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That is a terrific question to which I shall return emphatically in a few minutes. The basis of my hon. Friend’s argument is completely wrong, as I shall explain in a moment.
The reckless spending alternative—the false alchemy of the Labour manifesto—would, in contrast with the Government’s economic success, simply bankrupt us and wipe out our success, as the Institute for Fiscal Studies made clear the other day. The Chancellor was right to say that stronger growth is the means by which reasonable taxation can be raised to deliver better public services and better living standards. We need sound money to go with that growth.
The Chancellor mentioned the European Investment Bank, in which we have a massive 16% shareholding, worth more than €10.2 billion. He and others should bear in mind very carefully indeed the fact that the EIB was set up under articles 307 and 308 of the European Union treaty, along with article 28 of protocol 5 on the statute of the EIB. That demonstrates that, as far as I can judge, the EIB is within the jurisdiction of the European Court. I am convinced that that is the case. We should find an answer to the question without surrendering our commitment to insisting on our own Westminster jurisdiction and not that of the European Court. We are going to have to think through this matter very carefully.
The Chancellor discussed the importance of free trade and how the Prime Minister’s Lancaster House speech made clear we would seek a comprehensive free trade agreement. He also confirmed—I repeat: confirmed —that we were leaving the customs union, for which there is a good and fundamental reason. I shall now address the point raised by my hon. Friend George Freeman. When we leave the EU, our independent trade policy will be made by our Government, elected at Westminster, not by the unelected European Commission and by majority vote, which, as with all decisions taken under the European Communities Act 1972—as the European Scrutiny Committee made clear in its report in May last year—is made by consensus behind closed doors, with nobody knowing how the decision is arrived at. There is no public record, as we have in Westminster. It is all far removed from the democratic, transparent accountability of our procedures, our Hansard and our parliamentary system, in which people know who is deciding what. Furthermore, most EU business is done through the aegis of covert decision making in unsmoke-filled rooms. The EU is intrinsically undemocratic, as the recent Malta declaration of the 27 clearly indicated. I note that the Chancellor stated that as regards our trading policy he believes that we must negotiate
“mutually beneficial transitional arrangements to avoid unnecessary disruption and dangerous cliff edges.”
This mirrors, I think, what has been said by the CBI, the Society of Motor Manufacturers and Traders, the manufacturers’ group EEF and a number of other trade bodies, some apparently and some actually seeking to keep us in the single market and the customs union for up to five years, as my right hon. and learned Friend the Member for Rushcliffe indicated and with which I disagree.
The Chancellor also emphasised that we need an implementation period and frictionless customs arrangements, albeit, he said, outside the customs union. That poses a serious problem. Against this background, we need to understand where we are with the customs union and the single market and why it is important we leave both on leaving the EU, on which the Labour party is completely confused.
I want to draw attention to our trading within the single market, and ask our friends who are still at heart remainers to please take note of what I am saying. The Office for National Statistics and the House of Commons Library tell us that last year we ran a trade deficit with the 27 member states of £71.8 billion, up £9 billion in that year alone. In the same year, Germany ran a trade surplus with EU countries of £98.9 billion, up £16 billion in that year. Yet we enjoy a trade surplus with the rest of the world of £34.4 billion, which is accelerating rapidly. Yes, 44% of our trade is with the EU, and our trade with it will continue if we leave the single market and the customs union, but our global trade is where our successful economic future lies as soon as we leave the European Union and we have to get real about that.
Furthermore, although many describe leaving the customs union as a cliff edge, if done wisely it will be a launch pad for new and greater opportunities for growth and prosperity, providing trade deals with other countries, improving our regulatory environment, achieving a free trade agreement with the EU with zero-for-zero tariff deals, dealing with rules of origin, mutual recognition of goods, including agricultural products, and allowing expedited customs arrangements based on new technologies.