EU Membership: Economic Benefits

David Rutley Excerpts

Wednesday 15th June 2016 Commons Chamber

[Mr Hammond]

My hon. Friend is right. The world’s supply chain has globalised itself. If I am honest, when I listen to the arguments of some of our opponents in this debate, although framed in terms of hostility to the European Union, I sometimes wonder whether what I am hearing is hostility to the globalisation of our economy.

What is true for trade is also true for investment—the other side of the coin. The reality is that Britain benefits hugely as a platform for investment from both EU and non-EU countries, many of which see us as a gateway to the rest of the European Union. They come here because of our language, our skills, our flexible labour market and our domestic regulatory environment, but if I talk to foreign companies based in this country—I have lots of them in my constituency, and other Members will be in a similar position—and to others around the world thinking of making that investment decision, it is clear that the single most important factor in the decision making of most of them is our membership of the European Union. Our membership makes Britain a launch pad for doing business with the rest of Europe. Almost three in every four foreign investors cite our access to the European market as a principal reason for investment in the UK. If we lost that access, we would lose the investment. It is as simple as that.

[David Rutley (Macclesfield) (Con)]

Is my right hon. Friend aware of Ernst and Young’s recent report showing that the UK continues to be the No. 1 destination for foreign direct investment in Europe, with the north-west seeing the biggest increase? Does he agree that a vote to remain would encourage yet further investment in the northern powerhouse and in other regions?

[Mr Hammond]

My hon. Friend is right. Treasury analysis shows that the UK is the largest recipient of foreign direct investment in the EU, ahead of Germany and ahead of France. We get almost a fifth of total inward FDI into EU countries—20% of the investment, with less than 12% of the population. I remind the House that every pound of that investment creates jobs in the UK. It is why Australia is a disproportionately large investor here, it is why so many Indian firms use this country as a base, and it is why world leaders, such as President Obama, Prime Minister Abe and Prime Minister Modi, believe we would lose out if we voted to leave the EU.