Analysis of Costs and Benefits (European Union) (Hansard, 6 February 2001)

§ Mr. Michael Fabricant (Lichfield)

I beg to move, That leave be given to bring in a Bill to establish a Parliamentary Commission to investigate and report regularly to Parliament, at intervals to be determined by Parliament, on the costs and the benefits of the United Kingdom's membership of the European Union.

May I say what a pleasure it is to see the Minister of State, Foreign and Commonwealth Office, the hon. Member for Leicester, East (Mr. Vaz), in his seat, listening to me today? I hope that he will take on board some of the points that I intend to make.

The Bill is about one thing only: knowledge. We want to find out whether being a member of the European Union is a net cost or net benefit; whether, on balance, this country benefits from inward investment or whether it costs us billions of pounds. Unfortunately, secrecy shrouds the facts. My Bill would establish a parliamentary commission that would cut through that secrecy. It would then be up to Parliament to act on the facts as it thought fit. We simply do not know whether EU membership is costing billions of pounds, but if it turned out that it was, that money could otherwise be spent on pensions, health care, schools and investment to ensure that our industry remains strong.

Of course, I recognise that there is far more to our membership of the EU than money alone. There is the political facet, too. However, my Bill does not deal with that or questions of sovereignty; it deals simply with the fiscal issues. Are we benefiting or are we losing out? It seems an incredible irony that everyone does those analyses except the British Government. The Institute of Directors produced an analysis, which was published some months ago, called "EU Membership—What's the Bottom Line?" The institute's calculation was interesting. It stated: The current net cost of membership is £15 billion per annum and may be as high as £25 billion——around £1,000 for every household in the country. The institute took into account the benefits of the EU budget, the common agricultural policy, customs union, the single market, the EU social model and EU-related foreign direct investment, which have a benefit for the UK economy. The institute reckoned—although my point is that we just do not know—that that benefit was outweighed by the costs of the EU budget, the CAP and the EU social body. We do not know what will happen in future when the EU is enlarged.

More ironic still, while the British Government refuse to conduct such a cost-benefit analysis, the United States Government have. I confess that I have not read their weighty document and, judging by the quizzical look of the Minister of State, it seems that he has not read it either. It was published in August 2000, is called "The Impact on the United States Economy of Including the United Kingdom in a Free Trade Agreement with the United States, Canada and Mexico", and was produced for the US Senate and the US State Department.

That document examined the matter from the US point of view. Global Britain gave a brief synopsis of it, and 800 said that the "comprehensive and exhaustive study" produced by the US International Trade Commission is based on complex computer modelling of country-by-country and sector-by-sector trade flows. They—the United States Government—reckoned that the United Kingdom derives no economic benefit from being in the EU, compared with not being in the EU. Admittedly, the United States looks at the matter from the US point of view. I should like the United Kingdom Government to look at it from the British point of view.

The US Government came to another interesting conclusion: If the UK joined NAFTA, she would be better off leaving the EU completely, rather than retaining the present Single Market arrangements. The document went on to state: This is because leaving the EU completely, with the Continentals having to export to the UK over an average tariff wall equivalent to the present Common External Tariff, and vice versa, cuts the UK deficit with the EU, stimulating UK domestic output"— that is according to the US Government in mining", which would interest the hon. Member for Bolsover (Mr. Skinner), and iron and steel", which should interest many, many hon. Members on the Labour Benches, although one hon. Member is laughing and giggling continuously.

The Bill is intended not to make a judgment about the European Union, but to provide the facts about our membership. The conclusions that I have read out are those of the US Government. I want our Government and our officials to produce their own conclusions.

The Bill deals with knowledge that should be in the public domain. At present such knowledge seems to be a secret, either because the Government have conducted a cost-benefit analysis and are keeping the results secret, or because, as I suspect, the Government have conducted no such analysis.

The Opposition want to remain in Europe, but we do not want to be run by Europe. The costs of the exercise must be known; they cannot remain a secret indefinitely. The Bill would put the information in the public domain. If we benefit overall financially from EU membership, that is well and good, and we need to concentrate only on matters of sovereignty.

However, if there is a net financial cost, we must not only argue our case more rigorously and renegotiate for the retention of our national sovereignty, but we will have even greater cause to fight for a reform of the crippling common agricultural policy and directives that do so much damage to British manufacturing industry. The Bill would simply make public the costs or the benefits—nothing more, nothing less.

§ Mr. Stuart Bell (Middlesbrough)

I oppose the Bill. I have great admiration and respect for the hon. Member for Lichfield (Mr. Fabricant) and for the forthright way in which he expresses his views. The House has listened to his arguments with interest.

The last time that we had a similar parliamentary commission was in 1890, when there was a debate about whether the French would attack Britain. The commission proposed by the hon. Gentleman is of the same order.

801 The hon. Gentleman asks what benefit we derive from being in the European Union. The benefit is obvious to all those who are engaged in trade: 57 or 58 per cent. of our exports go to the European continental shelf. [Interruption.] The right hon. Member for Bromley and Chislehurst (Mr. Forth) says, "So what?" If he were in a manufacturing industry or a service industry selling to Europe, he would not be shouting, "So what?" He would be very grateful for the jobs and the work that had been created.

With 57 or 58 per cent. of our exports going to the European continental shelf, it would be extremely unwise for us to call for an analysis of the costs and benefits. The hon. Member for Lichfield suggests that other benefits are not self-evident. There are diplomatic benefits. We are part of Europe; we are members of all the Councils of Europe; someone in Palestine who wanted to discuss matters or to seek support would approach the European Union. In the United States, the first question asked by the George W. Bush Administration was, "With whom must we deal in Europe?" They will have asked how many telephones they have to pick up in order to debate diplomatic issues, but they want one debate, which can be conducted with the European Union, through one person.

The European Union enables Britain to debate and to exert diplomatic influence. As the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) said many years ago, we gave up none of our sovereignty when we joined the European Union. We shared and pooled it. We joined with our traditional enemies—France and Germany—to be sure that the wars that occurred during 100 years of conflict could never happen again.

802 The hon. Member for Lichfield made an eloquent proposition, but when I listen to the comments of some Conservative Back Benchers, I wonder how much of a little England we can become and how far removed we can be from the reality of the world in which we live. Clearly, that world is one of the European Union. Membership has a cost benefit, through improved trade, and a diplomatic benefit. There is also a greater overall benefit in historical terms. For all those reasons, I oppose the Bill, however well intentioned it is and however well the hon. Gentleman argued for it. This House of Commons, which represents this nation, should look the facts and history in the face. It should understand that our destiny is Europe and that the days of hon. Members who say that Europe is cut off by fog are over. The only fog that we see in the House is on the Opposition Benches.