HL Deb 05 July 1995 vol 565 cc1089-92

2.58 p.m.

Lord Stoddart of Swindon asked Her Majesty's Government:

Whether they will commission a cost/benefit analysis of the United Kingdom's membership of the European Union, as distinct from United Kingdom access to the European single market.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley)

My Lords, the Government have no intention of carrying out such an analysis, which would be time-consuming, expensive and unnecessary. The Government consider the benefits of membership of the European Union to be self-evident.

Lord Stoddart of Swindon

My Lords, is the noble Lord aware that I find that a disappointing Answer to what was intended to be a helpful Question? Is he further aware that the reason why we are having such a huge argument—and there has been such a huge argument over the past fortnight in the Conservative Party—is that the benefits of membership are not self-evident? Therefore, would it not be wise, as any business would do, to undertake an analysis of the cost and benefit of our membership of the European Union so that not only the Government but the country as a whole can make a decision and a judgment as to whether our membership is in the country's interests and whether it is in our interests to continue to be a member of the European Union?

Lord Henley

My Lords, I am sure that the noble Lord is trying, as always, to be helpful, but I think that he will accept that conducting such an exercise would be fraught with pretty major problems. It would rely very much on hypothetical assumptions about the level of domestic UK spending in the absence of contributions to and receipts from the Community budget; on the policies which replaced those in the Community; and on the performance of the UK economy outside the Community. Furthermore, as I made clear in my original Answer, there is a whole range of hidden political and economic benefits from European Union membership which I do not think that it would be possible to itemise or quantify in the manner which he suggested.

Lord Cockfield

My Lords, is not the Question meaningless as one cannot sever the single market from membership of the European Union? Would it not be just as sensible to ask for a cost/benefit analysis of the head if it were severed from the body—a state of affairs that the individual concerned would find most regrettable?

Lord Henley

My Lords, being a kind person, I would not want to follow my noble friend in saying that the Question was totally meaningless. I was trying to say that, even if it was meaningful, it would be jolly difficult to calculate the matter in the way in which the noble Lord suggested.

Lord Bruce of Donington

My Lords, is the noble Lord aware that neither he nor his Government can get away indefinitely with vague generalities about the effects of our membership of the European Community? Is he further aware that it is possible, at a fraction of the sum which the Government spend annually on employing consultants, to get the correct statistical material upon which reasonable judgments can be made? Is the Minister also aware that if he will not do that now, he will be compelled to do so sooner or later because this is something in which the British public as a whole, not merely statisticians, are vitally interested?

Lord Henley

My Lords, I am sorry that the noble Lord accuses me and the rest of the Government of uttering vague generalities. I thought that I was quite specific in my response to the noble Lord, Lord Stoddart, when I explained the difficulties of conducting such an exercise. I then added that there were various political and other advantages which could not be quantified in the manner which the noble Lord suggested. I do not think that I can take the noble Lord further than the Answer that I gave.

Lord Hailsham of Saint Marylebone

My Lords, is not the defect of a cost/benefit analysis in this context that it would involve hypotheses incapable of verification?

Lord Henley

My Lords, my noble and learned friend is absolutely correct. That was the point that I was trying to make but at slightly greater length. My noble and learned friend makes the point with greater succinctness.

Lord Marsh

My Lords, why does the Minister think that it is so difficult to separate the single market from the political union? ASEAN and NAFTA are both very successful single markets; they do not have a political union. Without wishing to argue the merits, I cannot understand why the two cannot be separated.

Lord Henley

My Lords, the fact is that we are members of the European Union. If the noble Lord is suggesting that we should withdraw from the Union but remain part of the European Economic Area, what he is suggesting is that we should have the benefits and the obligations that go with the single market without having any opportunity to influence its development within the European Union. The two cannot be separated.

Lord Monson

My Lords, is the Minister not aware that over the past year public support for membership of the European Union has fallen from 66 per cent. right down to 35 per cent. in Austria and from 52 per cent. down to 32 per cent. in Sweden? Does not that indicate that the peoples of Europe, as opposed to their establishments, are coming round to the view that membership of the European Union brings more disadvantages than benefits?

Lord Henley

My Lords, the noble Lord should be wary, as I think that the party opposite is now wary, of reading too much into opinion polls. The simple fact is that those countries decided to join the Community after referenda, and they decided to join by a majority.

Lord Tebbit

My Lords, but if all these matters are so hypothetical and if it is so difficult to make an assessment of them, how can my noble friend be so absolutely sure of in which direction the balance lies?

Lord Henley

My Lords, as I said in my original Answer, I believe—I think that a great many others also believe—that the advantages of membership are self-evident. I accept that my noble friend does not share my view on such matters, but I could list a whole range of advantages that we gain from membership of the Community in terms of trade and in terms of the EU acting as a trade negotiator and giving us greater influence in the world, as well as all the inward investment that has come to this country as a result of our membership. I could go on.

Lord Eatwell

My Lords, would the Minister care to reconsider his rejection of my noble friend's suggestion? Surely it might be useful to introduce some notion of scale into the debate; for example, in a cost/benefit analysis one could compare our annual contribution to the European Commission, which runs at an average about £1 billion per year, with the £14 billion of taxpayers' money which was wasted by the Tory Government on the poll tax in a single year. One could compare, could one not, the hypothetical costs which might be imposed on the UK Government by a Commission which directly controls at most 2 per cent. of UK GDP with the very real damage that was inflicted on the UK economy by the Tory Government, who control 45 per cent. of UK GDP?

Lord Henley

My Lords, I note with interest the Opposition Front Bench support for conducting such a cost/benefit analysis, which, as I explained, is severely impractical. There is no way in which one could do it with any relevance. As regards the main points of the noble Lord's question, I fail to see what they have to do with the Question on the Order Paper and I have no intention of even attempting to answer them.

Lord Peyton of Yeovil

My Lords, returning to the question which my noble friend the Minister was asked by my noble friend Lord Tebbit, does he agree that endless belly-aching and endless fault-finding with an organisation to which you belong is very unhelpful and is likely to be self-defeating?

Lord Henley

My Lords, this is one of those possibly rare occasions when I can totally and utterly agree with my noble friend Lord Peyton. I am most grateful for his comments.

Lord Pearson of Rannoch

My Lords, does my noble friend agree that in his answer to my noble friend Lord Cockfield it might have been helpful if he had suggested that he read the Question before intervening? The Question is whether there should be a cost/benefit analysis split between our benefits from the Union and our access to the market. Does my noble friend further agree that the benefits, which he takes as self-evident, come to this country because of low labour costs and good labour relations, because of low inflation, because we speak English, because we have access to the market, and scarcely at all because of our ruinous membership of the Union?

Lord Henley

My Lords, as I pointed out to the noble Lord, Lord Marsh, we not only have access to the market but, through our membership of the Union, we have the ability to influence how that market develops. That is the important point.