EU Membership: Economic Benefits

Simon Hoare Excerpts

Wednesday 15th June 2016 Commons Chamber

[Mr Hammond]

I absolutely agree with my hon. Friend. It is a risk we do not need to take, and it is a risk that it would be absurd to take. I just cannot believe that after all the grief and pain we have been through in this country to rebuild our economy following the disaster of 2008-09 we are seriously thinking about going back there. That astonishes me.

Economic experts have judged overwhelmingly from the evidence that Britain’s economy will be stronger and more resilient if we remain in the EU. The G7 Finance Ministers, nine out of 10 economists, and independent organisations such as the IMF, the World Bank, the Institute for Fiscal Studies and the World Trade Organisation have expressed the view that the UK will be better off inside the EU.

And not just economists but more than 200 entrepreneurs —founders of household names such as Skype, lastminute.com and innocent drinks—agree. Rarely, if ever, can an issue have united the opinions of everyone from global institutions, through trade unions, to British businesses, large and small. The overwhelming weight of economic and business opinion is clear: Britain is better off in.

[Simon Hoare (North Dorset) (Con)]

Will my right hon. Friend nail from the Dispatch Box the canard that some on the exit side are peddling—that this is just a vehicle for another round of never-ending renegotiations? This is a serious, one-off decision. We will abide by the decision, and it has to be right for the future of our country.

[Mr Hammond]

My hon. Friend is absolutely right, and I am happy to repeat what he says, as the Prime Minister did earlier. The British people will have their say; they will make their decision, and we will implement it. I do not believe that our 27 partners in the EU would say, “Oh, fine, let’s go through all this again,” even if we wanted to. This has to be the deciding point. It is make your mind up time. People have to look at the options bus: a future they know and can predict, with Britain in the European Union—a Britain that has created 2.5 million jobs over the last six years, and a Britain with a growth rate that has outstripped that of every other country in the European Union—or a leap in the dark.

--- Later in debate ---

[John Redwood (Wokingham) (Con)]

Prosperity, not austerity, is what we want, and that will be so much easier to achieve when we cast off the shackles of the European Union. It is an institution renowned for its gross austerity and the damage it has done throughout great swathes of our continent, driving young people into unemployment, preventing school leavers from getting any job at all, and starving public services of cash. Those policies have done terrible damage in Greece and in parts of Italy, Spain and Portugal. It is good that we have some freedom to distance ourselves from those policies, and we will have even more freedom when we take back control of our money, taxes and budgets.

It was bizarre to wake up this morning to press comments that there would need to be a post-Brexit-vote Budget. I am going to wait to see what the British public really want in a vote that is still to be decided, but the Government seem to have conceded defeat by saying that they would launch an austerity Budget if the British people dare to vote for their freedom and democracy. There is absolutely no need to do that, and I reassure the British people that there would be absolutely no chance of them getting such a Budget through the House of Commons. There is no enthusiasm for it from the SNP or the Labour party, and after Brexit many Conservative MPs will vote for lower taxes and more public spending, because that is what we will be able to afford as a result of the Brexit bonus, or dividend, when we get back the £10 billion a year that we send to the EU and currently do not get back.

[Simon Hoare]

Will my right hon. Friend give way?

[John Redwood]

No, I cannot. I have to be tight on time, because others wish to speak.

Those who want to remain so hate the idea that there is going to be a dividend, because they know that that money is taken away from us and is not used for the priorities of their electors and their local health and education services. Within the European Union, we are not legally allowed to get rid of VAT on fuel—a much hated imposition that hits those on lower incomes far more than others—but we would be free to do so as soon as the British people vote to leave, if that is their wish.

The issue of our membership of the EU needs to be looked at over the longer term. All of the gloomy and bogus forecasts by those who wish to remain are based on the assumption that the single market is a precious and virtuous body to which we can belong, which has fuelled our prosperity and manufacturing growth so far, and which would no longer be available to us if we left. Of course, they are wrong on both counts. Our membership of the single market has not helped our manufacturing. When we leave, we will still have access to the single market, just as 165 other countries around the world have access to it daily without being members, without having to accept the freedom-of-movement provisions and without having to accept the taxes and the laws that are imposed on us on a wide range of issues that have nothing to do with trade whatsoever.

The single market, when it was introduced, did not accelerate our growth rate or our exports in manufacturing in any way. The Government did a very good long-term survey, which covered the period 1951 to 2007. They started in the stable year ’51—it was necessary to leave out the bit immediately after the war, when there was a big demobilisation effect—and went up to 2007. The figures for manufacturing today are identical to those from 2007, because unfortunately we had a deep manufacturing recession in ’08-’09 and we are just about getting back to the ’07 levels. The survey showed that between 1951 and 1972, before we joined the European Union, we had manufacturing output growth of 4.4% per annum; and that since 1972, during the long period of time for which we have been in the thing, there has been absolutely no manufacturing growth at all.

If we look at individual sectors, we can see that prior to joining the European Union, our metals sector grew at 3% per annum, but it has declined at 6% per annum since we have been in the European Union. Our food and drink industry grew at 5.6% per annum before we joined, and it has fallen at 1% per annum ever since. Our textiles sector grew at 2.6% per annum when we were out of the EU, and it has fallen by 6% per annum since we joined. We used to have a 45 million tonne a year steel industry, thanks to massive national investment and the Labour Government of the ’60s, but it now produces only 11 million tonnes. We had a 400,000 tonne aluminium industry when we joined the EU, but we have only a 43,000 tonne industry left. We had a 20 million tonne cement industry when we joined the EU, but we have a 12 million tonne industry left. We had a 1 million tonne a year fishing industry when we joined the EU, and we have only a 600,000 tonne industry now.

Some of those industries, particularly the fishing industry, as my hon. Friend the Minister well knows, have been gravely damaged by our EU membership. EU rules in the common fisheries policy, and the quota allocations to other countries against the interests of our own fisherpeople, have caused the number of fishermen in our country to halve during our membership of the European Union. Our experience of manufacturing as a member of the European Union has been far from benign. High energy prices, rigged subsidies, arrangements that help other countries more than ours and a policy, quite often, of providing subsidy, grant and cheap loans to manufacturers literally to transfer plants from Britain to other continental countries have been part of the background to the dreadful erosion of our manufacturing.

It is fair to look at manufacturing because, as I think remain campaigners always say, there is no full single market in services. The single market was completed in goods by 1992. We have experienced that single market since 1992, and it has not made any beneficial difference whatsoever to our manufacturing. The deep-set decline that has characterised our period of membership of the European Union was not turned around by the introduction of those single market measures. Fortunately, our services have not yet been damaged by the growing regulation within the EU, but the evidence from what happened to manufacturing is not encouraging when we look at what might happen to our services. There have already been many cases in which the City of London, defending its interests as a financial services provider, has found itself at variance with incoming European rules. The matter is settled by qualified majority vote, so being around the table is of no use to us because we get outvoted. If we dare to take it further, we get European Court judgments against us for our alleged infringement of the rules.

--- Later in debate ---

[Tom Tugendhat]

I will make a little progress if I may.

It is worth remembering that this House has shaped the leadership of Europe. We have already achieved two very significant reforms. First, Britain, under the then Prime Minister Margaret Thatcher, steered the competing economies of Europe into a single market. She achieved that against pressure from many other member states. She did so to extend what Britain needed then and what it needs now: economic relationships that endure across the continent. The result was a huge boost to the economy. I pay tribute to my right hon. Friend the Member for Wokingham (John Redwood), who is no longer in his place, for what he did as a member of the Cabinet that took us into the single market. I also recognise the work of my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), who is also not in his place, as he helped us to achieve the lowest debt levels in a century.

Secondly, we have extended the boundaries of European co-operation to the borders of Russia. This may seem obvious now, but when I was growing up during the cold war, the challenge of uniting a continent seemed extraordinary. Now so obviously one nation and at peace with her neighbours, Germany was not always so, and many opposed the unity that was achieved. The inclusion of Estonia—I had the privilege of serving with Estonian troops in Afghanistan—Lithuania and Latvia shows what inclusion can achieve in the service of peace.

[Simon Hoare]

I know that my hon. Friend is a busy man, so I do not know whether he has seen General Smith’s comments in today’s media about the importance of and need for co-operation and partnership. It is a compelling case that underlines the point that my hon. Friend is making.

[Tom Tugendhat]

General Smith is one of the great strategists of our generation. His book “The Utility of Force” is well worth reading.

Britain played an essential role, but it did so not just for ourselves or for others. It did so because shared wealth is good for us all. We prosper when our partners prosper, we are strengthened when our friends are strong, and we achieve peace when our friends are at peace. Therefore, whether we stay or go, we must have a plan.

Our allies around the world—in the middle east, South America, the far east and the United States of America—have invested fortunes through our markets, billions in our industries, and decades in our friendship. They need to know that our promises count and mean something. They need to know that our agreements will endure. They need to know that if we vote out, we are not turning our back on the world, because it will look to them as though we are.

Whatever happens, I urge Her Majesty’s Government to commit to investing heavily in the Foreign Office over the next few years, because the trouble that we have caused our friends and allies in this very debate and the doubt that we have sown across the world are so serious that our markets are struggling, and we need messengers of hope and praise to go to our friends’ capitals to reassure them. Too often we have ignored our allies, and too often we have laughed at our friends. We must move on. I have heard many people talk about patriotism. Today, I say that I am a patriot, but this is my land here and it extends beyond the sea and beyond the cliffs. This is our continent and we must lead it.

--- Later in debate ---

[Simon Hoare (North Dorset) (Con)]

It is a pleasure to follow the hon. Member for Preston (Mr Hendrick), and I agreed with most of what he said.

When we started this process, if I had been split down the middle I was 49% for leave, and 51% for remain. Today, I am 127% in favour of remain—don’t worry, I haven’t got my figures from the leave campaign. Two reasons have got me to that position. The first is just looking at some of the facts. I am a south-west Member of Parliament. In the first quarter of this year, we exported goods worth £9.7 billion from the south-west to the EU. Some 64% of all exports from the south-west go to the EU. In my constituency, 5,249 jobs are reckoned to be dependent on trade with and membership of the EU—one of the highest, if not the highest, in the county. On a conservative estimate, 45,000 jobs will be at risk in my region were we to leave.

The average take-home pay in North Dorset, leafy and beautiful as it is, is £16,500. It would be a dereliction of my duty to vote in any way other than to protect and to preserve that. I am not one of those ideologues who wishes to sacrifice, on some altar of so-called sovereignty, the livelihoods of my constituents. Sovereignty as an abstract does not pay the mortgage, does not pay the rent, does not pay the bills and does not put food on the table. I would not be able to look my constituents in the eye and say, “But don’t worry, we’re free and all the rest of it, so we can starve in our own independence.” What a marvellous, marvellous legacy to leave!

[Mrs Sheryll Murray]

I relied on fisheries to pay my mortgage and put food on my table for my children. Will my hon. Friend look me in the eye and say he is happy to sacrifice an industry for the EU ideal?

[Simon Hoare]

In the first instance I would not say that our fishing sector has been sacrificed, but I have to think about agriculture. We are all absolutely right to look at this issue from the perspective of our constituents. Agriculture, in particular the dairy sector in North Dorset, would not be able to survive without the continued, guaranteed, politically colour-blind support the EU provides to British agriculture.

There are two specific things I would like to say. The first relates to the absolute lack of clarity and united vision from the leave campaign: Albania, Norway, the World Trade Organisation, something like the North American Free Trade Agreement, we can stand alone, imperial preference, let’s bring back the corn laws—whatever it might happen to be! Somehow or other we have an arrogance, which I think was probably the death of a lot of our industries some years ago, that we have a right to sell to the rest of the world, in particular Europe, on terms to our satisfaction, and that they should feel jolly grateful that they are allowed to buy our product. The global marketplace does not work like that anymore. We have to earn our living.

[Chris Stephens (Glasgow South West) (SNP)]

Is this not the big contradiction of the leave offer from some? They claim that we can be in the European Free Trade Association, but that would mean signing up to every single EU rule and regulation, which we would not be able to change. The only way to change EU rules and regulations is to be a member of the European Union.

--- Later in debate ---

[Simon Hoare]

The hon. Gentleman is absolutely right. It is either the longest suicide note in history or the worst-written business plan I have ever come across. Imagine going to the bank manager and saying, “I’ve got a fantastic wheeze. I’m going to put at risk 42% of my almost-guaranteed sales and leap in the dark to see if I can grow a few other markets.” We can actually do both, but it seems to me to be an act of the highest folly to endanger tariff-free access to the world’s largest free trading area. That would be a dereliction of our duty.

For those who slather and get frightfully excited when their erogenous zones of sovereignty are being tickled—not, in the cases of some, the most attractive prospect I can think of—let us recall and put it on the record that they keep saying that this sovereign House of Parliament must take the decisions. That is absolutely right. We are accountable to our constituents and if, after five years, they do not like what we have done they can jolly well kick us out. If we had a vote of this sovereign Parliament this afternoon, 74% of us would vote to remain—across party, across regions and across country. It is a telling sign of the clear merits and benefits of UK plc doing that traditionally British thing of fighting for our interests, championing our businesses, speaking up for our people and making sure we get the best deal possible.

I want to mention the other 60-odd per cent. of the reason I am voting to remain. I had prayed that we would not have a rerun of the debate in Russia in 1870s and 1880s and in Germany in the late ’20s and ’30s. Our infrastructure is under pressure. Well, we can solve that—it is a sovereign job of this place and our local councils—but, no, we will blame the Jew, the Ugandan—anybody but ourselves; we will blame them for taking our jobs, our houses, our places on the hospital waiting list, forgetting that in constituencies such as mine, 65% of people are retired and that we have a falling birth rate. We need these young people coming in to work in our services. Regrettably, we are hearing that bitter, twisted, mealy-mouthed, acid-riven debate about immigration. I do not want any part of it. There is a strong, positive narrative, about how we need that new blood and talent coming to our shores. When we go to Spain and set up a business, we call ourselves expats; when they come here, we see them as a drain. Not in my name or the name of this party! We will be voting to remain.