Brexit would not bring about better deal on trade – Lord Hill

Big Ben, Westminster

Britain would not get a better deal on trade or financial services by voting to leave the EU, the UK’s European commissioner, Jonathan Hill, has said.

In one of his strongest interventions yet in the EU referendum debate, Lord Hill said nobody voting to leave the European Union should expect the UK to get improved terms.

“If for different reasons you want to leave that is perfectly proper, but don’t believe there is such a thing as a free lunch, that you can have your cake and eat it,” he told the Guardian and two other European newspapers. “Sorting things out will take a very long time; it will be uncertain.”

Hill was appointed by David Cameron as Britain’s European commissioner and is responsible for EU policy on financial services.

The commission is staying out of the campaign fray, but Hill said his position meant he was in a good position to explain the consequences of a vote to leave.

“What some people are saying in the UK is: ‘Look, you can leave and it is all really, really easy and all those other Europeans need us more than we need them,’” he said.

But he questioned why other EU member states would want to give Britain a better deal, especially when their financial sectors were very different. Countries such as France and Germany would use Brexit to take competitive advantage – “clearly you would” – but also have different attitudes towards financial regulation.

Either Britain would have to accept all EU rules without influencing them, he said, or accept the status of a third country and go through an “uncertain” procedure to gain access to European markets.

His intervention stands at odds with pro-Brexit politicians such as Boris Johnson who claims that Britain could be like Canada.

An old friend of Cameron’s, Hill dismissed suggestions that the fallout from the Panama Papers and ensuing damage to the prime minister’s approval ratings had harmed the remain camp. Britain’s EU membership was “a much bigger question that people will take a much broader perspective on”, he said.

Hill was speaking a day before publishing a draft law that would oblige all companies operating in Europe to reveal taxes paid and profits earned not only in the EU’s 28 member states but also in tax havens. The commission hastily rewrote draft legislation to extend the disclosure requirements to tax havens in the wake of the revelations from 11.5m files from the offshore law firm Mossack Fonseca.

The Panama Papers had “shifted the public mood” and it was sensible to reflect that in the proposals, he said. The original proposals were drawn up following a spate of revelations about large corporations, from Apple to Starbucks, paying little tax despite earning healthy profits.

Under the plans all multinational companies with a turnover greater than €750m (£600m) would be obliged to meet tougher standards on public disclosure.

Europe’s main employers’ group, BusinessEurope, has claimed the rules would put the continent at a competitive disadvantage – a suggestion dismissed by Hill. He said his proposals would restore trust in business and level the playing field for smaller companies.

He said it was hard to justify to small- and medium-sized companies “why they should be paying at a higher effective tax rate”.

Powered by Guardian.co.ukThis article was written by Jennifer Rankin in Brussels, for theguardian.com on Tuesday 12th April 2016 05.00 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010