National Referendum on the European Union
(Limited Text - Ministerial Extracts only)
Read Full debate21:59 - The House having divided: - Ayes: 111 / Noes: 483 - Question accordingly negatived.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
It is a pleasure to follow the hon. Member for Lanark and Hamilton East (Mr Hood) and his shocking revelation that there are tabloid newspapers that wish to leave the European Union. This is an important issue at a critical time in European affairs and I congratulate my hon. Friend the Member for Bury North (Mr Nuttall) on securing the debate and moving the motion, even though, as I will explain, I disagree with it. As so many Members wish to contribute to the debate, I have given you, Mr Speaker, an undertaking that I will speak from the Front Bench for no more than 25 minutes—less, I hope—including interventions. I apologise for having to leave for Australia before the end of the debate.
Hon. Members who have put their names to the motion have done so for reasons that are honourable and passionately held. I wish to set out briefly six reasons why I believe the proposition to be the wrong one at the wrong time and why it would cut across a European policy that I believe has the best chance of success for this country. The starting point must be the recognition that disillusionment with the European Union in this country is at an unprecedented level, and in this regard there is some common ground between my hon. Friend the Member for Bury North and me. Just as I want to say some things that he and others will find difficult to accept, so I put it to those who have always enthused about the prospects for greater European integration that for this country the limits of such integration have been reached—more than reached, in my view.
The Leader of the Opposition said at the weekend that he did not rule out joining the euro in future. He must recognise that he is totally out of touch, not only with the people of Britain, but with economic reality. That is why the coalition Government—this is the first part of my argument—have already brought about a major change in European policy, which is absolutely in the interests of this country but which the motion would cut across. That change has three aspects, which I will set out briefly. First, following the previous Government’s refusal to hold a referendum on the Lisbon treaty, we passed the European Union Act 2011, which sets out that, in the event of a Government proposing any further transfer by treaty of powers or competence to the EU, there must by law be a referendum of the British people.
Dan Byles (North Warwickshire) (Con)
My right hon. Friend mentioned the Opposition’s view. Does he not share my bewilderment that the Leader of the Opposition, in response to the Prime Minister’s statement earlier today, appeared to say that the Prime Minister should not go into EU meetings and be robust in the British self-interest in case he upsets the French?
Mr Hague
Well, I never cease to be bewildered by the statements of the Leader of the Opposition, so we will leave him to worry about that himself.
Any or all of the treaties of the past 20 years would have been caught by the 2011 Act, and under the same Act parliamentary scrutiny of any treaty changes was vastly enhanced. The narrow treaty change that has been agreed to set up the European stability mechanism will now require primary legislation to be passed through both Houses of Parliament, rather than the cursory consideration it would have received under the previous Government.
Mr John Redwood (Wokingham) (Con)
Does the Foreign Secretary not see that very substantial transfers of power are going on at the moment under this Government by directive, by regulation and by opt-in? Why can we not have some lock or vote on that?
Mr Hague
As my right hon. Friend knows, we are also improving the scrutiny of opt-in decisions by this House and made some important commitments on that during the passage of the 2011 Act. On financial regulation, as he may know, my right hon. Friend the Chancellor has had a series of negotiating triumphs that have turned around the situation regarding directives that threaten this country’s financial services industry.
Mr MacShane
Is it now the Foreign Secretary’s view, and that of the Prime Minister, as he seemed to indicate in his statement, that we should have had a referendum in 1985 on Mrs Thatcher’s Single European Act?
Mr Hague
I have just stated my view, which is that all the treaties of the past 20 years would have been caught by the 2011 Act and that there would have been a referendum.
Secondly, we have negotiated far harder and far more effectively on the European budget, in which the increases proposed have been totally unacceptable to this country. Working with France and Germany, the Prime Minister has achieved a sharp reduction in the EU’s budget increase and a united demand for a real-terms freeze in the seven years from 2014 without making any concessions of our own.
Thirdly, we have used and will use any treaty change asked for by others to protect and advance our own national interest. The Prime Minister has secured agreement that, in return for accepting a legal basis for the European stability mechanism, Britain will no longer be liable for future eurozone bail-outs through article 122—a liability that the previous Government agreed to in their dying days.
Mr Hague
I am going to proceed for a while, given the time constraints. I will give way again a little later.
We have, therefore, already saved the British taxpayer potentially billions of pounds. None of those three major advances for British interests would have happened under the previous Government, because they actually did the opposite: refusing to hold a referendum; giving up £7 billion of rebate in budget negotiations for nothing in return; and signing us into a eurozone bail-out.
We propose to approach further treaty changes in the same firm and clear manner. We have agreed in the coalition that our first priority in responding to treaty changes aimed at stabilising the eurozone will be to protect the rights of those countries in the EU but outside the eurozone over decisions affecting them, and to prevent damage to the financial services industry that is so important to this country’s economy.
Mr Hague
I will give way again in a moment.
It is my view and the Prime Minister’s view, and the position of the Conservative party, that we will use future opportunities to bring further powers back to the United Kingdom—to repatriate powers to the United Kingdom in those areas where we believe European integration has gone too far.
The final part of our approach to the EU is to make the case at every opportunity for it to do effectively what we joined it for: to expand the opportunities for trade both within Europe and beyond. Britain is the leading champion of expanding the single market and concluding more free trade agreements with the rest of the world. Last year’s agreement with South Korea is worth up to £500 million to the British economy—a reminder to all of us, when we discuss these matters, that we are talking about not just politics, but people’s jobs and businesses, which we must never forget.
Ian Paisley
The Foreign Secretary has quite rightly tried to outline the savings that the Government are making on European costs, but he must know that by 2018 this nation will have spent £356 billion on enforcing EU regulations. Does he not agree that this Parliament could spend it better—on farming, on health care and on social policy—than the European Community?
Mr Hague
I have explained what we are doing to keep the European budget down, and how I believe the European Union has too much power. The hon. Gentleman must be a little careful, because European Union spending has gone disproportionately to Northern Ireland, and he ought to bear that in mind.
Andrew Selous (South West Bedfordshire) (Con)
On trade, may I take the Foreign Secretary from the general to the specific? A number of my constituents work at the Luton van factory, which very nearly closed before it secured a major contract with Renault to keep it going for the next decade. Does he share my concern that my constituents’ jobs would have been at risk had there been any danger of Britain being outside the European Union and the single market?
Mr Hague
I will have to proceed again. We are under this time constraint.
That is the Government’s policy towards the EU, and that is why we cannot treat this motion, as some have suggested, in a casual way. To do so would not do justice either to the importance of the issues or to the significance of motions presented in this House.
The Prime Minister and I, as he said earlier, want many of the same things as some of the motion’s supporters, but we clearly do not advocate leaving the European Union, and I say as someone who has called for referendums on European matters—on Amsterdam, Nice, Lisbon and the euro—and consumed vast acres of newsprint over the years, criticising the euro and setting out a different vision of Europe’s future, that the proposition for a referendum before the House today is the wrong proposition at the wrong time. Building on what the Prime Minister said earlier, I want in the 15 minutes remaining to me to give the House six reasons—[Interruption]—some of them are very brief, do not worry—why that is the case.
Mr Baron
No one doubts my right hon. Friend’s Euroscepticism, but, despite all the talk of reclaiming powers, week in, week out competences and powers are being transferred to Brussels under the very noses of the British people. That is why there is growing frustration in the country, and that is why people want a say on whether they become part of this ever-closer political union.
Mr Hague
I do not agree with my hon. Friend that that is what is happening day by day, or week by week. In foreign affairs, for example, we are absolutely clear, and all our embassies and posts throughout the world are clear, that we will not permit any competence creep following on from the Lisbon treaty.
My first reason is the same as the first one given earlier by the Prime Minister. The deficits of recent years, and the slowness of growth in all western economies, make this a difficult and uncertain time for many individuals and firms. The eurozone is clearly in crisis, and to pile on that uncertainty the further uncertainty of a referendum on leaving the European Union, when half the foreign direct investment into Britain comes from the rest of the European Union, and half our exports go out to the rest of the European Union, would not be a responsible action for Her Majesty’s Government to take. It would not help anyone looking for a job. It would not help any business trying to expand. It would mean that for a time, we, the leading advocates of removing barriers to trade in Europe and the rest of the world, would lack the authority to do so. It would mean that as we advocate closer trading links between the EU and the countries of north Africa as they emerge from their revolutions, helping to solidify tremendous potential advances in human freedom and prosperity, we would stand back from that. That is not the right way to respond to this dramatic year of uncertainty and change.
Mr William Cash (Stone) (Con)
In light of what my right hon. Friend said in advocacy of the single market as it now operates, will he explain why, between 2009 and 2010, our trade deficit with the 26 member states jumped from minus £14 billion to minus £53 billion, and with the eurozone from minus £4 billion to minus £38 billion in one year—last year alone? Why did that happen, and what is his remedy?
Mr Hague
The remedy is to restore the health of the British economy, to have a tax system, such as the Chancellor is creating, that attracts businesses to this country, and to create export growth from this country to the whole world, not just to the European Union. We cannot do that if we are not taking part in the free trade agreements that Europe is making with the rest of the world.
The second and third reasons—
Mr Hague
I will give two more reasons, and then I will give way again. The second and third reasons why I do not support the motion can be stated quickly. The second is that the election manifesto on which we stood as Conservative Members was very clear about the referendum legislation that we would introduce and that, in a coalition, we have now passed into law. We were also clear, having been asked about this many times during the election, that that did not include the option of an in/out referendum.
The third reason is that this Parliament has only recently, just weeks ago, passed with a large majority in this House comprehensive legislation setting out in minute detail the circumstances in which a referendum will be held.
Mr Field
Given that the Foreign Secretary said that if there is further substantial transference of power to Europe, we will have a referendum in this country, and as the Government are advocating closer fiscal and monetary union in Europe, which will obviously lead to major changes, why do they not adopt this motion and fix their own time scale for the referendum that he is promising?
Mr Hague
The only treaty change agreed so far—I am coming to this point—is the one that puts the European stability mechanism on a legal basis, and for that we secured in return, as the Prime Minister explained, that this country will no longer be forced to be part of eurozone bail-outs. We will respond to every proposal by putting forward what we need in return.
Any treaty that transfers power to the European Union, and that is interpreted not just by Ministers but by the courts of this country as doing so, will result in a referendum for the people of the United Kingdom.
Mr Hague
Let me give my fourth reason before giving way to a Liberal Democrat Member.
As the Prime Minister said, there is a serious danger that while holding a referendum such as the one advocated —it is predicated on a Bill in the next session of Parliament, which runs from 2012 to 2013 and means that a referendum would be in 2013 or later—we would lose important opportunities to protect or to further our national interest in the meantime. On all those areas where we need the agreement of others—from the shape of the EU budget up to 2020, to agreement on our requirements for any treaty change—it could be harder, not easier, to get our way.
Simon Hughes (Bermondsey and Old Southwark) (LD)
Although of course the Foreign Secretary and his party, and I and mine, come from different positions on Europe, we both made commitments to referendums, but both were conditional on there being a shift of power from this country to Brussels. It therefore must be right that, at the moment, we concentrate on helping our colleagues to sort out the European crisis, which is what businesses want us to do, and on getting our economy to grow again, which is what our constituents, in and out of work, want us to do. The referendum would be an absolute and immediate distraction from that.
Mr Hague
That is one of the reasons I am giving.
My fifth reason is that the concept of holding a three-way referendum as set out in the motion is innovative but seriously flawed. Leaving aside for a moment all the uncertainty and difficulty which would occur in the run-up to a referendum, which is my final point, if we are serious about this we have to think carefully about what would actually happen in a three-way vote. It is highly unlikely that any one of the three options would receive more than 50% of the votes. If, for the sake of argument, 40% of people voted to stay in, 30% voted to leave, and 30% voted to renegotiate, would that mean that we stayed in without any renegotiation at all? Is this to be a first-past-the-post referendum or a preferential voting referendum? If it is to be a preferential voting referendum, we have just rejected that system—in a referendum. Perhaps we would have to have a referendum on the voting system for the referendum itself.
Mr Hague
I will give way again in a moment.
If we voted to leave the European Union, would that mean that, like Norway, we were in the European Free Trade Association and in the European Economic Area but still paying towards the EU budget, or, like Switzerland, not in the European Economic Area? If we voted to renegotiate
“based on trade and co-operation”,
as the motion says, does that mean that we would be in the single market, or not; still subject to its rules, or not? Does “co-operation” mean that we still work together on a united position on Iran, Syria and other foreign policy positions, or not? When we had renegotiated, would we, given the wide range of possible outcomes, need another referendum on the outcome of the negotiation?
I point these things out because there is a reason why a referendum is normally held on a specific proposition with a yes or no answer, and I believe that any future referendum must be held on that basis, not as a multiple choice among vaguely defined propositions.
Steve Baker (Wycombe) (Con)
Surely my right hon. Friend must know as well as I do that preferential systems are used in this House for certain votes. Is it not equally the case that for some elections, first past the post is appropriate, and for others, a preferential system is appropriate? Why not have this three-way referendum on the basis of the single transferable vote, as we do in this House for other elections?
Mr Hague
I will give way another couple of times in a moment, but I am trying to help the House to make progress.
My sixth and final problem with the motion is that it does not do justice to the reality that the European Union is not a matter of everything or nothing. We are in the European Union, but not, thankfully, in the euro. We are not in the Schengen border control area. We opt out of many justice and home affairs provisions. I do not believe that most people in Britain want to say yes to everything in the EU or no to everything in the EU; I believe that they want to know that no more powers will be handed over to Brussels without their explicit consent, which is what we have provided for in our Act.
Ms Stuart
I am sure that we still have sufficient time before the Foreign Secretary catches the plane to get him a DVD of his 2008 speech on the Second Reading of the legislation on the Lisbon treaty. He can then blush in the privacy of the aeroplane and probably answer the question as to why he was for referendums then and is against them now, the difference being that now he is in government.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I happened to bump into the chairman of the Electoral Commission today and he did not rule out a three-option referendum as impractical. Did my right hon. Friend consult the Electoral Commission on this matter before giving his opinion?
Will my right hon. Friend also bear it in mind that the treaties are now so comprehensive that at the conclusion of the summit he has just attended, the European Union is setting up a new institution that does not even require the British signature on a new treaty: the so-called euro summit of the 17. He and his colleagues are having difficulty keeping track of things because that is how the European Union now works. The veto was the foundation of our membership and it is being eroded before our eyes.
Mr Hague
There is certainly no proposal at the moment to set up such an EU institution. That is an intergovernmental arrangement. Our first priority, as I and the Prime Minister have explained, is to ensure that matters that should be decided at the level of 27 countries are decided by the 27, not by the 17. I am grateful for my hon. Friend’s information about the Electoral Commission—another unelected body that is trying to decide what we might do. I am giving my opinion on the consequences of a three-way referendum.
I will give way one more time.
Nadhim Zahawi (Stratford-on-Avon) (Con)
Does the Foreign Secretary agree that, whether in business or in politics, the best strategies end up failing if they are badly timed?
Mr Hague
I absolutely agree with that. I reinforce the point that this is the wrong proposition at the wrong time.
The British people want to know that no more powers will be given away without their consent; that at a time of budgetary restraint, EU institutions will be faced with the financial reality, which is what our Prime Minister is doing; that we will address the crisis in the eurozone with clarity about what should be done, while minimising the exposure of the British taxpayer, which is what the Prime Minister and the Chancellor are engaged in; that we will make a passionate case for Europe to take measures that help growth and free up businesses to trade and expand, which is what we are doing; that we will do nothing to add to economic uncertainty at a difficult and dangerous time; and that we will seek to repatriate powers as the opportunity arises, which is my position and that of the Prime Minister. That is the right policy for the United Kingdom.