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My Lords, I am sorry that the noble Lord, Lord Mandelson, is not with us any more, because he referred to rules in the EU. He will know as well as I do that the EU has completed, or half-completed, a banking union. One of the critical elements of the banking union was that there would be no more bailouts: the taxpayer would be the last person who is called on to bail out banks. From here on, it will be bail-ins: all the depositors would have to pay in before the taxpayer was leant on. Two banks in Italy have now been bailed out by the Italian taxpayer and the depositors have not been required to produce anything. So almost before the ink was dry on the agreement, the rule has been broken. We know also that when the euro was set up there was a very sensible measure to stabilise the euro called the stability and growth pact. The stability and growth pact was broken first by the Germans and then by the French. So I listened to what the noble Lord, Lord Mandelson, said, and I am sure there are rules, but I am also sure that in great EU tradition, if they get in the way they can be ignored.
There is a small minority of those who voted remain who do not really accept the verdict of the referendum. They think, like the noble Lord, Lord Campbell of Pittenweem, that somehow we can stay in the EU. They desperately hope that everything in these negotiations will go wrong and that at the end of the day we will remain in the EU, everything will be all right and life will go on for ever. Well, who wants to stay in an EU with double the level of unemployment that we have in this country and youth unemployment at 24%—with one in four unemployed? The economic model of the EU does not actually work.
I am quite confident that there is a deal to be done. If we were to turn to the WTO and leave the European Union, the first thing we would do is stop paying any money into the European budget. That would leave a 12.5% hole in the EU budget. As we know, the Commission loves spending other people’s money. It would be faced with a rather unenviable choice. It would have either to cut programmes that are happening in eastern Europe and so forth, which is totally against everything it stands for, or go round all the 27 nations of the EU and say, “You must up your VAT contributions to the EU budget”. Both of those are extremely unpalatable choices and that is why we have something to offer in these negotiations which the EU desperately wants.
The whole business of negotiating exit from the EU has not really been done before, if you exclude Greenland, so we are into an extraordinary bargaining procedure—rather equivalent to a Turkish bazaar or Arab souk, where, when it comes to the money, the EU starts by saying, “You will have to pay €100 billion”. I am sure that our Ministers have gone back to the EU and said, “There is a wonderful report from the House of Lords that says we don’t have to pay you anything”. I can tell noble Lords now that we are not going to pay nothing. We are not going to pay €100 billion either. We are going to pay something in between, and that will certainly satisfy the EU to quite a large degree, because it wants to do something to fill this hole in the budget. That is something we can offer it. In return, we want access to the single market. This should not be too difficult because, at the end of the day, they sell 50% more to us than we do to them. They have no interest in embarking on a trade war with us.
Regrettably, there is a minority of those who voted remain who are not reconciled to the vote in the referendum, when the people made quite clear that they wanted to leave. I am very glad that the noble Lord, Lord Campbell of Pittenweem, actually admitted that. However, the country has made this decision and we would be in great danger if we tried to reverse it. At the end of the day, this country has a very great future outside the EU.