European Communities Act 1972 (Repeal) Bill

Douglas Carswell Excerpts

Friday 26th October 2012 Commons Chamber

[Mr Douglas Carswell (Clacton) (Con)]

I beg to move, That the Bill be now read a Second time.

I promote this Bill to repeal the European Communities Act 1972 not merely supported by many outside the House but as explicitly directed by more than 5,000 readers of the Guido Fawkes blog site. This is the first ever crowd-sourced private Member’s Bill. MPs are sometimes accused of not sharing the concerns of ordinary voters or the priorities of those outside the Westminster village, but this Bill was voted on by those outside Westminster.

Withdrawing from the EU can no longer be dismissed as unthinkable. It is no longer a marginal view confined to mavericks, but a legitimate point that is starting to go mainstream. It might have been many months since the House had a frank and open discussion about the merits of our EU membership, but perhaps that tells us more about the shortcomings of the Westminster system than about the cost benefits of being part of the EU club. According to a recent poll by Survation, a majority of voters—more than at any time in the past three decades—now want Britain to leave the EU. Some 51% are in favour of leaving and only 34% want to remain in. That is the highest level of discontent for a generation.

The idea that we should leave the EU might find few champions among the Sir Humphreys in King Charles street, but that just tells us how out of touch the Whitehall establishment has become. If we cannot get new people, perhaps we should try getting new Sir Humphreys. It is not just the people who want out; we hear that members of the Cabinet have started to come round to the view that Britain might, indeed, be better off out.

Britain joined the Common Market because, the people were told at the time, it would be good for the economy. What we lost in political sovereignty would be compensated for by material gain. Looking back, I can understand that view. We joined at a time when western Europe had been growing spectacularly. The Common Market that we joined in the early ’70s could look back at two and a half decades of the most spectacular growth. It seemed that we were joining a prosperous trade bloc. In 1973, western Europe accounted for 38% of total world output, but in 2010 that figure had shrunk to 24%, and in 2020 it will be 15%.

[Mark Reckless (Rochester and Strood) (Con)]

I congratulate my hon. Friend on once again making history in the House. Given what he has just said, how would he respond to the Financial Secretary to the Treasury, who, on the Order Paper today, is inviting us to agree that “tough decisions” are

“being taken…in countries across Europe to…stimulate economic growth”?

[Mr Carswell]

I would be more than a little sceptical of such claims. I am no Keynesian, but the idea that measures being taken across Europe, particularly southern Europe, are producing prosperity and growth seems absurd.

Far from joining a growing and prosperous free trade area, it turns out that we joined a cramped and declining customs union. Far from joining a rising economic powerhouse, we have shackled ourselves to a corpse. Being part of the EU hinders us, rather than helping us to prosper. The common agricultural policy obliges us to subsidise our farmers’ competitors in continental Europe, raising food prices and penalising the poor. The common fisheries policy has caused an ecological catastrophe in the seas around us. The EU social and employment rules have made us uncompetitive. EU directives have struck at our industries, art dealers, slaughtermen, cheese makers, temping agencies and fund managers.

On the EU’s own statistics, the cost of regulation outweighs the benefits of being in the single market by 5:1. According to the European Commission’s own statistics, the cost of regulatory compliance amounts to €600 billion, while the benefits of being in the single market are €120 billion. The common external tariff has forced us behind protectionist walls. Far from giving us free trade, these tariffs of between 5% and 9% are higher now than they were a century ago. At a time when the non-western world is enjoying an extraordinary boom and an extraordinary surge of prosperity and growth, we are forced to watch. Rather than join in, we are cut off by the EU’s mercantilist mindset.

The absurdity is that we pay for the privilege of being members of this poverty-producing club. Britain has paid more into the EU budget than she has received back in every year bar one since we joined. It is not just that we pay; our membership fee for being part of the club has risen by 70% within the past three years. In 2009, our net contribution to the Brussels budget was £5.3 billion; in 2010, it rose to £9.2 billion, and our gross contribution is nearly £20 billion.

[Mr Philip Hollobone (Kettering) (Con)]

I congratulate my hon. Friend on bringing forward this Bill, which I wholeheartedly support. Is he as shocked as I was to discover that during the last five years of the previous Government’s tenure our membership fee was some £19 billion, while in the five years of the present coalition Government, that membership fee will be £41 billion? How many nurses, policemen, doctors and teachers would that pay for?

[Mr Carswell]

My hon. Friend is absolutely bang on the money. One would expect this Government to do something about it. Instead, we have heard many debates about the need for austerity and cuts, with Members of all parties expressing their concern about what reduced public spending might mean in their constituencies, yet all the coalition’s austerity savings taken together do not add up to anything like our annual EU membership fee. The 2010 increase in our net contribution is greater than the sum total of all the austerity savings made since the last general election. Exactly when we have to justify austerity in our constituencies, we have an Administration who are handing over ever larger sums of our money to remain part of this austerity club.

Too many people in Whitehall—too many of the grand Sir Humphreys—still think of the EU as though it were vital to our economic survival, but the fact is that it is becoming less important almost by the hour. In the first six months of this year, our exports to the EU fell by 18%, while our exports to the rest of the world rose by 28%. On every measure, the EU now accounts for a minority of our trade. That is not to say, of course, that the single market is not important. It is very important and it remains a large market, but it is just one market alongside the North American Free Trade Agreement, Mercosur and all the rest. No one is suggesting that we have to give up our sovereignty in order to sell to them.

We joined the European Economic Community, as it then was, because we wanted to be part of a growing trade bloc. In the event, the growth has taken place elsewhere. The Prime Minister told us in Birmingham that European Council meetings are dominated by discussions about propping up Greece,

“while on the other side of the world, China is moving ahead so fast it’s creating a new economy the size of Greece every three months.”

While the eurozone stagnates, lurching from one round of bail-out-and-borrow blunders—usually supported by our Treasury—to the next, the International Monetary Fund expects the Commonwealth to grow by 7% every year for the next five years. This year, the Commonwealth’s gross domestic product overtook that of the EU for the first time. In just two years, exports to Brazil have increased by 25%; to China by 40%; to Russia by 80%. It is not me saying that; it is the Prime Minister. It is to this Government’s great credit that they recognise the need for us to realign ourselves economically. The Government have, I think, been successful in trying to refocus our efforts on trading with the wider world and on opening us up to the wider world. I would argue, however, that being part of the European Union is holding us back; it is stopping us from opening up the trade arrangements that we desperately need to be part of that network of global prosperity.

The Minister is, I know, an honourable man, a very clever and intelligent man and in many ways a great man. He can see beyond the Foreign Office brief on many things. He understands the arguments I am making, and I hope that in his response he will share with us his view on the extent to which we can realign ourselves economically if we remain part of the European Union. Can we? I do not believe we can. Could we have a Swiss-type relationship, through which we have access to Europe’s markets, but could at the same time negotiate entirely independent bilateral agreements with non-EU members on our own?

Of course, the Whitehall élite—the Sir Humphreys and Sir Jeremys—will say that we need to be part of the single market, but do we? Must we be part of the single market in order to trade with the EU? China seems to gain market access, and last time I checked it was not part of the single market. A firm in China, Japan, Australia or America that seeks to trade with the EU must conform to EU standards in order to sell its products there, but must it comply 100% with all energy regulations under the auspices of the single market? No, and the economies of those countries are in much better shape as a result.

About 80% of all the economic activity that takes place in this country this year will revolve entirely around internal trade, while about 20% will depend on external trade. Less than half of that 20%—between 8% and 9% of total output—will depend on trade with the EU. How can it possibly be right that all the economic activity that takes place in this country must comply 100% with single market rules, when only 8% or 9% of economic activity is geared towards trade with the EU?

[Mr Hollobone]

I am enjoying enormously my hon. Friend’s very impressive speech. Is not our trading relationship with the EU even more absurd, given that, on a regular and worsening basis, we actually have a trade deficit with the EU? In other words, the EU is doing better out of our EU membership than we are.

[Mr Carswell]

My hon. Friend is right. We have a massive trade deficit with Euroland, and, to compensate partly for that, we have to run a trade surplus with the rest of the world. When we first joined the Europe club, our trade with Europe was much more balanced. I cannot imagine that if we withdrew from the European Union, Siemens or some of the other great wealth creators in continental Europe would be any less likely to want to trade with us. Why should a business that is producing goods and services to sell outside the EU—to, say, India or America—be subject to red tape created under the auspices of the EU single market?

I leave the House with this thought. Switzerland is outside the European Union, yet it manages to do four and half times more trade per head with the EU from outside than we do from within. Let me ask the Minister this question. If Switzerland, with a population of 7 million or 8 million, can obtain more favourable terms with the EU than we have, could not we, with a population of more than 60 million, obtain even better terms than Switzerland?

Being in the European Union has done dreadful harm to our economy. It has put us in the global slow lane, but it has hampered our democracy as well. Public policy decisions are no longer made by those of us who are vulnerable to the electorate. They are no longer made by those who have to stand for marginal seats with the risk of being thrown out of office. They are now made by remote, unaccountable officials in Whitehall. Of course the Oxbridge-educated Sir Humphreys in Whitehall like being part of the EU, because it allows them to carry on making public policy. They do not have to answer to hoi polloi outside. However, it has corroded our democracy.

From agriculture policy to banking policy, from environmental rules to rules on bin collection, decisions that ought to be made by those who are vulnerable to the democratic process are made by technocrats. Technocracy is no more effective—in fact, it is a good deal less effective—than democracy when it comes to making good public policy. What is the point of voting if those whom the voters elect have no power? I cannot help noticing that voter turnout has fallen in every decade of our membership of the Europe club.

I am not introducing this Bill in the expectation that it will become law—yet. My aim is to ensure that we begin to give serious thought to the mechanics of withdrawal. Leaving the European Union will be simple, but it will not be easy. It will be simple because a simple Act of Parliament can get us out, but what then? What about all the acres of public policy that have been created under the auspices of the European Communities Act? How might we retain, for instance, perfectly sensible environmental protection rules, but change some of the secondary laws that need to be repealed? What process will we use to sort out the difference between public policy that we wish to retain and public policy that we need to get rid of? Do we need different mechanisms to deal with directives and to repeal regulations? How—and I say this as a staunch parliamentarian who is suspicious of all who sit on any Front Bench—do we balance the need for the legislature to oversee the process against the need for an Executive then to take action?

My proposal in this Bill is just one model. I propose that all secondary measures and laws would remain in place, but that Ministers would then, subject to the approval of this House, have the power to repeal or amend. Is this idea of statutory instruments and ministerial fiat enough? Might it not also be an idea to give Select Committees specific powers to try to overturn regulations introduced under the auspices of the 1972 Act?

I hope that by putting this Bill before the House I initiate some serious thought about the mechanics of withdrawal. It can be done, but those of us who want out need to give it serious thought. The question of Britain’s EU membership is no longer settled—it is now an open question. Many of us in this House, and indeed in the country, now openly question our EU membership. A referendum is coming, and it will boil down to in or out. The case for out gets stronger, but we need to give people a sense of what self-government is going to look like and feel like. I hope that this Bill helps us to begin to think carefully about what being a self-governing democracy once again would mean. The Whips may seek to talk out this Bill, but these questions will not go away.

[Several hon. Members]

rose—