European Affairs

Debate between Lord Hammond of Runnymede and Lord Herbert of South Downs

Thursday 25th February 2016 Commons Chamber

[Mr Hammond]

I agree with the hon. Gentleman, and I am about to come to that point. I hope that my remarks might provoke some of my hon. Friends to put some flesh on the bones of what leaving might mean. I will say something about the consequences of, respectively, a vote to leave the EU and a vote to remain.

[Nick Herbert (Arundel and South Downs) (Con)]

Will the Foreign Secretary give way?

[Mr Hammond]

Let me make my point, and then I will happily give way to my right hon. Friend. A vote to leave is a vote for an uncertain future. That is a simple fact. That uncertainty would generate an immediate and negative reaction in financial markets; on that, all market commentators agree. Indeed, the mere possibility of a leave vote will have a chilling effect on business confidence even before the referendum.

[Mr Hammond]

As the right hon. Gentleman suggests from a sedentary position, we have had a foretaste of that this week in the currency markets.

A vote to leave would trigger a fixed two-year time period under the treaty for the UK to negotiate the terms of our exit from, and our future relationship with, the EU. We would, of course, seek to reach agreement with the other 27 member states during that two-year period. In the meantime, however, we would be able to offer British businesses that wanted to invest no assurance at all about their future access to EU or other markets. We would have nothing to say to Japanese, American or Chinese companies that come here looking for a base from which to produce for the EU market. That would be truly a leap in the dark, and the effect would be to put the economy on hold until the negotiations were completed. At the end of those two years, there is no guarantee that agreement would have been reached, but our exit would be automatic unless every single one of the remaining member states agreed to an extension of the negotiating period.

[Nick Herbert]

My right hon. Friend is rightly drawing attention to the potential impact of Brexit on our economy, but may I take him back to the issue of security? It was suggested earlier that there would be no adverse consequences for security from our leaving the European Union, because we would remain members of NATO. Did he hear the remarks this morning of the former Secretary-General of NATO, Anders Fogh Rasmussen, who said:

“If the UK were to leave the European Union, the voice of the UK would be weakened”?

He concluded:

“I would strongly regret if Britain were to leave the European Union. A lot is at stake when it comes to security.”

Should we not listen to former Secretaries-General of NATO, as well as to former military commanders, and have some respect for their views?

[Mr Hammond]

Mr Fogh Rasmussen is not merely a former Secretary-General of NATO, but a former Prime Minister of Denmark. That country can tell us something about the binding and enduring nature of protocols that are made in EU negotiations. It is important to acknowledge that security comes in different parts: military security and defence, but also security against organised crime and against terrorism. The EU makes its most important contribution to our overall security in the latter two.