EU Membership (Audit of Costs and Benefits) Bill

Philip Hollobone Excerpts

Friday 26th February 2016 Commons Chamber

[Mr Christopher Chope (Christchurch) (Con)]

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

Madam Deputy Speaker, I apologise on behalf of my hon. Friend the Member for Wellingborough (Mr Bone) for his being unable to participate in this debate. He has been waiting for the opportunity for a long time, and it is only because of a series of supervening events that he cannot be here to move the Bill’s Second Reading himself. In those circumstances, he asked me, as a co-sponsor, to move it on his behalf, which it gives me great pleasure to do.

You may be aware, Madam Deputy Speaker, that this Bill, or a Bill very similar to it, has had a long gestation. It was back in the 2007-08 Session that I brought forward a Bill, supported by my hon. Friend the Member for Wellingborough and other colleagues. It was entitled the European Union (Audit of Benefits and Costs of UK Membership) Bill to

“establish a Commission to carry out regular audits of the economic costs and benefits of the UK’s membership of the European Union; and for connected purposes.”

That Bill had almost a full day’s debate here on 20 June 2008.

As we start today’s debate it is worth recalling some of the comments I made when opening the previous debate. The Bill was narrower than this one, in that it dealt only with the economic costs and benefits of the UK’s membership of the European Union. I started by referring to the preface to an excellent work by Ian Milne, “A Cost Too Far?: An Analysis of the Net Economic Costs and Benefits for the UK of EU Membership”. In the foreword to that pamphlet, which was published in July 2004, the former distinguished and late Speaker Lord Weatherill stated that when he was the Conservative Government’s Deputy Chief Whip in 1972, he supported entry into the European Common Market

“on the assurance of the Prime Minister, Mr Edward Heath that ‘joining the community does not entail a loss of national identity or an erosion of essential national sovereignty.’”

Lord Weatherill went on to say that things had moved on a bit since then, and that what was important was that

“Parliamentarians now have a sacred duty honestly to explain the pros and cons of our developing relationship with the European Union. Only then can the people make an informed choice.”

[Mr Philip Hollobone (Kettering) (Con)]

I congratulate my hon. Friend on putting forward this magnificent Bill and I thank him for giving me the privilege of being one of his co-sponsors. In the debate of 2008 and in the research by Ian Milne, was any prediction made that in 2016 we would be faced with a £62 billion annual deficit of trade with the European Union?

[Mr Chope]

The short answer is no. I do not think it was ever envisaged that the European Union would be such a manifest failure as an economic entity and would be unable to maintain its share of world trade. We know that since 1972, the EU share of world trade has declined significantly. We know, too, that the EU has not been growing in economic terms in the way people thought would be possible—even to the extent that we now face a situation in which half the new jobs being created in Europe are being created in the United Kingdom, while the other half are being created in the 27 other countries of the EU. When we first joined, the share of trade that the EU had with the rest of the world was significantly higher than it is now, despite the fact that at that time it had many fewer member countries. As the EU has got larger in numbers, its influence over trade in the rest of the world has declined. I do not think that any of that was anticipated by Mr Milne in his pamphlet.

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[Mr Chope]

The answer to my hon. Friend is, as always, that I am going to wait and see what the Minister says in response to my Bill. I am not going to anticipate that. Discussing the Bill provides us with a chance to look at the various issues surrounding information, or lack of it, on the costs and benefits of our membership of the European Union.

Today, I am delighted that Lord Howard—Michael Howard, as he was when he was a Member of this House—has decided to join the leave campaign. I had the privilege of serving with him as a junior Minister for several years in the late 1980s so I know what a great supporter he is of the idea of Europe. What he has shown today by his decision, however, is that he is very much against us continuing to be members of a European Union that is increasingly out of touch with the needs of the people of Europe. That is a really important move, following so soon after the decision by Lord Owen to join the leave campaign.

As a further response to the point raised by my right hon. Friend the Member for East Yorkshire (Sir Greg Knight), let me say that I tabled a parliamentary question to the Chancellor of the Exchequer on 1 June 2015. It said:

“To ask Mr Chancellor of the Exchequer, if he will commission an independent audit of the economic costs and benefits of UK membership of the EU.”

Do you know what answer I got, Madam Deputy Speaker? I shall read it to the House. It said:

“The Government has a clear mandate to improve Britain’s relationship with the rest of the EU, and to reform the EU”—

I emphasise that point—

“so that it creates jobs and increases living standards for all its citizens. The Government will hold an in/out referendum on the UK’s membership of the EU by the end of 2017.”

What was the answer to the question—I hear you saying, Madam Deputy Speaker—about the economic costs and benefits of UK membership? There was no answer. Why was there no answer from the Treasury Minister? Why did the Treasury not want to answer the question? It knew that if it said “no”, it would be ridiculed; and it knew that it did not want such an audit, so it was not prepared to say yes.

[Mr Hollobone]

Is it not the case that Her Majesty’s Government have always been frightened of an independent objective analysis of the costs and benefits of our membership, which explains why they were so worried about the answer to my hon. Friend’s question? Only today, we have heard the latest spin from Her Majesty’s Government that, were we to leave the European Union, the pound would fall and holidays would be more expensive for those going to Europe. I always thought it was the convention of Her Majesty’s Government, and in particular the Chancellor of the Exchequer, not to comment on the future direction of exchange rates, so does this not demonstrate that we are now in an era of spin because they are frightened of independent objective assessment?

[Mr Chope]

As ever, my hon. Friend has made an important and, indeed, fundamental point. I would just add that it is even odder that the Government should comment on sensitive issues relating to exchange rates at the same time—on the very same day—as saying that they were not prepared to answer questions about the disparity between the number of people from the European Union who registered for national insurance numbers last year and the number of people who are alleged to have come here from the European Union to work. I believe that more than 600,000 asked for national insurance numbers, but the Government say that only about 250,000 came here in that year. When the Government were asked to explain the difference between the two figures, their answer—it is in the papers today, so it must be correct—was that it would be wrong to answer the question, because it might influence the forthcoming referendum. I am sure that the Chancellor, the Prime Minister or whoever it was who said that we would all have to pay more for our holidays did not do so in order to try to influence the outcome of the referendum.

[Mr Hollobone]

I disagree with my hon. Friend. They said that deliberately to try to mislead people into thinking that their holidays would become more expensive. The truth is that exchange rates go up and down, and are very difficult to predict. However, if the Government are going to start commenting on the future direction of exchange rates, should not they at least do so in a balanced way, and point out that were the pound to decrease in value, that would be extremely good news for hard-pressed British exporters who are seeking to sell more of our products abroad?

[Mr Chope]

Absolutely. That is another side of this very important argument.

I referred extempore to what the Government were reported to have said yesterday about the disparity between the figures, but let me now give the exact figures. A total of 630,000 EU citizens registered for national insurance numbers entitling them to work or claim benefits in Britain last year, yet it is said that there were only 257,000 new EU migrants. Incidentally, 209,000 of those national insurance number registrations came from residents, or citizens, of Romania and Bulgaria.

Jonathan Portes, of the National Institute of Economic and Social Research, sought an explanation for this extraordinary disparity, but was told that the Government were not prepared to give more details because

“it might prejudice the outcome of the EU referendum.”

[Mr Chope]

Well, it depends what the answer was, does it not?

This illustrates the problem that we have with the unequal use of resources and statistics. Having refused to answer the simplest of questions from me last June, the Treasury is now refusing to inquire further into what is, on the face of it, an extraordinary disparity, while at the same time making the scaremongering assertions to which my hon. Friend the Member for Kettering (Mr Hollobone) has referred.

The purpose of my Bill is to introduce some objectivity and independence into the whole process of evaluating the costs and benefits of our membership of the European Union. My right hon. Friend the Member for Chichester (Mr Tyrie), the Chairman of the Treasury Committee, has launched an inquiry into the economic costs and benefits. He is doing a lot of good work, and I look forward to the publication of the report, but, having read much of the oral evidence, I note that the answer given by a great many experts, whether pro or anti-EU, is that it is extremely hard to be sure one way or the other.

During the forthcoming referendum campaign, we might be well advised to note the information that is set out so ably in House of Commons Library briefing paper 06091, which was published in January this year. According to chapter 6,

“There is no definitive study of the economic impact of the UK’s EU membership or the costs and benefits of withdrawal. Framing the aggregate impact in terms of a single number, or even irrefutably demonstrating that the net effects are positive or negative, is a formidably difficult exercise.”

Why is that?

“This is because many of the costs and benefits are subjective or intangible. It is also because a host of assumptions must be made to reach an estimate. If the UK were to leave the EU, assumptions must be made about the terms on which this would be done and how Government would fill the policy vacuum left in areas where the EU currently has competence. If the UK were to remain in the EU, assumptions would need to be made about how policy in the EU would develop.”

That is a very important point. We often hear—and we heard from the Prime Minister this week—words to the effect that there will be no leap in the dark if we decide to stay in the European Union; it will all be as plain as a pikestaff. However, the House of Commons Library briefing clearly states that we do not know how policy in the EU would develop if we chose to remain:

“Estimates of the costs and benefits of EU membership are likely to be highly sensitive to such assumptions.”

If the Government, whose current robust line is that we must at all costs stay in the European Union, start presenting figures and data, how shall we be able to assure ourselves that those figures and data are objective? I think the answer is that we shall not be able to do that, because the figures and data will come from a biased source.

[Mr Hollobone]

It seems to me that, rather than trying to present independent and objective statistics and data to the British public, Her Majesty’s Government are putting increasing emphasis on spin. For example, the claim that 3 million British jobs depend on our membership of the European Union is trotted out by all those who are campaigning for us to remain in the European Union, although any objective, independent assessment demonstrates that it is a complete myth.

[Mr Chope]

My hon. Friend is absolutely right. That is only one of the figures that have been strongly criticised in evidence to the Treasury Committee. It has now been ridiculed, but can we be sure that it will not be replicated in the Government propaganda leading up to the referendum?

The House of Commons Library briefing states:

“Open Europe (2015) The Consequences, challenges & opportunities facing Britain outside the EU estimated the effect on UK GDP in 2030”—

some 15 years from now—

“of leaving the EU could potentially be in the range from -2.2% to +1.55% of GDP. However, the study argued that a more realistic range was between -0.8% and +0.6% of GDP.”

In other words, there is no significant difference either way. Yet between now and 23 June, I predict the Government will be suggesting that it is all one way and it will be an economic disaster if we have the courage and conviction to take responsibility for our own lives and our own destiny and leave the EU.

The other part of the Library paper I want to mention is a reference to a May 2014 report by Civitas on trade advantages of the EU. It found that the trade benefits of EU membership were exaggerated. Based on a study of UK exports since 1960, Civitas found that UK trade with European nations outside the EU had increased dramatically, while the UK’s trade with other EU members accounted for no more of its trade with leading economies than in 1973. That goes back to a point we were making earlier.

[Mr Hollobone]

Yes, we were making that point earlier, and when we joined the EU—the Common Market as it then was in 1972—we did not have a £62 billion annual trade deficit with our EU partners. Over the 44 years of our membership, the trade deficit has grown. To put this in simple terms, the EU nations are selling to us £62 billion-worth every year more than we are selling to them. So our trade with our EU partners has deteriorated over the past 44 years, not improved.

[Mr Chope]

My hon. Friend is absolutely right and the figures he quotes are almost identical to those in this House of Commons Library briefing paper, which quotes figures from the Office for National Statistics balance of payments statistical bulletin. They show exactly the effect my hon. Friend describes. I wonder how much of that information we will see in the Government’s leaflets in the forthcoming campaign.

[Mr Hollobone]

Can my hon. Friend also confirm that, as a result of our EU membership, we have lost Britain’s seat at the World Trade Organisation? That means that we have lost our sovereign ability to negotiate friendly free trade arrangements with other countries around the world. So, for example, a country as small as Iceland has negotiated a friendly free trade treaty with an economic superpower like China, yet we are forbidden to do exactly the same thing because of our membership of the EU.

[Mr Chope]

My hon. Friend again makes a telling point. I was going to come to it later, but as he has raised it now, let us put on the record, for example, the concern many of our constituents have about TTIP, the Transatlantic Trade and Investment Partnership being negotiated between the EU and the United States. A legal opinion has been circulated to a number of us over the last 24 hours saying if TTIP goes ahead as proposed, it would potentially be disastrous for our national health service. I do not know whether that is correct or not, but there is an opinion saying that that could be the impact. Why are we relying on the EU to negotiate a trade deal with the US? Why do not we, as the fifth largest economy in the world—English-speaking, committed to free trade—make our own trade deal with the US? The short answer is that we are not allowed to do so until we leave the EU.

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[Mr Hollobone]

My hon. Friend makes an extremely good point about TTIP. He will have received letters and emails from constituents, as have I, expressing very real concern that the 28 additional words we need in the agreement to protect our NHS are not in the draft TTIP terms. Just to make it crystal clear, were we to leave the EU, we could negotiate such an agreement with the US and include in the agreement, under our new sovereign capabilities, those crucial 28 words that all the TTIP campaigners would like to see.

[Mr Chope]

Exactly, and if we did not include them we could be held to account by our constituents in this House for having let them down. At the moment we can just say, “Well, it’s beyond our control; we haven’t got any influence over this.”

[Mr Chope]

That is interesting. I was at a meeting the week before last with a group of people from the US Senate and Congress who were interested in the subject of TTIP. I was invited to take the chair of this gathering, and one of the first questions I asked was how many of these people thought TTIP was going to be resolved by the end of this year. The answer was zero.

What we were told when the Prime Minister launched this initiative in 2013 was that we would get this sorted out before the end of the Obama presidency; it is absolutely clear we are not going to get it sorted out before then. So I then asked the same gathering of people how many of them thought it would be sorted out by the end of next year. Again, nobody thought that. Basically, the message coming from these people who are very well connected on Capitol Hill was that TTIP is very much in the long grass as far as the US is concerned because of the difficulties being put in the negotiations by the European Union, which is trying to maintain the protectionism that is still espoused by so many members of the EU and that is not compatible with what the US wants. So in answer to my hon. Friend’s question about how long a resolution would take, my view is that we would get a bilateral trade agreement between the UK and the US one heck of a sight quicker than we are ever going to get a trade deal between the EU and the US.

[Mr Hollobone]

To extend that principle into a future where Britain is outside the EU, given that we are already 100% compliant with all the EU obligations, should it not be possible to negotiate a free trade agreement between Britain and the EU in double-quick time after our EU exit?

[Mr Chope]

Absolutely. The fall-back position if we did not negotiate such a deal would be that we would have a continuing relationship on WTO rules, which are signed up to by the EU. So any suggestion that there would be a complete curtailment of trade between us and the EU when we leave is absurd. Why would the EU not want to sign up very quickly with the UK? They are selling us more than we are selling them, so it must be in their interests to try to maintain those connections. Tellingly, and disappointingly, in addressing this point in Monday’s statement the Prime Minister did not talk in absolute terms. Instead of facing up to the fact that we sell less to the European Union than it sells to us, he started talking in percentage terms. That is completely misleading because we are but one of 28 countries in the EU, so if we start talking about the percentage of EU exports that come to us compared with the percentage of our exports that go to the EU, we will present a distorted picture. It was very sad that the Prime Minister chose not to use the absolute figures and instead resorted to such misleading percentages.

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[Mr Chope]

I agree absolutely with my right hon. Friend, who brings an enormous amount of experience, not only as a former trade Minister, but as a former Deputy Chief Whip. I am delighted that he is playing a key part in the leave campaign. What is happening in Europe to deal with the migration crisis is breath-taking in its incompetence. We are talking about a major cost; this crisis will potentially cost the EU a fortune. Who will have to contribute to those costs if we remain in the EU? It is none other than the British taxpayer. I think my right hon. Friend’s prediction is right, but I hope we will never see whether it comes to pass because by then we will have left the EU.

[Mr Hollobone]

Ten billion pounds sounds like an enormous figure, and it is, but people often struggle to deal with figures when they get so big, so let me place it into a local context. In Kettering, we are struggling to get £30 million for an improvement to Kettering general hospital and the development of an urgent care hub on the site there. That sum is less than one day’s subscription to the EU but we are having a really difficult job getting even that small a sum out of the Treasury. Imagine what we could do with £10 billion to spend on important public services across our country, providing hospitals, schools, doctors, police officers and nurses.

[Mr Chope]

Exactly. My hon. Friend makes the point brilliantly. One thing the Treasury is apparently willing to help on is the cost of vellum; I believe it is offering to pay £30,000 a year. That is the way the Treasury works.

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[Mr Hollobone]

Is this not the crucial point for people who voted Conservative at the last election on the basis of that manifesto pledge to cut immigration to tens of thousands? The truth is that that objective will simply be unattainable while we remain a member of the EU, so the only way to solve this is to vote to leave on 23 June.

[Mr Chope]

Exactly. If we ask whether the Government have any idea how we could achieve that without leaving, I am sure we will be told that we cannot have any more information because it might prejudice the outcome of the referendum.

It is not just the numbers; there is also an associated cost. I refer to the document called “The best of both worlds”. There is a problem with the title of that document. I believe in one world, and the people who are defending our position in the European Union seem to be under the illusion that there is more than one world. There is just one world, and we can be the masters of our own destiny in that world if we are released from being in the European Union.

[Mr Hollobone]

Maybe some members of the Government are living on a different planet.

[Mr Chope]

My hon. Friend makes the point in his own inimitable way. Perhaps that should be the subject of a parliamentary question in due course.

The document entitled “The best of both worlds” refers in paragraph 2.103 to the costs of the migration coming in. It has been pretty difficult to get hold of this information, but it has at last been wrung out of the Government. The document states:

“On average, families with a recent EEA migrant claim almost £6,000 per year in tax credits”.

If a million EU migrants have come in during the past four or five years, as we know from the latest figures, and over 40% of those are claiming tax credits, the cost of that is 400,000 multiplied by £6,000 per year. That is a lot of money, and that is just the cost of in-work benefits to non-UK citizens from the European Union. That creates pressure on our public services, such as health and schools. I saw in the Evening Standard last night how many people will not be able to get their children into the school of their choice in London in the coming year because of the increased population.

All the issues have a bearing on the question whether it is in our best interests to leave the European Union. Having done research such as I have, I am in no doubt that it would be in the best interests of the United Kingdom to leave the European Union. The purpose of this Bill is to ensure that the Government put forward objective figures in relation to the issue, rather than figures that are based on prejudice.

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[Philip Davies]

My hon. Friend is absolutely right. At the end of the day, what this boils down to is people’s confidence in their negotiating abilities. I used to work for Asda, and I fear that, if some of my hon. Friends had been our buyers and had used their negotiating skills, we would have gone bust. In effect, what many of my colleagues are saying—and what Labour Members are saying—is that we have a £62 billion trade deficit, but we do not think that we can negotiate a free trade agreement without handing over a huge membership fee every single year. That is the easiest negotiation known to mankind. If they cannot negotiate that deal, what on earth can these people negotiate? If the Prime Minister were to claim that he could not negotiate a free trade deal with the EU based on that trade deficit every year—I am sure that he will not say that because he claims to be a good negotiator—he would not be fit to lead this country into those negotiations. That is what I would say to anybody who aspires to such a role.

[Mr Hollobone]

Is not my hon. Friend’s point exactly right and enhanced by the fact that we already by definition meet 100% of the EU’s requirements for a free trade deal because we are part of the single market? Once we are outside the European Union, it should be relatively straightforward, given that we are the fifth largest economy in the world, to come up with terms.

[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.

[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.

[Mr Hollobone]

The world’s largest economies in order are: China, America, Japan, Germany and Britain. Were we to leave the European Union, there is every chance that we could overtake Germany and move into fourth place. We could negotiate on our own terms, with our seat back at the World Trade Organisation, friendly free trade agreements with growing economies such as China and India, and all those old Commonwealth countries that we effectively abandoned in 1972.

[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.

[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.

[Mr Hollobone]

An extension of that argument is the imposition of VAT on key products in this country, and a lot of fuss has been made about the fact that we cannot cancel the 5% VAT on domestic fuel, which has a big impact on low-income households. Recently, a very big fuss was made about VAT on women’s sanitary products. The British Parliament and Government are unable to remove VAT on those items without the consent of the European Union. If people want such situations to change, surely the message is clear: vote to leave on 23 June.

[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.

[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.

[Mr Hollobone]

As I understand it, VAT is still paid on the sanitary products and it still goes to Brussels, but the Chancellor is paying the equivalent sum of money to charities. We are effectively paying twice as much as we would if we had sovereignty.

[Philip Davies]

My hon. Friend makes his point well, as always, but we should not be in this situation. Such decisions should be taken in this House for the benefit of our constituents, but they are not.

We are signing up to a treaty, and the EU is saying to us, “You sign the treaty, and if we want to change things against your wishes, we have the freedom to do so through qualified majority voting.” If I said to you, Madam Deputy Speaker, “Let’s sign a deal on something, but by the way, I can change the terms at any time, and there is nothing you can do to stop me”, I do not think you would sign up to it—nobody would sign up to such a deal, but that is in effect what we are being asked to sign up to in the EU referendum if we vote to remain.