EU Membership: Economic Benefits

Robert Neill Excerpts

Wednesday 15th June 2016 Commons Chamber

[Mr Hammond]

That question has never been effectively answered—how many jobs are those advocating Britain’s exit from the European Union prepared to sacrifice on the altar of their notion of sovereignty? We have never had a straight answer to that question. What we do have is a range of independent estimates of what that number would be if we voted to leave next Thursday. I shall come to that in a moment.

It is because of the potential for the UK to open up the services market in the European Union that the deal the Prime Minister negotiated in February is so important. We now have a clear political commitment from all 27 other EU member states, plus the Commission, to accelerate the development of that market. These are the sectors in which the UK leads in Europe, and in which an expansion of the single market will disproportionately benefit the United Kingdom over the years ahead.

[Robert Neill (Bromley and Chislehurst) (Con)]

Does my right hon. Friend recognise that that commitment to a proper completion of the single market in services, added to the completion of a capital markets union, places the United Kingdom in a unique position to develop its world-leading sector, and that it would be mad to walk away from that opportunity?

[Mr Hammond]

My hon. Friend is right. That is what I hear from many of my European colleagues: we are about to move from one phase of European Union development into a new phase that is hugely beneficial to the United Kingdom, yet we are talking about walking away from it. Our financial services industry alone currently contributes more than 7% of UK GDP and employs more than 1 million people, two thirds of them outside London, but there is not yet a single market for financial services across the EU. The potential is huge.

A fully functioning digital single marketplace could be worth as much as £330 billion a year to the EU economy, with the UK again set to benefit more than any other country, as the leading digital economy in Europe. By the way, it would be a huge boon for Britain’s digital-savvy consumers, who would be able to shop freely across the digital single marketplace. Individuals are already feeling the benefits of last year’s EU agreement, led by the UK, to end mobile roaming charges, which it is estimated will save UK consumers around £350 million a year, and for years we have all been enjoying the budget airline boom created by EU regulations.

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[Robert Neill (Bromley and Chislehurst) (Con)]

A few moments ago, my hon. Friend the Member for Stroud (Neil Carmichael) made a passionate and magnificent speech in support of our membership of the European Union. He and I have been on the same side on this matter for many years, and I endorse every word that he said.

Let me begin by referring, like the hon. Member for Copeland (Mr Reed), to matters that particularly affect my constituents. The largest employment sector in Bromley and Chislehurst, in Greater London, is its business and financial services sector. According to the Office for National Statistics business and employment survey, 32.4% of my constituents and their families work in that sector. It is critical to their local economy—and that is leaving aside all the jobs in the supply chain that result from the income that it provides. It is crucial to the London economy, which benefits the whole of the United Kingdom. Leaving the European Union would, without question, damage the interests of the financial services industry, in which Britain is a world leader. This is an issue in which I have taken some interest in my capacity as secretary of the all-party parliamentary group on wholesale financial markets and services.

We have a winner here, and we have an opportunity not just to make it survive, but to make it better and stronger in a reformed European Union. That is why, when I intervened on the Foreign Secretary’s speech, I wanted to stress the importance of the Prime Minister’s renegotiation achievements. There were two key achievements. First, there was the commitment that British financial firms based here in the UK, and therefore outside the eurozone—of which we will never be members: we will never be subject to its internal governance rules or their bail-outs—will none the less have the significant advantage of being able to trade freely within the eurozone and the rest of the single market. That puts us in a unique position which no other free trade agreement replicates.

If we add to that the commitment in that renegotiation to completion of the capital markets union, that gives us a double opportunity to push forward in this area, at which we excel. It would be lunacy to walk away from that opportunity. Of course the Prime Minister is right to say we could survive outside the EU; London and the financial services industry, and my constituents, would survive, but I believe there is a real risk that they would be impoverished and I see nothing patriotic in running the risk of impoverishing my constituents or the people of this country.

[Alex Chalk (Cheltenham) (Con)]

My hon. Friend is making a powerful speech and makes an important point about patriotism. Does he agree that key to Britain’s national security is our economic security, and at a time when as a nation we are still borrowing as a nation more than the entire defence budget we need every single penny of public revenue to ensure our economy is strong, our finances are strong and our country is strong?

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[Robert Neill]

My hon. Friend is absolutely right. The economic interest is a national strategic interest of the United Kingdom. It is a damaging thing to this country for anyone to put that at risk; there is nothing patriotic in that.

[Mr Jim Cunningham (Coventry South) (Lab)]

So far I can agree with what the hon. Gentleman says, but some of us can remember the 1975 referendum, and the reality is that the options put to us by those who want to opt out were looked at then—trading with EFTA and the Commonwealth countries. The reasons why Harold Wilson thought we should go into Europe are there for all to see.

[Robert Neill]

I would not like to speculate as to the motives of those who, sometimes from genuine belief, but maybe sometimes from cynicism, want this country to leave the EU. The hon. Gentleman is right, however, that the issue was debated then. He and I can remember it—we both voted in that referendum, I suspect. Of course the EU needs reform, as everybody has said, but any businessperson will tell us, “You don’t walk away from a major market that you’re in just because it isn’t perfect; you stay in there, you negotiate your trade and you make the market work better for you.” That is basic common sense, and frankly I am amazed and mystified that some people who really ought to know better cannot get that.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

Will my hon. Friend give way?

[Robert Neill]

I have been generous in giving way so far and I am conscious that others want to speak. I hope my hon. Friend will forgive me, because I know he will speak later.

Given the position that we have of that double success for the City of London, it would be a tragedy—a criminal thing, virtually—for this country to turn away. The financial services industry, as well as being a key UK asset and part of our national strategic interest, is not just about people in the City of London and those working in banks, insurance and offices. A successful financial services sector affects every family in this country. It affects every pension fund. It affects the pensions of millions of people, whatever their income situation or previous position in life. To put that at risk is not to damage just that industry, but to damage the whole population of this country. It damages the revenue stream, as my hon. Friend the Member for Cheltenham (Alex Chalk) just said, that underpins our public services. I am sorry to have to say this to some of my friends who I know genuinely believe otherwise, but it will be a profoundly unpatriotic thing to leave the EU.

[Victoria Prentis (Banbury) (Con)]

Will my hon. Friend give way?

[Robert Neill]

One last time.

[Victoria Prentis]

My hon. Friend is making a passionate speech about various areas of the economy. Has he considered how leaving the EU might affect manufacturing industries, including a company in my constituency that has today told me that it has written to its employees to implore them to vote to remain?

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[Robert Neill]

I am sure my hon. Friend is right. I too have manufacturers in my constituency. Every sector of the British economy will be damaged by Brexit. Uncertainty damages business. Economic uncertainty damages business and so does legal uncertainty, which, as a final point, makes me all the more amazed to see some people who ought to know better suggesting that somehow we could introduce some emergency legislation to circumvent the rules laid down in article 50 of the treaty were this country, regrettably, to decide to leave. That would be a breach of law. It would involve the UK being suspended from the EU, losing the protections the EU gives to our businesses and turning 200 years of British constitutional practice, whereby this country has never unilaterally abrogated a treaty we have entered into, on its head.

It would be a scandal to ask this House to do that, and I say now that I, for one, would never vote for it. But I want to make sure first of all that we never get into that situation. We need to make the positive case for why this country is better economically, socially and, I suggest, morally for being in the European Union—because ultimately we are a broader-minded, a broader-looking, a happier, a more diverse nation as a result of our membership, and I do not want the likes of the vile creature who leads UKIP to drag this country backwards.