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4.48 pm

Adam Afriyie (Windsor) (Con): I welcomed much of what was said by the hon. Member for Luton, North (Kelvin Hopkins).

It is a great privilege to serve as a Member of this House. It strikes me that its primary function in a democracy is to create, amend, modify and repeal the laws of the nation, hopefully in the interests of British citizens. I think that people elect their Governments to serve the national interest. Sometimes, of course, it is necessary to sign international treaties on trade or aid, provided that that is in the interests of British citizens. However, such agreements should not include the wholesale handing over of control of our defence, our economy, or powers to make or modify our laws.

It is worth reflecting for a few moments on what might have been if citizens and campaign groups had not alerted the Government to some of the dangers posed by adventures that the Government had hoped to undertake in recent years. Having played a role in Business for Sterling and the “No to the euro” campaign since 1998, I am very much aware that in 1997-98 about 70 per cent. of the public was of the view that it was inevitable that we would join the euro, and about 90 per cent. of members of the Government of that time were in favour of joining the euro. It was almost as though we were in bunkers and outgunned on all sides, but gradually—and under duress—over a period of years a rational view prevailed. It was
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eventually recognised, including by the Chancellor, that maintaining our control of British interest rates, and thereby being able to control our economy via them, was the best way to generate a more competitive economy.

It is also interesting that not too long ago there was an ardent Government campaign for us to sign the European Union constitution. I remember commentating on Sky as the Prime Minister actually signed the EU constitution—we should not forget that he put his signature to the constitution. There was also a massive campaign in favour of it—so thank goodness not only for our own citizens’ views, but for the French and the Danish for rescuing us from what could have been a catastrophic position. I will not go through all the arguments on this topic, but if we had signed the EU constitution we would not be a freely trading independent state; we would be a subservient state of a European superstate. In hindsight, both now and in years to come, we are, and we will be, glad that we did not sign it.

Members have spoken eloquently on sovereignty, the supremacy of Parliament, defence and controlling our borders as part of what makes being an independent state, so I shall focus on business and competitiveness before going on to share some of my hopes for the future of the EU—because I am in some ways fairly, although also cautiously, optimistic about its future in a new form.

We must never forget that business is the engine of our economy and that freely operating British businesses that do not have too many burdens of bureaucracy on them generate all the jobs, all the income and all the taxation that pays for the good things that we want in society, such as health, education and pensions. I did mean to say that all the jobs come from business, because the taxation raised from business is what pays for Government jobs, quango jobs and our doctors and nurses. Any unnecessary burden or regulation on business is unwelcome and should be questioned.

It is a striking fact that about 70 per cent. of business regulation and legislation originates in the EU. We could claim that many of the regulations and laws—or the aspirations of many of them—are in our national interest. Plenty of arguments could be put forward on that topic. However, what is clear is that the EU has in many ways moved on from prescriptive legislation in the past year or two. It has begun to look at principles-based legislation—a simple principle is brought into effect and then it is left to businesses to determine how best to put it into practice and to make their own decisions without being overwhelmed with reams of paperwork. Sadly, the Government have not yet cottoned on to that, or to the fact that it means that they no longer need to gold-plate legislation coming from the EU. One can simply reflect a few lines or pages, rather than tens of thousands of words and hundreds of pages of regulation, on British businesses.

The British Chambers of Commerce estimates that the new burden of business regulation is about £50 billion, about 70 per cent. of which comes from the EU. I recall several years ago looking at the working time directive guidance. There were over 100 pages. I sat scan-reading it for about five or six hours, when at
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that time I should really have just been getting on with running my business. Even to this day, I cannot quite fathom the calculation for working out whether employees have been working an average of 48 hours a week over a 17-week period; it is mayhem. I can pretty much guarantee to the House that many small and medium-sized businesses will not be adhering to the working time directive by keeping such records. If they implemented all the detail in much of that guidance, they would simply be unable to run their businesses.

On European regulation, there are two main challenges. First, although not all the stock of existing regulation needs to be undone, that needs to happen to a certain degree. Secondly, we must consider the flow of new regulations. Fortunately, that flow has slowed somewhat, but a lot remains to be done in stemming it further. That is largely a job for this House, as it examines the regulations coming through via statutory instruments and their implementation.

I want to finish by painting a slightly more hopeful picture of the future of the European Union. We are all very aware of the existing EU’s failings and the challenges that we face, but I am hopeful and reasonably optimistic about the medium to long-term future. With enlargement come opportunities; with enlargement, the mood and culture of the EU change. Since Latvia, Lithuania, Estonia and Poland joined a few years ago, the culture of the EU has become more entrepreneurial. Those countries recognise the benefit of commerce and free trade, not only within the EU but in a global context. To a certain degree, that adds to the EU.

We also have the opportunity to adopt more inthe way of principles-based legislation, instead of prescriptive regulation, and to reform European institutions. Members have mentioned the changes that they would like to see, many of which are very sensible. In the light of enlargement, perhaps it is time to consider having a single European language. I am not sure which language we might nominate, but that would certainly save a lot of translation. What do we think?

Daniel Kawczynski: English, of course.

Adam Afriyie: Perhaps English would be the sensible choice as the language of the EU.

Perhaps it is also time seriously to consider ending the policy of switching between buildings in Brussels and Strasbourg, which costs millions of pounds each year. This is a good time to deal with such issues.

Mark Pritchard: Is my hon. Friend aware that many years ago Europe did indeed have a single language—Latin—a single currency—gold—and a single federal empire, which was of course the Roman empire? We know what happened to that.

Adam Afriyie: I thank my hon. Friend for that intervention. My Latin is a little rusty, but I do recall the Roman empire.

I studied agricultural economics 20 years ago, and on looking at the common agricultural policy I decided then that it would probably take 10, 20 or even 30 years before we saw fundamental reform of it. Well, 20 years later, we are still in exactly the same position. We have a fresh opportunity to look at the CAP and, indeed, at the common fisheries policy. Why do we not embrace
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this opportunity now? I urge the Government to do so—let us open up the dialogue.

Kelvin Hopkins: Would it not be simpler just to recommend the abolition of both the CAP and the common fisheries policy?

Adam Afriyie: I shall certainly consider the hon. Gentleman’s comments very carefully, but I was not necessarily proposing that at this precise moment.

There is also a great opportunity for democracy. Many Members have spoken about the democratic deficit and the fact that European citizens feel disfranchised—that they feel no connection with the European Parliament and the other European institutions. There is an opportunity to establish a flexible, outward-looking grouping of independent nations, and enlargement brings that prospect slightly closer.

In essence, might we dare hope for a newly evolved European Union in years to come—a grouping of democratic and independent nations co-operating in various ways on trade and aid, and in many other fields? Why should we limit our ambitions? Why do we not hope for a massive expansion of the EU? Why not add 10, 20 or even 100 new independent states? If we add 100, we will have outgrown Europe, so perhaps we would have to rename the EU. Perhaps we could call it “a global economy”.

4.59 pm

Philip Davies (Shipley) (Con): It is a pleasure to follow my hon. Friend the Member for Windsor (Adam Afriyie), who made a typically thoughtful and intelligent speech. I want to concentrate on one of the most fundamental issues facing Britain and Europe. Despite its importance, it is subject to little if any debate in this House.

Opinion polls consistently show that between 40 and 50 per cent. of the UK population favour Britain’s withdrawal from the EU, and that less than half the remainder are convinced that we should remain in that organisation. That means that a clear majority of the British public are either convinced that we should withdraw or are sceptical about our continued membership. Indeed, in opinion polls more people express their support for EU withdrawal than say that they would vote either Labour or Conservative in a general election.

The question of EU withdrawal is yet another matter on which the British public are way ahead of politicians. Back in 2004, the EU was included in the US Central Intelligence Agency’s “World Factbook”, an open-source publication that tracks the key characteristics of every nation around the globe. That was the first time that a supranational body had ever been included in a publication dedicated to tracking developments in nation states. The CIA said that it had included the EU because it had

So much for the intelligence-gathering abilities of the CIA, as I could have told it that a long time ago. I
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might also have mentioned that the EU has its own president, Parliament, Court and embassies.

It is hard to argue against many of the indictments against the EU. As my hon. Friend the Member for Windsor said, about 70 per cent. of our laws now emanate from the EU rather than from here. The rulings of unelected Commissioners take precedence over the wishes of democratically elected national Parliaments. Most people understand that the EU is inefficient and wasteful, and that it suffers from systemic corruption.

More often than not, EU supporters do not attempt to defend the organisation against those charges. From time to time, warm words are offered about reform, but little debate is ever allowed on the fundamental question of our relationship with a body that is failing and undemocratic. Instead, those who support the EU engage in skilful if sometimes frustrating shadow boxing.

For example, I recently tabled some questions about the number of our jobs that are dependent on our membership of the EU. I was told that about 3 million jobs depend on our trade with EU countries. There is no doubt that those jobs and that commerce are among the benefits of free trade, but they are not benefits of EU membership, as I shall try to explain later.

However, responses of that sort are not unusual. People who support the EU project bring the debate back to the UK economy and jobs, and in my opinion they are right to do so, as few people give much thought to the EU and its role in our democracy. Instead—and of course—they think about their jobs, pensions and the money in their pocket, but EU supporters are wrong to suggest that arguments based on jobs and the economy make the case for the UK’s continued membership.

For most people, the distant and impersonal EU is less tangible than questions about schools, hospitals, police on our streets and the money in our pockets. Few spend much time thinking about the EU constitution, but mortgages, bills and pensions occupy most people’s thoughts every day. Equally, people in business are likely to be far more concerned about making money and growing their businesses than about questions to do with the structure of the EU.

It is on the economy that the argument as to whether Britain remains in the EU will be lost or won, as those who support our staying in the EU realised a long time ago. By presenting EU membership in economic terms, successive Governments have been able to sell what is essentially a political and unpopular project to the British people. However, we should look at the figures and examine the economics. When we consider the EU’s effect on trade, jobs and growth we find that the case for Britain leaving the EU is more compelling than ever.

We are told that, if we were ever to withdraw from the EU, Britain’s economy and our trade with our European neighbours would suffer, and that jobs and prosperity would be lost. We are told that more than60 per cent. of our trade is with the EU, and that withdrawal would mean the loss of our markets there. We are told that the single market has been good for our economy and that we would suffer financial consequences from withdrawal. We are told that if we left 3 million jobs would be lost.

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If I were the managing director of a small company or if I were employed in manufacturing, I would find those arguments compelling.

Kelvin Hopkins: The hon. Gentleman makes a strong point; in fact, as we have a big trade deficit with Europe, they need us more than we need them.

Philip Davies: The hon. Gentleman is absolutely right and I shall deal with that point in a few moments.

When we examine the issues in any detail we find that the EU is bad for trade and bad for jobs, that Britain is worse off by being in the EU, and that withdrawal would actually give Britain a more global outlook to meet the challenges of the 21st century.

We are told that 55 per cent. of our trade is with the EU and that if we came out we could say goodbye to that, as well as to about 60 per cent. of our economy and 3 million jobs. I could quibble about the statistical sleight of hand that led to those figures, but I shall not, because to do so would give credence to the argument that that trade would be lost if we left the EU which, as I shall explain, is patently ridiculous, as the point made by the hon. Member for Luton, North (Kelvin Hopkins) illustrated.

Trade will not be lost, because it is a two-way street. Our European neighbours make money from us, too; in fact, they make more money from us than we make from them. Britain’s balance of trade with the EU has been running at a deficit since we joined in 1973. According to figures from the Library, between 1973 and 2005 the cumulative trade deficit between the UK and the EU amounted to an astonishing £230 billion. Our partners have made £230 billion more from us than we have from them.

Given the importance of the UK to EU countries, ask yourself this, Madam Deputy Speaker: how many European businesses would seriously say, “All right, that’s it, Britain’s left the EU. I don’t care what it does to my profit margins, but I’m no longer trading with them on principle”? How likely is that? In fact, Switzerland, a non-EU country, enjoys a healthier balance of trade with the EU than us and has a higher proportion of its trade with the EU than us. So much for the benefits of EU membership.

The deficit continues to rise while the UK enjoys a trade surplus with the rest of the world. Our surplus with the USA continues to rise every year. We were trading with Europe long before we were members of the EU and I bet we shall still be trading with countries in Europe long after we have left.

Let us consider the so-called fact that 3 million jobs depend on our EU membership. They do not; they depend on our trade with the EU. Trade with Europe is not dependent on our EU membership; nor are the jobs that it supports. The only jobs dependent on our membership of the EU are those of EU bureaucrats and civil servants from this country—I admit they might have to find alternative careers. I know that the EU is a bloated bureaucracy, but it hardly accounts for 3 million British jobs.

Proponents of the case for the EU try to claim that it is responsible for 55 or 60 per cent. of our trade, but it is not. Exports, of which those to the EU account for
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about half, are responsible for 21 per cent. of the UK’s gross domestic product, so trade with EU countries accounts for only about 10 per cent. of our GDP. I do not believe that trade would be lost if we left the EU, because so many sectors of our economy have few or no dealings with the continent yet they must all bear the burden of EU red tape and regulation.

Mr. Jeremy Browne (Taunton) (LD): I am listening to the hon. Gentleman’s speech with great interest. What is his view on the transitional arrangements in the Conservative party with regard to its membership of the European People’s party? Is he an enthusiast for retaining membership for the foreseeable future?

Philip Davies: Of course, I support my right hon. Friend the Leader of the Opposition in his quest to take us out of the EPP, but UK membership of the EU is far more important than my party’s membership of the EPP.

If I had a large multinational business I might be able to shoulder some of the regulatory burden, but the effects on a small business in Shipley can be crippling. If anyone wants the truth about the EU and the much hailed single market, they should not ask me and they should not ask a British politician. They should go straight to the horse’s mouth and ask the European Commission. For our friends in the Commission, the EU is unashamedly a political project. For them, unlike our Government, its economic failings do not take away from the validity of the project.

Mr. Hoon: Would the hon. Gentleman like to give one example of one piece of European regulation that is crippling any one business in his constituency?

Philip Davies: If the Minister will be patient, I will explain the problem of EU regulation. Indeed, I come to the very point now. Earlier this year, the Enterprise and Industry Commissioner, Gunther Verheugen, said that EU regulations were costing the European economy €600 billion a year. That amounts to about 5.5 per cent. of Europe’s total gross domestic product. That is staggering enough: on the Commission’s own figures, European businesses are losing the equivalent of the entire GDP of Holland every single year.

If we consider that against what the EU considers to be the financial benefits of the single market, the case against the EU becomes a bit more open and shut. The most recent Commission estimates are for 2002, when the single market benefits were put at €165 billion—quite substantially less than the costs. Even taking account of inflation, the costs of EU membership to business are about three times the benefits. So much for the economic benefits of the EU. Far from being good for business, the bureaucratic EU is actually profoundly harmful to business—and that according to the European Commission itself. I wonder how much of those costs are falling on the shoulders of British businesses and I wonder what a business man might feel about withdrawal when faced with that particular fact.

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