I consider myself to be an optimistic, entrepreneurial and global European. I am Eurosceptic in terms of the political, federal project that I have witnessed during my lifetime, but I am an optimistic democrat and businessman when it comes to Europe’s future in the

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world and our future in the world through it. We have much to be optimistic about. Post the cold war we have seen an extraordinary change in Europe, the middle east and across the world, and more recently we have seen the Arab spring and an opening up across the middle east. Rather than focus on ever-deepening European political union, should we not seek to widen the influence of a looser, pro-enterprise and entrepreneurial Europe? I dream of the day when the strife, poverty, violence and terror that dominate the middle east are vanquished because that area is part of a much wider European market. I want to buy goods from Syria, not watch it on television while it and neighbouring countries are torn apart by violence and strife.

Globalisation creates enormous market opportunities for us and for Europe, and a Europe that is plugged into that global phenomenon would be capable of leading against the two big blocs of America and China. That is not, however, the Europe with which we are confronted. In my field of science and innovation I know all too well how powerful the European market is and can be because of CERN, the life sciences and the European Space Agency. On Monday I was at the Sanger Institute in Cambridge and visited the European Bioinformatics Institute where hundreds of young European scientists here in Britain are at the forefront of breaking down the human genome and increasing our understanding of how disease affects different populations.

As a mature, sophisticated set of western economies, we can lead the world with the translation of our knowledge to help the developing world. Over the next 30 years, the developing world will have to go through revolutions that took us 200 years. Perhaps they will go through Maslow’s hierarchy of needs from the basics of food, medicine and energy to becoming sophisticated western markets that will unlock enormous markets for our talents and skills.

The problem is, however, that the European Union of today is not in a fit state to unlock such opportunities. Economically, the eurozone is riven by debt—I remind the House that as a whole, Europe currently owes €10.9 trillion—and it has high rates of unemployment, with the EU average currently running at 10.7%. That is unsustainable. Furthermore, politically we are seeing that the federal model of ever-closer union is simply not capable of accommodating the needs of the eurozone as well as those of us who are—fortunately—outside it. The need to recover trust among those of us who have observed the illegitimate ratcheting of a federal union demands the change set out by the Prime Minister.

Closer integration in the eurozone is a problem for the UK but also an opportunity for us and other countries not included in that zone. We need to define a new structure and I believe that a two-tier Europe is emerging. I have in my hand a list of the 17 nations in the eurozone. It is a long list, and the big leader is Germany. On the right is a list of the 10 nations outside the eurozone, and if Norway, Switzerland and the next wave of possible new entrants are added, the obvious leader of that group would be the United Kingdom of Great Britain and Northern Ireland. We can, I believe, develop our leadership in the context of a debate about that structure. Our leadership must be in the context of the global race about which the Prime Minister, and many hon. Members in this debate, have been so lucid.

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The life sciences are a particular interest of mine, and this country and Europe have a big part to play in the big markets of food, medicine and energy. Through collaborations between European universities, investors and companies, we lead the world in that sector. The truth is, however, that the European Union is not always—and of late has increasingly not been—supportive of our, or its, ability to unlock that strength. In particular, it has begun to develop a series of policies and directives on genetic modification that are holding back this country’s leadership. Global food demand is set to increase by 70% in the next 30 years, 29 countries are growing GM crops, and biotech crops are valued at £90 billion yet only two are licensed in the European Union. If the European Union will not let us lead in that sphere, we need the freedom to do it for ourselves.

I congratulate those hon. Members who have put together the Fresh Start group, and reiterate my support for them. If we set out a positive vision of a new Europe and build alliances with nations that share our interests, we can deliver real change. The truth is that Europe 1.0 is over and we need Europe version 2.0 in which we can lead and to which we want to belong. We must seize the moment and build the alliances to deliver that.

3.49 pm

Mike Gapes (Ilford South) (Lab/Co-op): The Prime Minister’s speech last week was much delayed, much anticipated and over-hyped. It is already clear that the blip in the opinion polls is much less than he had hoped for. I therefore look forward to the internal debate in the Conservative party over the coming two years, and to the Prime Minister continuing to try to appease and assuage the egos of many Conservative Back Benchers.

I want to consider the so-called five principles and aspects of the Prime Minister’s speech. He said that

“we…need to address the sclerotic, ineffective decision making that is holding us back.”

Much of that sclerotic decision making in the EU happens because of unanimity rules. Can we therefore take it that the Prime Minister has called for more qualified majority voting? Conservative Back Benchers are shaking their heads, but Ministers cannot tell us the answer, because they do not know what the negotiating position will be.

Similarly, the Prime Minister questioned whether we can justify an ever-larger Commission, but the Commission gets larger because of EU enlargement and the accession of more member states. If the Prime Minister does not wish the Commission to become larger, the long-standing policy of successive Governments for further European enlargement has presumably been ditched. Alternatively, is the Prime Minister arguing that there should be a limit on the number of commissioners and saying that there might be future circumstances in which there is no British commissioner? We do not know the answer to that question because, again, the Government are unable to tell us.

Mr Redwood: Does the hon. Gentleman recollect that the Labour Government sold the pass on the number of commissioners by saying that not every state should have one? Perhaps that was one of the few sensible things they did to drive home the point that the Commission is a European government, not a representative government.

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Mike Gapes: Why did the Prime Minister not give more information in his speech rather than putting up the straw man and attacking the EU for increasing the number of commissioners relentlessly, when that is in fact a consequence of our previous enlargement policies?

The Prime Minister said that the European treaty laid the foundations of ever-closer union among the peoples of Europe. It is interesting to note that he did not point out that British Conservative negotiators of the Maastricht treaty insisted on keeping the phrase “ever-closer union” because they deemed the words to be vague and therefore something they could live with.

The Prime Minister made a number of other criticisms, including an assertion referred to by the hon. Member for Mid Norfolk (George Freeman). The right hon. Gentleman said:

“Put simply, many ask ‘why can’t we just have what we voted to join – a common market?’”

I campaigned and voted no in 1975, in my misguided youth. At that time, the Wilson Government, like the previous Heath Government and pro and anti-European campaigners, said the vote was about more than a common market, namely political union and other aspirations for co-operation. Whatever position the hon. Member for Mid Norfolk took in 1975—I do not know whether he was old enough to vote at the time—it is not true that we had a referendum and joined an organisation that was just about trade. It was more than that. I could go on to comment on other aspects of the Prime Minister’s speech, but I will not because of limited time.

It is clear that instead of addressing the economic crisis that confronts the whole of this continent, and the wrong, misguided austerity economics that is creating tens of millions of unemployed people and the immiseration of millions in many European countries, we in this country are now going to have an obsession with the minutiae of a probably unrealisable renegotiation about unrealisable repatriation powers. We need Ministers to go to Brussels and argue, in all the forums of the European Union, for different economic policies. In the meantime, we need Ministers to bring in different domestic economic policies to again achieve growth, prosperity and jobs in this country.

The economic policies we are pursuing here are potentially leading, as we now know, to a triple-dip recession. We have a massive trade imbalance with the European Union, which is partly due to the failures of our domestic policy, but is being compounded by the wrong economic policies being pursued by the austerity programme within the eurozone. As a result, the Government’s British economic strategy—export-led growth to get us out of the situation we are in, presumably capitalising on the benefits of the devaluation of the pound that has been going on for some months—is not getting us the growth we need, partly due to domestic reasons and partly due to problems in the eurozone economy. There is a very good paper by Simon Tilford from the Centre for European Reform—I do not have time to quote it, but I recommend that hon. Members read it—about the problems confronting our country partly because of the wrong policies within the EU’s economies.

We need to have concerted economic plans for recovery in the next five years, not concerted plans to create economic uncertainty and damaging policies that will

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reduce the amount of inward investment into the UK economy. The Government have taken a dangerous leap in the dark, creating enormous uncertainty for anybody who wishes to plan to invest in this country. They are putting jobs and prosperity in Britain at risk, and in time they will come to regret it at the next general election.

3.57 pm

Henry Smith (Crawley) (Con): Thank you for this opportunity to speak in what is an extremely timely and important debate, Mr Deputy Speaker. As Members of this House, we are all very privileged to have the opportunity to contribute and have our say. Every time I walk through the doors, I am conscious that there are approximately 100,000 people in my constituency whom I am seeking to represent. I was struck by the concluding remarks of the hon. Member for Wirral South (Alison McGovern). She has left her place, but she spoke about giving dignity back to our constituents. I can think of no greater way of doing that than to give them a say on our future relationship with the European Union. The influence of the EU in the past four decades has increasingly dominated every aspect of our national life.

On 1 January 1973—I do not remember it; I was only three years old—we joined what was then referred to as the Common Market or the European Economic Community. When I was six, our membership was confirmed in a referendum. It is important to say that most people thought they were voting in favour of a common market—a customs union or a free trade area. [Interruption.] At the time, some people referred to the small print in the treaty of Rome about ever-closer union, but generally people believed that, essentially, they were joining an economic free trading agreement.

Over ensuing decades, the European Economic Community developed into the European Community and then into the European Union, and the various Acts and treaties, including the Single European Act, which has been referred to, the Maastricht treaty and the failed EU constitution, which had to be rebranded and essentially presented and passed by the previous Government as the Lisbon treaty, have seen an inexorable moving of power from this Parliament to a centralised EU.

I am often struck that people refer to the EU as a federal project—if only it were a little more federal with more subsidiarity! Over the past 40 years, however, it has grown into a central government project, and it is right that the Prime Minister has offered the country a chance to decide its future relationship with the EU. Last Wednesday’s speech will prove to be one of the most important speeches that a British Prime Minister has made in the past half century, and I, for one, am grateful for the clear direction he has set out—as the Foreign Secretary said, it is much clearer than what we hear from Her Majesty’s Opposition.

I only wish that our coalition partners were also signed up to a referendum. It certainly used to be their policy. I do not often quote the Deputy Prime Minister, but I would like to now. Writing in The Guardian on 25 February 2008, he said:

“It’s time we pulled out the thorn and healed the wound, time for a debate politicians have been too cowardly to hold for 30 years—time for a referendum on the big question. Do we want

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to be in or out? Nobody in Britain under the age of 51 has ever been asked that simple question. None of them were eligible to vote in that 1975 referendum. That includes half of all MPs. Two generations have never had their say.”

That was five years ago, so now that age is 56, and we are into a new Parliament.

Kate Hoey: Why does the hon. Gentleman think the Deputy Prime Minister has changed his mind?

Henry Smith: I wish I knew how the Deputy Prime Minister’s mind worked. You would be quite right, Mr Deputy Speaker, to rule me out of order for being unparliamentary if I used the word “hypocrisy” in the Chamber, and I would never use the word “hypocrisy” in the Chamber to refer to another right hon. or hon. Member, but I think that the Deputy Prime Minister is guilty of rank inconsistency over his party’s position on a referendum.

This country has a unique position in the world; we have global links like no other nation on earth and we of course have our proximity to the European continent. This nation’s success has been rooted in being a free trading nation that seeks links and co-operation with the world. Our best opportunity for the future, as in the past, is to utilise those unique links and act as a conduit—a bridge—between the world and the European continent.

Mr Kevan Jones: I do not want to give the hon. Gentleman a history lesson, but the British empire was actually founded on protectionism. Until the repeal of the corn laws, we had very restrictive markets for our goods.

Henry Smith: I was hoping to speak yesterday, to quote from the Reform Act of 1831 and refer to the sweeping away of the rotten boroughs—[Hon. Members: “1832.”] My apologies; I will refrain from using dates. Nevertheless, our history is based on free trade, as is our future.

Mr Cash: Does my hon. Friend accept that there is a serious problem if the free trade arrangements that he and I, along with many others, want are in any way obstructed by the exclusive competence of the European Union overlaying the question of whether we could trade freely with, for example, all the members of the Commonwealth and emerging markets?

Henry Smith: My hon. Friend is absolutely correct. It is an EU competence to negotiate free trade agreements. If we had that competence back, as a sovereign Parliament and a sovereign nation, we would once again be free to forge those free trade agreements. I am struck by the fact that there is a multilingual central European country that is free of the European Union, but which has free trade agreements with the European Union—and, indeed, the rest of the world—and that is the nation of Switzerland. It is perfectly possible for us to maintain co-operation and free trading with Europe and to extend that to the rest of the world.

Huw Irranca-Davies: Switzerland can indeed trade, by agreement, with the European single market, but it has to comply with the highest EU standards in food

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and farming—the policy area that I shadow for the Labour party—or not export into it. It does not have any say in the rules, however.

Henry Smith: It is the same with world free trade agreements. It is high time that we gave the British people back the ability to determine how their relationship with Europe and the rest of the world should go forward, so that we can have greater global free trade for greater prosperity and bring back democracy. I congratulate my right hon. Friend the Prime Minister on delivering that promise.

4.6 pm

Jack Dromey (Birmingham, Erdington) (Lab): In the 1970s I was chairman of the north-west London “Get Britain Out” campaign. I remember chairing a rally addressed on the one hand by local Labour MPs and Ken Gill, the general secretary of TASS—the Technical, Administrative and Supervisory Section—and a leading member of the Communist party on the party, and Enoch Powell on the other. I believed that position in good faith and I worked hard for it. I was disappointed by the outcome, but I soon came to recognise that I was wrong, just as I came to recognise that continuing to fight yesterday’s battles was wrong. We took a long time in the Labour party to recognise that. Indeed, when Labour members first went into the European Parliament, the Spanish socialists nicknamed them “Los Japonistos”, after the soldiers who emerged from the jungles in Guam 40 years after the war was over asking, “Is the war continuing?”

Why did I change my mind? I remember an excellent German-Jewish friend who had lost his family in the camps saying to me, “Jack, I’m not the greatest fan of the common market,” as it then was, “but we’ve had a continent at peace for a generation, unlike that which took my family from me.” I remember a very honourable Macmillanite Conservative in the 1980s—in the days when there were such people, before, in the immortal words of Julian Critchley, the “garagistes” took over the Conservative party—saying, “Jack, I’m proud of my country, but we can only be strong in a modern, bi-polar world,” as it was then, “if we are at the heart of the European Union, with its great traditions of Christian democracy and social democracy.”

The reason I changed my mind was also, yes, the rolling forward of the social dimension in the 1980s, when Jacques Delors—Frère Jacques, as we came to call him—came to address the TUC. However, it was also because of my experience in the real world of work, dealing with hard-headed business people—enlightened in their approach—who rightly argued that we needed a single market with common standards, at the heart of which was a social dimension that reflected a belief in the simple truth that how we treat workers is crucial to the quality of the service they provide and what they produce.

Richard Drax: Why do we need to be a member of a federalist state to treat our workers properly? Why cannot we pass those laws ourselves? Indeed, we have.

Jack Dromey: I am coming to that point in a moment.

On the argument that I have just deployed, I remember the chairman of the company then known as British Aerospace saying that we needed a single market, but

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that as a company and as a continent we could not succeed in the world on the basis of a race to the bottom. That brings me to my first concern, which is the hidden agenda that lies behind the Prime Minister’s argument. There was a tantalising glimpse of that last week when, extraordinarily, he seemed to suggest that we should return to the days when a junior doctor could work 100 hours a week. Repatriation is the cry, but the reality behind that is rolling back a generation of progress on workers’ rights and taking us back to the 1980s, an era I remember well.

Let me give the House an example, which relates to the acquired rights directive. The directive was legislated on at European Union level in 1978, and introduced here, reluctantly, by a Conservative Government in 1982. However, that Government did not extend it to cover 6 million public servants. What we saw was the most appalling Dutch auction, involving cut-throat competition as workers were transferred and suffered cuts to their pay, their holiday entitlement, their sickness entitlement and, often, their pension arrangements as well. I remember a particular example that I dealt with early on involving the Moreton-in-Marsh fire service training college, where 130 women caterers and housekeepers had seen dramatic cuts to their terms and conditions of employment. The only humorous side to that otherwise sad story was the fact that the managing director of the company concerned—Grand Metropolitan catering—was none other than a Mr Dick Turpin.

Two things happened at that time. First, in 1991, I took the case of the Eastbourne dustmen to the European Court of Justice, and we won. It was ruled that the British Government had acted unlawfully in denying protection on transfer from the public to the private sector. Secondly, employers themselves began to speak out. I remember Martin O’Halloran of ISS, the then chair of the CBI, saying that it was madness—that employers did not want a market based on a race to the bottom, and that they wanted a market in which we competed on quality and productivity, characterised by fair treatment and fair competition.

Mr Redwood: I, too, found that my attitude towards the single market changed in the 1980s, when I became the chairman of a big industrial company. I discovered that I had much better access, as an investor and as an exporter, to leading non-EU countries than I had to France and Germany.

Jack Dromey: I say this to the right hon. Gentleman and anyone else on the Government Benches: let us have some honesty in this debate. If they want to go back to the days of the 1980s, they should say so. If they want a Beecroft Britain, they should say so. If they believe that Britain can succeed only by driving down workers’ pay and conditions of employment, and by reducing their health and safety protection at work, they should say so. We will certainly be seeking to draw out what is undoubtedly their hidden agenda.

Damian Collins: The hon. Gentleman is making an impassioned case, but there is nothing to prevent the British Government from introducing legislation of that kind. What has created frustration about the EU is that those powers have come in under the guise of European treaties and not been put before the House properly. They have come in through the back door.

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Jack Dromey: They have come in as a consequence of our membership of the European Union and the move towards a single market based on clear ground rules, including the fair treatment of workers. I will say it once again: if Government Members want the repatriation of the legislation that protects workers’ rights so that they can cut that protection, they should say so.

My final point relates to the immense economic damage that this debate will cause. I have worked with the automotive industry for many years.

Oliver Colvile (Plymouth, Sutton and Devonport) (Con): The hon. Gentleman is making his case very eloquently, and I congratulate him on doing so. I do not agree with him, but that is another issue. I am curious as to which way he would vote in a referendum if we had been able to negotiate the return to the United Kingdom of some of those regulations.

Jack Dromey: What I certainly will oppose is the madness of saying now that we are going to have a referendum on an in/out basis in five years’ time, for exactly the reason that 82% of the cars that we produce in this country, through our world-class success story that is automotive, are exported—and half to the European Union. Key to the future of the industry is inward investment, and key to inward investment is continuing membership of the European Union. There is already a chorus of concern from Ford and BMW, for example, about the grave consequences of prolonged uncertainty, while the director general of the Engineering Employers Federation has said that this is the worst possible way to go about negotiations, as it will weaken any negotiating leverage we need rather than strengthen it.

That is why I believe that the good Lord Heseltine is right and the Prime Minister is fundamentally wrong. With an economy bumping along the bottom and a triple-dip recession possible, this is the worst possible time for prolonged uncertainty, which will inevitably impact on crucial investment decisions. Far from standing up for Britain, as the Prime Minister says he is doing, he is putting party interest before the public interest, and he runs the risk of doing great damage to the economy of our country.

4.16 pm

Neil Carmichael (Stroud) (Con): I am grateful for the opportunity to speak in this debate. The one question I would pose to the Labour Opposition is simply this: what is their opinion on the referendum? Do they want one now, do they want one later or do they not want one at all? We need to hear an answer to that.

I shall focus on the European Union in the context of the amount of trade we do with it, which is substantial. We have four times as much trade with the European Union as with the whole of the Commonwealth, so let us get that into perspective. It is a market some 500 million strong—a significant market, which happens to be the biggest single market in the world, accounting for up to a fifth of the world’s gross domestic product. That is the scale of what we are talking about today, and it is why I hope that if and when we have a referendum we will say yes, but on the back of having reformed the EU.

I like local government, but that does not mean to say that it should not be reformed, and I apply the same logic to the European Union. It is really important that we reform it, and the Prime Minister has signalled that.

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Michael Connarty: The hon. Gentleman has twice mentioned reform. Can he, unlike the Government Front-Bench team or anyone else who has spoken, give us the specifics about what needs reform? We do not want to hear about just a vague reform; let us hear the hon. Gentleman’s vision of reform, as it may tie up with the vision of other Members, although it may not.

Neil Carmichael: That is an excellent question. I shall talk about three areas where reform needs to take place and will take place under this coalition Government and the next Conservative Government.

Ironically, the first area is the common agricultural policy. It needs to be radically changed so that farmers face less bureaucracy and are able to farm more easily; for that, the strictures of the CAP need to be altered. The chamber for such a change is, I think, the Council of Ministers.

Oliver Colvile: Does my hon. Friend agree that we should also make sure that we bring UK fishing waters back under UK control, so we need a big reform of the common fisheries policy?

Neil Carmichael: We would also need to look at—I think—the Marine Act 1986 if we wanted to make that a consistent strategy. I agree with my hon. Friend’s important point, but we should not overlook the other legislation that governs our access to our waters.

Nia Griffith (Llanelli) (Lab): Does the hon. Gentleman not agree that, like the Welsh Agriculture Minister Alun Davies, we should be in there at the heart of the negotiations? If we are to get a proper deal on the CAP, we should be seen not as the country that is trying to leap out of the Union, but as a country at the heart of the negotiations.

Neil Carmichael: That is exactly right, and I think the Prime Minister has spelt out exactly how we are going to be at the heart of those negotiations. We are really talking turkey this time; we are saying that things have to change, and we are bringing the full force of this coalition Government behind that direction of change. The hon. Lady is right: we have to be in on the act; we have to be constructive; and we have to make sure that Europe nevertheless understands that we pack a punch. We pack a punch by eventually having a referendum.

Emma Reynolds (Wolverhampton North East) (Lab): Will the hon. Gentleman give way?

Neil Carmichael: No, as I am running out of time.

The first area in need of reform, then, is the common agricultural policy. The second—and we heard the Prime Minister signal this—is energy, in connection with the single market. We should be thinking about extending the single market to other areas, and energy is ripe for it.

I know that many people currently envisage what would effectively be the nationalisation of energy policy by European countries which are worried about their security of supply and how they can deal with such matters as reductions in carbon dioxide emissions. We therefore need to think carefully about how we can apply energy to the single market. There are two key words that we should be using, and one is competition.

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We need more competition: we need a competitive Europe generally, but we need a competitive market in energy specifically, because we need to be able to sell energy to other countries more easily than we do at present and because the development of a different tapestry of energy production systems will require a more open, flexible market.

There is a specific need for energy to be in the single market, but there is a desire for it as well, not just in Britain but in other countries, notably Germany. I have talked to representatives of the BDI—the German equivalent of the CBI—who are interested in the possibility that energy could become part of a more competitive, effective single market. I believe that the processes in which we are already engaging will eventually produce a single market that is more robust, more competitive and more flexible.

Alex Cunningham: Will the hon. Gentleman give way?

Neil Carmichael: I will give way briefly.

Alex Cunningham: The CBI is interested in employment law. I wonder whether the hon. Gentleman would hazard a reply to the question posed earlier by my hon. Friend the Member for Birmingham, Erdington (Jack Dromey). Do he and his party hope to reduce workers’ rights by repatriating powers in that area?

Neil Carmichael: Absolutely not. We do not want to “reduce workers’ rights”, as the hon. Gentleman puts it, but we do want to ensure that more people can be employed. That is being made possible by the Enterprise and Regulatory Reform Bill, which is probably an Act by now. It copies legislation introduced by the German Chancellor who, at the time, was none other than Chancellor Schröder of the SPD—the Social Democratic party of Germany—to make it easier for small firms to employ people. Those are the sort of measures that we should be introducing here, and we are starting to do exactly that.

Jack Dromey: Will the hon. Gentleman give way?

Neil Carmichael: No, because I am running out of time. I was asked specifically which policy areas we should be changing. I have dealt with the second, and I now want to talk about the third, which, although more long-term, is critical.

What are we going to do about the Council of Ministers? It needs to be more transparent, and it needs to have more capacity. I think that we can provide the answer to the democratic deficit in two ways. First, this Parliament and the Parliaments of the other member states must become more interactive, engaging in the kind of discussions that take place in the Council. We need to hear more about the agenda, we need to hear more about what is actually said and done, and we need to hear more about how we as parliamentarians can influence all that through our own national Parliaments. The second way in which that can be beneficial is in challenging the effective supremacy of the Commission in ensuring that treaties work as they should, which drives a hole into the argument about the European Parliament’s position that I have heard mentioned several times in the debate today.

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There are a great many areas of policy that we can change, but let me canter through the ones that I have mentioned. First, we need to act immediately to deal with the common agricultural policy. We are already too late for 2012, as we are now in 2013, but there are changes on which we should now be insisting. Secondly, we need to extend the single market to energy—although not just to energy: I could have mentioned the digital economy and financial services. Thirdly, there is the constitutional aspect, which I think is central to what the Prime Minister said in his speech.

If we can deliver on some or all of those areas— policy, the single market and the construction of the European Union itself—we shall have something really interesting to say to the electorate at the time of the in/out referendum. Meanwhile, we shall be protecting and, indeed, strengthening our interests. Above all, we shall be producing a better Europe, because it will be more flexible, more competitive, more transparent and more democratic.

Finally, I want to talk about President Obama. It is true that he said we should remain in the EU, but he is not the only American President to have said that: every single one has since Dwight Eisenhower in the 1950s. It is a consistent message, therefore, and we should listen to it, but the clear message we are getting from our electorate is this: “Make a difference in Europe. Reform it where necessary. Make it more flexible. Make it more competitive. Make it more useful to us, and make it less intrusive.” I can take that case to my constituents in Stroud, valleys and vale, and to businesses and everyone else who has a clear interest in protecting Britain’s interests through having a reformed and effective Europe.

4.25 pm

Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): The subject of this debate belongs in the same broad historical category as some of the great political causes the House has dealt with, including the repeal of the corn laws and imperial preference. These issues are also connected to the dry matters of tariffs and trade, but they, too, are really about Britain’s role in the rest of the world. We all have emotional views about what our country is and what it could be, and where we sit in relation to our neighbours. If we look back to the 1970s, we see that the case for our going in was framed predominantly in emotional, rather than rational, terms. It was about Europe coming together, an end to continental war and Britain giving up its empire but obtaining a role in Europe. Even the well-regarded Chancellor Roy Jenkins framed the case in those terms, rather than by reference to economic or trading arguments.

Intriguingly, however, the roles have now been reversed. The case for coming out is now the emotional one; it is based on the notion that we can be free of the shackles of an imaginary tyrannical European bureaucracy, even when all the rational, objective arguments push any pragmatist to the view that staying in the EU is both an advantage and a necessity. That should serve as a lesson to all Members on both sides of the House who are in favour of retaining our EU membership, because there is no doubt that, under this Government, we are sleepwalking towards the exit.

The Prime Minister must realise that no amount of renegotiation, repatriation or reorganisation will satisfy some of his Eurosceptic Back Benchers. That has been

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made clear today. He has completely lost control of them, and in doing so he has lost control of the country. He cannot compromise with them because, whatever the objective arguments, they hold to an outdated and misguided notion that Britain is in some way held back by the EU and that we would be better off without it.

In that regard, the absolutists on the Government Benches who want to leave Europe remind me of my Labour colleagues of the 1970s and 1980s who wanted to respond to Britain’s economic problems and our changing role in the world by running a siege economy and cutting ourselves off from the rest of the world. It was the basis of our 1983 manifesto, and it was not particularly successful as it was economic madness. Again, however, it was a message that gave emotional satisfaction to the people who believed in it, regardless of the strength of the arguments to the contrary.

We should therefore be used to seeing the tension between rational, objective economic arguments and an instinctive, emotional view that people want to hold about the future role of their country in the wider world. However, given the current state of the UK economy and what we all see and hear in our constituencies on Fridays and at weekends—the stories of human misery, unemployment and squeezed living standards—the only points that should matter to us are those rational, objective, economic arguments and, more than anything else, questions of what is in our national interest.

To me, the case for being in the EU is extremely clear. There are huge economic advantages to being in a single European market. A single market is not a free trade area; they are different things. A single market requires the co-ordination of certain domestic policies to ensure that that market is a level playing field. Although some understandably feel that this constrains national sovereignty, we must remember that we are now part of a global economy that already puts huge constraints on national sovereignty.

If people were arguing for a siege economy today, it would be taken even less seriously than previously, because, frankly, it would be impossible. Moreover, being a member of the single market does not inhibit our trading relationships with other countries; instead, it allows us to negotiate trade deals as part of a powerful bloc of nations and serves to attract investment into the UK from countries that want to be inside the EU.

In addition, although the World Trade Organisation should ensure that we have a rules-based system for resolving all global trade disputes, there is no doubt that the size of a country still counts when disputes arise. By operating as a bloc within organisations such as the WTO, we are in a far stronger position than we would be on our own.

Regarding non-economic matters, the only people who should be arguing to end co-operation on crime and justice are serious criminals. We absolutely should be working together to make sure that justice across Europe is effective and quick and that nowhere is beyond the reach of our law-enforcement agencies. Criminals will be just as mobile, just as international in their operations, whether or not we co-operate with our neighbours. Co-operation is so sensible that we cannot be tough on crime without being pro-European.

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The Eurosceptic argument that we frequently hear—we have heard it a lot today—is that we could be a Norway or a Switzerland: we could have these benefits without being a full member. Both Norway and Switzerland are wonderful countries, but neither is comparable to us in terms of economy, status or role in the world today. What Eurosceptics do not like to discuss is that those countries have to commit to introducing almost every bit of European law but get a say in none of it. That is perhaps okay for Norway, but how would we protect the City of London and our competitive advantage in financial services if we did not have a say in the formation of those laws? We might as well stand at the airport and wave those jobs off to Frankfurt. Norway still has to make a contribution to the EU budget—€1.8 billion over this budget period. We should also remember that, when the EU was first set up, we tried to create a rival body that was simply a free-trade organisation: the European Free Trade Association. It failed.

None of this means that I personally want to join, or ever see, a federal Europe, or even to join the euro. I judge these matters according to only one thing: what is in our national interest? That brings us to the Prime Minister’s speech and his attempt to reconcile what he knows to be sane with the views of many of his Back Benchers. He clearly recognises that adding to the turmoil in Europe by holding a referendum in the UK right now would be extremely reckless. But he can surely see that announcing a referendum to be held in five years’ time is equally reckless, given that during that time we will live in limbo, lose investment and have created further unnecessary uncertainty.

Yesterday, I and other members of the all-party group on manufacturing met some of our leading manufacturers and policy makers. They were clear that this uncertainty is bad for Britain. Why, in the present economic climate, would we want to make the UK a less attractive destination for investment and jobs? By all means, let us try to change Europe—there are plenty of things that I would like to change—but we have natural allies on this issue, and we could lead them.

The worst thing about the Eurosceptics is how pessimistic they are about how great our country could be. My right hon. Friend the Member for Southampton, Itchen (Mr Denham) was spot-on in saying that. Our priority should be to promote growth at home and secure influence abroad. Short-term expedient decisions based on party management should never be prioritised above what is in our national interest.

4.32 pm

Chris Heaton-Harris (Daventry) (Con): It is a privilege to follow the hon. Member for Stalybridge and Hyde (Jonathan Reynolds). I was canvassing on Saturday in a village called Crick, in my constituency. I told one of my constituents there that I had applied to speak in this debate, and he said, “It’ll be a bit like a conversation between the man from Del Monte and the Churchill insurance dog, with one side saying ‘Yes’ all the time the other saying ‘No’”. It is a bit like that, but there are some common themes. A number of Members on both sides of the House do want to see some fundamental reform of the European Union, and the hon. Gentleman identified a couple of those areas.

One thing that no hon. Member can dispute is that the ongoing eurozone crisis means that Europe and the European Union is changing. We therefore have challenges

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that we must look out for and find solutions to. Currently, there are 17 countries within the eurozone, and there could soon be more. Many of the countries that signed the acquis when they joined the EU signed up to the euro, but at the moment, 10 EU countries are outside the eurozone. There is fear among those 10 of the caucusing of the 17. That is writ large in the United Kingdom.

Paul Blomfield (Sheffield Central) (Lab): Can the hon. Gentleman explain the logic of the position that takes us from the eurozone nations needing to assess how they can underpin the currency to wanting to repatriate powers over policing?

Chris Heaton-Harris: I think that I will be able to do that during my speech, in the next few minutes. It was a pleasure to take an intervention from the hon. Gentleman, whose wife I enjoyed working with as an MEP. I believe that he was working for her at the time and so was obviously feeding her some good lines, but it was a pleasure working with her none the less.

The fear of caucusing could cause the UK and others outside the eurozone to be outvoted in the Council in the very near future—the voting weightings are just about to change—possibly affecting our access to the single market. Most Members from all parts of the House are keen to ensure that that access remains, so we need to have, at the very least, what the Prime Minister called “new legal safeguards” to protect us from that problem.

I am not as defeatist as many Opposition Members have been. I was getting concerned about the idea of a European banking regulator, which came out of the blue last year as a new thing that Europe desperately needed to correct problems in the eurozone. I was worried about how it might affect our banking system, but Europe, as ever, managed to find a reasonable fix—one well negotiated on our behalf by the Chancellor of the Exchequer—in the double-majority mechanism. Such a mechanism had not existed before, but it made sure that the UK position was fundamentally safeguarded. I am a great believer in the fact that these things that I and other Conservative Members might be calling for are achievable and that Europe will find solutions to problems if we enter the negotiation with a broad mind.

I am a founder of the Fresh Start group of Conservative MPs. Some Opposition Members are keen on detail, and we have detailed some of the areas where we think it would be worth while negotiating. In a way, we are making the Conservative political pitch, so I expect disagreement from Opposition Members, but I will try to explain why it is important at least to look at these areas, which include justice and home affairs. We highlighted a number of areas, and some Opposition Members might agree on some of them.

The first such area relates to a new legal safeguard to maintain access to the single market—I am sure hon. Members on both sides will agree that we need to ensure that the eurozone cannot prevent our accessing that. Secondly, we need an emergency brake that any member state can use on future EU legislation affecting the financial services market. That market is important to the United Kingdom, as a huge amount of our GDP is created in financial services. The single market has been important to that, by always providing an opportunity,

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but it is beginning to look a bit more like a threat, because of the 48 directives and regulations coming down the track at the moment.

Thirdly, we need the repatriation of competences in social and employment law. That is a controversial area for many Labour Members, but I was in the European Parliament when Labour Ministers appeared before its employment committee and were begging people to understand the different, liberal nature of the UK work force and were asking them not to put in extra measures on the working time directive and the temporary workers directive that would directly affect the number of people getting into employment in the UK.

Fourthly, we need to opt out from existing policing and criminal justice measures, as some of them are not working, some of them are defunct and some of them are based on mechanisms that no longer exist. Europe does not repeal things and it really should; there should be sunset clauses in some of the legislation.

Nia Griffith: Do I understand from what the hon. Gentleman says that he is very much in favour of a common market and economic union, but has reservations about other aspects? What sort of referendum is he therefore suggesting? Should we have an in/out referendum, or is he suggesting that any question would have to be worded differently and address whether people wanted to stay in one thing but not another?

Chris Heaton-Harris: This is a fairly simple matter, and I tend to agree with what the Prime Minister says: we should renegotiate, get our deal and then go to the British people and settle this question. We should end the uncertainty by putting our trust in the British people and asking them, “Do you want this on the basis of the package that we have renegotiated or not?”

Jack Dromey: On ending uncertainty, does the hon. Gentleman accept the warnings given by Ford, BMW and the Engineering Employers Federation that the danger of prolonged uncertainty is that it will have an impact on vital inward investment decisions?

Chris Heaton-Harris: The biggest uncertainty and biggest danger for the British economy is the chance that Labour might be elected to government. There could be no greater uncertainty for the British economy than that—[Interruption.] The right hon. Member for Warley (Mr Spellar) mentions democracy from the Opposition Front Bench—absolutely damn right. That is why we should trust the British people, because they will have the final say. We should be able to agree on reform of the European institutions.

Mark Hendrick rose

Chris Heaton-Harris: I shall give way to the hon. Gentleman, who used to travel regularly to Strasbourg when he was a Member of the European Parliament, as I did, as well as to a third institution in Luxembourg.

Mark Hendrick: I am interested by the hon. Gentleman’s shopping list of powers that might need to be repatriated, but may I ask him about the mechanism? I am a member of the Foreign Affairs Committee, and we have considered Switzerland and Norway. Would he prefer a

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relationship like that between one of those two countries and the EU, and if not, why not? Does he think that his Government can obtain their own relationship in some other way?

Chris Heaton-Harris: That is where the pessimism of Labour’s negotiating position has undermined our chances of getting some of the things that we have wanted in the past. I do not see either model working for us. We want a British model, which might be within the European Union but, if we do not get what we want, might be outside it.

I strongly believe that we need to negotiate a better settlement with the EU and that we should give the British people a say in it. I was delighted by the Prime Minister’s speech last week—as, I am sure, were the majority of the British public—although I was very concerned that the Leader of the Opposition said on the BBC’s “Politics Show” that he did not think that the European Union had enough power. Let me illustrate why I was concerned. The European Commission often asks for extra powers, and we have recently received its work programme, which contains proposals to harmonise and get rid of anomalies in the VAT system. In other words, the plan is to get rid of the anomaly whereby we can charge less VAT on energy, for example. That would increase fuel poverty in the United Kingdom, and I do not think that the European Commission should have more power to do that. We should retain the power in the UK to differentiate our own policies.

There is a divergence going on, and if we are going to stay in the EU, we need to ensure that we negotiate hard to ensure that that is in the British interest. If it is not, the British people will decide and they will decide to walk.

Several hon. Members rose

Mr Speaker: Order. The time limit on Back-Bench speeches must now be reduced to six minutes with immediate effect.

4.42 pm

Huw Irranca-Davies (Ogmore) (Lab): You have cut me down to size before I have even started, Mr Speaker, but I will comply with your ruling.

I want to speak in defence of agriculture in the EU and the dangers for our farmers, food producers, manufacturers and the UK economy that would arise from pulling out or from the prevarication we might see over the next few years. People do not often speak in defence of agriculture in the EU, but my discussions with farmers show that they have been universally in favour of staying in—and not because of CAP reform or subsidies, although I shall return to those issues in a moment.

The first issue is the clear benefit that being in the European Union brings to consumers. Our high food standards, animal welfare, food protection, food safety and so on—despite the recent issues that bubble along—are a direct result of our being in the EU and working across it to the highest standards. Examples include the beef hormone ban, comprehensive food labelling—although

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we can do more on that, a cross-Europe approach has been an enormous help to our farmers and food producers—and limits on the pesticide residue that can be left in our food.

I mentioned the higher welfare standards and one example is the ban on battery hens, which came at an enormous cost to our farmers. Despite their fears that they might be disadvantaged when we entered into the ban across Europe on 1 January last year, the demand for eggs from producers who met the highest standards meant that for a short period there was a premium on their eggs. We need to sing this out loud: our farmers provide the highest standards of animal welfare and food safety standards of which consumers can be proud. It is a question not just of domestic supply but of exports.

Richard Drax: We discussed eggs and their production in the Select Committee on Environment, Food and Rural Affairs, and it might interest the hon. Gentleman to learn that very few other countries met any of the requirements, at great cost to our producers.

Huw Irranca-Davies: I do not want to contradict the hon. Gentleman, but, to my surprise, the response of the EU on 1 January last year was a quite dramatic intervention: in Spain and elsewhere, immediate action was taken against suppliers who were not compliant, to the extent of closing down hatcheries and egg producers. My regular meetings with the British Egg Industry Council suggest that that has not been nearly as worrisome to its members as they thought it might be, and has, in fact, been to their advantage. The long-term advantage in the sector lies in having not just a level playing field, but in meeting the higher standards that consumers expect. Consumers are demanding more of food production.

The common agricultural policy is undergoing changes at the moment, but the rural development pillar has been directly beneficial to many hard-pressed rural communities throughout the UK by rewarding the delivery of biodiversity and good environmental outcomes as well as innovation and competitiveness in farming and food production, and supporting areas such as Wales and Scotland where there are natural environmental constraints.

Another benefit is found in European food protection labelling, such as protected designations of origin, protected geographical indications and traditional specialities guaranteed. We in the UK need to speak up proudly about how many of our foodstuffs, produced in every part of the UK, fall within one of those designations and because of that, have value added and command a premium price. It is interesting that, just within cheeses, we now have more than one speciality cheese for every single day of the year. That is the result of the European approach of recognising the very best in local and speciality foods. Examples include Welsh lamb, Stilton cheese, Scotch beef, traditional farm fresh turkey and traditionally farmed Gloucestershire Old Spots pork.

We should also look at what the EU does across its member states in agricultural scientific research. For example, this country is holding its breath over the spread of the Schmallenberg virus, but it is at EU level that the research is being done into how we can counter it in the seven or so member states affected. The UK specifically has €400,000 to carry out scientific studies designed to gather further information, and is working

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with farmers to deliver a joined-up approach to research and to provide advice to farmers and the farming community.

Access to the single market is also vital. My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) spoke about this. Yes, if we were outside the EU, we could still negotiate access, but there are difficulties with that. First, there is the time it would take and the complexity of negotiating access for a range of different products; and secondly, as farmers and the NFU tell me, we would have to comply with the standards that were determined without our having any input into making those rules. It would be like playing a game but having no say in the rules—just being told what to do. That is surely not to our advantage and it is the reason why the farming community are adamant that they want to be in the EU, playing and leading.

CAP reform is a continuous process. This week, the European Parliament voted on a proposal that, although it has some good parts, is in many respects extremely retrograde, not least re-coupling payments to production rather than to added value through environmental gains and so on. That links back to the old problem, albeit not on the same scale, of wine lakes and butter mountains, and it is wrong headed. None the less, I believe that our farmers want us to be in there, at the front, arguing loudly as a progressive member of the EU. My one concern in all this is that Government’s overall approach in the past couple of years of shaking a big stick on every possible occasion, and their present position that we will carry a bit of a threat here just in case we need to use it, have an impact not only on the tone of the negotiations but on their outcome. Having one of the leading Eurosceptics in the Cabinet taking those negotiations forward may be a disaster.

4.49 pm

Mr John Redwood (Wokingham) (Con): Who governs? That is the fundamental question before us in this mighty debate today. At what point does a self-governing country have to say it is no longer self-governing because the body of European law and the wide-ranging body of European decisions are so fundamental that Ministers and this Parliament can no longer effectively govern the country?

Too many of us have watched as Governments have given away mighty powers of self-government from these islands and from this once great Parliament to the European institutions, and we have worried greatly. This has been done in the name of the British people, but it has not been done with the consent of the British people. There has always been an excuse not to trouble the British people, and so often outside this House political parties have misled the British people.

The British people were told that they were joining a common market. It was very clear from the treaty of Rome onwards that they were joining a political, economic and monetary union in the making. They were told that they just belonged to a single market, needed to guarantee jobs in certain export industries. There were two misleading things there. First, we do not need to belong to the EU to export to the EU. Many other countries outside it export much more successfully than we have done from inside it. Secondly, it was always a far bigger and more noble venture in the eyes of its architects, its fathers and mothers, than a mere single market or internal market.

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I ask Members of this Parliament to look around and see what has been done in their names—to see how difficult it is now for Ministers of the coalition, future Ministers and Conservative or Labour Administrations to do many of the things they would like to do or their electors wish them to do, because so many powers have been given away. The bigger the corpus of European law becomes, the more constrained are not just our Ministers, but this once-great Parliament.

Mark Hendrick: Does not the right hon. Gentleman accept that the cars exported from the UK to mainland Europe today are a result of foreign direct investment to the UK because the UK is within the European Union, not outside the European Union?

Mr Redwood: No. That is a trivial point compared with the issues that I am raising, and it is entirely wrong, because there are many countries outside the EU that attract as much as or more inward investment than we do. I want, as does the hon. Gentleman, to keep those jobs, and we will continue to attract and support that inward investment as long as we have a satisfactory enterprise economy here and a decent market. We have a very large market of our own. That is why those investments come here.

The hon. Gentleman needs to look around and see how many powers have been taken away. We can no longer have an agricultural policy of any kind unless it is the approved one from Brussels. Our fishing grounds are completely controlled and regulated from Brussels. Our energy policy is greatly circumscribed by a large amount of European legislation, regulation and price control, and many more decisions coming along on climate change and energy, which means that it is very difficult to have an enterprise-oriented energy policy in this country.

We find that we do not control our own borders. We have no say over who comes here from the continent of Europe, and they have come in very large numbers in recent years. Many of them are welcome, but a sovereign country has the right to decide who comes and on what terms. We were always assured by Governments that we kept control of our welfare policy—that that was a matter for domestic consideration. We now find that the EU presumes to instruct us to whom we give benefits and what benefits we give them.

Michael Connarty: This is a grand opportunity to ask the right hon. Gentleman, as I asked the hon. Member for Stone (Mr Cash), to outline what position he would take and on what issues he would vote to leave the EU—on a matter of emotion, or can he give me some specific issues that he says should persuade his party and his Government to vote no when it comes to a referendum?

Mr Redwood: I wish to help restore democracy in our islands and to do that we need to regain the veto. We should not have sacrificed 100 vetoes at Nice, Amsterdam and Lisbon. This Parliament needs to be able to decide whether a new law goes forward or not; otherwise we will find that in ever more areas—I am just beginning to illustrate some of them—we are a fax or an e-mail democracy. We receive the e-mails or the faxes from Brussels and this Parliament has to put through the

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measure, whether we like it or not. That creates a tension within our democracy. Successive Governments bring measures to this House and recommend them to this House. They are very fundamental measures, but they often sneak them through this House, or sneak them through upstairs, because they fear they are unpalatable to us. However, they know that there is nothing that the House of Commons can do once the agreement has been made in Brussels—and very often it is made without the wholehearted consent of the British Minister. In the case of this Government, it may often be made against the wishes of the British Minister, but this House is still expected to put through these measures come what may.

That is why we need a Government who resolutely negotiate a new relationship for us with our partners in Europe. Of course, I give no ground to anybody in wanting to maximise jobs and investment in this country, and my recommendations would increase that rather than reduce them, as we find with non-EU members already. However, I also wish to see the Prime Minister’s great speech used as a platform for setting out how we recreate a democracy and secure the right in this House to say no to European laws if we do not like them. We have waited a long time for a Prime Minister who would say honestly that this country does not share the aim of the treaties and of many of the member states of the European Union because we do not wish ever-closer union.

I have heard very few Labour Members say that they want ever-closer union, because they know that that means political, monetary, fiscal, economic and every kind of union known; it means the creation of a united states of Europe. Those who wish to join that, I wish well, but it was never Britain’s view that we wanted to be part of a united states of Europe. The British people, if asked, would say no to that idea. It is up to us now, at this late hour, to say that too many powers have gone and that they need to be returned if we are to restore this once-great Chamber to what it once was.

This Parliament wrestled power from over-mighty monarchs. This Parliament took on those who wished to dominate the continent of Europe and rejected the imperial ambitions of first Spain, then France, and then Germany. Because of the work of our predecessors in the House of Commons, we as a nation said to Europe: “We want a Europe of the free. We want a Europe of independent nations. We want a Europe where people’s sense of local belonging is respected. We are against a tyranny. We are against an over-mighty Europe. We do not believe that Europe can be governed as a whole.”

How proud that vision was, and how right it is that our Prime Minister has reminded us of the foundations of our beliefs: no to ever-closer union, yes to more democracy; no to restrictions and too much centralised government from Brussels, yes to greater freedom to breathe and to decide and to choose among all the smaller countries of western Europe. I suspect that many countries out there and many politicians in them respect that vision and are rather impressed by its boldness. We should all join together now in rallying the peoples of Europe to say yes to friendship, yes to trade, yes to co-operation, but no to centralisation and no to authoritarian interference.

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4.58 pm

Michael Connarty (Linlithgow and East Falkirk) (Lab): Having listened to the right hon. Member for Wokingham (Mr Redwood), I have to say that I must have heard a different speech by the Prime Minister. I did not hear that rallying cry in the Prime Minister’s speech on Europe or in the Foreign Secretary’s speech today. It is a dream. It may be a good dream, and I am sure that it is one that the right hon. Member for Wokingham will take into his dotage, but it will never be realised on the basis of what is being offered by his Government. If he really believes that by speaking in that way he can change the route that his Government are taking, he is deluding himself.

The key question for me on the whole issue of Europe is whether, if the policies and procedures that currently exist in the UK’s relationship with the EU remain unamended, it is likely that the Foreign Secretary, given his speech today and his many contributions over his period in office, or the Prime Minister—or, indeed, the shadow Foreign Secretary or the Leader of the Opposition—would campaign for the UK to withdraw from membership of the EU. The answer is clearly no. I believe that that is the case for the majority of Conservative and Liberal Democrat Members and for the vast majority of Opposition Members. If there were no changes, I do not think that those people would go out and campaign for our withdrawal from the EU. I think that the people of the UK would reject that.

I ask the same question as I asked in the Scottish referendum debate: is the current relationship between the UK and the EU damaging or malevolent? I do not find it malevolent. I find it irritating, troublesome and tedious in its mechanistic way of working. I have seen that as a member of the European Scrutiny Committee since 1998. However, it is not malevolent and it is certainly not damaging to the UK. Every statistic shows that the UK benefits remarkably from its membership of the EU.

There is an issue with competence creep. There is no doubt about that. That is what gets me about this Government who put themselves forward as being reforming. I watch Ministers come forward every week, again and again, with explanatory memorandums saying that they have decided to go for a political agreement or a compromise that gives away power to the European Commission. I have always said that since Lisbon that has been much more difficult to resist. But it is not even resisted. That is not about the EU; it is about the failure of our Governments over a long period to stand up to the Commission when they could have done, to build the alliances that Opposition colleagues and some Government Members have talked about, and to deliver for the UK.

Mr Cash: To respond to the question that the hon. Gentleman put to me earlier, would he be good enough to tell me whether it is more important to implement the laws made by consensus in the European Council of Ministers or the laws that his constituents support through the ballot box?

Michael Connarty: In 20 years in this place, I have never found it inconsistent to support the European Union. I supported it when I voted in the first referendum, and I supported it when I was the chairman of the

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Mid Scotland and Fife European parliamentary constituency and convinced a Eurosceptic MEP to see the benefits of Europe. There is no inconsistency between my job as a Member of Parliament and my support for the EU.

The big questions that we should be discussing—the ones that were touched on by the shadow Foreign Secretary—are all included in the Irish presidency agenda. The budget, the next financial perspective, the multi-annual framework and the need to deal with debt in the eurozone are all on the agenda and are being discussed on a daily basis by the 27 countries and Ministers. We should be discussing low participation in the labour market, unemployment levels and the massive problem of youth unemployment. The only comment that was made by the UK Government on the proposal for a youth, education and sport initiative—interestingly, I am the chair of the Council of Europe’s sub-committee on education, youth and sport—was that it should not be called the youth, education and sport initiative because that spelled “YES”. That was the one contribution from a UK Minister about what is on the Irish presidency agenda on youth employment. The Government have rejected the proposal for a guaranteed job or training place for every youth in Europe after four months of unemployment because they did not want that to interfere with what they call apprenticeships. In fact, apprenticeships in this country are not apprenticeships, but merely in-work training.

Ian Swales (Redcar) (LD): As a fellow officer of the chemical industry all-party parliamentary group, I know that the hon. Gentleman is well aware that that is Britain’s leading export industry, ahead of the car industry. The chemical industry relies on long-term investment. Does he agree that the political risk premium that we now have will reduce the inward investment that is so important to that industry?

Michael Connarty: I totally agree. I would also point to things that are happening in the environment package, such as interference in health and safety in the North sea. Those things are being chased not by the environment directorate-general, but by the energy directorate-general. I know of three or four issues that it is trying to get into an energy chapter that it did not get into the Lisbon treaty. We have to watch the Commission creep and fight against it, as I have said before.

As for what it will mean, what is Fresh Start—the hon. Member for Daventry (Chris Heaton-Harris) and his colleagues—really about? Does it mean to renegotiate the 1972 treaty as the hon. Member for Stone (Mr Cash) suggested? No, it does not. If not, what is the agenda? It seems to me to be very light. As the hon. Member for Daventry said, the changes suggested are not radical ones that will make the EU a different place when people vote on the issue. That is the reality. It is about changing small matters, but it will not, for example, reinstate the UK vetoes. If that is the Government’s agenda, they are promising people a false referendum because it would not be a different Europe. If that is the case, why not hold the referendum now? Basically, Europe is not going to change, because this is a political ploy before an election, not a genuine attempt to re-establish the perspective on Europe.

Will the UK be allowed to renegotiate A8 citizens back to EU countries—one of the big cries from those in UKIP? No, it will not. Will the UK deny safe working

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conditions in its factories and building sites? I hope not. I worked in a toy factory in the ’70s. The EU came to the rescue by putting proper guards on the machines and, where they had damaged people, proper constraints. Will the UK return to the days of failed extradition processes? We used to talk of the Costa de los Bandidos in Spain because we could not get the crooks back here. Now we use the European arrest warrant. Will we abandon that? It is a nonsense. Will we make people in hospitals work longer hours? I do not think so.

My hon. Friend the Member for Ogmore (Huw Irranca-Davies), who speaks on agricultural matters, made an interesting point about meat eaters and I had a vision of carnivores in the Conservative party—carnivores or cannibals, I am not quite sure how they should be described because when the right hon. Member for Wokingham spoke I had a feeling that he would happily feed on the bones of his own Government if he could not feed on the bones of the European Union.

Those in Fresh Start basically hope that the EU is changing. Yes, it is changing because of the euro crisis and the crisis of the capitalist economy in Europe, but it is not changing fundamentally in its structures and powers. It will not change unless we repeal the Lisbon treaty and we are not going to do that. All the things that were mentioned about agricultural policy and the common fisheries policy are on the agenda of the Irish presidency, as is a more competitive single market. On the reform of the Council and Commission, since the Commission is set in stone, it will make policy and others will choose whether to implement that policy in the Council. My worry is that the feeding frenzy of the carnivores will not be justified by what the Prime Minister tries to do in this fake referendum, and in fact they will feed on the bones of their own Government when that fails.

5.7 pm

George Eustice (Camborne and Redruth) (Con): I start by saying that the speech the Prime Minister gave last week was probably the most important speech that a Prime Minister has given on Europe since we joined 40 years ago, and the first time we have seen a Prime Minister showing genuine leadership on the issue. There has been lots of rhetoric from previous Prime Ministers about wanting to lead in Europe, but all too often they have found themselves drifting along with an agenda set by others. For the first time we have a Prime Minister who does not necessarily want to make friends with Europe, and who is challenging Europe’s failure and challenging it to move in a new direction. Such an intervention is long overdue because for many years there has been tension in the European Union between those who wanted to integrate policy making more deeply within Europe, and countries such as Britain who said we should have a broader Europe and bring on board countries from eastern Europe.

The decision to enlarge the European Union to include eastern Europe should have been a triumph for British foreign policy and have led to a situation in which the EU tried to do less but did a few things better. Some powers should have started to return to national Governments, but instead the relentless dogma of ever-closer union has continued. It is high time we called time on that.

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We have heard a great deal from Labour Members about pessimism and defeatism, but I will tell them what those things really are. Pessimism and defeatism are seen in those who agree with the analysis that Europe needs to change and reform, and that some powers should return, but who have no confidence whatsoever in their ability to deliver that—they will not even try; they are not prepared to embark on the process. I heard the shadow Foreign Secretary agree with the five principles, but he will not say whether he thinks there should be a new treaty or intergovernmental conference, and he will not commit to any kind of renegotiation. There is a kind of craven fear among those who say they agree with our analysis but are completely unwilling to do anything about it or make a change.

Mr Kevan Jones: The Prime Minister is not clear what powers he wants to repatriate—it changes every time the Downing street spin machine gets into gear and whenever he is asked. Negotiations on that basis will mean four, five or seven years of uncertainty, which will damage the UK’s economy.

George Eustice: The Prime Minister is clear that we will have a renegotiation and put it to the people. The whole point of a renegotiation is that such things are developed in the negotiation. Labour Front Benchers say they share the Prime Minister’s analysis, but they are unwilling to do anything about it.

Three other aspects of the Prime Minister’s speech were important. First, he was right that the core of the EU is not the euro, but the single market. We are committed to the single market and want to expand and extend it. Research last year by Open Europe concluded that the current arrangement in the single market was better for Britain than the alternatives. It is better because we need to be in the single market for things such as financial services, and because we need to be in the customs union to support our manufacturing, because of complicated country-of-origin rules. For those reasons, we are committed to, and want to expand, the single market. The euro is not the core of the EU, as some would say. In fact, the euro is an optional project. Britain and perhaps other countries will never join it, and some member states trapped in it might yet choose to leave and re-establish their own currency.

The second important point expanded on by the Prime Minister is that we must end the dogma of ever-closer union. It must now be possible for powers to return to nation states. The reality is that the more competences the EU has taken on, the less competent it has become. We must give the EU the power to adapt and the power to let go of things when there is no longer a rationale for deciding them at European level. Who is really on the side of the EU? Is it those like me who say, “Let’s make the EU more flexible and give it the ability to adapt to new challenges in future,” or is it those who say, “It’s all too difficult to change. Let’s just leave it like it is”? Those of us who are arguing for change are on the side of the EU.

The third important aspect of the Prime Minister’s speech was the distinction between willing co-operation between nation states and national Governments, and the integration of policy. There is an opportunity to roll

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back the jurisdiction of the European Court of Justice in many areas. That has already been done on matters such as justice and home affairs by countries such as Denmark. It co-operates with directives and works with other countries in a spirit of co-operation but does not accept the jurisdiction of the ECJ. We do something similar on foreign affairs, and it works. We co-operate with other European countries and work to have co-ordinated policies on foreign affairs, but we do not have an integrated policy and we do not make foreign affairs subject to QMV.

I conclude by dwelling on whether change is possible. The big challenge in the debate is answering those who say, “It’s all well and good. We agree with you about what needs to be changed, but it’s impossible. What will you do if they say no?” I am more optimistic than many on that point, for a number of reasons. First, the euro has created challenges that mean that the EU will change anyway. I believe there will be growing demands for a new treaty in the coming 12 months if Angela Merkel is re-elected later this year. That demands a policy response from Britain. If other countries say that they want to integrate more deeply and understand that Britain will not follow them, we must at that point have a grown-up discussion on what a new model for Europe looks like.

The second thing to remember is that the differences between countries that are out of the euro and those that are in it can be exaggerated. The truth is that countries such as Germany, Holland and many others see Britain as an ally in liberalising markets and opening up the single market. They want us in the EU because they see us as an ally. The EU needs us because we give it influence in the world. People often say that Britain might be losing influence, but there is a two-way street, because we give the EU influence.

The third thing to bear in mind is that other countries have problems with aspects of EU policy. Germany and Sweden do not like measures such as the data retention directive. Therefore, we should discuss which bits they want to drop and which bits we want to drop.

Finally, the Prime Minister struck absolutely the right tone. He made it clear that Britain wants to be in the EU, but that we want Europe to change. He said that Britain will play its role as a genuine leader and challenge Europe to face up to its failures and make that change. To those who say that is impossible, I say that we should reject such defeatism. People used to say that the euro was inevitable; it was not. There is no such thing as historical inevitability.

5.14 pm

Albert Owen (Ynys Môn) (Lab): The shadow Foreign Secretary is absolutely right to say that the big political news stories from this House last week were the cuts and redundancies in our armed forces, the shrinking of the economy, and the Government’s failure to deal with the economy. However, the Prime Minister and sections of the media wanted to concentrate on Europe.

Europe is an obsession for the Conservative party. Only last Friday I spoke to former Conservative party activist who had agreed with the Prime Minister when he said that it was the “banging on” about Europe that put people off the Conservative party, and why it had not been elected to Government since 1992. That was what some Conservative people were telling me only last Friday. This obsession confuses me, because it was

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a Conservative Prime Minister who took us into the European Union; it was Mrs Thatcher, when she was Prime Minister, who signed the Single European Act which gave away many powers and vetoes; and it was Mr Major who signed the Maastricht treaty. He was very unkind to the right hon. Member for Wokingham (Mr Redwood) and others at that time—I would never be as rude as the former Prime Minister.

Oliver Colvile: Does the hon. Gentleman recognise that John Major was able to negotiate a number of opt-outs? Unfortunately, those opt-outs have been given away by Labour Governments.

Albert Owen: The then Prime Minister was very rude to the right hon. Member for Wokingham and doubted his parentage. He was angry and frustrated at being bounced by his Back Benchers, in the same way that the current Prime Minister has been bounced into making his speech. The Prime Minister could never be accused of being consistent on Europe. As recently as October 2011, I joined him in the Lobby to support the view that a referendum would cause all sorts of uncertainty. The Conservative party’s obsession is damaging the British interest.

I want today to make a pro-European speech. Although I totally disagree with the right hon. Member for Wokingham, I respect the fact that he has always been in favour of our leaving the European Union. He has been clear on that point, and he was clear again today. I believe that our strength lies in the EU. The title of today’s debate is “Europe”. We are in Europe; we are part of the continent of Europe. As a Welshman, I am proud of Wales being a part of the United Kingdom. I do not go to the UK and I do not go to Europe—I am in both and I want to remain in both. I believe that the interests of my constituents are better served by our having a strong voice in the United Kingdom in this Parliament, and in the European Union. I trust our representatives to fight for our interests. That is what the Prime Minister should be doing—talking not about our going somewhere closer to the exit of Europe, but about going to the centre of Europe and fighting for the interests of my constituency.

Identity is important. I am proud to be Welsh. I support Wales. Last year, 2012, was a great sporting year—Wales won the grand slam in rugby union, beating England on the way. Our British athletes won gold medals and I was proud to shout for Britain in the Olympics in the same way that I was proud to support the European win in the Ryder cup. The Welsh people are as proud as anybody of being at the centre of events, and Wales has benefited from being there.

I do not believe in an emotional approach towards Europe; I believe in practical, social and economic policies, and we have had good policies for Wales. Being a member of the European Union has been a net benefit to Wales. It is estimated that £40 per person per year extra comes into Wales from our membership of the European Union. We benefit in many other ways. Social and economic regeneration has happened through structural funds. Extra money has come from Europe, on top of what the UK Government have given, for real, social and economic regeneration that is sometimes difficult to quantify because it has built village halls and the structure of social cohesion of Wales and the UK.

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Damian Collins: The hon. Gentleman is right to mention the structural funds, but, because we are net contributors to the EU, all we are doing is getting some of our own money back—it is not extra money we could not otherwise find.

Albert Owen: I understand that, but in the ’80s and ’90s, when my community was declining and, as a result, qualified for European structural funds, the British Government were not doing enough to protect such communities. The structural funds, which go directly to my community, are good for Wales and my constituency. I understand the argument about our being a net contributor, but in many ways the UK is not uniform. Many people talk about unemployment falling, but in my constituency it is rising—dangerously—to the levels in the 1980s, and there are job threats today, because a European company, Vion food processers, is pulling out, putting 350 jobs at risk. Jobs have been created as a result of our membership of the EU.

My hon. Friend the Member for Vauxhall (Kate Hoey), who is no longer in her place, asked why we did not make these arguments in the last Parliament. The truth is, Mr Speaker, that the Speaker before you used only to call the likes of her and members of the Government from our side of the House. Now, however, I have the opportunity, and I am taking it, to say that I am proud to be Welsh and proud to be British—she is right that we should talk about the UK, not just the island of Britain.

I represent a constituency that has been in existence for 450 years—and, thanks to the Liberal Democrats, it will continue to be in existence. The people I represent do not have an island mentality; they are outward-looking patriots, and a patriot can be proud to be Welsh, proud to be British and proud to be European. The agenda does not belong to those who want to move us towards the exit from Europe; it belongs to those who want to be at the centre of Europe.

Jobs matter. My hon. Friend the Member for Ogmore (Huw Irranca-Davies) was quite right. Like him, I had a meeting with farmers today—I represent a rural community. They know that there are problems in Europe, but they also know the benefits of being in Europe. They run small businesses and local communities, and for them it is not about big or small Europe. They understand that Europe brings real benefits. That is what I am proud to speak about today.

The urban development in my town comes from European structural funds. The near neighbour of mine is not continental Europe, but Ireland. The Chancellor used to boast about how good the Irish economy was. We can have both free trade and good employment laws; they can go hand in hand. I am worried, however, that if we move away from the social chapter, our jobs will become less valuable and our constituents less valued. I am proud to say: Wales, Britain, Europe, we need to be united; we need to be leading in it, not moving away from the centre.

5.22 pm

Martin Horwood (Cheltenham) (LD): It is a pleasure to follow the hon. Member for Ynys Môn (Albert Owen), who made a passionate, excellent case for accepting and celebrating identity on many different levels. In a way,

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like him, I am proud to come from Gloucestershire, I am proud to be English and I am proud to be European—indeed, I am proud to be a member of a country that is part of the United Nations as well. We can celebrate and identify with people on many different levels.

We have heard many passionate speeches in this debate. Obviously, we heard from the hon. Member for Stone (Mr Cash), who is not in his place anymore, who revealed that he had voted in two French referendums—so perhaps we should call him the hon. Member for Pierre for now on. We also heard a passionate speech from the hon. Member for Croydon South (Richard Ottaway), who made a strong case for Britain remaining at the heart of Europe. If a referendum one day comes, I have no doubt that he, like the Liberal Democrats, will be putting the case strongly for a yes vote, for remaining in the EU and for keeping Britain at the heart of Europe.

In a spirit of coalition fraternité, let me say that I found much to welcome in the Prime Minister’s speech on Europe, although one would not necessarily have known it from much of the media coverage. He applauded the EU’s contribution to peace and freedom over many decades in Europe and emphasised the value of the single market. He also emphasised the EU’s role in putting Britain at the heart of negotiations on world trade—through free trade agreements and so on—and therefore its value to British jobs and British business. He also stressed its role in keeping Britain at the top table on issues such as climate change. The idea that if we left the European Union and were no longer a member, we would have that kind of access to top tables around the world, to the single market or to the free trade agreements that are negotiated at European level is a bit of fantasy and a misleading argument.

The Prime Minister also emphasised the importance of reform in Europe. I agree with a great deal of what he said in his speech about that. I was talking to consultants at Cheltenham general hospital only recently about the working time directive and the need, perhaps, to reform some aspects of it. We all want the EU budget reduced, in line with these austere times, and there are regulations—from small businesses to fisheries—that can be lightened or brought closer to national decision making. We would all support that. In fact, the Prime Minister made a very good case for British membership of the European Union and the kind of reforms that can be achieved within a process of negotiation and collaboration, positively engaging with our European partners.

However, the Prime Minister rather undermined that with his announcement of this hypothetical in/out referendum, not so much by putting forward the principle of a referendum, but by refusing to say which way he will ask us to vote if such a referendum actually happens, which is quite a big if. Let us look at Conservative policy over the past few years. In 2007 we had the “cast-iron guarantee” of a referendum on the Lisbon treaty. A few years later, that was not so certain. Then, once the Conservatives were in coalition with the Liberal Democrats, we had a clear and legislated-for agreement that there would be a referendum in the event of any powers moving from the British to the European level of government.

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Damian Collins: We are all enjoying a lecture from a Liberal Democrat MP on consistency in policy, but does the hon. Gentleman not accept that this argument about the Lisbon treaty is totally spurious? The treaty was signed into law by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) as Prime Minister before the coalition Government came into power, so the horse had long left the stables.

Martin Horwood: When the Lisbon treaty was debated in this Chamber, the Liberal Democrats were the only ones who proposed an in/out referendum, not at some hypothetical time in the far distant future, but then and there, yet few Conservative MPs—or, indeed, Labour MPs—joined us in the Lobby that day. We have therefore been very consistent in arguing for referendums at times of major change. What I am highlighting is the lack of certainty in Conservative policy, which has yet again changed in the last few weeks. I might make rather more money than I generally do at the Cheltenham gold cup by betting that within the next four years, before this hypothetical referendum takes place, Conservative policy might just change a little again.

The real problem is not the principle of a referendum; the real problem is what will happen in the intervening years. This whole debate has given those who do not share the Prime Minister’s agenda—which is quite positive about membership of the European Union—an excuse basically to campaign for a British exit. Some of them dress it up in the argument for this imagined wholesale renegotiation of the British terms of membership. There is no reason why that should succeed, because if we start unpicking all aspects of our relationship with Europe, why would the French not start arguing to unpick competition policy? Why would the Germans not start arguing for the protection of their energy markets? Why would quite a lot of countries not start arguing, after perhaps making a few concessions to us, for taking back our rebate, as a quid pro quo? Realistically, I do not think that an unpicking of the whole relationship will happen.

In the meantime, business will be concerned about the uncertainty. Some of the statements from business have been clear. David Sproul, the UK head of Deloitte, has said:

“The Europe debate does not help to create certainty. When I talk to US clients who have not been immersed in the European debate as we have, they say that what they need is clarity. There is no question: it will impact business—it will hit investment into the UK.”

That point is repeated in a number of different quotations.

George Eustice: Would the hon. Gentleman acknowledge that all those arguments were put forward during the euro debate and that they were all proved wrong? For example, it was said that the Japanese car companies would all go, but that did not happen. It is a sorry state of affairs when the European Union seems almost incompatible with a democratic referendum or with the will of democratically elected national Governments.

Martin Horwood: Membership of the European Union is not at all incompatible with democratic referendums. We have had one and we have advocated another, and the coalition has legislated for a referendum lock if powers should ever move closer to Brussels, so that is not the issue. The real issue is British jobs and British

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business, and the climate of uncertainty, which is not about the principle of a referendum; it is about the risk of exit and the damage that that would do to the British economy and to the guarantee of peace and freedom across the European continent for future generations. It is also about the risk of losing our place at the table on everything from climate change to world trade. Those are genuine, deep risks, and concern is now being expressed by businesses, by our European partners and by our allies around the world.

Whatever we think about the principle of a referendum, we need to be absolutely clear which way we would vote in a referendum. The Prime Minister has tried to start making the case for a yes vote, and for Britain remaining in the European Union, but he has shied away from making a really firm commitment. The Liberal Democrats are absolutely clear that we would argue for Britain to remain at the heart of Europe, and the more that Members on other Benches stick their heads above the parapet and start to make that case as well, the better.

5.31 pm

Ian Murray (Edinburgh South) (Lab): It is a pleasure to follow the hon. Member for Cheltenham (Martin Horwood). Given the events of the past 24 hours, I am surprised that he is still sitting across the Chamber from us and that he has not joined us on the Opposition Benches, especially in the light of the speech that he has just made.

Is it not strange that on this, the 1,000th day of the coalition Government, we should find ourselves in the Chamber discussing the Conservative party’s favourite obsession: Europe? That is a surprise indeed. As the economy hurtles towards a triple-dip recession, the Prime Minister and the Government have decided to create economic uncertainty that could damage any recovery and the long-term prospects for economic stability by adopting a policy that is designed to fix the Conservative party rather than this country’s economy.

It is the job of any Prime Minister to stand up for the national interest. Indeed, that has been the motto of this coalition since 2010, but the Prime Minister has compromised the national interest by responding to the increasing Euroscepticism of his Back Benchers. We have a Prime Minister who simply cannot reconcile the demands of his party with the demands of his country. Let us look at the potential consequences.

The EU brings the UK a considerable amount of investment, but that could be put at risk. Some estimates put the number of UK jobs reliant on the EU at 3 million. Those jobs could be put at risk. The EU remains our single biggest trading partner and represents a de facto domestic market of 500 million people. That market could be put at risk. At a time when economic recovery seems like a distant goal, that creates uncertainty for business, which could put any economic recovery at further risk. Businesses large and small are already warning about the potential dangers to investment. We have heard many such voices being quoted in the Chamber this afternoon. The head of the CBI has said that the promise of a referendum

“builds in a degree of uncertainty and business never welcomes uncertainty.”

The problem is that the Prime Minister wants to renegotiate with Europe, but he has no strategy and no thoughts on what he wants to renegotiate. How can he

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renegotiate anything when there is confusion over his own position? He has talked about the repatriation of powers since he became Prime Minister, but he has yet to tell the House and the country which powers he wants to repatriate. Many Government Members have been challenged to give us some examples this afternoon, but they have failed to do so. Does the Prime Minister’s shopping list include the progressive policies of the social chapter? Does it include the right to four weeks’ holiday for British workers, the right to parental leave and extended maternity leave or the right to request flexible working? Does it include protection for part-time workers, the working time directive, the TUPE regulations or collective redundancy provisions?

There is an obvious distinction between repatriation and repeal. The British people deserve to know not just the list of powers the Prime Minister wishes to repatriate but what the Government would do with those repatriated powers. We have already seen the Beecroft report on workers’ rights, which would take this country back to Victorian times. Would the Government repatriate and repeal? Would they just repatriate? Or would they even repatriate and improve? Those key questions need to be answered.

My hon. Friend the Member for Ogmore (Huw Irranca-Davies) was absolutely right to say that, whether we are in Europe or out of it, British business will still have to conform to EU directives to be able to trade. That is a critical point, but I think that the Government have missed it. If the Prime Minister has a menu for repatriation, how many or how few items on it will have to be met before being satisfied that he will go for an in/out referendum?

It would be remiss to talk of the EU in this Chamber without mentioning Scotland. It will not surprise the House to hear that the Scottish Government’s response to the Prime Minister’s speech was confusing at best. The Deputy First Minister wrote to the Foreign Ministers of the EU and said that Scotland had no intention of leaving it and that Scotland, after a successful independence vote, would continue to be a constructive member of the EU. That was despite the Irish Foreign Minister and the President of the European Commission stating that Scotland would have to reapply and that it could be a lengthy process with conditions attached.

Even more astonishingly, the Scottish Government responded to the Prime Minister’s speech by declaring that a referendum on the EU would create uncertainty for Scottish business—despite the referendum due to take place in 2014 being four years in the making. We could be in a position whereby, come 2014, Scotland is not just not in the UK, but not in the EU.

In the past two and a half years, the Government have never said anything positive about the EU. We know that the Prime Minister does not want a referendum, as he voted with us in the House only a few months ago. Back in June last year, he posed the question whether he wanted to stop the bus and get off, and he answered no. One thing is for sure: the Prime Minister can do none of this while he is away from the EU decision-making table and locked out of the room in a sulk. He should be at the table, thumping his fists on it and using this country’s considerable influence to make the patriotic case, founded on the national interest, for a flexible Europe that can stimulate economic growth, respect national sovereignty and change better to reflect current circumstances. Europe cannot be changed from an isolated position.

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In his speech, the Prime Minister referred to

“a tantric approach to policy-making”.

In reality, this is not a tantric approach, but complete impotence. Having been bounced by his party on Europe and bounced by the Liberal Democrats on boundaries, we could be talking about the one-term Prime Minister who broke up the UK, took Britain out of the EU and inherited a growing economy, only to take it three times back into recession.

My constituents are concerned about the real issues of the economy, jobs, the cost of living, protecting those who are most in need and getting young people and graduates into work, but their Governments on both sides of the border are putting their future prosperity in further—

Mr Deputy Speaker (Mr Nigel Evans): Order.

5.37 pm

Mr Robert Walter (North Dorset) (Con): A number of Opposition Members have criticised the Prime Minister for announcing that he will campaign in the next general election to renegotiate, hold a referendum and, on the basis of that renegotiation, campaign for a yes vote. It is probably worth reminding them that it was a Labour leader and a Labour Prime Minister who did just that in the general election of 1974. Despite having a number of irreconcilable people on his Benches, including Barbara Castle, Michael Foot and Tony Benn, he succeeded in gaining a two-to-one victory in the subsequent referendum.

Albert Owen: The hon. Gentleman reminds us of the 1970s. Of course, the clamour of the two camps to win out against each other took our eye off the economy at the time, and we went into a very difficult period. Are we in danger of doing exactly the same, and is not the Prime Minister in danger of being not the son of Blair, but the grandson of Harold Wilson?

Mr Walter: I thank the hon. Gentleman for that intervention, but I would remind him—I can remember it—that the economy was already in a difficult situation caused by the energy crisis. We had three-day weeks and other problems.

Martin Horwood: I think the hon. Member for Ynys Môn (Albert Owen) made a good comparison with Harold Wilson and the 1970s. Like our Prime Minister now, Harold Wilson wanted modest reforms, but was unable to satisfy the Europhobes in his own party. Within five years, that party was voting for exit from the European Union—despite the referendum. Is that not a little bit of a warning from history?

Mr Walter: It is a warning from history, but if the hon. Gentleman listens to what else I have to say, I hope that he will accept that I will be campaigning to make sure that that does not happen. I had rather hoped that the question of Britain’s membership had been settled decisively back then—my view has not changed—but I believe that the prospect of a national vote would give our country an opportunity to have a serious national conversation about Britain’s relations with the European Union. I welcome that, because I think that for too long

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the debate has been dominated and, to an extent, distorted by mistrust and by a suspicion that more EU integration means less sovereignty for the United Kingdom.

We need to set the record straight. For those of us who support the European project, this will serve as an opportunity to explain what Parliament and politicians have done in the people’s name over the last 40 years. It will also give us a chance to expose the myths purveyed by those who would have us turn our backs on both our European history and our European future.

It is true that the Europe we joined in 1973 was created on the basis of a vision of a post-war Franco-German elite. It is also true that Schuman, Monnet and de Gaulle himself saw ever-closer union as meaning an eventual federal Europe. But that was another time, and another Europe. The EU of today is markedly different, and the EU of tomorrow will, I believe, be even more so. In the Commission and, to some extent, in the European Parliament, there are those who still see the EU as a centralising project, but in national Parliaments—including this one—and among the peoples of Europe there is no craving for that original centralised model.

Brussels is not Europe, and the people who work there have no monopoly on the European vision. Schuman’s plan was fundamentally about eliminating trouble, anxiety and distrust from a continent ravaged by centuries of conflict. Today, our focus is not on keeping the peace, but on consolidating prosperity. The treaty of Rome was signed in 1957 by just six countries with a combined population of 173 million. By the time the Lisbon treaty came into force, more than half a century later, the Union comprised 27 member states with a combined population of more than half a billion. With Croatia, we are soon to number 28. Enlargement, one of the EU’s greatest success stories, is set to continue, bringing more change to the character and direction of the European project.

As its membership has changed, the EU has embarked on a different path. If we reflect on the way in which European institutions have evolved since that original blueprint, if we look at the aspirations and stated aims of EU member states—all of which want to protect their identities and interests—and if we consider the actions that member states have taken independently, across a wide spectrum of policies, it is clear to us that there is no great craving for the centralising project envisaged by the founding fathers. The proof is all around us.

After 40 years of British membership, there is really no overarching bureaucracy or executive. The Commission and the Council are small in comparison with many national Government administrations. The Commission’s budget is barely 1% of Europe’s GDP. Countries retain sovereignty over many areas that might have been expected to be transferred in a federal system. Member states have their own foreign policies and their own armies, which they can deploy at will, and they do. Member states can choose to opt out of a raft of agreements that they oppose, and they have: that has been proved.

We should not forget, of course, that treaties require the consent of every member state, even if they are supported by the vast majority of the population of the EU. That is an important point. When consent is not given, Europe must go back to the drawing board, and that has been done. In 2005, France and the Netherlands rejected, by referendum, what was then the constitution. In 2008, Ireland rejected the Lisbon treaty in the same

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way. Did those countries threaten to leave the European Union? No. Did the EU respond by trying to coerce those countries into accepting a treaty that was judged unacceptable by the people? No. What happened was that the countries returned to the negotiating table, and their Governments renegotiated the aspects of the treaties that conflicted with their national interest. They made the case for their concerns to be addressed, and they were.

I think that there is a lesson here. We in the UK have our concerns and suspicions, and the EU has many shortcomings. We are therefore right to push for reform, but these examples show us that the EU is not heading inevitably and inexorably towards some sort of federal superstate, even if some people within the Commission and the European Parliament still harbour that goal. Every country has its own corner to fight, and it has the power to do so. We are far too reluctant to admit this, but the UK has time and again proven itself to be an influential leader in the EU.

Mr Cash: Will my hon. Friend give way?

Mr Walter: Sadly, I only have a couple of minutes left.

Mr Cash: I can give you an extra minute.

Mr Walter: No, you cannot.

Thanks to our positive engagement across a swathe of policy areas, from economic reform and deregulation to environment and trade, we have consistently set the agenda. In the debates ahead, we need to strip away the rhetoric and clarify what Europe represents. Europe is the solution, not the problem. Our history is in Europe, and I believe that our future is, too.

Several hon. Members rose

Mr Deputy Speaker (Mr Nigel Evans): Mr Cash, you can do many things, but you could not have given Mr Walter another minute even if you had wanted.

5.45 pm

Mr Kevan Jones (North Durham) (Lab): It is a pleasure to follow the hon. Member for North Dorset (Mr Walter), who has been an isolated and lonely voice of sanity on the Government Benches this afternoon.

Like my hon. Friend the Member for Ynys Môn (Albert Owen), I am fascinated by the modern-day Conservative party’s obsession with Europe. We only have to mention the word “Europe” to send many Conservative Members into an act of communal or self-flagellation. As my hon. Friend said, however, that has not always been the case. The major changes in our relationship with Europe were introduced by Conservative Governments. They took us into Europe, and it was Margaret Thatcher who signed the Single European Act.

Now, however, the Conservative party holds to a little Englander narrative, which goes as follows: Europe is a foreign place that is anti our culture and somehow does things to poor old little Britain. Nothing could be further from the truth. It is true that we are an island off the continent of Europe, but we are part of Europe. For centuries, we spoke French, not English, and we even speak Norman French at the Prorogation of each Parliament. Our royal family has a proud German history and

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heritage, too. It is therefore plain wrong to argue that Europe is somehow alien to our culture. It is part of our history, and it is in our DNA, too, as the blood of people from Europe who have settled here flows through our veins. All this also influences the decisions we take: if we go down to the Members’ car park, we can see the most fervent anti-Europeans driving French and German-made cars.

The hon. Member for South West Bedfordshire (Andrew Selous) said what is important is inward investment and access to the European market. I completely agree. The EU is vital for jobs in my region of the north-east, and also for our future prosperity. My hon. Friend the Member for Ynys Môn made a point about structural funds, too. They made a real difference when the last Conservative Government ripped the heart out of the north-east economy. This is not only about manufacturing, however; it is about access to financial markets, too, and liberating the European telecommunications market, which cannot be done from the sidelines.

Albert Owen: My hon. Friend is making a strong argument about our being an English-speaking gateway to Europe, but we are not the only one. There is also the Republic of Ireland, so we must be on our toes and make decisions at the centre of Europe.

Mr Jones: That is true, which is why current policies and statements are potentially putting us at a competitive disadvantage.

There are those who argue we would be better off outside Europe, and that we should have an in/out referendum now. I respect that position—although I totally disagree with it—but that is not what is before us. It is worse than that. We will have five or more years of indecision because this Prime Minister has put party advantage ahead of Britain’s national interest. We will have five years of companies looking at Britain and asking themselves, “Should we invest? Can we be sure Britain is going to be part of Europe?” The Prime Minister will not even tell us what the red lines in respect of Europe are going to be. As my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said earlier, they will involve, for example, driving employment rights down to the bottom to try to ensure that we are competitive with the rest of the world.

Europe is our major trading partner and we need to be at the centre of it. We will not achieve that by standing on the sidelines, or, as this Prime Minister seems to do, by threatening to take our bat and ball home if we do not get our own way.

Much has been said about the free movement of people throughout Europe. This is nothing new. I grew up in the region of the north Nottinghamshire coalfields and went to school with people with Italian and Polish names—the children of people who had settled there after the second world war. Conservative Members who represent areas such as Lincolnshire will be aware that many generations of immigrant workers have come there to pick fruit and other agricultural produce. That has added to, not taken away from, this country’s prosperity.

Mark Hendrick: My hon. Friend, coming has he does from the north-east, will remember the “Auf Wiedersehen, Pet” generation who went to work in Germany because they could not find work in this country under the Thatcher regime.

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Mr Jones: My hon. Friend makes a very good point. When the Tyne shipyards were decimated by the last Conservative Government, most of the welders and other skilled workers got work in Holland and other parts of the EU, and those skills continue to be exported today.

It is important to remember that being part of, at the centre of, Europe is in this country’s interest. On the idea that Europe is doing things to us—that the Commission tells Britain what to do—Conservative Members tend to forget the nature of the decision-making process. What on earth do Cabinet Ministers and other Ministers go to Council of Ministers meetings for, if not to influence debate? Similarly, the last treaty actually changed the role of the European Parliament. I have my criticisms of the way it operates, but at least it increased the so-called democratic voice in decision-making processes.

Are we going to end up with a two-speed Europe? If we continue as we are, we certainly will, because our voice will be ignored in Europe. There are some changes that could be made. I am not one of those who argue for a federal Europe; I am arguing strongly that we need to be an active and loud voice, speaking up for what is in Britain’s national interest: the single market and the security that Europe offers this country.

There will be changes to, for example, the eurozone, but I should remind the Conservatives that we are not part of the single currency. Change will happen, and we need to be part of a constructive, positive dialogue. Standing at the sidelines stamping our feet, saying that we must get our way on every single thing or we will take our bat and ball home—in some instances, the Government do not even know what it is they want their way on—is not the way to get the economy out of the dire straits this Government have got it into.

5.53 pm

Ben Gummer (Ipswich) (Con): What a refreshing change to be in the Chamber today, having this interesting, broad and generous discussion about the European Union, which is so different from many such debates that I have watched remotely or participated in in my short time here. The same is no doubt true for other Members. The mood has changed, and the reason why is the Prime Minister’s speech last week. The greatest service that his speech has done not only to the country but to the European debate is that it has allowed us, at last, to open up this debate properly. It has allowed the full spectrum of belief and thinking—on both sides of the House—to find its voice and come alive, and with a graciousness that we have not had in such debates for many decades. That is a good thing, because this debate is too important for us to allow it to become reconciled only through rancour. We have to approach it afresh. The British public are tired, frustrated and irritated with this discussion and we need to have it in a new way that gets to the heart of the matter.

That was why I was so pleased with the way in which the Prime Minister opened his speech last Wednesday. It began, so importantly, by dealing with the historical context, which we have not discussed properly in this Chamber for many years. When we have been discussing the minutiae of European treaties, we have forgotten the reason for Europe, why this country is a member of the European Union and why so many of its other members care so deeply about the political consequences

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of this great community, which has done so much, with NATO, to forge a peace since the second world war. It has been the longest peace that the continent has enjoyed in its modern history.

As Tomas Masaryk so memorably said, our continent is

“a laboratory atop a vast graveyard”.

It behoves us not to forget that although we have found peace within the continent during the past 60 years, the edges of our continent are as dangerous, as vociferous and as potentially alive to crisis and trauma as they have been at any point in the past five or six centuries. Furthermore, we have to be alive to the fact that, as the Prime Minister said, our relationship with the European Union is peculiarly British; a golden thread runs from the very first engagement that we had in our modern history—the Norman conquest—all the way through to now, and it is peculiarly English. That has stamped its mark on the relationship between Great Britain—and then the United Kingdom—and Europe. Even in that prototype of European summitry at the field of the cloth of gold, which the Minister will know of far better than I do, the discussions between the delegations contained many of the same tensions that we see now in European summitry and in the discussions that he has to have on a weekly basis on our behalf.

None of that is to say that other nations in the European Union do not have their own peculiar, individual, unique relationships with other member states; for the Finns, for the Spanish, for the Italians and for the Germans these relationships are very special. So we are not in a unique position in encountering a difficult or particularly interesting relationship with our fellow member states; the relationship is made different by the great ditch that lies between us, but we still have to reconcile ourselves to the fact that other nation states also have these peculiar interests.

The Prime Minister recognised not only that changing relationship with the European Union, but the changing demos of the European Union. We would do well not to forget that the demos is changing in our own country, too. This is a remarkable moment for us and for our nation and, I would propose, for reform of the European Union. I am glad that the tone has changed as a result of his new beginning last week.

5.58 pm

Paul Blomfield (Sheffield Central) (Lab): I am pleased to follow a thoughtful contribution by the hon. Member for Ipswich (Ben Gummer). The debate has had a more welcome tone, perhaps because, with one or two honourable exceptions, it has been boycotted by some of the more extreme Europhobes on the Government Benches—[Interruption.] The hon. Member for Wellingborough (Mr Bone) walks in on cue. Perhaps they have boycotted it because they think they have the Prime Minister cornered.

I certainly agree with the hon. Member for Ipswich in congratulating the Prime Minister on the opening remarks in his speech last week. I thought it went rapidly downhill, but he was right to remind us of the big picture, of the wider national interest, of the bigger strategic goals and of the peace dividend from the European Union, which has been complacently disregarded by many. My father was a pilot in the second world war and my grandfather was in the trenches of the first. I am a member of the

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first generation of my family since the 19th century not to have been called up to one of the bloody conflicts that have engulfed our continent for centuries, because the European politicians who survived the last war said, “Enough,” and recognised that if we created economic and political interdependency among the countries of Europe, we would stop killing each other. And we have, for the longest period in our history.

Peace, safety and freedom: those were the objectives for post-war Europe that Churchill described in Zurich in 1946 and they have been delivered by the European Union. How has the Conservative party been transformed from the party of Churchill to one in which outright hostility to the European Union has become almost an article of faith for so many of its members? It has clearly not been helped by the tabloid press. As the Leveson inquiry reported:

“At various times, readers of these and other newspapers may have read that ‘Europe’…is intending to ban…kilts, curries, mushy peas, paper rounds, Caerphilly cheese, charity shops, bulldogs, bent sausages and cucumbers, the British Army, lollipop ladies, British loaves…and many more.”

Oliver Colvile: Will the hon. Gentleman give way?

Paul Blomfield: I have been asked not to give way because of the time available—I would otherwise have been delighted to do so.

All those claims by the tabloid press were nonsense, but there are more sophisticated myths, too. One, which was most recently reported during this debate by the right hon. Member for Wokingham (Mr Redwood), is that the people of Britain were misled about the Union we were entering and were not told that we were signing up for anything more than a single market. Again, that is simply not true. The Conservative Government’s 1971 White Paper was clear that the aim was

“an ever closer union among European peoples”

and went on to say:

“If the political implications of joining Europe are at present clearest in the economic field, it is because the Community is primarily concerned with economic policy. But it is inevitable that the scope…should broaden as member countries’ interests become harmonised…what is proposed is a sharing and an enlargement of individual national sovereignties in the general interest”.

The prospectus for the 1975 referendum was clear and so was the result.

Of course, the rhetoric of repatriating powers will sound attractive to some, but, as a number of Members have pointed out, we must be clear about exactly what powers we mean. Top of the list for many Government Members are the powers on employment. They need to be honest with the people of this country. Why repatriate those powers if not to abolish the rights for working people that come with them? We deserve an answer.

I do not think that Government Members want to abolish social Europe. They want the other 26 member states to keep it, but they want the UK out so that our USP in Europe is offering the lowest labour costs, leading a race to the bottom and offering companies the chance to boost profits at the expense of hard-working families. Why would the British people vote for that and why would the rest of Europe allow it? The single market is about a level playing field, not about skewing the market to the advantage of one country at the expense of its people. How will the British people be

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persuaded by a Prime Minister who cannot even win an argument in his own party? As he struggles and fails to control his party, he is undermining business confidence, damaging our economy, limiting the chance for growth and weakening the creation of jobs.

6.3 pm

Damian Collins (Folkestone and Hythe) (Con): Throughout the debate, we have been asked to consider the choice between optimism and pessimism and between certainty and uncertainty. It is clear to me, however, that the people on the Opposition Benches who would call themselves optimists are so optimistic about the benefits of the European Union that they do not want an open debate with the British people in which they get to have their say. Those Opposition Members complain that the uncertainty of the referendum period is damaging, but will not give us any certainty about whether they support having a referendum now or at any point in the future.

The debate today, and the debate that the Prime Minister has rightly started, is about our bottom line. What do we want from the European Union if we are to maintain our membership? What case will we put to the British people in the referendum campaign based on what we have renegotiated? Without certainty, without a bottom line and without the referendum, there is a danger that the debate will carry on for ever. Britain and other member states will grumble about the EU and what they do and do not get out of it, but there will never be clarity about what we want to get back, what we think is the best deal for Britain and whether we should consider that our national interest is better served by considering a future outside the EU. If someone has a negotiating position, they have to consider walking away from the table if they cannot get what they want; otherwise they are never taken seriously. That is the story of the Labour Government: they gave away Britain’s opt-out on social policy and £7 billion of our rebate and got nothing in return. Their rhetoric about Britain being at the heart of Europe was exactly that: a rhetorical position, totally meaningless. We got nothing out of Tony Blair’s positioning himself at the centre of a grand European stage—nothing that could be shown to be of any real benefit to the British people.

Following the Prime Minister’s speech, the German newspaper Bild wrote that:

“Most EU countries have tacitly agreed to build Europe above the heads of the people. Motto: The European project is simply too important for democratic participation. And then along comes this Cameron!”

That is exactly what the Prime Minister has done: he has demonstrated that we can have an open debate about Britain’s future in the European Union and put it to the people. If we start that national conversation, ultimately we will have a clear view and an answer, and an end to the debate.

There has been considerable discussion of the European social model and what reforms we would want. We certainly see the case for nation states and national Parliaments making decisions in that area. I believe that the social model of Europe has to be reformed if Europe is to be competitive in an increasingly competitive world, and that view has been expressed by a number of my right hon. and hon. Friends. It was also expressed by Tony Blair in an interview in Der Spiegel this week, but although, “We want reform—reform of social policy,”

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are fine words, if you do not have a clear view of what you want and do not back it up with a referendum, you will not get what you want. The reason countries such as Ireland could negotiate after their people originally said no to the Lisbon treaty is that they had a clear, definitive position as a country. The European Commission had to deal with them because they had the power to bring down the entire treaty; that was the strength they had in that negotiation. We have to learn from that.

We have to take a simple and pragmatic view of what is in our national interest. Britain, like Germany, is seeing its exports grow not within the EU, but in the growing consumer economies around the world. Brazil, Russia, India, China and Indonesia—those are the growing developing markets and we cannot ignore that. Neither can Europe ignore the fact that one of the reasons for the debt crisis is that the European model has been too expensive and the wealth generated by the European Union has not been enough to sustain it. That is a lesson we have to learn.

Ben Gummer: Does my hon. Friend agree that EU reform will result in that market itself growing, which will enable us to expand our exports into the EU?

Damian Collins: My hon. Friend makes an important point. That is why a reformed Europe—more liberal, more open and more competitive—is something we all want and would all work towards achieving.

We should realise that even if, at the end of the process, the British people decide that our future lies outside the EU—Britain could decide to leave; that is in the gift of the British people and this Parliament—we cannot abolish the European Union. It is a fact of life and it will continue to work in its own way. It is inevitable that the eurozone countries will see closer co-ordinated integration as part of the solution to the crisis in the eurozone, but it is clear that we will never be part of that inner core. There has to be a view of what Europe means for countries that are not only not in the eurozone, but have no desire ever to be in the eurozone, and what their relationship is with the EU.

My constituency, other than that of my hon. Friend the Member for Dover (Charlie Elphicke), is about the closest to the continent of Europe. From Folkestone, we can see France clearly, and the channel tunnel at Folkestone is a direct link to the continent. Our business links and our trade through the ferry ports of Kent and through the tunnel will continue. Companies’ investments, such as that of EDF in the cross-channel electricity pipe and Dungeness nuclear power station in my constituency, will continue. They make those investments because it makes business sense for them; they are not doing us a favour because we are in the European Union. Those pragmatic business decisions will continue to be taken because Britain is an open, low-tax, competitive economy with a very large consumer market, which is attractive to investors.

Martin Horwood: Surely one of the most valuable things the EU can do to help business and trade is negotiate free trade agreements? If we were to withdraw from the European Union, would we be guaranteed the same terms with South Korea or north America? That would pose an enormous risk, would it not?

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Damian Collins: We are not in a position where we can say that Britain will be outside the European Union, or even in a position to know, if we did leave, what our relationship would be in those trade negotiations. The process of leaving the European Union, as the hon. Gentleman knows, is incredibly complex and it takes two years of negotiations to achieve that end. It is not like walking out of a house, giving the keys to the estate agent or the bank and saying, “Right, I’m off.” These are matters that will be negotiated over a long period.

However, Britain has one of the top 10 economies in the world, with a very large consumer market. It tends to be a net importer of goods and it embraces trade and cultures from around the world. That has always been one of our great strengths. Britain will always be a country that people are interested in talking to when it comes to negotiating trade agreements. The opportunity for us to do that either inside or outside the European Union will remain, but the goal is to try to secure the open, liberal, competitive Europe that we think is in the interests of Europe and of Britain, too.

The political correspondent for Die Welt, Alan Posener, commented after the Prime Minister’s speech that for the first time in years Britain is setting the European agenda. We are doing that because we are putting down a marker. We are making it clear where we stand, where we are looking for renegotiation, and what we want from our membership. We are clear that things have to change. As the Chancellor of the Exchequer said in his interview with Die Welt, if Europe will not change, then our relationship with Europe must.

Mr Deputy Speaker (Mr Nigel Evans): Order. I am keen to get everybody in, so I am reducing the time limit to four minutes.