EU-UK Relationship (Reform)
Debate between Andrea Leadsom and Andrew Turner(11 years, 7 months ago)
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Andrea Leadsom
I entirely respect my hon. Friend’s views and perhaps I should say “multi-tier”, because his criticism is very fair—“multi-speed” is the wrong term. The point that I was trying to make is that there can be different relationships with the EU, not that different countries are all trying to get to the same end-point. His criticism is fair; I apologise for my careless writing there.
The key advantage of the EU for Britain’s national interest is that of a trade area. I think that most people, whether or not they are in favour of Britain’s membership of the EU, would accept that Britain will continue to trade with the EU. In fact, 48.6% of UK goods exports now go to the EU as a whole—
Andrea Leadsom
However, one can slightly reduce that figure if one looks at the Rotterdam-Antwerp effect, if that was the point that my hon. Friend was going to make.
Andrea Leadsom
Yes. I thank my hon. Friend for that intervention. I am coming straight on to that point now, so I am very pleased that he has raised it.
The EU is already a significant trading partner, but there are significant opportunities for growth. Services account for 71% of EU GDP, but only 3.2% of that comes from intra-EU trade, and the UK Government continue to push for the completion of the single market, especially in services. Financial services gave us 11% of our tax receipts in 2009-10, providing a trade surplus of £31 billion in 2010. Financial services is an incredibly important sector in which there is enormous capacity for growth. Of course, that is why the Prime Minister used his veto last December.
What are the alternatives to EU membership? There are probably four. First, there is most favoured nation terms, under which around half of manufactured exports to the EU would face an average tariff of more than 5%, with some sectors being particularly badly hit, such as UK car exports, which would face a tariff of 10%. That would have a significant effect on UK business, making us a far less attractive location for foreign direct investment. In addition, the UK would lose its influence on framing EU regulations, so it would be required to buy in to EU regulations in order to trade with the EU but would have no say in framing them.