European Union Bill

I do not want to delay the House, but that is why I made the distinction between a customs union and a free trade area. The worst aspect of our membership of the EU single market is its sheer cost. Like their predecessors, this Government are determined to avoid an official cost-benefit analysis, and so we are left with the eight analyses that have been produced since the turn of the century, four of which are pretty much official, and which put the cost of our single market membership at anything between 4 per cent and 10 per cent of GDP. Indeed, the highest cost estimate came in 2005 from the Treasury itself in a paper entitled Global Europe: full-employment Europe under the signature of Mr Gordon Brown when he was Chancellor of the Exchequer. It put the cost of EU regulation at 6 per cent of GDP and of EU protectionism at 7 per cent. In March 2006, the French Conseil d'Analyse Economique, which is attached to their Prime Minister’s office, found that France had gained nothing from the single market or, indeed, the euro. In June 2006, the Swiss Government published their finding that joining the EU and its single market would be nine times more expensive than staying with their current sectoral free trade agreements with Brussels. Later in 2006, the EU Commissioner for Enterprise and Industry, Mr Günter Verheugen, said that EU regulation was costing its members some €600 billion a year, or around 6 per cent of GDP at the time. One of the troubles with being in the single market is that this EU overregulation, whatever it costs, applies to the whole of our economy, not just to the 9 per cent that trades with clients in the rest of the EU. So the 11 per cent of our GDP that goes in trade with the rest of the world and the 80 per cent that stays in our domestic economy—91 per cent of our GDP—has to carry the burdens of Brussels’s overregulation. There are, of course, those who fear that were we to leave the EU and its single market our trade would somehow suffer and that, to quote the propaganda, 3 million jobs would be lost. The truth appears to be the opposite: trade would expand and jobs would be created. It is, of course, true that we have 3 million jobs exporting goods and services to clients in the EU, but they have 4.5 million jobs exporting goods and services to us. We are, in fact, the EU’s largest client. Would the French stop selling us their wine or the Germans their cars just because we had left the single market and were no longer bossed around by Brussels? Of course not. There are also the points that the World Trade Organisation would prevent any form of retaliation were we to leave and that the EU’s average external tariff is now below 1 per cent. Our trade is going up faster with the rest of the world than with the EU, both inwards and outwards. Our exports to the EU single market are declining. The single market is sclerotic and overregulated and its demographic trend is against it. It is the ““Titanic””. It is also hard to think of any other customs unions along the lines of the EU. There was the Soviet Union, and there may be something similar in the Caribbean, but nowhere else. Mercosur in South America does not count because its members are free to agree their trading relationships with non-members. Can the Government advise us of any other customs unions like the EU? If not, does that not suggest that it may not be such a great idea? As to Amendment 23F, I do not think we need the EU getting more involved in financial regulation. Commissioner Barnier has openly said that he does not favour what he calls the Anglo-Saxon model, and we have yet to feel the damage done to the City of London and its ability to pay tax by the new EU supervisory bodies. When the movers of the amendment say that they do not want it to interfere with the UK’s general approach to financial regulation, I ask whether they have Monsieur Barnier’s agreement? The deed is done. Overall financial supervision has passed to Brussels. No provisions in this Bill will prevent that. As to Amendment 23H, I fear that those of us who come from the Eurorealistic perspective would rather that the unelected Commission did not continue to negotiate on our behalf in a new global trade round. As the world’s fifth-largest economy, we would rather do it for ourselves. Finally, is it not really grotesque that an organisation that has so dismally failed to look after the vast sums entrusted to it by the taxpayers of Europe should have its powers strengthened, or made more effective, as the amendments have it? More will certainly mean even worse, and I oppose the amendments.