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[Andrew Percy in the Chair] — EU Membership (UK Renegotiation)

– in Westminster Hall at 9:30 am on 5th January 2016.

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Photo of Philip Hollobone Philip Hollobone Conservative, Kettering 9:30 am, 5th January 2016

I beg to move,

That this House
has considered renegotiation of UK membership of the EU.

May I say at the outset, Mr Percy, how delighted I am to see you in the Chair and what a pleasure it is to serve under your chairmanship? I can think of no one more suited to the role. What an excellent way to start the parliamentary year.

I thank Mr Speaker for granting me permission to have this debate and I thank the Prime Minister for his commitment to delivering an in/out referendum as part of the Conservative party manifesto. Let us not forget that if the Conservatives had not won last year’s general election, the Labour party, the Scottish National party and the Liberal Democrats would have denied us the referendum that the British people want to hold. There is a lot of speaking talent in the Chamber this morning, so I shall keep my remarks shorter than I would otherwise, because most hon. Members here know far more about this subject and are far more eloquent than I.

To keep things simple, the referendum question that we will face, either this year or next, is whether to remain in or leave the European Union. Repeated polls show basically the same pattern. About a third of people want to remain and about a third of us want to leave, whatever happens. In between, about a quarter to a third are uncomfortable with Britain’s present relationship with the European Union or are worried about the future, but they are also concerned that if we leave the EU, there might be bad consequences for their jobs or living standards. The lazy assumption of the establishment, the BBC and the CBI is that the UK will vote to remain.

I am privileged to represent the constituency of Kettering, which has the privilege of being the most average town in the whole country. I like to describe Kettering as middle England at its best. The people in Kettering will want clear explanations from both sides as to which way they will vote. It is true, I am sure we all agree, that people are wary of change, but a key point to get across is that whether we stay in the European Union or leave it, change will happen. My contention is that if we stay in, those changes will be bad for the United Kingdom, but if we leave, those changes can be made good. My central assumption this morning is that remaining in the European Union is the riskier option. Leaving and taking back control for ourselves is by far the safer choice, which is what we need to explain to the good people of Kettering and the great British public over the year—or years—ahead.

The first of the five main points I want to make is, I am afraid, that the Prime Minister’s renegotiation strategy has been unfortunately weak. It has been undermined from the start by the fact that he is in favour of staying in the European Union, whatever the outcome of those renegotiations. The reforms that we are likely to get, if any, will be too little and too late. For a start, it looks pretty certain that they will not involve any kind of change to the European treaties at all, so any proposed reforms will have the legal effect of simply being an unsigned contract. The Prime Minister promised us that we would have full-on treaty change, but that has effectively now been abandoned.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

My hon. Friend is more attuned to European matters than virtually anyone else in this House, so he will be well aware that any treaty change will require a series of domestic referendums. It will clearly not be possible to get that worked out by the end of December 2017, when we are committed to having a referendum. It has always been clear from the timetable that we have in place that having fully fledged treaty change in advance of our referendum was an impossibility. Does he accept that?

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

If my right hon. Friend is correct, it strengthens the case for voting to leave. Why would we want to stay in the European Union knowing that treaty change is yet to happen, trusting in the judgment of European politicians to deliver what they say they will deliver? The safer choice is to vote to leave, and then we would have the upper hand in negotiating our successful exit from the European Union.

If there are changes to the treaty, it is likely to be another five to 10 years before they happen, and if they proceed along the lines of the infamous Five Presidents report, they bode ill for this nation. It would appear that we are not going to get an end to the supremacy of EU law over UK law. We will not get the United Kingdom out of the charter of fundamental rights, which gives EU judges huge powers over us. We will not get a restoration of the UK’s right to make free trade deals under the World Trade Organisation. We are not going to get any reforms to the common agricultural policy or the common fisheries policy—I hope the SNP spokesmen are aware of that. We might get some changes to the benefit entitlement rules, but most EU migration to this country is driven not by a search for benefits, but by the fact that the UK has the most successful economy in Europe and people are coming here to seek work.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

My hon. Friend is absolutely right: one reason that our migration targets have failed so dismally has been the relative success of our economy. However, does he not also accept that it would be wrong simply to blame our membership of the EU for the fact that migration is at the highest levels ever? We have a huge amount of non-EU migration that comes in and, in many ways, we are all party to that; we all have constituents, particularly from the former Commonwealth countries, whom we represent when they want relatives to come to this country. It is that level which is unacceptably high and which has helped to ensure that our pledge to reduce the amount to tens of thousands has been fatally missed right the way through the last Parliament, and will be, I think, for many years to come.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

Yes, I think the two main factors behind the massive wave of immigration are, first, our membership of the European Union and the principle of free movement within it, and secondly, the Human

Rights Act 1998, both of which mean that we are effectively unable to control our borders. If we want to control our borders, however, leaving the EU is an absolute prerequisite. We now have the farcical situation in which an unskilled Romanian immigrant can come to this country without us doing anything about it at all, and they get a job perhaps as a cleaner, but a skilled migrant from India who has a degree in astrophysics will find it very difficult to come to this country. We are only going to get a sensible immigration policy back if we leave the EU and get rid of the Human Rights Act.

Photo of Tim Loughton Tim Loughton Conservative, East Worthing and Shoreham

My hon. Friend is making a very good point, but there is another point to add. Take the example of Poland—there are something like 15 million Poles living outside Poland. It has one of the best education systems in Europe and yet it is exporting people to work in jobs well below their skill level in the UK and other countries like it. Is not the point that getting control of immigration is good for countries such as Poland, so that they can make sure that more of their people want to stay at home and contribute to their economies? This is about what is good not just for Britain, but for eastern Europe and other countries from which many people are coming to the UK.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

As always, my hon. Friend makes an extremely good point. I think we want to allow into this country Polish people who have the skills that our economy needs, and we do not need in this country Polish people who do not have the skills that we need. At the moment, because of our EU membership, we are unable to control that and that will have implications, as he rightly said, for the Polish economy as well as for ours.

Photo of Owen Thompson Owen Thompson SNP Whip

I am hearing a lot about immigration, but we are not talking in any sense about emigration and the almost equal number of people who have left the country to live and work across Europe, as opposed to those who have come in. I would argue that the situation is similar regarding the skill base of those going out, and that UK citizens are benefiting from the advantages of being part of Europe and being able to travel and work in such a way.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

If we left the European Union, having negotiated our exit, we could have arrangements under which we would allow into this country people from the EU whose skills we need and the EU would allow into the EU British people whose skills it needs. At the moment, without those controls, we have massive net immigration into this country. It may not be an issue in Scotland, but it is a big issue in middle England.

Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham

My hon. Friend is making an extremely good speech. The media are focusing on benefits to EU workers and they are not sharing with our electorate some of the more important constitutional changes that the Prime Minister is trying to get agreement on. How does he assess the importance of the benefits issue for migrants among his constituents in comparison with constitutional changes they would like?

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

My constituents are concerned about any migrant coming to this country and getting benefits to which they have not contributed, and that includes EU and non-EU citizens. The rules should be tightened and changed. For example, if a Polish person comes to live in this country and receives child benefit for his children back in Poland, that is clearly wrong and must change. The vast majority of EU migrants do not come to Britain for benefits. Some do, but the vast majority come here for work. It is important to change the rules, but in the scheme of things changes to the benefits system are not a massive issue.

Constitutional change is a big issue and would alter fundamentally our relationship with the European Union, but I am afraid that the Prime Minister will not deliver any fundamental constitutional reform. For both those reasons, it is likely that his constituents and mine will increasingly come to the conclusion that our future is better outside the European Union.

It has been suggested that the Prime Minister may be successful in getting the EU to drop a reference to “ever closer union” in the treaties. That would be great, but the principle of integration is embedded within all EU institutions and is a core principle of the European Court in all its judgments. Just tweaking the language will not change the institution’s philosophy or the Court’s practice. The European Commission has made it clear with the release of the infamous Five Presidents report and its proposals for a new EU army that if we stay in the European Union the prospects are for even more integration.

I am a committed outer, but many people in this country have yet to make up their mind. Among them is the British Chambers of Commerce, which wrote to the Prime Minister on 23 June 2015 setting out a very reasonable set of parameters for the negotiations. It stated:

“First…Britain must have absolute guarantees to protect our economic and other interests within the EU. Second, it is necessary to sort out the ‘common market’ so that it works for British business. The UK is by and large a service sector economy and yet there is no meaningful internal market in services within the EU…Third, we need a cast iron opt-out to make sure we do not sleepwalk into an ‘ever closer union’. Fourth, we need to protect our businesses from the regulatory burdens imposed by the EU…we need a clear and balanced approach to immigration taking into account the need for stability and social cohesion and driven by the skills requirements of our economy, meaning businesses can access the talent they need.”

I contend that none of those five parameters will be met by the Prime Minister in his negotiations.

The second big point I want to make is that the UK is a big hitter in its own right. I am confident about the UK’s ability and future in the world. We are the fifth largest economy in the world. We are a member of the G7 and the G20, a permanent member of the UN Security Council and a member of NATO. If we left the EU, we would get back our seat at the World Trade Organisation. We are a member of the OECD, the International Monetary Fund, the World Bank, the Organisation for Security and Co-operation in Europe, the Council of Europe, Interpol and the Commonwealth. The idea that if we left the EU we would wither and die and have no international significance is absolute nonsense.

If there were a successful leave vote, the UK could negotiate a UK-EU deal based on free trade and friendly co-operation. That need not be acrimonious at all. The UK is the EU’s biggest trading partner.

Photo of Philip Davies Philip Davies Conservative, Shipley

I am sure my hon. Friend is aware that the Library has done some research that shows that if the UK left the EU, the UK would be the EU’s single biggest export market, bigger than any other country in the world. Is it not clear that if we left, and given that we have a £62 billion trade deficit with the EU, we would still be able to trade freely with other countries in the EU?

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

My hon. Friend demonstrates again that he is a very well read Member of this House and, as usual, ahead of the curve. He is right, because negotiating a free trade agreement with the EU should be fairly straightforward, given our status as the EU’s largest trading partner and the fact that we already meet all the EU’s requirements. One fifth of all the cars produced in Germany are exported to the United Kingdom. Is anyone seriously suggesting that if we left the European Union Germany would want to cease trading with us? With a successful leave vote we could negotiate a successful UK-EU deal.

Many countries around the world already have free trade deals with the EU but do not have to accept the supremacy of EU law like we do and do not have to pay the EU a massive £10 billion and rising each year as a membership fee. If Chile, Peru and Colombia can negotiate successful free trade arrangements with the EU, surely the UK, as the world’s fifth largest economy, would also be able to do so. Our membership of the European Union means that we are constitutionally unable to negotiate free trade deals of our own with other countries.

The EU has been in existence since 1957 and has yet to conclude a free trade arrangement with America or China because 28 countries are involved and getting them all to agree on every detail is proving impossible. I suggest that if we left the EU negotiating free trade agreements with the United States and China would be a top priority.

Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham

My hon. Friend talks about an issue that is very close to my heart—British export strategy—and he referred to the United States of America. Does he believe that if we were outside the European Union we could use our special relationship with the Commonwealth—Canada has an agreement with the EU—to get preferential trading agreements with those countries that are more preferential than those that the European Union has?

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

My hon. Friend is right. I think that many countries around the world that have been unable to negotiate a free trade arrangement with the EU would be all too keen to negotiate one with the world’s fifth largest economy. We would have an appetite for doing exactly that were we to leave.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

It strikes me that the one group that would be pleased if we left on that basis would be the new breed of civil servants that would be required in vast numbers to negotiate all those free trade deals across the globe. My hon. Friend alluded to the fact that one of the bigger concerns is not the economic issues in the European Union but political ones. Would he not at least recognise the risk—if we left the EU, given how calamitous that would be for the European Union as well as, in my view, not being good news for the United Kingdom—of retaliation, particularly in areas such as the City of London, an area that we both know well because we both worked there before coming here? For example, euro-denominated business would be largely out of Frankfurt and Paris instead of London. Retaliation would be a significant risk and the smooth path he has presented would not come into place.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

I am afraid that my right hon. Friend has been, as part of his constituency duties, spending too much time at too many big lunches in the City of London with the wrong crowd. I will give an example of what I am talking about. ICAP is the world’s largest dealer broker for financial institutions. The chairman of ICAP, Michael Spencer, has said that the UK can “thrive” outside the European Union. We were told by my right hon. Friend’s friends in the City of London that if we did not join the euro, all that euro-denominated business would go to Frankfurt, Paris and elsewhere. Actually, the City of London is today doing more euro-denominated deals than ever before in its history, so I do not take much notice of those scare stories, but I do suggest to my right hon. Friend that if his contacts want to continue to put out that sort of propaganda for our staying in the European Union, it demonstrates the weakness of their case. I do not want my constituents in Kettering, in middle England, to be unnecessarily scared by baseless scare stories from financial institutions that should know better.

Photo of Steven Baker Steven Baker Conservative, Wycombe

I am always shocked and surprised by the argument about retaliation, because we are asked to believe that the European Union project is about suppressing nationalism—the kind of economic and other political nationalisms that lead to war—yet we are also asked to believe that if we chose not to surrender our parliamentary democracy to that set of institutions, we would suffer exactly the kind of nationalisms and retaliation that the EU itself was set up to avoid. Can they make their minds up which way it is to be?

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

My hon. Friend has hit the nail on the head.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

I will not respond to that, but in the good-natured way in which we are having this discussion, I should perhaps point out that I have had many lunches in the City of London in the 14 or 15 years for which I have been the local MP, but my lunching activities go back a lot further, as my hon. Friend Mr Hollobone will know, because 30 years ago we began our political lives together as junior common room presidents in respective colleges and then as officers of the Oxford University Conservative Association. I have had lunch with him relentlessly over the last 30 years in the City and I do regard my hon. Friend as very much the right crowd, who I should be hanging around with, among many others whom I lunch with.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

I thank my right hon. Friend for that intervention.

The fact is that the EU is going in the wrong direction. As we know, it is planning a new treaty to save the eurozone from itself and to give the EU more control. In many respects, that is the right response for the eurozone countries to make, but it would be bad for the

United Kingdom. In truth, the EU cannot cope. In some parts of the EU, unemployment is already 25% and youth unemployment more than 50%—the worst situation since the 1930s. Debts are large and growing. Unfunded pension systems require large tax increases, immigration increases or both. Voting to remain would mean signing up to the new EU treaty currently being negotiated, which has been spelt out in the Five Presidents report. That will give the EU even more power over our economy and take our seat on key bodies such as the IMF. No new treaty has ever given powers back or saved us money.

My constituents in Kettering and people across the country will be increasingly alarmed to read the contents of the Five Presidents report, set out in July last year. Who are these pompous five Presidents? The first is Jean-Claude Juncker, the European Commission President. The second is Donald Tusk, the President of the Euro Summit. The third is Jeroen Dijsselbloem, President of the Eurogroup, whatever that is. The others are Mario Draghi, president of the European Central Bank, and Martin Schulz, President of the European Parliament. They do like to call themselves Presidents whenever they get the chance. Among their plans are a euro area Treasury and increasing control over Europe’s fiscal systems.

Photo of Graham Stringer Graham Stringer Labour, Blackley and Broughton

I was not going to interrupt the hon. Gentleman, but if he consults the House of Commons Library, he will find out that there are seven European Presidents, but only five of them signed the document to which he is referring. That just shows what an absurdity this organisation is.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

The hon. Gentleman demonstrates that he is as well read as my hon. Friend Philip Davies, and I am grateful for that—the situation is even worse than I had feared.

Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham

My hon. Friend referred to Martin Schulz. Let me tell him that there is growing disquiet in certain smaller central and eastern European states about some of the language that Mr Schulz is starting to use in cajoling them on certain issues, particularly with regard to the crisis of immigrants from Syria. Will my hon. Friend join me in urging caution on this man in his interactions with sovereign nations along those lines?

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

My hon. Friend needs to realise that these people are impervious to criticism, and the smaller nations in the EU need to wake up quick, because what few powers they retain are about to be taken away should these seven Presidents get their way. They aim to complete that, at the latest, by 2025. Apparently, we are already in the first phase—“Deepening by Doing”—and in spring 2017 there will be a white paper outlining the extent of their plans. To hold a referendum in this country on our membership before the spring of 2017 would be a big mistake, because it would be misleading the British people by not telling them now what is just around the corner. If we stay in the European Union, the future as outlined by these Presidents is that it will be very much in charge of Whitehall.

Our membership of the European Union is bad for us. It costs us each week a net £230 million. That is something like a quarter to a half of England’s schools budget. That money would be far better spent either on reducing the national debt or on our NHS. Also, our influence in the EU is far less than it used to be. It is true that the Prime Minister has upped the UK’s game in opposing measures in the EU Council. For example, from 1996 to 2010, the UK voted against 32 measures in the EU Council; since 2010, the Prime Minister has tried to stop 40. However, we have lost all—each and every one—of those votes and we have only an 8% voting share.

Only 5% of UK businesses export to the EU, but 100% of UK businesses are subject to European rules. Four fifths of Britain’s economy has nothing to do with exports, but is in effect regulated by the European Union. We were told that being outside the eurozone meant that we would not be liable for propping up failing eurozone countries. That has proved not to be the case, with bail-out funds going from this country to Greece. Of course, if the global economy were a motorway, the European Union would be on the hard shoulder. The EU’s share of world trade was 40% in 1972, when we joined; it is set to be 20% by 2020. The accounts have not been signed off by European auditors since 1994. Of course, immigration is out of control, and that is set to get even worse. We can be sure that if Turkey, with a population of 85 million, were allowed into the European Union, the wave of immigration that we have seen from eastern Europe would be dwarfed by the wave of immigration from Turkey, and I predict that it would cause big social unrest in this country, but if we vote to stay in the European Union, there will in effect be nothing we can do to stop that.

Increasingly—we have already had a taste of this during the debate today—many bogus arguments will be made as to why it would be dangerous for Britain to leave the European Union. We have been told that we would lose 3 million jobs if we left the European Union. I would like my right hon. Friend the Minister to confirm today that that age-old claim is completely false and that 3 million UK jobs are not dependent on our membership of the European Union. It demonstrates the weakness of the case of those who want us to stay in that those scare stories are being put around. Of course, so many people told us that we would be disadvantaged if we did not join the exchange rate mechanism and the euro. In fact, Britain has been far better served by coming out of the ERM and by not joining the euro. We currently have the biggest amount of foreign direct investment of any country in the European Union.

I will conclude shortly, because I want other hon. Members to contribute to the debate, but it comes down to this: I am confident about Britain’s future. We are the fifth largest economy in the world. We are a member of many prominent international organisations. Our influence in the world would increase if we were to take back our seat at the World Trade Organisation. It is time for the UK to come off the global hard shoulder and go back to doing what we always did best—being a trading nation around the world. If we remain in the European Union, we will have access to its single market, as we do now, but we will have to pay at least £10 billion a year net as our membership fee; EU judges will have supremacy over UK law; and we will have to submit to the free movement of people, with no control over immigration. If we vote to leave, we will still be able to negotiate access to the single market through a free-trade arrangement with the EU, but we will not have to pay the membership fee; we will get back control over own laws; and, at long last, we will be able to control immigration, which is what constituents in Kettering and, I suggest, across the country want to see.

Several hon. Members rose

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole

Order. I do not propose to impose a time limit, but Members can see how many people are standing. I ask them to bear in mind the fact that, to get everybody in, speeches will have to be about four minutes in length.

Photo of Graham Stringer Graham Stringer Labour, Blackley and Broughton 10:01 am, 5th January 2016

This country would be more prosperous, have more influence in world affairs and be able to take control of its own affairs as a sovereign Parliament once again if we left the European Union. I congratulate Mr Hollobone on securing this debate so that we can explore the arguments that demonstrate the truth of those three desirable objectives.

First, we would be more prosperous if we left the European Union. At the moment, we are tied to the European Union, of which all but two countries are in, or have signed up to join, the euro. Quite frankly, the European Union is an economic basket case partly because of the euro. Many of the people who argue that we should stay in the European Union wanted us to join that terrible currency.

Secondly, we would have more influence in the world if we left the European Union. At the moment, the EU represents us at a number of world bodies, the most obvious being the World Trade Organisation, and negotiation between the 28 countries of the European Union dilutes any influence that we have. If we represented ourselves, we would have more influence.

Finally and self-evidently, I believe in parliamentary democracy and the fundamental principle that the people who make the laws should be subject to the electorate. In the words of the old phrase from American presidential elections in the 19th century, the people should be able to “throw the rascals out”. If we cannot do that, we do not have a democracy, and we cannot do that to the people who influence, propose and produce the laws in the EU.

Given the hon. Members who are present, one might think that only Conservative Members oppose our continuing membership of the European Union, but that is simply not true. Although a majority of Labour MPs are in favour of staying in the European Union, many Labour party members, perhaps a majority of Labour supporters, and ex-Labour supporters—people who have stopped supporting the party because of its position on the European Union—understand that we would be better off out of the European Union. There is clearly a left-of-centre view, in favour of democracy and control of our own rules, that we should leave the European Union. I have never understood, when there is a consensus across the Labour movement and the Labour party against extreme deflationary policies, why we would support the European Union when its policies of competitive deflation across eurozone countries are destroying its economy.

I start, in any debate on the EU, by looking at what is in the interests of my constituents. Their employment situation is threatened by more or less uncontrolled immigration. Unskilled workers are competing with people who have no history in this country, and they often fail to get employment. That is particularly true in areas where the legal jobs market overlaps with the illegal or black market, where many people hope to survive. Such people are increasingly at a disadvantage. As the hon. Member for Kettering has said, many skilled workers from Poland come over here and compete below their skill level, and that is not in the interests of my constituents. It is all right for Mr Rose to say that he can lead the in campaign, because he is financially okay and will be all right at the end of it, but that does not apply to my constituents, who are among the poorest people in the country.

I represent many constituents from parts of the Commonwealth, such as the Indian subcontinent and parts of Africa, which have a long history of helping and supporting this country, not least in the armed services. Why should it be more difficult for those people’s relatives to visit them, or to join them and find employment in this country when they have particular skills? As the hon. Member for Kettering has said, they find that very difficult, whereas people from Romania—I do not want to pick on Romania—or Croatia or Lithuania, which have very shallow links with this country, can simply walk in and out of the country. It is not often said, but it should be, that the EU’s immigration policies are explicitly racist, because it is usually Africans and people from the Indian subcontinent who are excluded from having a fair go at our employment market.

All the political parties recognise, and say explicitly, that the current operation of the EU is unsatisfactory, and therefore there needs to be renegotiation. The Labour party has a clear policy, which is at least consistent and honourable: whatever happens in the renegotiation, we will campaign to stay in. I will not; I will be on the other side of that debate, but the Labour party will do so. The Government’s position is much less honest. They say that there will be a fundamental renegotiation and treaty change to improve our situation. There is, however, no real negotiation taking place that will help my constituents and improve their economic situation.

I will run briefly—I am aware of the time—through four points. The first is the suggestion that we could have more parliamentary influence, because we could negotiate with other Parliaments and three, four or five Parliaments could give a red card to, or veto, decisions by the European Union. What an insult to parliamentary democracy it is to say that this Parliament has to negotiate with another Parliament before we can stop laws that might be against the interests of this country.

The second point is that there will be more competition, or that the competitive agenda will be increased. I was a Minister in 1999 when the then Prime Minister, Tony Blair, came back from Lisbon with a new competition agenda, which had zero influence. It was almost exactly the same as what is promised in these so-called negotiations.

The third point, which is at the core of where the future of the EU lies, is that this country needs protecting from being suppressed or oppressed by the majority of countries that will be in the EU and that may take decisions that are not in this country’s interest. Whether there is treaty recognition of our separate interest or not, there is bound to be a different set of interests from countries that are in a monetary union and that will eventually move, inevitably, into a fiscal union and greater political union. There are bound to be huge risks for this country in that we will always be in a minority position in the EU. I do not believe there can be any protection against that.

Mark Field made a point about the risks if we leave the EU. Of course there are risks if we leave the EU; there is always risk in change. The question is where the balance of risk is. There is a much greater risk to the future of not only democracy, but the country’s economy and influence in world affairs by staying in the EU, where we will be in a perpetual minority, with a different interest from the rest of the countries.

The fourth point is where most of the publicity has been aimed—at in-work benefits. I do not believe that those benefits drive immigration into this country. What drives immigration into this country is that it is a fair, decent country where there is a real chance of getting employment, unlike many of the other countries, particularly those that have come out of the communist bloc. To say that somebody who comes here for genuine reasons—to work—will actually be in an inferior position to somebody who they are working next to in a factory, public service, or whatever position it might be, is not a desirable objective. It is a deeply nasty and unpleasant objective, and it will not do what it says.

I am getting looks from the Chair so I will finish on this point. There is a real opportunity for the country’s future to be better by leaving the EU and having more influence. I hope this will be one of many debates that we have between now and whenever the referendum is held that will allow the real arguments, facts and figures to come out.

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole

I will now impose a time limit of three minutes, starting with Steve Baker.

Photo of Steven Baker Steven Baker Conservative, Wycombe 10:12 am, 5th January 2016

This morning shows that this year could be a time of great blessing, Mr Percy. We are blessed to have you in the Chair and the Government are blessed indeed that the people of Kettering have seen fit to send my hon. Friend Mr Hollobone here so that he could secure this debate and give the Government this opportunity, which I am sure is intended to be helpful, to review the renegotiation and take a really good look at where we stand before the Prime Minister’s statement later today.

What do we want from this renegotiation?

“We are very clear about what we want: British judges making decisions in British courts, and the British Parliament being accountable to the British people.”—[Hansard, 3 June 2015; Vol. 596, c. 582.]

That is what my right hon. Friend the Prime Minister said on 3 June 2015, albeit in relation to the European Court of Human Rights. However, as the European Scrutiny Committee has reported, the charter of fundamental rights is now in EU law, which means that we are in a horribly complex situation where exactly the kinds of decisions to which my right hon. Friend was objecting are now increasingly subject to the jurisdiction of the European Court of Justice.

It seems that the Prime Minister’s heart is in exactly the right place—British courts, British judges, and a transparent and accountable British Parliament answering to the people—but that the only way that one can achieve those obvious desires of the Prime Minister is to leave the EU or, at the very least, to request a fundamental change to exempt wide areas of public policy from the jurisdiction of the European Court of Justice, which is something that the Government are not doing.

Graham Stringer, who I am glad to follow, talked about the yellow card procedure. I just checked while he was speaking, and the current yellow card procedure requires a third of Parliaments to agree with one another. Well, my goodness, if a yellow card requires a third of Parliaments, whatever will a red card system look like? Presumably it would be a supermajority, which seems an entirely worthless way of trying to assert the rights of national Parliaments. So why have we got to a position where the Prime Minister’s heart is very clear on the issue of British courts, British judges and the power of our Parliament, and yet we end up with such a thin renegotiation?

Over Christmas I was reading Hugo Young’s history of the EU, “This Blessed Plot”. On page 170, he writes:

“Along with serial inconsistency, this discrepancy between deeds and words is the political style that infuses, time and again, the history of Britain-in-Europe. Fatally aberrant, often counter-productive, these are practices the political nation has regularly adopted as its only way of coping with the project that dominates its existence.”

That is the problem we have. Time and again, we are locked into this futile hope that the EU project would be other than it is. With just 15 seconds remaining, I will refer to Vote Leave’s research, which shows that nine out of 10 of the Prime Minister’s pledges on the EU have been dropped. We are shut into a situation in which the referendum will be held on substantially the basis of the Lisbon treaty. That is not good enough. We should leave.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Equality) 10:15 am, 5th January 2016

It is a pleasure to serve under your chairmanship, Mr Percy. As I said to you earlier, does your position in the Chair mean that you have mellowed? I am not sure whether you have or not, but it is good to see you there anyway. I thank Mr Hollobone for securing this debate, which we will contribute to in this very short time.

In a political lifetime, there have been divisions within parties and within the nation over our relationship with Europe. Indeed, some of the defining issues of 2015 were directly related to the UK’s membership of the EU. When we started 2015, there was a financial crisis. As the year moved on, there was the migrant crisis, to which EU members responded in their own ways.

Over a period of time, I have noticed a clear change of mood. According to the survey of large businesses released by Deloitte just this week, business support for membership of the EU has narrowed from 74% six months ago to 62%. In total, 28% of those who were surveyed said that their decision depended on the outcome of the renegotiation of UK membership—up from 23% in the second quarter of last year. It is vital that the Prime Minister is as clear and transparent as possible about the renegotiation process. The public and the business community have to know what is going on. Uncertainty will only negatively impact upon business confidence.

Very quickly, in the short time I have, I want to mention some other points. The Prime Minister’s key aim is to get the EU to allow the United Kingdom to opt out from the EU’s founding ambition to forge an “ever closer union” of the peoples of Europe. I am at pains to understand just where the movement and the progress has been on that. It is hard to believe that one twenty-eighth of the political union would be able to opt out of a core founding principle of the EU project. The Prime Minister needs to be honest and transparent in what he says.

When it comes to the Prime Minister’s renegotiation of benefits, again we need clarity. On the aim of restricting access to in-work and out-of-work benefits to EU migrants, the European Commission has said that such a move would be “highly problematic”. Does that mean impossible? Is the Prime Minister giving us—the Eurosceptics—false hope, or is there an actual chance that he will achieve his aim on this aspect of the renegotiation? The Prime Minister is seeking greater powers for national Parliaments to block EU legislation—something I totally agree with. Hon. Members have referred to the yellow card system and the red card system, but it seems unrealistic to put that forward when we do not see any evidence of it.

I will finish by mentioning the common fisheries policy, to which the hon. Member for Kettering referred. If we want to retain control and ensure the long-term sustainability of the fishing industry, it should be under the control not of Europe, but of regional bodies and Administrations. If we want to help the farmers—I say this as the MP for Strangford, where there is a fishing sector in Portavogie and a large rural community—we need to take away the red tape and convince them that the money we are putting in from Europe can be used to help them. There is an argument and a battle to be won. I thank the hon. Member for Kettering for giving us all a chance to speak in the debate.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough 10:19 am, 5th January 2016

My hon. Friend Mr Hollobone has given a consummate performance, in which he really summed up the arguments well. There is only time to give a few headlines. The first hero of this debate is, of course, our Prime Minister because, but for him, there would not be a debate. Even our heroine, Margaret Thatcher, never gave us a full referendum on Europe, so we should thank our current Prime Minister profusely for giving the British people the chance to make this historic decision. It will be a most interesting debate, and I will make one or two points about it.

First, the language should be relatively calm. Authoritative studies prove that leaving the EU, or staying in it, would make a difference of only 1% or 2% to gross national product, so leaving the EU would not be a great disaster that will cost 3 million jobs. If we leave the EU, I am not sure there will be an extraordinary nirvana. Let us have a measured debate and keep things in perspective.

Secondly, we do not want to have a debate based on nationalism. We Eurosceptics are not nationalists; we welcome political co-operation and friendship with all the nations of Europe. We welcome Poles, French and Italians coming to live and work here, but it has to be measured migration. Ultimately, when there is net migration of 300,000 into this country, the British Parliament has a right to try to make a decision on such matters.

This negotiation is a missed opportunity. My hon. Friend the Member for Kettering is probably right that perhaps a third of the population definitely want to leave, a third definitely want to stay and a third are in the middle. That last third probably want the comfort of remaining in some sort of relationship or partnership with the EU, but I believe they want to regain the supremacy of Parliament and regain control over fisheries, agriculture and, above all, migration. Given that we are the fifth largest economy in the world, and given that we are now a self-confident nation, we are no longer, as was the wartime generation, transfixed by the prospect of the loss of empire and the belief that we had to be part of a larger political union. We have moved on, and we are a self-confident, successful nation. I believe that we can create a dynamic, mid-Atlantic trading economy outside the EU that can move forward and increase prosperity for all our people. That is what I will be arguing in the EU referendum, and this debate is just one of the first steps along that path.

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole

We have two speakers left—I left some time for interventions—so there will be about four minutes for each speaker before I call the Front Benchers.

Photo of Philip Davies Philip Davies Conservative, Shipley 10:22 am, 5th January 2016

It is a pleasure to serve under your chairmanship, Mr Percy. I commend my hon. Friend Mr Hollobone for his brilliant speech. As usual, I agree with everything he said.

I will focus my brief remarks on the renegotiation itself to tell the Minister that we are not fooled, and that the British public will not be fooled, by the farce of this renegotiation. The Prime Minister has already pre-agreed all the things in his letter, and he certainly will not have risked writing a letter asking for things unless they had already been agreed. He has written a letter asking for things that have clearly already been agreed, but he knows that it would lead to more problems if the EU accepted it all straightaway—people would say that he had not asked for enough, and all the rest of it—so he had to choreograph a farcical row with all these EU leaders: “Oh, he’s gone too far this time. He can’t possibly ask for all this. It is an absolute disgrace. He is going way too far this time.” And then, lo and behold, as the EU referendum approaches, we can expect that an equally choreographed agreement will be reached one by one in a domino effect across Europe. Hey presto! All these EU leaders will then say, “Actually, go on then. You can have what you’ve asked for.” The Prime Minister will come back saying, “This is a massive triumph for my renegotiation, and it goes to prove that if you battle hard for such things in the EU, you can get exactly what you want. As a result of my great triumph in these renegotiations, we can now vote to stay in the EU.”

If the Minister and the Prime Minister think that we are all going to be fooled by such nonsense, they are sadly mistaken. The Prime Minister underestimates the British public if he thinks they will be taken in by such choreographed, farcical renegotiation. We all know that it will all be agreed and that the renegotiation is just a farce. If the renegotiation is really meaningful, presumably the Prime Minister, who for years berated the previous Labour Government for giving up our rebate, would have made it a key part of his renegotiation strategy to get the rebate back by seeking a reduction in the amount of money that we hand over each year. He is the one who has been going on about that so much over the last few years, yet he did not even ask for it. It is perfectly clear that this is not a meaningful renegotiation; it is not covering all the things that the Prime Minister wants to see. The document that he sent is a request for things that have already been agreed by EU leaders so that he can come back and say that his renegotiation is a great triumph.

As it happens, I do not blame the Prime Minister for his strategy to some extent. I have never known a Prime Minister to come back from a renegotiation saying, “Do you know what? I gave it my best shot, but it was a disaster and I didn’t get anything at all.” Every Prime Minister comes back from a renegotiation saying that it was a great triumph. Even Neville Chamberlain said that his renegotiation was a great triumph, so I do not blame the Prime Minister for doing so—that is just the way it is.

Like my hon. Friend Sir Edward Leigh, I commend the Prime Minister for giving us the referendum that the British public have wanted for so many years. There is no question that we will fall out with each other—everyone has their view, and I respect people’s opinions. All I will say to the Minister is: please, do not treat us like fools. Please, do not pretend that this is a meaningful renegotiation. Please, do not pretend that the Prime Minister is battling hard to agree these things with the EU. We are not that stupid, and the British public are not that stupid. When the referendum comes, I hope the facts will win the day. We can survive and prosper on our own. We have a huge net trade deficit with the EU, and we would be the EU’s single biggest export market. There is no way that we would have an end to free trade. Ultimately, when people voted to stay part of the common market in 1975, that is what they thought they were voting for—free trade. We can have that for nothing, and we do not need to pay £19 billion a year to have something that we can have for nothing.

Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham 10:26 am, 5th January 2016

Britain’s contribution to the European Union since we joined has been massive, honourable and, from a fiscal perspective, extremely generous. I therefore believe that we are renegotiating from a position of strength. I take great pride in being the first British Member of Parliament to have been born in Poland, so I am one of these migrants. I regularly go to Warsaw and talk in Polish to Polish politicians, journalists and other people. I try to reiterate to them the extraordinary support that Poland has had from the United Kingdom for many years—whether it was during world war two, Solidarity in the 1980s, helping Poland enter NATO and the European Union, getting rid of Poland’s communist-era debts to the Paris Club or guaranteeing its borders after German reunification—yet I am extremely disappointed with the intransigence coming out of Warsaw when, for the first time, the United Kingdom is seeking support from Poland and other countries, with everything that we have done for them over such a long period of time. The intransigence and the difficulties are pushing me towards campaigning to pull out of the European Union. I have not yet decided but, when one thinks of what the United Kingdom has done for these countries, it is disappointing that their support for us is now so lacking.

The Prime Minister has asked me to advise him on the eastern European diaspora in this country, and I go around the United Kingdom meeting many Polish organisations. Poles are here not to claim benefits but to work. I am very proud of the Polish community’s contribution to the United Kingdom, and I am extremely disappointed and concerned that the media are focusing so much on the issue of benefits reform. That is why I asked my hon. Friend Mr Hollobone about his views on that issue. Our renegotiation should not boil down to whether EU migrants get the same benefits as our own citizens. No, I believe that what my constituents in Shrewsbury want— I know a little about what they want because I asked them about their views—is fundamental reform of our membership of the European Union to back up what he said earlier about who governs Britain and how Britain can make such decisions and be accountable to the electorate.

I am worried that Warsaw is trying to conflate the issues of potentially supporting us in exchange for our support for permanent NATO bases in Poland. What is the Minister’s view on that? I am a great supporter of NATO bases in Poland, and I raised the issue with the Secretary of State for Defence at the 1922 committee. We should be helping our NATO allies and protecting them from any aggression from Russia, but the two issues should not be conflated in these important EU negotiations.

Lastly, I have been to villages and towns in Poland that have been completely depopulated. The risk is that there will not be enough people to look after the vulnerable and elderly, because so many young and talented people have left Poland to come to the United Kingdom. If the free movement of people is to work, it must be more equal among the nations. Something must be done to address the massive flows of people coming to the United Kingdom, because it is a concern for my constituents in Shrewsbury.

Photo of Stephen Gethins Stephen Gethins Shadow SNP Spokesperson (Europe) 10:30 am, 5th January 2016

Mr Percy, it is good to see you in the Chair. I wish everybody in the House a happy new year—or bonne année, if you will—and I congratulate Mr Hollobone on securing this timely debate. We might not agree, but I congratulate him on the way in which he has conducted himself in this debate.

The Scottish National party would like to say to all Members, in the debate on European Union membership, that we believe that the United Kingdom can be a successful, independent country outside the European Union but we want to debate whether it should be outside it. Those are the parameters of debate within which we should work. I have several questions for the Minister that I will ask later, but I do not want to give him too much of a hard time; his own party is doing that already. We heard this morning—he can tell us whether or not it is true—that Ministers will be given a free vote in the European Union referendum. I look forward to his comments on that.

Photo of Steven Baker Steven Baker Conservative, Wycombe

It is of course a secret ballot; the crucial issue is whether Ministers will have the freedom to campaign from within Government.

Photo of Stephen Gethins Stephen Gethins Shadow SNP Spokesperson (Europe)

I thank the hon. Gentleman for the correction. Based on that, will the Minister tell us on which side he will be campaigning in the forthcoming referendum? Similarly, I do not want to be too hard on Labour Members. I sincerely hope that Mr McFadden will be with us on the European portfolio by the end of today. I know how committed he is to the European perspective.

Photo of Tim Loughton Tim Loughton Conservative, East Worthing and Shoreham

The hon. Gentleman makes an interesting point about what Ministers might be able to do. What will SNP spokesmen be able to do, and is it the policy of every single SNP Member that they are in favour of our continued membership of the EU?

Photo of Stephen Gethins Stephen Gethins Shadow SNP Spokesperson (Europe)

I thank the hon. Gentleman for that intervention, which leads me nicely on to the position of the only party in this House that is united on the European Union—[Interruption.]—notwithstanding our colleagues in Northern Ireland. The SNP has set out its position clearly. First, we are against a referendum, because we do not think that it would bring substantial change; Conservative Members seem to agree. The other reason, and a smaller point, is that it was in our manifesto not to have a referendum on the European Union. Since we won the election—it was the worst election result for the Conservatives in Scotland since 1865, 150 years ago—we have stuck to our manifesto commitments, revolutionary as that might seem, by voting against a referendum.

The SNP Government, joined by their partners here in London, have set out their position. The First Minister made a very good case in a speech on 2 June to the European Policy Centre. At the moment we see an opportunity for renegotiation, but as many Members have said, we think that the Government are doing a great job of losing friends and influence throughout Europe. Areas for renegotiation set out by the Scottish Government include public health; the Scottish Government have so far been unable to implement minimum pricing for alcohol. Whether or not others agree with it, it is the democratically elected Scottish Government’s way of tackling a specific public health issue.

Another area is fishing; obviously, although the Minister can confirm this, there will be no treaty change. Scottish fishermen can tell of the failings of the common fisheries policy; they were of course described by the UK

Government when we entered the European Union as expendable in the pursuit of the UK’s broader interests, so they are well aware of the impact of UK membership of the European Union.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Equality)

The hon. Gentleman is aware of the opinions of Scottish fishermen who are opposed to Europe and want out. How will the Scottish National party represent that viewpoint?

Photo of Stephen Gethins Stephen Gethins Shadow SNP Spokesperson (Europe)

The hon. Gentleman makes a good point. We say that an opportunity to renegotiate on that issue and more broadly has been squandered. We think there is another squandered opportunity, in that any renegotiation should be a two-way process. Yes, we should examine some of the powers that we have and institutional changes, but we should also consider working more closely with our European partners on some issues. Will the Minister discuss those?

I refer, of course, to issues such as energy. At the moment, we are on the cusp of spending billions on French and Chinese nuclear technology, while our renewables industry, in which Scotland could have led the way, is suffering as a result of UK Government policy. Energy union would have had huge benefits across the continent, not least for our economy. What about climate change? Does the Minister think that we should be working more closely with our European partners?

Finally, on security issues, no country—not the UK, and not Germany—can deal alone with the challenges of Ukraine, Syria, Yemen or the biggest refugee crisis since the second world war. We contend that we can and should be working more closely with our European Union partners, as well as our NATO partners, on those challenges. They are also issues on which the Scottish Government have a great deal more in common with many of our European Union partners than with our partners in the UK Government down in London.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

On the issue of working together, our waters are teeming with fish. They are the most productive fishing grounds in the world. During the last two days of negotiations, in order to get support, Ted Heath gave away control of our fishing policy. Ever since then, we have had nil success in regaining real control of our own fertile fisheries. Although I wish the hon. Gentleman well with regaining control within the EU, he will find it difficult.

Photo of Stephen Gethins Stephen Gethins Shadow SNP Spokesperson (Europe)

I concede that the hon. Gentleman makes a good point. As I have said, Scottish and other fishermen were described as expendable. It is a shame that that issue was not further up the agenda for the UK Government. However, he makes a good point. Can the Minister tell us what efforts were made on fisheries?

I have several other questions for the Minister. Members across the House will be aware that Angela Merkel has said that freedom of movement is non-negotiable. Can the Minister tell me what negotiations he has had with Germany and whether it is indeed non-negotiable? Can he also expand on chapter 20 of the European Union’s conclusions? I understand that numerous other things were going on, and that only one paragraph was given over to the United Kingdom. We concede that given everything else that was happening, there were other priorities, but can the Minister expand on the “substantive and constructive debate” that it mentions, and on the scope for more co-operation? He has already said that there is more scope; does that include issues such as climate change, energy or others?

What formal role will there be for the devolved Administrations? Co-operation with them has already been sadly lacking; goodness knows, the UK Government need friends and influence. The Scottish Government have already said that they are more than happy to help, as I am sure are our colleagues in Northern Ireland or in Wales. Finally—I will repeat my question so that the Minister does not dodge it—is it true that Ministers will have a free vote, and how will he campaign?

Photo of Pat McFadden Pat McFadden Shadow Minister (Foreign and Commonwealth Affairs) 10:38 am, 5th January 2016

It is a pleasure to serve under your chairmanship, Mr Percy. I wish you and all the other Members present a happy new year, and I congratulate Mr Hollobone on securing this debate. It is fitting and timely to begin the year by discussing this issue. If the referendum is held in 2016, it may well be the defining political issue of the coming year. It certainly dominated the media over Christmas and the new year, as various Conservative grandees came out either for or against EU membership, or gave their views on the issue of the application of collective Cabinet responsibility.

Since our debate began about an hour ago, we have been led to believe that the Prime Minister will make an announcement this afternoon confirming that collective Cabinet responsibility will not apply on the issue of the referendum, and that Ministers will be free not only to vote as they wish but to campaign as they wish. So, my first question to the Minister is whether those media reports, which are running as we speak, are true, and whether collective Cabinet responsibility will indeed not be applied on this issue.

Photo of Peter Bone Peter Bone Conservative, Wellingborough

In the right hon. Gentleman’s party, collective Cabinet responsibility has obviously been given up already. In relation to the EU, does he think that Ministers and shadow Ministers should be able to campaign as they see fit?

Photo of Pat McFadden Pat McFadden Shadow Minister (Foreign and Commonwealth Affairs)

I agree with the hon. Gentleman that Labour Members know a thing or two about free votes after our recent experience, and his intervention gives me a chance to pick up on some of the points made by my hon. Friend Graham Stringer.

In the Labour party, we have a clear policy—passed by our conference—to campaign for the UK to remain in the EU. I am not aware of any Front Bencher who disagrees with that policy. There is a pro-Europe group in the parliamentary Labour party that has the names of 214 of the 232 Labour MPs, including every member of the shadow Cabinet. So that is where we stand regarding the balance of views on the issue. I do not deny that there are some Labour MPs who take a different view, as my hon. Friend the Member for

Blackley and Broughton set out, but they are only a small minority of the parliamentary party. That is where we stand on this issue.

Photo of Pat McFadden Pat McFadden Shadow Minister (Foreign and Commonwealth Affairs)

I will make a little progress before giving way again.

Regarding the terms of the renegotiation, which is the subject of this debate, we have had the exchange of letters between the Prime Minister and one of the “famous five” Presidents, Donald Tusk, who is the President of the European Council. Mr Tusk replied to the Prime Minister’s letter on 7 December, setting out his assessment of where other member states stood on this agenda. There are four items, or four “baskets” as they say, and we are led to understand that progress has been made on the first three issues—protection for non-eurozone countries, competitiveness and the rights of national parliaments—but that further discussions are taking place on the final issue, which we are led to believe is the most difficult of the four issues to resolve, and which is the issue of access to in-work benefits for workers from other EU member states.

Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham

I am grateful to the shadow Minister for giving way. On that point, could he clarify matters for us? Bearing in mind the way that renegotiation is going, what is the Labour party’s official position as to whether or not it is in our country’s national interests to have the referendum earlier—in other words, in June or September 2016—or later, in 2017?

Photo of Pat McFadden Pat McFadden Shadow Minister (Foreign and Commonwealth Affairs)

I thank the hon. Gentleman for that intervention. We have not expressed an opinion on the exact timing, other than to say, as we said during the passage of the European Union Referendum Act 2015, that we do not think it is a good idea to combine the referendum with other important elections scheduled for May this year or May next year, because this issue is of such import that it deserves a campaign and a vote on its own. That is what we have said about how the referendum should take place.

I will put a couple of questions to the Minister about the renegotiation. First, is it correct for people to conclude that there has been substantial progress on the first three issues that I have referred to, but that the fourth issue remains more difficult to make progress on?

On that fourth issue, which is the issue of tax credits and other in-work benefits for workers from other EU member states, the Government’s contention is that the availability of those benefits acts as a pull factor, resulting in levels of immigration that are higher than they would otherwise be. Consequently, the Prime Minister claims that if those benefits are curtailed in the way that he has set out immigration will go down. I disagree with a lot of the points that have been made today by hon. Members who wish to campaign to leave the EU, but there is one issue on which I think I am in some agreement with them, which is to be sceptical about this claim. What evidence do the Government have for the contention that these in-work benefits are affecting the level of immigration? By how much do the Government believe that immigration from other EU member states will go down if the availability of in-work benefits is cut in the way that the Government have set out?

The Office for Budget Responsibility, giving evidence to the Treasury Committee before Christmas, said that its view is that such a change to in-work benefits would make little difference to immigration levels. Also, is it not the case that the vast majority of people who come to the UK from other EU member states come to work hard, pay their taxes and make a positive contribution to this country, in the same way as anyone else?

Photo of Graham Stringer Graham Stringer Labour, Blackley and Broughton

I am grateful to my right hon. Friend for giving way and I am pleased that he is sceptical about the basis of the Government’s policy in this area. However, does he agree not only that that policy will fail to do what it says on the tin, but that it is an offensive policy, which will be very divisive in the workplace?

Photo of Pat McFadden Pat McFadden Shadow Minister (Foreign and Commonwealth Affairs)

I think there is a case for a discussion about the basis upon which people have access to benefits, but there is a big difference between saying that and claiming that restricting access to benefits will make a fundamental difference to immigration levels. The truth is that people come to the UK because it is a great country, not because it is a “soft touch” on welfare.

We will probably see the results of the renegotiation soon, so I would also like to ask the Minister a question about timing. If he expects that there will be a conclusion to these negotiations at the European Council in February, what will be the implications of that conclusion for the timing of the referendum itself? The 2015 Act only says that the referendum must be held by the end of December 2017, but the Prime Minister’s new year message indicated that it was more likely to be held later this year. I ask the Minister directly: if the renegotiation is completed in February, is it the Government’s intention to hold the referendum this year rather than next year?

In one or two of the interventions on me, I was asked about my own party’s position. Our view is that we should not make the decision about whether or not Britain remains a member of the EU on the basis of this renegotiation. At the end of the day, the question on the ballot paper is, “Remain or leave?” It may be the case that the Prime Minister’s renegotiation has some impact on the public view of that question, but it may well not be the case, because there are issues concerning our EU membership that go well beyond the four items that the Prime Minister has set out in his renegotiation.

Our party conference quite clearly supported a position of being in favour of remaining in the EU and our campaign to remain in has already been launched, under the leadership of my right hon. Friend Alan Johnson. We want to see what the renegotiation produces, but that is our basic position.

My final point in response to some of the arguments that have been put forward by Government Members is that we have been told repeatedly today that we can retain access to the single market without paying anything for it. I would like to ask a question about that assertion, which is perhaps more for the hon. Member for Kettering, who secured this debate, than for the Minister. On what basis is it made? If the British people are going to be asked to exchange more than 40 years of EU membership for a future outside the EU, they have a right to know—with some certainty—what that future will entail. What will it mean for access to the single market? What will be the price for access to the single market? What will that future mean in terms of our adherence to the rules of that market while we perhaps forgo any say about what those rules are? What will it mean for inward investment in this country, which in European terms comes at the rate of tens of millions of pounds every single day? What will it mean for our export industries? What will it mean for our research, our universities, our agricultural industries and so on?

Whatever the flaws of the EU, a referendum on it is not only a referendum on one future but a choice between two futures, and those who advocate leaving the EU need to do an awful lot more to say what being out would be like.

Photo of David Lidington David Lidington The Minister for Europe 10:50 am, 5th January 2016

It is a pleasure to serve under your chairmanship, Mr Percy, and I hope that this is but the first of a number of such occasions.

I congratulate my hon. Friend Mr Hollobone on securing the debate. As he said in his opening remarks, he is a long-standing, open and honourable opponent of Britain’s membership of the European Union, and I know he will not take it with any sense of offence if I say that I would have been flabbergasted had there been any conceivable renegotiation by this or any other Prime Minister that would have come near to being satisfactory enough for him to support continued EU membership. My hon. Friend set out his case as I would have expected—lucidly and with conviction—and I want to spend most of my speech addressing some of his points.

As I suspect Members had anticipated, my right hon. Friend the Prime Minister will make an oral statement this afternoon on the outcome of the December European Council, and the House will understand that I will not pre-empt what he may say in that statement and in his answers to subsequent questions.

My hon. Friend Philip Davies expressed some scepticism about the current negotiation, claiming that everything had been agreed and it was all just a matter of choreography. His view of the choreography seems to have the same generosity of spirit as Craig Revel Horwood shows when assessing the skill of “Strictly Come Dancing” competitors. If only my hon. Friend had been with me at European ministerial meetings. I will even lend him a badge with the blue flag and the gold stars on it if that will aid his passage into the Justus Lipsius building.

I think that my hon. Friend the Member for Shipley would recognise that the arguments of our right hon. Friend the Prime Minister are not being met with an unreserved welcome from our partners. They have made it clear that they wish the United Kingdom to stay in the European Union, and that the European Union itself is stronger for this country’s membership. At the December European Council, Heads of Government raised objections and difficulties in respect of all four areas of policy. In the eyes of our partners, the Prime Minister is pursuing an ambitious and far-reaching set of reforms that challenge a number of the ways in which the European Union has been accustomed to doing its business and thinking about its vocation.

My hon. Friend the Member for Kettering mentioned a number of concerns about which I hope to give him a measure of reassurance. He talked about the Five Presidents report. The report is explicitly and chiefly about the future of the eurozone, and there is a challenge for those of our partners who have decided to commit themselves to that currency union. We can take a view as to whether they were wise to do so, but it was their sovereign decision. It seems logical that a commitment to a single monetary policy, a single interest rate and a banking union has broad implications for the future conduct of fiscal and economic policy, and our colleagues in the eurozone may therefore wish to consider some of the ideas coming out of the report, such as a eurozone treasury function and a single eurozone—not EU—seat on bodies such as the International Monetary Fund. Such decisions would not bind, or create obligations for, the United Kingdom, and if the Five Presidents report were to lead to a new European Union treaty, that would require the unanimous agreement of member states and be subject to primary legislation in the UK. Were any such treaty to include measures that transferred additional competences from the United Kingdom to the European Union, it would also be subject, under the terms of the European Union Act 2011, to a self-standing referendum in this country. I would hope, therefore, that my hon. Friend could take some reassurance on that point.

My hon. Friend also mentioned Greece, and I can tell the House that the UK has, and has had, no liability in respect of Greece, either through the European stability mechanism or the European financial stability facility—EFSM—which are both euro-only. Greece has paid back its bridging loan through the EFSM, but the UK had, in any case, ensured that we would face no liability in the event of Greece defaulting on that obligation. Greece has IMF loans, to which we contribute our usual share, and our IMF liability would continue whether we were inside or outside the European Union.

My hon. Friend also mentioned Turkish accession, which is something that both Conservative and Labour Governments over the years have supported as a strategic objective. Although we are nowhere near such accession at the moment, it would require the unanimous agreement of member states and a treaty, subject to primary legislation here. The Prime Minister has said that he is not prepared to agree to any new accessions to the European Union without reform of the transitional arrangements for migration from new countries, to put them on a much more effective and objective basis than the time limit of five or seven years after which all restrictions fall away.

It is hard to argue both that the EU will be inimical to our interests, resistant to what we want to do and jealous of our freedom of national action and that, in the event of a British exit, it would agree to sign up to our continuing to enjoy all the things we like about EU membership without any of the things that might matter to other countries but which we find irksome. Whatever the outcome of the renegotiation, that will be something that people will have to weigh up. My hon. Friend Sir Edward Leigh said that it will not be the end of the world if we leave the EU, and I agree, but the judgment that the British people will ultimately have to make is whether it is in the interests of the country’s prosperity, national security and worldwide diplomatic influence to be inside or outside the organisation.

When we consider trade, for example, we have to judge the likelihood of getting a free trade agreement outside the EU. In 2014, we sent roughly 44% of our exports to the EU27 but received only about 10% of that bloc’s exports. We would not be in as powerful a leverage position in the hypothetical circumstances as is sometimes argued, nor have Norway and Switzerland found that they can simply have all the benefits of access to the European single market without the obligation to apply EU laws—as the effect of that single market—and to contribute to the European Union’s budget.

I look forward, therefore, to the Prime Minister’s being successful in his renegotiation, to his getting a deal that makes Europe more democratic, prosperous, trade-minded and flexible than it is today, and to campaigning in his support when the referendum comes.

Question put and agreed to.

Resolved,

That this House has considered renegotiation of UK membership of the EU.