Author: johnredwood

When assessing our past membership of the EU the UK has plenty of reason to worry over damage done to our interests, jobs and economy by EU membership. I would be interested to hear your views on which EU policy has been most damaging. There are so many to choose from. I list below some of the more obvious candidates.

1. Common Fishery Policy. Has led to the loss of fish stocks, the imposition of tough quotas, and the elimination of much of the British fishing fleet. Making our fish a common resource has not been good for the UK.

2. The European Exchange Rate Mechanism. Our membership of this quack remedy for our economy led first to a rapid inflation and then to a deep recession. It lost us around 5%of our national output.

3. The Common Agricultural Policy. UK farmers have been denied sufficient quota to meet our and their needs in some sectors. Our beef farmers were badly treated over handling BSE. Food consumers have had to buy dearer continental product instead of importing from cheaper places elsewhere thanks to tariffs and controls. Emerging market countries have been denied fair access to our markets, impeding their development.

4. The Common energy policy. Whilst the UK’s home grown Climate Change policy of the Labour government was unhelpful for keeping the lights on and supplying enough affordable power for our needs, the UK is locked in by the Renewables requirements and the combustion controls to expensive and unreliable power and to premature power station closures.This worsens fuel poverty and spurs de industrialisation.

5. The Euro. Fortunately we won the battle to keep the UK out, but we are adversely affected by the mass unemployment, slow growth and no growth which this currency scheme is inflicting on much of the rest of the EU.

John Redwood (Wokingham) (Con): I welcome a fairly early date for the referendum. I do not know about you, Mr Speaker, but there is only so much that I can take of all the stories of the pestilence, famine and plague that are going to be visited upon us by the very European Union countries that the Government say we love and work well with. The Government have this strange vision that those countries would suddenly change and become extremely unpleasant were we to want a relationship based on friendship and trade rather than on the current treaties. I personally think that 16 weeks would be quite enough to do the job that I would love the Government to do, which is to win it for the leave campaign by using this highly inappropriate tone and by constantly slanging off our European partners by telling us just how unpleasant they would be. I would have thought that a Government wishing to encourage us to stay in the European Union would want to be rather more obliging about our European partners and to paint a picture of how things might be better were we to stay in, rather than concentrating only on ascribing false futures to the leave campaign.

I am interjecting in this debate because I am worried that 16 weeks might not be long enough for the Government to carry out all the tasks necessary to fulfil the requirements of the legislation. In particular, I have been moved to that view by listening to my hon. Friend the Member for Stone (Sir William Cash), who is often absolutely right about these points and their salience. The Government have an important duty to provide impartial information to the public as part of the task of preparing them for the referendum. Having seen their work so far, I am afraid to say that it fails by all standards. It is not impartial, it is not well researched and it is often exceedingly misleading. I am using parliamentary language, Mr Speaker; I might use richer language were I not inside the House. It seems to me that the Government are going to need a lot more time to work with their ever willing officials to come up with balanced, mature and sensible information about what the future might look like under either scenario.

One thing that the Government have clearly had no time to prepare so far—this is a particularly worrying lacuna—is information on what the future might look like if we stay in. We have had no response from the Government on how they would respond to “The Five Presidents’ Report: Completing Europe’s Economic and Monetary Union” or on how they would handle demands for capital markets union, banking union, full economic and monetary union and political union. Would such a situation immediately trigger a requirement for us to veto the next treaty, would we seek a comprehensive opt-out from it, or would the Government want to work with their partners and agree to some modest treaty changes that would affect the United Kingdom, in the spirit of “The Five Presidents’ Report”? Any such changes would be triggered after about 2017, so probably within this Parliament. Could we then look forward to a second referendum if we stayed in the European Union?

Under the European Union Referendum Act 2015, there would need to be a referendum on any treaty changes made as a consequence of “The Five Presidents’ Report” and the clear desire of our partners to go along the route to political union.

Sir William Cash (Stone) (Con): Has my right hon. Friend had the opportunity to see not only the White Paper that was produced a few days ago but the latest jewel in the crown from the Government, which is entitled “The process for withdrawing from the European Union”? It contains page after page of tendentious remarks, assertions and assumptions that cannot be substantiated. I can see the Minister for Europe wriggling around a bit on the Front Bench, because the bottom line is that he will not be able to answer these questions, but they will be tested before 23 June.

John Redwood: That is why, in my amiable way, I was suggesting that the Government might like to rethink their position on the timing of the referendum. Having seen that piece of work, I agree with my hon. Friend. I was frankly ashamed that such a document could come from the United Kingdom Government. It bore no relation to what the leave campaigns are saying about how we would like the Government to handle the British people’s decision if they decide to leave. It did not give any credence to the idea that we would be negotiating with friends and allies who would have as much interest in a successful British exit as we would, should that be the will of the British people.

Ministers never seem to understand that the rest of Europe has far more exports to us at risk than we have to the rest of the European Union, because we are in massive deficit with those countries. I have had personal assurances from representatives of the German Government, for example, that they have no wish to see tariffs or barriers being placed in the way of their extremely profitable and successful trade with the United Kingdom. To issue a document implying that all sorts of obstacles would be put in the way of such trade over a 10-year period simply beggars belief.

Sir William Cash: May I give my right hon. Friend an example? These documents contain scarcely any serious objective analysis from bodies such as the Office for National Statistics or the House of Commons Library, and their arguments are tendentious. I am sure he will remember, because this is at the forefront of his mind, that in current account transactions relating to imports, exports, goods and services, we run a deficit with the other 27 member states of about £58 billion a year, and that Germany runs a surplus in those same goods, services, imports and exports. If that is a single market, I’m a Dutchman.

John Redwood: I am sure that my hon. Friend is many fine things, but a Dutchman is clearly not one of them. He has, however, revealed an important fact, and it is the kind of fact that we would expect to see in a balanced document setting out the position on trade. I hope that the Minister will leave enough time in his urgent timetable to ensure that those sorts of important facts—

Sir William Cash: With references.

John Redwood: With references and proper statistical bases. Those important facts should be put in front of the British people. Indeed, the Minister would be wise to do that from his own point of view—perhaps I should not help him as much as I am apparently trying to do. The Government have been rumbled on this. The press and a lot of the public are saying that they want factual, mature and sensible information setting out the risks of staying in, the risks of leaving and what it would look like in either case, but that is not what we are getting.

We have had another example in the past few days. We have been witnessing a long-term decline of the pound against the dollar for many months, because we are living through a period of dollar strength. In the past few days, when Brexit was in the news, we were told that the pound was going down because of fears about Brexit, whereas that was clearly not the case on other days when the pound had been going down. However, on those same days, the Government bond market had been going up. The prices of bonds had been rising and our creditworthiness was assessed as being better, but I did not hear the Government saying that the idea of Brexit was raising Britain’s credit standing. We could make that case just as easily as we could make the case that the fear of Brexit was leading to a fall in the pound.

That is the kind of tendentious information that I hope the Minister will reconsider if he wishes to keep up the normally high standards of Government documentation and use impartial civil service advice in the right tradition, which we in the House of Commons would like to see. I can see that a few colleagues are not entirely persuaded that those high standards are always met, but I shall give the Government the benefit of the doubt. I have certainly seen many Government documents that achieve higher standards than the ones on this matter.

I again urge the Minister to make sure that he leaves enough time in the action-packed timetable to produce high-quality, balanced information that includes the risks of staying in and the wild ride to political union that others have in mind, as well as what he sees as the risks of leaving. For instance, the Government should point out that if we stop paying the £10 billion of net contributions—money we do not get back—that will immediately improve the balance of payments by one fifth next year. Would that not be a marvellous advantage? I do not see it being pointed out in any of the current material in order to show some kind of balance.

Mrs Anne Main (St Albans) (Con): My right hon. Friend is making a hugely powerful argument. The answer is quite simple: the Government do not want the facts in there—they do not want the British public to know. The British public will come to that conclusion, and it is not a good conclusion if we are to have a balanced debate on the referendum.

John Redwood: I fear that is right, but I also fear I am beginning to give the Government too much help. Obviously, I would like them to lose on this occasion, because I think we will be much better off if that happens. I will therefore vote with the Government, because 16 weeks is quite enough of “Project Fear” and of people misrepresenting a whole lot of things that are going on by saying, “These are the results of the fears of Brexit.” That will do the job I would like the Government to do and help the case I am trying to make, but the Government have a long way to go in the interests of good government and in meeting the legal requirements that they have placed on themselves to provide impartial information. I just trust that in the next few weeks they can lift their game.

Various lower estimates for the UK’s saving from leaving the EU have been put about. Let me remind people where the £10 billion figure comes from. It is the last official ONS figure for a whole year, 2014, published in the Pink Book. It is based on the following figures:

 

UK payments into EU

 

Vat contribution                                                                              £2388 m

GNI contribution (based on recently revised up GDP)         £13762 m

Customs duties                                                                               £2949 m

Total (inc small items)                                                                 £19107 m

 

Payments to UK

Fontainebleau abatement  (Thatcher rebate)                        £4416 m

UK charge for collection of customs duties etc                      £741 m

Agricultural receipts                                                                    £2309 m

European Social fund                                                                    £221m

Capital receipts (universities, regional etc)                           £1478 m

Other receipts                                                                                    £70 m

Total Receipts                                                                              £9235 m

 

NET ONE YEAR COST OF EU                                                                      £9872 m

 

 

The Stay in campaign seem to think the fall in the pound against the dollar is the result of Brexit fears. I don’t think so. But let’s humour them and agree that the chances of Brexit have become much higher recently and this drives markets. Then on that basis they need to explain the following:

In early May 2015 on the election of a Conservative government offering a referendum it cost the government 1.9% a year to borrow 10 year money. Clearly before the election there was no chance of a Brexit, and after the election there could only be a chance of Brexit on a Conservative win.
By January 3rd this year this had fallen to 1.77%.
On February 1st it still cost 1.626%.
Over the month of February, the first month of serious campaigning for Brexit and the first month that markets focused on the possibility of exit, the cost fell to 1.37%.

Clearly markets think the UK out of the EU will be more credit worthy! That makes sense, as we will no longer need to send huge sums of borrowed to the EU and not get it back.

The only thing the Stay in campaign wishes to say is that the Brexiteers are muddled over coming out. This is far from the case. Let me try one more time to explain our view.

There is no need for the UK to seek a Norwegian or Swiss style deal with the EU. The two biggest wins from leaving will be getting our money back to spend as we wish, and ending our obligation to freedom of movement with the rest of the EU. The Leave campaign has no wish to throw part of these gains away by entering an EU lite arrangement which makes us pay some money in and requires us to be part of the free movement zone.

The only reason the Stay in campaign wish to imply we want to be Norway is to be able to claim that we will then not get the two big wins we want from exit! When will the media get this point and start asking the Stay in campaign what the future looks like inside as the EU rushes on to political union.

The day after we decide to leave – assuming we do – nothing changes. We would say that trade and other contacts continue as at present, and we will then go to Brussels to discuss what we need to change and to hear what they would like to change in our relationship. We would tell them that contributions will cease and that we will taking charge of our own borders. All EU citizens currently in the UK would be welcome to stay, and we would expect all UK citizens in EU countries to be free to stay. Future EU citizens wishing to come to the UK would need to comply with UK migration rules, which would have common principles for the whole world and would no longer discriminate against non EU nationals. The EU is not going to evict UK nationals legally settled elsewhere in the EU, and may or may not want to impose restrictions in future over migrants from the UK. Neither side is going to want to restrict people with good qualifications or with money to support themselves from changing residence as they see fit.

The UK would not wish to impose any new barriers on trade with the EU, despite being in heavy deficit. It is unlikely the rest of the EU will wish to impose any new tariffs or barriers on their trade with us. Were they to seek to do so, they would be unable to exceed World Trade Organisation tariff levels as both the other EU states and the UK will be members of the WTO. To clarify the current position, the UK and the other EU states are members of the WTO in their own right, so WTO arrangements can remain in place when we leave the EU. All that should change is the UK will regain her voice and vote at the WTO and no longer have the EU representing her. The EU has very few trade agreements outside the WTO arrangements.

Western democracies have traditionally produced two main parties, one centre left and one centre right, who compete for power. In sovereign states the party out of power can offer an alternative in big matters like how to run the economy. Those who dislike or disagree with the government can rally round, hope to win the next election and then see the major policy change they want if they win. Sometimes centre left parties adopt more of the centre right agenda to win as with New Labour. Sometimes centre right parties adopt some of the policies of their rivals to win.The important things are they must offer genuine choice and can change things when elected. Sometimes it is because they sell a convincing message of change that they win.

Belonging to the Euro and the EU alters all that. Belonging to the EU without joining the Euro has changed quite a bit of that. As we have seen in Greece, it does not matter what economic policy the voters or the winning parties want, they end up with EU policy which does not change. Greek voters used recent elections to issue a strong protest, but ended up with the same EU austerity policies they rejected. In the EU, now there are large areas including energy, fishing, agriculture and the EU budget and tax requirements that cannot be changed by a change of UK government.

As a result we are seeing in the Euro area the collapse of the traditional parties as frustrated electors seek a change which will still be denied them. Ireland has now followed Spain in producing an election result that does not produce a stable government owing to the decline of the two main parties. Even Germany has the two main parties governing in coalition with each other. In Greece the two old main parties have been hugely damaged by events.

In the most recent results in their respective countries the two main traditional parties managed to poll just 34.4% together in Greece, 40.7% combined in Spain and 49.8% in Ireland. Such is the impact of recent events and of EU policy and the Euro on their economies that now more than half of all voters in each of these three countries rejects both traditional alternating governing parties of the last century and the previous decade. In the UK where the absence of the Euro has allowed a better economic recovery from the crash, the two main parties received the votes of 67.3% of voters, well down on the much higher proportions in past decades. In Germany too, despite being relatively well served by the Euro compared to the badly damaged countries of the south and west, the two main parties only managed to get the votes of 67.2% of those voting in the last election.

The two main parties look hard in each country at seeking to prop up the EU/Euro establishment by entering coalition together,to keep the challenger parties who want a change of policy out of government. Junior partner parties in coalitions often do badly in subsequent elections, so not every country goes this route. It will be interesting to see what the two traditional lead parties in Ireland do now they are faced with this dilemma. Although the UK has not yet needed or wanted a grand coalition, in practice we have experienced a grand coalition of Labour, Lib Dem, Conservative front bench and SNP to drive through many EU measures which Conservative Eurosceptic MPs have fought against. Labour is usually keen to avoid all discussion of the EU, and in office refused to set out just how much power it was surrendering.

What the voters seem to be saying in many Euro and EU countries is they want changes to policy which the EU will not allow. Only the UK so far has tried to get changes to the EU following a General Election result producing a win for a party that represents the UK voters worry about EU policies on welfare and borders. The lack of success in negotiating proper change will confirm many people’s views that the EU cannot be made democratic. The UK model is also one which other countries will not be allowed to follow. The EU as it stands cannot face a renegotiation of membership terms with each country following a General election. However, unless it does so and allows proper changes, the wishes and views of electorates from Greece to Portugal and from Cyprus to the UK will be ignored.

Recent reporting of market movements and the EU arguments has been highly selective. Some ascribe falls in sterling to Brexit uncertainty. At the same time UK government bonds have been rising, implying investors have more confidence in UK financial assets and therefore implying that Brexit is seen as strengthening the UK public finances. My view is they are exaggerating the impact of Brexit on the pound, but maybe they have not worked out that saving all those large contributions to the EU will strengthen the UK public finances and of course cut the balance of payments deficit.

We should be more worried about EU finances and their economic outlook if the UK leaves the EU. Which countries and taxpayers will have to replace the £10 billion the UK pays in to the benefit of the other countries? How will a new UK fishing policy affect the Spanish fishing industry? If the UK imports more cheaper food from the rest of the world who will pay the higher prices for CAP food inside the EU? Is any of the EU’s large trade surplus at risk when the UK leaves, as some commentators like to claim the UK’s trade might be? My view is trade is not at risk, but those who think it is at risk need to understand which side has more to lose.

It is true that the U.K’ S departure from the EU will allow the rest of the EU to move more rapidly to political union and to impose more common policies and more regulations without the UK trying to slow it all down. We have learned that pending rules to ban fast kettles and toasters have been delayed until after the UK vote, as it would not look smart to outvote us on those issues just before the referendum. The 5 Presidents Report has been on ice this year, but could be brought out more rapidly if the UK goes.

I see myself as a good European. I like my continent and many of its people. As a good European I do not want my country to hold up plans for more European integration, nor do I want my country to be dragged into that Union.
The UK is an outward looking global country, trading with the five continents, and friends with many countries worldwide. To restore and foster our democracy we need to leave. There will be no additional economic risks for us outside the EU. On the contrary the risks that come from being too close to the Euro, having to pay into an ever rising EU budget and being pillion on their wild ride to political union mean we must leave to cut our risks.