EU Membership: Economic Benefits

Mark Pritchard Excerpts

Wednesday 15th June 2016 Commons Chamber

[John McDonnell]

With the greatest respect, I ask the hon. Member for Perth and North Perthshire (Pete Wishart) to listen to my speech before he comes to a judgment on this matter.

I believe that the economic arguments for remaining are overpowering, but the polls and the feedback from the doorstep confirm that immigration is a key motivating factor for some people in different parts of the country. Let me deal with some of the economic arguments around migration. I admit that I do not come to the debate on immigration completely objectively. I am the grandson of an Irish migrant. My grandfather’s generation of Irish migrants and subsequent Irish migrants built many of this country’s roads, railways and homes. They staffed the factories while many Irish women were the nurses who formed the backbone of the NHS and the teachers who taught in our schools. They all contributed to making this country’s economy the fifth largest in the world. That is what migrants overwhelmingly do. Over the last decade, migrants from new EU member countries contributed £20 billion more in taxes than they used in public services and benefit payments. More than 52,000 EU migrants work in our NHS. With labour shortages reported in key sectors such as construction, it is migrant labour that helps to fill the gap. The Royal Institution of Chartered Surveyors’ recent surveys show that a lack of skilled workers is already hurting the delivery of infrastructure projects.

Let us admit, however, that genuine concerns have been expressed about the impact of migration on wages and employment, as my hon. Friend the Member for Bolsover (Mr Skinner) suggested. Those concerns should not be dismissed. Research presented by Oxford University’s Migration Observatory has demonstrated that migration has not had the impact of reducing wages except in a small proportion of the workforce: those at the lowest end of the pay scale. This has to be addressed, and that is why Labour is calling for greater protection for this group of workers. Yes, reforms are needed with regard to the free movement of labour, to introduce greater protection of wages and employment rights and to halt the undercutting of wages and employment conditions. In government, we will renegotiate to give effect to those changes.

Other concerns have been expressed at the pressure placed on our public services by migration. The reality is that our public services struggle to cope with existing demand because of the austerity measures, the cuts and the chronic underfunding forced through by this Government over the last six years. But there is an argument that where pressures on public services increase in a particular area, funding must be made available to respond to that increased demand. That is why Labour has consistently argued for a special migration fund to assist those communities where demand increases. We condemned the abolition of the fund that was set up by Gordon Brown, but we welcome the Prime Minister’s statement today that he is exploring the establishment of a fund of that sort. We also want to seek further European funding to support this initiative, and that will be on our agenda.

[Mark Pritchard (The Wrekin) (Con)]

Does the shadow Chancellor agree that being an EU citizen in the United Kingdom might be an uncomfortable experience at the moment, particularly in the light of the language and tone being used by one of the leaders of the Brexit campaign, Nigel Farage? Does he also agree that if we were to remove those EU citizens and put in place the 50,000 cap proposed by Nigel Farage, we would see an exodus of people who work in our care homes, our hospitals and our schools? That would have a real impact on our ability to deliver public services. Is it not the case that we are an open and tolerant United Kingdom?

[John McDonnell]

I find some of the statements that have been made reprehensible and irresponsible, because they do not weigh up the impact of the policies being advocated on our public services and our economy.

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[Mr Hammond]

I say that because I take a holistic view. I am looking at the interests of the United Kingdom as a whole, taking into account all the pluses and minuses of our EU membership—yes, there are negatives as well as positives—balancing those arguments and reaching a conclusion about the net benefit to this country of being a member of the European Union.

[Mark Pritchard]

My right hon. Friend is absolutely right that there can be no economic security without national security. Will he tell the House how many of our NATO allies want the United Kingdom to leave the European Union? Many in the Brexit camp invoke Commonwealth leaders. Perhaps he can enlighten the House about how many Commonwealth leaders want the UK to leave the European Union.

[Mr Hammond]

My hon. Friend knows very well that the answer to both those questions is zero, but it goes further than that: I have not found any foreign leaders at all urging Britain to leave the European Union and saying that Britain would be a more influential and valuable partner if it left the EU.

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[Mr Lilley]

My hon. Friend is absolutely right. Trade deals take place because they are in the mutual interests of both parties; they are not military conflicts. They take place between two parties, like trade itself.

A very plausible but incorrect argument is that trade agreements always take a long time. When the Secretary of State for Foreign Affairs was asked whether Ministers had done any study of trade agreements, he sidestepped the question. A freedom of information request has actually revealed that neither the Treasury nor the Government have done any study of the trade agreements about which they talk so knowledgeably. However, such studies have been done. I refer to the study by Professor Moser of the Centre of European Union Studies in Salzburg of every single trade agreement in the past 20 years. There are 88 of them. They took an average of 28 months, but the time for each varied greatly. The deals that took a long time were those that involved lots of countries, which certainly concurs with my experience. Of course, by definition any EU treaty involves 28 countries and takes a long time, because all 28 have vetoes. A lot of EU treaties are being held up now, but bilateral treaties take less than that average of 28 months. We should not start deluding people into thinking that it will take a long time to negotiate bilateral deals with countries that already have bilateral deals with Switzerland, for example.

The right hon. Member for Sheffield, Hallam asked rhetorically whether anyone was queueing up for trade deals with us. Well, look not for what they say but what they do. Switzerland has trade deals with countries whose total GDP is four times that of the countries with which the EU has trade deals. Chile has trade deals with countries whose collective GDP is even bigger. Switzerland has a trade deal with China. We are told that it is a bad deal for Switzerland, but clearly the Swiss did not think so. The Swiss published the details of the deal online; Members can look at it themselves. By the time the EU even gets around to negotiating a trade deal with China—which by the way will never succeed because the EU will always insist on human rights terms the Chinese will not accept—the Swiss will have zero tariffs on the vast majority of their exports to China.

[Mark Pritchard]

My right hon. Friend is a distinguished former Trade Secretary so knows what he is on about. We come from different sides of the debate on this issue, but does he—with all his experience and wisdom, and all his contacts both in the Commonwealth and the European Union—accept this point? Brexiteers invoke the Commonwealth leaders as wanting to do business with Britain whether we are in or out of Europe. Is it not the case that Commonwealth leaders want a trade deal with the whole of Europe, not just with the United Kingdom?

[Mr Lilley]

They probably want trade deals with whoever they can negotiate sensible ones with, if they are sensible. They will not say that it is either/or; they will want a trade deal with us, because we are the fifth biggest economy in the world, and they will probably also want a trade deal with the EU. They will find, however, that that deal takes a very long time because all 28 countries will have to agree to it first.

It is often suggested that the EU will get better deals because it is bigger. Actually, not only is it more complicated to do those deals with lots of countries, and so takes longer, but the result is worse and less comprehensive, because there are 28 times as many exceptions and exclusions. They are even less likely to be in the UK’s interests, as we can see from what has happened so far. A third of the trade deals that the EU has negotiated with other countries do not include services. As has been repeatedly stated, services are very important to this country, but they are less important to the rest of the EU, so it does not bother to include them in the deals. Switzerland also attaches great importance to exporting services, so more than 90% of its trade deals include them—as of course would ours if we were independent and making our own deals.

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[Neil Carmichael (Stroud) (Con)]

The fact of the matter is that this referendum would not be useful exercise if we were not a sovereign nation, because we would be unable to implement the outcome. That proves that we are sovereign—the questions are what we do with our sovereignty; what we do to influence our neighbours; and what we do to advance our national interest. Because we are a vibrant, ambitious and decent society, we have to do that within the European Union, as I will explain. It is about the future; it is not some blast to the past. It means this country thinking about what we do for our people beyond today.

Let us take trade; we have heard a lot about it today. We export twice as much to the Netherlands as we do to China. That is a fact. Why does it matter and what does the European Union provide for us? It provides a huge pool of wealth. It is the world’s largest single market, not just in its activity but in its value. It is nearly twice the size of China, yet some are thinking of leaving it. That would be madness, because the people we trade with most are the people who are most like us and who will benefit most from us as well. That is the trade argument.

Then we come to investment. In my constituency—and I bet in most other Members’ constituencies—there are examples of powerful intervention from the European Union through investors. That matters, and 48% of our foreign direct investment comes from the European Union. What does that equal? It equals jobs and it equals rising wages and opportunities for our young people.

That brings me on to the issue of our universities and young people’s opportunities to develop careers after they have been to university, not to mention the importance of opportunities for young people who do not want to go to university. The fact remains that the opportunities open to them by moving around Europe are immense, and it is vibrant for them and great for our economy. Do we want our young people to be stuck here when others are thriving somewhere else?

That brings me on to migration. It is a two-way street. We must remember that. There are just as many people coming here to help us with our skills as there are people going from here to there to make money for this economy. There are nearly 2 million Britons working or living in the European Union, benefiting from the opportunities with which being in the single market provides them.

[Mark Pritchard]

Does my hon. Friend agree that the majority of EU citizens coming to this country come here to work hard, pay their taxes and better their and their families’ lives—and that the majority are not here to scrounge?

[Neil Carmichael]

Absolutely. Some factories in my constituency could not do as much as they do without the sort of skills that they can get from the European Union. My hon. Friend is absolutely right about that.

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[Mark Pritchard (The Wrekin) (Con)]

I believe it is in our national security interest to remain in the European Union and, indeed, that it is in the national security interests of the United States and of our allies in Europe. At a time when there are many conflicts around the world and when the world is very unstable, with an aggressive Russia and a belligerent North Korea, the very last thing we want is a fragmentation of the European Union, ambiguity in foreign policy or a weakening of the European Union and of the strength we draw from one another.

There has been a lot of debate about whether NATO or the European Union is the cornerstone of our national security, but I would argue that both have become such a cornerstone. I do not resile from the fact that NATO is a major cornerstone of our national security. However, I ask Brexiteers this: if the UK were to leave the European Union, is it more likely that France and Germany would fast-track EU defence structures? My answer is yes. If that is the case, is it likely to undermine NATO? Again, my answer is yes. In my view, in the medium term we would see EU defence structures compete with NATO rather than complement it. That makes me very concerned indeed.

We also hear, on counter-terrorism, that our so-called open borders endanger our cities and towns and those who live in this country. But the majority of counter-terrorism challenges in this country are home grown. The majority of those involved in the awful and egregious attacks in Brussels and Paris were EU citizens. It is completely misleading to suggest that remaining in the European Union increases our likelihood of suffering a terrorist attack. We could be attacked at any time. I pay tribute to our intelligence services, our armed forces and police.

Along with my hon. Friend the Member for Bury North (Mr Nuttall), I co-wrote a motion on having a European referendum that went against the Conservative Prime Minister and Government. We are where we are, and I make no apology for having played a key part in that, because it is right that, after 41 years, the British people are re-enfranchised on the European question. Nevertheless, I served on the NATO Parliamentary Assembly for five years and on the Joint Committee on the National Security Strategy for four years and, after serious reflection, I have come to the view that, on balance, for national security reasons we should remain in the European Union.

We have rightly heard a lot about the economic impacts of withdrawal from the European Union. I have absolutely no doubt that there would be a massive shock for our economy. If there was a £30 billion or £40 billion hit, yes, there would be further public sector cuts and tax rises. That would be bad for Britain, which today is leading the economies of Europe and indeed has the fastest growing economy in the G7. But without national security, we cannot have economic security, and without economic security we cannot have national security, because we will not have the funds to pay for our defence and our intelligence agencies. My hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) quite rightly called for an expansion of the Foreign Office—both the Secret Intelligence Service and the mainstream Foreign Office.

My hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) put his finger right on it: do we want to put up the white flag and surrender all that we have worked for in Europe to France and Germany? They are close allies, but occasionally on foreign policy they can be eccentric, to put it politely. Diplomacy is a key part of national security. Are we going to surrender the diplomacy of the European Union to some of the more eccentric play of France and Germany? Would we have the robust and tough sanctions on Russia over Ukraine if it had not been for the Prime Minister’s and Foreign Secretary’s robust representations in Brussels and around the capitals of Europe to make sure that Russia paid for its aggression? If Russia were not paying for that aggression through sanctions, would there be aggression in the Baltic states?

I am not a Europhile. I am not passionate about Europe. I love the United Kingdom. That is why I believe that, on balance, the best prospect for a safer, more secure and more prosperous United Kingdom is to remain in the European Union.