EU Membership (Audit of Costs and Benefits) Bill

David Morris Excerpts

Friday 26th February 2016 Commons Chamber

[Philip Davies (Shipley) (Con)]

It is a pleasure to follow my hon. Friend the Member for Christchurch (Mr Chope) who, as ever, has put his case persuasively. I did not need much persuasion, as it happens, but if I had, he would certainly have persuaded me of the case that he made.

I shall focus on a few aspects of the Bill. One part that needs stressing is the independence that the Bill asks for any cost-benefit analysis. My fear is that over the next few months we will hear the Government say—we may even hear it from the Minister today—that they will do a cost-benefit analysis of our membership of the European Union, and, as we have been calling for that, we should be placated by that assurance. But we are not asking just for the Government’s cost-benefit analysis of our membership of the European Union. We already know the Government’s view of that, and I have no confidence at all in the Government producing an objective cost-benefit analysis. They will resort to all kinds of dodgy figures, spin, presumptions and so on, and we will no doubt end up being told that the benefits of being in the EU are enormous and the costs are negligible, and vice versa were we to leave.

I have no doubt that that is what the Government would do. We have only just started the referendum campaign and already some rather strange arguments have started to develop. I will come on to some of those shortly. The key part of the Bill, which I hope the Minister will take away with him for when the Government pull their cost-benefit analysis out of the hat, relates to the appointment of the commission that carries out the analysis. The Bill calls for a balance between those members of the commission in favour of remaining and those in favour of leaving the EU, with an equal number on either side. The chairman should be broadly neutral, and no member should be or have been a Member of the European Parliament or an employee of the European Commission, whose pension would therefore be dependent on our membership of the European Union.

Those are not unreasonable proposals. Most people would say that that is a reasonable basis for carrying out a cost-benefit analysis. If the Minister thinks that saying that the Government intend to conduct a cost-benefit analysis will satisfy us, it will not. We want some guarantee of the independence of the people involved, and only at that point will I be satisfied.

I was intrigued by what my hon. Friend the Member for Christchurch said about the questions that he has posed to Treasury Ministers, and not getting an answer to the question, but a different answer altogether. Funnily enough, I asked the Chancellor a question in the Chamber a while ago. I thought it was quite a patsy question. As far as I could see, I was giving him a great opportunity to sell the benefits. I asked him in June last year to outline what exactly we get from our £19 billion membership fee to the European Union. Here was a great opportunity for the Chancellor to stand at the Dispatch Box and reel off a huge number of benefits that we get for our £19 billion membership fee. I could not have asked a more helpful question.

[David Morris (Morecambe and Lunesdale) (Con)]

Does my hon. Friend agree that £19 billion is an inaccurate figure? It has recently been reported in the press that our membership of the EU costs up to £120 billion. The point of this debate is to try to find out exactly what our direct membership fees are to the EU and what benefits we get back from it.

[Philip Davies]

My hon. Friend is right. I have taken the figure from the Office for Budget Responsibility, which publishes the figures in the Treasury Red Book. It states that our gross contribution is around £19 billion a year. The EU generously gives us back some of that money—a very small amount—as a rebate. That has been a diminishing amount since the Labour Government gave up much of our rebate for nothing in years gone by, but the gross figure that we hand over each year is £19 billion.

In answer to my question, the Chancellor said:

“I certainly commend my hon. Friend for his consistency. I remember that in his maiden speech he made the case for Britain leaving the European Union, and he will of course have his opportunity in the referendum. I would say that this is precisely the judgment that the British people and this Parliament have to make: what are the economic benefits of our European Union membership, such as the single market, and what would be the alternative? That will be part of the lively debate, and as I say, the Treasury will be fully involved in that debate.”—[Official Report, 16 June 2015; Vol. 597, c. 165.]

As far as I could see—people can make their own interpretation of the Chancellor’s reply—he could not give one single example of what we got back for our £19 billion membership fee. He knows, presumably, as he is a canny kind of fellow, that he could not say that we get free trade for our £19 billion a year, because he presumably knows, just as the rest of us know, for the reasons set out by my hon. Friend the Member for Christchurch, that given that we have a £62 billion trade deficit with the EU, we would be able to trade freely with the EU if we were to leave.

[David Morris]

Hypothetically, if we did come out of the EU, what would happen to the £62 billion trade deficit? Does my hon. Friend have any idea how we would be able to pay Europe back, or vice versa?

[Philip Davies]

I suspect that, in the short term, not a fat lot would happen to the £62 billion trade deficit with the EU, as we would pretty much carry on in the same way. We would keep trading with it, and it would keep trading with us. I tried to check that out. I asked the Prime Minister, after one of his European Council meetings, whether he had had any discussions with Angela Merkel that would indicate that, if we were to leave the EU, she would want her country to stop selling BMWs, Mercedes, Volkswagens and Audis free of tariff to the UK. The Prime Minister did not say anything at all about that, so I presumed that he had not heard anything. Given his determination that we should stay in the EU, I am sure that, if he had had any inkling at all that the Germans were not going to continue selling us their cars free of tariff, he would have been more than happy to put it on the public record. As people can see from his answer, it appears that he had had no such indication from the German Government that they would stop trading freely with us.

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[Philip Davies]

My hon. Friend is absolutely right. The point he makes is self-evident, and I am sure that it will be self-evident to the British public.

When we look at the terms of reference of our cost-benefit analysis, the areas that the Bill asks the Government to consider are the economy, trade, national security, further regulation, and sovereignty.

[David Morris]

What I want to clarify is this: if we are the fifth largest economy in the world, how much is that down to trading with Europe, and how much does that contribute to us being the fifth largest economy in the world?

[Philip Davies]

It is not a question of “if”—we are the fifth largest economy in the world. That is a matter not of hypothesis or aspiration, but of fact. We are the fifth largest economy in the world, and therefore, clearly, we are in a very good position to negotiate trade deals. I am not sure that there is any country in the world that would not want to have a trade deal with the fifth largest economy in the world.

Interestingly, the people who are so anxious for us to stay in make what they think is the killer point that 44% of our exports go to the European Union and that only a very tiny proportion goes to the emerging economies of the BRIC—Brazil, Russia, India and China—nations. We should not boast about that; we should be deeply concerned. The fact is that we have got ourselves shackled to a declining part of the world’s economy. That is the problem for the remain campaigners. According to figures from the House of Commons Library, when we joined the European Union, the countries that make up the EU now account for a third of the world economy. By 2020, that will be 20%, by 2030 17% and by 2050 13%. We should bear in mind, too, that we are 4% of the world economy. If we were to leave the European Union we would take off the 4% that we represent, which would mean that the EU would be 9% of the world’s economy. Some people think that it is great that so much of our trade is dependent on being shackled to such a group, but I think that is something that we should be deeply concerned about. It is a matter of great shame that we have such a low proportion of trade with the growing parts of the world economy, which is why it is so important that we leave the European Union. We need to leave this declining market and start building up our trade with all the growing parts of the world economy. That is what we should be doing.

[Philip Davies]

My hon. Friend is absolutely right about that. We are always told that the EU is the biggest single market in the world. What is not said is that it would not be if we were to leave. It is only the biggest single market in the world largely because we are a member of it. If we were to leave it, it certainly would not be. Nobody ever mentions that particular point.

Interestingly, a briefing from the House of Commons Library said that if we were to leave the European Union, the UK would be the EU’s single biggest export market—bigger than China, America and anywhere else in the world. Why on earth would the EU not want to do a free trade deal with its single biggest export market? Of course it would. Anybody who tries to suggest otherwise is either completely crackers or is deliberately misleading people. It is palpably clear that that would not be the case.

The case in terms of the economy and trade is very clear. Competitiveness is one of the key points. My hon. Friend the Member for Christchurch touched on that when he said that staying in the EU was a leap into the dark. Of course, it is just that. We pool our sovereignty in many areas because we sign lots of treaties, but when we sign treaties with other countries, that treaty agreement tends to stay the same; the nature of it does not change in any shape or form unless we agree to it. That is how treaties tend to work. But our membership of the European Union is based on a treaty that does not work like that. What happens is that, every so often, the European Commission, which is completely unelected and unaccountable to anybody, proposes new legislation. We think that it is completely ridiculous. In any other normal kind of treaty relationship, we would not be susceptible to it unless we agreed to it. With the EU, we are being asked to sign up to changes on a monthly basis based on qualified majority voting where we get outvoted in the Council of Ministers. If we vote to remain in the EU, we are not signing up to the status quo; the European Union does not do the status quo. The EU is always trying to introduce new regulations, new burdens on business, and new protectionist measures to protect its failing businesses, to protect French farmers and all the rest of it. Effectively, we are signing up to something about which we know little. We have no idea where it ends and what measures will be introduced as a result of it.

[David Morris]

As far as I am aware—I have been out to Brussels and done battle with the bureaucrats there—the problems are to do with not what Europe gives to us, but how ineffectively it is scrutinised when it comes here. A lot of the problems that we have are lost in translation. For example, there was a proposition to stop women wearing high heels in hairdressing salons, and that legislative measure spread to town halls, and perhaps even to shiny floors here in Parliament. When we drilled down into the detail, however, it was a mis-translation that eventually got the whole thing thrown out. Does my hon. Friend agree that more scrutiny should be given to European issues in Parliament and in Committees, and that more Committees should be set up should we vote to stay in the EU at the referendum?

[Philip Davies]

There is not much point in spending hours and hours scrutinising legislation that we have no ability to amend or change in any way. It does not matter how much time we spend scrutinising it; we are still susceptible to it, so I cannot see that there is a great deal of point in doing that. If my hon. Friend is right and a lot of the problems in this country are created by bad translations of European legislation, that is another good reason why we should leave the European Union, so that all our laws can be decided in this place and written in English so that we understand them. I am pleased that he has given us yet another reason—one I had not thought of—for leaving the European Union. His intervention is welcome.

[Philip Davies]

My hon. Friend is right, and we have a ridiculous situation. We are supposed to be a proud nation, and in that debate on sanitary products, everybody in the House agreed that it was inappropriate for VAT be levied on them. If we were a properly sovereign nation outside the EU, that could be mended in a flash in the forthcoming Budget. In mid-March, the Chancellor could announce that VAT on sanitary products will be ended, and that would be the end of the situation. Instead we are left as a proud nation that resorts to a Treasury Minister saying, “I will commit to go and ask the EU if it will give us permission to do something. It will be hard. It might not want us to do this, so I cannot promise anything, but I will do my best and have a word.” What a situation we are in when we in this country are unable to make such decisions for ourselves.

My constituency suffered terribly from the floods over Christmas, and one of the worst affected places was the Bradford rowing club, which has to spend tens of thousands of pounds repairing the damage. It has to pay VAT on those repairs. I wrote to the Chancellor of the Exchequer and said that given the extenuating circumstances, it would be a decent gesture for him to waive VAT on the repairs caused by that flooding. What was the answer? That the Chancellor’s hands are tied and he does not have the ability to waive VAT because that matter is decided by the European Union. Therefore, 20% will be added to the bill of my rowing club for the repairs from the flooding, and we cannot make decisions on VAT ourselves because they are decided for us by the European Union. It is funny how we never hear that from the remain campaigners. Perhaps my hon. Friend the Member for Morecambe and Lunesdale (David Morris) will defend that situation.

[David Morris]

I will defend that because VAT is the sole domain of HMRC and not the Chancellor of the Exchequer—I know because I had a similar problem in my constituency. Perhaps my hon. Friend will consider the point about sanitary products. I agree that we should not be paying VAT on them, but because of our special relationship in Europe, my hon. Friend the Member for Colchester (Will Quince)—sadly, he is not in his place today—found a way around that VAT going to Europe, so that it now goes to charities. Does he agree that that was a good move?

[Philip Davies]

That had nothing to do with a special status, and neither does it benefit the consumer who still has to pay VAT on the sanitary products that they buy. Where the money ends up is of no benefit to the consumer whatsoever; it just means that it does not benefit the Treasury directly.

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[Philip Davies]

I invite people to look at the transcript of what I said—I am not sure I did say that terrorism came only from other parts of the European Union and that it could not be home-grown. Of course it can be—it is both. We cannot stop British people from living in Britain, and I do not think that anybody has ever proposed that we should, but the fact that we have home-grown terrorists is surely no reason to let in people from other countries who may want to cause us harm.

If people think that this robust system is in place, perhaps they would like to explain why so many crimes in the UK each year are committed by EU nationals and why the UK prison population of EU nationals has gone through the roof since we had free movement of people. The reason why it has gone through the roof since we had free movement of people is that a lot of those people have taken advantage of that arrangement to come here to commit their crimes. That is the fact of the matter; it may be an inconvenient fact, but nobody can deny that that is what has happened.

Every quarter, the Ministry of Justice publishes the prison population figures broken down by nationality. I invite anybody to look back over a few years at the figures for each nationality, because they will see a huge increase in the number of EU nationals in our prisons. That is because these people are coming to the UK under the free movement of people to commit crimes. As a result, we are creating lots of unnecessary victims of crime in the UK. People who want to remain in the EU should be honest about the fact that that is one of the downsides. They should not pretend that there is some miracle passport control system that stops these people coming into the UK, which, as I say, is a blatant lie.

[David Morris]

I wish there were a passport control system that could vet these people coming into the country, but does my hon. Friend not agree that the Prime Minister, in his renegotiations, has secured easier ways to deport these criminals and, may I add, to stop them coming into the country?

[Philip Davies]

No, I do not accept that at all. The Prime Minister has done absolutely nothing to stop these people coming into the UK—literally nothing. There is nothing in place to stop them; there are a few people on a watch list whom we can stop coming into the UK, but they would be on a watch list whether we were in the EU or outside it. We need to develop a watch list for people from around the world, because this is not an EU issue. We can already stop those people coming to the UK, and we would always be able to stop them coming to the UK, if they are on a terrorist watch list. I am talking about the thousands and thousands of criminals who are unknown to the British authorities, who come through every week on an EU passport to commit their crimes. When I was out with West Yorkshire police a few years ago—this might seem fanciful, and it seemed fanciful to me when I first heard it—they told me they had a problem with people getting a short-haul flight from other EU countries to Leeds Bradford airport, going out into Leeds city centre and committing high-value crimes and robberies, and then being back on the plane out to their country of origin before the police have even finished investigating the crime. I had not even thought that that type of thing could happen, but West Yorkshire police told me that that was a serious concern for them.

Of course, it is easy for people do these things while we are in the EU—there is nothing to prevent them from coming here. They are known to their own national law enforcement agencies, so they are at risk of being apprehended in their own countries. It is much easier for them to commit crimes in the UK, where they are not known to anybody—they can come in and go out in a flash. We have to be aware that these are problems.

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[Philip Davies]

My hon. Friend is absolutely right about that. I very much agree that people wanting to come and live in the EU should have to give their fingerprints and DNA, so that if they do commit a crime, it is easy to track them down, convict them and deport them. As he says, however, that is not what happens. The best the Government have come up with so far is that if somebody comes into the UK and commits a crime, the police can go through some burdensome procedure of asking other EU countries whether they have a fingerprint match for a crime that has been committed there. If those countries ever manage to get back to us, which they probably do not half the time, Lord knows what may happen on the back of that. However, that is not the same as stopping people who are criminals coming into the UK.

[David Morris]

I am listening intently to my hon. Friend’s eloquent arguments about letting people into the country. Will he clarify whether these are people coming into the EU from nations outside the EU? As I understand it, the security systems between the EU bloc and Great Britain are seamless and can interface with, say, the databases of the French and the German authorities, but where people are coming into the EU, we have to get the co-operation of the country they are coming from. If we came out of the EU, would we have to do the same procedure in reverse?

[Philip Davies]

I am not entirely sure what my hon. Friend is driving at. At the moment, if somebody comes to the UK from outside the EU, we do not have to let them in, whereas if they are an EU citizen, we pretty much do have to let them in. It does not matter how suspicious we are of their motives—that is irrelevant. I want the more robust immigration policy that we are allowed for non-EU nationals to apply to EU nationals too. Nobody is saying that we do not want anybody to come into the UK from the EU, but I would rather we had some choice as to who we allow in. It is a great privilege to come into the UK. We should make sure that it is indeed a great privilege and that we are not just letting any old person into the country, which is the situation at the moment.

On sovereignty, it cannot be right that people making so many of our laws are unelected and completely unaccountable to anybody. The remain campaigners say, “Well, of course we have a European Parliament to scrutinise all these laws.” First, Members of the European Parliament who represent the UK are a tiny proportion of the total, so even if every single UK MEP voted against something, there is no guarantee that it would make any difference whatsoever. Secondly, if, in this country, the Government were permanently in office and the only people elected were the MPs scrutinising the decisions they were making, that would be a bizarre situation and there would be uproar. Yet the justification for having the European Commission, unelected and unaccountable, initiating all the legislation, which is the role of Governments in most national Parliaments, is that MEPs are elected. It is unbelievable that anybody can justify that kind of democratic situation. When we sign treaties with other countries, that is the end of it—the position does not get changed every five minutes by qualified majority voting, with things being imposed on us against our wishes. That is not how treaties work, but it is how our relationship with the European Union works.

We are told that we have a lot of influence in the EU. That argument was completely demolished by my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) in his contribution to the Prime Minister’s statement on Monday. He pointed out that a freedom of information request showed that over the past two decades there had been a definitive vote in the European Council 72 times and that we had been outvoted 72 times. So on Monday the idea that we are wielding this huge influence in the European Union was clearly demolished. It was shown to be a complete load of old codswallop. It is an illusion of influence. We do not have any influence; we are having discussions around a table and being outvoted at every single turn, as Ministers who attend these things know to their cost.

We are told that the US wants us to stay in the EU and that that is a reason why we should. I do not doubt that it is in the United States’ best interests that we stay in the European Union, because we add a bit of common sense to it and it does not want the French, who are very anti-American, having even more power. If it is so important for the Americans that we stay in the European Union, perhaps they will pay our £18 billion membership fee each year for us. I look forward to President Obama making that offer when he comes to campaign in the referendum. I am sure that amount would be a drop in the ocean for the United States.

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[Sir Edward Leigh]

Exactly. It is extraordinary, given that we have this great industry and are a proud island race, and that much of our past and present is tied up in our fishing fleets, that the fishing Minister has already been put in purdah by his own civil servants and cannot talk about this subject at all. It beggars belief.

Apparently, the Government are not going to do any independent analysis over the next four months of what leaving the EU would mean for fishing. Presumably, at some stage or another, a Minister will make a claim—perhaps a fairly wild claim—and there will be no comeback, because the fishing Minister has been put in the corner, like a naughty boy with a dunce’s hat on his head, and told to keep silent. It is amazing. This is the most important decision we are going to make—yet silence.

In trying to answer the Minister for Europe, who asked, “Why don’t the leave people give an alternative vision?”, I have talked a bit about fishing and agriculture, but what about trade? I have quoted Winston Peters, a former Deputy Prime Minister and Foreign Secretary of New Zealand—no slouch—who has talked in public about leaving behind the “betrayal” of 1973. Yes, we did betray them. We betrayed our friends in New Zealand and Australia, who, in two world wars, had come to our aid. He says there is the exciting prospect of recreating free trade between Australia, New Zealand and the United Kingdom. It is an exciting prospect. My hon. Friend the Member for Shipley made a good point about the declining proportion of world trade taken by the sclerotic, over-regulated and overtaxed EU. There is another world out there—the world of the burgeoning growth of China and India.

I will go into more detail about the Government’s case in a moment, but I would be quite happy for them to say, “This is all just pie in the sky—a romantic illusion—and it’s not going to happen. You wouldn’t have any influence on the world trade body, because you’d just be one voice out of 130.” Well, we have very little voice at the moment, because we are one vote out of 28—at least we would be there on our own—but I accept that the Government can make these arguments. Given the importance of this issue, however, surely we want at least some independent analysis, so that the people, before they cast their votes, know what the realistic prospects are of a United Kingdom outside the EU being able to negotiate good trade deals with the rest of the world. But we have nothing.

That was my introduction, Madam Deputy Speaker. I now want to go into more detail about the history of this independent audit and analysis. People now argue—there is some lazy thinking on this—that way back in 1957 when the treaty of Rome was being signed, we were casual in our decision not to join it. A sort of myth has been created, particularly by my personal friend, Michael Heseltine, now Lord Heseltine, and others that this was an enormous wasted opportunity. Actually, people in government at the time were attempting a reasonable audit and analysis of what joining the treaty of Rome would mean. This debate has therefore been going on for a long time.

One cause of worry in 1957 was article 3 of the European Community treaty, which would

“eliminate…customs duties and quantitative restrictions on imports and exports”

between member states, establish a common tariff and “common commercial policy” and

“abolish obstacles to freedom of movement for persons, services and capital”.

When we were having these debates in 1957, the view taken by the then Conservative Government was that that was a risk too great and particularly, showing the importance of objective analysis, too great a risk to the Commonwealth.

My personal view is that that was a right conclusion. Unfortunately, during the 1950s and ’60s, there was a lack of confidence in our future as an independent nation. We should bear it in mind that we were dealing with a generation scarred by the second world war—I accept all the arguments about that. The hon. Member for North West Durham (Pat Glass), who is going to reply to this debate on behalf of the Labour party, spoke most movingly yesterday about the scars of two world wars, and I can understand how that was an influence on people at the time. As I said, there was a lack of confidence, not just about peace in Europe, but about our own nature and the resilience of our manufacturing and service industries. That led directly to Harold Macmillan’s failed bid to join the then European Economic Community.

As we know, of course, we eventually joined the European Economic Community. What then happened after we joined it? We were told at the time that it was going to be primarily a trading mechanism. The British people were never really made to understand and appreciate that under articles 2 and 3, it was much more than that. This was effectively the end of the sovereignty of this House. It was completely different from any other treaty that we had ever signed. Those arguments were made by Tony Benn, Michael Foot and Enoch Powell at the time. To its credit, Labour tested this in the referendum, and the British people decided to join.

Let me move on to the treaty of Nice. Although there had been a reasonably detailed debate, as I mentioned, in the mid-1950s about the benefits or otherwise of joining, this is where I believe the debates got rather weaker and there was less and less independent cost-benefit analysis of whether we should take this ever closer union further.

Article 3 of the treaty of Nice created an explicit common policy in fisheries, when it had previously been included under agriculture. An environmental policy was also created. Under the guise of strengthening competitive industry through the promotion of research and technological development, the EU acquired competence. The EU was authorised to establish and develop trans-European networks. I was here and I may be wrong, but although I certainly know that no independent analysis was done, I am not aware how much analysis of any kind was done on the costs and benefits of these very important matters that furthered the integration of Europe and our involvement in it. The treaty of Lisbon completed the process by making all remaining pillar three matters subject to EU justice-making procedure.

There was a steady increase in the area of EC and EU activity, and thus a steady increase in the number of pieces of legislation until the 1990s. Until we set up the Scrutiny Committee—which is now under the distinguished chairmanship of my hon. Friend the Member for Stone (Sir William Cash)—there was very little analysis of the vast plethora of legislation that was pouring out.

In a paper published by the Robert Schuman Centre, Professor Carol Harlow, of the London School of Economics, noted:

“On the regulatory side, an average of 25 directives and 600 regulations per annum in the 1970s rose to 80 directives and 1.5 thousand regulations by the early 1990s”.

In a study of the evolution of European integration, EU academics Wolfgang Wessels and Andreas Maurer observed that the increase in legislation had been accompanied by an increase in the EU’s institutional structures and sub-structures. While all that was proceeding apace, there was virtually no debate in the House of Commons or, I suspect, within the Government.

My hon. Friend the Member for Christchurch and I were Ministers at the end of the Thatcher Government and in the Major Government. We remember going to the Council of Ministers, and we remember, as we sat there all night, a vast tide of more and more pieces of legislation which was subjected to very little, if any, independent analysis. Output peaked in 1986 with the single market legislative programme. It fell slightly after that, but it continues apace. Meanwhile, apart from the analysis conducted by the Scrutiny Committee, very little detailed analysis of what the directives involved mean for our country is available to Members of Parliament—if, indeed, they are interested, given the complexity of many of those directives.

[David Morris]

The figures that my hon. Friend is citing are truly frightening. Does he agree that there should be more Scrutiny Committees, and perhaps even a larger Scrutiny Committee whose members could operate a shift system when European regulation comes our way?

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[Sir Edward Leigh]

We are impotent; it is not a question of cosying up to the Chinese, as we have no control over this. Whether we like it or not, China will be the greatest, biggest and most important economy in the world within the next 10 or 20 years. Whatever the Minister’s views, the fact that we are part of the EU means that he could do nothing to defend Scunthorpe. I accept that the Government may argue that we get other advantages, perhaps in steel, but let us have an analysis of what it all means.

Open Europe is not some sort of purely ideological campaigning group; it produces fine studies, some of the most voluminous available, and it attempts in a reasonably intellectual way to work out what staying in and leaving the EU involves. Open Europe says that according to the UK Government impact assessments,

“these regulations also provide a total benefit of £58.6bn a year.”

Open Europe is trying to be fair. It goes on to say:

“However, £46bn of this benefit stems from just three items, which are vastly over-stated. For example, the stated benefit of the EU’s climate targets (£20.8bn) was dependent on a global deal to reduce carbon emissions that was never struck…Open Europe estimates that up to 95% of the benefits envisaged in the impact assessment have failed to materialise.”

Where is the Government’s response to that?

Open Europe continued by saying:

“Taking the regulations individually, the impact assessments show that Ministers signed off at least 26 of the top 100 EU-derived regulations, despite the IAs explicitly stating that the costs outweigh the estimated benefits. These regulations include the UK Temporary Agency Workers Directive and the Energy Performance of Buildings Directive.

A further 31 of the costliest EU-derived regulations have not been quantified. Between the over-stated benefits, the regulations that come with a net cost and the ones with unquantified benefits, it remains unclear how many of these EU-derived rules actually come with a net benefit in reality, showing that there is plenty of scope to cut regulatory cost to business and the public sector.”

I would echo that. I may be wrong and if the Government want to argue these points in detail, I, for one, would be delighted.

Open Europe went on to say:

“Although the cost of EU regulation too high in proportion to the benefits it generates, it is important to note that these rules can bring benefits including by facilitating trade across the single market, for example in the case of financial services”.

That is an argument in favour. I fully accept that and Open Europe accepts it, but we need a genuine impact assessment of the costs and benefits of all these regulations. Where does this leave us in the total picture? My view is—[Interruption.] I would be grateful if the Whip would not speak too loudly while I am speaking. She is not supposed to be heard, unlike me. She has the real power; I can just speak.

My contention is that people are worrying too much about this decision in terms of the impact on the economy. Again, there have been many studies on this, but I do not believe that the impact on the economy of whether we stay or leave will be as dramatic as has been made out. That is “Project Fear”—that we are all going to lose our jobs and so on. According to Open Europe,

“In a worst case scenario, where the UK fails to strike a trade deal with the rest of the EU”—

thereby having to fall back on the World Trade Organisation rules—

“and does not pursue a free trade agenda”—

fairly unlikely, I would have thought, but this is the worst case scenario—

“Gross Domestic Product (GDP) would be 2.2% lower than if the UK had remained inside the EU.”

So 2.2% lower, which is quite significant, but I am not sure that we would all suddenly lose our jobs.

[David Morris]

The figure of 2.2% is near enough as much as the economy is expected to grow in the next 12 months. I am certain that if we leave the EU in the next few months, especially with an oil crisis on our doorstep, we could face financial catastrophe. Does my hon. Friend agree?

[Sir Edward Leigh]

This is the worst case scenario and I am being completely fair in putting it. I think it is unlikely.

--- Later in debate ---

[Pat Glass]

No; just a second. We are a proud nation, with almost half our exports going to European countries. Those exports were worth £227 billion last year to the UK economy. We receive, on average, £26.5 billion of investment every year from the EU. Jobs and businesses, large and small, depend on our trading with the EU. Future EU trade could create 790,000 more jobs by 2030 by opening up markets in digital services, energy and tourism.

I will talk a little about my part of the country. The north-east is the only part of the country that has a trade surplus. Proportionately, we are the biggest exporting region in the country. We make things in my part of the world and we export them, largely to Europe. As I said yesterday, we make more cars in one city in the north-east in a month than that great car-building country, Italy, does in a whole year. I invite Conservative Members to go along to Teesport or the port of Tyne and see the lines of cars that are made in the north-east and exported to the European Union. In my region, 75% of our trade depends on being part of the European Union. Hundreds of thousands of jobs in the north-east are directly or indirectly linked to being part of the European Union. That is just one aspect of the benefits.

I will talk about the peace dividend later, but I want to talk a little about the fact that we live in a global world where we face issues such as international terrorism, international crime, war, migration and Russian expansionism. Listening to the debate today, I have not heard anything from Conservative Members that gives me any answers to the big questions facing us. It is not possible to reduce those huge issues to a cost-benefit analysis or an economic cost.

TTIP has been mentioned. I have to say that my blood runs cold at the thought of negotiating a TTIP arrangement outside the European Union. I am quite clear that our public services and our NHS need to be protected in any negotiations about TTIP. Having listened to the libertarians opposite, I am sure that that would not be the case.

[David Morris]

On negotiating TTIP within Europe, it is my understanding that that point is a non-issue, especially in relation to the NHS, as has been clarified many times during the past three years. Will the hon. Lady elaborate on that point?

[Pat Glass]

In such negotiations, it is clear that we are much more likely to get a TTIP agreement with red lines around our public services and the NHS as part of the European Union. If we were outside the European Union and negotiating such a treaty directly with the USA, I would not be so confident that that would be the priority of the current Government.

[David Morris]

For the record, does the Opposition agree that there will be protection for the NHS under TTIP within the European framework as it stands?

[Pat Glass]

We agree that if there is to be a TTIP agreement, it is much better to negotiate it with Britain as part of the European Union.

We have talked a lot about sovereignty in recent weeks. Many of us would agree that we have in various ways negotiated on our sovereignty in order to be part of something bigger. We have given up part of our sovereignty in defence to be part of organisations such as NATO, and we have done the same with the UN. On a personal level, when I married—I have been married for 30 years—I gave up some of my sovereignty over decisions that I would have made myself to be part of something that I accepted was bigger and better for both of us. The principle is very clear: in order to be part of something better, we sometimes have to give up things we want to hang on to. That is true of our sovereignty. I do not believe that this country has given away our sovereignty. It is very clear that whenever decisions are made in the European Union, they come back to and come under the sovereignty of this House.

On immigration, one of the huge strengths of this country—it has made us one of the strongest, richest, most powerful and greatest countries in the world—has been our ability, over centuries, to absorb and integrate millions of immigrants, migrants, people fleeing oppression and economic migrants. My family were economic refugees who came to this country during the Irish famine in the mid-19th century. Such people came to this country and worked hard for it. They brought up their children in this country, and paid their taxes. They fought for this country and, frankly, some of them died for this country. That is part of what makes this country the great country it is. To the idea that we can close the doors to people who will work in our NHS or our schools, I would say that that is part of what has kept this country rich. This country has got rich and stayed rich on immigration. We need to be very careful when talking about closing the doors to people, particularly those from the European Union.