EU Membership: Economic Benefits

Debate between Simon Hoare and John Redwood

Wednesday 15th June 2016 Commons Chamber

[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.