Mr. Joe Durkan:

I will talk a bit about the background to the UK leaving. I will then say what I think the likelihood is for the UK and for its relations with the European Union. I will also say something about the likely performance of the UK economy being out of the EU and what that means for us because it is really through trade that we will face an impact. The focus is on the UK.

The basis for the UK leaving, as presented, is almost entirely political and driven by the political needs of the present Government and how it perceives Eurosceptics within the Conservative Party, and the growth of the United Kingdom Independence Party, UKIP. That lies behind it and in order to justify it many arguments have been used, most of which do not stand up. There is a claim that the UK is not integrated within the EU economy and in particular the financial services sector, the services sector, has not been integrated. The data do not support that. The growth in the UK trade with Europe has been very rapid, much more so than in previous periods. Work that has been done in the United Kingdom that has tried to separate out the Single Market effect and the growth effect suggests that the UK’s penetration of Europe has increased, as has the penetration of other EU countries into the UK.

In respect of the services sector it is probably true that it has not integrated as well but that is true of all countries, not just financial services but accountancy, legal and all the rest of those services have not developed to the extent that one might have expected under the Single Market programme. It may be that it takes a bit longer than people had expected. That is important. There is also a problem with red tape and the claim that the UK economy is held back by red tape but exactly the same red tape applies to every other country and not all countries are held back. Some work has been done to try to quantify the effect of red tape and suggest that the UK has less regulation than most other EU countries, particularly in the labour market, with the exception I think of Holland, which is the most liberal. The degree of regulation in the United Kingdom is no different from that in the United States.

There is also a question that the UK contribution is excessive in spite of the rebate but in fact its net contribution amounts to 0.5% of UK GDP so this is not the huge burden that it makes out.