EU: UK Membership

Viscount Younger of Leckie Excerpts

Monday 11th February 2013 Lords Chamber

[Lord Davies of Stamford]

To ask Her Majesty’s Government how many jobs they think would be created by the United Kingdom leaving the European Union.

[Viscount Younger of Leckie]

My Lords, the Question is based on multiple hypotheticals and intangible variables. I will do my best to deliver my response with a touch of realism. The Government’s policy on the EU is clear. It was set out most recently in the mid-term review and was confirmed in the Prime Minister’s speech, so no analysis has been made at this time of the number of jobs that might be created or, indeed, lost as a result of a UK exit.

[Lord Davies of Stamford]

My Lords, I am afraid that the Minister’s bureaucratic evasion cannot avoid the bare fact that no one has ever suggested that leaving the European Union would create a single job, but everybody knows that doing so would put at risk many jobs, both present and future, depending on future decisions about the location of investment. Against that background, why are the Government gratuitously creating this uncertainty for investors and employers? Can we have an explanation for why over the past few weeks several Cabinet Ministers have openly been talking about their willingness to leave the European Union?

[Viscount Younger of Leckie]

The noble Lord is right in saying that we were right to stay within the European Union. The reason that decisions have been made to get rid of the uncertainty is because questions are being asked, not only within the UK but within Europe, about our future, and it is right to settle that now. I stress that the noble Lord is right in saying that it is very important that we stay in the EU. The single market provides UK businesses with access to a market of 500 million customers worth around £11 trillion in 2011. Between 1992 and 2008, the single market is estimated to have raised EU GDP by 2.13% and to have created 2.77 million new jobs. It is estimated that those benefits could be doubled with the removal of the remaining trade barriers.

[Lord Pearson of Rannoch]

My Lords, given that only 9% of our GDP exports to the European Union, declining and in deficit, that 11% of our GDP exports to the markets of the future, rising and in surplus, and that 80% stays in our domestic economy, is it not obvious that that 91% of our GDP, which is made up of our non-EU exports and our domestic economy, would generate several million new jobs if they were freed from the stifling overregulation from Brussels?

[Viscount Younger of Leckie]

It may not surprise the noble Lord that I do not agree with his approach. It is estimated that around 3.5 million jobs in the UK are dependent on trade with the EU. The UK exports a wide range of goods and services to other European member states, everything from cars, worth more than £13 billion in 2011, through music, which represents £1 billion and even more once related services, royalties and licences are included, to a wide variety of food and drink products, worth close to £10.5 billion. There is much to be lost if we leave the EU.

[Lord Razzall]

My Lords, if we take the follow-up question by the noble Lord, Lord Davies, and indeed, the Minister’s answer to the last question, does he not fear, realistically, that the uncertainty created by the Prime Minister’s commitment to a referendum in 2017 will risk reduced investment and employment in British manufacturing industry, particularly in the motor car industry, to which he referred?

[Viscount Younger of Leckie]

I do not agree with my noble friend, but I stress again that it is right to end the uncertainty of the questions that are persistently asked. My noble friend mentioned UK car manufacturers. They effectively saved £0.9 billion in 2009 by not having to pay the common external tariff to export to the EU. This equates to a saving of £1,100 per vehicle exported in 2009 to the EU. I stress that there are large figures involved in needing to settle the uncertainty.

[Lord Soley]

I put it to the Minister that he is not answering the question about the judgment of investors as a result of the uncertainty created by a referendum. Can we have his assessment of the impact of the uncertainty of a referendum on inward investment?

[Viscount Younger of Leckie]

I cannot give any specific figures on that, but I stress again that it is important to end the uncertainty. That is why my right honourable friend the Prime Minister has set out in the other place his stall in terms of how we go forward, including with a referendum.

--- Later in debate ---

[A noble Lord]

We’re in Europe!

[Viscount Younger of Leckie]

I do not agree with that particular approach. European markets count for under half of UK exports of goods and services. Seven of the UK’s top trading partners are EU member states.

[Lord Reid of Cardowan]

My Lords, multiple hypotheticals and transient variables seem the very essence of the Government’s policy on Europe. Avoiding those, will the Minister answer a factual question? When last year, in the middle of the eurozone crisis, I asked the Government whether there was not an approaching fork in the road, and whether they would envisage the possibility of a two-speed, or multi-speed, Europe, I was told that the Government did not envisage that under any circumstances. What happened to change their mind?

[Viscount Younger of Leckie]

The answer to the noble Lord’s question is that we are fully focused on staying within the EU. We do not see a two-tier Europe coming forward.

[Lord Hannay of Chiswick]

Can the Minister clarify another simple point? How does the announcement of a referendum in four years’ time, the result of which cannot possibly be predicted, remove uncertainty?

[Viscount Younger of Leckie]

The Prime Minister emphasised in another place that now was not the right time to hold a referendum, and that it would be right to hold a referendum after the next election—and after, we hope, the current EU crisis has abated.