EU Membership: Economic Benefits

Angus Brendan MacNeil Excerpts

Wednesday 15th June 2016 Commons Chamber

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

I welcome the opportunity to speak in this crucial debate, Mr Speaker, and I consider that the subject matter falls perfectly well within my remit of foreign affairs.

As we approach the final stage of this campaign, it sometimes feels that we have lost sight of the key question that people are supposed to be answering in the polling booths a week tomorrow. That question is not, “Do we like the EU?”, or “Do we agree with everything it does?” It is not, “What message do you want to send the EU?” or even, “What message do you want to send the Government?” It is certainly not, “Is the EU perfect?” I would be the first to say loudly that it is not. This is a straightforward question that requires a clear-eyed, hard-headed analysis and response: “Are we safer, stronger and better off inside a reformed EU or outside it?” As Foreign Secretary, I know as well as anyone the frustrations of decision making by committee of 28 and the compromises that entails, but I also know that we are winning the arguments in Europe and are increasingly influential in shaping its future. I know, too, that we have greater global influence as a result of being a leading member of the world’s largest trading bloc.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The right hon. Gentleman asked the question that we hear all too often: is the EU perfect or imperfect? The reality is that people complain that their council is imperfect. Unbelievably, some people in Scotland even complain that their Government are imperfect. A lot of people definitely complain that Westminster is imperfect. I find that a lot fewer people complain about the EU being imperfect, so can we stop saying that the EU is uniquely imperfect? There are imperfections at all levels of government, and to brand the EU in that way is a problem. The EU is a club for independent countries, which Westminster most certainly is not; it is a family of nations, which this is not.

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[Mr Lilley]

I am afraid the hon. Gentleman has burned his boats.

Another myth, which I am afraid has been proffered by my right hon. Friend the Foreign Secretary, is that we will need to renegotiate trade agreements with all the countries with which the EU currently has trade agreements. That is not the case. There is an accepted principle in international law called the principle of continuity: if a political unit splits into parts—as the Soviet Union or Czechoslovakia did, for example—the component parts continue with the same agreement unless one party objects to it. There is absolutely no reason to suppose that the countries with which we are currently party to free trade agreements will want to end those agreements when we leave. For example, when the Soviet Union broke up it was not a member of the WTO, so had traded under separate trade agreements with other countries. Those trade agreements migrated by agreement, so that within weeks even America had migrated its agreement to Russia and other successor states. There is absolutely no reason—

[Mr MacNeil]

Will the right hon. Gentleman give way?

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[Jeremy Lefroy (Stafford) (Con)]

It is a great honour to speak in this debate after so many powerful and lucid speeches. I am unashamedly speaking in favour of remain, but next week my constituents each have one vote—the same number I do. My job here is to try to represent what I see as their best interests. They may not see it like that, but it is what I see as being in the best interests both of my constituency and the country.

I will follow on from what my hon. Friends the Members for Faversham and Mid Kent (Helen Whately), for Portsmouth South (Mrs Drummond) and for North Devon (Peter Heaton-Jones) have said about the importance of stability, prosperity and co-operation, and about the United Kingdom’s place in the world and its position as a force for good.

Let me start with stability and prosperity. It is quite clear—this is acknowledged even by those who speak for leaving—that there will be at least a short-term impact on the United Kingdom economy if we leave the EU. My hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) has said as much. He talks about the Nike swoosh, or the dip, that would happen. We are talking about not a graphic but a direct impact on people’s pockets and on Treasury revenues.

As for what happens in the medium term, there is more debate. A vast majority of economists have said that being part of the European Union would be better for our economy in the medium and long term, but I accept that there are a wide range of views on that. How much that would cost—how much we would gain, or not gain—is more difficult to say. One thing is absolutely clear: those who claim that we will thrive outside the European Union in a way that we do not inside are profoundly mistaken.

Economically, there are two areas in which we suffer the most. The first is our failure to export enough, which we have spoken about time and again, and the second is our productivity. Neither has anything to do with our membership of the European Union, and both have everything to do with ourselves. Germany and France have considerably higher productivity levels than us, as does the United States. Germany is quite capable of exporting three or four times as much to China as we can, from within the European Union. I fully agree that there are aspects of regulation and so on where we might do better if we controlled them entirely ourselves, but those are minor points—mere pinpricks—compared with the responsibility on our shoulders to improve our productivity and exports. We can do that whether we are inside or outside the European Union. Coming out of the EU is no panacea.

It is clear that where we will suffer if we leave is in inward investment. I have spoken to inward investors in my constituency on whom thousands of jobs depend, and they say they want us in and that it is very important. As the Foreign Secretary said earlier, with our current account deficit as it is, a reduction in foreign investment would be dangerous. I have not had investors coming to me and saying, “I’ve been waiting for you to leave the European Union so that I can invest in Stafford.” That has never happened.

On co-operation and Britain’s place in the world, I am unashamed about the need to work together. There are many challenges in this world, and putting ourselves on the outside is not the way forward. We must not underestimate the importance of good relations with our neighbours, even if they come through difficult meetings in the European Union week in, week out and month in, month out. The other bodies of which we are a member, such as the United Nations, are no substitute. They meet infrequently and are much bigger bodies.

Who wants us out? Do our best friends? Do the United States, Australia, New Zealand and Canada—those with whom we have the strongest personal and political ties? Absolutely not.

[Mr MacNeil]

The hon. Gentleman is making a very good speech, which plays into the idea of getting some sort of independence from the European Union. It strikes me that there is a misunderstanding among some people in the debate about the referendum. The EU is not a country, it is an intergovernmental organisation. That fundamental point has been misunderstood by people who imagine that they are leaving some country. They are not. They are leaving an almost global body, and that is the mistake that many of the exiters make.