European Union Membership (Economic Implications) Bill [HL]

Lord Stevens of Ludgate Excerpts

Friday 25th November 2011 Lords Chamber

[Lord Stevens of Ludgate]

My Lords, I, too, congratulate the noble Lord, Lord Pearson, on instigating today’s debate. He is very persistent and continues to fight earnestly for what he truly believes in despite much opposition. I also agree with most of what the noble Lord, Lord Desai, and other speakers, said in that I think that we need to have a serious discussion about the broader aspects of the membership of the EU, apart from just cost-benefit analysis. The noble Lord, Lord Howell, said in a debate on the European Union (Implications of Withdrawal) Bill:

“The whole process of incorporating EU regulations and other burdens into our lives is sloppy, full of holes and should long since have been tightened up”.—[Official Report, 8/6/07; col. 1359.]

I agree with these sentiments, but sadly we have not been able to make much progress.

Calls in the past for a cost-benefit analysis have always been brushed aside on the grounds that the net gains from our membership were so obvious that there was no need to quantify them. Recent developments must make even those so committed to the project feel uneasy. The reality is that Britain’s membership of the EU is very costly and the benefits are becoming harder to see. The most transparent cost is our net budget contribution. Following the December 2005 Brussels summit at which the UK’s rebate was significantly reduced, this has risen sharply. In addition, there are off-budget contributions; for example, projects such as the Galileo, which is now expected to cost the EU taxpayer up to €22 billion in the next 20 years. The net costs to Britain of the common agricultural policy and the common fisheries policy are estimated at £16 billion and £3 billion per annum respectively. More difficult to quantify are the costs of excessive regulation. But here perhaps the estimate produced in October 2005 by our previous Prime Minister when Chancellor, in a Treasury paper under his own signature, and as mentioned by the noble Lord, Lord Pearson, is well worth thinking about. I shall not repeat the figures.

The flood of new regulations from Brussels continues despite everything which the new coalition Government say they would like to stop. Now Brussels wants to tackle the big four auditing firms and suggests that large companies should have two firms of auditors. Would it not be better for its members to get their own accounts signed off with a clean audit first?

As we all know, the UK has serious budgetary problems and is seeking to cut expenditure. Indeed, all the countries in the EU have similar problems. It might be expected, therefore, that Brussels would share the pain experienced by its member states by cutting its expenditure and not increasing it. Its recent proposal to increase its budget by approximately 5.9 per cent is out of touch with all reality. Even though the increase had been reduced by Ministers, it just goes to show that they have no budgetary control.

I do not propose to spend much time on discussing where all the EU money goes; suffice it to say that a prime example of what appears to me as a lay man to be gross duplication and waste is the new foreign service. Its budget is 20 times the cost of the UK’s Foreign Office and includes among other items £33 million for 150 bomb-proof limousines for all EU ambassadors. The number of staff employed by its quangos and committees alone has tripled during the past five years, amounting to a total cost of more than £2 billion in 2011. It has just opened a new £25 million office in London, and our Foreign Secretary has claimed that the UK Government have brought the EU budget under control. Perhaps the noble Lord, Lord Sassoon, could confirm in his reply that the UK has no liability for any losses incurred by the ECB, another potential burden on this country.

It is a shame that our Deputy Prime Minister has chosen to describe those who want treaty change as “populists, chauvinists and demagogues”. I am afraid that I fit into that category. Surely those who do not want treaty change can raise the level of debate higher than this. However, we must be grateful to our Deputy Prime Minister for supplying us with the information that an extra £1 billion of government expenditure in the UK would create 200,000 to 300,000 jobs. By extrapolation—and perhaps this is unfair—expenditure of £15 billion, which is our gross contribution to the EU would create 3 million to 4 million jobs, matches both our annual contribution to Brussels and the mystical, unsubstantiated and inaccurate figure from the Government that 3 million jobs would be lost if the UK left the EU.

The UK exports less than 10 per cent of GDP in goods and services to the EU each year, yet, as has been said, the EU influences 100 per cent of the UK economy. British exports worldwide, outside the EU, are substantially more than those within it and are growing much faster.

If one turns to the longer term, one sees that the EU has a declining population whereas most of the countries in the rest of the world have rising populations, particularly the US, out largest country export market. The EU is forecast to lose 16 per cent of its current working population by 2050, more than the current working-age population of Germany. The US is to gain 17 per cent. Let us not forget that the Lisbon treaty obliges the EU to negotiate free trade agreements with a member state that wishes to withdraw. It already has free trade agreements with more 80 per cent of all member countries. Our Chancellor says that he is worried that if we do not fully participate in the bail-out negotiations, we could become a “second-tier … state”. Good. Then we can join the USA and the other 165 countries that are not members—China, India, Brazil to mention but three—and be free of the thousands of regulations that come from Brussels.

I am confident that a cost-benefit analysis will show —after all, we have it for other legislation—that the costs far outweigh the benefits. In addition, there is only one way to restore our nation status and sovereignty, and that is to renegotiate our relationship with the EU to achieve what many of us were led to believe; namely, that we entered into a free trade area and not a federal Union. I therefore support the excellent Bill of the noble Lord, Lord Pearson, as a major step in this direction.