EU Membership (UK Renegotiation)

Philip Hollobone Excerpts

Tuesday 5th January 2016 Westminster Hall

[Mr Philip Hollobone (Kettering) (Con)]

I beg to move,

That this House has considered renegotiation of UK membership of the EU.

May I say at the outset, Mr Percy, how delighted I am to see you in the Chair and what a pleasure it is to serve under your chairmanship? I can think of no one more suited to the role. What an excellent way to start the parliamentary year.

I thank Mr Speaker for granting me permission to have this debate and I thank the Prime Minister for his commitment to delivering an in/out referendum as part of the Conservative party manifesto. Let us not forget that if the Conservatives had not won last year’s general election, the Labour party, the Scottish National party and the Liberal Democrats would have denied us the referendum that the British people want to hold. There is a lot of speaking talent in the Chamber this morning, so I shall keep my remarks shorter than I would otherwise, because most hon. Members here know far more about this subject and are far more eloquent than I.

To keep things simple, the referendum question that we will face, either this year or next, is whether to remain in or leave the European Union. Repeated polls show basically the same pattern. About a third of people want to remain and about a third of us want to leave, whatever happens. In between, about a quarter to a third are uncomfortable with Britain’s present relationship with the European Union or are worried about the future, but they are also concerned that if we leave the EU, there might be bad consequences for their jobs or living standards. The lazy assumption of the establishment, the BBC and the CBI is that the UK will vote to remain.

I am privileged to represent the constituency of Kettering, which has the privilege of being the most average town in the whole country. I like to describe Kettering as middle England at its best. The people in Kettering will want clear explanations from both sides as to which way they will vote. It is true, I am sure we all agree, that people are wary of change, but a key point to get across is that whether we stay in the European Union or leave it, change will happen. My contention is that if we stay in, those changes will be bad for the United Kingdom, but if we leave, those changes can be made good. My central assumption this morning is that remaining in the European Union is the riskier option. Leaving and taking back control for ourselves is by far the safer choice, which is what we need to explain to the good people of Kettering and the great British public over the year—or years—ahead.

The first of the five main points I want to make is, I am afraid, that the Prime Minister’s renegotiation strategy has been unfortunately weak. It has been undermined from the start by the fact that he is in favour of staying in the European Union, whatever the outcome of those renegotiations. The reforms that we are likely to get, if any, will be too little and too late. For a start, it looks pretty certain that they will not involve any kind of change to the European treaties at all, so any proposed reforms will have the legal effect of simply being an unsigned contract. The Prime Minister promised us that we would have full-on treaty change, but that has effectively now been abandoned.

[Mark Field (Cities of London and Westminster) (Con)]

My hon. Friend is more attuned to European matters than virtually anyone else in this House, so he will be well aware that any treaty change will require a series of domestic referendums. It will clearly not be possible to get that worked out by the end of December 2017, when we are committed to having a referendum. It has always been clear from the timetable that we have in place that having fully fledged treaty change in advance of our referendum was an impossibility. Does he accept that?

[Mr Hollobone]

If my right hon. Friend is correct, it strengthens the case for voting to leave. Why would we want to stay in the European Union knowing that treaty change is yet to happen, trusting in the judgment of European politicians to deliver what they say they will deliver? The safer choice is to vote to leave, and then we would have the upper hand in negotiating our successful exit from the European Union.

If there are changes to the treaty, it is likely to be another five to 10 years before they happen, and if they proceed along the lines of the infamous Five Presidents report, they bode ill for this nation. It would appear that we are not going to get an end to the supremacy of EU law over UK law. We will not get the United Kingdom out of the charter of fundamental rights, which gives EU judges huge powers over us. We will not get a restoration of the UK’s right to make free trade deals under the World Trade Organisation. We are not going to get any reforms to the common agricultural policy or the common fisheries policy—I hope the SNP spokesmen are aware of that. We might get some changes to the benefit entitlement rules, but most EU migration to this country is driven not by a search for benefits, but by the fact that the UK has the most successful economy in Europe and people are coming here to seek work.

[Mark Field]

My hon. Friend is absolutely right: one reason why we have so dismally failed to meet our migration targets has been the relative success of our economy. However, does he not also accept that it would be wrong simply to blame our membership of the EU for the fact that migration is at the highest levels ever? We have a huge amount of non-EU migration that comes in and, in many ways, we are all party to that; we all have constituents, particularly from the former Commonwealth countries, whom we represent when they want relatives to come to this country. It is that level which is unacceptably high and which has helped to ensure that our pledge to reduce the amount to tens of thousands has been fatally missed right the way through the last Parliament, and will be, I think, for many years to come.

[Mr Hollobone]

Yes, I think the two main factors behind the massive wave of immigration are, first, our membership of the European Union and the principle of free movement within it, and secondly, the Human Rights Act 1998, both of which mean that we are effectively unable to control our borders. If we want to control our borders, however, leaving the EU is an absolute prerequisite. We now have the farcical situation in which an unskilled Romanian immigrant can come to this country without our being able to do anything about it at all, and they get a job perhaps as a cleaner, but a skilled migrant from India who has a degree in astrophysics will find it very difficult to come to this country. We are going to get a sensible immigration policy back only if we leave the EU and get rid of the Human Rights Act.

[Tim Loughton (East Worthing and Shoreham) (Con)]

My hon. Friend is making a very good point, but there is another point to add. Take the example of Poland—there are something like 15 million Poles living outside Poland. It has one of the best education systems in Europe and yet it is exporting people to work in jobs well below their skill level in the UK and other countries like it. Is not the point that getting control of immigration is good for countries such as Poland, so that they can make sure that more of their people want to stay at home and contribute to their economies? This is about what is good not just for Britain, but for eastern Europe and other countries from which many people are coming to the UK.

[Mr Hollobone]

As always, my hon. Friend makes an extremely good point. I think we want to allow into this country Polish people who have the skills that our economy needs, and we do not need in this country Polish people who do not have the skills that we need. At the moment, because of our EU membership, we are unable to control that and that will have implications, as he rightly said, for the Polish economy as well as for ours.

[Owen Thompson (Midlothian) (SNP)]

I am hearing a lot about immigration, but we are not talking in any sense about emigration and the almost equal number of people who have left the country to live and work across Europe, as opposed to those who have come in. I would argue that the situation is similar regarding the skill base of those going out, and that UK citizens are benefiting from the advantages of being part of Europe and being able to travel and work in such a way.

[Mr Hollobone]

If we left the European Union, having negotiated our exit, we could have arrangements under which we would allow into this country people from the EU whose skills we need and the EU would allow into the EU British people whose skills it needs. At the moment, without those controls, we have massive net immigration into this country. It may not be an issue in Scotland, but it is a big issue in middle England.

[Daniel Kawczynski]

(Shrewsbury) (Con): My hon. Friend is making an extremely good speech. The media are focusing on benefits to EU workers and they are not sharing with our electorate some of the more important constitutional changes that the Prime Minister is trying to get agreement on. How does he assess the importance of the benefits issue for migrants among his constituents in comparison with constitutional changes they would like?

--- Later in debate ---

[Mr Hollobone]

My constituents are concerned about any migrant coming to this country and getting benefits to which they have not contributed, and that includes EU and non-EU citizens. The rules should be tightened and changed. For example, if a Polish person comes to live in this country and receives child benefit for his children back in Poland, that is clearly wrong and must change. The vast majority of EU migrants do not come to Britain for benefits. Some do, but the vast majority come here for work. It is important to change the rules, but in the scheme of things changes to the benefits system are not a massive issue.

Constitutional change is a big issue and would alter fundamentally our relationship with the European Union, but I am afraid that the Prime Minister will not deliver any fundamental constitutional reform. For both those reasons, it is likely that his constituents and mine will increasingly come to the conclusion that our future is better outside the European Union.

It has been suggested that the Prime Minister may be successful in getting the EU to drop a reference to “ever closer union” in the treaties. That would be great, but the principle of integration is embedded within all EU institutions and is a core principle of the European Court in all its judgments. Just tweaking the language will not change the institution’s philosophy or the Court’s practice. The European Commission has made it clear with the release of the infamous Five Presidents report and its proposals for a new EU army that if we stay in the European Union the prospects are for even more integration.

I am a committed outer, but many people in this country have yet to make up their mind. Among them is the British Chambers of Commerce, which wrote to the Prime Minister on 23 June 2015 setting out a very reasonable set of parameters for the negotiations. It stated:

“First…Britain must have absolute guarantees to protect our economic and other interests within the EU. Second, it is necessary to sort out the ‘common market’ so that it works for British business. The UK is by and large a service sector economy and yet there is no meaningful internal market in services within the EU…Third, we need a cast iron opt-out to make sure we do not sleepwalk into an ‘ever closer union’. Fourth, we need to protect our businesses from the regulatory burdens imposed by the EU…we need a clear and balanced approach to immigration taking into account the need for stability and social cohesion and driven by the skills requirements of our economy, meaning businesses can access the talent they need.”

I contend that none of those five parameters will be met by the Prime Minister in his negotiations.

The second big point I want to make is that the UK is a big hitter in its own right. I am confident about the UK’s ability and future in the world. We are the fifth largest economy in the world. We are a member of the G7 and the G20, a permanent member of the UN Security Council and a member of NATO. If we left the EU, we would get back our seat at the World Trade Organisation. We are a member of the OECD, the International Monetary Fund, the World Bank, the Organisation for Security and Co-operation in Europe, the Council of Europe, Interpol and the Commonwealth. The idea that if we left the EU we would wither and die and have no international significance is absolute nonsense.

If there were a successful leave vote, the UK could negotiate a UK-EU deal based on free trade and friendly co-operation. That need not be acrimonious at all. The UK is the EU’s biggest trading partner.

[Philip Davies (Shipley) (Con)]

I am sure my hon. Friend is aware that the Library has done some research that shows that if the UK left the EU, the UK would be the EU’s single biggest export market, bigger than any other country in the world. Is it not clear that if we left, and given that we have a £62 billion trade deficit with the EU, we would still be able to trade freely with other countries in the EU?

[Mr Hollobone]

My hon. Friend demonstrates again that he is a very well read Member of this House and, as usual, ahead of the curve. He is right, because negotiating a free trade agreement with the EU should be fairly straightforward, given our status as the EU’s largest trading partner and the fact that we already meet all the EU’s requirements. One fifth of all the cars produced in Germany are exported to the United Kingdom. Is anyone seriously suggesting that if we left the European Union Germany would want to cease trading with us? With a successful leave vote we could negotiate a successful UK-EU deal.

Many countries around the world already have free trade deals with the EU but do not have to accept the supremacy of EU law like we do and do not have to pay the EU a massive £10 billion and rising each year as a membership fee. If Chile, Peru and Colombia can negotiate successful free trade arrangements with the EU, surely the UK, as the world’s fifth largest economy, would also be able to do so. Our membership of the European Union means that we are constitutionally unable to negotiate free trade deals of our own with other countries.

The EU has been in existence since 1957 and has yet to conclude a free trade arrangement with America or China because 28 countries are involved and getting them all to agree on every detail is proving impossible. I suggest that if we left the EU negotiating free trade agreements with the United States and China would be a top priority.

[Daniel Kawczynski]

My hon. Friend talks about an issue that is very close to my heart—British export strategy—and he referred to the United States of America. Does he believe that if we were outside the European Union we could use our special relationship with the Commonwealth—Canada has an agreement with the EU—to get preferential trading agreements with those countries that are more preferential than those that the European Union has?

[Mr Hollobone]

My hon. Friend is right. I think that many countries around the world that have been unable to negotiate a free trade arrangement with the EU would be all too keen to negotiate one with the world’s fifth largest economy. We would have an appetite for doing exactly that were we to leave.

[Mark Field]

It strikes me that the one group that would be pleased if we left on that basis would be the new breed of civil servants that would be required in vast numbers to negotiate all those free trade deals across the globe. My hon. Friend alluded to the fact that one of the bigger concerns is not the economic issues in the European Union but political ones. Would he not at least recognise the risk—if we left the EU, given how calamitous that would be for the European Union as well as, in my view, not being good news for the United Kingdom—of retaliation, particularly in areas such as the City of London, an area that we both know well because we both worked there before coming here? For example, euro-denominated business would be largely out of Frankfurt and Paris instead of London. Retaliation would be a significant risk and the smooth path he has presented would not come into place.

[Mr Hollobone]

I am afraid that my right hon. Friend has been, as part of his constituency duties, spending too much time at too many big lunches in the City of London with the wrong crowd. I will give an example of what I am talking about. ICAP is the world’s largest dealer broker for financial institutions. The chairman of ICAP, Michael Spencer, has said that the UK can “thrive” outside the European Union. We were told by my right hon. Friend’s friends in the City of London that if we did not join the euro, all that euro-denominated business would go to Frankfurt, Paris and elsewhere. Actually, the City of London is today doing more euro-denominated deals than ever before in its history, so I do not take much notice of those scare stories, but I do suggest to my right hon. Friend that if his contacts want to continue to put out that sort of propaganda for our staying in the European Union, it demonstrates the weakness of their case. I do not want my constituents in Kettering, in middle England, to be unnecessarily scared by baseless scare stories from financial institutions that should know better.

[Mr Steve Baker (Wycombe) (Con)]

I am always shocked and surprised by the argument about retaliation, because we are asked to believe that the European Union project is about suppressing nationalism—the kind of economic and other political nationalisms that lead to war—yet we are also asked to believe that if we chose not to surrender our parliamentary democracy to that set of institutions, we would suffer exactly the kind of nationalisms and retaliation that the EU itself was set up to avoid. Can they make their minds up which way it is to be?

[Mr Hollobone]

My hon. Friend has hit the nail on the head.

[Mark Field]

I will not respond to that, but in the good-natured way in which we are having this discussion, I should perhaps point out that I have had many lunches in the City of London in the 14 or 15 years for which I have been the local MP, but my lunching activities go back a lot further, as my hon. Friend the Member for Kettering (Mr Hollobone) will know, because 30 years ago we began our political lives together as junior common room presidents in respective colleges and then as officers of the Oxford University Conservative Association. I have had lunch with him relentlessly over the last 30 years in the City and I do regard my hon. Friend as very much the right crowd, who I should be hanging around with, among many others whom I lunch with.

[Mr Hollobone]

I thank my right hon. Friend for that intervention.

The fact is that the EU is going in the wrong direction. As we know, it is planning a new treaty to save the eurozone from itself and to give the EU more control. In many respects, that is the right response for the eurozone countries to make, but it would be bad for the United Kingdom. In truth, the EU cannot cope. In some parts of the EU, unemployment is already 25% and youth unemployment more than 50%—the worst situation since the 1930s. Debts are large and growing. Unfunded pension systems require large tax increases, immigration increases or both. Voting to remain would mean signing up to the new EU treaty currently being negotiated, which has been spelt out in the Five Presidents report. That will give the EU even more power over our economy and take our seat on key bodies such as the IMF. No new treaty has ever given powers back or saved us money.

My constituents in Kettering and people across the country will be increasingly alarmed to read the contents of the Five Presidents report, set out in July last year. Who are these pompous five Presidents? The first is Jean-Claude Juncker, the European Commission President. The second is Donald Tusk, the President of the Euro Summit. The third is Jeroen Dijsselbloem, President of the Eurogroup, whatever that is. The others are Mario Draghi, president of the European Central Bank, and Martin Schulz, President of the European Parliament. They do like to call themselves Presidents whenever they get the chance. Among their plans are a euro area Treasury and increasing control over Europe’s fiscal systems.

[Graham Stringer (Blackley and Broughton) (Lab)]

I was not going to interrupt the hon. Gentleman, but if he consults the House of Commons Library, he will find out that there are seven European Presidents, but only five of them signed the document to which he is referring. That just shows what an absurdity this organisation is.

[Mr Hollobone]

The hon. Gentleman demonstrates that he is as well read as my hon. Friend the Member for Shipley (Philip Davies), and I am grateful for that—the situation is even worse than I had feared.

[Daniel Kawczynski]

My hon. Friend referred to Martin Schulz. Let me tell him that there is growing disquiet in certain smaller central and eastern European states about some of the language that Mr Schulz is starting to use in cajoling them on certain issues, particularly with regard to the crisis of immigrants from Syria. Will my hon. Friend join me in urging caution on this man in his interactions with sovereign nations along those lines?

[Mr Hollobone]

My hon. Friend needs to realise that these people are impervious to criticism, and the smaller nations in the EU need to wake up quick, because what few powers they retain are about to be taken away should these seven Presidents get their way. They aim to complete that, at the latest, by 2025. Apparently, we are already in the first phase—“Deepening by Doing”—and in spring 2017 there will be a white paper outlining the extent of their plans. To hold a referendum in this country on our membership before the spring of 2017 would be a big mistake, because it would be misleading the British people by not telling them now what is just around the corner. If we stay in the European Union, the future as outlined by these Presidents is that it will be very much in charge of Whitehall.

Our membership of the European Union is bad for us. It costs us each week a net £230 million. That is something like a quarter to a half of England’s schools budget. That money would be far better spent either on reducing the national debt or on our NHS. Also, our influence in the EU is far less than it used to be. It is true that the Prime Minister has upped the UK’s game in opposing measures in the EU Council. For example, from 1996 to 2010, the UK voted against 32 measures in the EU Council; since 2010, the Prime Minister has tried to stop 40. However, we have lost all—each and every one—of those votes and we have only an 8% voting share.

Only 5% of UK businesses export to the EU, but 100% of UK businesses are subject to European rules. Four fifths of Britain’s economy has nothing to do with exports, but is in effect regulated by the European Union. We were told that being outside the eurozone meant that we would not be liable for propping up failing eurozone countries. That has proved not to be the case, with bail-out funds going from this country to Greece. Of course, if the global economy were a motorway, the European Union would be on the hard shoulder. The EU’s share of world trade was 40% in 1972, when we joined; it is set to be 20% by 2020. The accounts have not been signed off by European auditors since 1994. Of course, immigration is out of control, and that is set to get even worse. We can be sure that if Turkey, with a population of 85 million, were allowed into the European Union, the wave of immigration that we have seen from eastern Europe would be dwarfed by the wave of immigration from Turkey, and I predict that it would cause big social unrest in this country, but if we vote to stay in the European Union, there will in effect be nothing we can do to stop that.

Increasingly—we have already had a taste of this during the debate today—many bogus arguments will be made as to why it would be dangerous for Britain to leave the European Union. We have been told that we would lose 3 million jobs if we left the European Union. I would like my right hon. Friend the Minister to confirm today that that age-old claim is completely false and that 3 million UK jobs are not dependent on our membership of the European Union. It demonstrates the weakness of the case of those who want us to stay in that those scare stories are being put around. Of course, so many people told us that we would be disadvantaged if we did not join the exchange rate mechanism and the euro. In fact, Britain has been far better served by coming out of the ERM and by not joining the euro. We currently have the biggest amount of foreign direct investment of any country in the European Union.

I will conclude shortly, because I want other hon. Members to contribute to the debate, but it comes down to this: I am confident about Britain’s future. We are the fifth largest economy in the world. We are a member of many prominent international organisations. Our influence in the world would increase if we were to take back our seat at the World Trade Organisation. It is time for the UK to come off the global hard shoulder and go back to doing what we always did best—being a trading nation around the world. If we remain in the European Union, we will have access to its single market, as we do now, but we will have to pay at least £10 billion a year net as our membership fee; EU judges will have supremacy over UK law; and we will have to submit to the free movement of people, with no control over immigration. If we vote to leave, we will still be able to negotiate access to the single market through a free-trade arrangement with the EU, but we will not have to pay the membership fee; we will get back control over own laws; and, at long last, we will be able to control immigration, which is what constituents in Kettering and, I suggest, across the country want to see.

[Several hon. Members rose—]