THE COST OF EUROPE
18th June 2003
Michael Fabricant: It is interesting, and quite revealing, that despite
the fact that people have spent nine months to a year discussing the
Convention on the Future of Europe and have come to conclusions that most
hon. Members find abhorrent-apart from the hon. Member for Barnsley, Central
(Mr. Illsley), who took the view that there was nothing to worry about at
all-the Government tell us that there is no problem because it is only a
draft Convention and nothing will come of it.
We all know better than that, however. As the hon. Member for Leicester,
South (Mr. Marshall) said, both in an intervention and in his excellent
speech, there are always compromises when Governments get together. They
agree on some things, they disagree on others, and they make compromises. I
fear that some of the issues raised in the excellent speech of my right hon.
Friend the Member for Wells (Mr. Heathcoat-Amory) will have to be accepted
by the House because of the very compromises that have been mentioned.
I am not planning to say a great deal about the Convention on the Future of
Europe, which has already been covered by many hon. Members. Before I reach
the issue that I want to concentrate on, however, I want to say that we have
to accept that, in some respects, the European Union has been an agent for
good. I believe that the democratic processes that have taken place in
Portugal, Spain and Greece came about sooner because of those countries'
desire to join the European Union and to enjoy the benefits that membership
has given them. I also believe that there has been greater co-operation
between the member states of the European Union; that, too, should be
applauded.
The Foreign Secretary talked about the absence of war, but I think that he
was going a bit too far. I do not believe that an absence of war stems from
membership of the European Union, although membership will certainly not
have done any harm in that regard. I believe that the absence of war came
about as a result of our membership of NATO and of the common threat of the
Soviet Union. Most hon. Members feel very strongly that the European Union
should do nothing to undermine NATO, yet there is a very real risk of that
happening. That must be avoided at all costs, particularly at this time.
I want to move on to a subject that dare not speak its name. The moment
anyone raises it in the House, they are accused-especially by the
Government, at the moment-of talking about withdrawal. I hope that the
Minister will not be tempted to accuse me of that. It is a subject that was
raised by my hon. Friend the Member for Rochford and Southend, East (Sir
Teddy Taylor): the cost of the European Union. The hon. Member for Glasgow,
Pollok (Mr. Davidson) said in his excellent speech that he wanted to remain
in the European Union and that he felt strongly that there were benefits to
be accrued from membership. The problem is that we do not know how much that
amounts to.
At Foreign Office Question Time about a month ago, I asked the Minister for
Europe a question, having told him before the sitting what I was going to
ask him. He very helpfully answered that no real analysis of the costs or
benefits of membership of the European Union had been made since 1997. In
fact, the analysis carried out in 1997 was only into the effects on the
European Union of its enlargement when the 10 new member states join.
I raised the matter with the Chancellor only last Thursday, and having done
more research it seems that neither John Major's Government nor the present
Administration did any such analysis. When the Government were elected in
1997, very early on they adopted the shibboleth that the European Union
creates 300,000 jobs in this country. I think that the Foreign Secretary
cited that figure again today.
Mr. Straw: I never mentioned it.
Michael Fabricant: The figure was certainly cited by the Chancellor, and
has been used by Foreign Office Ministers in the past. It is fair enough,
but we do not actually know, because no such analysis has been undertaken
since at least 1992. I find that very strange indeed. I do not know of any
company or individual who would belong to an organisation and not
occasionally check what the costs or the benefits are. After all, if I was a
member of a club and knew what the costs and benefits of membership were, it
would give me an opportunity to negotiate and get a better deal.
My hon. Friend the Member for Rochford and Southend, East (Sir Teddy Taylor)
gave us some statistics on the balance of trade, and I have some further
statistics, which I obtained from the Library. From about 1998 onwards, the
balance of trade deficit in goods and services has fallen in respect of our
trade both with the European Union and with the world. It is only with the
United States that we have a balance of trade surplus. The figures have
risen remorselessly year after year.
Our balance of trade in goods with the world is minus £35 billion, with the
EU it is minus almost £10 billion, but we have a surplus with the United
States. For goods and services-in other words, the entire balance of trade
position-in 2002, the last year for which figures are available, we had a
deficit with the world of £18.8 billion and with the European Union of
almost £14 billion, but we had a balance of trade surplus with the United
States of £13.5 billion. Perhaps those figures give the lie to the notion
that we necessarily benefit from EU membership-it might be far worse for us
if we were not in the EU, but the point is that we do not know.
According to the analysis undertaken by the US Treasury, the World Trade
Organisation gives us access to European markets regardless of whether we
are members of the European Union. I have an interesting document produced
by the US Treasury about two years ago. It goes into considerable detail
about the direct and indirect costs and benefits accruing from our
membership of the European Union. Its strange conclusion-it is strange
because it runs contrary to everything that we are told-is that the net
benefit to the United Kingdom is minus US $40 billion a year. Putting it
crudely, that is equivalent to about £500 for every man, woman and child in
this country every year, or to almost doubling our state pension overnight.
We know that that cannot be true, because the Government tells us how much
we benefit from the European Union. After all, people tell us that we
benefit by 300,000 jobs. My simple message and plea to the Minister today is
this: I am sure that those figures are wrong; I am sure that we benefit from
the European Union-but let us not guess at it. Will the Government conduct
their own cost-benefit analysis, publish the methodology and the results,
and set out all the direct and indirect benefits and costs that arise from
the EU? Only then can we really know the cost or the benefit of our
membership.
