EU Membership: Economic Benefits

William Cash Excerpts

Wednesday 15th June 2016 Commons Chamber

[John McDonnell]

I will come on to that later in my speech, but the evidence is clear: the impact on our economy overall will set us back a number of years. Brexit will undermine our economy and undermine the futures of our families and communities, while at the same time doing nothing with regard to migration overall.

[Sir William Cash (Stone) (Con)]

In response to my hon. Friend the Member for Shipley (Philip Davies) referring to the trade deficit, will the shadow Chancellor comment on the fact that our trade deficit in export of goods and services with the other 27 member states is now £67.8 billion and has gone up by £10 billion this year alone, but our trade surplus with the rest of the world is £31 billion, up by £7 billion in the same year? Germany, however, has a trade surplus with the rest of the EU of £81.8 billion. What kind of single market is that for us?

[John McDonnell]

I join the hon. Gentleman in his critique of Conservative economic policy over the past seven years, which has undermined our ability to export, but is he really proposing to impose tariffs against the rest of Europe, which would undermine free trade generally? If that is the case, he would be undergoing a damascene conversion to a planned economy, which would amaze me.

The Labour party places critical importance on employment rights because those rights enable ordinary workers to secure the benefits of the jobs, investment and trade that membership of the single market brings. To be frank, over the past 40 years, as trade unionists we have been promiscuous in where we have gone to secure those rights. In the decades when trade union rights were under attack in this country, we have gone to the EU to secure those protections. And we have succeeded. We have secured statutory holiday pay, maternity rights and the right to parental leave, TUPE protection and a maximum working week. This has served not only to protect British workers but to prevent a race to the bottom across Europe, so that our own and all other workers are protected, wherever they work. There is a well founded concern that withdrawal would put jobs, investment, trade and employment at risk.

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[Mr Hammond]

I will give way in just a moment, but I need to make some progress, because many Members wish to speak.

The hon. Member for Hayes and Harlington (John McDonnell) set out some of the economic benefits of our continued membership of the EU. By the way, I welcome his candid assessment of the achievements of the SWP over the past four decades—I never thought that I would hear that coming from his mouth. I agree with him that workers’ rights such as paid holidays and maternity and paternity leave are important. However, it is perhaps worth reminding him that it was a Tory-led Government who abolished Labour’s jobs tax and took 3 million of the lowest paid out of income tax altogether, and that it is this Conservative Government who are introducing the statutory national living wage, which addresses his point about the wages of the lowest paid.

It is also worth reminding the hon. Gentleman—the Labour party periodically appears to forget this—that the most fundamental right for any worker is the right to have a job and a pay packet at the end of the month. That is a right that 2.5 million more people enjoy today under a Conservative Government than in 2010 under a Labour Government, which is the result of Conservative fiscal management and Conservative economic reforms. A Tory-led Britain that is a member of the European Union has delivered record levels of employment.

[Sir William Cash]

The Foreign Secretary has just referred to the net benefit to the United Kingdom from being in the single market. Will he tell me how a net benefit is actually a UK trade deficit? According to the House of Commons Library and the Office for National Statistics, in our trade in goods and services with the other 27 member states, we had a deficit of no less than £67.8 billion in 2015, which was up £10 billion on the previous year and is escalating. How is that a net benefit?

[Mr Hammond]

I shall come to that in a minute, but my hon. Friend dwells like an old-fashioned mercantilist on the trade statistics alone. I suggest to him that there are wider issues at stake about the overall impact on our economy and the benefits of the growth, investment and dynamism that being part of a 500 million-strong market of very wealthy consumers delivers to us.

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[Mr Nick Clegg (Sheffield, Hallam) (LD)]

I am grateful to be following the right hon. Member for Wokingham (John Redwood) because he is widely considered to be one of the more erudite spokesmen for the Brexit campaign. I waited with bated breath for a cogent, coherent and practical economic analysis of why Britain’s economy would thrive out of the single market. Instead we got this curious mix of fantasy and naivety, which I never thought I would hear expressed in such a way.

I would like to make three points. First, the right hon. Gentleman’s diagnosis of the British economy and its relationship to its European economic hinterland is based on a backward-looking view that belongs to an era of gunboat diplomacy, tariff wars and 19th-century economic rivalry. As Margaret Thatcher and Lord Cockfield, the inventor of the single market, recognised, modern trade is not about taxes, levies and tariffs; it is about the rules, the standards, the norms, the qualifications and the regulations that assist or impede trade. What possible control would we gain by being outside the room in which those rules are made but none the less, as the right hon. Gentleman has just admitted, abiding by them? That would be a catastrophic loss of sovereignty and control.

[Sir William Cash]

As usual, the right hon. Gentleman is off beam. He is completely incapable of getting anything on the European Union right. Decisions are taken in the Council of Ministers, as he well knows, largely behind closed doors by COREPER. Those decisions are not made in the manner he suggests.

[Mr Clegg]

Being called “off beam” by the hon. Gentleman is quite something. He and I share a passion for Sheffield, however, so I shall put that aside for a minute. In the economy of this country, 78% of GDP is generated by services. Services are barely affected by taxes, tariffs and levies, but British lawyers, British engineers, British architects and British creative industries trying to sell their wares, as they successfully do—we are a services economy superpower in Europe—are affected by precisely the rules that are thrashed out in Brussels, in discussions that we would be excluded from if we left the European Union.

As the right hon. Member for Wokingham acknowledged, the completion of the single market in services is, indeed, a work in progress. We are the chief author and architect of the success in that area. Why on earth would anyone walk away from the construction of a building of which they were the chief architect and the chief beneficiary? A 7% increase in our GDP is the calculated improvement in the economic performance of this country if we complete the single market in services, but the Brexit camp want to walk away from that.

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[Sir William Cash (Stone) (Con)]

I have one simple message as we approach the last week of the referendum campaign: people fought and died for the right to govern themselves; people fought and died for our democracy, and it is on democracy that everything else depends.

[Tom Tugendhat (Tonbridge and Malling) (Con)]

Will my hon. Friend give way?

[Sir William Cash]

In a minute, but not now.

People fought and died for the right to govern themselves, and everything else depends on that, including the economic arguments. I urge the British people to consider the consequences for future generations if we get this wrong and vote to stay in the European Union. As a result of successive leaderships since 1972, we have given away more and more of our powers to govern ourselves.

If I may say so, I predicted the consequences of that in a book in 1990, at the time of the Maastricht treaty. I said there would be protests and riots throughout Europe, and massive unemployment. I said there would be recession and waves of immigration. I said there would be breaches of the rule of law and the rise of the far right. I was concerned about those things then and I remain concerned about them now. The direction in which the European Union is being taken is putting the United Kingdom—our voters, our people—in the second tier of a two-tier Europe dominated increasingly, through the eurozone, by the excessive economic nationalism of the German system of economic government.

Members must bear in mind that the consequences of the single market are demonstrated by what I said earlier in an intervention: we run a trade deficit, or loss, with the other 27 member states of £67.8 billion a year. That has gone up by £10 billion in the past year alone. Our trade surplus with the rest of the world has gone up by about £10 billion in this year alone to £31 billion. European growth is going down—that is the trajectory of our capacity to have growth and jobs for the young people of this country. In Europe as a whole, youth unemployment in certain countries is as much as 60%. That is a complete disgrace.

In contrast, the German trade surplus with the same 27 member states is running at £81.8 billion and has gone up by as much as £18 billion in the past year alone. That trajectory is what the third-rate so-called economists are ignoring. They are the ones who got it wrong over and over and over again: they got it wrong over Maastricht, they got it wrong over the euro and they got it wrong over the exchange rate mechanism. I listened to the absolutely absurd nostalgic nonsense of the right hon. Member for Sheffield, Hallam (Mr Clegg). It is evident that those who got it wrong are trying yet again to mislead people.

[Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)]

I am grateful to the hon. Gentleman for giving way, not least because we might have the opportunity to get answers to some important questions. He will be aware that when the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) was asked about the impact on the economy in GDP of Brexit, his answer was, “We don’t know.” He will also be aware that when Diane James, a UKIP MEP, was asked whether visas would be required, the answer was, “We don’t know.” Given that the answer to every question posed to the leave campaign is, “We don’t know”, perhaps the hon. Gentleman could answer these questions now.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We need to have short interventions, not speeches. That was longer than five minutes!

[Sir William Cash]

I can say that I do know. I know because I look at the facts as they are now. The facts I have just given demonstrate that inside the single market we run a monumental trade deficit, while we have an enormous and growing trade surplus with the rest of the world. That surplus is the future. That is the vision. That is the means by which we will get jobs and ensure the future of our children and our grandchildren.

To conclude, it is very simple: this is about who governs us. If we get this wrong, we will not be able to organise and establish a democracy in this country, which is what people fought and died for in not just one world war but two.

[Tom Tugendhat]

Will my hon. Friend give way?

[Sir William Cash]

I will give way one last time.

[Tom Tugendhat]

I appreciate the loss that my hon. Friend’s family suffered in the second world war. My family suffered too, and I have had the privilege to wear the Queen’s uniform and fight for the peace we enjoy today. When I see the division and the spreading of hatred and virulent anti-foreign messages by some people in our country, I wonder whether they are really talking about peace or just stirring the pot.

[Sir William Cash]

I simply say to my hon. Friend that there is one person who has never, ever done that: me.

[Tom Tugendhat]

indicated assent.

[Sir William Cash]

I am glad my hon. Friend acknowledges that. I do believe in peace. I do believe in good relations. What really troubles me, however, is that the majority voting system and the decisions taken behind closed doors are so manifestly undemocratic that they are completely impossible to justify. It has become a kind of dictatorship behind closed doors. We in this House make our decisions based on speeches and votes that are made in public and reported. We are held accountable. That is not the case in the European Union. If we give that up on 23 June, I say to my hon. Friend and to all hon. Members that they will live to regret it. This is about democracy above all else.