EU: Disintegration

Thursday 26th January 2012 Lords Chamber

Question

11:06

Asked By

[Lord Pearson of Rannoch]

To ask Her Majesty’s Government whether they have contingency plans for the disintegration of the European Union.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, the Government do not envisage the disintegration of the European Union. The United Kingdom remains a full member of the EU and we will continue to work hard with our many allies throughout Europe to advance our national interests, as well as those of all other EU member states.

[Lord Pearson of Rannoch]

My Lords, both Chancellor Merkel and President Van Rompuy have said that if the euro breaks up, the EU itself will follow suit. In case they are right, should we not plan to develop our trade and ties with the countries of the future, most particularly and obviously with the Commonwealth? Secondly, should we not be encouraged in this initiative by the knowledge that the EU was supposed to bring peace and prosperity to Europe, whereas in fact it has brought—

[Noble Lords]

Peace.

[Lord Pearson of Rannoch]

My Lords, that is now wishful thinking. The EU has in fact brought austerity, slump and civil unrest. What is the EU for? Why do we need it at all now?

[Lord Howell of Guildford]

My Lords, we have to be clear-sighted about the future. In one respect the noble Lord is right: all the great growth in new consumer markets, and the areas in which we must succeed as a nation if we are to maintain—let alone increase—our living standards, tend to lie in the emerging powers of Asia, Africa and Latin America. That is where my right honourable friend the Foreign Secretary has emphasised all along that we must develop our commercial, economic and political clout in order to survive. In that sense the noble Lord is right. However, at the same time, Europe is our neighbourhood and our biggest market. It is full of innovation and potential for the future. There are eurozone difficulties—no one denies that—at the moment, although with the European Central Bank now issuing unlimited three-year loans to all banks in trouble, there is at least a breathing space ahead on the question of the eurozone itself.

As to the specific matter of the Greek debt structure and how it will be resolved in the next few days, I really could not comment. However, one obviously hopes that it will be an orderly affair.

[Lord Dykes]

My Lords, if an aspiring Tory candidate for the other place decides to deny that he is Europhobic to the local party, he will not be selected. That means, logically, that UKIP is not fit for purpose, so will it not disintegrate much quicker than the eurozone recovers from its own crisis?

[Lord Howell of Guildford]

I am not sure that I quite get the ins and outs of all that. Generally, I hope my noble friend agrees with me that Europe is our neighbourhood but the world is our market, that we must have a balanced and sensible approach in developing good relations with a European Union which obviously requires reforming and modernising to meet the 21st century, and that we must also adjust our own nation to meet this new international landscape.

[Lord Peston]

My Lords, is it not a bit thick to blame the euro for our economic troubles when the Government are doing all they can with their own economic policies to destroy our economy?

[Lord Howell of Guildford]

I hear the view of one very learned economist but, as he knows, I think probably better than many economists, there are many different views, and that is very healthy. All economists tend to disagree with each other on these matters. Indeed, when they agree, they are usually wrong. As an ex-economist—a renegade economist—I am afraid that I have to disagree entirely with the noble Lord. I believe that our policies are the right ones to move us out of the colossal difficulties we face not only over the eurozone but the gigantic debt mountain that we were left by the previous Government.

[Baroness Gardner of Parkes]

My Lords, on this Australia Day, will the Minister confirm that he is well aware that the ties with the Commonwealth are already very strong and that everyone believes they will continue to be so?

[Lord Howell of Guildford]

Yes, I can confirm that I am well, well, well aware of that. The Commonwealth is one of the great networks of the future and we are proud to be members of that network. Indeed, it provides a gateway to many of the great new markets that I was talking about a moment ago.

[Lord Kinnock]

My Lords, in the interests of equipping members of this noble House, can the Government arrange for the provision to the noble Lord, Lord Pearson of Rannoch, of a sandwich board with, “The end of the world is nigh” written on one side and, “Stop the world, I want to get off” on the other? Is it not true and does the Minister agree that the United Kingdom’s best interests are in remaining a strong member of a modernising European Union in order that we can effectively deal with what the noble Lord, Lord Pearson, calls “the countries of the future”—notably those in Latin America, China and India? They really respect and take us seriously because we are participants in the EU.

[Lord Howell of Guildford]

I mostly agree with the noble Lord that our European membership is very valuable in promoting trade interests and access to new markets. At the same time, the bilateral links on the Commonwealth network have their part to play. Therefore, as usual, the answers lie in a number of directions, and if it is a question of sandwich boards, the glory of this House is that we tend to avoid simplicities and single answers and see that in many of these areas the answers are complex and multifaceted.

Lord Triesman: My Lords, unlike the noble Lord, Lord Pearson, our concern relates to the Government’s plans to improve cohesion with European partners. Last week, the Minister told me that my view was itself too dramatic. However, a week of discussions with other European missions has suggested to me that it was not. What preparatory discussions did the Prime Minister have with the Heads of Government to prepare them for the steps he took at the December Council? What instructions were given to our ambassadors throughout the EU to prepare other Governments for the steps that the Prime Minister took at that Council?

[Lord Howell of Guildford]

The details of this have been set out, particularly by my right honourable friend the Minister for Europe in front of the Lords European Union Committee the other day. I recommend that the noble Lord reads them. They are very detailed and answer his question very closely. Broadly, however, the preparations were of course there but had to be conditional on the initial drafts of what was going to be, and now is becoming, the intergovernmental agreement. It was presented in the first instance in December as a treaty for the 27. The draft of that was available only 24 hours before the actual meeting, so inevitably there had to be some last-minute reactions and adjustments, but at the end of it all it was perfectly clear that the safeguards sought by the Prime Minister were not going to be available and that haggling over an intergovernmental treaty that other members wanted to achieve rapidly would have been very disruptive. The best way was simply to say that we did not wish to be part of it, and that is what happened.

[Baroness Howarth of Breckland]

My Lords, if we are so influential in Europe, what are the Government doing to ensure that the financial framework matches the plans for 2020? At the moment, the common financial framework has not been adjusted to the 2020 planning, particularly regarding the work on the common agricultural policy, where a huge amount of funding continues to go into non-innovative processes.

[Lord Howell of Guildford]

Well, we are. The Government and many outside government continue to work to strengthen and reform all aspects of the European Union. The common agricultural policy is by no means set in concrete and certainly requires reform, as do infrastructure fund arrangements and many aspects of financial regulation, all of which can be improved. We are working away at those things all the time.