Author: johnredwood

1970  21,443 fishermen                    2914  11,845 fishermen

The EU has been most damaging to UK business. The more closely it has been involved, the bigger has been the collapse.

Consider our fishing industry. In 1971 just before entry we produced around 1 million tonnes of fish with a thriving industry in England  as well as in Scotland. There were 21,500 fishermen.

Last year we caught around 600,000 tonnes, with just 11,845 fishermen. The English industry has been very badly damaged, with our fishing now concentrated on Scottish waters. Overfishing and regulation combined have done grave damage to the English fishery in particular, as the EU made our fishing grounds into a common resource with free access for all EU member states with dreadful results.

The UK now imports more fish than it exports, and has witnessed a collapse of the cod,haddock and plaice fishery.

 

Steel Output   1972     25 million tonnes     2013     12 million tonnes

Consider our steel industry. Output has more than halved since we joined the EU, whilst Germany’s at 43 million tonnes has been much more stable and is now 3.6 times the UK’s.

The current state of crisis in the industry has been brought about in part by very dear energy prices from EU energy policies, and from the inability of the UK to buy enough UK steel owing to EU procurement rules. Other states do not seem to enforce them in the same way.  EU state aid rules now also prevent  helping the industry at a time of crisis made worse by cheap Chinese steel.

The UK has become a heavy net importer of steel.

 

Aluminium output

1972  300,000 tonnes   2015  43,000 tonnes

Both the UK’s large smelters at Anglesey and Lynemouth have closed. High energy costs resulting from EU and UK energy policies have been the main reason.

So can we say the EU has been good for business? It has certainly been good for continental businesses, who have come in and taken our fish and sold us many manufactured products. It has promoted imports to the UK, but has helped or caused the collapse of important industries at home. The Fishing decline is wholly attributable to the EU, as throughout the time we have been in the EEC/EU they have controlled it through their common policies and have insisted on others exploiting our natural resource.

 

 

 

 

 

 

I have done many debates and briefings for the business community in recent weeks. They all have some  things in common. There is a strong wish to learn, as many in the business community have  been starved of honest accounts of what powers the EU has and what policies it is following. There is an ignorance of the Leave campaign, as the media crowds out our positive message by endless aggressive interviews asking us to rebut the latest absurdity of project fear, or they seek to turn the whole thing into a Tory split story. The business community and many others are getting fed up with this silly treatment of a big national issue.

 

The first thing few grasp is this is about much more than trade rules and how easy it should be for Germany to sell us her cars. It is about who makes our laws, who levies taxes, who spends our money, who controls our borders. I have to explain just how much power the EU now has over VAT, Corporation Tax, energy policy, business regulation, criminal law and much else.

 

The second thing I notice is even the big  banks and foreign investment houses who say they analyse economics do not understand the need to analyse the favourable economic impacts of saving a £12 bn outflow on balance of payments and a £11bn contribution which is spent on the continent which could be spent at home. When I point out we get a 0.6%boost to GDP from spending our own money no one disagrees but no one  includes this  in their analysis.

 

The third thing I notice is they assume we will follow the Article 50 route out if the EU but do not then realise that means no change for the first two years. They are usually unsighted on the UK Parlianentary route allied to a faster negotiation timetable.

They find it difficult to understand that Article 50  is designed more for the convenience of the Union than of the leaver. That’s why using UK legislation to restore our veto before entering a faster negotiation would give us more leverage.

Many of them  assume we will do a Norway and seem not to have heard the clear  statements of the Leave campaign that we will not pay contributions in or have free movement once we have left.

I have spent all my energies setting out how we will be freer, more democratic and better off out of the EU. I want  a policy of prosperity, not austerity. I want us to take back control of our laws. I want us to spend our money on our priorities.

Today I want to do something the BSE people do all the time. I want to ask a few questions of my opponents in this referendum.

The  BSE campaign should be called the Better Stay in Europe or else campaign. They spend all their time portraying a bleak future for us should we dare to vote for freedom and independence. Their pessimism is usually based on assuming all our partners in Europe will single mindedly seek to do us down in ways which will damage themselves.Why do they want to stay in organisation with people they think are so unpleasant?

Apparently BSE have their doubts and problems.  A series of endorsements by powerful foreigners, large investment banks and multinational companies may be putting more people off than it is winning over. Why should British voters vote for a deal which suits Germany and the USA when it clearly doesn’t meet the Prmine Minister’s aims in his Bloomberg speech, when it does not get us our money back or give us control of our own borders and taxes? Many voters are unhappy about the self serving conduct of some large corporations, so they are not impressed by being told how to vote by them. Lord Rose of BSE let the cat out of the bag when he told us the higher wages he expects when we leave could be bad news!

Given their absence of positive messages it is easy to ridicule their style of bombast. Will EU exit lead to the Black Death being visited upon us? Will France and Germany refuse to ring us up if they hear of a threat to our country?  Will they want to stop selling us their cars and wine, and wrongly impose new trade barriers which are largely  illegal anyway under international law?

What new groups and companies will they get to sign letters of support? What new fears will they dream up? I would welcome your suggestions for more absurd claims than they have already made, though it is difficult to  outdo some of their wild forecasts.

We also need to remind people all the time that institutions like the CBI and some of the investment banks that are so keen on us staying in recommended the European exchange rate mechanism to us which caused a big inflation and a major recession. They then often went on to recommend the Euro, which has done enormous damage to many of the economies outside the German core of the zone. Why should we believe them again when their track record has been so lamentable?

Few of them seem to have read the 5 Presidents Report on future political union and the next treaty and none of them want to talk about it. As we know from the EUs own words they want more central powers, a Euro Treasury and a bigger EU budget, shouldn’t they tell us their view of all this. The EU is on a wild ride to political Union.

John Redwood (Wokingham) (Con): I share the concern of my hon. Friend the Member for Stone (Sir William Cash) about page 19 and that is the main reason I have entered this debate. It is an unfair exposition on the opportunities and risks linked to our membership of the European Union and I do not think it accurately reflects what the OBR has been saying. I am pleased that the OBR has now spoken for itself and put on the record the important point that it does not believe that in the five-year forecast period, were we to leave, there would be a decline in economic output or activity. Like many forecasters, the OBR believes that the net impact would be quite small. Of course, in line with others it has said that there could be volatility in currency and asset price markets. All I would add is that there has been massive volatility in those markets in the years we have been a member of the EU, so it would be somewhat outrageous to claim that that would suddenly stop were we to leave the EU, but I cannot see that it is a particularly damning point.

My hon. Friend has gone on at some profound length about what is wrong with page 19. I hope Ministers will look again and realise that it is not a fair exposition of the OBR’s position. Linking the OBR’s position with Christine Lagarde’s comment, which is obviously a comment made for the “stay inside” campaign trail rather than for normal commentary purposes, gives a misleading impression.

I wish to make some more fundamental points about the figures and the document before us this evening. Let us start with why we are doing this at all. It is a completely pointless exercise, but it is legally required by the treaty and the framework of law under which we live. It is a great pity that in the renegotiation this, along with dozens of other things, was not sorted out because if, as the Minister says, the Government can ignore the advice and the policy laid down by the European Union to control the deficit and get the debt down, what is the point of the Government having to table 300 pages of carefully selected documentation, go through the surveillance procedure, on some occasions receive a report saying that their policy is not good enough or they are not converging in the way that the European Union wishes, and the Government then saying, “Well, fortunately, there is no penalty on us so we will ignore that”?

It is strange to belong to a club, accept the rules and then, when we do not like the rules, say, “Of course, we didn’t really want any of that and fortunately we have been opted out of the penalty bit of it.” It is a strange exercise. I suspect that the official machine of the Government, which goes on whoever is in office, is quite guided by all this. There is probably a wish on the part of officials to get the British Government policy and the figures closer to the convergence requirements. It is high time the European Union itself had an honest debate about the most pressing and most difficult target it has set—the target that all member states should keep their stock of debt to 60% of their national income.

Practically every member state is way above that, and some of them violate the target by having more than double the level set down by the European Union. Why does that body think it is sensible to persevere with a target that none of the member states wish to keep and none of them are trying to reach?

George Kerevan (East Lothian) (SNP): May I add that the rule that sets the 60% target also states that member states in breach must have a rectification programme and bring their debt level, whatever it is, down by five percentage points a year, which this Government have significantly failed to do and significantly will fail to do for a long, long time?

John Redwood: All the Governments are failing to do that, and it is even more pressing and difficult for a country such as Greece, where the penalties do apply because it is in the euro scheme. Despite all the best efforts of the European leadership, the European Central Bank and others, and very cruel and difficult expenditure cuts that Members in this House would not have accepted for the United Kingdom, Greece is still miles off getting anywhere near the stock-of-debt target and it has struggled until recently to get down to the deficit target.

We need to ask fundamental questions of our European partners about why we go through this routine and what malign influence it has on some economies and some economic performances around the European Union, which should be a matter of common concern all the time we remain in that body. The Minister says this is not a new exercise and it is not much of a burden on the British state; it is just one of those things, and we send in figures that we produce for other purposes. That is not quite true. The introduction to the document clearly has to be written, the selection has to be made, it is clear throughout the document that it is written for domestic purposes and for the purpose of forwarding it to the European Union, and we try to produce figures that we would not otherwise produce in order to conform with the workings of the European Union.

Next, I would like to highlight the figure for the convergence criteria and the so-called treaty deficit on page 186 of the report. That shows that in 2016-17, if all goes well and these figures work out, for the first time in many years we will get below the 3% target to 2.9%. That makes my point: we would not have to calculate that treaty deficit, think that it was significant or use it as part of the guidance for the British economy if we were not signed up to this surveillance and management system within the European Union. The Minister has to bear it in mind that there is actually some subtle guidance in the European policy. I think that many of my constituents would find it quite surprising that we have to table 300 pages of detailed financial and economic information in order to comply, and that that is then put through a scrutiny and surveillance process.

The next figure that I would like to highlight is on page 156, which shows how much in “expenditure transfers” we have to make to the European Union institutions—in other words, how much money we send that we do not get back. We see that the November forecast for 2016-17 was £10.7 billion, which is a very considerable sum, and that the March forecast, just four months later, has gone up to £11.8 billion. Between the autumn statement and the current Budget there is an increase of £1.1 billion in next year’s expenditure transfers to the EU institutions.

That figure of £1.1 billion is very close to the figure that the Government had pencilled in for disability cuts. I do not know about you, Mr Deputy Speaker, but I would rather not have the disability cuts and not pay £1.1 billion extra to the European Union. Why can we not make those kinds of choices? The reason, of course, is that we are signed up to membership of an organisation that thinks it knows better than we do how to spend our own money. I think that people in the United Kingdom are getting very frustrated at being told that we have to be very careful about our priorities, only to discover, if they get guidance from these complex figures, that the European Union can take £1.1 billion extra off us for next year without a by-your-leave. That leaves us struggling to find that money when we try to make the Budget add up, ending up with options and choices that I am sure Ministers did not really want to make, and which Parliament, in its wisdom, has decided should not be made.

I draw the House’s attention to some very important figures on page 205 that the Government are sending to our European partners and masters about projected net migration into the United Kingdom. I was very happy to campaign with my right hon. and hon. Friends at the previous general election on a sensible and sensitive policy of controlled migration, wishing to get it down to the tens of thousands by the end of the Parliament. It was a very popular policy, because I think that people liked the idea that there would be a fair system offering sensible rules so that people could understand it before deciding whether or not to come to our country. Interestingly, the forecast that we are sending to the European Union shows that the level of migration will stay much higher than the Government’s target—it shows 256,000 in 2016, declining to 185,000 in 2021. There is also a further projection in which net migration stays considerably higher, actually above 250,000 in every year.

I think that matters, because the Government’s intentions are very clear: they would like to get net migration well below these forecast figures. Why, then, is the forecast so high? I think that it is very simple: the forecast is that high because the European continental economies, particularly in the south of our continent, are performing very badly and have created mass unemployment on an extremely worrying scale, so the UK, which has a more successful economic policy that is generating a lot of jobs, is acting as a magnet for people who are otherwise without hope of employment.

That policy is making it very difficult for the United Kingdom Government to hit their very popular target on migration. I hope that when this document is submitted Ministers will follow it up by pointing that out to the European Union and saying that they have a solemn promise to keep to the United Kingdom electors, who helped elect them to government, and that this set of EU policies, creating joblessness and therefore triggering a lot of foot-loose migration around the European Union, is making it very difficult to honour that promise.

It also leads us to worry about the quality of some of these forecasts, because I am sure that the Government wish to get the level down, but there is a great danger that the variant of a much higher level has been put in, because actually that is what they are afraid will happen. I hope the Minister will consider that when he replies and that if we are going to go through the process of submitting our homework on economic matters to the European Union to be marked—by sending it 300 pages of figures—we will also say to it, “You are making it impossible for us to meet our legitimate wish to create more jobs to mop up unemployment in our country and to get wages up, as we would like to, because your failing economic policies in many parts of the euro area are bringing a number of migrants into our country that makes it impossible for us to meet our targets.”

Those are just a few brief comments on an extremely complex set of documents and numbers, which show that, while we stay in this body, we need to engage much more and to get some change so that there is honesty in the targeting and an understanding of the damage that some of the targets and policies are creating. However, it will not be a surprise to hon. Members to learn that I think that the simplest thing would be for us to leave the European Union so that this is the last one of these documents we ever have to produce. We can then take control of our own money, banish austerity, spend the £10 billion on things that we want and leave the European Union free to get on with its political union, which is clearly what it will need to do to try to deal with the mass unemployment, the lack of cash transfers and the inadequacy of its regional policies.

I hope tonight’s debate will be of use to the general public and that they will understand that we can take back control, spend our own money, and have prosperity, not austerity. That is what we will get if we leave the European Union.

Yesterday there was a debate on the UK’s report of its public finances to the EU. Under the EU Treaties the UK has to submit its budgets to the EU, and they examine and comment on our economic management. Under the Treaty the UK is meant to keep its deficit to less than 3% of GDP. The figures sent in this year show the UK hitting that target for the first time since the crisis in 2008-9

Being out of the Euro the EU cannot fine the UK for failing to comply, but the EU does apply moral pressure and will comment on the UK’s financial situation if it wishes. As the government has been seeking to reduce the deficit anyway there has not been tension, but if a government had been elected that wanted to keep the deficit well above Treaty levels there could have been more public tensions.

The UK government felt it had to send a 300 page document to the EU to meet the requirements of the Treaty. This takes the form of sending the relevant parts of the Budget reports, along with a special preface to the figures. The document reproduces some of the interesting materials of the UK publication, including the latest OBR forecasts of population change. Their central forecast assumes net migration of 329,000 in 2025 and 256,000 in 2016, declining to 185,000 in 2021. This is well above the government’s own target for reduced numbers, and of course is based on the assumption of continuing EU membership. They also run a higher migration forecast where it stays above 250,000 for the next five years.

I raised with the Minister several issues. First, I asked why the UK has to go through this process. As the UK has failed to hit the deficit target for an extended period of years, wouldn’t it be better to exempt the UK from this whole process? Clearly our controlling our deficit is not important to the others in the way it is crucial if you belong to the same currency as the neighbours. Shouldn’t the UK’s so called “special status” recognise this?

Second, I raised the issue of population forecasts. What action is the government taking to prove these forecasts wrong, given the stated policy objective to get net migration down to the tens of thousands.

Third, I asked about the increase in expenditure transfers to the EU institutions, where the forecast for 2016-17 has been increased from £10.7bn in November to £11.8bn this March. This increase of £1.1bn is unhelpful, and just happens to be similar to the amount of the annual savings being sought in disability payments in the original budget.

Conservatives for Britain continues the serialisation of its Brexit Manifesto by showing how a future Conservative government could use the £10bn we send to the EU which we don’t get back to end austerity.

The UK currently hands over £19 billion to the EU every year. We get £9 billion back in services and the rebate which means when we Vote Leave we will be able to guarantee all the funding to farmers, universities and regional grants that currently come from the EU and still have £10 billion more to spend on our priorities like the NHS.

The Conservatives for Britain spending suggestions for the first post-Brexit budget include:

£1.1 billion for disability benefits to avoid controversial cuts
£800 million to train an extra 60,000 nurses a year to deal with shortages and excess agency staff
£250 million a year to provide an additional 10,000 doctors a year to deal with doctor shortages and to staff the seven day NHS well
£750 million a year on social care to offering better support for people in their own homes, and for more care home and respite care places.
£200 million to cancel hospital car parking charges
£400 million for dearer medical treatments not currently licensed by NICE, for example cancer treatments such as Proton Beam therapy and Meningitis vaccines
£1.9 billion to abolish VAT on domestic energy, energy saving materials, on converting existing dwellings and on carry cots, children’s car seats and safety seats
£1.5 billion to keep Council Tax down by offering councils the money to pay for a discount on bills they issue
£900 million to remove Stamp Duty on the £125,000 to £250,000 band of home purchase
£500 million should be allocated to a local road fund to support local schemes to improve junction safety and flows, and to provide additional capacity and bypasses on busy roads in congested areas

Commenting, John Redwood said:

‘The UK currently hands over £19 billion to the EU every year. That’s £350 million a week. If we Vote Leave we will be able to spend our money on our priorities like the NHS. We would have an extra £10 billion to spend allowing us to recruit thousands of new nurses and doctors.

‘We would be able to provide the latest cancer treatments that the NHS currently can not afford and provide extra money for people who are frail and need long term care. We would no longer need to make controversial cuts to disability benefits and we could scrap the tampon tax and the EU’s VAT increases on green goods like solar panels.

‘Instead of sending billions abroad each year we should spend that money on improving our NHS and helping families by cutting unfair EU taxes. That’s why the safer choice in this referendum is to Vote Leave.’

Section-3-Budget

Yesterday I was told that VAT on energy saving materials is not going up in the budget. I found that surprising, as I believed the consultation document HMRC (part of the Treasury)  put out on 9 December 2015. It stated clearly

“In line with the CJEU’s judgement, the government intends to amend the relevant legislation in the Finance Bill 2016.” “The purpose of this consultation is to receive comments as to whether or not the proposed legislation achieves its objective…”

The Consultation document made clear that the lower 5% rate of VAT on solar panels, water turbines and wind turbines would be replaced with a 20% rate. It also showed that in certain cases installations will in future only attract the lower rate on all energy saving materials if they are to “people living in dwellings who have a social need (qualifying persons) “etc  Other installations in residential dwellings will depend on the cost of installation relative to the energy saving materials. The Treasury estimated this as being a £65 m tax hike in a full year.

The truth is the UK lost its case in the European Court last summer. The European Commission took the UK to court, demanding that we raise VAT on energy saving materials in various cases. The Court decided clearly in favour of the Commission.  The Court said

 

“the United Kingdom of GB and NI has failed to fulfil its obligations under Article 98 of the VAT Directive , read in conjunction with Annex III thereto”.

 

In view of the fact that VAT is an EU tax, all the time the UK is in the EU it has to comply with EU law. The ECJ decides this, not the UK, and has recently decided the UK has to raise VAT on energy saving materials. The HMRC consultation is quite clear about what has to be done. It is not a consultation on whether we should do it or not, just a technical consultation on whether their latest proposals will ensure the UK complies. So why are some now  told the Finance Bill will not contain a VAT rise on energy saving materials?

 

The government seems to think it will get some new flexibility over VAT. This would require a new VAT policy from the Commission and changes to EU law. In the meantime the UK has  broken the current EU law and has been ordered by the European Court to change our law instead. When is this legal tangle going to be sorted out? Is the EU really going to change its law In the way we want? If so, how and when? Are we going to be fined for non compliance? Will we see the new draft law before the referendum?

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Before the last election Mr Cameron was attentive and available to MPs who wanted a change of course. He was persuaded by some of us to veto the Fiscal treaty, to offer a referendum and to seek to cut the EU budget, for example. Although he did not have a fully representative number of Eurosceptic Ministers in the government, he did make up for that to some extent by meeting with us and seeking to understand our concerns. We were delighted with the offer of a referendum, and redoubled our efforts to achieve a Conservative government on the strength of it.

Since the election Mr Cameron has been  spending much more  time with other EU leaders than with Eurosceptic backbenchers. Maybe that goes with the job. Maybe it was necessary to undertake a renegotiation. In part it is because the EU has entered another one of its phases of permanent crisis, with the great migration testing the borderless empire to destruction of the policy whilst the financial tensions of the Euro continue to play in many parts of the currency zone. He was of course abroad when the IDS problem blew up, showing again the difficulty  of EU entanglements to domestic politics, taking a PM away from crucial domestic matters when it is important to be available in person.

Whilst this may all be an understandable use of Prime Ministerial time, the danger is he loses sufficient contact and understanding with his own party, the very force that keeps him in office. Ending up on the opposite side to a majority of his party members and to around half his Parliamentary party on the EU issue despite indicating clearly he would like them to side with him creates new issues in party management that need careful and urgent attention. If he retains his understanding  of the merits of the Eurosceptic case and can sympathise with what we are doing it can be handled. If he gets to the point where he has forgotten all the reservations he has expressed in the past about the EU, and the apparent narrow call he made to recommend staying in, then he will find it more difficult to put the party back as one after the result of the vote. Some of us were proud to help with the Bloomberg speech, and many were pleased with its clear message that democratic accountability had to rest in the UK from the people to their Parliament. That is what we are trying to restore by proposing we leave the EU.

So what needs the Prime Minister to do to unite his party? He needs first of all to demonstrate that Ministerial jobs are as open to pro Leave people as to Remain people – I speak for many talented colleagues who wish us to leave, not for myself. The replacement of Iain Duncan Smith with a Remain person is not a good first step. If Leave wins then of course all the crucial roles that are EU facing and are part of the negotiation for exit need to  be taken by people who believe in exit. That modest minority who wished to remain and have been long term believers in the project also deserve their share of positions, but those who have voted Remain with little conviction do not need a representative quota given the views of the party but should be judged solely on their Ministerial merits. Were Remain to win the half of the Parliamentary party that wants out will be  bitterly disappointed as they are believers and representatives of much of the party membership , so will need to be involved in the government that follows. Again some of them could  be useful in EU facing roles to try to prevent the EU using their win in our vote to brush the UK’s continuing legitimate concerns aside.

He also needs to nuance his comments in the referendum campaign. He speaks as if the only thing that matters to him is winning, turning a deaf ear to the legitimate  views of the other side. That is fine for a partisan fighting a  normal election, as such  partisans don’t win the right to stay in office if they lose. As he wishes to remain  Prime Minister, he has to remember that the Prime Minister has to speak as best he can for the whole nation. As party leader he has to speak for the majority of his party. If he spends the next few weeks denying, criticising and brushing aside everything we believe in about the fundamentals of our democracy and our nation, it will  be that much more difficult for him to put it all together again afterwards.

I respect those on the other side of the EU debate who genuinely want a United Europe, with full banking, monetary, economic and political union as the leaders of the EU want. I disagree with them, but understand their vision. I find it  very difficult to understand people who argue with us about how imperfect the EU is, and then insist we stay in it for fear of them trying to  be nasty to us if we leave. The UK has no tradition of giving in to bullies. It is  bizarre that the main view that many pro EU people have in the UK is that our partners are nasty. Fortunately they would not be powerful enough to hurt us.

I drew attention to the fact that the official minutes of the 7 March EU/Turkey Agreement made clear that all member states need to lift visa restrictions on Turkey by June this year. The UK government keeps saying this does not apply to the UK.  I suggested they have the minutes amended in that case.

 

Far from doing so, the minutes of the European Council held 17-18 March  reconfirmed the minutes of the 7 March “Following the decisions of the Heads of State of government of 7 March”  the European Council “calls for the full implementation of the EU-Turkey statement”.  So if we assume the UK is not actually going to lift visa restrictions we are left wondering why official statements of the Heads of State and government which we are asked to rely on in other contexts are wrong on this matter. We also need to remember how assurances that the UK would not have to bail out Euro countries were swept aside when it came to a new loan for Greece.

There can be no opt out for the UK when it comes to possible Turkish membership of the EU. There we are told clearly in the minutes of the Council meeting that ” the EU and Turkey reconfirmed their commitment to re energise the accession process” for Turkey to become a full member.

Visa liberalisation even if confined to the continent means many more people having easy access to the EU and possibly establishing citizenship and free movement rights to the UK  as well as the rest of the EU. Full membership of course brings complete freedom of movement. In view of the pressure on us already from the many people in the rest of the EU who want to work and live here, we do need to consider this Turkish issue more seriously. One of the failings of William Hague’s Referendum Act was it does not give the UK people a vote on new members joining the EU, though they can represent a big change to the EU and to our obligations as. Result.