive of this country’s future. It is because of that background, as well because of our cash contributions, that we should not pass the Bill tonight. I remain astonished at the continuing inability of our political class to grasp a simple fact: our trade with our clients in the European Union is separate from our membership. The two things are different, and the former does not depend on the latter. Our politicians, bureaucrats and most of our political media seem to believe that our trade with the EU, and the three million or so jobs that depend on it, would be lost if we left the political construct of the Treaties of Rome and continued in free trade and friendly collaboration with our neighbours in Europe. I can only assume that they continue to believe that because they have no personal experience of international trade or commerce. Their dream of European integration is therefore free to banish common commercial sense from their minds. That common commercial sense contains several hard facts that no amount of dreaming will dispel. The first hard fact is that the EU’s average external tariff, supported by the World Trade Organisation, has now fallen to below 1 per cent. That makes the single market somewhat redundant anyway. Then there is the fact that our EU partners sell us more than we sell them, so they need our trade more than we need theirs. We are in fact their largest customer, taking some 18 per cent of all EU exports. The United States of America comes second, with 16 per cent. Therefore, whatever happens politically, that trade would not be lost and nor would the jobs that depend on it. The jobs depend on the trade, not on our EU membership. Our position would therefore be stronger than that of Norway and Switzerland, for example, neither of which is in the EU but both of which export more per capita to it than we do. That fact alone surely confirms that EU membership is irrelevant to a healthy trading relationship with the single market. It is no good the Minister and your Europhile Lordships replying that Switzerland is smaller than us and therefore what goes for Switzerland would not go for us. I am afraid that is nonsense and that the reverse is obviously true. The Swiss economy is similar to ours in many ways, but we are roughly 10 times its size and, as I have said, we are the EU’s largest client, so we could easily agree at least as good a free trade deal as that enjoyed by Switzerland. In parenthesis, the Swiss Federal Government have helpfully gone further and estimated that full EU membership would cost Switzerland nearly nine times as much in budgetary contributions as its present bilateral trading arrangements—or some 4,940 million Swiss Francs versus 557 million Swiss Francs. A similar study here would no doubt come up with the same sort of picture and reveal the many billions that our EU membership costs us more than a simple free trade agreement with the single market. Talking of free trade, Written Answers to me on 16 January reveal that the EU already has free trade agreements with Chile, Mexico, South Africa, Liechtenstein and Iceland, as well as Norway and Switzerland. It is negotiating free trade agreements with a further 42 countries. Why not us? Why is it that none of these countries, nor most of the other countries in the world, feels the need to join the EU? The answer is that membership is cripplingly expensive and wasteful and removes the right of its members to govern themselves. The latter disadvantage is beyond the scope of this debate but no doubt we will return to it when we come to debate the proposed Lisbon constitution. It is not only British Eurosceptics who are saying that EU membership brings no economic advantage. The leading French think-tank, the Conseil d’Analyse Economique, which reports to the French Prime Minister, said nearly two years ago that neither the single market nor the euro had done anything for the economy. I quote: "““no sudden burst in the trade of goods and services””—" such as was seen in North America after the North American Free Trade Agreement was signed in 1989— "““has been observed since the Single Act entered into effect in 1993, nor since the euro was introduced in 1999. The price convergence which EU monetary union was supposed to bring also did not occur, and convergence even came to a standstill in 1999 … The authors believe that these problems may largely be attributed to the EU’s institutional shortcomings … Economic integration has stagnated and no longer promotes growth””." Since it is a semi-official French Government report, it goes on to recommend that the cure is even more Europe, and more economic integration and deepening from Brussels. So it gets the solution wrong, but the analysis of the status quo remains depressingly accurate. I am aware that the Government are fond of quoting a rather different analysis from the Commission, entitled, Steps Towards a Deeper Economic Integration, which claims that the single market has created 2.5 million jobs across the EU and boosted prosperity by €225 billion in 2006. If the Minister is going to produce those figures again this evening, will he pause and consider the €660 billion which the EU competition commissioner, Verheugen, estimates is wasted on EU overregulation and red tape? Does that not make the EU economies some €435 billion worse off, even on the Eurocrats’ own figures, or around 4 per cent of GDP? I look forward to the Minister’s comments. It is a continuing national scandal that the Government refuse to sanction an official cost-benefit analysis of our EU membership. In the absence of such an exercise, the several private academic studies which have been carried out put the cost of our membership, including our cash contributions, at anything between 4 and 10 per cent of GDP. The reason for the Government’s refusal to commission an analysis can be only that they know that the result would make the British people very angry indeed. Our membership of the European Union costs millions of jobs. I suppose that that is why the Government invent all sorts of other justifications for the project of European integration. They say that, as part of the EU, we can better fight climate change, which is a pointless exercise. They say that we can deal with international drug-trafficking and terrorism, and generally promote peace and goodwill in our time. I fear that I am again straying into constitutional rather than economic territory, so suffice it to say that this is all make-believe. We would have much more and better influence as an independent sovereign state in all these areas than we do as a minority player in the EU. I return to the hard cash that we hand over to Brussels. Thanks to this Government’s cowardly failure to hold on to the rebate secured by my noble friend Lady Thatcher, I gather that the amount is set to rise to some £25 billion gross by 2012, and £12 billion net. The figures start to escalate fast in 2010-11, so I am advised—the noble Lord, Lord Barnett, may know better, but even he appeared to be confused. The deal was, as I understand it, that the French would agree to an inquiry on CAP reform if we lowered the rebate. So we lowered the rebate, and the French have refused any reform of the CAP, which is one of the most destructive policies on the planet, until 2013 and probably until 2020. That is EU negotiation for you: honourable, great fun, and well worth it. As I said at the outset, I have no doubt that my noble friend Lady Noakes will deal with this sorry saga in greater detail. I conclude by reminding your Lordships that we are talking about wasting an awful lot of taxpayers’ money. A mere £1 billion equips and staffs a decent-sized district hospital indefinitely, as I have pointed out to your Lordships previously. The figure cited by my noble friend Lord Waddington only built the hospital; my figure builds it, equips it and staffs it indefinitely. We should look at the gross, not the net, figures, after Brussels has been graciously pleased to give back some of our money to spend on projects designed to improve its own wretched image. I remind your Lordships, too, that we are handing over these huge sums to an organisation which is institutionally and hopelessly wasteful and corrupt. It is therefore wholly unworthy of our support. Its own internal auditors have refused to sign off its accounts for 13 years. It employed its first qualified chief accountant in 2002, in the shape of Mrs Marta Andreasen, after the scandal-ridden Commission had been forced to resign. It then sacked her when she refused to sign the first set of unaccountable accounts which were put in front of her. The EU’s Civil Service tribunal naturally found against her in November, parroting the Commission’s case. She is a brave and thoroughly decent woman, and she will now appeal to the EU’s Court of First Instance. I trust that we all wish her luck and justice. For years, nobody would employ her because they did not want to offend the beast in Brussels, but I am proud to say that she has recently agreed to become the UK Independence Party’s treasurer. My party at least will be kept on the straight and narrow. That is more than can be said for the European Union, to which we should not give another penny until its accounts are fairly audited. We should reject the Bill and spend the money which goes with it on better purposes of our own.