Second Reading

1:55 pm
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Douglas Carswell (Clacton, Conservative)

I beg to move, That the Bill be now read a Second time.

I promote this Bill to repeal the European Communities Act 1972 not merely supported by many outside the House but as explicitly directed by more than 5,000 readers of the Guido Fawkes blog site. This is the first ever crowd-sourced private Member’s Bill. MPs are sometimes accused of not sharing the concerns of ordinary voters or the priorities of those outside the Westminster village, but this Bill was voted on by those outside Westminster.

Withdrawing from the EU can no longer be dismissed as unthinkable. It is no longer a marginal view confined to mavericks, but a legitimate point that is starting to go mainstream. It might have been many months since the House had a frank and open discussion about the merits of our EU membership, but perhaps that tells us more about the shortcomings of the Westminster system than about the cost benefits of being part of the EU club. According to a recent poll by Survation, a majority of voters—more than at any time in the past three decades—now want Britain to leave the EU. Some 51% are in favour of leaving and only 34% want to remain in. That is the highest level of discontent for a generation.

The idea that we should leave the EU might find few champions among the Sir Humphreys in King Charles street, but that just tells us how out of touch the Whitehall establishment has become. If we cannot get new people, perhaps we should try getting new Sir Humphreys. It is not just the people who want out; we hear that members of the Cabinet have started to come round to the view that Britain might, indeed, be better off out.

Britain joined the Common Market because, the people were told at the time, it would be good for the economy. What we lost in political sovereignty would be compensated for by material gain. Looking back, I can understand that view. We joined at a time when western Europe had been growing spectacularly. The Common Market that we joined in the early ’70s could look back at two and a half decades of the most spectacular growth. It seemed that we were joining a prosperous trade bloc. In 1973, western Europe accounted for 38% of total world output, but in 2010 that figure had shrunk to 24%, and in 2020 it will be 15%.

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Mark Reckless (Rochester and Strood, Conservative)

I congratulate my hon. Friend on once again making history in the House. Given what he has just said, how would he respond to the Financial Secretary to the Treasury, who, on the Order Paper today, is inviting us to agree that “tough decisions” are

“being taken…in countries across Europe to…stimulate economic growth”?

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Douglas Carswell (Clacton, Conservative)

I would be more than a little sceptical of such claims. I am no Keynesian, but the idea that measures being taken across Europe, particularly southern Europe, are producing prosperity and growth seems absurd.

Far from joining a growing and prosperous free trade area, it turns out that we joined a cramped and declining customs union. Far from joining a rising economic powerhouse, we have shackled ourselves to a corpse. Being part of the EU hinders us, rather than helping us to prosper. The common agricultural policy obliges us to subsidise our farmers’ competitors in continental Europe, raising food prices and penalising the poor. The common fisheries policy has caused an ecological catastrophe in the seas around us. The EU social and employment rules have made us uncompetitive. EU directives have struck at our industries, art dealers, slaughtermen, cheese makers, temping agencies and fund managers.

On the EU’s own statistics, the cost of regulation outweighs the benefits of being in the single market by 5:1. According to the European Commission’s own statistics, the cost of regulatory compliance amounts to €600 billion, while the benefits of being in the single market are €120 billion. The common external tariff has forced us behind protectionist walls. Far from giving us free trade, these tariffs of between 5% and 9% are higher now than they were a century ago. At a time when the non-western world is enjoying an extraordinary boom and an extraordinary surge of prosperity and growth, we are forced to watch. Rather than join in, we are cut off by the EU’s mercantilist mindset.

The absurdity is that we pay for the privilege of being members of this poverty-producing club. Britain has paid more into the EU budget than she has received back in every year bar one since we joined. It is not just that we pay; our membership fee for being part of the club has risen by 70% within the past three years. In 2009, our net contribution to the Brussels budget was £5.3 billion; in 2010, it rose to £9.2 billion, and our gross contribution is nearly £20 billion.

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Philip Hollobone (Kettering, Conservative)

I congratulate my hon. Friend on bringing forward this Bill, which I wholeheartedly support. Is he as shocked as I was to discover that during the last five years of the previous Government’s tenure our membership fee was some £19 billion, while in the five years of the present coalition Government, that membership fee will be £41 billion? How many nurses, policemen, doctors and teachers would that pay for?

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Douglas Carswell (Clacton, Conservative)

My hon. Friend is absolutely bang on the money. One would expect this Government to do something about it. Instead, we have heard many debates about the need for austerity and cuts, with Members of all parties expressing their concern about what reduced public spending might mean in their constituencies, yet all the coalition’s austerity savings taken together do not add up to anything like our annual EU membership fee. The 2010 increase in our net contribution is greater than the sum total of all the austerity savings made since the last general election. Exactly when we have to justify austerity in our constituencies, we have an Administration who are handing over ever larger sums of our money to remain part of this austerity club.

Too many people in Whitehall—too many of the grand Sir Humphreys—still think of the EU as though it were vital to our economic survival, but the fact is that it is becoming less important almost by the hour. In the first six months of this year, our exports to the EU

fell by 18%, while our exports to the rest of the world rose by 28%. On every measure, the EU now accounts for a minority of our trade. That is not to say, of course, that the single market is not important. It is very important and it remains a large market, but it is just one market alongside the North American Free Trade Agreement, Mercosur and all the rest. No one is suggesting that we have to give up our sovereignty in order to sell to them.

We joined the European Economic Community, as it then was, because we wanted to be part of a growing trade bloc. In the event, the growth has taken place elsewhere. The Prime Minister told us in Birmingham that European Council meetings are dominated by discussions about propping up Greece,

“while on the other side of the world, China is moving ahead so fast it’s creating a new economy the size of Greece every three months.”

While the eurozone stagnates, lurching from one round of bail-out-and-borrow blunders—usually supported by our Treasury—to the next, the International Monetary Fund expects the Commonwealth to grow by 7% every year for the next five years. This year, the Commonwealth’s gross domestic product overtook that of the EU for the first time. In just two years, exports to Brazil have increased by 25%; to China by 40%; to Russia by 80%. It is not me saying that; it is the Prime Minister. It is to this Government’s great credit that they recognise the need for us to realign ourselves economically. The Government have, I think, been successful in trying to refocus our efforts on trading with the wider world and on opening us up to the wider world. I would argue, however, that being part of the European Union is holding us back; it is stopping us from opening up the trade arrangements that we desperately need to be part of that network of global prosperity.

The Minister is, I know, an honourable man, a very clever and intelligent man and in many ways a great man. He can see beyond the Foreign Office brief on many things. He understands the arguments I am making, and I hope that in his response he will share with us his view on the extent to which we can realign ourselves economically if we remain part of the European Union. Can we? I do not believe we can. Could we have a Swiss-type relationship, through which we have access to Europe’s markets, but could at the same time negotiate entirely independent bilateral agreements with non-EU members on our own?

Of course, the Whitehall élite—the Sir Humphreys and Sir Jeremys—will say that we need to be part of the single market, but do we? Must we be part of the single market in order to trade with the EU? China seems to gain market access, and last time I checked it was not part of the single market. A firm in China, Japan, Australia or America that seeks to trade with the EU must conform to EU standards in order to sell its products there, but must it comply 100% with all energy regulations under the auspices of the single market? No, and the economies of those countries are in much better shape as a result.

About 80% of all the economic activity that takes place in this country this year will revolve entirely around internal trade, while about 20% will depend on external trade. Less than half of that 20%—between 8% and 9% of total output—will depend on trade with the EU. How can it possibly be right that all the economic

activity that takes place in this country must comply 100% with single market rules, when only 8% or 9% of economic activity is geared towards trade with the EU?

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Philip Hollobone (Kettering, Conservative)

I am enjoying enormously my hon. Friend’s very impressive speech. Is not our trading relationship with the EU even more absurd, given that, on a regular and worsening basis, we actually have a trade deficit with the EU? In other words, the EU is doing better out of our EU membership than we are.

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Douglas Carswell (Clacton, Conservative)

My hon. Friend is right. We have a massive trade deficit with Euroland, and, to compensate partly for that, we have to run a trade surplus with the rest of the world. When we first joined the Europe club, our trade with Europe was much more balanced. I cannot imagine that if we withdrew from the European Union, Siemens or some of the other great wealth creators in continental Europe would be any less likely to want to trade with us. Why should a business that is producing goods and services to sell outside the EU—to, say, India or America—be subject to red tape created under the auspices of the EU single market?

I leave the House with this thought. Switzerland is outside the European Union, yet it manages to do four and half times more trade per head with the EU from outside than we do from within. Let me ask the Minister this question. If Switzerland, with a population of 7 million or 8 million, can obtain more favourable terms with the EU than we have, could not we, with a population of more than 60 million, obtain even better terms than Switzerland?

Being in the European Union has done dreadful harm to our economy. It has put us in the global slow lane, but it has hampered our democracy as well. Public policy decisions are no longer made by those of us who are vulnerable to the electorate. They are no longer made by those who have to stand for marginal seats with the risk of being thrown out of office. They are now made by remote, unaccountable officials in Whitehall. Of course the Oxbridge-educated Sir Humphreys in Whitehall like being part of the EU, because it allows them to carry on making public policy. They do not have to answer to hoi polloi outside. However, it has corroded our democracy.

From agricultural policy to banking policy, from environmental rules to rules on bin collection, decisions that ought to be made by those who are vulnerable to the democratic process are made by technocrats. Technocracy is no more effective—in fact, it is a good deal less effective—than democracy when it comes to making good public policy. What is the point of voting if those whom the voters elect have no power? I cannot help noticing that voter turnout has fallen in every decade of our membership of the Europe club.

I am not introducing this Bill in the expectation that it will become law—yet. My aim is to ensure that we begin to give serious thought to the mechanics of withdrawal. Leaving the European Union will be simple, but it will not be easy. It will be simple because a simple Act of Parliament can get us out, but what then? What about all the acres of public policy that have been created under the auspices of the European Communities Act? How might we retain, for instance, perfectly sensible

environmental protection rules, but change some of the secondary laws that need to be repealed? What process will we use to sort out the difference between public policy that we wish to retain and public policy that we need to get rid of? Do we need different mechanisms to deal with directives and to repeal regulations? How—and I say this as a staunch parliamentarian who is suspicious of all who sit on any Front Bench—do we balance the need for the legislature to oversee the process against the need for an Executive then to take action?

My proposal in this Bill is just one model. I propose that all secondary measures and laws would remain in place, but that Ministers would then, subject to the approval of this House, have the power to repeal or amend. Is this idea of statutory instruments and ministerial fiat enough? Might it not also be an idea to give Select Committees specific powers to try to overturn regulations introduced under the auspices of the 1972 Act?

I hope that by putting this Bill before the House I initiate some serious thought about the mechanics of withdrawal. It can be done, but those of us who want out need to give it serious thought. The question of Britain’s EU membership is no longer settled—it is now an open question. Many of us in this House, and indeed in the country, now openly question our EU membership. A referendum is coming, and it will boil down to in or out. The case for out gets stronger, but we need to give people a sense of what self-government is going to look like and feel like. I hope that this Bill helps us to begin to think carefully about what being a self-governing democracy once again would mean. The Whips may seek to talk out this Bill, but these questions will not go away.

Several hon. Members:

rose —

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Lindsay Hoyle (Chairman of Ways and Means; Chorley, Labour)

Order. We have three speakers, so we will start with Mr Edward Leigh and then work our way through.

2:10 pm
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Edward Leigh (Gainsborough, Conservative)

Thank you, Mr Deputy Speaker.

It is ironic that we are in the closing minutes of a Friday sitting and we have so little time to discuss possibly the most momentous decision that we are going to have to take in the coming years. I congratulate my hon. Friend Mr Carswell on raising this issue. I hope he will forgive me for not discussing at length the merits or otherwise of our membership of the European Union—there simply is not time to do so. This is too complex and important an issue to be left to just a 20-minute debate.

I wish to make one point: whatever one’s views on the EU—whether one is strongly in favour, whether one is agnostic or whether, like my hon. Friend, one has severe doubts about it—surely everyone must now accept that on this issue there is a democratic deficit. Why is it that every 16-year-old in Scotland is going to be allowed to vote on whether or not Scotland should remain in the Union, but no Briton under the age of 55—that includes most people in this Chamber and most people watching this debate—has ever been given the chance to vote on whether we should remain in the European Union? That is a severe democratic deficit, and either this

Government, in this Parliament, or a future Government will have to address it. The issue is becoming increasingly important and increasingly urgent.

The Government argue that the only way to resolve the crisis in the euro is for its members—the states that subscribe to it—to create full fiscal and monetary union. Let us be under no illusion: if that takes place—and our own Government are encouraging the process—it would have a dramatic effect on our relationship with the European Union, and on our whole trading and political position. I doubt that the process will be easy, but apparently the Government want it to take place. Whether one is fiercely in favour of our membership of the European Union or sceptical of it, nobody doubts that if full fiscal and monetary union were to take place, enormous pressures would be put on our Government, particularly in terms of financial regulation, and the oversight of the City of London and of our industries. I do not want to get involved in these arguments, but nobody denies that that would have a dramatic effect. I therefore believe that a referendum must take place. The Government must announce their decision to move towards a referendum.

What is going to be the nature of the referendum question? There is no doubt that the Government would like to have some sort of negotiation. I do not believe that the members of the European Union, or the fiscal and monetary union, will be able or willing, given that 27 nations are involved in this whole process, to allow a great return of powers. Ultimately the issue will boil down to a simple question: do you want to be part of the European Union—do you want to be a fully subscribing, enthusiastic member of the European Union who ultimately wants to join fiscal and monetary union; there may be many arguments in favour of that—or do you want to be part of a customs union?

A number of us had a meeting this week with an expert in this field, and I personally have come to the conclusion that loose talk of a free trade area simply will not do and that there is a future for this country as part of a customs union, which would be popular with the people and reassure opinion both in the City of London and in our industries. It is perfectly possible for us to regain our freedom—to regain the freedom to make our own laws—but to remain within a customs union. That is precisely what happens in other countries. Switzerland is successful example.

This is a clear and simple issue—should we be in the European Union, or should we be part of a customs union?—and it could be put to the British people, and there would be a fair, honest and open debate, but I do not think the Government can simply sit on this issue for ever. There will be a fair amount of cynicism if the Government say sometime in the next 18 months that it is their intention, perhaps after the next election, to hold a referendum without any clear indication of what the question will be and what will be negotiated. There is a huge amount of cynicism among the British people. They have been promised referendums in the past—they have had promises from the former Government; they have had them from this Government—so this is the most important issue of our times.

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John Spellar (Shadow Minister (Foreign and Commonwealth Affairs); Warley, Labour)

The hon. Gentleman refers to promises of referendums and says that Governments have not delivered on them. Does he

acknowledge that one Government promised a referendum and gave a referendum? They were the Labour Government under Harold Wilson.

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Edward Leigh (Gainsborough, Conservative)

That was a very long time ago, and the right hon. Gentleman and I, who are perhaps in a similar age group, were lucky enough to be given that choice, but our colleagues sitting in the Chamber are all younger than we are and they have never had a chance. Should they not be given one? Yes, I pay tribute to Harold Wilson and the then Labour Government; they actually gave the British people a chance. All I ask is that, once again, the British people are allowed to decide, yes or no.

2:16 pm
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Steven Baker (Wycombe, Conservative)

I congratulate my hon. Friend Mr Carswell on provoking this debate. I am slightly more optimistic about those who sit on the Front Bench than he is, and I will return for the second if not the third time to a speech made by my right hon. Friend the Prime Minister in Prague in 2007, when he said of the European Union:

“It is the last gasp of an outdated ideology, a philosophy that has no place in our new world of freedom, a world which demands that we fight this bureaucratic over-reach and lead Europe into the hope and potential of a new, post-bureaucratic age.”

Of course I am reminded of my hon. Friend’s book, “The End of Politics and the Birth of iDemocracy”, which I would recommend to everyone. Both he and my right hon. Friend the Prime Minister have, with typical wisdom, hit upon the trend of our times. This great experiment with social democracy, which the European Union typifies, is coming to an end. That can be seen right across the continent. Indeed, it can be seen in the United States.

The crux of the matter is that if nations will be combined in a customs union yet persist in interventionist policies, we must end up with economic centralisation. That policy has not worked. For 100 years, increasing state power has led us to this point. The idea that laissez-faire liberalism has failed is a total fallacy. The state right across Europe has produced the disaster that now faces so many of our friends around the continent. We must not return to a Europe of economic nationalism, so it is time to find a future that is hopeful, prosperous and free. That means a post-bureaucratic age.

The Prime Minister has called for a post-bureaucratic age, and my hon. Friend the Member for Clacton has in his own words called for the same thing. It is time that we moved on, got beyond the European Union and found a more hopeful way forward for the entire continent.

2:18 pm
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Philip Hollobone (Kettering, Conservative)

I congratulate my hon. Friend Mr Carswell on having the courage to introduce a commendably short Bill. It comprises just one piece of paper, although admittedly it does stretch to two sides, and its purpose is very simple, straightforward and understandable: to repeal the European Communities Act 1972 and all related legislation. “Hear, hear” to that—not just from me but, I believe, from a majority of the constituents I have the privilege to represent from the borough of

Kettering. It was in this very Chamber, almost exactly to the day, 40 years ago that the European Communities Act 1972 was passed. We are now in a very different world, a different UK and a different Europe, and the answers that seemed to be the solution to the difficulties of the 1970s are dragging this country back. If we are ever again to be the proud, confident and prosperous sovereign nation that we once were, the EU and our membership of it must go.

My hon. Friend Mr Leigh was right to say that only people who are now at least 55 years of age had the privilege of taking part in the referendum that Harold Wilson introduced in 1975. I will not ask my hon. Friend which way he voted—I hope it was no—but, sadly, two thirds of the British people voted yes.

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Edward Leigh (Gainsborough, Conservative)

My hon. Friend asks me the question. Like so many other people, including our then leader, Margaret Thatcher, I voted yes, because I was promised a common market.

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Philip Hollobone (Kettering, Conservative)

My hon. Friend is exactly right. Two thirds of the British nation were convinced by the argument that we were joining a common market, and that the way out of our economic travails in the early 1970s was free trade with our European partners. That was a persuasive argument but 40 years on, in 2012, we do not have what we voted for.

Colleagues in the House who are less than 55 years old, and all our constituents who are under 55, have never had the chance to take part in a referendum on Europe. The Common Market morphed into the European Economic Community, the European Community, and the European Union. The United States of Europe is probably just around the corner. I am completely confident that the British people do not want that.

I should tell the Minister for Europe that my constituents do not want the situation we are in. They do not believe in ever-closer union, and nor do I. They want to have their say on whether Britain should carry on with its membership of this 27-member club, not least because our membership fee is simply too high. Ten billion pounds a year would buy a lot of nurses, police officers, doctors and teachers—the economically productive people we could employ to improve our public services. We could reduce the burden of taxation. We could decide to do whatever we want with that £10 billion, but giving it to Europe and Brussels is not the correct way to spend taxpayers’ money from this country.

As my hon. Friend the Member for Clacton said, our fishing industry has basically been destroyed. Tens of thousands of fishermen used to be gainfully employed in all the proud coastal ports in the early 1970s. Where are they now? The business has gone to France, Spain and other countries that have been stealing our fish. Our once prosperous fishing grounds have been destroyed—the European Union’s handling of fishing grounds is a conservationist’s nightmare.

The biggest issue is immigration. Effectively, we no longer have the border controls we once had. Hundreds of thousands, and perhaps millions, of EU citizens live freely in our country. They are just living by the rules and doing their best—who can blame them?—but most

of my constituents will say that we simply cannot cope as a nation with the uncontrolled wave of immigration from the EU to our shores. We cannot cope with the numbers of people who have come to this country. With the economic collapse in countries such as Greece, Italy and Spain, hundreds of thousands more EU citizens could well be heading our way. Our economy is struggling out of a double-dip recession. How on earth will we provide jobs for hundreds of thousands of extra immigrants to our shores? I am not saying that we should not have immigrants who offer skills to our economy. Of course we should, but we should have bilateral agreements with those nations, not a border-free Europe in which we have no control over the number of people coming to our shores.

We also have the burden of regulation on struggling small businesses in this country thanks to the legislation factory in Brussels and the European Parliament in its two locations—a scandal that continues 40 years on. Why it needs a Parliament in the first place, let alone one that sits in two places, is beyond the comprehension of my constituents. Those institutions are turning out a stream of red tape and bureaucracy that stifles the economic growth of entrepreneurs in this country. Not only do we have to pay a horrendous membership fee of £10 billion a year, but we strangle economic growth from small enterprises with all the European legislation.

I congratulate my hon. Friend the Member for Clacton on having the courage to introduce the Bill 40 years on from our accession to the European club. Let me say on behalf of my constituents that the very least the British people deserve is another say on Europe. If there were such a referendum, I for one would vote to leave. I am confident that the majority of my constituents would do likewise, because Britain’s best future lies with the rest of the world. That is how Britain came to be one of the most dominant powers of the world—by trading with other countries and spreading our message overseas. Limiting ourselves to a future tied to an increasingly sclerotic European economy condemns future generations in this country to a life without the prosperity we would otherwise enjoy.

2:26 pm
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John Spellar (Shadow Minister (Foreign and Commonwealth Affairs); Warley, Labour)

Clearly, the friends of Mr Carswell are trying to talk out his Bill and leave very little time for the Minister. I shall take less time, as I shall make merely two brief points.

First, as I said earlier, only Labour has given the people of this country a say. Not John Major, not Margaret Thatcher—only a Labour Government consulted the people. Secondly, this Bill does not consult the people. It intends to take a decision over their heads and is therefore quite inconsistent with the comments made by Mr Hollobone. However, as we want to hear from the Minister, rather than intrude any longer on this private quarrel on the Government Benches I shall now allow him to speak.

2:27 pm
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David Lidington (The Minister for Europe; Aylesbury, Conservative)

My hon. Friend Mr Carswell has always been a champion of greater direct democracy in this House. In choosing to introduce a Bill that was

selected in the way he described, he has demonstrated to the House that he is fully prepared to practise what he preaches.

As the debate has shown, the Bill, which has considerable technical deficiencies, is in effect being used as a proxy for a debate about the principle of whether the United Kingdom should be in the European Union. The challenge to my hon. Friend is that our continued membership for 40 years derives not from some mythical conspiracy of civil servants in King Charles street—by the way, they come from a much more diverse range of social and educational backgrounds these days than the caricature he presented to the House—but from a hard-headed, calculated and pragmatic decision by successive Governments, and successive leaders of the Conservative party, that despite the acknowledged flaws and drawbacks of the European Union as it has existed and as it exists today, our membership of it is to the national advantage. It is to the advantage of the British people because of what it gives us through trade, market access, the attraction of foreign direct investment, and increased diplomatic leverage over foreign and security policies.

My hon. Friend the Member for Clacton posed what I think is a false choice between increasing our trade with the emerging markets of Asia and Latin America and maintaining the lion’s share of our trade that remains with the European Union. Although I think that future growth will indeed, as he says, come largely from those emerging markets, the bulk of our trade and inward investment will continue to come from Europe.

The debate stood adjourned (Standing Order No. 11(2)).

Ordered, That the debate be resumed on Friday 1 March.