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European Affairs

If the Minister will be patient, I will explain the problem of EU regulation. Indeed, I come to the very point now. Earlier this year, the Enterprise and Industry Commissioner, Gunther Verheugen, said that EU regulations were costing the European economy €600 billion a year. That amounts to about 5.5 per cent. of Europe’s total gross domestic product. That is staggering enough: on the Commission’s own figures, European businesses are losing the equivalent of the entire GDP of Holland every single year. If we consider that against what the EU considers to be the financial benefits of the single market, the case against the EU becomes a bit more open and shut. The most recent Commission estimates are for 2002, when the single market benefits were put at €165 billion—quite substantially less than the costs. Even taking account of inflation, the costs of EU membership to business are about three times the benefits. So much for the economic benefits of the EU. Far from being good for business, the bureaucratic EU is actually profoundly harmful to business—and that according to the European Commission itself. I wonder how much of those costs are falling on the shoulders of British businesses and I wonder what a business man might feel about withdrawal when faced with that particular fact. ICM recently conducted a poll that found that 54 per cent. of businesses think that the cost of implementing EU regulations now outweighs the benefit of the single market. That poll also showed that 52 per cent. of chief executives think that the EU is failing and that 60 per cent. want what I advocate—withdrawal from the EU and a free trade agreement with EU countries. Crucially, only 24 per cent. of those business people thought that the EU would increase in economic importance in the future, whereas 35 per cent. thought that it would decline. Our future prosperity, Madam Deputy Speaker, depends on trading with countries such as China, India and South America and with the Commonwealth; it does not depend on being part of an inward-looking, backward-looking protection racket, which is what the EU has become. Since 1970, the United States has enjoyed net growth of about 25 per cent., yet the EU—this much heralded economic powerhouse—has enjoyed net growth of around zero. When it comes to such stark figures, we have to ask whether the EU has contributed towards that sluggish growth. If we compare the EU’s stifling levels of regulation and high taxes with the USA’s business-friendly, low-tax economy, we are forced to conclude that the EU’s social democratic model has contributed to it. If the Chancellor is to be believed, the UK has enjoyed the longest period of sustained growth, but what could it have been without the drag of the European Union? If we are to compete with the vastly cheaper labour forces of India and China, our economy will need to be agile and competitive with a light regulatory touch—not the EU model of crippling regulation, restrictive employment laws and high taxes. Surely the EU and the British Government must see the economic threat to our economy from India and China. In years to come, Madam Deputy Speaker, historians will look back and say that the biggest winner of the EU project was China. Britain puts more into the pot than it gets out. We have been a net contributor to the EU ever since it started. We have contributed almost £200 billion in membership fees alone, and we will add another £14 billion to our bill for continued membership next year. The annual cost of the EU for every man, woman and child works out at £873. Can we imagine what a hard-working family of four on a tight budget could do with that kind of money—about £3,500? Every minute of 2007, the EU will cost the UK £100,000. Let us just think of the nurses, operations, hospitals, policemen, prisons or even cuts that such a figure could pay for. When you consider how wasteful the EU is, how many people do you think, Madam Deputy Speaker, would think that it was the best way to spend all that money?