House of Commons

Wednesday 30th January 2013 Commons Chamber

Wednesday 30 January 2013

The House met at half-past Eleven o’clock

Prayers

Wednesday 30th January 2013 Commons Chamber

[Mr Speaker in the Chair]

Business before Questions

Humber Bridge Bill

Motion made, That the Bill be now read a Second time.

[Hon. Members]

Object.

Bill to be read a Second time on Tuesday 5 February.

Oral Answers to Questions

Wednesday 30th January 2013 Commons Chamber

The Secretary of State was asked—

[Mr Mark Williams (Ceredigion) (LD)]

1. What steps her Department is taking to improve standards in education in Nigeria.

[The Parliamentary Under-Secretary of State for International Development (Lynne Featherstone)]

As discussed with you, Mr Speaker, and as Labour Front Benchers have been advised, my right hon. Friend the Secretary of State is in Kuwait for an international conference on the humanitarian crisis in Syria. I hope that the House will accept her apologies for not being here to answer questions today.

Our education programmes in Nigeria have already reached 1.25 million children by improving the quality of education in 3,700 schools, and 6,800 more schools will be reached by 2014. We are supporting school-based management committees to make schools and teachers more accountable to parents, and we are providing training to more than 60,000 teachers.

[Mr Williams]

I thank my hon. Friend for that answer and for the reaffirmation of the Government’s commitment to Nigeria, where there are 10.5 million out-of-school children. Inevitably, we focus on the number of children at school, but given the pressures on teacher training, the infrastructure of schools, and the number of children in classes, can we also focus on the quality of the education that those children are receiving?

[Lynne Featherstone]

I thank my hon. Friend for his question and for his work on the all-party group on global education for all. He goes to the heart of the matter, which is not just the number of children coming into school but the quality of the teaching. The statistics show that in Kwara, for example, only 75 of 19,000 teachers passed a test for nine-year-olds—that gives some idea of the scale of the challenge that we are facing. My hon. Friend will therefore be pleased to know that we have a new teacher development programme supporting over 60,000 teachers.

[James Duddridge (Rochford and Southend East) (Con)]

In addition to the excellent work that DFID does in education in Nigeria, what more can the Minister do to suggest to the large number of British companies in Nigeria that they should also be getting involved in taking on responsibility in this respect?

[Lynne Featherstone]

My hon. Friend raises an important point. All UK companies have the opportunity to get involved and engaged. If he knows the names of the companies concerned, I would be only too happy to contact them myself.

[Fiona O’Donnell (East Lothian) (Lab)]

2. How her Department plans to reach its target of spending 0.7% of gross national income.

[The Minister of State, Department for International Development (Mr Alan Duncan)]

The Government are committed to spending 0.7% of gross national income on development aid from 2013 and thereafter. The Department’s budget after the 2012 autumn statement adjustment, along with planned overseas development spending from other Government Departments, is set to meet this commitment.

[Fiona O’Donnell]

I thank the Minister for his answer. The Enough Food For Everyone If campaign has highlighted the value of investing in smallholder farmers: the men, or more often women, who already feed a third of humanity but are vastly under-resourced. Will the Minister confirm that as his Department’s budget increases he will increase funding for smallholder agriculture and support countries’ agriculture investment plans?

[Mr Duncan]

We give our full support to the recently launched If campaign; my right hon. Friend the Secretary of State went to the launch herself. I do agree with the hon. Lady that this should be a focus of our activity, as 90% of food comes from smallholders in their own countries. Supporting them and the markets in which they work is a crucial part of the activity we wish to undertake over the next few years.

[Sir Malcolm Bruce (Gordon) (LD)]

The Minister may be aware that the International Development Committee is publishing its report on the Department’s annual report tomorrow. Is he prepared to consider different ways of ridding the world of absolute poverty, such as setting up a development bank or offering loans so that we can reach more people, particularly poor people in middle-income countries where we do not currently have programmes?

[Mr Duncan]

I congratulate my right hon. Friend on that ingenious plug for his report and on the idea of a development bank. We remain open-minded and non- dogmatic about what we should do with our budget. What matters is what works. As always, we will study his report in detail and reply formally to any ideas in it.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The Minister has indicated that we will meet the 0.7% commitment. Will he also assure us that when that money is deployed, we will ensure value for money and, most vitally, that corruption is addressed, particularly in parts of Africa?

[Mr Duncan]

I agree with the hon. Gentleman on all counts. Value for money and its proper evaluation are the principles by which we work every day. We focus a great deal on corruption, by which we mean the risk of fraud in the use of our funds and endemic corruption in the countries in which we work. To that end, we are publishing anti-corruption strategies for each of our bilateral countries, as recommended by the Independent Commission for Aid Impact.

[Sir Tony Baldry (Banbury) (Con)]

Now that we have reached the target of 0.7% of GDP, should non-governmental organisations and others not be focusing part of their attention on encouraging other G8 countries to meet that target? There is no point in our doing it if other G8 countries are not pulling their weight.

[Mr Duncan]

My hon. Friend may well have pre-empted a question that is further down the Order Paper. In principle, the answer is yes. Where we lead, we want others to follow. If we are prepared to spend 0.7%, so should other economically wealthy countries.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I visited the west bank and Israel with colleagues last December, where I saw evidence of the daily indignity and injustice that Palestinians face. A number of EU and UK-funded schools in the west bank are under the threat of demolition orders. What are the Government doing to ensure that our investment is not wasted?

[Mr Speaker]

I think that we need to relate the matter to the question of 0.7%, which the Minister will be dextrous at doing.

[Mr Duncan]

Of course, some of the 0.7% of GNI, which we spend so well, goes to the Palestinian Authority, whose finances are in some peril. We wish to support them and we urge other countries to do so. A two-state solution, which we all want to see, is not served by a weak and fractured Palestinian Authority.

[Mr Speaker]

Dexterity duly demonstrated.

[Martin Horwood (Cheltenham) (LD)]

The If campaign emphases that if other countries followed our example on the 0.7% target, enormous investment in small-scale agriculture and child and maternal nutrition could be delivered. Will the Government use this year’s hunger summit to state not only that other countries should meet the 0.7% target, but that they should spend the money on those priorities to address hunger and poverty?

[Mr Duncan]

There are many claims on the development budget, but as my hon. Friend says, such matters are a good and sensible call on it. They would be best served by other countries meeting the same sort of percentage commitment as us. The demand for assistance is almost insatiable, but so much good could be done if other comparatively wealthy countries followed our lead.

[Ann McKechin (Glasgow North) (Lab)]

3. What steps her Department is taking to improve food security in west Africa.

[The Parliamentary Under-Secretary of State for International Development (Lynne Featherstone)]

The UK is improving food security in west Africa through investment in agricultural research, innovative agribusiness, improving access to markets and supporting national food security plans. We work through country programmes in Ghana, Nigeria, Sierra Leone and Liberia, and international organisations such as the World Bank.

[Ann McKechin]

The Minister will be aware that the impact of climate change in that region has led to a dramatic fall in crop yields. What efforts is her Department making to secure global agreement on finding new sources of finance, so that countries in the region can plan properly for their future food supplies?

[Lynne Featherstone]

The hon. Lady points to the fragility of this area and its food security. Crises arise from chronic vulnerabilities that need long-term solutions. We are supporting multilateral efforts to promote resilience in the Sahel to ensure that its communities can deal with the shocks and do not face dire consequences in future. We are currently preparing a Sahel resilience strategy.

[Mrs Caroline Spelman (Meriden) (Con)]

Food security in west Africa is indeed threatened by climate change. Does the Minister also agree that the Prime Minister’s insistence on addressing the property rights of the world’s poorest farmers tackles one of the underlying causes of food insecurity?

[Lynne Featherstone]

The Prime Minister is quite right. The work that we are doing to give land title to smallholders means that they have security and can work their land without it being taken from them.

[Sir Tony Cunningham (Workington) (Lab)]

I join Members from all sides of the House in expressing my support for the If campaign, which seeks to end food insecurity and global hunger. One of the main causes of food insecurity is the illegal acquisition of large areas of land by investors. What steps has the Department taken to support good land governance in west Africa?

[Lynne Featherstone]

As I said just now, some of our programmes involve land titles for smallholders, and the UK welcomes the successful negotiation of voluntary guidelines on the responsible government of land tenure, fisheries and forests that was concluded at the Committee on World Food Security last year. The UK is working to promote transparency of land administration and security of tenure in a number of countries. For example, in Mozambique we are helping local communities to register their land, and we want to continue that progress.

[David Mowat (Warrington South) (Con)]

4. What assessment she has made of the proportion of GDP spent on overseas aid by the UK compared to equivalent spending by France and Germany.

[The Minister of State, Department for International Development (Mr Alan Duncan)]

In 2011, the UK spent 0.56% of GNI on official development assistance, or ODA. France spent 0.46% and Germany 0.39%. As I said a moment ago, we will reach our 0.7% ODA target this year. At the June 2012 European Council, France and Germany recommitted to spend 0.7% of their GNI on ODA by 2015.

[David Mowat]

I thank the Minister for that answer. As we have heard, we are on a trajectory to meet the 0.7% commitment, but that determination is not shown by all our EU partners. Can the Government do more to encourage them to meet previously made commitments?

[Mr Duncan]

The priorities we set are shared by EU countries, and some states—Sweden and Denmark, for example—have reached 0.7%. Germany’s aid increased by 2.6% in 2011, and it has publicly committed to reach 0.7% after 2015. The Government strongly urge other EU countries to follow our lead, and commit to and reach 0.7%.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I welcome the Minister’s commitment to pressure other European countries to meet their targets and reach 0.7%. When the UK meets that target, how much will be made up of non-departmental spend?

[Mr Duncan]

The amount of ODA in Government spending is accounted for with 90% from the Department for International Development and about 10% from other Departments.

[Sir Gerald Howarth (Aldershot) (Con)]

As my right hon. Friend knows, I am a huge fan of his, but I wonder whether he agrees that there is something arbitrary about 0.7%. The United Kingdom has taken a lead in the world and shown the way, and we can also add in what our armed forces have contributed. Given the desperate and catastrophic state of the public finances that we inherited from the previous Government, surely the time has come to freeze overseas aid spending and devote some of that money to our hard-pressed armed forces.

[Mr Duncan]

The 0.7% target is a long-standing campaign, and my hon. Friend is right to say that to some extent it is arbitrary. Even if countries reach that target, it could be argued that it would still not suffice for the needs of the world. As a doughty defender of the armed forces, I assure my hon. Friend that we are committed to spending 30% of our budget on countries that are fragile or at risk of conflict, which often means working with his friends in the armed forces. Even though 0.7% may be arbitrary, the results we get for the money we spend are not, and they are evaluated rigorously.

[John Glen (Salisbury) (Con)]

5. What recent assessment she has made of the humanitarian situation in Mali.

[Mr Gary Streeter (South West Devon) (Con)]

9. What assistance her Department is offering to the Government of Mali.

[The Parliamentary Under-Secretary of State for International Development (Lynne Featherstone)]

There is a serious humanitarian situation in Mali, with over 360,000 displaced people since March 2012. We do not give bilateral development aid directly to the Government of Mali, but we provide significant assistance to the region through the World Bank, EU and other multilaterals.

[John Glen]

I thank the Minister for that response. My constituents usually recognise the great contribution that our aid budget and programme makes, but they also have concerns about the effectiveness of that spending. Will the Minister confirm that in crisis situations, such as that in Mali, money is being spent effectively and will deliver massively good outcomes that I can be proud of?

[Lynne Featherstone]

My hon. Friend raises an important point. British people who support our aid and development programme need to know that money is being spent effectively and I can give him the assurance he seeks. Even in the crisis situation in Mali, agencies in receipt of our humanitarian support are tried and trusted, neutral and impartial humanitarian organisations with a history of effective operations in the most challenging of environments.

[Mr Streeter]

Is not Mali a tragic of example of instability and conflict rushing in where democracy breaks down, as so often happens? In this case, that has threatened Mali’s security. Does the situation not further underpin the importance of focused and intelligent aid to support democracy in the developing world?

[Lynne Featherstone]

My hon. Friend is entirely right. Where instability and conflict reign, into such ungoverned space come threats, not only to those in Mali but to the wider world, including the UK. That is why the territorial integrity of Mali must be protected, democratic government restored, terrorism dealt with, and the humanitarian situation addressed. My hon. Friend seeks assurance. We are providing considerable aid support through the UN, the EU and other agencies to promote increased economic resilience across the Sahel, including Mali.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

Is the Minister satisfied with the distribution of aid in northern Mali, and particularly in those parts that have been retaken? Have the Government had any discussions with their French counterparts? [Interruption.]

[Mr Speaker]

Order. Far too many noisy conversations are taking place on the Opposition Benches. We are discussing extremely serious matters of life and death.

[Lynne Featherstone]

Thank you, Mr Speaker. If I heard correctly, the right hon. Gentleman’s question was about whether we can access those areas. Health non-governmental organisations are still operating in some hospitals and health centres in northern Mali, although NGOs and aid agencies have in some cases been forced to suspend their outreach work temporarily for security reasons. They want to carry out an assessment in the inaccessible areas. Humanitarian agencies are waiting to return to conduct those assessments so that we can respond to those needs. At the moment, they are pretty much confined to the accessible areas.

[Mr Speaker]

Order. We are immensely grateful to the Minister.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Although every country has its particular circumstances, everyone knows that the underlying problems that have led to the situation in Mali could exist in many other countries in west Africa. Will the Government agree to make an international effort on a long-term basis to provide support and development for countries in west Africa a major focus of their G8 presidency, and particularly of the summit in Northern Ireland later this year?

[Lynne Featherstone]

I appreciate that desire, but it is not possible to do everything at the G8 that everyone would wish us to do. However, the hon. Gentleman is right. The only solution in the end is a long-term, measured and intelligent political solution.

[Michael Fabricant (Lichfield) (Con)]

6. What estimate she has made of the number of (a) internally displaced people in Syria and (b) Syrians displaced to Turkey and other countries; and if she will make a statement.

[The Minister of State, Department for International Development (Mr Alan Duncan)]

The UN estimates the number of people displaced inside Syria to be about 2 million. There are an additional 700,000 Syrian refugees in need of assistance in neighbouring countries, including 163,000 in Turkey, 228,000 in Lebanon, 222,000 in Jordan, 79,000 in Iraq and more than 14,000 in Egypt.

[Michael Fabricant]

The tragedy in Syria continues. Last night, we heard on the news of 50 young men found in a river near Aleppo, each with a bullet through his head. The UN says that 60,000 people have died so far in the civil war in Syria. What further steps, if any, can we take to resolve this terrible situation?

[Mr Duncan]

My right hon. Friend the Secretary of State is currently at the UN high-level pledging conference for Syria in Kuwait where, I can tell the House, she has just announced a further £50 million for the UN Syria appeals. Together with the £21 million she announced during her visit to Jordan at the weekend, it means that the UK has doubled its funding for this crisis. We are now providing nearly £140 million to deliver emergency assistance to hundreds of thousands of people in Syria and the region.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

More than 650,000 people have fled Syria and 60,000 have been killed since the conflict began. Serious food and medicine shortages, and freezing weather conditions, are making access to basic services increasingly difficult. The Opposition welcome today’s announcement to increase humanitarian assistance to Syria, but what steps are the Government taking to assist UN agencies and NGOs to provide access to Syria?

[Mr Duncan]

As the House appreciates, because of the security situation inside Syria the humanitarian effort is primarily UN-led and it is working through respectable non-governmental organisations. If we were there ourselves it could put that effort at risk, so this requires careful diplomatic consideration. We have to ensure that the flow of aid, and the protection of those who deliver it, is paramount and retained.

[Charlotte Leslie (Bristol North West) (Con)]

T1. If she will make a statement on her departmental responsibilities.

[The Minister of State, Department for International Development (Mr Alan Duncan)]

In addition to her Syria meetings in Kuwait today, my right hon. Friend the Secretary of State will be attending the next meeting of the high-level panel in Liberia.

[Charlotte Leslie]

I thank the Minister for his answer. I had the privilege last night of attending a “Syria Speaks” event at the Southbank centre, where it was apparent how important the cosmopolitan secular nature of Syria is to the future stability of the country. What is the Minister doing not only to address the horrible humanitarian situation there, but to support the rich cultural heritage that is so important to its future?

[Mr Duncan]

My hon. Friend is right. Before the civil war erupted thanks to President Assad’s stewardship of his country, Syria was in many respects an example of religious harmony—I saw that for myself on a number of visits. It is a tragedy to see the country disintegrate, and there will need to be many diplomatic efforts to resolve the problems once the conflict has ceased.

[Mr Ivan Lewis (Bury South) (Lab)]

I welcome the right hon. Gentleman to his role today as joint acting Secretary of State—he has waited far too long and he is clearly enjoying it. This week the Prime Minister is co-chairing a meeting of the UN high-level panel on the future of global development post-2015. Last week, the Select Committee on International Development said that the Prime Minister needs to be clear about what he means by the “golden thread” of development. Will the Minister explain what is meant by the golden thread and, specifically, does it recognise that tackling inequality and supporting sustainable growth should be at the heart of future development policy?

[Mr Duncan]

My right hon. Friend the Prime Minister is absolutely right in his definition. Development is far more than just about handing out money; it is about draining the swamp of grievance and ensuring that in any country there is the rule of law, such as the property rights we were discussing earlier. It is only if we look at the whole picture of a country that we can properly achieve the development we want. The Prime Minister will be arguing that at the high-level panel, which he is co-chairing with two others.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

T2. My right hon. Friend will be aware of the huge difficulties in returning and reintegrating victims of human trafficking to their home countries. This is something with which his Department can assist, and I hope that he can tell the House that he is now looking to ensure adequate in-country funding for source country NGOs accordingly.

[Mr Duncan]

My hon. and learned Friend makes a good point, and that is why we are assessing the practicality of giving support to NGOs that work in countries where we have no other Department for International Development presence, even though they may be based elsewhere. Our main focus is on tackling the practice of trafficking in the workers’ countries of origin, and we are currently designing a cross-Asian anti-trafficking programme, the purpose of which will be to equip vulnerable people with knowledge of their rights and the means to enforce them.

[Ian Lucas (Wrexham) (Lab)]

T5. Yesterday’s failure to sign a Congo peace accord in Addis Ababa is very serious. [Interruption.] Will the Government carry out an immediate assessment of development projects in eastern Congo in view of the failure to resolve the situation on the ground?

[Mr Duncan]

I apologise; I did not hear much of the hon. Gentleman’s question, but I understand that he is referring to eastern Congo. We will, of course, do all we can, and, if I may, I will write to him in more detail.

[Mr Speaker]

Order. If Question Time is to be meaningful, questions and answers must be heard. We are discussing matters of momentous significance to the people concerned and it would show some respect if the House listened. Let us have a bit of order.

[Fiona Bruce (Congleton) (Con)]

T3. What is DFID doing to encourage funding applications from the small organisations and charities we all have in our constituencies which support schools, hospitals and other aid projects in the developing world, and which often provide excellent value for money?

[Mr Duncan]

DFID established the global poverty action fund to support UK-based, not-for-profit organisations across the country to improve people’s lives in the world’s poorest countries. So far, 102 grants have been awarded, and these are helping more than 3 million poor people across 30 countries.

[Stephen Timms (East Ham) (Lab)]

T7. Given the Government’s welcome support for the If campaign against hunger, is the Minister optimistic that the UK presidency of the G8 can tackle the corporate tax avoidance that deprives developing countries of so much badly needed revenue?

[Mr Duncan]

Tax is one of the main themes of the G8, and my right hon. Friend the Prime Minister has made it absolutely clear, including in his speech at the Davos world economic forum last week, that it is one of his top priorities for our presidency.

[Andrew Stunell (Hazel Grove) (LD)]

T4. What is being done to ensure that the companies of the world smell the coffee, as the Prime Minister wants, when it comes to developing countries receiving their tax income?

[Mr Duncan]

It is the policy both of our presidency of the G8 and of DFID more generally in our work in poor countries to get far greater transparency from global corporations and to ensure that they pay their fair share of tax and that they do so to the most appropriate tax regimes in which they work.

[Keith Vaz (Leicester East) (Lab)]

T9. Given recent events, what additional help does the Minister propose to give to the people of Yemen?

[Mr Duncan]

The Friends of Yemen meeting is looming; we are supporting the social fund for development to meet urgent food and welfare needs; we are encouraging the Government of Yemen to set up an executive bureau for national dialogue; and we are ensuring that pledged funds can be properly disbursed so that they go to the projects that are so desperately needed.

The Prime Minister was asked—

[Alison Seabeck (Plymouth, Moor View) (Lab)]

Q1. If he will list his official engagements for Wednesday 30 January.

[The Prime Minister (Mr David Cameron)]

This morning, I had meetings with ministerial colleagues and others, and in addition to my duties in the House I shall have further such meetings later today.

[Alison Seabeck]

Is it right that a mother in my constituency may not, because of the Prime Minister’s bedroom tax—and as confirmed by his Minister—be able offer her son, serving in Her Majesty’s armed forces, either a home or a bedroom on his return from duty?

[The Prime Minister]

I will happily look at the case that the hon. Lady mentions, but our reforms to housing benefit have a clear principle at their heart. There are many people in private rented accommodation who do not have housing benefit and cannot afford extra bedrooms. We have to get control of housing benefit. We are now spending, as a country, £23 billion on housing benefit, and we have to get that budget under control.

[Rebecca Harris (Castle Point) (Con)]

Does my right hon. Friend welcome today’s news that university applications for UK universities are up 3.5% this year and at their highest level ever for disadvantaged students?

[The Prime Minister]

My hon. Friend makes an important point about the figures released this morning. After all the concerns expressed about how the new way of paying for university finance would reduce the number of students applying to university, the number of 18-year-olds has actually risen and is now level with where it was in 2011, which is higher than in any year under the last Labour Government.

[Edward Miliband (Doncaster North) (Lab)]

In October, the Prime Minister told me that when it came to the economy

“the good news will keep coming.”—[Official Report, 24 October 2012; Vol. 551, c. 917.]

After last week’s growth figures, it obviously has not. What is his excuse this time?

[The Prime Minister]

As the right hon. Gentleman knows, GDP in the third quarter of last year went up by 0.9%, and, as forecast by the Office for Budget Responsibility, it fell in the fourth quarter by 0.3%. [Interruption.] Only Labour Members could cheer that news. Is that not absolutely typical? He should listen to the Governor of the Bank of England, who said:

“Our economy is recovering, more slowly than we might wish, but we are moving in the right direction.”

The fall in unemployment numbers clearly backs that up.

[Edward Miliband]

What an extraordinarily complacent answer from the Prime Minister. Let us understand the scale of his failure on growth. In autumn 2010, the Government told us that by now the economy would have grown by over 5%. Will he tell us by how much it has actually grown since then?

[The Prime Minister]

There is absolutely nothing complacent about this Government. That is why we are cutting corporation tax, we are investing in enterprise zones and a million apprenticeships have started under this Government. Let me point out to the right hon. Gentleman what is actually happening in our economy: 1 million new private sector jobs; and in the last year alone, half a million private sector jobs—the fastest rate of job creation since 1989. That is what is happening, but do we need to do more, to get the banks lending and businesses investing? Yes we do, and under this Government we will.

[Edward Miliband]

Just for once, why does the Prime Minister not give a straight answer to a straight question? Growth was not 5%, as he forecast, but—[Interruption.] The part-time Chancellor is about to give him some advice. I have to say to the part-time Chancellor that he should spend more time worrying about our economy and less time worrying about how to divert high-speed rail routes away from his constituency.

[The Chancellor of the Exchequer (Mr George Osborne)]

indicated dissent.

[Edward Miliband]

He shakes his head, but what does his council leader say? “Your MP”—[Interruption.]

[Mr Speaker]

Order. Mr Ellis, you are a distinguished practising barrister. You would not have behaved like that in the courts; do not behave like that in this Chamber. Calm yourself and be quiet—learn it man!

[Edward Miliband]

The part-time Chancellor is looking very embarrassed because he knows the truth.

Now, growth was not 5% but 0.4%, and a flatlining economy means people’s living standards are falling. The Prime Minister’s excuse is that other countries have done worse than us, so can he confirm that since the Chancellor’s spending review more than two years ago, out of the major G20 economies, Britain has been 18th out of 20 for growth?

[The Prime Minister]

First of all, let me say on high-speed rail—which goes right through the middle of the Chancellor’s constituency—that we are proud of the fact that it is this Government who have taken the decision to invest, just as it is this Government who are building Crossrail, which is the biggest construction plan anywhere in Europe.

The right hon. Gentleman asks about other European economies. The fact is that if we listen to the European Union, the OECD or the International Monetary Fund, they all point out that Britain will have the fastest growth of any major economy in Europe this year. But I have to ask him: what is his plan? We all know it; it is a three-point plan: more spending, more borrowing, more debt—exactly the things that got us into the mess in the first place.

[Edward Miliband]

I have to say, we have got used to that kind of answer from the Prime Minister. He promises a better tomorrow and tomorrow never comes. That is the reality, and he could not deny the fact that we are 18th out of 20 countries. We have done worse than the USA, worse than Canada, worse than Germany and worse than France because of his decisions. Last week the chief economist of the IMF said:

“If things look bad at the beginning of 2013—which they do”—

he was talking about the UK—

“then there should be a reassessment of fiscal policy.”

So after two years of no growth, can the Prime Minister tell us whether he thinks he should do anything differently in the next two years?

[The Prime Minister]

First of all, I would say that the right hon. Gentleman should listen to the managing director of the IMF. She said this:

“when I think back myself to May 2010 when the UK deficit was at 11%”—

when you were in office, right?—

“and I try to imagine what the situation would be like today if no such fiscal consolidation programme had been decided, I shiver.”

That is what the IMF said about the plans of the last Labour Government. Now, the right hon. Gentleman raises the issue of growth—[Interruption.]

[Mr Speaker]

Order. It is not acceptable to shout down either the Prime Minister or the Leader of the Opposition. The public have a very low opinion of that kind of behaviour. Let us hear the questions and hear the answers.

[The Prime Minister]

The right hon. Gentleman raises the issue of America and American growth. The fact is that our recession was longer and deeper than the recession in America. The biggest banking bust was not an American bank; it was a British bank. He may want to talk about tomorrow because he does not want to talk about yesterday, when the two people responsible for the regulation of the banks and the performance of our economy are sitting right there on the Opposition Benches.

[Edward Miliband]

It was once again a completely incomprehensible answer. I think basically the answer that the Prime Minister did not want to give was: it is more of the same—more of the same that is not working. He mentions borrowing. He is borrowing £212 billion more than he promised. Last week he told the country in a party political broadcast that he was “paying down Britain’s debts”, but the debt is rising and he has borrowed £7.2 billion more so far this year compared with last year. Will he not just admit: it’s hurting, but it just isn’t working?

[The Prime Minister]

If the right hon. Gentleman thinks that there is a problem with borrowing, why does he want to borrow more? The Institute for Fiscal Studies says that Labour’s plans would basically add £200 billion to Britain’s borrowing. He has made absolutely no apology for the mess his Government made of the economy. His whole message to the British people is: give the car keys back to the people who crashed the car in the first place. They did not regulate the banks, they built up the debts; we are clearing up the mess that he made.

[Edward Miliband]

The right hon. Gentleman is borrowing for failure. And he is borrowing more for failure. That is the reality of his record. Here is the truth: they said they would balance the books; they have not. They said there would be growth; there is not. They said Britain was out of the danger zone; it is not. Is it not the truth that the Prime Minister has run out of excuses for the fact that, on his watch and because of his decisions, this is the slowest recovery for 100 years?

[The Prime Minister]

The right hon. Gentleman talks about failure; we are dealing with year after year of failure from the Labour party. They did not regulate the banks, they built up the debt and they had a totally unbalanced economy. What is happening under this Government is 1million private sector jobs, unemployment down since the election, the fastest rate of business creation in our recent history and a balance of payments surplus in cars. We are clearing up the mess they made. They are doomed to repeat the mistakes of the past because they have not learned the lessons. That is why the British public will never trust them with the economy again.

[Andrew Griffiths (Burton) (Con)]

Like the Prime Minister, I want to see a fresh settlement in Europe. British beer drinkers pay 13 times more duty than German drinkers, nine times more duty than Spanish drinkers and 10 times more duty than Italian drinkers. Will he take the Chancellor for a pint and tell him to scrap the beer duty escalator and do something for British pubs and British publicans?

[The Prime Minister]

My hon. Friend quite rightly speaks up for Burton. I remember visiting that great brewery with him during the last election. I am sure that the Chancellor will have listened very carefully to what he said. I think it is very important that we also try to support the pub trade in our country, and the Government have plans for that as well.

[Mr Gordon Marsden (Blackpool South) (Lab)]

Q2. Thousands of my Blackpool constituents in poorly insulated homes fear sky-high cold weather bills. The Government’s green deal has 7% interest charges and only five households have signed up for it. How has the Prime Minister achieved that fiasco?

[The Prime Minister]

First of all, I hope that the hon. Gentleman will welcome the green deal, because it gives households the opportunity to cut their bills with absolutely no up-front costs. He should be encouraging his constituents to do that. It has only just begun. The energy company obligation—the ECO—also provides the opportunity to help to insulate some 230,000 homes a year, compared with 80,000 under Warm Front. Instead of talking down these schemes, he should be encouraging his constituents to take them up.

[Mr Adrian Sanders (Torbay) (LD)]

Two men have drowned in stormy seas off Torquay in separate incidents this week, despite the best efforts of brave lifeboat crews and the co-ordination of the Brixham coastguard. How will the Prime Minister reassure local fishermen, who pay significant amounts of duty and taxes on their catch, that if the coastguard station is closed, the risks they take will not increase?

[The Prime Minister]

My hon. Friend makes an important point, and this is a good moment to pay tribute to our coastguards and the incredibly difficult and dangerous work that they do. As he knows, the Government’s examination of the coastguard has not been about reducing the number of boats or active stations; it has been about the co-ordination centres and where they are best located. I think that that is an important point to make.

[Mr Dave Watts (St Helens North) (Lab)]

Q3. Why is the Prime Minister frightened to go and visit a food bank? Could it be that, if he visited one, he would see the heartless Britain that he is creating?

[The Prime Minister]

Only yesterday, I was discussing the matter with the person who runs the food bank in my constituency, which I will be visiting very shortly. He pointed out to me that the food bank was established five years ago, and it is worth remembering that food bank use went up 10 times under the last Labour Government. Instead of criticising people who run food banks, we should thank them for the work they do.

[Richard Drax (South Dorset) (Con)]

Q4. I am sure the Prime Minister will join me in praising all those who work in the search and rescue service. May I ask him to intervene personally in our battle to save the Portland search and rescue helicopter and ask his Ministers to come down to Dorset to listen to those who work in this life-saving service before it is cut? Repeated requests have so far been ignored, and I would have thought that a visit would be at the least courteous and wise.

[The Prime Minister]

I know that the former Transport Secretary and other Ministers from the Department have met my hon. Friend, and I am sure they will have listened very carefully to what he said. As well as paying tribute to the coastguard, it is a good opportunity to pay tribute to the search and rescue services across the country. Our reforms are aimed at improving average response times by 20%. That is why we are going ahead with these reforms, but I am sure Ministers will listen very carefully to what he said.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

Q5. Since the Prime Minister came to office, unemployment in Dumfries and Galloway has risen by over 15% and youth unemployment has risen by 9%. My right hon. Friend the Leader of the Opposition made reference to the Prime Minister’s words “good news will keep coming”, so will the Prime Minister be good enough to explain to the House and my constituents exactly what his definition of “good news”,is, especially in view of the shrinking economy at the end of last year, which will lead to further economic failure?

[The Prime Minister]

In Scotland, unemployment has fallen by 14,000 this quarter. It has fallen by 10,000 since the general election. The number of people employed in Scotland has actually gone up. One point that I think is important is that, because we have raised the tax thresholds, 180,000 people across Scotland have been taken out of income tax altogether. There is much more that we need to do, but I think that represents progress.

[Sir Peter Bottomley (Worthing West) (Con)]

It is now clear that the Syrian people would be much better off if China and Russia had not blocked effective action authorised by the United Nations. Will my right hon. Friend say what we are doing to try to help the poor people of Syria?

[The Prime Minister]

My right hon. Friend the International Development Secretary has, like me, visited the Syrian border and seen the refugee camps for herself. Britain is, I believe, the second largest donor for aid and help into those refugee camps. My hon. Friend is absolutely right to say that one of the biggest things that could happen would be for the Chinese and the Russians to consider again their positions and recognise that transition at the top of Syria would be good for the whole of that part of the world—and, I believe, good for Russia as well. We should continue to work with the opposition groups in Syria to put pressure on the regime, not least through sanctions, and also provide aid and help for those who are fleeing.

[Grahame M. Morris (Easington) (Lab)]

Q6. Seaham school of technology serves a growing population and some of the most deprived wards in the country. It is dilapidated and in need of replacement. Will the Prime Minister acknowledge that the real reason for the latest and further 15-month delay in the proposed PFI-funded scheme in my constituency and others is that the banks, which continue to pay themselves huge bonuses, simply refuse to lend the money on the 25-year term demanded by his Education Secretary. Will the Prime Minister speak, in plain language—maybe in Latin—to the Education Secretary? Perhaps he might say, “Optamus schola nova”—we need our new school.

[The Prime Minister]

I will leave the Latin to the Mayor of London, if that is all right, but I will certainly have a word with the Education Secretary. What I would say to the hon. Gentleman is that school capital budgets as a whole are equivalent to what the previous Labour Government did in their early terms. The money is there. In terms of the banks, evidence now shows that the funding for lending scheme from the Bank of England is having an effect on lowering interest rates. We are reforming PFI, but we are also offering infrastructure guarantees—something that the Treasury has never done before—to help projects go ahead.

[Damian Hinds (East Hampshire) (Con)]

Q7. Nothing is more important in early-years education than the caring people who deliver it. Does the Prime Minister agree that raising the bar and elevating their status will help to add prestige to the profession, support parents and give children the best possible start in life?

[The Prime Minister]

My hon. Friend is absolutely right. I pay tribute to the Department for Education, which yesterday published a series of proposals to expand the availability and affordability of child care while also ensuring that there is an offer of real quality.

When we look across Europe, we see countries that provide very good and very affordable child care, and there are lessons that we can learn from those countries. I suggest that the people who say that changing the ratios is wrong should look at the ratios in countries such as Denmark and France. We are coming into line with those countries: we too can provide more available, more affordable child care, so that people who want to go out to work are able to because they can find the child care that they need.

[Angus Robertson (Moray) (SNP)]

Today the Scottish Government accepted the Electoral Commission’s welcome proposals on the independence referendum, in full. Among them is the recommendation that the United Kingdom and Scottish Governments should jointly

“clarify what process will follow the referendum, for either outcome”.

Given that the United Kingdom Government and, indeed, the Labour party have called for full acceptance of the Electoral Commission’s recommendations, will the Prime Minister now give a commitment that he will work with the Scottish Government before the referendum to come up with that joint position?

[The Prime Minister]

I welcome the fact that the Scottish National party has accepted the findings of the Electoral Commission, because the commission was worried that the question was biased. It is good that the SNP has accepted that.

Of course we will work with the Scottish Government in providing information, but let me be clear about what we will not do. We will not pre-negotiate Scotland’s exit from the United Kingdom. It is the hon. Gentleman’s party that wants to break up the United Kingdom, and it is for his party to make the case.

[Mr Julian Brazier (Canterbury) (Con)]

Q8. Will my right hon. Friend confirm that the 2 million-plus surge in net immigration under the last Labour Government has resulted in severe housing shortages, critical overstretch in our infrastructure, and a situation in which one household in 20 does not speak English? Does he agree that it is in the interests of all British citizens that we are starting to get a grip on our borders?

[The Prime Minister]

My hon. Friend is absolutely right. During the last decade, net migration to the UK was running at more than 200,000 a year: 2 million over the decade as a whole. That is the equivalent of the population of two cities the size of Birmingham. It was too far, it was too high, and the last Government bear a huge responsibility for not making responsible decisions.

We have made responsible decisions. We are dealing with, for instance, bogus colleges and bogus students, and the level of net migration has fallen by a quarter. While we welcome people who want to come here from European Union countries and work, we obviously need to do more to ensure that we take a tough approach to prevent people from abusing our benefits system. My hon. Friend the Immigration Minister is working very hard on the issue, and I think it very important for him to do so.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

Q9. Last week, the Prime Minister described blacklisting as “a completely unacceptable practice”.Why is he still blacklisting food banks this week, by refusing to have the decency to visit them, listen and speak—[Interruption.] Government Members may find it funny, but thousands of families do not. Will the Prime Minister visit a food bank, and actually speak to the people who use them?

[The Prime Minister]

Maybe we need to modernise the system, so that a Member can receive a question from a Whip on a tablet or an iPad and change it as Question Time proceeds.

Of course I look forward to having discussions with the people who operate food banks and those who use them, but as I have said, use of food banks increased 10 times under the last Labour Government. I think that, rather than attacking them, we should praise the people who give of their time to work in those organisations.

[Tim Farron (Westmorland and Lonsdale) (LD)]

After a huge community campaign, Westmorland general hospital in Kendal has been identified as the potential site of a new radiotherapy unit. If we are to deliver that vital service to local people, we shall need flexibility when it comes to the tariff for radiotherapy fractions. Will the Prime Minister meet me to discuss how we can achieve that?

[The Prime Minister]

The hon. Gentleman has made an important point about changes in the tariff. I will arrange for him to meet the Health Secretary to discuss the issue. I know from visits to Cumbria how important that hospital is to local people, and I hope that the issue can be satisfactorily resolved.

[Graham Stringer (Blackley and Broughton) (Lab)]

Q10. This week’s announcement about the second phase of HS2 was welcomed in Manchester and the whole of the north of England, but if the project is to have a real impact on the north-south divide, would it not make sense to produce one hybrid Bill, and to build north to south as well as south to north?

[The Prime Minister]

I will look carefully at what the hon. Gentleman says. I am glad there is an all-party welcome for high-speed rail, and it is important that we get this done. The best way of delivering the legislation is for the Leader of the House to come forward with our plans at the appropriate time. I worry that if we change the plans for building the route, we will delay the overall project, and my concern is not that it is going too fast, but that, if anything, it is going too slowly.

[Richard Graham (Gloucester) (Con)]

Q11. Last week Graham Godwin was convicted in Gloucester of dangerous driving and of causing the death of my much respected constituent, Paul Stock, while disqualified, uninsured and speeding. Mr Godwin has multiple previous convictions for driving without insurance and while disqualified, and said that he was not subject to the laws of our land. The current maximum prison sentence for this crime is two years and my constituent’s widow, Mandy Stock, understandably believes that it is time for Parliament to recognise the danger caused by serial disqualified drivers and to increase the maximum sentence for dangerous driving. Will my right hon. Friend ask the Justice Secretary to look urgently at both these issues?

[Hon. Members]

Hear, hear.

[The Prime Minister]

My hon. Friend can tell from the response his question has received that the concern he expresses is shared widely around the House, and, I would argue, widely around the country. The previous Government and this Government have both worked to try to increase some of the penalties associated with drivers who end up killing people through their recklessness and carelessness. I will look carefully at what my hon. Friend has said and arrange for him to have a meeting with the Justice Secretary. It is important that we give our courts a sense that when there are appalling, extraordinary crimes, they can take exemplary action. That is important in a justice system.

[Alex Cunningham (Stockton North) (Lab)]

Q12. On the subject of food safety, can the Prime Minister confirm that traces of stalking horse have been found in the Conservative party food chain?

[The Prime Minister]

Somewhere in my briefing, I had some very complicated information about the danger of particular drugs for horses entering the food chain, and I have to say the hon. Gentleman threw me completely with that ingenious pivot. The Conservative party has always stood for people who want to work hard and get on, and I am glad that all of my—all those behind me take that very seriously indeed.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

As my right hon. Friend sets forth on his pacific mission to Algeria, will he, with his great historical knowledge, bear in mind that when Louis Philippe sent his eldest son to Algeria in the 1840s on a similar venture, it took a century, massive casualties, the overthrow of the Third Republic and the genius of General de Gaulle to get the French army back out of the north African desert?

[Hon. Members]

Answer!

[Mr Speaker]

Order. We want to hear the Prime Minister’s answer to this question.

[The Prime Minister]

I can reassure my right hon. Friend that I am planning only to visit Algiers. I am sure he put down an urgent question at the time of the events to which he referred, and got a response.

[Gavin Shuker (Luton South) (Lab/Co-op)]

Q13. Last week the Prime Minister said he was paying down Britain’s debt, but on his watch it will go up by £600 billion. Would he like to take this opportunity to correct the record?

[The Prime Minister]

I have been very clear: we have got the deficit down by a quarter, and in order to get on top of our debts, we have to get on top of the deficit. That is stage 1 of getting on top of our debts. It is also worth reminding ourselves of of why we are having to do this in the first place. Who was it who racked up the debts? Who was it who racked up the deficit? Who was it who gave us the biggest deficit of any country virtually anywhere in the world? It was the Government whom the hon. Gentleman supported.

[Peter Luff (Mid Worcestershire) (Con)]

If the Prime Minister agrees that the shortage of engineering skills is one of the greatest avoidable threats to our prosperity and security, and that the participation of women in engineering is scandalously low, will he encourage his colleagues to look favourably on the provisions of my Science, Technology and Engineering (Careers Information in Schools) Bill to inspire young people to take up the challenging and well paid careers in engineering, whether as graduates or apprentices?

[The Prime Minister]

I will certainly look very carefully at the Bill that my hon. Friend puts forward. In the recent UCAS data, released today, one of the encouraging signs is that the number of people studying engineering and computer science has actually gone up quite radically. That is an early sign that the steps that have been taken over recent years—frankly, by Governments of all parties —to try to raise the status of and encourage engineering are beginning to have an effect.

[John Mann (Bassetlaw) (Lab)]

Q14. The Prime Minister’s Government have just introduced two new taxes that will cost people wanting to build their own home between £25,000 and £35,000 per family. Why is he choosing to put a block on the aspirations of young people who want to build their own home?

[The Prime Minister]

We are encouraging people to build their own home and buy their own home, not least by the reform of the planning system, which has seen the planning guidance go from 1,000 pages to 50 pages. That is why we are also encouraging the right to buy. If Opposition Members want to help, they might want to talk to the Labour authorities that are continually blocking people from buying their council housing association homes.

[Gordon Birtwistle (Burnley) (LD)]

Would my right hon. Friend like to congratulate an engineering company in my constituency, Lupton and Place, which has taken advantage of the capital allowances announced in the autumn statement and purchased a £1.3 million die-casting machine which will create six new jobs and deliver a component for Jaguar cars that was destined for the far east?

[The Prime Minister]

I certainly will join my hon. Friend in welcoming that investment. His experience in Burnley and the campaign he has been launching did have an effect in bringing forward these proposals on capital allowances. It is absolutely clear that a lot of businesses have money locked up on their balance sheets that we want to see invested, and I believe that these capital allowances are a good way of encouraging businesses to bring forward that sort of investment.

[Ian Lucas (Wrexham) (Lab)]

Q15. David Burslem is severely disabled and has a medical need for an extra room in his home. Why are the Government led by the Prime Minister taking £676 a year away from him in order to pay for a tax cut for the richest?

[The Prime Minister]

What I would say to the hon. Gentleman is that we have put in place a £30 million discretionary fund to help in particular cases such as the one that he raises, but we do have an overall situation where the housing benefit budget is now £23 billion. That is only £10 billion less than the entire defence budget, and it is not good enough for Opposition Members to oppose welfare cut after welfare cut, to propose welfare spend after welfare spend, while they realise that we are dealing with the mess they left.

[Alun Cairns (Vale of Glamorgan) (Con)]

Does the Prime Minister agree that when the Leader of the Opposition talks about the economy, he sounds just like a Victorian undertaker looking forward to a hard winter? Does the Leader of the Opposition not accept that we cannot get out of a debt crisis by borrowing more money?

[The Prime Minister]

My hon. Friend makes a very good point. The fact is that the economy that we inherited was completely unbalanced. It was based on housing, it was based-on finance, it was based on Government spending and it was based on immigration. Those were four incredibly unstable pillars for sustained economic growth, and what we have had to do is a major recovery operation. That operation is still under way, but given the new jobs created, the private sector businesses that are expanding, the new people setting up their businesses, we are making progress.

[George Galloway (Bradford West) (Respect)]

Following yesterday’s announcement, will the Prime Minister adumbrate for the House the key differences between the hand-chopping, throat-cutting jihadists fighting the dictatorship in Mali whom we are now to help to kill, and the equally bloodthirsty jihadists to whom we are giving money, matériel and political and diplomatic support in Syria? Has the Prime Minister read “Frankenstein”, and did he read it to the end?

[The Prime Minister]

Some things come and go but there is one thing that is certain: wherever there is a brutal Arab dictator in the world, he will have the support of the hon. Gentleman. [Interruption.]

[Mr Speaker]

Order. Last but not least, Craig Whittaker.

[Craig Whittaker (Calder Valley) (Con)]

We are, unfortunately, forced to live with them, but we can definitely do without them, so will my right hon. Friend tell the House whether he will be taking seriously the Liberal Democrat Ministers who are queuing up today to resign their posts after voting against the Government in last night’s vote?

[The Prime Minister]

Clearly there is a very profound disagreement about this issue. I would say to everyone in the House of Commons who voted for an oversized House of Commons, and for unequal constituency boundaries that are both costly and unfair, that they will have to justify that to their constituents.

Points of Order

Wednesday 30th January 2013 Commons Chamber

12:35

[George Galloway (Bradford West) (Respect)]

On a point of order, Mr Speaker. I wonder whether you have had time to consider and reflect on the answer that you gave to the hon. Member for Cardiff West (Kevin Brennan) yesterday in relation to the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), whose nobility of character is, of course, beyond compare and legendary, as attested his bravura performance yesterday. But he cannot surely be called a noble Member of the House of Commons; it must be many centuries since any such appellation was permissible. Will you rule that, however noble the hon. Gentleman’s character, he cannot be referred to in here as the noble Member for Caithness, Sutherland and Easter Ross?

[Mr Speaker]

I am grateful to the hon. Gentleman for his exquisite point of order, of which I had no advance notice whatsoever. I, of course, recall the exchange yesterday and what I say to him is that it is possible to be both noble and to sit in the House of Commons. With particular reference to honorific titles, which I think is the matter he has in mind, my recollection is that the Modernisation Committee issued a report recommending the substantial reduction in the use of such titles. As a consequence, I understand the present situation to be that their use in debate is a matter not of order but of taste. I hope that that is helpful to the hon. Gentleman.

[Several hon. Members]

rose—

[Mr Speaker]

I think that the hon. Member for Bradford West (George Galloway) has started a trend.

[Mike Gapes (Ilford South) (Lab/Co-op)]

On a point of order, Mr Speaker. This morning, the Care Quality Commission published a damning report on accident and emergency services at Queen’s hospital in Romford. The Government, as the Secretary of State for Health confirmed in an answer to me earlier this month, still intend to go ahead with the closure of the accident and emergency department at King George hospital in Ilford, in my constituency. May we have an urgent statement from the Health Secretary on the implications of the CQC’s report for that decision?

[Mr Speaker]

I am grateful to the hon. Gentleman for that. I hope that he will not take offence—because this is an extremely serious matter—when I say that he is 24 hours or thereabouts ahead of himself. I acknowledge that this is a matter of extreme importance to his constituents, and what he should do is ensure that he is in his place tomorrow for business questions, which will afford him, if he catches my eye, as I think he might, the chance to raise the matter with the Leader of the House. The Leader of the House is in his place now and has heard what the hon. Gentleman has said, but he should come back tomorrow and have a go in the proper forum. We will leave it there for now.

Housing Market Reform

Wednesday 30th January 2013 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

12:39

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

I beg to move,

That leave be given to bring in a Bill to amend section 157 of the Housing Act 1985 to extend the use of local occupancy clauses to certain urban areas with the permission of the Secretary of State; to increase the qualifying period of local occupancy clauses from three years to either five or ten years; to place a duty on the Homes and Communities Agency and local authorities with housing and planning responsibilities to promote co-operative and mutual housing options and report annually in this regard; to require the Homes and Communities Agency, local authorities and the Land Registry to identify land available for housing development which has not been developed and to publish a report on the available options for development of housing on such land; and for connected purposes.

For far too many people, the housing market is not working. Not enough homes are being built at a price that is within reach in many areas of the UK, particularly in London. The drastic cut in the budget for new affordable homes has unsurprisingly led to a considerable fall in the amount of new social housing. My right hon. and hon. Friends have set out a series of initiatives to build 100,000 more affordable homes, which I strongly support, but even if the Chancellor were to start listening and house building and construction were to begin to return to good health, it is questionable whether sufficient homes would become available to challenge the shortage of supply in key parts of the country at a price that more people can afford.

London is in danger of having a housing market that has priced out those who live and work in our city. It is already virtually impossible to envisage that someone on average earnings could afford to buy a property within the Circle line area and to live in it. In Westminster, average earnings were almost £43,000 last year, while average house prices pushed close to £800,000—a ratio of price to earnings of 18:1. The suburbs of London are heading in the same direction as house prices continue to creep up. In Harrow, where my constituency is, average earnings last year were £30,000, while the average house price was £309,000—10 times average earnings.

Although no set income is required to secure a 90% mortgage on an average property, the scale of difficulty facing people in the suburbs and inner London when trying to buy a property is revealed by the rough-and-ready guide offered by online mortgage calculations, which suggest that an individual income of around £80,000 or joint income of around £90,000 would be required to secure a mortgage of £280,000. That is a challenge for many families, to put it mildly, particularly in London.

This Bill would give urban local authorities the opportunity to create a more affordable market in the sale of former social housing by extending the use of local occupancy clauses, which were allowed under the original right-to-buy legislation. Under the original rules, local authorities in areas of outstanding natural beauty were allowed to include a covenant limiting the freedom of the tenant to sell on property that they purchased to people living or working in the area, so creating a second tier to the housing market in those areas that allows more affordable house sales and helps to ensure local people have the opportunity to get on to the property ladder at an affordable price in the area in which they have strong local connections. My Bill seeks to extend that exemption to other areas of the country where the huge rise in house prices has made a house purchase extremely costly.

Surely, helping local people who are not rich, who have lived and/or worked in an area for a considerable period and who are an integral part of their community to afford to buys, by allowing local authorities to designate sales of former social housing to be just for local people, was a sensible measure in the 1980s for those living in national parks and would be again now for many other areas of the country, particularly London. It does not alter the fundamental principle of the right to buy, which I have always supported, but it recognises the reality of the difficulties that too many people face in wanting to buy a home. Estate agents in national parks, where the exemption operates, are clear that it makes a significant difference to the price of some ex-local authority housing of between 5% and, in some cases, 30%—and typically between 10% and 20%. To qualify to buy such properties one has to have lived or worked or done both in the area for three years prior to purchase.

The exemption makes the price more affordable and essentially restricts the sale of some homes to people on lower incomes and those who have strong ties to an area. My Bill would increase the restriction to help more explicitly those who have a long-standing connection to the community that they live in. Clearly, such a change would need to be phased in, as new tenants move into new social housing and consider whether they want to buy the property.

The second part of the Bill deals with co-op housing, for too long the forgotten part of the housing sector. It makes up only 0.6% of the UK’s housing supply, compared with 18% in Sweden, 15% in Norway and 6% in Germany. Tenant-run co-op housing has especially good satisfaction rates, but co-op housing also offers additional options for those who are working, who want to get on to the property ladder and who cannot completely afford to buy their new dream home. My Bill would require local authorities to promote co-op housing options.

The Bill requires Government to consider afresh the problem of land banking by housing developers, where land is deliberately not developed, often because the developer is waiting for prices to rise. That slows the supply of affordable housing, and the undeveloped sites are often a considerable blight on local communities. If a developer does not want to develop the land, there are few incentives to change its mind, which in turn exacerbates the shortage of affordable homes and affects the amenity for local people.

The Barker review, initiated by the then Chancellor, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), made an important contribution to that debate at the time, but recent work by the Joseph Rowntree Foundation and a review of the tax system by the Institute for Fiscal Studies and led by Sir James Mirrlees of Cambridge university have again focused attention on the issue. Their reports suggest options including a land value tax, amending council tax criteria and imposing levies on land identified for housing but not yet brought to market. Those ideas—there are others—are worthy of serious Government scrutiny, and I urge the Government to support the Bill to tackle the lack of incentives for housing developers to get on with development.

We need to make housing, particularly but not exclusively in urban areas, much more affordable than it is now. I believe that the measures in my Bill would help us to achieve that objective, and I commend it to the House.

Question put and agreed to.

Ordered,

That Mr Gareth Thomas, John Cryer, Stephen Pound, Mike Gapes, Mr Andrew Love, Ms Diane Abbott, Ms Karen Buck, Jonathan Reynolds, Lyn Brown, Margaret Hodge, Jim Fitzpatrick and Nick Smith present the Bill.

Mr Gareth Thomas accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 1 March, and to be printed (Bill 129).

Europe

Wednesday 30th January 2013 Commons Chamber

[Mr Speaker]

Before I call the Foreign Secretary to move the motion, I remind the House that, as will be clear from the Annunciator, in the light of the extensive interest in participating in this debate, I have imposed a seven-minute limit on each Back-Bench contribution.

12:48

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

I beg to move,

That this House has considered the matter of Europe.

The background to the debate, as the House knows, is that Europe faces greater change than at any time since the fall of the Berlin wall. As my right hon. Friend the Prime Minister set out in his speech last week—a speech that was well received in this country, by British business and in many quarters overseas—[Interruption.] I thought that would excite the House at the beginning. As my right hon. Friend said, there are three great challenges facing the European Union: the profound changes being wrought by the eurozone crisis, the lack of competitiveness in the face of a transformed global economy and the gap between Europe and its peoples.

This remains a difficult time for economies across Europe. Unemployment here is coming down, but elsewhere in Europe it is rising sharply. Europe faces challenges from surging economies of the east and south. On some predictions, by 2050 only Germany and the UK from Europe are likely to remain in the top 10 largest world economies. Growth elsewhere benefits us all, but we should be in no doubt that a new global race is under way and that financial market turbulence and the burden of debt make the path to recovery in Europe harder to climb. Europe has many fundamental economic assets but action is needed. As Chancellor Merkel has said, if Europe today accounts for over 7% of the world’s population, produces 25% of global GDP and has to finance 50% of global social spending, it is obvious that it will have to work very hard to maintain its prosperity and way of life.

Then there is the democratic disconnection between the EU and its peoples—a disconnection felt particularly acutely in Britain, for reasons I will come on to in a few minutes. The Eurobarometer survey conducted earlier this year showed that only 27% of Britons were very or fairly attached to the EU. The EU average is 46%, which is hardly encouraging.

[Kevin Brennan (Cardiff West) (Lab)]

Does the Foreign Secretary think that the road to recovery for the UK economy will be helped by the Prime Minister saying that the UK might be out of the European Union in four or five years?

[Mr Hague]

Often, the best judges on the economic side are the business organisations in the country. The British Chambers of Commerce has said that it supports the Prime Minister’s determination to negotiate a new settlement on the basis of a refocused relationship with Europe. The Institute of Directors has said:

“The Prime Minister’s approach is realistic and pragmatic… It is far better to deal with these issues than to shy away from them.”

The Federation of Small Businesses has said:

“Governments around the world need to do all they can to keep markets open and take barriers away.”

The CBI has said:

“The Prime Minister rightly recognises the benefits of retaining membership of…a reformed EU and the CBI will work closely with government to get the best deal for Britain.”

They clearly think such a strategy is in the interests of the British economy.

[Martin Horwood (Cheltenham) (LD)]

Did not Sir Roger Carr of the CBI also say:

“But the referendum builds in a degree of uncertainty and business never welcomes uncertainty.”?

[Mr Hague]

I am coming to uncertainty in a moment. Uncertainty has been a particular theme of some hon. Members and we need to address it, but the quote that I was giving the hon. Member for Cardiff West (Kevin Brennan) was from the director general of the CBI. If my hon. Friend the Member for Cheltenham (Martin Horwood) wants to invite me to read a long list of business quotations—[Interruption.] Clearly, the Opposition do not want to hear from the other business people of the country.

[Several hon. Members]

rose—

[Mr Hague]

I will give way one more time for the moment.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Does the Foreign Secretary accept, though, that what business wants is to renew and refresh the relationship, not for Britain to withdraw? In particular, companies such as Tata Steel near my constituency, which are already paying 50% more tax in Britain than our European counterparts, are very concerned about the prospect of Britain withdrawing from the EU.

[Mr Hague]

Business does want to renew and refresh that relationship, and the only political leader who has put forward a plan to do so is my right hon. Friend the Prime Minister.

For those reasons Britain should be at the front of the debate about Europe’s future to shape it and reform it, given that in the Government’s view, British membership of a reformed, competitive EU is strongly in our national interest. It is worth noting what the coalition Government have achieved to date. We have already democratised how we make the most important decisions of all on the EU by giving people and Parliament more control: the referendum lock in the European Union Act 2011 for the first time gives British voters the final say over any further expansion of EU powers. I am delighted that the Opposition have now stirred themselves from apathy and abstention to give support, belatedly, to the Act that we passed two years ago.

We have supported free trade agreements, with British efforts that helped secure a free trade agreement with Singapore and one with Korea worth up to £500 million a year to Britain alone. British negotiators helped to secure a single EU patent regime. All these support renewed economic growth and competitiveness across Europe.

[Several hon. Members]

rose—

[Mr Hague]

I will give way in a moment. I must make some progress. I am conscious of the time limit on Back-Bench speeches.

Such achievements are of direct benefit to the UK and have been secured by a country able to influence and shape decisions among its partners. It is our responsibility, as one of the leading members of the EU, to press for the reforms that must happen if the EU is to succeed in this century: more competitiveness, flexibility, democratic accountability and fairness for countries both in the eurozone and outside it. All those will benefit the UK and the European Union as a whole.

[Several hon. Members]

rose—

[Mr Hague]

I will give way a few more times.

[Keith Vaz (Leicester East) (Lab)]

The Foreign Secretary is a great champion of enlargement and knows the importance of the freedom of movement of individuals. Is it the Government’s intention to put advertisements in the Romanian and the Bulgarian media saying that they do not want people from Romania and Bulgaria to come to this country? That is in the public domain; it has been mentioned. How does that square with the website of the British embassy in Bucharest, which encourages Romanians to come to work and study in the United Kingdom?

[Mr Hague]

I think that the right hon. Gentleman’s latter point relates to the GREAT campaign, through which we encourage people to visit the United Kingdom. We encourage people to come as tourists to the United Kingdom and so on. On the question of advertising, I have to tell him that we are very stingy about advertising because we are reducing one of the biggest budget deficits in the world, and the Government do not pay for much advertising anywhere around the world, so we do not at present plan to place the advertisements that he describes.

[Several hon. Members]

rose—

[Mr Hague]

Let me give way two or three more times and then make some progress.

[Mr Nigel Dodds (Belfast North) (DUP)]

The Prime Minister has pledged an in/out referendum. Therefore, in any future coalition discussions that might arise after the next election, would that be a red-line issue for the Prime Minister? Would there have to be an in/out referendum in the next Parliament?

[Mr Hague]

Despite having played a considerable role in the last coalition discussions, I can say that we are not actually planning coalition discussions for two years’ time. We plan, as most parties do, though not the right hon. Gentleman’s party, to win a majority in the House of Commons. The Prime Minister has made the position on the matter clear. That is something that we would absolutely want to proceed with in any Parliament where we held office. Talking of which, let me give way to my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes).

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I pay tribute to the Foreign Secretary for his role in the coalition Government and the work that he has done. Is not the strength of this country, past and present as well as future, that we are part of the continent of Europe, where we want to lead, that we increasingly have an English-speaking world, where we can lead, and that we have an empire, now an expanding Commonwealth, where there are huge opportunities? We are best placed if we exploit all three opportunities and do not suggest uncertainty about our commitment to any one of them.

[Mr Hague]

I absolutely agree about our central position in all those areas, and we want them all to succeed. Sometimes, we have to make the case for reform in each of those forums, and it is very important for Europe’s future that we make the case in the EU.

[Mr William Cash (Stone) (Con)]

Right at the heart of the five principles, as my right hon. Friend knows, was the insistence that the national Parliaments lie at the heart of our democratic accountability. In that context, does he accept that the movement towards ever-closer union had to be rejected and, furthermore, that it is vital that we recognise that there cannot be two Governments and two Parliaments dealing with the questions that arise in the context of the future of Europe?

[Mr Hague]

I will come in a few moments, I hope, to the importance of national Parliaments playing an increased role in the decision making of the European Union. My hon. Friend knows from his close reading of the Prime Minister’s speech that he set out a vision of the EU as an explicit contrast to the vision of ever-closer union, so that is absolutely right.

[Several hon. Members]

rose—

[Mr Hague]

This will turn into a Question Time. I will give way to my hon. Friend the Member for Enfield North (Nick de Bois), then I will make progress.

[Nick de Bois (Enfield North) (Con)]

The Foreign Secretary has been extremely generous in giving way. Given that free trade agreements are currently an exclusive competency of the EU and that nothing can be more important than delivering new markets for growth and jobs, does he agree that if it takes the British Government to take a stand on renegotiation, and that brings speedier and more successful agreements to a conclusion, that is the right way?

[Mr Hague]

My hon. Friend rightly highlights the importance of working on that area. Whatever the circumstances and whatever the disagreements in Europe, progress on free trade agreements is always at the top of our priorities.

[Several hon. Members]

rose—

[Mr Hague]

I am going to make a bit of progress, because I have not yet exhausted the list of the coalition’s achievements.

First, on banking union, we understood from the start the case for a single supervisory mechanism for the eurozone. We were clear that that we would not participate in it—and we are not participating. We suggested that the European Central Bank would be the best institution to take on this role—and it is taking it on. Crucially, we said we wanted safeguards for the single market—and we got them. The outcome of those negotiations was of fundamental importance, and it is proof that fair arrangements between eurozone and non-eurozone members can be achieved. That is a good precedent for the future, and it is something of a contrast with previous negotiations when the previous Government gave up £7 billion of our rebate for nothing in return.

On the multi-annual financial framework, we approached the November European Council open to reaching agreement. The deal on the table was not good enough, and that is why we could not accept it. We were not alone: the Dutch, the Swedes, the Danes, the Finns and the Germans were all in the same position. We have established a group of 12 like-minded member states to push for urgent action on EU growth, and we have expanded that alliance, which advocates completion of the single market and less regulation. We have secured the first ever exemption of the smallest businesses from new EU proposals from 1 January this year, and we have persuaded the European Commission to review the body of EU legislation to identify existing obligations from which those businesses could be exempted.

As the Prime Minister said last week in Davos, we want Europe to succeed not just as an economic force but as an association of countries with the political will, the values and the voice to make a difference in the world. When that political will is there—

[Mike Gapes (Ilford South) (Lab/Co-op)]

Will the Foreign Secretary give way?

[Mr Hague]

In a few minutes, given that I have taken a lot of interventions already.

When that political will is there, we can make a decisive difference. That is clear in foreign policy. We have led the way with France on EU policy on Syria, and with France and Germany on sanctions on Iran. The flagship EU anti-piracy operation is hosted not at an EU operational headquarters—something that I have always opposed—but at the UK’s Permanent Joint Headquarters in Northwood.

Those are some of things we have achieved so far. Looking briefly at the months ahead, a number of important issues are on the agenda. The multi-annual financial framework will be discussed again at next month’s Council. We are working closely with all our European partners—

[Andrea Leadsom (South Northamptonshire) (Con)]

Will my right hon. Friend give way?

[Mike Gapes]

rose—

[Mr Hague]

I will give away again in a few minutes.

We are working closely with all our European partners—those who are like-minded and those who are less so—to achieve a deal that is right for the UK and right for the EU. Our objective for EU spending within that framework remains clear: we want to see spending reduced and we will insist on at worst a real-terms freeze and at best a cut. The UK abatement is not up for negotiation, unlike under the previous Government.

[Chris Bryant (Rhondda) (Lab)]

rose—

[Mr Hague]

I will give way again in a moment, but the hon. Gentleman is a bit far down the queue.

On competitiveness, Britain has great advantages: one of the most competitive corporate tax rates in the world, Europe’s largest venture capital community, tax breaks for early-stage investment, and entrepreneur visas so that the brightest can come to the UK. We want the EU to help its members to succeed in the global race.

[Mike Gapes]

In his long list of achievements, the Foreign Secretary referred to like-minded partners. Will he take this opportunity to welcome the election of the new Czech President, Milos Zeman, who is a strong, fervent pro-European, which means that the Czech Republic now has a pro-European President and that the Government have lost one of their few allies in the former President of the Czech Republic, Mr Klaus?

[Mr Hague]

Of course I congratulate, and the Prime Minister will be congratulating, the new President of the Czech Republic. However, the Prime Minister of the Czech Republic said last week:

“The scepticism of the British public is understandable...British voters’ feeling of remoteness from EU elites in Brussels is right. EU competitiveness is a Czech priority as well.”

So it is interesting to hear from the Czech Republic.

[Andrea Leadsom]

Does my right hon. Friend agree that the Prime Minister’s speech last week was right to set out a new vision for Britain in Europe, because it is Europe itself that is changing? That change is inevitable, and the Prime Minister is simply reflecting the inevitability of reforming the EU if it wants to become globally competitive once again.

[Mr Hague]

Yes, my hon. Friend is absolutely right. I pay tribute to all the work that she, with many of our colleagues, has done on this subject. It is vital to shape and reform this debate. Europe has to change, and the UK should be at the forefront of arguing for that change.

[Chris Bryant]

rose—

[Mr Hague]

I give way to the hon. Gentleman because I was inadvertently rude to him earlier.

[Chris Bryant]

I am grateful to the Foreign Secretary. What renegotiation do the Government really want to enter into, given that the coalition agreement refers to seeking only one treaty change, which is to stop the European Parliament going to Strasbourg? I gently suggest to him that even though I agree that that is as bonkers an arrangement as there can be, it is probably not at the top of his list of priorities for renegotiation. Is staying in or out of the European arrest warrant a priority for him?

[Mr Hague]

As the hon. Gentleman knows, because he is well informed about these matters, the debate about the European arrest warrant is part of the justice and home affairs opt-out considerations. The Home Secretary has announced our proposals regarding a block opt-out and the negotiation of an opt-in to some of these requirements and arrangements. The Prime Minister has set out the principles for a future negotiation, and that is a wise thing to do. If the previous Government had set out the principle that the rebate was not up for negotiation, they would not have surrendered so much of it. If they had set out the principle that they were not going to agree to budget increases, they would not have agreed to such increases in so many negotiations. That is the right place to start.

[Several hon. Members]

rose—

[Mr Hague]

I will give way again in a few minutes, but out of respect to the rest of the House I cannot give way more than 10 or 20 times.

We will continue to lead the EU growth agenda with the aim of removing unnecessary regulations, particularly for small companies; deepening and widening the single market; liberalising trade; and, most importantly, seeking the opening of negotiations for a free trade deal with the United States, which would be a very considerable prize.

The right hon. Member for Leicester East (Keith Vaz) asked me about enlargement, so I will say a few sentences about that. On 1 July 2013, Croatia will join the EU as the 28th member state. As hon. Members know, the European Union (Croatian Accession and Irish Protocol) Bill has passed through this Parliament and is awaiting Royal Assent. We are long-standing supporters of EU enlargement, and we will play an active role in advancing it. However, the real burden of effort lies with the political leaders of pre-accession states. We want to see reinvigorated reforms in Bosnia and Herzegovina, progress on Macedonia’s reform efforts and towards good neighbourly relations, new impetus in negotiations with Turkey, Serbia delivering on her commitments on Kosovo, and Kosovo delivering on her short-term conditions to move forwards towards a stabilisation and association agreement.

[Several hon. Members]

rose—

[Mr Hague]

I will give way to a couple of colleagues in a few minutes.

This is the immediate agenda, but we are living in a time of profound change, as my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) reminded us, and a new settlement will emerge from it. The settlement for the European Union should be a reformed one that is better for Britain and the whole EU. The Prime Minister set out the five principles of global competitiveness, flexibility, powers being able to flow back to EU countries, democratic accountability, and fairness. It is on the basis of that new settlement that we should give the British people the choice of whether we remain in a changed Union.

But these great questions are not just for Britain but for all members of the EU, so we all need to find ways of addressing them, building on what we have in common but respecting our diversity. We do not have a one-size-fits- all approach for all 27 member states now, because it would be unworkable. Far from unravelling the EU, flexibility could bind us more closely together, because flexible, willing co-operation is a much stronger glue than compulsion from the centre.

[Several hon. Members]

rose—

[Mr Hague]

I will give way to the right hon. Member for Neath (Mr Hain) and then to one Government Member.

[Mr Peter Hain (Neath) (Lab)]

I am grateful to the Foreign Secretary; he is being very generous. Having represented the Government for two years in Europe, it is clear to me that we can best stand up for Britain’s interests, and sometimes achieve our objectives against all the odds, by building alliances and friendships and being right in there negotiating. How is he getting along with that enterprise?

[Mr Hague]

I have just pointed out many of the things that we have achieved. The reason we have had such strong support from Germany, Finland, Sweden and the Netherlands on the EU budget is that we have built alliances. The reason that the EU patent regime has been brought in is that we have built alliances. I hope that that is well understood by Members from all parts of the House.

[Margot James (Stourbridge) (Con)]

My right hon. Friend talks convincingly about the need for the reform of Europe being respected by many other member states. I met Japanese officials yesterday and they made the point that many Japanese investors who invest in this country support what the Prime Minister said last week and are keen for some of the EU regulations on their businesses to be lifted.

[Mr Hague]

Absolutely. Such people come to the UK because there are many cultural and linguistic advantages, and because of the corporate tax rate, which we are bringing down progressively. They want to see Europe reformed. There is no doubt about that.

Britain is not alone in calling for powers to flow back to member states.

[Sir James Paice (South East Cambridgeshire) (Con)]

rose—

[Natascha Engel (North East Derbyshire) (Lab)]

rose—

[Mr Hague]

I will give way again a little later.

We have already achieved a considerable amount. We have ended Britain’s obligation to bail out eurozone members—an obligation entered into by the Labour party. We are keeping Britain out of the fiscal compact and working to reform the common fisheries policy, and we will achieve more. Like every other member state, we are working with partners to pursue our national and shared interests.

The national debate that we will have over the next few years must rely on an understanding of what the EU does well and what it does not do well; where it helps and where it hinders. The balance of competences review, which I announced in July, will give us a better informed and more objective analysis of these matters.

As my hon. Friend the Member for Stone (Mr Cash) pointed out, the changes in the eurozone are raising questions across the EU about national sovereignty and democratic legitimacy. In our view, balancing the need for flexibility, competitiveness and a stronger role for national Parliaments will be central to the future success of the EU.

The European Parliament has an important role that is set out in the treaties and many MEPs do excellent work. However, over the past 20 years, member states have granted the European Parliament a dramatic increase in its powers through successive treaties, in the hope that it would address the growing sense of distance and disengagement among European voters. That manifestly has not worked. The question of democratic disconnection and accountability has not gone away. That suggests that we need a different answer. That answer will include a bigger and more significant role for national Parliaments, which are and will remain the true source of democratic legitimacy in the European Union. By according a greater role to national Parliaments, we will give practical effect and real force to the principle of subsidiarity.

[Several hon. Members]

rose—

[Mr Hague]

I will give way a couple more times.

[Natascha Engel]

These are all very general and nice principles that we cannot disagree with—we all want more fairness and diversity. What we want to debate today is the meat. We want to know what is the Conservative party’s vision for Europe, on which there will be an in/out referendum? That is what we want to debate.

[Mr Hague]

I am delighted to hear that Opposition Members support all these policies and principles, because many of them were not brought about while they were in office. I commend the hon. Lady for being dramatically clearer than her Front Benchers in her support for what the Prime Minister has set out. I will return to them in a moment.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

My right hon. Friend talked about building relationships and support for our position within the European Union. I hope that he will remind our friends in Poland of the extraordinary championing of its right that Britain instigated, which helped it to enter the European Union and NATO. As mutual friends, we now look to Poland for a little reciprocation and for it to respect our position.

[Mr Hague]

All parties across this House have been strong advocates of enlargement, and successfully so. We remain strong advocates of enlargement. That is a commendable feature of our politics in this country. My hon. Friend is right to point out the importance of our working with those countries in the future.

[Several hon. Members]

rose—

[Mr Hague]

I will not give way again for a few minutes.

All this country’s institutions and relationships, and the role that it chooses for itself in the world, ultimately depend on democratic consent. The undeniable truth is that the democratic consent for this country’s membership of the EU has grown very thin. That problem is not unique to Britain—one in every three voters in France’s recent election voted for parties that advocated leaving the EU—but it is particularly acute in Britain.

In the past 20 years, the EU has changed profoundly in nature and the British people have had no direct say in it. Under the previous Government, Europe changed and its powers expanded at an ever-greater rate, with the treaties of Amsterdam, Nice and Lisbon, the last of which was put into force without any consultation with the voters whatever, either in a referendum or in a general election. The previous Government allowed the EU to be taken in a direction that the British people were uncomfortable with. They did not persuade the British people of the case for taking them there. They made a monumental mistake in preventing a referendum on the Lisbon treaty—a mistake that came from a lack of understanding about the nature of, and need for, democratic consent.

[Several hon. Members]

rose—

[Mr Hague]

I will give way in a moment to the hon. Member for Vauxhall (Kate Hoey).

Ratifying Lisbon without consulting the people did real damage to the EU’s democratic legitimacy in this country. I remember one Labour Member agreeing with that point in the debates on the Lisbon treaty—the hon. Member for Vauxhall.

[Kate Hoey (Vauxhall) (Lab)]

The Foreign Secretary should know that a majority of Labour voters support bringing back powers from Europe. Although, as my right hon. Friend the Member for Neath (Mr Hain) said, we want to be friends with our European allies, talk to them and work with them, does the Foreign Secretary agree that the threat of a referendum makes it much more likely that we will get the real engagement that will satisfy the British public?

[Mr Hague]

Although, as Foreign Secretary, I might not describe it as a threat on a daily basis, I agree with the thrust of the hon. Lady’s argument.

[Sir James Paice]

I am grateful to my right hon. Friend for giving way. For many years, successive Governments have been bedevilled by the perception in many other member states that Britain is not completely comfortable within the European Union, which may or may not be true. He referred earlier to the importance of working with like-minded member states to get the successes that he has rightly listed. Is it not hugely important that this debate is couched in terms of finding a better way for Europe and Britain showing leadership in Europe, which has been lacking for many years, and that it is not presented as a cloak for disengagement from Europe, which some people sadly want?

[Mr Hague]

My right hon. Friend is quite right. That is why the Prime Minister’s speech made the case for benefits for the whole of the European Union and called for global competitiveness and flexibility to help people across Europe. That is the mindset with which we are approaching the debate.

[Mr James Clappison (Hertsmere) (Con)]

I welcome the approach that the Foreign Secretary has taken on a referendum. Will he give careful consideration to the request that the holding of a referendum in the next Parliament be entrenched through legislation? I believe that that idea has much support on both sides of the coalition, because I remember how angry the Liberal Democrats became in the last Parliament when they were refused a vote on an in/out referendum during the treaty of Lisbon, even though they are a little shy about remembering that today.

[Mr Hague]

Of course I hope that the concept of such a referendum will become entrenched, just as the European Union Act 2011 is now becoming entrenched through the belated acceptance of the Opposition. However, to entrench something, one must be able to get it through Parliament in the first place. My hon. Friend will know that what he is suggesting is not part of the coalition agreement. That is why it is our party’s proposal to have draft legislation and to legislate at the beginning of a new Parliament.

[Several hon. Members]

rose—

[Mr Hague]

To be fair to all parties, I will give way to the hon. Gentleman from the Scottish National party.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

I am very grateful to the Foreign Secretary for giving way. His speech is painfully thin on detail and he has been asked for the beef, but can I ask him whether there are any fish in it? In opposition, the Conservatives made a lot of noise about the common fisheries policy, but they are strangely silent in government. Where does the common fisheries policy figure on the radar screen in what he is saying?

[Mr Hague]

I have already mentioned reform of the common fisheries policy, but there are many things to mention and that was the only fish I was going to throw the hon. Gentleman in this debate. As he knows, work to end discards and bring greater regional control over the common fisheries policy is important and a lot of progress has been made on the proposals now before the EU. That is the sort of thing we must carry through to success.

[Several hon. Members]

rose—

[Mr Hague]

To be fair to the House I must make a bit more progress and soon conclude.

There is every reason to ask the people and trust their judgment when changing one of the most fundamental issues in any democracy—that of who decides. That is what happens when powers over an area of policy are moved from a national to a European level, and why we have already passed the European Union Act 2011. It will be for each party to put forward its own proposals at the next election on how to deal with these problems. My view is that we want Britain to be a successful member of a successful European Union, but that cannot happen unless we have reform in Europe and fresh democratic consent. We must confront those facts.

Whether we want Britain to stay in the EU or leave, we should trust the people and put the decision to them. We should let the people look at the new settlement that Europe will have arrived at once the eurozone crisis has been further addressed, see what reforms have been achieved, weigh up the benefits and costs of Britain’s membership, and make a judgment about whether Britain should be in the European Union or out. The question of membership of a reformed Union in the coming years will be the right question at the right time and that is what we should put to the people.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

rose—

[Mr Hague]

I will not give way many more times, but I will, of course, give way to the hon. Member for Birmingham, Edgbaston (Ms Stuart).

[Ms Stuart]

I will attempt to be helpful and allow the Foreign Secretary to do something now rather than project very general aims for the future. National Parliament is important, but the accountability of those on the Front Benches is much more important. If he starts making decisions made by UKRep on behalf of the Government accountable in this House through the Europe Minister, he could make immediate democratic changes now.

[Mr Hague]

We have already made important reforms to accountability in the House, and when I appear in front of the Foreign Affairs Committee next week, our permanent representative from UKRep will also answer questions. I am open to further innovations.

Our approach is one of reform and referendum, and its alternative is to let the issue drift. Speaking of drift, I must say an additional word about her Majesty’s loyal Opposition. Last week, on the day of the Prime Minister’s speech, the shadow Foreign Secretary, the right hon. Member for Paisley and Renfrewshire South (Mr Alexander), said that a referendum on EU membership was not

“a decision you could or should take now”.

He also said:

“We’ve never ruled out referenda in principle”,

by which I think he meant that he was fairly certain that Labour’s position was uncertain.

The next day, after the Prime Minister had given his speech but before the Leader of the Opposition had pronounced on it, the shadow Energy Secretary, the right hon. Member for Don Valley (Caroline Flint) said:

“I can’t tell you what the situation is going to be at the next election”,

by which I think she meant that she was absolutely certain that Labour’s position was uncertain. At Prime Minister’s questions the Leader of the Opposition was unfortunately uncertain that he was meant to be uncertain and said:

“My position is no, we do not want an in/out referendum”—[Official Report, 23 January 2013; Vol. 557, c. 305.]

Never has such certainty created such uncertainty so quickly.

[Albert Owen (Ynys Môn) (Lab)]

Will the right hon. Gentleman give way?

[Mr Hague]

No, this is quite an interesting explanation. Minutes later, on the “Daily Politics” show the shadow Energy Secretary adjusted her position: it was correct, she said, that at the next election the Conservatives would be promising a referendum and Labour would not, but she gave the caveat that that was the position “as it stands today”. More accurately, it was the position as it stood that minute because minutes later journalists were briefed that the Leader of the Opposition had meant to say that Labour did not want an in/out referendum now. Within half an hour, the shadow Foreign Secretary was back on the airwaves—a busy chap—to correct his leader and explain,

“our judgement is that to commit to an in/out referendum now is the wrong choice for the country”

but, he added, “we’ve never said never”.

If we look at the evidence, although we cannot be certain about the Labour party’s position, we can make an educated guess that although Labour will not call for an in/out referendum now, it might do so in future, and it is completely possible—but not certain—that it will be in its next election manifesto. I am waiting for the right hon. Gentleman to nod—

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

indicated assent.

[Mr Hague]

He is nodding. That is the position: it is possible, but not certain. If that is Labour’s position, it is the most uncertain position of all—they might have an in/out referendum, but they might not. The Labour party is against a referendum but not necessarily; it has adopted a position for the next general election that might not apply at that election. It is against uncertainty, but it is not really sure about it. I ask Labour Members to listen to members of their party, the shadow Cabinet or the leadership.

Who said:

“This is about democracy…it is about respecting the people. Successive generations have not had a say on the European debate. All parties have promised a referendum over the last couple of years. This will fester until a proper open discussion is allowed by the political class.”?

That was the hon. Member for Dagenham and Rainham (Jon Cruddas) who is meant to be in charge of policy in the Labour party. More recently, who said:

“I think at some point there will have to be a referendum on the EU. I don’t think it’s for today or for the next year, but I think it should happen...My preference would be an in or out referendum when the time comes”?

That was the shadow Defence Secretary, the right hon. Member for East Renfrewshire (Mr Murphy), a close colleague of the shadow Foreign Secretary. Most eloquent of all, who said:

“The European mandate that the Heath Government secured in the 1970s belongs to another time and another generation. I believe a fresh referendum on this will be necessary…a healthy means of re-establishing a consensus—among Britons…about Britain’s place in the world”?

It is not often that I agree with Lord Mandelson of Hartlepool in the County of Durham and Foy in the County of Herefordshire—he likes his full title—but when he spoke he was, most unusually, speaking for the people of Britain. We will wait for the shadow Foreign Secretary to set out his party’s definitive position. If he does so with certainty, it will be very revealing, and if he accuses the Government of uncertainty, it will be very amusing.

The coalition Government have a strong record with many achievements to their name. We have a clear vision for Britain’s future in Europe. We want reform, and then a referendum with a real choice: in the European Union on a new settlement or out. I hope and believe that Britain will remain in the European Union under a fresh settlement with fresh consent. That would be in the interest of Britain and Europe. We are seeking not only an improvement in Britain’s position, but an improvement in the way the European Union works that would benefit all its countries. We need a focus on competitiveness, flexibility, less centralisation and better democratic accountability, and that would be a European Union that can succeed in the 21st century.

13:27

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

It is, of course, courteous to welcome the Foreign Secretary to the Front Bench, and indeed back to Britain. I am sure it was more agreeable celebrating Hillary Clinton’s time in office last night than watching those on the Opposition Benches celebrate the vote he chose to miss.

The right hon. Gentleman’s speech was, as ever, amusing, but rather less enlightening in terms of its principles, and I will speak about that in a minute. This debate is taking place in the context not just of a speech made last week but of some figures. On Friday it was confirmed by the Office for National Statistics that the United Kingdom economy shrank by 0.3% in the last quarter, and last week we learned that throughout 2012 the UK economy did not grow at all. Unemployment is high.

[Ben Gummer (Ipswich) (Con)]

Will the right hon. Gentleman give way?

[Mr Alexander]

No, it is important the hon. Gentleman listens. I will make a little progress and then I will happily take some interventions.

Unemployment today is high, borrowing is rising and growth is flatlining. The International Monetary Fund is worried, credit rating agencies are concerned, and the British public are anxious. It tells us all we need to know about the Government’s focus that against such a backdrop they chose to call a general debate in Government time not on the economy, but on Europe.

[Daniel Kawczynski]

The right hon. Gentleman talks about the economy shrinking over the last quarter. Does he accept that under the previous Labour Government there was an overdependency on exports to the European Union and huge neglect of various parts of the middle east and north Africa? The Labour party is responsible for making us overdependent on exports to Europe.

[Mr Alexander]

I hope for the hon. Gentleman’s sake that he misspoke in suggesting there was an overdependence on exports to the European Union. I certainly do not think that reflects the position of those on the Conservative Front Bench. Perhaps the Foreign Secretary will nod his assent to the point raised by the hon. Gentleman. No, he has chosen not to nod. That is one all, and we are not off the first page of my speech.

[Several hon. Members]

rose—

[Mr Alexander]

I am keen to make a little progress and then I will happily take as many interventions as we can manage in the time available.

The Prime Minister, alas, seems more focused on the UK Independence party’s numbers than on the gross domestic product figures. When the priority should have been stability, investment and jobs, as Friday’s figures confirmed, he delivered a glorified handling strategy for Conservative Back Benchers, confirming that he is more interested in securing stability in the Conservative party than in securing stability in the economy.

[Andrea Leadsom]

Does the right hon. Gentleman not accept that the EU is changing, and that the eurozone crisis has led to the point at which Britain simply cannot continue in the same way? Does he agree that, in order to safeguard our current interests, we must adopt change?

[Mr Alexander]

Of course change is coming to the EU and we want to see it. The tragedy is that Conservative Back Benchers prevent the Prime Minister from addressing those changes in a sensible, serious way and from advancing Britain’s national interest.

[Mr John Redwood (Wokingham) (Con)]

I heard very clearly the Opposition rule out an in/out referendum at any time, but I have also heard the right hon. Gentleman’s reluctance to say never. Will he explain in what circumstances he will go to his party leader and say, “Things have changed. We need an in/out referendum”?

[Mr Alexander]

The right hon. Gentleman missed the “Today” programme on Saturday morning, of which the Foreign Secretary spoke. The position I set out last week in the studios reflected the fact that we could not sensibly and should not make a judgment now. As I have said, Europe is changing. The timing, character and impact on Britain and our national interests of those changes is as yet unclear. That is not a party political position but simply the reality. I do not start from a prejudiced view towards the EU. The right hon. Member for Wokingham (Mr Redwood) published a book called “The Death of Britain?” in 1999. As far as I am aware, Britain still exists. In that sense, I am not sure that his concerns—[Interruption.] He seems uncertain because he is adopting the shadow Chancellor’s hand gestures. I hope he soon adopts the shadow Chancellor’s economics as well.

On economics, senior British figures, including Sir Richard Branson and Sir Martin Sorrell, warned that the Prime Minister’s approach risked creating damaging uncertainty for British business. The Foreign Secretary did his very best to use the expertly drawn-up brief from the Foreign Office to suggest that British business was rushing to endorse the Prime Minister’s approach last week, but he was careful to give a series of quotes that endorsed a process of reform—not a single quote welcomed the prospect of a referendum, which is the basis on which economic stability has been put at risk. The Foreign Secretary does not need to take my word for that. On 24 October 2011, he himself claimed that an in/out referendum

“would create additional economic uncertainty in this country at a difficult economic time.”

For the record, since the Foreign Secretary made those remarks, it has been confirmed that the UK economy has shrunk by 0.3%, so perhaps he will take this opportunity to enlighten the House on how calling for an immediate in/out referendum creates, as he suggests, “additional economic uncertainty”, but committing to an in/out referendum years from now does not. The sound of silence speaks volumes. For all his best efforts today, we know that the origins, timing and content of the Prime Minister’s speech on the EU lay in the politics of the Conservative party much more than they lay in the foreign policy of the country.

[Ian Murray (Edinburgh South) (Lab)]

My right hon. Friend highlights the Conservative party’s difficulties, but does he agree with Ian Birrell, the Prime Minister’s former speech writer, who has said that the Prime Minister’s speech was the biggest gamble of his career? He also said that the Prime Minister is not only throwing a block of meat to the Conservative right, but giving them the keys to the abattoir.

[Mr Alexander]

Ian Birrell is an engaging and illuminating columnist, and his point on the lack of specificity in the Prime Minister’s speech is an important one. Of course, it is important to recognise that the Prime Minister did not wake up last Wednesday morning suddenly filled with a new-found democratic impulse; he woke up with the same headache he has had for years—a set of Conservative Back Benchers banging on about Europe. He used to oppose that.

[Sir James Paice]

rose—

[George Freeman (Mid Norfolk) (Con)]

rose—

[Mr Douglas Alexander]

I shall make a little progress before giving way.

The Prime Minister’s speech last week disregarded the greatest concern—I would argue—of the British people, namely the need for stability, growth and jobs. In truth, it was a speech that the Prime Minister did not want to give, on a subject he prefers not to talk about, at a time when no decision was required. Its primary aim was to try to deliver unity through the device of obscurity. That is why the Foreign Secretary’s speech was so illuminating.

Alas, I calculate that the Prime Minister’s speech managed to unite the Conservative party for less than 96 hours, at which point the papers were once again full of new plans and plots against him from within the Conservative ranks. Who can blame them?

[Henry Smith (Crawley) (Con)]

Will the right hon. Gentleman give way?

[Mr Alexander]

I will make a little more progress.

Far from resolving the issue of Europe, the Prime Minister’s speech ended up prompting more questions than it answered. Those questions, alas, were singularly avoided by the Foreign Secretary in his speech today. Instead of setting out red lines for the negotiations or detailing the powers he wants to repatriate, the Prime Minister instead described five principles, about which we have heard more today, with which few hon. Members could disagree. I am happy to confirm for the Foreign Secretary—this might discombobulate Conservative Back Benchers—that the Opposition are happy to endorse the five principles. Foreign Secretaries have been advocating them for many years.

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

Which powers would the right hon. Gentleman like to be returned from Europe to this country?

[Mr Alexander]

The Opposition have said that reform rather than repatriation is how to achieve the change in Europe we want—[Interruption.] Will the right hon. Gentleman allow me to finish? We have said that we will judge on a case-by-case basis the merits or demerits of where those powers reside. With respect, I should point out to him that the only power identified by the Prime Minister in his long and much trailed speech last week was a change to the working time directive. Is the Prime Minister honestly suggesting that the right of British doctors not to treat a patient when they have not been to bed for two days is the only power he is seeking to repatriate? Is he suggesting that, if he fails to secure that repatriation, he will recommend a no vote for the EU? That is the idiocy we were left with after the Prime Minister’s speech last week.

[Sir James Paice]

rose—

[George Freeman]

rose—

[Mr Douglas Alexander]

I will make a little more progress before giving way.

Let me read the principles so that the House can know just how crystal clear they are. The principles are competitiveness, flexibility, that power must be able to flow back to member states and not just away from them, democratic accountability and fairness. As I have said, the Opposition agree with those principles—I hope that does not cause great discomfort on the Conservative Benches. Indeed, to be fair, there is a degree of common ground between the Prime Minister and the Opposition on the need for change in Europe.

[Andrea Leadsom]

Will the right hon. Gentleman give way?

[Mr Alexander]

I have already let the hon. Lady intervene. As I have suggested to her, the real tragedy is that Conservative Back Benchers will not let the Prime Minister sensibly deliver the changes that we agree are needed in Europe.

[Chris Bryant]

Is there not an irony in the fact that the Government are able to come up with only one line on a power they would like to repatriate—namely, the working time directive? The working time directive can be changed. The Prime Minister could be fighting to change it, because it is a directive and a matter of qualified majority voting. If he wants to repatriate that power, he must get every single country in Europe to agree to the change. Is there not hypocrisy at the centre of the Government policy?

[Mr Alexander]

The Labour Government secured an opt-out on the working time directive, and that process of change can be advanced now rather than in many years ahead. It is significant that the Foreign Secretary, for all his skill as a parliamentarian, singularly avoided giving a single additional detail in his lengthy remarks today on what the Prime Minister was talking about.

[George Freeman]

rose—

[Ben Gummer]

rose—

[Mr Douglas Alexander]

Let me make a little more progress.

The Prime Minister has repeatedly talked about bringing back EU social and employment laws. On 15 November 2005, he said:

“I want, as a strategic imperative, to take back from the European Union social and employment legislation.”

He gave no qualification of that statement. The Foreign Secretary has often singled out the EU’s fisheries policy. He has said he “deplored” it, but was rather more measured in his response to the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). The Foreign Secretary has also said that he has

“long argued that far greater control over fisheries should pass back to national and regional bodies.”—[Official Report, 16 June 2009; Vol. 494, c. 199.]

He has been equally explicit on justice and home affairs. On 16 June 2008, he said:

“The whole area of justice and home affairs…should be matters for individual nations.”

However, the Prime Minister seems to have misplaced his shopping list on the way to delivering his speech last week. All he said on the matter was this:

“we need to examine whether the balance is right in so many areas where the European Union has legislated including on the environment, social affairs and crime.”

The words “employment law” did not feature in his speech; fisheries were mentioned only in passing; there was not a single reference to the common agricultural policy or agriculture; the word “repatriation” was never mentioned; and he did not even utter the term “opt-out”. He promised his Back Benchers chunks of red meat and instead delivered a text full of tofu. The reason he chose only to serve up the vegetarian option last Wednesday is that before, during and after the Prime Minister’s speech a couple of truths endure: the impression of unity can only be achieved through the device of obscurity, and the gap between what the Conservative Back Benchers will demand and what the European Union can deliver remains simply unbridgeable.

[Ben Gummer]

The right hon. Gentleman is proceeding elegantly, which is characteristic, but this is a general debate on the matter of Europe. We have a settled position on the Conservative Benches—[Laughter.] Well, we do, and we are still waiting and looking forward to hearing the opinion of Her Majesty’s Opposition, were they to come into government in two years’ time.

[Mr Alexander]

The hon. Gentleman did his best to read the Whips’ brief with a degree of conviction, but the idea that there is a settled position is risible. The only attempt to try and find common ground is on the basis of obscurity. The Prime Minister cannot level with his Back Benchers, and he cannot level with European leaders. That is why he has tried to avoid making the speech for the past year. It is not that he does not have talented speechwriters, it is that he did not know what to say. He does not know how to reconcile the demands of his Back Benchers with the needs of the country, and the Foreign Secretary demonstrated the same thing today.

[Gloria De Piero (Ashfield) (Lab)]

Does my right hon. Friend agree with the managing director of Abacus Lighting in my constituency, who told me that if the UK was to leave the EU

“this would make it increasingly difficult for Abacus to compete”?

Does he also agree with another MD in my constituency, from R and D/Leverage, who said:

“My belief is we should take a more active role in Europe…not as happens today, sit on the side lines and point out the shortcomings of the EU, thus irritating all of our EU member states”?

[Mr Alexander]

I have a great deal of sympathy with what my hon. Friend says. She offers two views that are an authentic expression of the real concerns of British businesses. They are exactly the kind of businesses that are struggling to deliver orders and to secure the economic growth that the country desperately needs. The Foreign Secretary’s attempt to offer a credible account of how the prospect of a referendum will assist such firms was an abject failure.

[Mr MacNeil]

The right hon. Gentleman railed against obscurity, and with that in mind will he inform the House what he would like to see happen with the common fisheries policy?

[Mr Alexander]

We want to see some of the changes that the hon. Gentleman mentioned today, as distinct from what he has said on previous occasions, which was to suggest that the abolition of the common fisheries policy was the way forward. Incidentally, it is a great pleasure to be responding to a Scottish National party Member today, and not simply because we now have agreement on that issue. I was fascinated by his party’s response to the Prime Minister’s speech, because the hon. Gentleman will be aware—he knows the figures as well as I do—that Scottish exports to the European Union are worth approximately £9 billion. Scottish exports to the rest of the United Kingdom—including from his constituency, so he should listen—are worth approximately £45 billion. What was the response of the Deputy First Minister in her ill-fated speech in Dublin? She suggested that a referendum could cause instability and threaten growth. Why would a referendum on Europe, affecting an export market worth £9 billion, cause instability and threaten growth, but a referendum affecting an export market worth £45 billion not be a cause of instability? I have to say that when I heard the Deputy First Minister speak, I thought irony had left the building.

[George Freeman]

rose—

[Mr Alexander]

I will make a little more progress and then I will give way.

The Foreign Secretary had his fun today on the matter of clarity, but within moments of the Prime Minister ending his speech it emerged that he could not tell the country how he will vote in his anticipated referendum. He cannot tell us what people will be choosing to stay in or to stay out of. Crucially—this reflects the point I have just answered—he cannot tell investors whether the United Kingdom will be part of the world’s largest single market in four years’ time. I am sure that even the Government Front-Bench team would accept that in any negotiation, European or otherwise, there has to be give and take. However, the Foreign Secretary cannot or will not tell us whether his party would advocate a yes vote or a no vote at the time of any potential in/out referendum if they had secured only 50% of the negotiating objectives—or indeed 60%, 70%, or perhaps even 80%. That is partly because we do not know what the negotiating objectives are, and partly because the Prime Minister simply cannot answer, as his party would not tolerate his answer.

[George Freeman]

I am extremely grateful to the shadow Foreign Secretary for giving way on that point. We all know that business needs certainty, and we live in uncertain times. Will he take this opportunity to be tough on uncertainty and tough on the causes of uncertainty, and tell us whether Her Majesty’s Opposition support the Government’s proposal to renegotiate and to put the solution to the British people in an in/out referendum?

[Mr Alexander]

We do not support the Government’s approach. We do not support the idea, when we have seen a 0.3% shrinkage in the British economy in the last quarter, that now is the time to call for an in/out referendum. We listen to the voices of businesses in communities across the country. If the hon. Gentleman suggests that economic stability should not be the priority, I fear that he falls into exactly the area that the Prime Minister used to define his leadership by opposing. Does anyone remember the days when the Prime Minister talked about modernisation? He used to say that the Tories were going to have a different approach to the health service, and then they delivered the biggest reorganisation that the NHS has ever seen—one that the chief executive said could be seen from space. Does anyone remember the time when the Prime Minister said, “We’re going to be a different kind of Conservative party. We’re not going to be the nasty party anymore. We’re all in this together”? Then they delivered a millionaires’ top-rate tax cut. Does anyone remember the time when the Prime Minister said, “We’re going to stop banging on about Europe.” Well, that is exactly what we have now from those on the Government Benches.

[Huw Irranca-Davies (Ogmore) (Lab)]

The progress towards regional management of our seas under the common fisheries policy is a good example of an initiative taken forward by this Government that was started under the Labour Government. It is very progressive and shows that it is not necessary to withdraw from the EU to achieve reform. May I appeal to my right hon. Friend on behalf of one of the strongest constituencies—the farming and food production sector? They want strong leadership; they do not want uncertainty. They want us in the European Union not for the food or farming subsidies, but for entry to the European market, good standards of animal welfare and good standards right across the food sector. That is what I have been told, having just come from a reception with the Farmers Union of Wales and others.

[Mr Alexander]

My hon. Friend speaks a great deal of sense. The point he makes about the conditions in which British farms want to compete and succeed extends beyond the agricultural sector—a more general point I will come on to make in relation to the single market.

[Sir James Paice]

I am grateful to the shadow Foreign Secretary for giving way. He has made it clear several times during his speech that not only does he foresee change in the EU, but he wants it and believes it is happening—I am sure that is a common view. However, he is giving us the clear impression that he will accept that change, whatever it may be. The position of my right hon. Friend the Foreign Secretary, which I wholly support, is that, yes, we want that change, and we want to direct and be involved in negotiating that change, but that we cannot at this stage say that we will accept the results of that change whatever it may be. If he wants to stop uncertainty, surely he should be making it clear that either the Labour party will accept the evolution of change regardless of what it throws up in the next few years and that we will still be in the EU whatever it may be, or that there may be a stage where he has to say, “We don’t like that, we’ll ask the people.”

[Mr Alexander]

Modesty aside, may I suggest that the right hon. Gentleman has a look at the speech I gave at Chatham House? Frankly, it set out far more details of specific changes that we would like to see in the European Union than the Prime Minister was able to manage in his speech. We do not suggest that the status quo is what we will or should advocate. We want to see change in Europe. We also recognise that change is coming to Europe. However, there is a fundamental disagreement between this side of the House and that side of the House on how best to achieve the objective of change within the European Union.

[Henry Smith]

Will the right hon. Gentleman give way?

[Mr Alexander]

I am keen to make a little more progress.

Of course there are differences between our parties’ approaches on what those changes should include. My judgment is that the reason the Prime Minister was unable last week to set out the changes he wanted to see, beyond the change in working hours for junior doctors, was that the brittle façade of unity to which he is aspiring will crack—indeed, will disintegrate—as soon as he starts to get into the specifics, whether on employment law, social policy, fisheries policy, or a wide range of other issues. I commend the speech I gave, because it details changes in policy. We want to see Europe moving towards growth, and specific policies within the Commission to advance growth, rather than the approach taken in recent years. We see some institutional changes that are required. Of course there are other areas that we will look at, and they are set out in the speech. It is a matter of regret, however, that the Prime Minister felt unable even to match the shadow Foreign Secretary in the level of detail he could provide in his much-trailed speech last week.

One other point on which there was only obscurity last week was that of timing. The Prime Minister seemed unable to be clear on the most basic issue, because it remains uncertain whether treaty change will even happen on the time scale he suggested. At present, no intergovernmental conference is planned for 2015 and most EU Governments now claim there is no need for a big treaty revision for years to come. The only certainty, therefore, is more uncertainty delivered by the Prime Minister.

After both the Prime Minister’s speech and the Foreign Secretary’s speech today, we have been left with a commitment to an in/out referendum on a repatriation agenda that is unknown, within a time frame that is uncertain and towards an end goal that remains wholly undefined. In the debate in the House in 2011—when, incidentally, the Foreign Secretary voted alongside me in the Division Lobby—we argued that to announce an in/out referendum in these circumstances would not serve Britain’s national interest. Our position remains: reform of Europe, not exit from Europe.

Labour recognises, as I have sought to suggest, that the need for EU reform did not begin with the eurozone crisis, which is why our agenda for change must address the need for institutional, as well as policy, reform. That means tackling issues such as how to give national Parliaments more of a say over the making of EU legislation and delivering credible proposals for reform of the free movement directive and family-related entitlements at EU level.

The most immediate focus, however, must be on changes that promote and create jobs and growth. That is why we have consistently called not just for restraint, but for reform of the EU budget. The budget might be only 1% of GDP, but it could be better used, with a greater focus on securing growth and continued reform of the CAP. Alongside reform of the budget, we have argued for a new position of EU growth commissioner and a new mechanism better to assess the impact of every new piece of EU legislation to promote growth across the EU.

Protections for the single market and revival of the prospects for growth should be Europe’s priority for change, but to support and defend the single market—this was the point I was alluding to earlier—we must first understand how the market works. The internal market involves more than simply the absence of tariffs and trade quotas at the border. Common regulatory standards covering issues such as consumer rights, environmental standards and health and safety rules are not simply additions to the workings of the single market, but the basis on which it is built.

That means that a credible growth strategy for the UK as part of the EU cannot, and should not, be pursued on the basis of cheap labour, poor labour standards, poor safety standards and environmentally shoddy goods. If European partners, such as the Germans and the Dutch, can compete in global markets with high European standards, why do some Government Members claim that Britain cannot do so? The Opposition understand that the real agenda on certain Government Benches is not only to bring powers back, but to take rights away.

The Government’s approach threatens the directives on parental leave and agency workers and could mean that they no longer apply in the UK. On the working time directive, it is right that we have the opt-out negotiated by the last Labour Government, but what is the Government’s position? They cannot tell us whether they oppose every aspect of the working time directive. Perhaps the Foreign Secretary will nod or shake his head. Does he support the maintenance of four weeks’ paid holiday entitlement?

[Mr Hague]

Finish the speech.

[Mr Alexander]

What a revealing answer.

[Mr Redwood]

Are there any powers or changes that the EU is currently seeking or likely to seek in the future that the right hon. Gentleman’s party would regard as unacceptable?

[Mr Alexander]

First, that would be a matter for negotiation, and secondly the changes we can envisage to the eurozone in particular do not involve significant additional transfers of powers from the UK to the EU. Indeed, as we heard at length from the Foreign Secretary, if there were a significant transfer of power in the future, it would trigger the referendum lock legislated for in this Parliament. I hope that that offers some comfort to the right hon. Gentleman that, in any circumstances, if there were a significant transfer of power, the referendum lock would be considered. Frankly, however, it is far from clear that the changes envisaged at the moment—on the deepening of the eurozone—would involve any significant transfer of sovereignty from the UK to Brussels.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

I am reluctant to interrupt my right hon. Friend, because he is making such salient points, but obviously one of the meat-eaters on the Government Benches wanted to interrupt him. My right hon. Friend’s analysis should have been done by the Foreign Secretary. Is it not a matter of deep sadness that the Foreign Secretary, who knows about Europe and its significance to this country, has been driven into a corner by the ultra-right in his party? Is it not time he stood up to them, as we would, and challenged them over their idea of breaking away from Europe and bringing down the nation?

[Mr Alexander]

I yield to no one in my admiration for the Foreign Secretary, but he is in a difficult position: he is trading on his past Euroscepticism. In order to maintain his position with his Back Benchers, he has to effect the same persona that suggested we had nine days left to save the pound about 4,000 days ago. He is an intelligent man, however, and he has learned in office that Britain’s interests are served by being part of the EU. He cannot be too explicit about the changes he wants to see, however, because it would compromise the support on his own Back Benches. Nevertheless, I fully endorse my hon. Friend’s point; the right hon. Gentleman has learned in office, and that is why his points about Britain standing taller in the world as part of the EU are probably heartfelt.

[Mr Cash]

Does the shadow Foreign Secretary agree with the Barroso blueprint that the European Parliament, and only that, is the Parliament of the European Union?

[Mr Alexander]

We were clear during the passage of the Lisbon treaty that there should be an enhanced role for national Parliaments—indeed, in my speech last week, I contemplated whether we could strengthen the yellow card procedure with a red card procedure. I see a greater role for national Parliaments being contemplated in the future, therefore; it is certainly one of the negotiations that the Foreign Secretary might be minded to articulate, if he felt able to be explicit, but alas he has taken a Trappist vow of silence.

The debate about Britain’s place in Europe, for all the importance of talking about the economy, stability and jobs and growth, is about more than economics and labour markets. Fundamentally, it is about the kind of country we are and the kind we aspire to be. In a century that many have taken to calling the Asian century, the Labour party is clear that the case for EU membership remains strong. Indeed, if the mechanisms for co-ordinating approaches at EU level did not exist, there would be significant calls for them to be created in today’s world.

Over the past 50 years, the case for Britain’s place in Europe has been based on its ability to deliver peace and prosperity. Today, the EU is also an indispensible vehicle and instrument for amplifying our power. That is certainly true economically, but it is also true in trade. We have discussed today the EU free trade agreement. Is it not ironic that the Prime Minister’s No. 1 ambition for his presidency of the G8 this year is an EU-US free trade area? What could more eloquently speak to the fact that, in any of these international organisations, we stand taller and speak with a louder voice as part of the EU than we would outside it?

Whether in economics, trade, defence, foreign policy or the global challenges around development and climate change, Britain’s interests are strengthened by being part of the EU. It gives us a weight collectively that on our own we would lack. It is not a matter of outdated sentiment or even of party ideology; it is a matter of simple arithmetic. In an age when countries are the size of continents, our membership gives us access to, and influence over, the world’s biggest trading bloc, prising open new frontiers that would otherwise be unreachable by the UK. In an age of common threats that permeate national borders, membership gives us the power of collective action and pooled resources.

For the past 50 years, Britain’s foreign policy has rested on two key pillars—a leading role in Europe and a powerful partnership with the US. Let us be honest: both those foundations are at risk, with a US Administration increasingly pivoting towards Asia, and an EU in which the UK could potentially marginalise its future role. It is a time when Britain must navigate a careful course, and the priority must be to make Britain a leading force within Europe as part of an increasingly multi-polar world. Rather than seeing power and decision making contracting to the G2, in a world where all the decisions are taken in Washington or Beijing, Europe, with Britain leading within it, can work to build a G3 world. Instead of focusing on a future agenda for Europe, the Prime Minister has sadly chosen to push a familiar but vague agenda: to bring back powers and roll back protections. At a time when the rest of Europe is preoccupied with future reforms on the big questions—about currency, continued pacification of the European neighbourhood and the projection of European power globally—the British Government have chosen to focus their efforts on looking back rather than looking ahead.

Even after the much delayed speech last week, the truth remains that—as we have seen again today—on the issue of Britain’s membership of the European Union, the gap between the minimum that Conservative Back Benchers will accept and the maximum that the EU can deliver remains unbridgeable. With a divided Government—and, indeed, a divided Conservative party —it therefore falls to Labour to make the hard-headed, patriotic case, founded on the national interest, both for Britain in Europe and for change in Europe, and that is what we will do.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I remind the House that there is a seven-minute limit on Back-Bench speeches, with immediate effect.

13:59

[Richard Ottaway (Croydon South) (Con)]

Time does not permit me to analyse the shadow Foreign Secretary’s speech, except to say that I think that he has misjudged the mood not just of the House, but of the whole country.

A lot can change in a day in politics. The Prime Minister’s EU speech, given in his capacity as leader of the Conservative party, was a landmark speech that has resonated far and wide. It was probably the most cogent argument for the European Union that most of us have heard in recent times. Of course it will have its critics, but leadership always does. The House should be in no doubt: this was leadership not just of Britain, but of Europe as a whole. Some of Britain’s fiercest critics, on both sides of the in/out fence, are now congratulating the Prime Minister on leading the agenda.

Just a few weeks ago, the Select Committee on Foreign Affairs had what it thought was a private meeting in Berlin with the political editor of Die Welt—a leading German newspaper. A few days later, we were slightly surprised to find a full account of the meeting in The Times, under the headline “Gone is the time when David Cameron had new ideas for Europe”, in which that journalist said:

“Turkey is becoming more relevant to discussions on the future of Europe than Britain.”

However, after last week’s speech, the same journalist wrote:

“Mr Cameron has staked out an excellent position…Britain is setting the European agenda.”

German journalists have much in common with their British counterparts.

[Jane Ellison (Battersea) (Con)]

Given what my hon. Friend the Chairman of the Foreign Affairs Committee has just said and having reflected on the shadow Foreign Secretary’s speech, does he share my surprise that the right hon. Gentleman is not willing to put what he clearly believes is a compelling argument for Britain’s place in a reformed Europe to the British people?

[Richard Ottaway]

I quite agree. My hon. Friend makes her point well.

For far too long, the debate about the EU has been polarised. Now we have a course of action that recognises British Eurosceptism, but keeps us at the table using our influence. Of course Britain continues to have its detractors. The French Foreign Minister said:

“You join the football club, but once you are in, you cannot say, ‘Let’s play rugby’”,

but he misses the point. We are not saying that we want to do a Webb Ellis, picking up the ball and running with it; we are simply asking whether the offside rule is working properly. Also, we have allies. Like us, the Dutch want to reform the EU. They are shortly to produce a report on the repatriation of powers—a document that has a familiar ring to it. Reform will be tough, but it is necessary. There is now a widespread recognition that the EU is not working as it should. That was admitted in an excellent piece in The Times today by Guido Westerwelle, the German Foreign Minister. He clearly expresses his support for reform across the board, arguing that it should be on an EU-wide basis. I agree.

[Mr Redwood]

Is not the problem that we thought we were joining a football club and now there is mandatory synchronised swimming?

[Richard Ottaway]

Yes, but my point is that it is an exaggeration to say that we are trying to play a different sport. We are trying to take a fresh approach. It is the multi-tiered approach that I think is most likely to win the day.

[Michael Connarty]

Will the hon. Gentleman give way?

[Richard Ottaway]

I will not give way. I have had my two shots, and I do not get a third.

Clearly, we need different arrangements for those countries in the euro, those that are out and those in transition—a group that I suspect will be around for a long time. Call it multi-tiered or an inner and outer group, or whatever, but we have long been at the point where a one-size-fits-all approach is over, and Europe knows it.

The case for sticking with the EU hinges on three main plus points—trade, the single market and diplomacy—and another often forgotten aspect: peace and security. Britain’s trade with the EU is a major success story. Almost half the UK’s exports go to the EU and 51% of imports come from the EU. We export more to Ireland than to Brazil, Russia, India and China put together. Global success is to be found in single markets. Let us look at the economies of the USA, China, Brazil and India—all single markets with a common currency and common language. The EU single market—a British invention of Margaret Thatcher—has significantly increased EU prosperity since its inception in 1987. We need to be part of it.

Then there is the diplomatic clout that membership of the EU brings. In trade, combating crime and terror, fighting fundamentalism, liberating markets and addressing climate change, we have a strong voice at the table. Within the EU, the UK, together with France, leads Europe’s defence policy. I am proud that our intervention in Mali shows that, when the going gets rough, Europe can count on Britain to step up to the mark.

Some people have called for us to have the same status as Norway, as a member of the European economic area. I do not accept this. If it means stepping to one side and letting others dictate the terms of trade, that is not gaining sovereignty but losing it. We have to be difficult, but stay in.

It is interesting to reflect on Mrs Thatcher’s defining Bruges speech of 1988, in which she rejected the centralised, unaccountable, federal Europe of Jacques Delors. She said:

“The European Community…must reflect the traditions and aspirations of all its members.”

Far more importantly, she went on to say:

“Britain does not dream of some cosy, isolated existence on the fringes of the European Community. Our destiny is in Europe, as part of the Community.”

I could not put it better myself. Indeed, her words seem rather tame compared with some of the language that we hear today. But the peace dividend that Europe brings still remains uppermost in my mind.

At last week’s Chatham House seminar, the French commentator pointed out that between 1870 and the second world war, France and Germany fought each other three times. In the same period, Britain fought two devastating world wars. In the period since, we have lived in peace. I was born in May 1945, as Europe lay in smouldering ruins. I am part of a generation that has rebuilt that Europe. I have enjoyed a life of unparalleled peace and prosperity. Now is not the time to jeopardise all that we have achieved. The stakes are high, but I believe that we can reach a new agreement with our European partners, and I believe that the people of Britain will back it.

14:08

[Julie Elliott (Sunderland Central) (Lab)]

Thank you for allowing me to speak in this important debate, Mr Deputy Speaker.

I want to focus on the important impact that the European Union has on growth, investment and jobs in the north-east of England and my constituency of Sunderland Central. I was extremely concerned last week to hear the Prime Minister stating his support for an in/out referendum on our membership of the European Union. His announcement weakens our negotiating position and creates uncertainty in the markets and in industry, which will impede investment and thus jobs and growth. The timing of his announcement could not be worse. Last month in my constituency there were just under 4,000 people unemployed, 34% of whom had been unemployed for over 12 months. As the threat of a triple-dip recession looms large over our country, the Government’s priority should be ensuring stability, investment and growth.

This is a crucial time for areas such as Sunderland, yet with his speech the Prime Minister is creating volatility and undermining investment in the region. His announcement will mean years of economic uncertainty, deterring potential investors and destabilising the vital economic recovery that is critical for areas such as mine. The Prime Minister’s focus should, and must, be on our economy, rather than on pandering to his Back Benchers.

Nissan is a great success story for Sunderland. The plant there employs almost 7,000 people, and for every person directly employed by the company, another four are employed throughout the UK. The Sunderland plant is the company’s most productive factory in Europe. Nissan has invested a huge amount in Sunderland: some £3.6 billion since 1984. Only in December, it committed to building another car at the Sunderland plant, involving £250 million of extra investment and creating 280 new jobs. I worry about whether a multinational company such as Nissan would have made the same decision if the future of the UK’s trade relationship with the EU looked set to change.

[Mr Redwood]

Does the hon. Lady remember all the forecasts that her constituency would lose all that investment if we did not join the euro? We did not join the euro, and Nissan has put more in.

[Julie Elliott]

That is not the same point. We are not discussing the euro. We are discussing something far more fundamental to our country: the continuation of our membership of the EU.

The business stability needed to invest in car manufacturing is about long-term business planning. How can a company such as Nissan make long-term assessments of where to base its operation when access to its major market is put at risk by the threat of withdrawal from that market? Pulling out of the EU could result in a 10% tariff on car imports into the EU market, which would severely damage the UK car manufacturing industry and might prompt it to relocate. Across the north-east, 140,000 jobs depend on EU trade, of which more than 60,000 in Tyne and Wear and more than 8,000 in the city of Sunderland are EU-dependent. It would be misleading to suggest that all those jobs would disappear overnight if Britain withdrew from the European Union, but many of them would be lost over time, because the area would be at a competitive disadvantage.

In addition to jobs supported directly by the single market, there has been a substantial amount of investment in the north-east from structural funds to support employment and job creation. Between 2007 and 2013, £196 million was invested in the north-east through the European social fund to promote skills and employment, as well as €375 million through the European regional development fund to support regional competitiveness. Our involvement in the EU has delivered proven jobs and growth. That is something that we should be proud of and that we should protect.

Let us not forget the benefits that our EU membership has brought to British workers. Our membership has introduced employment rights, through the working time directive and other measures. The directive has delivered the right to at least one day off a week, the right to four weeks’ paid holiday a year, the right not to work more than 48 hours a week if a person does not wish to do so, and the right to a 20-minute break if they work more than six hours. Before I came to the House, I worked for almost 20 years negotiating with employers on behalf of the members I represented. I learned that we get the best deals when we negotiate from a position of strength. That is a simple principle, but it is an important one.

The Prime Minister’s announcement has seriously weakened the UK’s bargaining position. I agree that the European Union requires some reforms, but the Prime Minister cannot demand reforms while he is hovering in the doorway and threatening departure. Our EU neighbours will not be blackmailed, and as their allies and friends, we should not attempt to do that to them. When Labour was in government, we were able to negotiate flexibilities in the Lisbon treaty by working with our fellow member states and assuring them that our future lay in the Union.

The Prime Minister has said that he wants to remain in the EU, but with this announcement he is leading us even closer to the exit. This uncertainty for businesses, for markets and for investment opportunities will be extremely damaging for our country and for regions such as mine that rely, to an extent, on the EU for jobs and growth. His policy of wait and see is just not good enough; it is a wait that we simply cannot afford.

00:00

[Mr William Cash (Stone) (Con)]

The ultimate question that lies at the heart of the five principles that the Prime Minister set out in his speech is about our democracy, because everything ultimately depends on the fact that we agreed, in the European Communities Act 1972, on a voluntary basis, to accept the legislation that came out of the Council of Ministers when it made decisions. Those decisions are increasingly made by qualified majority vote now.

The 1971 White Paper—the basis on which the legislation went through, albeit by only six votes—categorically stated that there would be no erosion of British sovereignty in this House, and that it was vital that we retained the veto, not only in our national interest but in the interests of the European Community as a whole. That remains fundamental because, in a democratic nation faced with the pressures for federalism that people are seeking to impose from outside, it has to be right that the Prime Minister has taken the decision to challenge the nature of the structure of the European Union. He went to the heart of the issue when he rejected the notion of ever-closer union, and I commend him for that. I also believe profoundly that we must bring this programme forward rather than waiting until 2017. For reasons of uncertainty, of practicality and of principle, we should have a decision during this Parliament, not during the next one.

[Several hon. Members]

rose—

[Mr Cash]

I will make one further point before I give way.

I have just come back from Dublin, where, in my capacity as Chairman of the European Scrutiny Committee, I met the other 27 national chairmen. There was no doubt whatever in the statement made by the chairman of the Bundestag’s European affairs committee that, as far as he and Germany were concerned, delay was unacceptable. We also know, from listening to him and to the German ambassador, that there will be no cherry-picking and no negotiations of the kind that are being contemplated. The French take a similar view; I have had meetings with them, too. The reality is, therefore, that there is a serious requirement to make the decisions earlier rather than later.

[Mr Redwood]

I quite agree with my hon. Friend’s central point. Does he agree that the reason that we have this tragedy in Britain over our relationship with Europe is that more than 100 vetoes in important policy areas were given away at Nice, Amsterdam and Lisbon, against the wishes of the loyal Opposition in this House and probably against the wishes of the overwhelming majority of the British people, who were never consulted about the way in which their democracy was taken away and trashed?

[Mr Cash]

I absolutely agree with my right hon. Friend, and I will add another point. The recent analysis by VoteWatch Europe, which has been through every decision taken by the Council of Ministers in the past three years, demonstrates that in 91.7% of votes taken in that forum, the UK Government—under the aegis of UKRep and through the Council of Ministers itself—have voted in favour of the proposals in question. That is effectively a forced consensus, because we have only 8% of the votes in the Council of Ministers. When I hear Ministers and others talking about the degree of influence that we exercise in relation to qualified majority voting, I say yes, we have to have alliances, but we know that if others are not going to be in alliance with us, we will not get the kind of result that the British people deserve.

Ultimately, this is about one fundamental question. It is not just about the word “democracy”; it is about democracy in action and its impact on the daily lives of the people of this country. The reality is that someone goes into the ballot station, votes in secret and casts his or her vote based on a manifesto in which they are told what the party in question is offering them in a general election; that is what democracy is all about. When they cast their vote, they expect the legislation to follow what they have been promised. The reality is that, under this system, the whole of Europe is becoming increasingly dysfunctional, with riots, unemployment and the rise of the far right. Let us face it: we have to get real. The fact is that it is not working. That is why our debate is so important.

[Michael Connarty]

I am grateful to the Chair of the European Scrutiny Committee. I have always wanted to ask him this question, so that he can put his answer on the record rather than provide it in a private conversation with me. Is he likely to campaign to come out of the European Union and, if so, on what terms? I want to know, and I think the Foreign Secretary wants to know, on what basis the hon. Gentleman will campaign and vote to come out of the European Union.

[Mr Cash]

I am grateful for that intervention for a very good reason. One of the reasons why I believe it is right for the Prime Minister to insist on the “in or out” question is that now, after all the agonising over all these years—including the Maastricht rebellion, for example, which I was able to participate in and lead at the time—all these things have culminated in this referendum. We have fought for a referendum. Precisely because the question is “in or out?”, it raises the question of the European Communities Act 1972 and whether the British people, having voted in the ballot box, should be expected to receive legislation that comes automatically into law when they might not in fact agree with it. That is the problem: that is why I believe we must have the right question, but it must also be at the right time. As far as I am concerned, if that democratic principle is not upheld, I will vote to come out, because the democratic principle is the fundamental issue for the British people, many of whom fought and died for this country.

I heard my hon. Friend the Member for Croydon South (Richard Ottaway) refer to the fact that he was born in May 1945. I was born on 10 May 1940. That was the day on which Churchill became Prime Minister, and it was over the question of whether or not Britain would be able to govern itself—and much more besides. I follow the line Churchill took about being “associated but not absorbed” with Europe. That is the fundamental question.

In addition, on the economic front, let me make this point. My hon. Friend the Member for Harwich and North Essex (Mr Jenkin) and I wrote a pamphlet about a positive way forward for the single market. We believe that there is a positive way forward for Europe, but that what is happening at the moment is that Europe is creating instability by this concentration on a compression chamber when there are all these diverse countries. As my hon. Friend the Member for Croydon South said, “one size fits all” does not work. We must have an association of nation states. I appreciate that that challenges the centralisation that has gone on for so long in Europe, and I appreciate that it challenges the democratic deficit. I appreciate, too, if I may say so, that this would increase trade, increase opportunities and help to liberalise the rest of the world in the global marketplace. All these things have to be examined, as we move forward in the debate that has now started.

Given the dysfunctionality of the European Union, the determination to repudiate the idea that we should have a referendum is astonishing. The French had two referendums—I took part in both of them in France—and we did incredibly well in Denmark, too, where there were several referendums. There was a referendum in Ireland and in Holland. Who on earth are these people to turn round to us in this country and say, “We can have referendums, but you can’t”? It is beyond belief.

[Wayne David]

Just so we can be absolutely clear, when would the hon. Gentleman like to see the referendum in this country being held?

[Mr Cash]

I would like to see it before the European elections. I believe that that is where the focus on the European question will be at its best. Then we can expose the position of the Liberal Democrats, UKIP and the Labour Opposition at the same time. The reality is that the British people deserve to have that vote.

14:25

[Phil Wilson (Sedgefield) (Lab)]

Thank you, Mr. Speaker.

“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.”—[Official Report, 24 October 2011; Vol. 534, c. 55.]

Those are not my words. Those are the words of the Foreign Secretary in a debate on Europe in October 2011. What has happened since then to change Her Majesty’s Government’s mind?

Change in the Government’s mindset was accelerated on that evening at the end of that debate because 81 Conservative Members of Parliament voted against their own party. That created the kind of uncertainty with which the Prime Minister cannot live—uncertainty in his own position and uncertainty in his ability to keep his leadership in place and his party together. That kind of uncertainty has taken priority over any concerns about the uncertainty over the economy that the Foreign Secretary mentioned in his speech a couple of years ago.

Party management over national interest is now the Prime Minister’s priority, because he knows that there are three parties forming the coalition: the Lib Dems, the Conservatives and the Eurosceptic wing of his own party. We end up with a commitment to a referendum in four or five years’ time. We do not know what the question will be because we do not know what the Prime Minister will be able to renegotiate with the EU.

[Nick de Bois]

Will the hon. Gentleman set the record straight, since his Front-Bench team still leave me confused? Will he let his constituents know: does he or does he not support giving the British people a choice in a referendum?

[Phil Wilson]

As I carry on, the hon. Gentleman will find out exactly what my position is; I will answer his question in due course.

With the Prime Minister being the arch-negotiator he is, he has decided to put in the next Conservative manifesto the terms he will be seeking, thus revealing to the entire world his negotiating position before the negotiations actually start. The Prime Minister has said that he will put his heart and soul into achieving a yes vote to stay in the EU, but will he still do that if he does not achieve what he has laid out in that Conservative manifesto at the next election? Will he then push for a no vote, or will there be an arbitrary threshold that says the Prime Minister will push for a yes vote only if he achieves 80% of what he wants, or 60% or 20% or whatever? All this because the Prime Minister faces the uncertainty of what his Back Benchers will do on the EU. It has become a kind of fetish that skews reality and it will not be sated until we leave the EU—without any regard to the consequences for the UK.

The Prime Minister believes his speech will soothe his truculent Back Benchers, but I’ve got news for him: his Back Benchers can see the EU exit door ajar, and they will push and push at that door until it is fully open and they can march through.

[Mr Robert Walter (North Dorset) (Con)]

Will the hon. Gentleman give way?

[Phil Wilson]

I do not have much more to say, but I need to cover the earlier point and I know this debate is oversubscribed.

We are left with a Prime Minister whose renegotiating position is “If I can’t get what I want; I’ll stop playing and take my ball home”. If he does that, he will be isolated in his negotiations. While this is being played out, the economic uncertainty faced by millions of families up and down the country continues. About 3.5 million jobs rely on the EU, 6,500 of them in Sedgefield, 28,000 in County Durham and 141,000 in the north-east. Companies such as Nissan are big exporters to Europe.

[Mr Douglas Carswell (Clacton) (Con)]

rose—

[Phil Wilson]

I want to continue.

Hitachi Rail Europe is to build a train-building factory in Newton Aycliffe. It is called “Hitachi Rail Europe” for a reason: it wants to export trains and rolling stock to Europe. I would have thought that it wanted not uncertainty but clarity going forward.

No party is opposed to the principle of a referendum, but I do not believe we should undermine British investment and British jobs for years to come just to satisfy the needs of the Tory party. Offering a referendum in five years’ time when we do not know the question, do not know the result of negotiations and do not know whether those negotiations will be completed in that time is like a general telling his troops “We will launch a surprise attack in five years, but we do not know where and we do not know when.”

Uncertainty is the enemy of investment. I do not believe that this is right, at a time when the economy may fall into a third recession in two and a half years. The Government’s position will not lead to a Great Britain if we continue in this way; indeed, we are going down the road towards achieving nothing more than a little Britain.

14:30

[Andrew Selous (South West Bedfordshire) (Con)]

It was Winston Churchill who said that we should learn to trust the people. For far too long, the British people have believed that European matters are decided by a cosy political elite from which they feel completely excluded.

Let me say to Labour and Liberal Members that they have nothing to fear from putting their arguments to the British people. Listening to some of the speeches made by Labour Members today, I wondered whether they lived in the same country as I do. I hear what the British people are saying, and they have said to us regularly, for a very long time, that they want their say on European matters.

I have enormous trust in the good sense and wisdom of the British people, and in their ability to know what is in the British national interest. Conservative Members are proud to be sending this question back to the people, because we think that the people are grown up enough, wise enough and sensible enough to make a decision that is in the British national interest.

[Mr Kevan Jones (North Durham) (Lab)]

It is a matter of fact that every increase in our integration with Europe has come about under a Conservative Government. We joined under a Conservative Government, and we signed the Single European Act under Margaret Thatcher. What has changed in the Conservative party in terms of giving the people a say, which it clearly has not done in the past? The hon. Gentleman may recall that the Single European Act was the key piece of legislation that took powers away from Britain and transferred them to Brussels.

[Andrew Selous]

Treaty signing took place under a Labour Government. It was a Labour Government who promised the British people a referendum on the constitution—as did the Liberal Democrats—but transformed it into the Lisbon treaty, which they signed into law before the general election, thus denying the British public a choice. The then Conservative Opposition were drawing up legislation to offer the people a referendum, which could have taken place had the Lisbon treaty not been signed into law before the election. Conservative Members have been consistent in wanting to allow the British people to have their say on these matters.

We believe that the changes the Government want to see in Europe are in the United Kingdom’s interests, but—and this is vital—we also believe that they are in the interests of the European Union. We should bear it in mind that 47% of our trade is with the European Union, and that the ability to trade with a market of 500 million people, with a GDP of £11 trillion, is not an insignificant matter.

Car manufacturers are free from paying tariffs of £900 million because we are in the European Union. Every Range Rover that we exported to the EU would carry a tariff of £6,000 if we were outside it. One in 10 jobs—3.5 million—depend on trade with the European Union. Of course those jobs would not disappear completely if we left, but the fact remains that there are significant economic interests of which we need to be very mindful. The United Kingdom is the largest recipient of foreign investment in the European Union, and the Foreign Office believes that in 2011-12 about 111,000 jobs were either created or safeguarded because of investment in this country.

We have already heard about the Chinese, American, Japanese and Indian car manufacturers that have been moving to the United Kingdom. We also know from an analysis of 147 decisions made by finance firms that 47% of those firms said that they came here because of access to the European market. It is beyond question that half our trade is with Europe, and we recognise that that trade is vital for the UK economy.

Of course the Government are rightly determined to increase our trade with the growing markets in Asia, Africa and South America, and we have experienced some success. So far we have increased our trade with India by a third, and our trade with China by a fifth. The EU South Korean free trade agreement that we negotiated has already increased our trade with South Korea by 32%. Dorset Cereals, for instance, has experienced a sixfold increase in its trade with that country. We need to put all those developments on the record, so that the British people can make a dispassionate decision about what is in the British national interest.

The Vauxhall van factory is in Luton, very close to my constituency, and some of my constituents work there. The factory recently secured a 12-year contract with Renault to extend production of the Vivaro van. I do not believe that General Motors would have given it that contract if the United Kingdom had been outside the European Union. There are other van factories in Europe to which it could have given the business.

That is the positive side of the argument, and people need to hear it, but we also need to recognise that European regulation is hurting British business. For instance, a firm in Leighton Buzzard called ProEconomy, which does highly effective work in eradicating legionella throughout hospitals in the United Kingdom, recently experienced enormous difficulty in obtaining European Union authorisation and approval for copper and silver ionisation. The science is perfectly safe and the Health and Safety Executive is entirely happy with it, but because of the cost of obtaining EU approval and the length of time that it has taken, ProEconomy, along with a similar firm in High Wycombe, was almost put out of business. I am very grateful to the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Fareham (Mr Hoban), for the action that he has taken to help those firms.

That is one example of European Union interference going too far and causing difficulties to firms. Another involves a small haulier in Leighton Buzzard who used to transport two vehicles on his trailer up and down the country, but who has been put out of business because of a transport regulation that this country did not want and the Department for Transport opposed.

I have raised both those issues with my right hon. Friend Minister for Europe, and I am grateful for his help, but I wanted to put them on the record to demonstrate that we need a balance. We must realise that there are instances in which we should say to Europe, “You are hurting business, not helping it. Your regulation is heavy-handed, and it is causing us difficulties.”

[Mr John Denham (Southampton, Itchen) (Lab)]

The hon. Gentleman is clearly raising some serious points, but the question that will be posed by the Prime Minister in the referendum is an in/out question. If the hon. Gentleman failed to secure change in regard to any of the issues that he has listed, would that lead him to vote no?

[Andrew Selous]

What I have been saying—I hope that the House has followed the logic of my argument— is that of course there are powerful reasons for our membership of the European Union which are connected with trade, jobs and investment, but there are also some negatives, and there is a massive democratic deficit about which the British people are speaking very loudly to their elected representatives.

We have embarked on the beginning of a process. My right hon. Friend the Minister for Europe is conducting a “balance of competencies” review, a cost-benefit analysis which I think could have been given a slightly snappier title, but which is examining all the areas of EU business with the United Kingdom. I have tried to set out the economic case. I have spoken positively about jobs in my constituency, and I have also spoken about some European Union regulation that is harmful to business in my constituency.

I want the best possible deal for the United Kingdom, but also for Europe. I want us to be able to compete with Asia, Africa and the growing markets in the middle east and South America, which are forging ahead in a more competitive manner, and are leaving European business behind. We are starting out with a series of negotiations: we are starting out by trying to put right things that the Government, and many of our constituents, believe are wrong.

I end my remarks by returning to what I said at the beginning. I say this to Labour Members: “I understand your concerns, but you must have confidence in the British people. Trust your constituents.” They are absolutely capable of deciding what is in the British national interest, and they are saying to us very loudly and clearly that they are fed up with being excluded from this debate, whether by Labour or Conservative Governments. They want their say, and they are entitled to it, and I am proud and pleased that under my party and this Government they will be offered that choice.

14:39

[Mark Hendrick (Preston) (Lab/Co-op)]

The Prime Minister’s much anticipated and delayed Europe speech of last week, announcing an in/out referendum after the next election, was an unnecessary gamble. It was a Machiavellian gesture, seeking to placate the increasingly frustrated Tory Back Benchers, as the Front-Bench team tries to manage party disquiet over Europe and the realities of coalition government. At best, it is a diversion and kicks Europe into the long grass; at worst, it will undermine investment into the UK, creating uncertainty and weakening our relationships with other EU member states. That is not a desirable place for the Government to be in if they are serious about renegotiating competences.

What we need is a clear vision and policy on the UK’s role in Europe and what sort of Europe the UK should be fully involved in. In general, I believe it is the role of politicians to make informed judgments and generate policies that are in the interests of our constituents and the general public, and I am therefore generally opposed to the use of referendums, except on strictly constitutional issues.

[Mr Andrew Turner (Isle of Wight) (Con)]

Is sovereignty such an issue?

[Mark Hendrick]

The hon. Gentleman anticipates what I am about to say.

It is conceivable that any Government, either Labour or Conservative, would be drawn into negotiating a new treaty some time after the next general election in 2015. There may well be an inter-governmental conference at that time, especially given the state of the eurozone, and it may be necessary to have an agreement on fiscal rules, in particular between Germany and France, written into a treaty. Such a treaty would therefore be likely to come after any IGC. Given our experience in respect of the Lisbon treaty and the clamour from the popular media and the general public to hold a referendum, I believe it would be difficult for any political party to go into that election without committing to a referendum if there is to be treaty change.

The Opposition clearly accept the possibility of a referendum, given our commitment not to repeal the referendum lock legislation, which will trigger a referendum in the case of any attempt to transfer powers from the UK to the European Union or, indeed, to move to a position of enhanced co-operation in any one of a number of areas. I welcome the fact that we have not ruled out the possibility of having a referendum as part of our policy mix for the next election. Given that the Government have not made clear what their negotiating positions will be, and on what issues they would wish to push in the unlikely event of a Conservative victory at the next general election, our position is sustainable. It is a reasonable, measured response to an unreasonable movement in the Conservative-led Government’s policy.

I envisage the EU developing in such a way that there will be a hard core of countries that form the eurozone and an outer layer of countries, some of which will want to go into the eurozone and others, like the UK, that do not. Talking about the repatriation of powers to the UK does not serve the interests of people in the UK, as co-operation in Europe is more beneficial. Therefore, a future Labour Government should look at having powers of enhanced co-operation in new areas, so that an EU of 27 states can progress without the deadlock that the need for unanimity can bring. We should also look at how we might apply that to the outer layer of countries, one of which would be Britain, so that those countries that wish to go ahead with initiatives could do so without being held back by others.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Does the hon. Gentleman share my concern that if the Tories get their way, the electorate will be faced with a loaded question? There will not be a status quo option on the referendum ballot paper; instead, the choice will be between less Europe and no Europe.

[Mark Hendrick]

In the unlikely event of the Conservatives winning the next general election, it is not clear that they would succeed in getting any of their shopping list of demands. They will want change in much of the social legislation. The working time directive has been mentioned, as have holiday pay and health and safety at work, and they might also wish to focus on measures such as the European arrest warrant and some justice and home affairs issues. There will be a long shopping list to placate Tory Back Benchers, therefore, but if, by some chance, the Tories win the next election, there will be huge disappointment. The situation will be the same as the Labour party faced under Harold Wilson in the 1970s: there will be a huge split in the Conservative party, leading to its being out of office for a long time—after all, it took Labour 18 years to be re-elected to office following that split in our party.

[Mr Redwood]

Does the hon. Gentleman think it was more damaging to run out of money and go to the International Monetary Fund or to offer people a referendum, as that Labour 1970s Government did?

[Mark Hendrick]

The right hon. Gentleman knows that none of the money offered by the IMF was used by that Labour Government. It was there as a back-up.

The Conservatives do not want a social Europe, with working time protection, holiday rights and health and safety regulation. The single market is about the free movement of goods, capital, services and labour. The right of workers to move around freely in the European Union is as important as the rights of capital, goods and services to do so. I have always supported the free movement of people whose countries are members of the EU. With the imminent accession of Romania and Bulgaria, we should seek to extend full rights to workers and not object to their having equal freedoms to other Europeans. Some 50% of the Polish people who originally moved to the UK following their country’s accession have now returned, because of the economic condition of our country under the current Government. The rest are making a valuable contribution to the British economy.

We know that every country’s economic fortunes are cyclical. Our economy is bad at present, in part because of the irresponsible policies of the current Government, but it will get better at some time in the future. Therefore, it is important that we continue to take workers from other countries; after all, 2 million Britons work elsewhere in the EU.

[Mike Gapes]

My hon. Friend mentioned people returning to Poland. In part, that is because, as a consequence of Poland’s membership of the EU, its economy has been growing much faster than ours.

[Mark Hendrick]

That is right. Many Poles are returning to Poland with money in their pockets and are growing businesses there. The Poles will be customers for many goods and services produced in this country, so these events are mutually beneficial; there is not one-way traffic in respect of who benefits.

The European Union is not simply a one-way transfer of sovereign powers; it is about pooling sovereignty, so the sovereignty that resides centrally is worth more than the sum of the constituent parts. That gives the European Union power in what is a global economy, so we can ensure that we get the best deals in trade and can project our influence in a world increasingly dominated by economic powerhouses such as the United States and China.

As 50% of our trade is with the EU, exiting the single market would have devastating consequences for our economy. In other areas, such as justice and home affairs, we have had great success; the European arrest warrant is one example of that. When the current Government or a future Government set out their shopping list for renegotiating competences and our relationship with Europe, Labour Members need to put our case for a social Europe and a Europe of security, where justice and home affairs measures play a crucial role in ensuring international co-operation to fight common enemies, such as drug trafficking and terrorism.

My right hon. Friend the shadow Foreign Secretary says this is about arithmetic. That is true, but it is about much more than that. It is about geography, too—after all, Britain is in Europe—and it is about culture and history, because we are a European nation. Let us play our role in strengthening a united Europe for all the peoples of Europe.

14:49

[Mr Brian Binley (Northampton South) (Con)]

I welcome this debate, allowing us to reflect on the Prime Minister’s speech of last week. I also welcome not only what he said, but the considered and direct way in which he said it. He is to be congratulated on his straight and direct approach. Politicians must be clear; they are the architects of their own downfall when they are not. Whatever people’s view of the content of that speech, there can be little ambiguity regarding the Government’s approach to Europe in the future. For too long there has been a tendency for politicians to hedge with supposedly clever words, enabling a later get-out, almost as though they wish to be all things to all men. By golly, we had a wonderful example of that today from the Opposition Front-Bench spokesman.

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[Mr Binley]

I would like to make a little progress, and then I will come back to the hon. Gentleman.

No wonder the political classes are held in such low esteem, when politicians prevaricate and refuse to give straight answers in meaningful English.

[Albert Owen]

I do not think the Prime Minister could have been any clearer when he said he was going to give a cast-iron guarantee on the Lisbon treaty—and he failed to do so. Was the hon. Gentleman alluding to the Prime Minister?

[Mr Binley]

In keeping with a tradition first established by Labour—so we will not go too deeply into that question.

I am delighted that the Prime Minister rejected the ploy of not straight-talking last week, and spoke directly to the British people in terms they could understand. He also dealt plainly with the “R” word, and he was right to do so.

[Mr Kevan Jones]

The hon. Gentleman says that the Prime Minister has been straight-talking, but he will not say what the red lines are in the negotiations and how he will handle them. He also will not give a commitment on how he will vote in a referendum if he does not get what he actually wants. What is straight about that? Is it just a political fudge for the Back Benchers in the Tory party?

[Mr Binley]

I am not sure whether the hon. Gentleman has ever been involved in business negotiations. Business people start by saying they will negotiate, then think about how they will negotiate, and then undertake those negotiations. That process is occurring at this very moment, I hope. I hope the hon. Gentleman is satisfied with my answer, and that I can make some progress.

The starting point for this debate, on which almost everybody is agreed, is that the present arrangements are going to have to change. The pressures within the eurozone will require a greater convergence than the current sticking-plaster approach allows. Increased integration among eurozone member states will require a new settlement, and that will include a new settlement for those outside the zone, too.

It may not be necessary to create a new treaty, although I would put money on the fact that the Germans will want one, but another quick political “fix” is no way to put right the fundamental issues that have confronted the single currency. There may be a need for a more centralised fiscal eurozone, and that means there is no place for Britain. It means at least a two-tier Europe, and that could raise its head before the next election. We need to be doing the contingency work now, to be prepared for that possible outcome. I assume that such contingency work is under way, but I look appealingly to the Minister for Europe to assure us on that point.

When Europe looks to achieve that new settlement, it is right that we should present a positive vision for our own future. The Prime Minister has outlined the principles which will underpin the approach to those discussions, and the outcome of the negotiations will determine his approach to the referendum—which, incidentally, I quite look forward to. This debate is an opportunity for the House to provide some further detail on what we want the Prime Minister to achieve in those deliberations.

[Damian Collins (Folkestone and Hythe) (Con)]

Does my hon. Friend agree that the reason the Prime Minister is right to set out the referendum commitment is that no attempt to renegotiate will be taken seriously unless that sanction is clearly in place?

[Mr Binley]

I am most grateful to my hon. Friend and, of course, he is absolutely right. One clearly does not enter into renegotiating a relationship without giving a bottom line. That seems to me to be eminently sensible. [Interruption.] I again point out to Opposition Members who know so little about business that it is a business practice.

It is right to attempt to create a new settlement, and I share the Prime Minister’s view that the overriding purpose of the European Union now is to secure prosperity. I have heard a lot about Nissan. Sadly, Nissan got it wrong. It built motor cars for the European Union, and what has happened to the European market? That is one of the problems we face when we cannot trade globally, and that is why we want to create a new situation, allowing us to talk to the wider trading world.

The shift of economic power over the last decade or so has been immense. New consumer markets have emerged in many parts of the world, and Europe’s demographics and regulatory posture are not configured in our favour. One of the most important priorities in these negotiations —I again look appealingly to the Minister—is that they deal mainly with economic and trade matters, because that is where we started with Europe. The fact that we have allowed such discussions to proliferate is one of the problems we face.

I also want to confront those who argue about uncertainty. The eurozone is facing an existential challenge, and unprecedented levels of uncertainty still abound. The relationship between eurozone and non-eurozone member states is in a considerable state of flux. Trends in popular opinion in this country show increasing frustration at the nature of our existing arrangements with the institutions of Europe. Maintaining the status quo without any regard to what needs to change in future will create far greater levels of uncertainty than anything else. In his speech last week, the Prime Minister acknowledged that point. He said that we need to move forward, and I welcome that view.

The Prime Minister was right to state:

“The future shape of Europe is being forged.”

The challenge of a new world of eurozone and non-eurozone member states needs adequately to be addressed —for the sake of both sets of parties. We need to do more to position ourselves to succeed in the global village, with a proactive and helpful approach to global trade.

Today, Europe is not working. The Prime Minister wants to put it right, and to engage the consent—thank the Almighty!—of the British people. If he succeeds, then we will have arrangements that suit our needs and interests, and that serve the wider ambitions of the wider continent. I believe that this will be a compelling message across Europe. I look forward to the Minister’s assurances on the matters I have raised, which are important in this unfolding debate.

14:58

[Kate Hoey (Vauxhall) (Lab)]

I am delighted that my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander) referred on a number of occasions to the UK and not to Britain. I am afraid that the Foreign Secretary, who talks about “Britain, Britain, Britain”, seems to have forgotten that we are part of the United Kingdom. So I thank my right hon. Friend, but that is probably as much as I am going to be thanking him for. I am here to say on behalf, I believe, of many Labour voters, the majority of the British public and the majority of my constituents that what the Prime Minister said about a referendum, our changing relationship with Europe and the need to bring back powers from Europe is absolutely right, and those comments have been welcomed by the country. I am genuinely disappointed that my party is going to take a little bit of time before, inevitably, it comes round to saying that we want a referendum.

Normally, it is just a few of us who put forward the “Eurorealistic” case in such debates, but it is great to see that today quite a number have come along to put forward that view, which I welcome. I remember when there were just a few of us here and we were supporting the Government in putting in place their EU lock. We said it was right that we should be saying that if any more powers were going back to Europe we should have a referendum. I am sorry that Labour Front Benchers were not in favour of that at the time, but I am delighted that we have changed our mind and are now supporting that.

I know that before the European elections my party will without doubt be saying that it wants us to have a referendum, because that is a basic tenet of democracy. We know that the European Union—the Common Market to which we signed up all those years ago—has changed so much. We have seen many changes and the British public never got the chance to say what they thought about them. We had promises from Members on both sides of the House that there would be a referendum, but we never got that referendum.

[Mr Kevan Jones]

Does my hon. Friend agree that the major change in our relationship with Europe was the signing of the Single European Act in 1986 by Margaret Thatcher?

[Kate Hoey]

I perhaps differ in that I do not take that tribal attitude to the matter—I want to do what is best for our country. I do not care who made those decisions; my party made terrible decisions, as did the Conservatives, and the Liberal Democrats always make terrible decisions on Europe. I do not care who did it—it was wrong. I voted against the Maastricht treaty, as did many of us way back then. We were right in everything we said at that time and everything we said about joining the euro, which of course my Front Benchers did have the right view on, and our Government rightly did not join it.

Let us remember something about the people who are now all doom and gloom about what would happen if we had a referendum, and we did not get enough powers back and voted to come out of the European Union. These people are saying that that would be the most catastrophic thing that could happen, but they are the very same people who were wrong earlier—the Richard Bransons of this world and the other top business leaders who, for their own particular interests, have always been in favour of more integration. They were wrong then and they are wrong now, and the British public know that.

[Christopher Pincher (Tamworth) (Con)]

The hon. Lady is making a very good point. I wonder whether, like me, she is an aficionado of the Danish political drama “Borgen”. The first episode of the second series just a few weeks ago had that memorable line, “In Brussels, no one can hear you scream.” Does she think that it is not only in Brussels, but in the office of the hon. Member for North Durham (Mr Jones) that nobody can hear the British people scream?

[Kate Hoey]

The reason I support the lancing of the boil, as many people have described getting this matter out in the open, is that we need to have that debate; we need to be able to listen to people and we need to deal with the arguments from Members on both sides of the House about whether it is crucial that we stay in the EU. It would not be such a terrible thing if we came out of the European Union; we would have a much more confident future looking to Asia and the rest of the world, and looking back to our heritage of the Commonwealth. We could do that, but until now the ordinary person in this country has felt that nobody has listened to them.

We have now begun that debate, and I would like it enshrined in legislation in this Parliament that whatever happens and whoever is in government—I hope that my party will be in power after the election—the referendum will go ahead. The only way we are going to get these powers back—the only way we will get the fisheries policies and the common agricultural policy changed—is by showing that we mean we want the power back and by being confident enough to say to our European allies and our European friends, “We do not like the structure of the European Union. We do not like the way it has shaped up. We want to change it.”

I was reading an article today that I suggest all hon. Members should read, even those who do not normally read the Daily Mail. It was written by Andrew Alexander and it goes through the details of how we got to where we were when we joined the Common Market and how our leaders—Ted Heath, the former Prime Minister, and all our negotiators—gave in, gave in and gave in. What Mr Alexander is saying, as I am, is that we should have the confidence to say, “No, we are not giving in, as they want us almost more than we want them. They need us more than we need them.” If we were able to go out and make that case, we would be able to get a huge amount of those powers back.

If those powers are not going to give us the feeling that we have taken things back into our country and if we were out of the European Union, we would still be able to have all the social policies that we have opted for. We could have our own social chapter—we could do it here. We do not have to be told that we have to do it in Europe. This Chamber is where we should be making the laws for this country and this is where I believe we will ultimately win back that power.

Although it may take just a little longer than I would have liked and we will not get the referendum for a few more years, I am pleased that we have finally reached a position where, between now and then, we will be able to ensure that the case is heard and that people will be listened to. We are actually here to promote democratic views in this country, and people will now be listened to. I believe that my party will go into the next election making sure that it trusts the British people; if we did not trust the British people to have their say on the future of this country and of our relationship with Europe, that would be quite disgraceful. I have confidence that my party will change its view, just as it has changed its view on a number of other issues on Europe.

15:05

[Mr Andrew Turner (Isle of Wight) (Con)]

First, may I commend the Prime Minister on his fine speech in London last Wednesday? After signing the treaty of accession in 1972, Edward Heath said that the ceremony marked

“an end and a beginning”.

Now, our Prime Minister’s speech must mark the beginning of the end of our current relationship with Europe—it is a promise that, if we win the next election, the British people will decide whether we remain part of a reformed European Union, and it is long overdue. I hope that the Leader of the Opposition will reconsider his position. Instead of rubbishing a referendum, he should listen to many of his Back Benchers, who actually welcomed such a measure.

[Alex Cunningham (Stockton North) (Lab)]

More than 4,300 people are on jobseeker’s allowance in my constituency, which is 300 more than last year. More jobs than that—some 5,000 in my constituency and 32,000 across Teesside—depend on EU markets, so surely the Government should be concentrating on protecting and promoting jobs, instead of blighting our country with talk of an in/out referendum.

[Mr Turner]

We should do both—that is the point.

Of course, the Liberals, once again, find themselves on the wrong side of public opinion. Their reason for dodging the Lisbon referendum in 2008 was that they were in favour—so they said—of an in/out vote. Their leader said:

“It’s...time for a referendum on the big question. Do we want to be in or out?”

That was their attempt to persuade the public that they wanted a referendum, but by 2010 they had changed their minds yet again. The fact is that they believe in giving more powers to Brussels, rather than fewer. Why are the Liberals afraid of asking the people what they think?

In 1975, we were asked:

“Do you think the UK should stay in the European Community (Common Market)?”

I was in the minority, as I voted no. However, I believe that if the British people had known what the Common Market was to become, almost everyone would have voted no.

[Alison McGovern (Wirral South) (Lab)]

Would the hon. Gentleman be so good as to explain to the House the evidence for the assertion he just made?

[Mr Turner]

It is only my guess—that is all it is—but it is a guess that I will explain to hon. Members. Since that vote, the European experiment has taken on a life of its own, consistently demanding more and more from the UK. We must reverse that trend or leave. I fully support the measures already taken by this Government in cutting an ever-expanding European budget. Previous Governments have given more and more money that belongs to British taxpayers—and for what in return? Was it to be told that we do not have the right to protect our natural fishing stocks against Spanish trawlers that ignore the rules, or that we must be left vulnerable to unrestricted migration from across Europe, including the expected influx from Bulgaria and Romania at the end of this year? The EU says we can do nothing to stop it. To quote Lord Denning, Europe is

“like a tidal wave bringing down our sea walls and flowing inland over our fields and houses”.

It directly affects the sovereignty of our nation and it is time to turn back the tide.

[Mark Tami (Alyn and Deeside) (Lab)]

Does the hon. Gentleman accept that even in the unlikely event that his party wins the next election, we will still have a period of four years or so of uncertainty when investors will not know whether they should invest in this country?

[Mr Turner]

Of course it would be better if these things were done more quickly, but we must persuade Europe to change. If it does, okay; we must offer it that chance.

I am never very biddable when it comes to voting for further controls or regulations from Europe; neither are some of my esteemed colleagues on the Government Benches—nor, indeed, are some on the Opposition Benches. We do not vote against the Prime Minister to be awkward, but because we sincerely believe that our relationship with Europe must change and because we know that many of those whom we represent agree with us. If that change does not happen, the people must be asked whether we should be in or out.

[Mr Redwood]

Does my hon. Friend agree that the fundamentally undemocratic point is that if we legislate through Europe, we cannot reverse it on our own, whereas if we legislate in this House and get it wrong, or if the Government were to change, it could be repealed the next day?

[Mr Turner]

My right hon. Friend has made the exact point that I was about to reach. I sincerely hope that the Prime Minister can renegotiate our membership and come to an agreement where we do not have to contribute so much and get so little. We need only one fundamental change in our relationship with Europe: full sovereignty must lie with the United Kingdom. That would mean those of us elected to this House would be truly answerable to our constituents. I know that the Prime Minister will keep his promise on a referendum. If renegotiation does not mean that sovereignty will be returned to Britain’s shores—I am sorry, to the United Kingdom’s shores—a referendum is the only option left. The issue is sovereignty.

15:12

[Mr John Denham (Southampton, Itchen) (Lab)]

The Foreign Secretary is a fine orator but today, apart from quite an amusing bit at the end of his speech, he gave the impression that he would rather have been anywhere other than here. He certainly gave no clue why this issue has driven such passions in politics over a long time.

Let me make one or two fundamental points. There is a fundamental truth: the driving forces of anti-Europeanism are fear and pessimism—fear of meeting the challenges of the 21st century and pessimism about our country’s role in the world. Many Eurosceptics would like us to believe that they are patriots, but their actions tell a different story and show a deep belief that Britain’s future is inevitably one of decline, lowered ambitions and a downgrading of our role in the world. I do not think, based on the same evidence as that used by the hon. Member for Isle of Wight (Mr Turner), that most British people want to share that pessimism about our future.

When Eurosceptics talk of being free from the drag of co-operation, from shared obligations and from any common purpose, and when they talk about Britain going it alone, they think that that is a proud statement of intent. It is not. It is an admission that they have lost faith in the future of our country. Those who say, “Go it alone” do not believe that we can succeed, as any modern nation must, in collaboration with others. They think that if Britain tries to work with others we must inevitably be losers—that it will always be them bossing us, rather than us influencing them. The debate does not divide Europhiles from Europhobes; it divides pessimists from optimists.

[Andrea Leadsom]

Does the right hon. Gentleman not think that the Prime Minister’s speech last week was incredibly optimistic about Britain’s positive future at the heart of a newly globally competitive reformed European Union? Surely it was the definition of an optimistic speech.

[Mr Denham]

None of us is against competitive success, but the Prime Minister gave no clue about how he thought that should be achieved or about which failures to achieve it in the EU would lead him to a no vote. It was all motherhood and apple pie, as my right hon. Friend the leader of the Labour party said last Wednesday. We can always sign up to those five principles, but the speech took us no further forward.

[Mr Redwood]

Will the right hon. Gentleman give way?

[Mr Denham]

I shall do so a little later.

On the one hand, we have those who believe Britain can never again be a nation of power and influence; on the other, we have those of us who have few doubts about the capacity of our country and our people to succeed, our ability to have an influence that exceeds our economic power and our capacity to create a stronger economy in the future.

Some of the pessimists are the traditional Eurosceptics —that is, the UK Independence party and its allies in the Tory party. They still wear the flapping white coats that caused so much harm to the previous Conservative Prime Minister. Those defeatists have been joined today by a new group who are perhaps a bit sensitive to the taint of the past. Those new Eurosceptics—perhaps we should call them neurosceptics—enjoy a much more nuanced and subtle lunacy. Let us stay in the EU, they say, but only if we can act as though we were not part of it, by pulling out of agreement after agreement until there is no meaningful relationship left. Of course, the end game is the same: years of uncertainty and declining influence, which make it more likely to end in a British exit.

[Mr Carswell]

The right hon. Gentleman makes a powerful case for remaining in, and I am sure that when the “in” campaign starts it will draw heavily on his powers of advocacy. Is he against allowing the people who voted for him to be an MP having the final say? If so, why does he believe that the political elite alone should decide these points? Why not allow everyone in the country their say?

[Mr Denham]

A year ago, I voted with the Prime Minister of the hon. Gentleman’s party to say that an in/out referendum at that point would be damaging to Britain. Nothing I heard last week made the case that an uncertain referendum in five years’ time is not equally damaging. We never say never, but on the two issues that we are considering today, I think that the Prime Minister was right a year ago and wrong on Wednesday.

[Mr Redwood]

rose—

[Mr Denham]

I will not give way, as I have done so twice already.

The Eurosceptics and the neurosceptics have made the Conservative party ungovernable. The Prime Minister, who lacks the will, ability or interest to lead his party, was forced into last week’s speech. That pessimism is in their language. Historians will surely puzzle over how the party of Winston Churchill—indeed, that of Margaret Thatcher—became the party that sees Britain’s future in Norway and Switzerland and how a country with all our history, all the capabilities of our people and, notwithstanding our current difficulties, all our strengths should consider countries a 10th our size and with little of our influence as role models.

The pessimism is there in the Eurosceptics’ policy and in the call to withdraw from most of the provisions of the social chapter. They will say that it is about sovereignty, but it reflects a deeper belief that the creation of wealth is incompatible with ensuring that wealth is fairly shared among all the people who help to create it. They want us to turn our back on a broadly shared European value that we helped to create, which is that economic growth and social justice can go hand in hand. That is what leads neurosceptics like the Mayor of London to speak against serious banking reform, despite the damage done to the global economy and our own by the excesses and distortions of the past.

The debate is often clouded by concerns, sometimes quite legitimate, about this regulation or that regulatory threat, but those concerns are the cover for a much bigger and more pessimistic view of Britain’s future. Those who express them believe that we must give up on a fair sharing of wealth, on decent protection at work from exploitation and danger and on the shared obligation to protect our environment, which the Prime Minister attacked last week. That is the pessimist vision: a Britain that can compete only by offering ourselves to the worst regulated, most unstable and least committed global economic forces. That is, indeed, a possible vision of Britain’s future, but true patriots will say that it is not the best.

The real future that is possible—the best vision for Britain—will have sustained, committed private investment that builds on the research, the innovation and the skills that we have to offer, that understands that real success is based not on the quickest profit but on the creation of lasting value and that sees the potential to build strong companies, whether British or foreign, rooted in this country whose business success depends on our country’s success. That is the way to compete and pay our way in the world.

Although their economic prescriptions are founded on pessimism, much of the rest of the Eurosceptics’ and neurosceptics’ agenda is either fanciful or dangerous. On what basis should we believe that an isolated Britain will be able to negotiate more preferential trade terms than a large trading bloc; that an isolated Britain would have more diplomatic influence with the USA or with China and the rest of the BRICs than as an influential part of the EU; or that our constituents would be safer if we tried to tear up co-operation on justice, as though the drugs smugglers, the weapons dealers, the terrorists and the paedophiles will think, “Oh, Britain’s leaving the EU. We won’t go there any more.”? Evil people do not target the strong and the confident; they target the weak and the pessimistic. That leaves our constituents—the people of Britain—more vulnerable, not less.

That is not to say that everything is perfect. It is not. Change is coming and change is needed, so had the Prime Minister come to the House last week and said, “Let’s bring regional aid policy back to member states,” he would not only have united the House but won many friends in Europe. Had he come to the House and said, “Let’s change the state aid rules so that countries that want to develop an active industrial policy can do so within the single market,” he would, I think, have united the House and won many friends in Europe. Had he said, “Let’s change the rules on the movement of people so that benefits are only for those who have contributed through work and taxation, even if they aren’t members of a formal contributory scheme,” I believe that he would have united the House and won more friends in Europe than he thinks.

We have no idea what the Prime Minister wants to achieve, though. The Europe Minister tells us that we will have to wait for the Tory manifesto in 2015 to find out, and tells us nothing about what our Prime Minister wants to achieve in the next two years. That is the truth: it is not about British interests; it is about Tories and the next election. Our hapless Prime Minister dare not say whether he is with the optimists or the pessimists, and the price that our country pays is five years of paralysis, indecision and uncertainty. Britain deserves better than that.

15:10

[David Rutley (Macclesfield) (Con)]

We have heard from John the optimist, but I am not sure about his approach. I speak as a sceptic and a definite, confirmed optimist.

Being the MP for the wonderful constituency of Macclesfield, I have little incentive to leave these shores, but in the two parliamentary overseas trips that I have made, my world view has changed quite fundamentally. The first trip, led by the hon. Member for Preston (Mark Hendrick) and with the hon. Member for Blaenau Gwent (Nick Smith) accompanying us, was to China. There I saw for the first time the rapid changes going on in the world economy—the opportunities and the challenges of increasingly competitive, dynamic and globalised marketplaces.

The second trip was a visit to Brussels with the all-party group for European reform, led by my hon. Friend the Member for South Northamptonshire (Andrea Leadsom). It was another eye-opening visit, but one that told a very different story about the challenges and opportunities of globalisation. Of course Europe’s economic interests were discussed, but the participants in that discussion got lost in the fog of political point scoring and diplomatic manoeuvres to patch up the eurozone. That sort of howling at the moon is rendering the EU an increasingly uncompetitive, increasingly undynamic and increasingly parochial place, and it is something that Conservative Members are determined to address.

[Mark Hendrick]

I remember our visit to China, but does the hon. Gentleman not think that the UK has far more influence around the world through its membership of the EU and the weight that that adds, so we should stay in the EU? Given that there are countries—Germany, for example—that do far more trade with China than we do, is it not important that we stay within the EU?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We need shorter interventions. The hon. Gentleman has already spoken—[Interruption.] He should know better. I do not mind interventions, but they must be short.

[David Rutley]

There is an opportunity for Europe to respond, but it is not responding—in fact, it has been caught completely flat-footed by the economic crisis and is not responding properly. We want that to change.

[Mr Redwood]

Is not the true pessimism the Labour pessimism that says that Britain is not big enough and strong enough to have a strong presence in the world and that we have to kowtow to Germany and France to achieve that?

[David Rutley]

As so often, I agree with my right hon. Friend. I hope to build on that thought.

The reality of the world economy is shifting patterns of trade and emerging markets. They have been tapping us on the shoulder for some time and are now tapping even harder. Some hon. Members in the Chamber today may remember John Major pointing out to Peter Mandelson that if we do not notice when reality taps us on the shoulder, one day reality will grab us by the throat. Yet it is sadly clear that the EU has become divorced from reality—from real people and from real lives. When the British people voted to stay in the European Economic Community in 1975, it was for real world reasons—for jobs, for growth and for the common market—and at that time the EEC gave every impression that that was its purpose. The EU needs to give us and our constituents similar cause for optimism today. There is an urgent need for reform and a fundamental resettlement in the UK’s relationship with Europe.

This is not about being little Englanders. It is about being big Britons who want to seize the opportunities available in the global marketplace; so do big Germans, big Swedes and big Danes—not to be confused with Great Danes—and we need to work with them, our reformist friends, against those who should be called little Europeans, who would turn our continent’s shoulder to the world. Just as we led Europe to the single market, we can lead in its completion and help our local businesses and our constituents to compete better on the global stage. The channel is little more than 20 miles across, but the gulf is huge between the global economic horizons of the big Britons we represent and the continental introversion represented by the little Europeans on the Opposition Benches.

The EU has been caught flat-footed in the economic crisis, and the euro—a political creation—has been caught in an economic straitjacket, yet there remains clear political will among many people in the eurozone for it to succeed. That has already led to calls for deeper, thicker integration and less flexibility at national level, and that is not the Europe that was voted for. We are told that we should not demand a Europe à la carte, yet the eurozone members chose to set up a new club within the club of Europe and—perhaps unsurprisingly, given the problems that the euro has caused—they are now demanding a European fixed price set menu. The Prime Minister is resisting this, quite rightly.

The bottom line for our constituents is this: are we better off in or better off out? Are we more likely to create jobs and economic growth, or are we to be suffocated by excessive regulation and told that our national Parliament cannot do anything about it? Those are important questions that we want answered. We do not want to fudge them. The Government have already taken important action, which the Foreign Secretary told us about. We wanted to ensure that, if transfers of power to the EU were proposed, they would have to be put to the British people first, and we have achieved that by creating the referendum lock. Rightly, no further powers can be transferred to the EU without the British people having their say.

The Government have already taken action to kick-start the debate on the resettlement with Europe. The review of the balance of the EU competencies will provide a national audit of what the EU currently does and what it means for our country, and it will provide us with the information that is needed to take future decisions about our relationship with the EU and in the referendum that now, thank goodness, lies ahead.

The House will not be surprised that I regard myself as a Eurosceptic. As I said at the beginning, in scepticism there is hope, contrary to what the right hon. Member for Southampton, Itchen (Mr Denham) said. On the Government Benches and across the country, Euro- scepticism is on the rise. The Prime Minister and the Foreign Secretary are surely right to press for renegotiation before an in/out referendum and to work with our partners for a more competitive EU and one that is worth considering voting for.

Some people have asked, “What are you considering repatriating?” or “What do you want to renegotiate?” I commend the fantastic work that is being led by my hon. Friends the Members for South Northamptonshire and for Daventry (Chris Heaton-Harris) on the Fresh Start project. A wealth of options is being put forward there—worked through, thought through and analysed carefully. Take a look. I think that Opposition Members will find something to learn there.

This negotiation must be aimed, laser-like, at improving our economic position, cutting through red tape, safeguarding our financial services, delivering government at the lowest possible level and trusting the people to have the final say. That is the Conservative way. But in their heads the Opposition, with a few notable exceptions, do not want the British people to have their say. The reality of the Labour Government was the Lisbon treaty, with no promised referendum at the end.

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[David Rutley]

I have given way twice already.

The Opposition prefer the top-down, little European approach which I spoke about, where EU membership is a price worth paying and staying in an unreformed EU is worth any price at all. How depressingly pessimistic that is. How unambitiously 20th century of the Labour party. It is here, on the Conservative Benches, where Members are fizzing with ideas for a sustainable, successful and competitive Europe, which I suggest the Opposition should take a look at. The Prime Minister has taken a bold approach. It is the right approach for Britain; it is the right approach for Europe; it is optimistic and reformist; and it is based on reality—the reality of where we are, where we could be and where we should be to compete in the globally competitive marketplaces that we face today.

00:00

[Alison McGovern (Wirral South) (Lab)]

It is a great pleasure to contribute to this important debate. I made my maiden speech in the House in a debate on Europe so people might start to think I have something of an interest. Let me say at the outset that my allegiance, first and foremost, is to my constituents. Our allegiance in this place should be to the people of the United Kingdom. We are here to serve the national interest, not narrow party interests. Our job is to listen to the concerns of our constituents and to try and understand the things they need to make their lives better, not to think about our narrow point of view.

I am in politics because it broke my heart to see people I loved in the place I come from have to leave our city to get a job. That is what motivates me to speak in the debate today. It is not about some kind of philosophical attitude. It is about the practical needs of my constituents. Nor should the debate be about party interests separated from the needs of the British people.

So the Prime Minister makes his great speech and his Tory attack dogs turn into puppies having their tummies tickled—for now. Unfortunately for the Prime Minister, I think there might be a couple of problems ahead for him. That is because his speech might have been a victory of spin over substance. Unfortunately, we are still not quite clear what the Conservative view on Europe is. The Prime Minister cannot tell the public how he would vote in any referendum that we might have. Nor is it clear what concessions or what negotiations he can achieve. I have seen House of Commons Library briefings that say that there are no examples of repatriation without new treaties. As the Deputy Prime Minister told us, it seems unlikely that there would be. The rest of Europe, he said, simply would not have it. The Business Secretary said that the UK should not overestimate its own negotiating position. Oh dear!

[Damian Collins]

Does not the hon. Lady agree that the end of this process could not be clearer, because there will be an in/out referendum and the people will decide? What is ambiguous about that?

[Alison McGovern]

No—the end of this process is the Prime Minister telling us and the British people how he would vote. That is the confusion.

[Mr Redwood]

rose—

[Alison McGovern]

I will make some progress.

[Mr Redwood]

rose—

[Alison McGovern]

I am tempted to give way but I will make some progress before I do.

Let us not forget the real issues. As I said, what matters to my constituents at the moment is the fact that our local authority has been cut to the bone and we are losing hundreds and hundreds of jobs. We are worried about employment and having a well-functioning economy on Merseyside where people have the money in their pockets to afford the prices in the shops. That is what people are really concerned about.

Because my time is limited and I have only four minutes left, I want to focus on a particular problem in Europe that I would have hoped we could all try to work together to deal with. This is timely, I hope, because yesterday a report by the Work Foundation demonstrated not only that youth unemployment is a significant problem on the continent of Europe but that the UK’s unemployment is higher than the European average, third only to Greece and Spain, and that we have youth unemployment that is higher than the OECD average. In yesterday’s Treasury questions, I asked how the Government planned to tackle the fact that their own predictions from the Department for Work and Pensions demonstrate that they have increased by 31,000 the number of young people to whom we will be paying jobseeker’s allowance by the end of this Parliament. We have the wrong economic plans. This problem cuts across the whole continent of Europe, and we ought to work together with our European partners to try to solve it. Considering this question helps to enlighten the debate about what we should do in Europe.

We need to focus on two things in the light of this problem. First, we need to rebalance the economy of Europe.

[Richard Drax]

: (South Dorset): Will the hon. Lady give way?

[Alison McGovern]

Briefly, if the hon. Gentleman wants to answer the question of what the Government should do about Europe.

[Richard Drax]

Just as a matter of observation, when talking about losing jobs and all the things the hon. Lady is mentioning, is it not the case that many more millions of people are out of work in Europe because this whole European federalism dream—we can call it what we like—is going horribly wrong? It is not just a UK matter; it is about what we are trying to live with, and we just cannot do it.

[Alison McGovern]

To help the hon. Gentleman, let me point out that what went horribly wrong was that the financial services industry invested in complicated products that it told us would help to manage risk, but it turned out that they made the risks worse. That sparked a financial crisis, and that has led to the problems that I have been describing.

We need a rebalancing of our European economy, and we need to think about how we can address the significant problem of inequality that is being created. In a recent Mansion House speech, the Chancellor of the Exchequer said that he was not in favour of a stimulus because it would lead to leakage in relation to imports. An EU-wide plan therefore makes sense, because we are part of a trading bloc and we should be working together to improve our shared economy. My right hon. Friend the Member for Southampton, Itchen (Mr Denham), who is sadly no longer in his place, mentioned state aid rules to rebalance areas of the economy that use high technology. It makes sense to work with our European colleagues on rebalancing.

Some commentators have advanced the idea of a youth contract whereby we could use unused structural funds for a European youth guarantee. I would argue that in order to tackle youth unemployment we need to learn the lessons of the projects proposed by the best of our town halls in the UK and the best countries around the world that have used active labour markets to tackle these problems. If there are funds available in Europe, we should work together with colleagues to get them to the heart of the problem.

[Michael Connarty]

My hon. Friend is talking about youth unemployment and employment strategies. Unfortunately, the proposal made by the Irish presidency to have a four-month trigger point at which all young people would have the guarantee of a job, which is better than what is offered in the UK, seems to be getting very short shrift from the UK Government.

[Alison McGovern]

My hon. Friend makes my point for me. For me, being in politics is not about standing in this Chamber thinking that we have all the answers; it is about listening to and working with colleagues in town halls in this country and across the European Union to solve the problem together.

Finally, there is no doubt that if we want to get people in Europe working, we need to trade. In my view, we should listen to the President of the United States of America.

[Mr Carswell]

No you can’t.

[Alison McGovern]

I’m afraid I will. The President of the USA said that it would be better for the UK to remain part of the EU. We really have to listen to that. As other people have said, our future must be in Europe, using its strength to negotiate with the great economies of the future—India, China, the United States of America and, hopefully, Africa.

The question is this: are we prepared to negotiate for the good of the people in the UK? What matters more: our own party interests or the dignity of the people we are supposed to represent? Their ability to work, to have money in their pockets and to have a good family life is what matters to me. That is why this debate on Europe could not be more important.

15:41

[George Freeman (Mid Norfolk) (Con)]

I want to start by paying tribute to the Foreign Secretary and the Prime Minister. Their leadership on this issue has electrified Europe, the nation and this debate, and not before time.

The context for this debate is that the EU has changed fundamentally and is still changing. The eurozone crisis demands that we rethink our relationship, and the rise of globalisation and new markets require us all, as Europeans, to look to new models of economic growth.

The principal reason why this debate is so important to my constituents is democracy. The British people voted nigh on 40 years ago for a common market. They have been delivered a federal political union that does not have the legitimacy of their support. At the heart of all democratic politics is a golden principle: those who are elected to serve should never give away the power vested in them by the people they serve without their authority.

The electorate are looking to us to build an economic future for them and their families. They demand that we leave no stone unturned in insisting that the European project adjusts to the realities of globalisation and growth. Furthermore, the world economy demands that Europe becomes more enterprising and more prosperous, and that it engages more with the economies of tomorrow.

[Mr Kevan Jones]

The hon. Gentleman says that we do not have what we signed up for in 1975. I agree with him about that. However, does he not agree that the biggest transfer of power to Brussels and the biggest change in the EU came with the Single European Act, which was signed in 1986 by Margaret Thatcher, who never even considered taking it to the country in a referendum?

[George Freeman]

I disagree. We could have an interesting debate about how the illegitimate ratcheting of power has happened over the past 30 years. The Lisbon treaty had a big part to play. The previous Government’s promise to hold a referendum and their denial of one played a big part in the destruction of trust.

Twenty-five years ago, the then Conservative Prime Minister, Mrs Thatcher, made a major speech on Europe that became known as the Bruges speech. I think that our Prime Minister’s speech will become known as the Bloomberg speech. I pay tribute to his leadership. He set out some important messages, not least the idea that Europe requires a new model to deal with global growth and that we cannot build a 21st century economy within the constraints of a 20th century political and economic institution. I warmly welcome the five principles that he set out to guide this important renegotiation.

I welcome the Prime Minister’s statement of our belief in a common single market—not a market that is over-regulated by big government and dominated by the big businesses that feed of it, but a single market that is dynamic, entrepreneurial, open, innovative and global. We are, as the Prime Minister said, in a global race. We need a Europe that helps us and itself to cope and compete in that race.

I consider myself to be an optimistic, entrepreneurial and global European. I am Eurosceptic in terms of the political, federal project that I have witnessed during my lifetime, but I am an optimistic democrat and businessman when it comes to Europe’s future in the world and our future in the world through it. We have much to be optimistic about. Post the cold war we have seen an extraordinary change in Europe, the middle east and across the world, and more recently we have seen the Arab spring and an opening up across the middle east. Rather than focus on ever-deepening European political union, should we not seek to widen the influence of a looser, pro-enterprise and entrepreneurial Europe? I dream of the day when the strife, poverty, violence and terror that dominate the middle east are vanquished because that area is part of a much wider European market. I want to buy goods from Syria, not watch it on television while it and neighbouring countries are torn apart by violence and strife.

Globalisation creates enormous market opportunities for us and for Europe, and a Europe that is plugged into that global phenomenon would be capable of leading against the two big blocs of America and China. That is not, however, the Europe with which we are confronted. In my field of science and innovation I know all too well how powerful the European market is and can be because of CERN, the life sciences and the European Space Agency. On Monday I was at the Sanger Institute in Cambridge and visited the European Bioinformatics Institute where hundreds of young European scientists here in Britain are at the forefront of breaking down the human genome and increasing our understanding of how disease affects different populations.

As a mature, sophisticated set of western economies, we can lead the world with the translation of our knowledge to help the developing world. Over the next 30 years, the developing world will have to go through revolutions that took us 200 years. Perhaps they will go through Maslow’s hierarchy of needs from the basics of food, medicine and energy to becoming sophisticated western markets that will unlock enormous markets for our talents and skills.

The problem is, however, that the European Union of today is not in a fit state to unlock such opportunities. Economically, the eurozone is riven by debt—I remind the House that as a whole, Europe currently owes €10.9 trillion—and it has high rates of unemployment, with the EU average currently running at 10.7%. That is unsustainable. Furthermore, politically we are seeing that the federal model of ever-closer union is simply not capable of accommodating the needs of the eurozone as well as those of us who are—fortunately—outside it. The need to recover trust among those of us who have observed the illegitimate ratcheting of a federal union demands the change set out by the Prime Minister.

Closer integration in the eurozone is a problem for the UK but also an opportunity for us and other countries not included in that zone. We need to define a new structure and I believe that a two-tier Europe is emerging. I have in my hand a list of the 17 nations in the eurozone. It is a long list, and the big leader is Germany. On the right is a list of the 10 nations outside the eurozone, and if Norway, Switzerland and the next wave of possible new entrants are added, the obvious leader of that group would be the United Kingdom of Great Britain and Northern Ireland. We can, I believe, develop our leadership in the context of a debate about that structure. Our leadership must be in the context of the global race about which the Prime Minister, and many hon. Members in this debate, have been so lucid.

The life sciences are a particular interest of mine, and this country and Europe have a big part to play in the big markets of food, medicine and energy. Through collaborations between European universities, investors and companies, we lead the world in that sector. The truth is, however, that the European Union is not always—and of late has increasingly not been—supportive of our, or its, ability to unlock that strength. In particular, it has begun to develop a series of policies and directives on genetic modification that are holding back this country’s leadership. Global food demand is set to increase by 70% in the next 30 years, 29 countries are growing GM crops, and biotech crops are valued at £90 billion yet only two are licensed in the European Union. If the European Union will not let us lead in that sphere, we need the freedom to do it for ourselves.

I congratulate those hon. Members who have put together the Fresh Start group, and reiterate my support for them. If we set out a positive vision of a new Europe and build alliances with nations that share our interests, we can deliver real change. The truth is that Europe 1.0 is over and we need Europe version 2.0 in which we can lead and to which we want to belong. We must seize the moment and build the alliances to deliver that.

15:49

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Prime Minister’s speech last week was much delayed, much anticipated and over-hyped. It is already clear that the blip in the opinion polls is much less than he had hoped for. I therefore look forward to the internal debate in the Conservative party over the coming two years, and to the Prime Minister continuing to try to appease and assuage the egos of many Conservative Back Benchers.

I want to consider the so-called five principles and aspects of the Prime Minister’s speech. He said that

“we…need to address the sclerotic, ineffective decision making that is holding us back.”

Much of that sclerotic decision making in the EU happens because of unanimity rules. Can we therefore take it that the Prime Minister has called for more qualified majority voting? Conservative Back Benchers are shaking their heads, but Ministers cannot tell us the answer, because they do not know what the negotiating position will be.

Similarly, the Prime Minister questioned whether we can justify an ever-larger Commission, but the Commission gets larger because of EU enlargement and the accession of more member states. If the Prime Minister does not wish the Commission to become larger, the long-standing policy of successive Governments for further European enlargement has presumably been ditched. Alternatively, is the Prime Minister arguing that there should be a limit on the number of commissioners and saying that there might be future circumstances in which there is no British commissioner? We do not know the answer to that question because, again, the Government are unable to tell us.

[Mr Redwood]

Does the hon. Gentleman recollect that the Labour Government sold the pass on the number of commissioners by saying that not every state should have one? Perhaps that was one of the few sensible things they did to drive home the point that the Commission is a European government, not a representative government.

[Mike Gapes]

Why did the Prime Minister not give more information in his speech rather than putting up the straw man and attacking the EU for increasing the number of commissioners relentlessly, when that is in fact a consequence of our previous enlargement policies?

The Prime Minister said that the European treaty laid the foundations of ever-closer union among the peoples of Europe. It is interesting to note that he did not point out that British Conservative negotiators of the Maastricht treaty insisted on keeping the phrase “ever-closer union” because they deemed the words to be vague and therefore something they could live with.

The Prime Minister made a number of other criticisms, including an assertion referred to by the hon. Member for Mid Norfolk (George Freeman). The right hon. Gentleman said:

“Put simply, many ask ‘why can’t we just have what we voted to join – a common market?’”

I campaigned and voted no in 1975, in my misguided youth. At that time, the Wilson Government, like the previous Heath Government and pro and anti-European campaigners, said the vote was about more than a common market, namely political union and other aspirations for co-operation. Whatever position the hon. Member for Mid Norfolk took in 1975—I do not know whether he was old enough to vote at the time—it is not true that we had a referendum and joined an organisation that was just about trade. It was more than that. I could go on to comment on other aspects of the Prime Minister’s speech, but I will not because of limited time.

It is clear that instead of addressing the economic crisis that confronts the whole of this continent, and the wrong, misguided austerity economics that is creating tens of millions of unemployed people and the immiseration of millions in many European countries, we in this country are now going to have an obsession with the minutiae of a probably unrealisable renegotiation about unrealisable repatriation powers. We need Ministers to go to Brussels and argue, in all the forums of the European Union, for different economic policies. In the meantime, we need Ministers to bring in different domestic economic policies to again achieve growth, prosperity and jobs in this country.

The economic policies we are pursuing here are potentially leading, as we now know, to a triple-dip recession. We have a massive trade imbalance with the European Union, which is partly due to the failures of our domestic policy, but is being compounded by the wrong economic policies being pursued by the austerity programme within the eurozone. As a result, the Government’s British economic strategy—export-led growth to get us out of the situation we are in, presumably capitalising on the benefits of the devaluation of the pound that has been going on for some months—is not getting us the growth we need, partly due to domestic reasons and partly due to problems in the eurozone economy. There is a very good paper by Simon Tilford from the Centre for European Reform—I do not have time to quote it, but I recommend that hon. Members read it—about the problems confronting our country partly because of the wrong policies within the EU’s economies.

We need to have concerted economic plans for recovery in the next five years, not concerted plans to create economic uncertainty and damaging policies that will reduce the amount of inward investment into the UK economy. The Government have taken a dangerous leap in the dark, creating enormous uncertainty for anybody who wishes to plan to invest in this country. They are putting jobs and prosperity in Britain at risk, and in time they will come to regret it at the next general election.

15:57

[Henry Smith (Crawley) (Con)]

Thank you for this opportunity to speak in what is an extremely timely and important debate, Mr Deputy Speaker. As Members of this House, we are all very privileged to have the opportunity to contribute and have our say. Every time I walk through the doors, I am conscious that there are approximately 100,000 people in my constituency whom I am seeking to represent. I was struck by the concluding remarks of the hon. Member for Wirral South (Alison McGovern). She has left her place, but she spoke about giving dignity back to our constituents. I can think of no greater way of doing that than to give them a say on our future relationship with the European Union. The influence of the EU in the past four decades has increasingly dominated every aspect of our national life.

On 1 January 1973—I do not remember it; I was only three years old—we joined what was then referred to as the Common Market or the European Economic Community. When I was six, our membership was confirmed in a referendum. It is important to say that most people thought they were voting in favour of a common market—a customs union or a free trade area. [Interruption.] At the time, some people referred to the small print in the treaty of Rome about ever-closer union, but generally people believed that, essentially, they were joining an economic free trading agreement.

Over ensuing decades, the European Economic Community developed into the European Community and then into the European Union, and the various Acts and treaties, including the Single European Act, which has been referred to, the Maastricht treaty and the failed EU constitution, which had to be rebranded and essentially presented and passed by the previous Government as the Lisbon treaty, have seen an inexorable moving of power from this Parliament to a centralised EU.

I am often struck that people refer to the EU as a federal project—if only it were a little more federal with more subsidiarity! Over the past 40 years, however, it has grown into a central government project, and it is right that the Prime Minister has offered the country a chance to decide its future relationship with the EU. Last Wednesday’s speech will prove to be one of the most important speeches that a British Prime Minister has made in the past half century, and I, for one, am grateful for the clear direction he has set out—as the Foreign Secretary said, it is much clearer than what we hear from Her Majesty’s Opposition.

I only wish that our coalition partners were also signed up to a referendum. It certainly used to be their policy. I do not often quote the Deputy Prime Minister, but I would like to now. Writing in The Guardian on 25 February 2008, he said:

“It’s time we pulled out the thorn and healed the wound, time for a debate politicians have been too cowardly to hold for 30 years—time for a referendum on the big question. Do we want to be in or out? Nobody in Britain under the age of 51 has ever been asked that simple question. None of them were eligible to vote in that 1975 referendum. That includes half of all MPs. Two generations have never had their say.”

That was five years ago, so now that age is 56, and we are into a new Parliament.

[Kate Hoey]

Why does the hon. Gentleman think the Deputy Prime Minister has changed his mind?

[Henry Smith]

I wish I knew how the Deputy Prime Minister’s mind worked. You would be quite right, Mr Deputy Speaker, to rule me out of order for being unparliamentary if I used the word “hypocrisy” in the Chamber, and I would never use the word “hypocrisy” in the Chamber to refer to another right hon. or hon. Member, but I think that the Deputy Prime Minister is guilty of rank inconsistency over his party’s position on a referendum.

This country has a unique position in the world; we have global links like no other nation on earth and we of course have our proximity to the European continent. This nation’s success has been rooted in being a free trading nation that seeks links and co-operation with the world. Our best opportunity for the future, as in the past, is to utilise those unique links and act as a conduit—a bridge—between the world and the European continent.

[Mr Kevan Jones]

I do not want to give the hon. Gentleman a history lesson, but the British empire was actually founded on protectionism. Until the repeal of the corn laws, we had very restrictive markets for our goods.

[Henry Smith]

I was hoping to speak yesterday, to quote from the Reform Act of 1831 and refer to the sweeping away of the rotten boroughs—[Hon. Members: “1832.”] My apologies; I will refrain from using dates. Nevertheless, our history is based on free trade, as is our future.

[Mr Cash]

Does my hon. Friend accept that there is a serious problem if the free trade arrangements that he and I, along with many others, want are in any way obstructed by the exclusive competence of the European Union overlaying the question of whether we could trade freely with, for example, all the members of the Commonwealth and emerging markets?

[Henry Smith]

My hon. Friend is absolutely correct. It is an EU competence to negotiate free trade agreements. If we had that competence back, as a sovereign Parliament and a sovereign nation, we would once again be free to forge those free trade agreements. I am struck by the fact that there is a multilingual central European country that is free of the European Union, but which has free trade agreements with the European Union—and, indeed, the rest of the world—and that is the nation of Switzerland. It is perfectly possible for us to maintain co-operation and free trading with Europe and to extend that to the rest of the world.

[Huw Irranca-Davies]

Switzerland can indeed trade, by agreement, with the European single market, but it has to comply with the highest EU standards in food and farming—the policy area that I shadow for the Labour party—or not export into it. It does not have any say in the rules, however.

[Henry Smith]

It is the same with world free trade agreements. It is high time that we gave the British people back the ability to determine how their relationship with Europe and the rest of the world should go forward, so that we can have greater global free trade for greater prosperity and bring back democracy. I congratulate my right hon. Friend the Prime Minister on delivering that promise.

16:04

[Jack Dromey (Birmingham, Erdington) (Lab)]

In the 1970s I was chairman of the north-west London “Get Britain Out” campaign. I remember chairing a rally addressed on the one hand by local Labour MPs and Ken Gill, the general secretary of TASS—the Technical, Administrative and Supervisory Section—and a leading member of the Communist party on the party, and Enoch Powell on the other. I believed that position in good faith and I worked hard for it. I was disappointed by the outcome, but I soon came to recognise that I was wrong, just as I came to recognise that continuing to fight yesterday’s battles was wrong. We took a long time in the Labour party to recognise that. Indeed, when Labour members first went into the European Parliament, the Spanish socialists nicknamed them “Los Japonistos”, after the soldiers who emerged from the jungles in Guam 40 years after the war was over asking, “Is the war continuing?”

Why did I change my mind? I remember an excellent German-Jewish friend who had lost his family in the camps saying to me, “Jack, I’m not the greatest fan of the common market,” as it then was, “but we’ve had a continent at peace for a generation, unlike that which took my family from me.” I remember a very honourable Macmillanite Conservative in the 1980s—in the days when there were such people, before, in the immortal words of Julian Critchley, the “garagistes” took over the Conservative party—saying, “Jack, I’m proud of my country, but we can only be strong in a modern, bi-polar world,” as it was then, “if we are at the heart of the European Union, with its great traditions of Christian democracy and social democracy.”

The reason I changed my mind was also, yes, the rolling forward of the social dimension in the 1980s, when Jacques Delors—Frère Jacques, as we came to call him—came to address the TUC. However, it was also because of my experience in the real world of work, dealing with hard-headed business people—enlightened in their approach—who rightly argued that we needed a single market with common standards, at the heart of which was a social dimension that reflected a belief in the simple truth that how we treat workers is crucial to the quality of the service they provide and what they produce.

[Richard Drax]

Why do we need to be a member of a federalist state to treat our workers properly? Why cannot we pass those laws ourselves? Indeed, we have.

[Jack Dromey]

I am coming to that point in a moment.

On the argument that I have just deployed, I remember the chairman of the company then known as British Aerospace saying that we needed a single market, but that as a company and as a continent we could not succeed in the world on the basis of a race to the bottom. That brings me to my first concern, which is the hidden agenda that lies behind the Prime Minister’s argument. There was a tantalising glimpse of that last week when, extraordinarily, he seemed to suggest that we should return to the days when a junior doctor could work 100 hours a week. Repatriation is the cry, but the reality behind that is rolling back a generation of progress on workers’ rights and taking us back to the 1980s, an era I remember well.

Let me give the House an example, which relates to the acquired rights directive. The directive was legislated on at European Union level in 1978, and introduced here, reluctantly, by a Conservative Government in 1982. However, that Government did not extend it to cover 6 million public servants. What we saw was the most appalling Dutch auction, involving cut-throat competition as workers were transferred and suffered cuts to their pay, their holiday entitlement, their sickness entitlement and, often, their pension arrangements as well. I remember a particular example that I dealt with early on involving the Moreton-in-Marsh fire service training college, where 130 women caterers and housekeepers had seen dramatic cuts to their terms and conditions of employment. The only humorous side to that otherwise sad story was the fact that the managing director of the company concerned—Grand Metropolitan catering—was none other than a Mr Dick Turpin.

Two things happened at that time. First, in 1991, I took the case of the Eastbourne dustmen to the European Court of Justice, and we won. It was ruled that the British Government had acted unlawfully in denying protection on transfer from the public to the private sector. Secondly, employers themselves began to speak out. I remember Martin O’Halloran of ISS, the then chair of the CBI, saying that it was madness—that employers did not want a market based on a race to the bottom, and that they wanted a market in which we competed on quality and productivity, characterised by fair treatment and fair competition.

[Mr Redwood]

I, too, found that my attitude towards the single market changed in the 1980s, when I became the chairman of a big industrial company. I discovered that I had much better access, as an investor and as an exporter, to leading non-EU countries than I had to France and Germany.

[Jack Dromey]

I say this to the right hon. Gentleman and anyone else on the Government Benches: let us have some honesty in this debate. If they want to go back to the days of the 1980s, they should say so. If they want a Beecroft Britain, they should say so. If they believe that Britain can succeed only by driving down workers’ pay and conditions of employment, and by reducing their health and safety protection at work, they should say so. We will certainly be seeking to draw out what is undoubtedly their hidden agenda.

[Damian Collins]

The hon. Gentleman is making an impassioned case, but there is nothing to prevent the British Government from introducing legislation of that kind. What has created frustration about the EU is that those powers have come in under the guise of European treaties and not been put before the House properly. They have come in through the back door.

[Jack Dromey]

They have come in as a consequence of our membership of the European Union and the move towards a single market based on clear ground rules, including the fair treatment of workers. I will say it once again: if Government Members want the repatriation of the legislation that protects workers’ rights so that they can cut that protection, they should say so.

My final point relates to the immense economic damage that this debate will cause. I have worked with the automotive industry for many years.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

The hon. Gentleman is making his case very eloquently, and I congratulate him on doing so. I do not agree with him, but that is another issue. I am curious as to which way he would vote in a referendum if we had been able to negotiate the return to the United Kingdom of some of those regulations.

[Jack Dromey]

What I certainly will oppose is the madness of saying now that we are going to have a referendum on an in/out basis in five years’ time, for exactly the reason that 82% of the cars that we produce in this country, through our world-class success story that is automotive, are exported—and half to the European Union. Key to the future of the industry is inward investment, and key to inward investment is continuing membership of the European Union. There is already a chorus of concern from Ford and BMW, for example, about the grave consequences of prolonged uncertainty, while the director general of the Engineering Employers Federation has said that this is the worst possible way to go about negotiations, as it will weaken any negotiating leverage we need rather than strengthen it.

That is why I believe that the good Lord Heseltine is right and the Prime Minister is fundamentally wrong. With an economy bumping along the bottom and a triple-dip recession possible, this is the worst possible time for prolonged uncertainty, which will inevitably impact on crucial investment decisions. Far from standing up for Britain, as the Prime Minister says he is doing, he is putting party interest before the public interest, and he runs the risk of doing great damage to the economy of our country.

16:16

[Neil Carmichael (Stroud) (Con)]

I am grateful for the opportunity to speak in this debate. The one question I would pose to the Labour Opposition is simply this: what is their opinion on the referendum? Do they want one now, do they want one later or do they not want one at all? We need to hear an answer to that.

I shall focus on the European Union in the context of the amount of trade we do with it, which is substantial. We have four times as much trade with the European Union as with the whole of the Commonwealth, so let us get that into perspective. It is a market some 500 million strong—a significant market, which happens to be the biggest single market in the world, accounting for up to a fifth of the world’s gross domestic product. That is the scale of what we are talking about today, and it is why I hope that if and when we have a referendum we will say yes, but on the back of having reformed the EU.

I like local government, but that does not mean to say that it should not be reformed, and I apply the same logic to the European Union. It is really important that we reform it, and the Prime Minister has signalled that.

[Michael Connarty]

The hon. Gentleman has twice mentioned reform. Can he, unlike the Government Front-Bench team or anyone else who has spoken, give us the specifics about what needs reform? We do not want to hear about just a vague reform; let us hear the hon. Gentleman’s vision of reform, as it may tie up with the vision of other Members, although it may not.

[Neil Carmichael]

That is an excellent question. I shall talk about three areas where reform needs to take place and will take place under this coalition Government and the next Conservative Government.

Ironically, the first area is the common agricultural policy. It needs to be radically changed so that farmers face less bureaucracy and are able to farm more easily; for that, the strictures of the CAP need to be altered. The chamber for such a change is, I think, the Council of Ministers.

[Oliver Colvile]

Does my hon. Friend agree that we should also make sure that we bring UK fishing waters back under UK control, so we need a big reform of the common fisheries policy?

[Neil Carmichael]

We would also need to look at—I think—the Marine Act 1986 if we wanted to make that a consistent strategy. I agree with my hon. Friend’s important point, but we should not overlook the other legislation that governs our access to our waters.

[Nia Griffith (Llanelli) (Lab)]

Does the hon. Gentleman not agree that, like the Welsh Agriculture Minister Alun Davies, we should be in there at the heart of the negotiations? If we are to get a proper deal on the CAP, we should be seen not as the country that is trying to leap out of the Union, but as a country at the heart of the negotiations.

[Neil Carmichael]

That is exactly right, and I think the Prime Minister has spelt out exactly how we are going to be at the heart of those negotiations. We are really talking turkey this time; we are saying that things have to change, and we are bringing the full force of this coalition Government behind that direction of change. The hon. Lady is right: we have to be in on the act; we have to be constructive; and we have to make sure that Europe nevertheless understands that we pack a punch. We pack a punch by eventually having a referendum.

[Emma Reynolds (Wolverhampton North East) (Lab)]

Will the hon. Gentleman give way?

[Neil Carmichael]

No, as I am running out of time.

The first area in need of reform, then, is the common agricultural policy. The second—and we heard the Prime Minister signal this—is energy, in connection with the single market. We should be thinking about extending the single market to other areas, and energy is ripe for it.

I know that many people currently envisage what would effectively be the nationalisation of energy policy by European countries which are worried about their security of supply and how they can deal with such matters as reductions in carbon dioxide emissions. We therefore need to think carefully about how we can apply energy to the single market. There are two key words that we should be using, and one is competition. We need more competition: we need a competitive Europe generally, but we need a competitive market in energy specifically, because we need to be able to sell energy to other countries more easily than we do at present and because the development of a different tapestry of energy production systems will require a more open, flexible market.

There is a specific need for energy to be in the single market, but there is a desire for it as well, not just in Britain but in other countries, notably Germany. I have talked to representatives of the BDI—the German equivalent of the CBI—who are interested in the possibility that energy could become part of a more competitive, effective single market. I believe that the processes in which we are already engaging will eventually produce a single market that is more robust, more competitive and more flexible.

[Alex Cunningham]

Will the hon. Gentleman give way?

[Neil Carmichael]

I will give way briefly.

[Alex Cunningham]

The CBI is interested in employment law. I wonder whether the hon. Gentleman would hazard a reply to the question posed earlier by my hon. Friend the Member for Birmingham, Erdington (Jack Dromey). Do he and his party hope to reduce workers’ rights by repatriating powers in that area?

[Neil Carmichael]

Absolutely not. We do not want to “reduce workers’ rights”, as the hon. Gentleman puts it, but we do want to ensure that more people can be employed. That is being made possible by the Enterprise and Regulatory Reform Bill, which is probably an Act by now. It copies legislation introduced by the German Chancellor who, at the time, was none other than Chancellor Schröder of the SPD—the Social Democratic party of Germany—to make it easier for small firms to employ people. Those are the sort of measures that we should be introducing here, and we are starting to do exactly that.

[Jack Dromey]

Will the hon. Gentleman give way?

[Neil Carmichael]

No, because I am running out of time. I was asked specifically which policy areas we should be changing. I have dealt with the second, and I now want to talk about the third, which, although more long-term, is critical.

What are we going to do about the Council of Ministers? It needs to be more transparent, and it needs to have more capacity. I think that we can provide the answer to the democratic deficit in two ways. First, this Parliament and the Parliaments of the other member states must become more interactive, engaging in the kind of discussions that take place in the Council. We need to hear more about the agenda, we need to hear more about what is actually said and done, and we need to hear more about how we as parliamentarians can influence all that through our own national Parliaments. The second way in which that can be beneficial is in challenging the effective supremacy of the Commission in ensuring that treaties work as they should, which drives a hole into the argument about the European Parliament’s position that I have heard mentioned several times in the debate today.

There are a great many areas of policy that we can change, but let me canter through the ones that I have mentioned. First, we need to act immediately to deal with the common agricultural policy. We are already too late for 2012, as we are now in 2013, but there are changes on which we should now be insisting. Secondly, we need to extend the single market to energy—although not just to energy: I could have mentioned the digital economy and financial services. Thirdly, there is the constitutional aspect, which I think is central to what the Prime Minister said in his speech.

If we can deliver on some or all of those areas— policy, the single market and the construction of the European Union itself—we shall have something really interesting to say to the electorate at the time of the in/out referendum. Meanwhile, we shall be protecting and, indeed, strengthening our interests. Above all, we shall be producing a better Europe, because it will be more flexible, more competitive, more transparent and more democratic.

Finally, I want to talk about President Obama. It is true that he said we should remain in the EU, but he is not the only American President to have said that: every single one has since Dwight Eisenhower in the 1950s. It is a consistent message, therefore, and we should listen to it, but the clear message we are getting from our electorate is this: “Make a difference in Europe. Reform it where necessary. Make it more flexible. Make it more competitive. Make it more useful to us, and make it less intrusive.” I can take that case to my constituents in Stroud, valleys and vale, and to businesses and everyone else who has a clear interest in protecting Britain’s interests through having a reformed and effective Europe.

16:25

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

The subject of this debate belongs in the same broad historical category as some of the great political causes the House has dealt with, including the repeal of the corn laws and imperial preference. These issues are also connected to the dry matters of tariffs and trade, but they, too, are really about Britain’s role in the rest of the world. We all have emotional views about what our country is and what it could be, and where we sit in relation to our neighbours. If we look back to the 1970s, we see that the case for our going in was framed predominantly in emotional, rather than rational, terms. It was about Europe coming together, an end to continental war and Britain giving up its empire but obtaining a role in Europe. Even the well-regarded Chancellor Roy Jenkins framed the case in those terms, rather than by reference to economic or trading arguments.

Intriguingly, however, the roles have now been reversed. The case for coming out is now the emotional one; it is based on the notion that we can be free of the shackles of an imaginary tyrannical European bureaucracy, even when all the rational, objective arguments push any pragmatist to the view that staying in the EU is both an advantage and a necessity. That should serve as a lesson to all Members on both sides of the House who are in favour of retaining our EU membership, because there is no doubt that, under this Government, we are sleepwalking towards the exit.

The Prime Minister must realise that no amount of renegotiation, repatriation or reorganisation will satisfy some of his Eurosceptic Back Benchers. That has been made clear today. He has completely lost control of them, and in doing so he has lost control of the country. He cannot compromise with them because, whatever the objective arguments, they hold to an outdated and misguided notion that Britain is in some way held back by the EU and that we would be better off without it.

In that regard, the absolutists on the Government Benches who want to leave Europe remind me of my Labour colleagues of the 1970s and 1980s who wanted to respond to Britain’s economic problems and our changing role in the world by running a siege economy and cutting ourselves off from the rest of the world. It was the basis of our 1983 manifesto, and it was not particularly successful as it was economic madness. Again, however, it was a message that gave emotional satisfaction to the people who believed in it, regardless of the strength of the arguments to the contrary.

We should therefore be used to seeing the tension between rational, objective economic arguments and an instinctive, emotional view that people want to hold about the future role of their country in the wider world. However, given the current state of the UK economy and what we all see and hear in our constituencies on Fridays and at weekends—the stories of human misery, unemployment and squeezed living standards—the only points that should matter to us are those rational, objective, economic arguments and, more than anything else, questions of what is in our national interest.

To me, the case for being in the EU is extremely clear. There are huge economic advantages to being in a single European market. A single market is not a free trade area; they are different things. A single market requires the co-ordination of certain domestic policies to ensure that that market is a level playing field. Although some understandably feel that this constrains national sovereignty, we must remember that we are now part of a global economy that already puts huge constraints on national sovereignty.

If people were arguing for a siege economy today, it would be taken even less seriously than previously, because, frankly, it would be impossible. Moreover, being a member of the single market does not inhibit our trading relationships with other countries; instead, it allows us to negotiate trade deals as part of a powerful bloc of nations and serves to attract investment into the UK from countries that want to be inside the EU.

In addition, although the World Trade Organisation should ensure that we have a rules-based system for resolving all global trade disputes, there is no doubt that the size of a country still counts when disputes arise. By operating as a bloc within organisations such as the WTO, we are in a far stronger position than we would be on our own.

Regarding non-economic matters, the only people who should be arguing to end co-operation on crime and justice are serious criminals. We absolutely should be working together to make sure that justice across Europe is effective and quick and that nowhere is beyond the reach of our law-enforcement agencies. Criminals will be just as mobile, just as international in their operations, whether or not we co-operate with our neighbours. Co-operation is so sensible that we cannot be tough on crime without being pro-European.

The Eurosceptic argument that we frequently hear—we have heard it a lot today—is that we could be a Norway or a Switzerland: we could have these benefits without being a full member. Both Norway and Switzerland are wonderful countries, but neither is comparable to us in terms of economy, status or role in the world today. What Eurosceptics do not like to discuss is that those countries have to commit to introducing almost every bit of European law but get a say in none of it. That is perhaps okay for Norway, but how would we protect the City of London and our competitive advantage in financial services if we did not have a say in the formation of those laws? We might as well stand at the airport and wave those jobs off to Frankfurt. Norway still has to make a contribution to the EU budget—€1.8 billion over this budget period. We should also remember that, when the EU was first set up, we tried to create a rival body that was simply a free-trade organisation: the European Free Trade Association. It failed.

None of this means that I personally want to join, or ever see, a federal Europe, or even to join the euro. I judge these matters according to only one thing: what is in our national interest? That brings us to the Prime Minister’s speech and his attempt to reconcile what he knows to be sane with the views of many of his Back Benchers. He clearly recognises that adding to the turmoil in Europe by holding a referendum in the UK right now would be extremely reckless. But he can surely see that announcing a referendum to be held in five years’ time is equally reckless, given that during that time we will live in limbo, lose investment and have created further unnecessary uncertainty.

Yesterday, I and other members of the all-party group on manufacturing met some of our leading manufacturers and policy makers. They were clear that this uncertainty is bad for Britain. Why, in the present economic climate, would we want to make the UK a less attractive destination for investment and jobs? By all means, let us try to change Europe—there are plenty of things that I would like to change—but we have natural allies on this issue, and we could lead them.

The worst thing about the Eurosceptics is how pessimistic they are about how great our country could be. My right hon. Friend the Member for Southampton, Itchen (Mr Denham) was spot-on in saying that. Our priority should be to promote growth at home and secure influence abroad. Short-term expedient decisions based on party management should never be prioritised above what is in our national interest.

16:25

[Chris Heaton-Harris (Daventry) (Con)]

It is a privilege to follow the hon. Member for Stalybridge and Hyde (Jonathan Reynolds). I was canvassing on Saturday in a village called Crick, in my constituency. I told one of my constituents there that I had applied to speak in this debate, and he said, “It’ll be a bit like a conversation between the man from Del Monte and the Churchill insurance dog, with one side saying ‘Yes’ all the time the other saying ‘No’”. It is a bit like that, but there are some common themes. A number of Members on both sides of the House do want to see some fundamental reform of the European Union, and the hon. Gentleman identified a couple of those areas.

One thing that no hon. Member can dispute is that the ongoing eurozone crisis means that Europe and the European Union is changing. We therefore have challenges that we must look out for and find solutions to. Currently, there are 17 countries within the eurozone, and there could soon be more. Many of the countries that signed the acquis when they joined the EU signed up to the euro, but at the moment, 10 EU countries are outside the eurozone. There is fear among those 10 of the caucusing of the 17. That is writ large in the United Kingdom.

[Paul Blomfield (Sheffield Central) (Lab)]

Can the hon. Gentleman explain the logic of the position that takes us from the eurozone nations needing to assess how they can underpin the currency to wanting to repatriate powers over policing?

[Chris Heaton-Harris]

I think that I will be able to do that during my speech, in the next few minutes. It was a pleasure to take an intervention from the hon. Gentleman, whose wife I enjoyed working with as an MEP. I believe that he was working for her at the time and so was obviously feeding her some good lines, but it was a pleasure working with her none the less.

The fear of caucusing could cause the UK and others outside the eurozone to be outvoted in the Council in the very near future—the voting weightings are just about to change—possibly affecting our access to the single market. Most Members from all parts of the House are keen to ensure that that access remains, so we need to have, at the very least, what the Prime Minister called “new legal safeguards” to protect us from that problem.

I am not as defeatist as many Opposition Members have been. I was getting concerned about the idea of a European banking regulator, which came out of the blue last year as a new thing that Europe desperately needed to correct problems in the eurozone. I was worried about how it might affect our banking system, but Europe, as ever, managed to find a reasonable fix—one well negotiated on our behalf by the Chancellor of the Exchequer—in the double-majority mechanism. Such a mechanism had not existed before, but it made sure that the UK position was fundamentally safeguarded. I am a great believer in the fact that these things that I and other Conservative Members might be calling for are achievable and that Europe will find solutions to problems if we enter the negotiation with a broad mind.

I am a founder of the Fresh Start group of Conservative MPs. Some Opposition Members are keen on detail, and we have detailed some of the areas where we think it would be worth while negotiating. In a way, we are making the Conservative political pitch, so I expect disagreement from Opposition Members, but I will try to explain why it is important at least to look at these areas, which include justice and home affairs. We highlighted a number of areas, and some Opposition Members might agree on some of them.

The first such area relates to a new legal safeguard to maintain access to the single market—I am sure hon. Members on both sides will agree that we need to ensure that the eurozone cannot prevent our accessing that. Secondly, we need an emergency brake that any member state can use on future EU legislation affecting the financial services market. That market is important to the United Kingdom, as a huge amount of our GDP is created in financial services. The single market has been important to that, by always providing an opportunity, but it is beginning to look a bit more like a threat, because of the 48 directives and regulations coming down the track at the moment.

Thirdly, we need the repatriation of competences in social and employment law. That is a controversial area for many Labour Members, but I was in the European Parliament when Labour Ministers appeared before its employment committee and were begging people to understand the different, liberal nature of the UK work force and were asking them not to put in extra measures on the working time directive and the temporary workers directive that would directly affect the number of people getting into employment in the UK.

Fourthly, we need to opt out from existing policing and criminal justice measures, as some of them are not working, some of them are defunct and some of them are based on mechanisms that no longer exist. Europe does not repeal things and it really should; there should be sunset clauses in some of the legislation.

[Nia Griffith]

Do I understand from what the hon. Gentleman says that he is very much in favour of a common market and economic union, but has reservations about other aspects? What sort of referendum is he therefore suggesting? Should we have an in/out referendum, or is he suggesting that any question would have to be worded differently and address whether people wanted to stay in one thing but not another?

[Chris Heaton-Harris]

This is a fairly simple matter, and I tend to agree with what the Prime Minister says: we should renegotiate, get our deal and then go to the British people and settle this question. We should end the uncertainty by putting our trust in the British people and asking them, “Do you want this on the basis of the package that we have renegotiated or not?”

[Jack Dromey]

On ending uncertainty, does the hon. Gentleman accept the warnings given by Ford, BMW and the Engineering Employers Federation that the danger of prolonged uncertainty is that it will have an impact on vital inward investment decisions?

[Chris Heaton-Harris]

The biggest uncertainty and biggest danger for the British economy is the chance that Labour might be elected to government. There could be no greater uncertainty for the British economy than that—[Interruption.] The right hon. Member for Warley (Mr Spellar) mentions democracy from the Opposition Front Bench—absolutely damn right. That is why we should trust the British people, because they will have the final say. We should be able to agree on reform of the European institutions.

[Mark Hendrick]

rose—

[Chris Heaton-Harris]

I shall give way to the hon. Gentleman, who used to travel regularly to Strasbourg when he was a Member of the European Parliament, as I did, as well as to a third institution in Luxembourg.

[Mark Hendrick]

I am interested by the hon. Gentleman’s shopping list of powers that might need to be repatriated, but may I ask him about the mechanism? I am a member of the Foreign Affairs Committee, and we have considered Switzerland and Norway. Would he prefer a relationship like that between one of those two countries and the EU, and if not, why not? Does he think that his Government can obtain their own relationship in some other way?

[Chris Heaton-Harris]

That is where the pessimism of Labour’s negotiating position has undermined our chances of getting some of the things that we have wanted in the past. I do not see either model working for us. We want a British model, which might be within the European Union but, if we do not get what we want, might be outside it.

I strongly believe that we need to negotiate a better settlement with the EU and that we should give the British people a say in it. I was delighted by the Prime Minister’s speech last week—as, I am sure, were the majority of the British public—although I was very concerned that the Leader of the Opposition said on the BBC’s “Politics Show” that he did not think that the European Union had enough power. Let me illustrate why I was concerned. The European Commission often asks for extra powers, and we have recently received its work programme, which contains proposals to harmonise and get rid of anomalies in the VAT system. In other words, the plan is to get rid of the anomaly whereby we can charge less VAT on energy, for example. That would increase fuel poverty in the United Kingdom, and I do not think that the European Commission should have more power to do that. We should retain the power in the UK to differentiate our own policies.

There is a divergence going on, and if we are going to stay in the EU, we need to ensure that we negotiate hard to ensure that that is in the British interest. If it is not, the British people will decide and they will decide to walk.

[Several hon. Members]

rose—

[Mr Speaker]

Order. The time limit on Back-Bench speeches must now be reduced to six minutes with immediate effect.

16:40

[Huw Irranca-Davies (Ogmore) (Lab)]

You have cut me down to size before I have even started, Mr Speaker, but I will comply with your ruling.

I want to speak in defence of agriculture in the EU and the dangers for our farmers, food producers, manufacturers and the UK economy that would arise from pulling out or from the prevarication we might see over the next few years. People do not often speak in defence of agriculture in the EU, but my discussions with farmers show that they have been universally in favour of staying in—and not because of CAP reform or subsidies, although I shall return to those issues in a moment.

The first issue is the clear benefit that being in the European Union brings to consumers. Our high food standards, animal welfare, food protection, food safety and so on—despite the recent issues that bubble along—are a direct result of our being in the EU and working across it to the highest standards. Examples include the beef hormone ban, comprehensive food labelling—although we can do more on that, a cross-Europe approach has been an enormous help to our farmers and food producers—and limits on the pesticide residue that can be left in our food.

I mentioned the higher welfare standards and one example is the ban on battery hens, which came at an enormous cost to our farmers. Despite their fears that they might be disadvantaged when we entered into the ban across Europe on 1 January last year, the demand for eggs from producers who met the highest standards meant that for a short period there was a premium on their eggs. We need to sing this out loud: our farmers provide the highest standards of animal welfare and food safety standards of which consumers can be proud. It is a question not just of domestic supply but of exports.

[Richard Drax]

We discussed eggs and their production in the Select Committee on Environment, Food and Rural Affairs, and it might interest the hon. Gentleman to learn that very few other countries met any of the requirements, at great cost to our producers.

[Huw Irranca-Davies]

I do not want to contradict the hon. Gentleman, but, to my surprise, the response of the EU on 1 January last year was a quite dramatic intervention: in Spain and elsewhere, immediate action was taken against suppliers who were not compliant, to the extent of closing down hatcheries and egg producers. My regular meetings with the British Egg Industry Council suggest that that has not been nearly as worrisome to its members as they thought it might be, and has, in fact, been to their advantage. The long-term advantage in the sector lies in having not just a level playing field, but in meeting the higher standards that consumers expect. Consumers are demanding more of food production.

The common agricultural policy is undergoing changes at the moment, but the rural development pillar has been directly beneficial to many hard-pressed rural communities throughout the UK by rewarding the delivery of biodiversity and good environmental outcomes as well as innovation and competitiveness in farming and food production, and supporting areas such as Wales and Scotland where there are natural environmental constraints.

Another benefit is found in European food protection labelling, such as protected designations of origin, protected geographical indications and traditional specialities guaranteed. We in the UK need to speak up proudly about how many of our foodstuffs, produced in every part of the UK, fall within one of those designations and because of that, have value added and command a premium price. It is interesting that, just within cheeses, we now have more than one speciality cheese for every single day of the year. That is the result of the European approach of recognising the very best in local and speciality foods. Examples include Welsh lamb, Stilton cheese, Scotch beef, traditional farm fresh turkey and traditionally farmed Gloucestershire Old Spots pork.

We should also look at what the EU does across its member states in agricultural scientific research. For example, this country is holding its breath over the spread of the Schmallenberg virus, but it is at EU level that the research is being done into how we can counter it in the seven or so member states affected. The UK specifically has €400,000 to carry out scientific studies designed to gather further information, and is working with farmers to deliver a joined-up approach to research and to provide advice to farmers and the farming community.

Access to the single market is also vital. My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) spoke about this. Yes, if we were outside the EU, we could still negotiate access, but there are difficulties with that. First, there is the time it would take and the complexity of negotiating access for a range of different products; and secondly, as farmers and the NFU tell me, we would have to comply with the standards that were determined without our having any input into making those rules. It would be like playing a game but having no say in the rules—just being told what to do. That is surely not to our advantage and it is the reason why the farming community are adamant that they want to be in the EU, playing and leading.

CAP reform is a continuous process. This week, the European Parliament voted on a proposal that, although it has some good parts, is in many respects extremely retrograde, not least re-coupling payments to production rather than to added value through environmental gains and so on. That links back to the old problem, albeit not on the same scale, of wine lakes and butter mountains, and it is wrong headed. None the less, I believe that our farmers want us to be in there, at the front, arguing loudly as a progressive member of the EU. My one concern in all this is that Government’s overall approach in the past couple of years of shaking a big stick on every possible occasion, and their present position that we will carry a bit of a threat here just in case we need to use it, have an impact not only on the tone of the negotiations but on their outcome. Having one of the leading Eurosceptics in the Cabinet taking those negotiations forward may be a disaster.

16:49

[Mr John Redwood (Wokingham) (Con)]

Who governs? That is the fundamental question before us in this mighty debate today. At what point does a self-governing country have to say it is no longer self-governing because the body of European law and the wide-ranging body of European decisions are so fundamental that Ministers and this Parliament can no longer effectively govern the country?

Too many of us have watched as Governments have given away mighty powers of self-government from these islands and from this once great Parliament to the European institutions, and we have worried greatly. This has been done in the name of the British people, but it has not been done with the consent of the British people. There has always been an excuse not to trouble the British people, and so often outside this House political parties have misled the British people.

The British people were told that they were joining a common market. It was very clear from the treaty of Rome onwards that they were joining a political, economic and monetary union in the making. They were told that they just belonged to a single market, needed to guarantee jobs in certain export industries. There were two misleading things there. First, we do not need to belong to the EU to export to the EU. Many other countries outside it export much more successfully than we have done from inside it. Secondly, it was always a far bigger and more noble venture in the eyes of its architects, its fathers and mothers, than a mere single market or internal market.

I ask Members of this Parliament to look around and see what has been done in their names—to see how difficult it is now for Ministers of the coalition, future Ministers and Conservative or Labour Administrations to do many of the things they would like to do or their electors wish them to do, because so many powers have been given away. The bigger the corpus of European law becomes, the more constrained are not just our Ministers, but this once-great Parliament.

[Mark Hendrick]

Does not the right hon. Gentleman accept that the cars exported from the UK to mainland Europe today are a result of foreign direct investment to the UK because the UK is within the European Union, not outside the European Union?

[Mr Redwood]

No. That is a trivial point compared with the issues that I am raising, and it is entirely wrong, because there are many countries outside the EU that attract as much as or more inward investment than we do. I want, as does the hon. Gentleman, to keep those jobs, and we will continue to attract and support that inward investment as long as we have a satisfactory enterprise economy here and a decent market. We have a very large market of our own. That is why those investments come here.

The hon. Gentleman needs to look around and see how many powers have been taken away. We can no longer have an agricultural policy of any kind unless it is the approved one from Brussels. Our fishing grounds are completely controlled and regulated from Brussels. Our energy policy is greatly circumscribed by a large amount of European legislation, regulation and price control, and many more decisions coming along on climate change and energy, which means that it is very difficult to have an enterprise-oriented energy policy in this country.

We find that we do not control our own borders. We have no say over who comes here from the continent of Europe, and they have come in very large numbers in recent years. Many of them are welcome, but a sovereign country has the right to decide who comes and on what terms. We were always assured by Governments that we kept control of our welfare policy—that that was a matter for domestic consideration. We now find that the EU presumes to instruct us to whom we give benefits and what benefits we give them.

[Michael Connarty]

This is a grand opportunity to ask the right hon. Gentleman, as I asked the hon. Member for Stone (Mr Cash), to outline what position he would take and on what issues he would vote to leave the EU—on a matter of emotion, or can he give me some specific issues that he says should persuade his party and his Government to vote no when it comes to a referendum?

[Mr Redwood]

I wish to help restore democracy in our islands and to do that we need to regain the veto. We should not have sacrificed 100 vetoes at Nice, Amsterdam and Lisbon. This Parliament needs to be able to decide whether a new law goes forward or not; otherwise we will find that in ever more areas—I am just beginning to illustrate some of them—we are a fax or an e-mail democracy. We receive the e-mails or the faxes from Brussels and this Parliament has to put through the measure, whether we like it or not. That creates a tension within our democracy. Successive Governments bring measures to this House and recommend them to this House. They are very fundamental measures, but they often sneak them through this House, or sneak them through upstairs, because they fear they are unpalatable to us. However, they know that there is nothing that the House of Commons can do once the agreement has been made in Brussels—and very often it is made without the wholehearted consent of the British Minister. In the case of this Government, it may often be made against the wishes of the British Minister, but this House is still expected to put through these measures come what may.

That is why we need a Government who resolutely negotiate a new relationship for us with our partners in Europe. Of course, I give no ground to anybody in wanting to maximise jobs and investment in this country, and my recommendations would increase that rather than reduce them, as we find with non-EU members already. However, I also wish to see the Prime Minister’s great speech used as a platform for setting out how we recreate a democracy and secure the right in this House to say no to European laws if we do not like them. We have waited a long time for a Prime Minister who would say honestly that this country does not share the aim of the treaties and of many of the member states of the European Union because we do not wish ever-closer union.

I have heard very few Labour Members say that they want ever-closer union, because they know that that means political, monetary, fiscal, economic and every kind of union known; it means the creation of a united states of Europe. Those who wish to join that, I wish well, but it was never Britain’s view that we wanted to be part of a united states of Europe. The British people, if asked, would say no to that idea. It is up to us now, at this late hour, to say that too many powers have gone and that they need to be returned if we are to restore this once-great Chamber to what it once was.

This Parliament wrestled power from over-mighty monarchs. This Parliament took on those who wished to dominate the continent of Europe and rejected the imperial ambitions of first Spain, then France, and then Germany. Because of the work of our predecessors in the House of Commons, we as a nation said to Europe: “We want a Europe of the free. We want a Europe of independent nations. We want a Europe where people’s sense of local belonging is respected. We are against a tyranny. We are against an over-mighty Europe. We do not believe that Europe can be governed as a whole.”

How proud that vision was, and how right it is that our Prime Minister has reminded us of the foundations of our beliefs: no to ever-closer union, yes to more democracy; no to restrictions and too much centralised government from Brussels, yes to greater freedom to breathe and to decide and to choose among all the smaller countries of western Europe. I suspect that many countries out there and many politicians in them respect that vision and are rather impressed by its boldness. We should all join together now in rallying the peoples of Europe to say yes to friendship, yes to trade, yes to co-operation, but no to centralisation and no to authoritarian interference.

16:58

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

Having listened to the right hon. Member for Wokingham (Mr Redwood), I have to say that I must have heard a different speech by the Prime Minister. I did not hear that rallying cry in the Prime Minister’s speech on Europe or in the Foreign Secretary’s speech today. It is a dream. It may be a good dream, and I am sure that it is one that the right hon. Member for Wokingham will take into his dotage, but it will never be realised on the basis of what is being offered by his Government. If he really believes that by speaking in that way he can change the route that his Government are taking, he is deluding himself.

The key question for me on the whole issue of Europe is whether, if the policies and procedures that currently exist in the UK’s relationship with the EU remain unamended, it is likely that the Foreign Secretary, given his speech today and his many contributions over his period in office, or the Prime Minister—or, indeed, the shadow Foreign Secretary or the Leader of the Opposition—would campaign for the UK to withdraw from membership of the EU. The answer is clearly no. I believe that that is the case for the majority of Conservative and Liberal Democrat Members and for the vast majority of Opposition Members. If there were no changes, I do not think that those people would go out and campaign for our withdrawal from the EU. I think that the people of the UK would reject that.

I ask the same question as I asked in the Scottish referendum debate: is the current relationship between the UK and the EU damaging or malevolent? I do not find it malevolent. I find it irritating, troublesome and tedious in its mechanistic way of working. I have seen that as a member of the European Scrutiny Committee since 1998. However, it is not malevolent and it is certainly not damaging to the UK. Every statistic shows that the UK benefits remarkably from its membership of the EU.

There is an issue with competence creep. There is no doubt about that. That is what gets me about this Government who put themselves forward as being reforming. I watch Ministers come forward every week, again and again, with explanatory memorandums saying that they have decided to go for a political agreement or a compromise that gives away power to the European Commission. I have always said that since Lisbon that has been much more difficult to resist. But it is not even resisted. That is not about the EU; it is about the failure of our Governments over a long period to stand up to the Commission when they could have done, to build the alliances that Opposition colleagues and some Government Members have talked about, and to deliver for the UK.

[Mr Cash]

To respond to the question that the hon. Gentleman put to me earlier, would he be good enough to tell me whether it is more important to implement the laws made by consensus in the European Council of Ministers or the laws that his constituents support through the ballot box?

[Michael Connarty]

In 20 years in this place, I have never found it inconsistent to support the European Union. I supported it when I voted in the first referendum, and I supported it when I was the chairman of the Mid Scotland and Fife European parliamentary constituency and convinced a Eurosceptic MEP to see the benefits of Europe. There is no inconsistency between my job as a Member of Parliament and my support for the EU.

The big questions that we should be discussing—the ones that were touched on by the shadow Foreign Secretary—are all included in the Irish presidency agenda. The budget, the next financial perspective, the multi-annual framework and the need to deal with debt in the eurozone are all on the agenda and are being discussed on a daily basis by the 27 countries and Ministers. We should be discussing low participation in the labour market, unemployment levels and the massive problem of youth unemployment. The only comment that was made by the UK Government on the proposal for a youth, education and sport initiative—interestingly, I am the chair of the Council of Europe’s sub-committee on education, youth and sport—was that it should not be called the youth, education and sport initiative because that spelled “YES”. That was the one contribution from a UK Minister about what is on the Irish presidency agenda on youth employment. The Government have rejected the proposal for a guaranteed job or training place for every youth in Europe after four months of unemployment because they did not want that to interfere with what they call apprenticeships. In fact, apprenticeships in this country are not apprenticeships, but merely in-work training.

[Ian Swales (Redcar) (LD)]

As a fellow officer of the chemical industry all-party parliamentary group, I know that the hon. Gentleman is well aware that that is Britain’s leading export industry, ahead of the car industry. The chemical industry relies on long-term investment. Does he agree that the political risk premium that we now have will reduce the inward investment that is so important to that industry?

[Michael Connarty]

I totally agree. I would also point to things that are happening in the environment package, such as interference in health and safety in the North sea. Those things are being chased not by the environment directorate-general, but by the energy directorate-general. I know of three or four issues that it is trying to get into an energy chapter that it did not get into the Lisbon treaty. We have to watch the Commission creep and fight against it, as I have said before.

As for what it will mean, what is Fresh Start—the hon. Member for Daventry (Chris Heaton-Harris) and his colleagues—really about? Does it mean to renegotiate the 1972 treaty as the hon. Member for Stone (Mr Cash) suggested? No, it does not. If not, what is the agenda? It seems to me to be very light. As the hon. Member for Daventry said, the changes suggested are not radical ones that will make the EU a different place when people vote on the issue. That is the reality. It is about changing small matters, but it will not, for example, reinstate the UK vetoes. If that is the Government’s agenda, they are promising people a false referendum because it would not be a different Europe. If that is the case, why not hold the referendum now? Basically, Europe is not going to change, because this is a political ploy before an election, not a genuine attempt to re-establish the perspective on Europe.

Will the UK be allowed to renegotiate A8 citizens back to EU countries—one of the big cries from those in UKIP? No, it will not. Will the UK deny safe working conditions in its factories and building sites? I hope not. I worked in a toy factory in the ’70s. The EU came to the rescue by putting proper guards on the machines and, where they had damaged people, proper constraints. Will the UK return to the days of failed extradition processes? We used to talk of the Costa de los Bandidos in Spain because we could not get the crooks back here. Now we use the European arrest warrant. Will we abandon that? It is a nonsense. Will we make people in hospitals work longer hours? I do not think so.

My hon. Friend the Member for Ogmore (Huw Irranca-Davies), who speaks on agricultural matters, made an interesting point about meat eaters and I had a vision of carnivores in the Conservative party—carnivores or cannibals, I am not quite sure how they should be described because when the right hon. Member for Wokingham spoke I had a feeling that he would happily feed on the bones of his own Government if he could not feed on the bones of the European Union.

Those in Fresh Start basically hope that the EU is changing. Yes, it is changing because of the euro crisis and the crisis of the capitalist economy in Europe, but it is not changing fundamentally in its structures and powers. It will not change unless we repeal the Lisbon treaty and we are not going to do that. All the things that were mentioned about agricultural policy and the common fisheries policy are on the agenda of the Irish presidency, as is a more competitive single market. On the reform of the Council and Commission, since the Commission is set in stone, it will make policy and others will choose whether to implement that policy in the Council. My worry is that the feeding frenzy of the carnivores will not be justified by what the Prime Minister tries to do in this fake referendum, and in fact they will feed on the bones of their own Government when that fails.

17:07

[George Eustice (Camborne and Redruth) (Con)]

I start by saying that the speech the Prime Minister gave last week was probably the most important speech that a Prime Minister has given on Europe since we joined 40 years ago, and the first time we have seen a Prime Minister showing genuine leadership on the issue. There has been lots of rhetoric from previous Prime Ministers about wanting to lead in Europe, but all too often they have found themselves drifting along with an agenda set by others. For the first time we have a Prime Minister who does not necessarily want to make friends with Europe, and who is challenging Europe’s failure and challenging it to move in a new direction. Such an intervention is long overdue because for many years there has been tension in the European Union between those who wanted to integrate policy making more deeply within Europe, and countries such as Britain who said we should have a broader Europe and bring on board countries from eastern Europe.

The decision to enlarge the European Union to include eastern Europe should have been a triumph for British foreign policy and have led to a situation in which the EU tried to do less but did a few things better. Some powers should have started to return to national Governments, but instead the relentless dogma of ever-closer union has continued. It is high time we called time on that.

We have heard a great deal from Labour Members about pessimism and defeatism, but I will tell them what those things really are. Pessimism and defeatism are seen in those who agree with the analysis that Europe needs to change and reform, and that some powers should return, but who have no confidence whatsoever in their ability to deliver that—they will not even try; they are not prepared to embark on the process. I heard the shadow Foreign Secretary agree with the five principles, but he will not say whether he thinks there should be a new treaty or intergovernmental conference, and he will not commit to any kind of renegotiation. There is a kind of craven fear among those who say they agree with our analysis but are completely unwilling to do anything about it or make a change.

[Mr Kevan Jones]

The Prime Minister is not clear what powers he wants to repatriate—it changes every time the Downing street spin machine gets into gear and whenever he is asked. Negotiations on that basis will mean four, five or seven years of uncertainty, which will damage the UK’s economy.

[George Eustice]

The Prime Minister is clear that we will have a renegotiation and put it to the people. The whole point of a renegotiation is that such things are developed in the negotiation. Labour Front Benchers say they share the Prime Minister’s analysis, but they are unwilling to do anything about it.

Three other aspects of the Prime Minister’s speech were important. First, he was right that the core of the EU is not the euro, but the single market. We are committed to the single market and want to expand and extend it. Research last year by Open Europe concluded that the current arrangement in the single market was better for Britain than the alternatives. It is better because we need to be in the single market for things such as financial services, and because we need to be in the customs union to support our manufacturing, because of complicated country-of-origin rules. For those reasons, we are committed to, and want to expand, the single market. The euro is not the core of the EU, as some would say. In fact, the euro is an optional project. Britain and perhaps other countries will never join it, and some member states trapped in it might yet choose to leave and re-establish their own currency.

The second important point expanded on by the Prime Minister is that we must end the dogma of ever-closer union. It must now be possible for powers to return to nation states. The reality is that the more competences the EU has taken on, the less competent it has become. We must give the EU the power to adapt and the power to let go of things when there is no longer a rationale for deciding them at European level. Who is really on the side of the EU? Is it those like me who say, “Let’s make the EU more flexible and give it the ability to adapt to new challenges in future,” or is it those who say, “It’s all too difficult to change. Let’s just leave it like it is”? Those of us who are arguing for change are on the side of the EU.

The third important aspect of the Prime Minister’s speech was the distinction between willing co-operation between nation states and national Governments, and the integration of policy. There is an opportunity to roll back the jurisdiction of the European Court of Justice in many areas. That has already been done on matters such as justice and home affairs by countries such as Denmark. It co-operates with directives and works with other countries in a spirit of co-operation but does not accept the jurisdiction of the ECJ. We do something similar on foreign affairs, and it works. We co-operate with other European countries and work to have co-ordinated policies on foreign affairs, but we do not have an integrated policy and we do not make foreign affairs subject to QMV.

I conclude by dwelling on whether change is possible. The big challenge in the debate is answering those who say, “It’s all well and good. We agree with you about what needs to be changed, but it’s impossible. What will you do if they say no?” I am more optimistic than many on that point, for a number of reasons. First, the euro has created challenges that mean that the EU will change anyway. I believe there will be growing demands for a new treaty in the coming 12 months if Angela Merkel is re-elected later this year. That demands a policy response from Britain. If other countries say that they want to integrate more deeply and understand that Britain will not follow them, we must at that point have a grown-up discussion on what a new model for Europe looks like.

The second thing to remember is that the differences between countries that are out of the euro and those that are in it can be exaggerated. The truth is that countries such as Germany, Holland and many others see Britain as an ally in liberalising markets and opening up the single market. They want us in the EU because they see us as an ally. The EU needs us because we give it influence in the world. People often say that Britain might be losing influence, but there is a two-way street, because we give the EU influence.

The third thing to bear in mind is that other countries have problems with aspects of EU policy. Germany and Sweden do not like measures such as the data retention directive. Therefore, we should discuss which bits they want to drop and which bits we want to drop.

Finally, the Prime Minister struck absolutely the right tone. He made it clear that Britain wants to be in the EU, but that we want Europe to change. He said that Britain will play its role as a genuine leader and challenge Europe to face up to its failures and make that change. To those who say that is impossible, I say that we should reject such defeatism. People used to say that the euro was inevitable; it was not. There is no such thing as historical inevitability.

17:14

[Albert Owen (Ynys Môn) (Lab)]

The shadow Foreign Secretary is absolutely right to say that the big political news stories from this House last week were the cuts and redundancies in our armed forces, the shrinking of the economy, and the Government’s failure to deal with the economy. However, the Prime Minister and sections of the media wanted to concentrate on Europe.

Europe is an obsession for the Conservative party. Only last Friday I spoke to former Conservative party activist who had agreed with the Prime Minister when he said that it was the “banging on” about Europe that put people off the Conservative party, and why it had not been elected to Government since 1992. That was what some Conservative people were telling me only last Friday. This obsession confuses me, because it was a Conservative Prime Minister who took us into the European Union; it was Mrs Thatcher, when she was Prime Minister, who signed the Single European Act which gave away many powers and vetoes; and it was Mr Major who signed the Maastricht treaty. He was very unkind to the right hon. Member for Wokingham (Mr Redwood) and others at that time—I would never be as rude as the former Prime Minister.

[Oliver Colvile]

Does the hon. Gentleman recognise that John Major was able to negotiate a number of opt-outs? Unfortunately, those opt-outs have been given away by Labour Governments.

[Albert Owen]

The then Prime Minister was very rude to the right hon. Member for Wokingham and doubted his parentage. He was angry and frustrated at being bounced by his Back Benchers, in the same way that the current Prime Minister has been bounced into making his speech. The Prime Minister could never be accused of being consistent on Europe. As recently as October 2011, I joined him in the Lobby to support the view that a referendum would cause all sorts of uncertainty. The Conservative party’s obsession is damaging the British interest.

I want today to make a pro-European speech. Although I totally disagree with the right hon. Member for Wokingham, I respect the fact that he has always been in favour of our leaving the European Union. He has been clear on that point, and he was clear again today. I believe that our strength lies in the EU. The title of today’s debate is “Europe”. We are in Europe; we are part of the continent of Europe. As a Welshman, I am proud of Wales being a part of the United Kingdom. I do not go to the UK and I do not go to Europe—I am in both and I want to remain in both. I believe that the interests of my constituents are better served by our having a strong voice in the United Kingdom in this Parliament, and in the European Union. I trust our representatives to fight for our interests. That is what the Prime Minister should be doing—talking not about our going somewhere closer to the exit of Europe, but about going to the centre of Europe and fighting for the interests of my constituency.

Identity is important. I am proud to be Welsh. I support Wales. Last year, 2012, was a great sporting year—Wales won the grand slam in rugby union, beating England on the way. Our British athletes won gold medals and I was proud to shout for Britain in the Olympics in the same way that I was proud to support the European win in the Ryder cup. The Welsh people are as proud as anybody of being at the centre of events, and Wales has benefited from being there.

I do not believe in an emotional approach towards Europe; I believe in practical, social and economic policies, and we have had good policies for Wales. Being a member of the European Union has been a net benefit to Wales. It is estimated that £40 per person per year extra comes into Wales from our membership of the European Union. We benefit in many other ways. Social and economic regeneration has happened through structural funds. Extra money has come from Europe, on top of what the UK Government have given, for real, social and economic regeneration that is sometimes difficult to quantify because it has built village halls and the structure of social cohesion of Wales and the UK.

[Damian Collins]

The hon. Gentleman is right to mention the structural funds, but, because we are net contributors to the EU, all we are doing is getting some of our own money back—it is not extra money we could not otherwise find.

[Albert Owen]

I understand that, but in the ’80s and ’90s, when my community was declining and, as a result, qualified for European structural funds, the British Government were not doing enough to protect such communities. The structural funds, which go directly to my community, are good for Wales and my constituency. I understand the argument about our being a net contributor, but in many ways the UK is not uniform. Many people talk about unemployment falling, but in my constituency it is rising—dangerously—to the levels in the 1980s, and there are job threats today, because a European company, Vion food processers, is pulling out, putting 350 jobs at risk. Jobs have been created as a result of our membership of the EU.

My hon. Friend the Member for Vauxhall (Kate Hoey), who is no longer in her place, asked why we did not make these arguments in the last Parliament. The truth is, Mr Speaker, that the Speaker before you used only to call the likes of her and members of the Government from our side of the House. Now, however, I have the opportunity, and I am taking it, to say that I am proud to be Welsh and proud to be British—she is right that we should talk about the UK, not just the island of Britain.

I represent a constituency that has been in existence for 450 years—and, thanks to the Liberal Democrats, it will continue to be in existence. The people I represent do not have an island mentality; they are outward-looking patriots, and a patriot can be proud to be Welsh, proud to be British and proud to be European. The agenda does not belong to those who want to move us towards the exit from Europe; it belongs to those who want to be at the centre of Europe.

Jobs matter. My hon. Friend the Member for Ogmore (Huw Irranca-Davies) was quite right. Like him, I had a meeting with farmers today—I represent a rural community. They know that there are problems in Europe, but they also know the benefits of being in Europe. They run small businesses and local communities, and for them it is not about big or small Europe. They understand that Europe brings real benefits. That is what I am proud to speak about today.

The urban development in my town comes from European structural funds. The near neighbour of mine is not continental Europe, but Ireland. The Chancellor used to boast about how good the Irish economy was. We can have both free trade and good employment laws; they can go hand in hand. I am worried, however, that if we move away from the social chapter, our jobs will become less valuable and our constituents less valued. I am proud to say: Wales, Britain, Europe, we need to be united; we need to be leading in it, not moving away from the centre.

17:22

[Martin Horwood (Cheltenham) (LD)]

It is a pleasure to follow the hon. Member for Ynys Môn (Albert Owen), who made a passionate, excellent case for accepting and celebrating identity on many different levels. In a way, like him, I am proud to come from Gloucestershire, I am proud to be English and I am proud to be European—indeed, I am proud to be a member of a country that is part of the United Nations as well. We can celebrate and identify with people on many different levels.

We have heard many passionate speeches in this debate. Obviously, we heard from the hon. Member for Stone (Mr Cash), who is not in his place anymore, who revealed that he had voted in two French referendums—so perhaps we should call him the hon. Member for Pierre for now on. We also heard a passionate speech from the hon. Member for Croydon South (Richard Ottaway), who made a strong case for Britain remaining at the heart of Europe. If a referendum one day comes, I have no doubt that he, like the Liberal Democrats, will be putting the case strongly for a yes vote, for remaining in the EU and for keeping Britain at the heart of Europe.

In a spirit of coalition fraternité, let me say that I found much to welcome in the Prime Minister’s speech on Europe, although one would not necessarily have known it from much of the media coverage. He applauded the EU’s contribution to peace and freedom over many decades in Europe and emphasised the value of the single market. He also emphasised the EU’s role in putting Britain at the heart of negotiations on world trade—through free trade agreements and so on—and therefore its value to British jobs and British business. He also stressed its role in keeping Britain at the top table on issues such as climate change. The idea that if we left the European Union and were no longer a member, we would have that kind of access to top tables around the world, to the single market or to the free trade agreements that are negotiated at European level is a bit of fantasy and a misleading argument.

The Prime Minister also emphasised the importance of reform in Europe. I agree with a great deal of what he said in his speech about that. I was talking to consultants at Cheltenham general hospital only recently about the working time directive and the need, perhaps, to reform some aspects of it. We all want the EU budget reduced, in line with these austere times, and there are regulations—from small businesses to fisheries—that can be lightened or brought closer to national decision making. We would all support that. In fact, the Prime Minister made a very good case for British membership of the European Union and the kind of reforms that can be achieved within a process of negotiation and collaboration, positively engaging with our European partners.

However, the Prime Minister rather undermined that with his announcement of this hypothetical in/out referendum, not so much by putting forward the principle of a referendum, but by refusing to say which way he will ask us to vote if such a referendum actually happens, which is quite a big if. Let us look at Conservative policy over the past few years. In 2007 we had the “cast-iron guarantee” of a referendum on the Lisbon treaty. A few years later, that was not so certain. Then, once the Conservatives were in coalition with the Liberal Democrats, we had a clear and legislated-for agreement that there would be a referendum in the event of any powers moving from the British to the European level of government.

[Damian Collins]

We are all enjoying a lecture from a Liberal Democrat MP on consistency in policy, but does the hon. Gentleman not accept that this argument about the Lisbon treaty is totally spurious? The treaty was signed into law by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) as Prime Minister before the coalition Government came into power, so the horse had long left the stables.

[Martin Horwood]

When the Lisbon treaty was debated in this Chamber, the Liberal Democrats were the only ones who proposed an in/out referendum, not at some hypothetical time in the far distant future, but then and there, yet few Conservative MPs—or, indeed, Labour MPs—joined us in the Lobby that day. We have therefore been very consistent in arguing for referendums at times of major change. What I am highlighting is the lack of certainty in Conservative policy, which has yet again changed in the last few weeks. I might make rather more money than I generally do at the Cheltenham gold cup by betting that within the next four years, before this hypothetical referendum takes place, Conservative policy might just change a little again.

The real problem is not the principle of a referendum; the real problem is what will happen in the intervening years. This whole debate has given those who do not share the Prime Minister’s agenda—which is quite positive about membership of the European Union—an excuse basically to campaign for a British exit. Some of them dress it up in the argument for this imagined wholesale renegotiation of the British terms of membership. There is no reason why that should succeed, because if we start unpicking all aspects of our relationship with Europe, why would the French not start arguing to unpick competition policy? Why would the Germans not start arguing for the protection of their energy markets? Why would quite a lot of countries not start arguing, after perhaps making a few concessions to us, for taking back our rebate, as a quid pro quo? Realistically, I do not think that an unpicking of the whole relationship will happen.

In the meantime, business will be concerned about the uncertainty. Some of the statements from business have been clear. David Sproul, the UK head of Deloitte, has said:

“The Europe debate does not help to create certainty. When I talk to US clients who have not been immersed in the European debate as we have, they say that what they need is clarity. There is no question: it will impact business—it will hit investment into the UK.”

That point is repeated in a number of different quotations.

[George Eustice]

Would the hon. Gentleman acknowledge that all those arguments were put forward during the euro debate and that they were all proved wrong? For example, it was said that the Japanese car companies would all go, but that did not happen. It is a sorry state of affairs when the European Union seems almost incompatible with a democratic referendum or with the will of democratically elected national Governments.

[Martin Horwood]

Membership of the European Union is not at all incompatible with democratic referendums. We have had one and we have advocated another, and the coalition has legislated for a referendum lock if powers should ever move closer to Brussels, so that is not the issue. The real issue is British jobs and British business, and the climate of uncertainty, which is not about the principle of a referendum; it is about the risk of exit and the damage that that would do to the British economy and to the guarantee of peace and freedom across the European continent for future generations. It is also about the risk of losing our place at the table on everything from climate change to world trade. Those are genuine, deep risks, and concern is now being expressed by businesses, by our European partners and by our allies around the world.

Whatever we think about the principle of a referendum, we need to be absolutely clear which way we would vote in a referendum. The Prime Minister has tried to start making the case for a yes vote, and for Britain remaining in the European Union, but he has shied away from making a really firm commitment. The Liberal Democrats are absolutely clear that we would argue for Britain to remain at the heart of Europe, and the more that Members on other Benches stick their heads above the parapet and start to make that case as well, the better.

17:29

[Ian Murray (Edinburgh South) (Lab)]

It is a pleasure to follow the hon. Member for Cheltenham (Martin Horwood). Given the events of the past 24 hours, I am surprised that he is still sitting across the Chamber from us and that he has not joined us on the Opposition Benches, especially in the light of the speech that he has just made.

Is it not strange that on this, the 1,000th day of the coalition Government, we should find ourselves in the Chamber discussing the Conservative party’s favourite obsession: Europe? That is a surprise indeed. As the economy hurtles towards a triple-dip recession, the Prime Minister and the Government have decided to create economic uncertainty that could damage any recovery and the long-term prospects for economic stability by adopting a policy that is designed to fix the Conservative party rather than this country’s economy.

It is the job of any Prime Minister to stand up for the national interest. Indeed, that has been the motto of this coalition since 2010, but the Prime Minister has compromised the national interest by responding to the increasing Euroscepticism of his Back Benchers. We have a Prime Minister who simply cannot reconcile the demands of his party with the demands of his country. Let us look at the potential consequences.

The EU brings the UK a considerable amount of investment, but that could be put at risk. Some estimates put the number of UK jobs reliant on the EU at 3 million. Those jobs could be put at risk. The EU remains our single biggest trading partner and represents a de facto domestic market of 500 million people. That market could be put at risk. At a time when economic recovery seems like a distant goal, that creates uncertainty for business, which could put any economic recovery at further risk. Businesses large and small are already warning about the potential dangers to investment. We have heard many such voices being quoted in the Chamber this afternoon. The head of the CBI has said that the promise of a referendum

“builds in a degree of uncertainty and business never welcomes uncertainty.”

The problem is that the Prime Minister wants to renegotiate with Europe, but he has no strategy and no thoughts on what he wants to renegotiate. How can he renegotiate anything when there is confusion over his own position? He has talked about the repatriation of powers since he became Prime Minister, but he has yet to tell the House and the country which powers he wants to repatriate. Many Government Members have been challenged to give us some examples this afternoon, but they have failed to do so. Does the Prime Minister’s shopping list include the progressive policies of the social chapter? Does it include the right to four weeks’ holiday for British workers, the right to parental leave and extended maternity leave or the right to request flexible working? Does it include protection for part-time workers, the working time directive, the TUPE regulations or collective redundancy provisions?

There is an obvious distinction between repatriation and repeal. The British people deserve to know not just the list of powers the Prime Minister wishes to repatriate but what the Government would do with those repatriated powers. We have already seen the Beecroft report on workers’ rights, which would take this country back to Victorian times. Would the Government repatriate and repeal? Would they just repatriate? Or would they even repatriate and improve? Those key questions need to be answered.

My hon. Friend the Member for Ogmore (Huw Irranca-Davies) was absolutely right to say that, whether we are in Europe or out of it, British business will still have to conform to EU directives to be able to trade. That is a critical point, but I think that the Government have missed it. If the Prime Minister has a menu for repatriation, how many or how few items on it will have to be met before being satisfied that he will go for an in/out referendum?

It would be remiss to talk of the EU in this Chamber without mentioning Scotland. It will not surprise the House to hear that the Scottish Government’s response to the Prime Minister’s speech was confusing at best. The Deputy First Minister wrote to the Foreign Ministers of the EU and said that Scotland had no intention of leaving it and that Scotland, after a successful independence vote, would continue to be a constructive member of the EU. That was despite the Irish Foreign Minister and the President of the European Commission stating that Scotland would have to reapply and that it could be a lengthy process with conditions attached.

Even more astonishingly, the Scottish Government responded to the Prime Minister’s speech by declaring that a referendum on the EU would create uncertainty for Scottish business—despite the referendum due to take place in 2014 being four years in the making. We could be in a position whereby, come 2014, Scotland is not just not in the UK, but not in the EU.

In the past two and a half years, the Government have never said anything positive about the EU. We know that the Prime Minister does not want a referendum, as he voted with us in the House only a few months ago. Back in June last year, he posed the question whether he wanted to stop the bus and get off, and he answered no. One thing is for sure: the Prime Minister can do none of this while he is away from the EU decision-making table and locked out of the room in a sulk. He should be at the table, thumping his fists on it and using this country’s considerable influence to make the patriotic case, founded on the national interest, for a flexible Europe that can stimulate economic growth, respect national sovereignty and change better to reflect current circumstances. Europe cannot be changed from an isolated position.

In his speech, the Prime Minister referred to

“a tantric approach to policy-making”.

In reality, this is not a tantric approach, but complete impotence. Having been bounced by his party on Europe and bounced by the Liberal Democrats on boundaries, we could be talking about the one-term Prime Minister who broke up the UK, took Britain out of the EU and inherited a growing economy, only to take it three times back into recession.

My constituents are concerned about the real issues of the economy, jobs, the cost of living, protecting those who are most in need and getting young people and graduates into work, but their Governments on both sides of the border are putting their future prosperity in further—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order.

17:37

[Mr Robert Walter (North Dorset) (Con)]

A number of Opposition Members have criticised the Prime Minister for announcing that he will campaign in the next general election to renegotiate, hold a referendum and, on the basis of that renegotiation, campaign for a yes vote. It is probably worth reminding them that it was a Labour leader and a Labour Prime Minister who did just that in the general election of 1974. Despite having a number of irreconcilable people on his Benches, including Barbara Castle, Michael Foot and Tony Benn, he succeeded in gaining a two-to-one victory in the subsequent referendum.

[Albert Owen]

The hon. Gentleman reminds us of the 1970s. Of course, the clamour of the two camps to win out against each other took our eye off the economy at the time, and we went into a very difficult period. Are we in danger of doing exactly the same, and is not the Prime Minister in danger of being not the son of Blair, but the grandson of Harold Wilson?

[Mr Walter]

I thank the hon. Gentleman for that intervention, but I would remind him—I can remember it—that the economy was already in a difficult situation caused by the energy crisis. We had three-day weeks and other problems.

[Martin Horwood]

I think the hon. Member for Ynys Môn (Albert Owen) made a good comparison with Harold Wilson and the 1970s. Like our Prime Minister now, Harold Wilson wanted modest reforms, but was unable to satisfy the Europhobes in his own party. Within five years, that party was voting for exit from the European Union—despite the referendum. Is that not a little bit of a warning from history?

[Mr Walter]

It is a warning from history, but if the hon. Gentleman listens to what else I have to say, I hope that he will accept that I will be campaigning to make sure that that does not happen. I had rather hoped that the question of Britain’s membership had been settled decisively back then—my view has not changed—but I believe that the prospect of a national vote would give our country an opportunity to have a serious national conversation about Britain’s relations with the European Union. I welcome that, because I think that for too long the debate has been dominated and, to an extent, distorted by mistrust and by a suspicion that more EU integration means less sovereignty for the United Kingdom.

We need to set the record straight. For those of us who support the European project, this will serve as an opportunity to explain what Parliament and politicians have done in the people’s name over the last 40 years. It will also give us a chance to expose the myths purveyed by those who would have us turn our backs on both our European history and our European future.

It is true that the Europe we joined in 1973 was created on the basis of a vision of a post-war Franco-German elite. It is also true that Schuman, Monnet and de Gaulle himself saw ever-closer union as meaning an eventual federal Europe. But that was another time, and another Europe. The EU of today is markedly different, and the EU of tomorrow will, I believe, be even more so. In the Commission and, to some extent, in the European Parliament, there are those who still see the EU as a centralising project, but in national Parliaments—including this one—and among the peoples of Europe there is no craving for that original centralised model.

Brussels is not Europe, and the people who work there have no monopoly on the European vision. Schuman’s plan was fundamentally about eliminating trouble, anxiety and distrust from a continent ravaged by centuries of conflict. Today, our focus is not on keeping the peace, but on consolidating prosperity. The treaty of Rome was signed in 1957 by just six countries with a combined population of 173 million. By the time the Lisbon treaty came into force, more than half a century later, the Union comprised 27 member states with a combined population of more than half a billion. With Croatia, we are soon to number 28. Enlargement, one of the EU’s greatest success stories, is set to continue, bringing more change to the character and direction of the European project.

As its membership has changed, the EU has embarked on a different path. If we reflect on the way in which European institutions have evolved since that original blueprint, if we look at the aspirations and stated aims of EU member states—all of which want to protect their identities and interests—and if we consider the actions that member states have taken independently, across a wide spectrum of policies, it is clear to us that there is no great craving for the centralising project envisaged by the founding fathers. The proof is all around us.

After 40 years of British membership, there is really no overarching bureaucracy or executive. The Commission and the Council are small in comparison with many national Government administrations. The Commission’s budget is barely 1% of Europe’s GDP. Countries retain sovereignty over many areas that might have been expected to be transferred in a federal system. Member states have their own foreign policies and their own armies, which they can deploy at will, and they do. Member states can choose to opt out of a raft of agreements that they oppose, and they have: that has been proved.

We should not forget, of course, that treaties require the consent of every member state, even if they are supported by the vast majority of the population of the EU. That is an important point. When consent is not given, Europe must go back to the drawing board, and that has been done. In 2005, France and the Netherlands rejected, by referendum, what was then the constitution. In 2008, Ireland rejected the Lisbon treaty in the same way. Did those countries threaten to leave the European Union? No. Did the EU respond by trying to coerce those countries into accepting a treaty that was judged unacceptable by the people? No. What happened was that the countries returned to the negotiating table, and their Governments renegotiated the aspects of the treaties that conflicted with their national interest. They made the case for their concerns to be addressed, and they were.

I think that there is a lesson here. We in the UK have our concerns and suspicions, and the EU has many shortcomings. We are therefore right to push for reform, but these examples show us that the EU is not heading inevitably and inexorably towards some sort of federal superstate, even if some people within the Commission and the European Parliament still harbour that goal. Every country has its own corner to fight, and it has the power to do so. We are far too reluctant to admit this, but the UK has time and again proven itself to be an influential leader in the EU.

[Mr Cash]

Will my hon. Friend give way?

[Mr Walter]

Sadly, I only have a couple of minutes left.

[Mr Cash]

I can give you an extra minute.

[Mr Walter]

No, you cannot.

Thanks to our positive engagement across a swathe of policy areas, from economic reform and deregulation to environment and trade, we have consistently set the agenda. In the debates ahead, we need to strip away the rhetoric and clarify what Europe represents. Europe is the solution, not the problem. Our history is in Europe, and I believe that our future is, too.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Mr Cash, you can do many things, but you could not have given Mr Walter another minute even if you had wanted.

17:45

[Mr Kevan Jones (North Durham) (Lab)]

It is a pleasure to follow the hon. Member for North Dorset (Mr Walter), who has been an isolated and lonely voice of sanity on the Government Benches this afternoon.

Like my hon. Friend the Member for Ynys Môn (Albert Owen), I am fascinated by the modern-day Conservative party’s obsession with Europe. We only have to mention the word “Europe” to send many Conservative Members into an act of communal or self-flagellation. As my hon. Friend said, however, that has not always been the case. The major changes in our relationship with Europe were introduced by Conservative Governments. They took us into Europe, and it was Margaret Thatcher who signed the Single European Act.

Now, however, the Conservative party holds to a little Englander narrative, which goes as follows: Europe is a foreign place that is anti our culture and somehow does things to poor old little Britain. Nothing could be further from the truth. It is true that we are an island off the continent of Europe, but we are part of Europe. For centuries, we spoke French, not English, and we even speak Norman French at the Prorogation of each Parliament. Our royal family has a proud German history and heritage, too. It is therefore plain wrong to argue that Europe is somehow alien to our culture. It is part of our history, and it is in our DNA, too, as the blood of people from Europe who have settled here flows through our veins. All this also influences the decisions we take: if we go down to the Members’ car park, we can see the most fervent anti-Europeans driving French and German-made cars.

The hon. Member for South West Bedfordshire (Andrew Selous) said what is important is inward investment and access to the European market. I completely agree. The EU is vital for jobs in my region of the north-east, and also for our future prosperity. My hon. Friend the Member for Ynys Môn made a point about structural funds, too. They made a real difference when the last Conservative Government ripped the heart out of the north-east economy. This is not only about manufacturing, however; it is about access to financial markets, too, and liberating the European telecommunications market, which cannot be done from the sidelines.

[Albert Owen]

My hon. Friend is making a strong argument about our being an English-speaking gateway to Europe, but we are not the only one. There is also the Republic of Ireland, so we must be on our toes and make decisions at the centre of Europe.

[Mr Jones]

That is true, which is why current policies and statements are potentially putting us at a competitive disadvantage.

There are those who argue we would be better off outside Europe, and that we should have an in/out referendum now. I respect that position—although I totally disagree with it—but that is not what is before us. It is worse than that. We will have five or more years of indecision because this Prime Minister has put party advantage ahead of Britain’s national interest. We will have five years of companies looking at Britain and asking themselves, “Should we invest? Can we be sure Britain is going to be part of Europe?” The Prime Minister will not even tell us what the red lines in respect of Europe are going to be. As my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said earlier, they will involve, for example, driving employment rights down to the bottom to try to ensure that we are competitive with the rest of the world.

Europe is our major trading partner and we need to be at the centre of it. We will not achieve that by standing on the sidelines, or, as this Prime Minister seems to do, by threatening to take our bat and ball home if we do not get our own way.

Much has been said about the free movement of people throughout Europe. This is nothing new. I grew up in the region of the north Nottinghamshire coalfields and went to school with people with Italian and Polish names—the children of people who had settled there after the second world war. Conservative Members who represent areas such as Lincolnshire will be aware that many generations of immigrant workers have come there to pick fruit and other agricultural produce. That has added to, not taken away from, this country’s prosperity.

[Mark Hendrick]

My hon. Friend, coming has he does from the north-east, will remember the “Auf Wiedersehen, Pet” generation who went to work in Germany because they could not find work in this country under the Thatcher regime.

[Mr Jones]

My hon. Friend makes a very good point. When the Tyne shipyards were decimated by the last Conservative Government, most of the welders and other skilled workers got work in Holland and other parts of the EU, and those skills continue to be exported today.

It is important to remember that being part of, at the centre of, Europe is in this country’s interest. On the idea that Europe is doing things to us—that the Commission tells Britain what to do—Conservative Members tend to forget the nature of the decision-making process. What on earth do Cabinet Ministers and other Ministers go to Council of Ministers meetings for, if not to influence debate? Similarly, the last treaty actually changed the role of the European Parliament. I have my criticisms of the way it operates, but at least it increased the so-called democratic voice in decision-making processes.

Are we going to end up with a two-speed Europe? If we continue as we are, we certainly will, because our voice will be ignored in Europe. There are some changes that could be made. I am not one of those who argue for a federal Europe; I am arguing strongly that we need to be an active and loud voice, speaking up for what is in Britain’s national interest: the single market and the security that Europe offers this country.

There will be changes to, for example, the eurozone, but I should remind the Conservatives that we are not part of the single currency. Change will happen, and we need to be part of a constructive, positive dialogue. Standing at the sidelines stamping our feet, saying that we must get our way on every single thing or we will take our bat and ball home—in some instances, the Government do not even know what it is they want their way on—is not the way to get the economy out of the dire straits this Government have got it into.

17:53

[Ben Gummer (Ipswich) (Con)]

What a refreshing change to be in the Chamber today, having this interesting, broad and generous discussion about the European Union, which is so different from many such debates that I have watched remotely or participated in in my short time here. The same is no doubt true for other Members. The mood has changed, and the reason why is the Prime Minister’s speech last week. The greatest service that his speech has done not only to the country but to the European debate is that it has allowed us, at last, to open up this debate properly. It has allowed the full spectrum of belief and thinking—on both sides of the House—to find its voice and come alive, and with a graciousness that we have not had in such debates for many decades. That is a good thing, because this debate is too important for us to allow it to become reconciled only through rancour. We have to approach it afresh. The British public are tired, frustrated and irritated with this discussion and we need to have it in a new way that gets to the heart of the matter.

That was why I was so pleased with the way in which the Prime Minister opened his speech last Wednesday. It began, so importantly, by dealing with the historical context, which we have not discussed properly in this Chamber for many years. When we have been discussing the minutiae of European treaties, we have forgotten the reason for Europe, why this country is a member of the European Union and why so many of its other members care so deeply about the political consequences of this great community, which has done so much, with NATO, to forge a peace since the second world war. It has been the longest peace that the continent has enjoyed in its modern history.

As Tomas Masaryk so memorably said, our continent is

“a laboratory atop a vast graveyard”.

It behoves us not to forget that although we have found peace within the continent during the past 60 years, the edges of our continent are as dangerous, as vociferous and as potentially alive to crisis and trauma as they have been at any point in the past five or six centuries. Furthermore, we have to be alive to the fact that, as the Prime Minister said, our relationship with the European Union is peculiarly British; a golden thread runs from the very first engagement that we had in our modern history—the Norman conquest—all the way through to now, and it is peculiarly English. That has stamped its mark on the relationship between Great Britain—and then the United Kingdom—and Europe. Even in that prototype of European summitry at the field of the cloth of gold, which the Minister will know of far better than I do, the discussions between the delegations contained many of the same tensions that we see now in European summitry and in the discussions that he has to have on a weekly basis on our behalf.

None of that is to say that other nations in the European Union do not have their own peculiar, individual, unique relationships with other member states; for the Finns, for the Spanish, for the Italians and for the Germans these relationships are very special. So we are not in a unique position in encountering a difficult or particularly interesting relationship with our fellow member states; the relationship is made different by the great ditch that lies between us, but we still have to reconcile ourselves to the fact that other nation states also have these peculiar interests.

The Prime Minister recognised not only that changing relationship with the European Union, but the changing demos of the European Union. We would do well not to forget that the demos is changing in our own country, too. This is a remarkable moment for us and for our nation and, I would propose, for reform of the European Union. I am glad that the tone has changed as a result of his new beginning last week.

17:58

[Paul Blomfield (Sheffield Central) (Lab)]

I am pleased to follow a thoughtful contribution by the hon. Member for Ipswich (Ben Gummer). The debate has had a more welcome tone, perhaps because, with one or two honourable exceptions, it has been boycotted by some of the more extreme Europhobes on the Government Benches—[Interruption.] The hon. Member for Wellingborough (Mr Bone) walks in on cue. Perhaps they have boycotted it because they think they have the Prime Minister cornered.

I certainly agree with the hon. Member for Ipswich in congratulating the Prime Minister on the opening remarks in his speech last week. I thought it went rapidly downhill, but he was right to remind us of the big picture, of the wider national interest, of the bigger strategic goals and of the peace dividend from the European Union, which has been complacently disregarded by many. My father was a pilot in the second world war and my grandfather was in the trenches of the first. I am a member of the first generation of my family since the 19th century not to have been called up to one of the bloody conflicts that have engulfed our continent for centuries, because the European politicians who survived the last war said, “Enough,” and recognised that if we created economic and political interdependency among the countries of Europe, we would stop killing each other. And we have, for the longest period in our history.

Peace, safety and freedom: those were the objectives for post-war Europe that Churchill described in Zurich in 1946 and they have been delivered by the European Union. How has the Conservative party been transformed from the party of Churchill to one in which outright hostility to the European Union has become almost an article of faith for so many of its members? It has clearly not been helped by the tabloid press. As the Leveson inquiry reported:

“At various times, readers of these and other newspapers may have read that ‘Europe’…is intending to ban…kilts, curries, mushy peas, paper rounds, Caerphilly cheese, charity shops, bulldogs, bent sausages and cucumbers, the British Army, lollipop ladies, British loaves…and many more.”

[Oliver Colvile]

Will the hon. Gentleman give way?

[Paul Blomfield]

I have been asked not to give way because of the time available—I would otherwise have been delighted to do so.

All those claims by the tabloid press were nonsense, but there are more sophisticated myths, too. One, which was most recently reported during this debate by the right hon. Member for Wokingham (Mr Redwood), is that the people of Britain were misled about the Union we were entering and were not told that we were signing up for anything more than a single market. Again, that is simply not true. The Conservative Government’s 1971 White Paper was clear that the aim was

“an ever closer union among European peoples”

and went on to say:

“If the political implications of joining Europe are at present clearest in the economic field, it is because the Community is primarily concerned with economic policy. But it is inevitable that the scope…should broaden as member countries’ interests become harmonised…what is proposed is a sharing and an enlargement of individual national sovereignties in the general interest”.

The prospectus for the 1975 referendum was clear and so was the result.

Of course, the rhetoric of repatriating powers will sound attractive to some, but, as a number of Members have pointed out, we must be clear about exactly what powers we mean. Top of the list for many Government Members are the powers on employment. They need to be honest with the people of this country. Why repatriate those powers if not to abolish the rights for working people that come with them? We deserve an answer.

I do not think that Government Members want to abolish social Europe. They want the other 26 member states to keep it, but they want the UK out so that our USP in Europe is offering the lowest labour costs, leading a race to the bottom and offering companies the chance to boost profits at the expense of hard-working families. Why would the British people vote for that and why would the rest of Europe allow it? The single market is about a level playing field, not about skewing the market to the advantage of one country at the expense of its people. How will the British people be persuaded by a Prime Minister who cannot even win an argument in his own party? As he struggles and fails to control his party, he is undermining business confidence, damaging our economy, limiting the chance for growth and weakening the creation of jobs.

18:03

[Damian Collins (Folkestone and Hythe) (Con)]

Throughout the debate, we have been asked to consider the choice between optimism and pessimism and between certainty and uncertainty. It is clear to me, however, that the people on the Opposition Benches who would call themselves optimists are so optimistic about the benefits of the European Union that they do not want an open debate with the British people in which they get to have their say. Those Opposition Members complain that the uncertainty of the referendum period is damaging, but will not give us any certainty about whether they support having a referendum now or at any point in the future.

The debate today, and the debate that the Prime Minister has rightly started, is about our bottom line. What do we want from the European Union if we are to maintain our membership? What case will we put to the British people in the referendum campaign based on what we have renegotiated? Without certainty, without a bottom line and without the referendum, there is a danger that the debate will carry on for ever. Britain and other member states will grumble about the EU and what they do and do not get out of it, but there will never be clarity about what we want to get back, what we think is the best deal for Britain and whether we should consider that our national interest is better served by considering a future outside the EU. If someone has a negotiating position, they have to consider walking away from the table if they cannot get what they want; otherwise they are never taken seriously. That is the story of the Labour Government: they gave away Britain’s opt-out on social policy and £7 billion of our rebate and got nothing in return. Their rhetoric about Britain being at the heart of Europe was exactly that: a rhetorical position, totally meaningless. We got nothing out of Tony Blair’s positioning himself at the centre of a grand European stage—nothing that could be shown to be of any real benefit to the British people.

Following the Prime Minister’s speech, the German newspaper Bild wrote that:

“Most EU countries have tacitly agreed to build Europe above the heads of the people. Motto: The European project is simply too important for democratic participation. And then along comes this Cameron!”

That is exactly what the Prime Minister has done: he has demonstrated that we can have an open debate about Britain’s future in the European Union and put it to the people. If we start that national conversation, ultimately we will have a clear view and an answer, and an end to the debate.

There has been considerable discussion of the European social model and what reforms we would want. We certainly see the case for nation states and national Parliaments making decisions in that area. I believe that the social model of Europe has to be reformed if Europe is to be competitive in an increasingly competitive world, and that view has been expressed by a number of my right hon. and hon. Friends. It was also expressed by Tony Blair in an interview in Der Spiegel this week, but although, “We want reform—reform of social policy,” are fine words, if you do not have a clear view of what you want and do not back it up with a referendum, you will not get what you want. The reason countries such as Ireland could negotiate after their people originally said no to the Lisbon treaty is that they had a clear, definitive position as a country. The European Commission had to deal with them because they had the power to bring down the entire treaty; that was the strength they had in that negotiation. We have to learn from that.

We have to take a simple and pragmatic view of what is in our national interest. Britain, like Germany, is seeing its exports grow not within the EU, but in the growing consumer economies around the world. Brazil, Russia, India, China and Indonesia—those are the growing developing markets and we cannot ignore that. Neither can Europe ignore the fact that one of the reasons for the debt crisis is that the European model has been too expensive and the wealth generated by the European Union has not been enough to sustain it. That is a lesson we have to learn.

[Ben Gummer]

Does my hon. Friend agree that EU reform will result in that market itself growing, which will enable us to expand our exports into the EU?

[Damian Collins]

My hon. Friend makes an important point. That is why a reformed Europe—more liberal, more open and more competitive—is something we all want and would all work towards achieving.

We should realise that even if, at the end of the process, the British people decide that our future lies outside the EU—Britain could decide to leave; that is in the gift of the British people and this Parliament—we cannot abolish the European Union. It is a fact of life and it will continue to work in its own way. It is inevitable that the eurozone countries will see closer co-ordinated integration as part of the solution to the crisis in the eurozone, but it is clear that we will never be part of that inner core. There has to be a view of what Europe means for countries that are not only not in the eurozone, but have no desire ever to be in the eurozone, and what their relationship is with the EU.

My constituency, other than that of my hon. Friend the Member for Dover (Charlie Elphicke), is about the closest to the continent of Europe. From Folkestone, we can see France clearly, and the channel tunnel at Folkestone is a direct link to the continent. Our business links and our trade through the ferry ports of Kent and through the tunnel will continue. Companies’ investments, such as that of EDF in the cross-channel electricity pipe and Dungeness nuclear power station in my constituency, will continue. They make those investments because it makes business sense for them; they are not doing us a favour because we are in the European Union. Those pragmatic business decisions will continue to be taken because Britain is an open, low-tax, competitive economy with a very large consumer market, which is attractive to investors.

[Martin Horwood]

Surely one of the most valuable things the EU can do to help business and trade is negotiate free trade agreements? If we were to withdraw from the European Union, would we be guaranteed the same terms with South Korea or north America? That would pose an enormous risk, would it not?

[Damian Collins]

We are not in a position where we can say that Britain will be outside the European Union, or even in a position to know, if we did leave, what our relationship would be in those trade negotiations. The process of leaving the European Union, as the hon. Gentleman knows, is incredibly complex and it takes two years of negotiations to achieve that end. It is not like walking out of a house, giving the keys to the estate agent or the bank and saying, “Right, I’m off.” These are matters that will be negotiated over a long period.

However, Britain has one of the top 10 economies in the world, with a very large consumer market. It tends to be a net importer of goods and it embraces trade and cultures from around the world. That has always been one of our great strengths. Britain will always be a country that people are interested in talking to when it comes to negotiating trade agreements. The opportunity for us to do that either inside or outside the European Union will remain, but the goal is to try to secure the open, liberal, competitive Europe that we think is in the interests of Europe and of Britain, too.

The political correspondent for Die Welt, Alan Posener, commented after the Prime Minister’s speech that for the first time in years Britain is setting the European agenda. We are doing that because we are putting down a marker. We are making it clear where we stand, where we are looking for renegotiation, and what we want from our membership. We are clear that things have to change. As the Chancellor of the Exchequer said in his interview with Die Welt, if Europe will not change, then our relationship with Europe must.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I am keen to get everybody in, so I am reducing the time limit to four minutes.

18:10

[Nia Griffith (Llanelli) (Lab)]

Business needs certainty. What business wants to know is, “Where are we going to be in the next 10 years?” It does not need a situation where it does not know whether we will be in or out of the Common Market or European Union.

In Wales we depend heavily on foreign direct investment. We want to be part of the European Union that allows us to be a country where goods can be manufactured and then exported to the European Union. We forget how very complicated it was before the days of the Common Market. We forget the number of bilateral trade agreements that were necessary and the number of different safety standards. We take it for granted that we now have common standards and free trade, and we lose that at our peril. Instead of investing in my constituency and neighbouring constituencies, firms such as Tata Steel will say, “Well, we’ve already got a plant in IJmuiden in the Netherlands. We know that that will stay securely in the European Union. If we make further investment, that is where we’re going to put our money.” That is a very real risk for people working in the steel industry, the car components industry and in the many other industries whose products are exported to other countries in Europe.

Of course we want reform of agricultural policy. Our Agriculture Minister in the Welsh Assembly Government, Alun Davies, is discussing common agricultural policy reform at the heart of Europe, and also consulting Welsh farmers so that we get the right sort of reforms. On consumer protection, yes, we want to move forward together. Consumer protection and employment legislation are two sides of the same coin. As well as protecting the worker, such measures protect investment in this country because we are competing on a more level playing field if we expect the same standards of rights, pensions, welfare and so forth to apply to workers in the countries with which we may be competing.

We in the Labour party delivered devolution to Scotland and Wales. There will always be a discussion about the level at which certain decisions are best made, but we forget at our peril the important decisions made at European level in respect of issues such as the pollution of rivers and acid rain. Borders are not respected by the elements and we have to get it right for all of us. The same applies to the emissions trading scheme. Again, it is about creating a level playing field so that businesses and industries can compete on the same terms.

When we look forward to where we are going to be by 2017, we seem to be looking at a huge Pandora’s box, and we do not know where the Prime Minister is leading us. Instead of showing real commitment to Europe, he is showing a lack of commitment. Unfortunately, instead of such commitment being a bargaining tool, some of the countries of Europe might be quite pleased to see us go. One of the big problems is that we do not know what the referendum will be about—whether it will be about the Common Market, the state that we were in pre-Maastricht or pre-Lisbon, or something else. That is the uncertainty that business does not like to operate in.

We would like a much clearer commitment from the Government to a proper pro-European policy and to getting the very best for the country from our membership of the European Union. Of course there must be accountability and scrutiny. We will always be able to say, “That could have been done better,” or “Money could have been spent more wisely,” but that is the same at every level of government. We should be at the heart of Europe, fighting for our cause.

18:14

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

I am very supportive of the Prime Minister, who has changed the climate to make sure that we are going to have a proper debate about Europe for the next few years. I have a little lesson for Labour Members who might think it rather strange that we want to talk about Europe. In my constituency in the south-west, I am for ever being talked to about the whole issue of Europe. A lot of people come to see me on a regular basis, and they clearly perceive that Europe is now the bogeyman. We as politicians have to be seen to be taking some action, and the Prime Minister is certainly showing the way.

Britain’s role in Europe has been to maintain the balance of power within Europe—that has been our island story for the past 1,000 years. It has been very much about trading issues to do with imperial preference, the corn laws and so on. These issues come along every 100 years or so, and we need to react to them. The Conservative party has been having this debate because we are the party that represents the whole country and understands what people feel about such issues.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

Will the hon. Gentleman give way?

[Oliver Colvile]

I will not, I am afraid, because we have only a short time to speak.

In terms of trade, Britain has been far too dependent on Europe. It is very important that we have a relationship with Europe, but we need to do more about trade with other countries as well. This whole debate sparked off as it did because shortly before the Berlin wall came down Jacques Delors made a speech in which he made it very clear what the European vision was, and we did not agree with it.

The eurozone is having to go through a complete reappraisal of where it will end up. The countries in it are going to have to become closer. We are not part of the eurozone, and nor should we be. I very much welcome the job that the Foreign Secretary did when he was leader of the Conservative party. We in Britain must demonstrate that we are taking the lead in all this. We support a free market. The difference between us and Labour Members is that they have thought that it is a way of maintaining regulation sent down from Europe whereas we think that we can change the situation.

We must have an agenda that sets out what we want. I will set out my personal view; if the Prime Minister is listening, I would be very grateful if he took it on board. We need to bring UK fishing waters back under UK control. We need to make sure that we are able to negotiate back all the opt-outs that John Major was able to deliver during his time in office when he dealt with the Maastricht treaty. We must be able to control who is allowed to come into our country. We must be able to decide who should be charged and who should be prosecuted. That is how I want us to end up. If we can achieve that, we can do what Drake set out to do in the first place—a great Plymouth boy who went out and beat the Spanish armada. We have a real opportunity of securing a big victory for our country under the current Prime Minister.

18:14

[Alison Seabeck (Plymouth, Moor View) (Lab)]

It is a pleasure to follow my neighbour, the hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile), although we will disagree more than we agree.

The debate that we and the country are having on Europe is a healthy one, albeit one that it stems from an embattled Prime Minister trying to deal with his party members’ conflicting views. The public understand very well that this is really about political opportunism, and they will be watching this debate carefully as it unfolds—or, in the case of the Government, unravels. It is still not clear whether the Prime Minister personally wants Britain to be in or out of the EU. It is also not clear what that means for inward investment. Only this week, I attended an event here at the House of Commons with members of the financial services sector who gave a clear message that the current situation is not good for their sector. I am afraid that selective quoting by the Foreign Secretary hides a very genuine concern that people have about the referendum.

I do not often sympathise with the Foreign Minister of Poland, but in a recent speech he made a very cogent argument for Britain’s remaining in the EU. He pointed out the strength of our trade output to some of our EU partners.

The Prime Minister’s allusions to a possible exit have jeopardised our market position. Perhaps he should consider changing his catchphrase to, “We’re not in this together anymore.” Is he going to rely on the goodwill of significant trading partners in the EU, such as Ireland and Germany, for their continued trade with the UK if we find ourselves outside the single market? They certainly will not want to give us preferential rates. Why on earth should they?

It would be helpful to know exactly what the Prime Minister meant by some of the little snippets in his speech. What did he mean by

“pushing to exempt Europe’s smallest entrepreneurial companies from more EU Directives”?

How does that work when his Government have just supported the EU directive on defence and security that is designed to support small and medium-sized enterprises in the defence supply chain and ensure that there is a level playing field? That directive was opposed by the Conservative party in opposition. It has now had the sense to see that it works for business and is taking it forward.

The Government have a pick-and-mix attitude to Europe, but we do not know what they want to pick. Nothing in the Foreign Secretary’s speech today left us any the wiser. He did not explain why he wants us to leave the champions league and play in league two. We do know, as we heard from the hon. Member for Plymouth, Sutton and Devonport, some of the things that Government Members want to lose. However, they also want to lose protections that British families and workers enjoy: the entitlement to a safe workplace, paid leave and fair pay. That was highlighted well by my hon. Friend the Member for Birmingham, Erdington (Jack Dromey).

Everything that we have heard from Government Members is indicative of the uncertainty and lack of consistency that are the hallmarks of this Government. They are not clear whether we are staying or going; they are not clear about what exemptions they want; they are not clear about what powers they want repatriated—the list is endless. This Government will spend the next five years bickering and failing to get the UK economy back on track.

18:21

[Richard Drax (South Dorset) (Con)]

It is a privilege to follow the hon. Member for Plymouth, Moor View (Alison Seabeck). I do not agree with her views, but that is probably why we are on opposite sides of the Chamber.

I suspect that it will surprise a few Members in this place when I say that I love Europe. I love the languages, the culture, the history, the open roads, the mountains, the rivers, the wine—

[Neil Parish (Tiverton and Honiton) (Con)]

The women!

[Richard Drax]

Indeed, the women. However, I do not want to be ruled by Europe.

Why do we not admire the diversity of this great European space rather like a family? I am a father of four. I am not offering any advice on how to be a father —it would be far beyond me to do that. However, I have noted from my experience and that of my friends that if you let your children go, they come home, but if you cudgel them over the head and say, “Do this job, do that course,” they say, “Goodbye,” and you lose them. Why can we not do the same with Europe? One rule simply does not fit all. The evidence is there to be seen.

I warmly congratulate the Prime Minister on his speech. It is perhaps rare for me to say that, but I really do. He is a man of courage, standing up for our country, which is what we are all here to do. My battle cry during the election campaign was, “We want our country back.” That is not being a pessimistic, down-at-heart little Englander. It is being optimistic. It is looking to the future and doing what is best for our country. As my right hon. Friend the Member for Wokingham (Mr Redwood) said so eloquently, this debate is about democracy and freedom. I am delighted that we are at last talking about this bogeyman—this elephant in the room—that nobody has discussed until now. The fact that the Prime Minister has at last said that we will have a referendum in 2017 allows us to speak our minds.

From the Opposition Benches we heard words such as “uncertainty” and “clarity”, but we do not have certainty and clarity now, because Europe as we know it is dead; it is finished. I am sure all hon. Members are familiar with the “Dead Parrot” sketch from Monty Python. As it stands and as it is being progressed, the parrot—Europe—is dead. It is finished. For 17 years the doctor—the accountant—has injected all this medicine into the poor EU parrot: “Wake up, wake up!” Yet there it lies saying, “No. I am a corrupt dead parrot; I am a finished parrot.” The evidence is there to see. Opposition Members are shaking their heads—yes, the nightmare Member for South Dorset is standing up for his country. I am proud to be in the Chamber and to speak in this way, and I have 46 seconds left to speak up for my constituents and my country—our country.

As my right hon. Friend the Member for Wokingham said, this place has lost so much power. We were put here to stand up for our constituents and they say that they are worried about the way Europe is going. It is time to look at the issue and at whether we can renegotiate the powers. Again, we are asked, “What powers?” I say all powers—repatriate the lot so that this House becomes a sovereign Parliament once again and all hon. Members do the job that we were sent here to do.

18:25

[Mr William Bain (Glasgow North East) (Lab)]

It is 62 years since the treaty of Paris was adopted, and 57 years since the adoption of the first treaty of Rome. In that time we have seen peace among the great powers in Europe, a great boost to our growth and trade, and a greater sense of social unity between Europe’s peoples. That is now under threat because the Government no longer seem willing to make the case that pooling part of our sovereignty increases our collective economic strength within Europe, and that our influence in the world increases as a result.

The success of the European Union means that other countries such as Serbia and Turkey are queuing up to join, and the model of peaceful rules-based co-operation between nation states has been followed in Asia with the Association of Southeast Asian Nations, in Africa with the African Union, and in south America with Mercosur. We know from the views of the American Administration and the Government of China that our sense of and influence in the world is bound up with our full participation in the European Union, and we risk that at our peril.

Like my hon. Friend the Member for Sheffield Central (Paul Blomfield), my grandfather served during the first world war and my parents were children during the second world war when Europe was in the process of tearing itself apart.

[Mr Redwood]

Will the hon. Gentleman give way?

[Mr Bain]

Sadly I cannot because of time. For my generation, Europe stands stronger together with common rights at work, free movement for workers and a successful single market of 480 million with whom we trade more than 48% of our exports. On many issues, the common stance that we have adopted has added to our strength in the world. That is why, as a Scottish Member of Parliament, I am clear that we must remain part of the United Kingdom and through that play a crucial part in Europe. I am hugely concerned that the Scottish Government’s proposals to take Scotland out of the United Kingdom would impact on that strong link with Europe and lead to years of negotiations and uncertainty about our currency and central bank, and our inclusion in global trade agreements.

The EU is at an important crossroads and needs reform, not least of its economic policies. Through the fiscal pact to which 25 countries have signed up, we see southern Europe at risk of a generation of austerity. The tragedy of the Prime Minister’s leadership—as the ghost of Maastricht continues to stalk the Conservative Benches two decades after the ratification of that treaty—is that Britain is well placed to lead on major issues of reform such as reducing agricultural subsidies through the CAP, increasing Europe’s investment in science and innovation, and completing the single market in energy. Instead of prioritising those areas, the Prime Minister is throwing that opportunity away and trying to diminish the rights of workers within the single market to paid holidays, maternity and paternity leave, and safe conditions at work.

As the Government’s survey shows, if Britain is not part of the single market and if the rest of Europe completes it in our absence, our national income would be 7.4% lower—[Interruption.] The analysis, which Government Members can consult, was conducted by the Department for Business, Innovation and Skills.

The Prime Minister is placing his increasingly forlorn ambition of uniting his party above our national interests at the heart of Europe. It is the Opposition’s duty to make the positive case.

18:30

[Glyn Davies (Montgomeryshire) (Con)]

Thank you, Mr Deputy Speaker, for managing to squeeze me into this hugely important debate—this is one of the most important subjects that Parliament can debate, because at its heart is the question of who governs the country, and what power lies in Westminster and in Europe. No issue can be more important than that.

There are several reasons why the EU is going through a period of change, the first of which is the move towards political union by eurozone countries. When politicians considered entry to the eurozone, it was obvious to many of us that political union among eurozone countries was inevitable. I did not want to be a part of that and was opposed to joining. That inevitable process is now leading to great change in the EU.

Secondly, there is a challenge of competitiveness for the EU. There is great change and other countries in the world are moving forward. Unless the EU changes its internal processes, it will find that it is outflanked by many other countries.

The third pressure, which is perhaps the most important, is the democratic disconnect between the peoples of Europe and those who govern them. Unless we address that problem, we could have serious social problems.

I support the Prime Minister’s speech, which has greatly changed the narrative in the House and the country—I am not an Order Paper-waving enthusiast, but a realistic pragmatist, and the speech was hugely important to us. Before hon. Members make speeches in the Chamber, it is as well that they look back at the last speech they made on the subject. I spoke in the October 2011 debate, when a referendum motion was before the House. I opposed the motion quite strongly, for two reasons, and the Prime Minister addressed both in his speech.

My first reason was the need for clarity. In October 2011, I felt we were discussing a referendum when there was no clarity on the options that the public would be given. Some hon. Members spoke of a “preferendum”. The Prime Minister has now made the position clear: the choice will be between what the Prime Minister has renegotiated and withdrawal.

My second reason was that I needed to be certain that the Prime Minister—the leader of Britain’s political entity—was willing to withdraw if the people voted no. It would be unthinkable if he was unwilling to withdraw if the people voted no. It is pretty clear now that, should the people vote no, Britain will seriously consider withdrawal.

I shall conclude by repeating the words with which I finished my speech in October 2011:

“I believe that one day, following a serious negotiation, there will be a referendum on our relationship with the European Union, and that that referendum will ask a clear question enabling the public to say yes or no about our relationship with the European Union. I look forward to that day”.—[Official Report, 24 October 2011; Vol. 534, c. 115.]

Nothing in my position has changed.

18:33

[Andrea Leadsom (South Northamptonshire) (Con)]

I am delighted to speak last from the Back Benches in this debate. Who laughs last laughs longest, so I hope to have some influence on Britain’s EU reform. I feel hugely optimistic. The Prime Minister’s vision for Britain at the heart of a new globally competitive EU, and an EU that is both fair and democratically accountable, is music to my ears.

I find it astonishing that Opposition Front Benchers say that the Prime Minister’s speech causes rather than resolves uncertainty. They need to focus on the fact that the uncertainty over Britain’s future in the EU is the same as the uncertainty over the EU’s future. The eurozone has faced an unprecedented currency crisis and an existential crisis. While we have been worrying about jobs and growth, they have been worrying about the literal collapse of their currency and their eurozone union. Change is not just something that Britain would like to have and haggle over a bit here and there at the edges; change is essential across the whole of the EU, something already in evidence in the recent actions in the eurozone.

[Mr Redwood]

My hon. Friend has done an important study of EU powers. Did she find that the EU either now controls, or has substantial influence over, every part of Government?

[Andrea Leadsom]

My right hon. Friend makes a good point. Clearly, as part of a newly negotiated relationship with Brussels, it will be important for Britain to bring back significant powers. At the same time, the EU is set to change itself. It is already changing significantly, and changing in ways that already benefit Britain. Just one example is the eurozone’s decision to create a single regulator for eurozone financial institutions, and the recognition that in doing so there was the potential for member states to caucus against non-euro members. It has been agreed, at the request of Britain and other non-euro member states, to have a double majority, so that eurozone members cannot exclude non-euro countries from having a say in a vote. That is an important, game-changing precedent that points the way to a future for the European Union. There is a group of eurozone members that need to move towards a country called Europe where they underwrite one another’s debts and move to a federal united states of Europe. At the same time, there can be another very strong group of non-euro member countries that can find a different path. The Fresh Start project, which I was closely involved in establishing 18 months ago, has recently recommended a number of reforms. I hope that the Government will take close account of its recommendations.

[Ben Gummer]

Does my hon. Friend not agree that that does not necessarily preclude closer co-operation in some areas? For example, a single sex offenders register across the European Union is necessary to stop some of the outrages that some of us have seen in our constituencies. People have come in unchecked and have committed crimes.

[Andrea Leadsom]

I completely agree with my hon. Friend. It is essential that Britain co-operate fully with the EU on matters of crime and policing. I will come on to that, because it is one of the recommendations in the Fresh Start manifesto that Britain repatriate its competency in that area. In other words, Britain can envisage a scenario where we co-operate fully with the EU, but do not necessarily have to opt in to directives that cannot then be changed under qualified majority voting and are subject to European Court of Justice oversight. It is perfectly possible for Britain to repatriate crime and policing without having to give up its sovereignty in that area.

[Mr Robert Buckland (South Swindon) (Con)]

On that point, is it not important that, if we can get proper negotiation on proportionality, we can make the European arrest warrant work for serious crimes while avoiding the sorts of abuses about which we all have concerns ?

[Andrea Leadsom]

That is a very specific point. I advocate co-operation on the European arrest warrant, but not opting back into that specific directive.

I want to come on to the other proposals in the Fresh Start manifesto, which support the development of the EU. First, the repatriation of social and employment law is not, as Opposition Members would have us believe, to get rid of workers’ rights, but to say that national Parliaments are best placed to decide and should have the flexibility to amend legislation when it is in the interests of their countries to do so. Let us face it, there is up to 50% youth unemployment in places such as Spain and Greece. If ever they needed flexible labour laws, it is now.

There is a recommendation to have an emergency brake for financial services for all member states. The financial services industry is very important at EU level, and for Britain it is a key contributor to the Chancellor’s tax take. We need to defend it, but it is also essential for the entire EU. We want an emergency brake that enables any member state to defend itself against unfavourable interventions. The final proposal is for a legal safeguard for the single market.

Those are some of the proposals from the Fresh Start project. I hope that the Front-Bench team will be listening carefully and taking up some of our ideas.

18:39

[Emma Reynolds (Wolverhampton North East) (Lab)]

We have heard some excellent contributions to this debate.

Former French President Charles de Gaulle famously asked how it was possible to govern a country with 246 types of cheese. The same could be said of the Conservative party on the EU. As my hon. Friends the Members for North Durham (Mr Jones) and for Plymouth, Moor View (Alison Seabeck) stressed, the timing and the content of the Prime Minister’s speech last week were clearly motivated by an attempt to manage his party, rather than to serve the national interest. His speech was both a delaying tactic and a diversionary tactic designed to kick the can of a Tory split over Europe down the road and to divert attention from the Government’s ongoing economic failure.

When the Prime Minister set the original date for his much delayed EU speech, there was a failure to notice the clash with the anniversary of the Élysée treaty, but it was clear that the speech was deliberately timed to divert attention from last Friday’s GDP figures, which were, as expected, disappointing. [Interruption.] Government Members may laugh, but the situation is serious in my constituency and throughout the country. We were told last week that our economy contracted in the last quarter of 2012, but today, instead of discussing the possibility of the economy slipping into a triple-dip recession, we are talking about Europe.

The Prime Minister’s policy last week was to buy himself some time, keep his party quiet and stem the tide of rumours of leadership challenges. Unfortunately for the Prime Minister, it would appear that the hon. Member for Windsor (Adam Afriyie) and several other Back Benchers did not get the memo. This week’s leadership rumours show that behind the paper-thin veneer of unity afforded by last week’s speech, the Conservatives remain a deeply divided party. Today’s debate has shown that, too.

There are many factions in the Conservative party over the EU. There are those who want us to leave no matter what, although I am slightly confused by the position of the hon. Member for Stone (Mr Cash)—I would have put him in that group, but now I do not know whether he is a Camembert or a Roquefort. Another faction is led by the Fresh Starters.

[Mr Cash]

Would the hon. Lady recognise that some of us seek to address this question in the context of the national interest? When she speaks about GDP, does she recognise that the challenges to GDP in this country are largely driven by the lack of growth in the eurozone? We run a deficit with the EU member states of £47 billion a year.

[Emma Reynolds]

Germany’s EU membership has not prevented its economy from growing more than 4% in the past two years, nor has France’s membership prevented its economy from growing by more than 1.5%.

I return to the divisions in the Conservative party. There are different factions with different shopping lists. There is an interesting faction that actually quite likes the status quo, but will not admit it, and various Members—not least the Minister for Europe—who are pro-Europeans, but would never call themselves that. I will not name any others, because I might get them in trouble with their local Conservative associations, but it is clear that the gap between what the Prime Minister’s party is demanding and what he can renegotiate with our European partners is unbridgeable.

The Prime Minister’s announcement of an in/out referendum in four years—on an arbitrary time scale, an unknown set of demands and an unknown outcome—will create economic uncertainty. Many of my hon. Friends have made that point. Many business leaders are concerned about the UK drifting towards an exit. A leading group of business leaders warned that to call for a wholesale renegotiation would

“put our membership of the EU at risk”

and cause

“damaging uncertainty for British business”.

Interestingly, back in November 2011, the Chancellor, when talking about a slightly different referendum, said:

“The instability and the uncertainty that hangs over the Scottish economy”

is the result of the First Minister

“raising the prospects of independence without actually providing any detail of when he wants to have his referendum or what the question will be.”

It seems curious that the Prime Minister and the Chancellor cannot see that there is a direct parallel with their commitment to a referendum on Europe.

[Mark Reckless (Rochester and Strood) (Con)]

Conservative Members are all united behind allowing the people to decide. The hon. Lady says that there is uncertainty about a referendum, but the uncertainty is: what is Labour’s position on whether the British people will ever have a referendum?

[Emma Reynolds]

We have been clear and consistent about our position. I was in the Division Lobby with each of the right hon. Gentlemen who are sitting on the Treasury Bench, voting against a referendum on our membership in October 2011. We are not the ones who have changed our position; they are the ones who have changed theirs.

The Government’s commitment to a referendum also weakens the UK’s negotiating position with the rest of the EU. Opposition Members would like meaningful reform of the European Union, but we do not do that by blackmailing our European partners. Although my right hon. Friend the shadow Foreign Secretary has been specific about what kind of EU reform he would like, the same cannot be said of the Prime Minister’s speech last week, which gave very little detail about which powers he wanted to repatriate. Indeed, he did not even mention the word “repatriation”—much to the disgust, I am sure, of his Back Benchers—and he was also unclear about how he would campaign if he was not successful in that negotiation. When the Minister winds up, it would be useful for the rest of the House and the country if he put an end to that obscurity and told us which powers the Conservatives are attempting to bring back. What is their strategy, if they have one, and why are they so sure that the timing, in 2017, chimes with any sort of timing in the European Union? Chancellor Merkel has gone very lukewarm on the possibility of treaty change. It is not clear that we will have any treaty change between now and 2017.

[Mr Redwood]

Why did the Labour party in office give away a lot of our rebate, which a Conservative Prime Minister had negotiated, and then get no agricultural reform, which it had promised?

[Emma Reynolds]

I correct the right hon. Gentleman: he may have longer experience than I do, but I can tell him that there was significant reform of the common agricultural policy, and we put our contribution, for the first time in our history, on a par with the French contribution.

Labour’s agenda for the EU is reform, not exit. We believe it is in our vital national interest that the UK remains a full member of the EU, arguing and pushing for reform from the inside. In a global economy dominated by economic giants—the US, China, India and Brazil—it would be economic madness to shrink our domestic market from 500 million people to 60 million people. The EU is the biggest collective negotiating tool when negotiating trade deals with those emerging economies. At a time when the economy is flatlining, the Prime Minister’s attempt to unite his party might prove incredibly damaging. [Interruption.] I hope that it is not, but those are the warnings that we are getting on jobs, trade and inward investment in the years to come. That is indeed regrettable.

18:48

[The Minister for Europe (Mr David Lidington)]

I am grateful for the opportunity to reply, only briefly, to the 37 right hon. and hon. Back-Bench Members on both sides of the House who have spoken, in addition to the two Front Benchers. Beneath all the knockabout and the genuinely strong views that we have heard on the different sides of the debate, there has been a common recognition that the European Union is changing already and is likely to have to change further, as a consequence of three inexorable trends that are affecting how it operates.

My hon. Friends the Members for Croydon South (Richard Ottaway) and for South Northamptonshire (Andrea Leadsom) and the hon. Member for Preston (Mark Hendrick) emphasised how the dynamic inherent in the single currency union is pushing its members towards closer fiscal and economic integration and that, over time, that will require further political integration to make those fiscal and economic decisions democratically accountable. They suggested that that, in turn, would mean that at some stage in the next few years, all members of the European Union would have to sit down and have what my hon. Friend the Member for Camborne and Redruth (George Eustice) called a grown-up conversation about how we can get right the political and institutional architecture to make the European Union work with different levels of integration, with some countries having committed themselves to much closer, deeper integration on some aspects of policy than others, but with those others still remaining full participants in the EU.

As my hon. Friends the Members for Mid Norfolk (George Freeman) and for Macclesfield (David Rutley) pointed out, Europe is having to contend with the dramatic rise of the emerging economies. Therefore, Europe as a whole—as well as the individual countries—needs to raise its game quickly. Otherwise, the blunt truth is that none of us will be able to afford either the material standards of living or the social protection that current generations in Europe have come to take for granted. That does not mean sweeping away all social protection, however.

If the hon. Member for Sheffield Central (Paul Blomfield) and other hon. Members who raised that scare story look at European debates on the working time directive, the pregnant workers directive or the posted workers directive, they will find that the United Kingdom is far from being the only member state that questions whether we need a one-size-fits-all policy, or whether the Commission or the Parliament need to be quite so prescriptive in trying to harmonise different systems that are based on national traditions, laws and practices in relation to employment protection and social benefits.

Given the need to respond to the global economic challenge, Europe as a whole needs to focus on the further deepening of the single market. We have already accomplished a great deal in terms of goods, but the single market in services is woefully underdeveloped. It is profoundly in the interest of the United Kingdom and of Europe as a whole that we should be successful in promoting those reforms further.

It is also essential that the United Kingdom should work energetically within the European Union, as the Government are doing, to promote greater free trade between Europe and other countries around the world. During the lifetime of this Government, we have achieved free trade agreements with Singapore and South Korea, and there is now an ambition to obtain an historic free trade agreement with the United States that would in effect set global regulatory standards, as well as sweeping away tariffs and non-tariff barriers. That objective is among the top priorities of our Prime Minister and of the German Chancellor, as well as of other leaders around the European Union.

We need a practice and a culture of legislation and regulation at European level, as at national level, that seek always to reduce the burden that such law and regulation impose on the flexibility of our businesses, particularly small and medium-sized enterprises. In answer to the hon. Member for Plymouth, Moor View (Alison Seabeck), I would say that the plan to extend the deregulatory exemption for the smallest business is not some plot dreamt up in the nether recesses of Conservative central office. It is a policy objective that has been endorsed by the European Council on more than one occasion and that is supported by the Heads of State and Heads of Government of all 27 member states—conservative, liberal and socialist alike. I hope that, on reflection, she will welcome what is happening in that regard.

The third driver for change is the need to strengthen democratic accountability. As I would have expected, much has been said in the debate today about the United Kingdom’s desire for a greater role for national Parliaments in how decisions are taken at European level. My right hon. Friend the Foreign Secretary has pointed out that discontent with the current state of Europe manifested itself in the voting in the French presidential election. If we look at countries such as Hungary and Greece, we can see manifestations of an ugly strand of European politics that we hoped had been defeated for good at the end of the second world war. Those undemocratic populist movements are exploiting genuine grievances against, among other things, the way in which decisions appear to be taken over the heads of ordinary people. It would be to the disadvantage of the European Union as a whole and of democratic traditions and values in Europe if they were not dealt with.

[Mr Cash]

Would my right hon. Friend care to take this opportunity to repudiate the statement in the Barroso blueprint that the EU Parliament and only the European Parliament is the Parliament for the European Union?

[Mr Lidington]

I do not agree with that statement. The European Parliament has a role that is set down in the treaties, but if giving extra powers to the European Parliament were the answer to discontent over the democratic deficit, the transfer of those additional powers in successive treaties over the past 15 or 20 years would have remedied the problem. It clearly has not, and it is not just in the United Kingdom where politicians are starting to think about how to involve national Parliaments more in European business than they have been in the past. Europe is changing and needs to change further.

[Michael Connarty]

Will the Minister give way?

[Mr Lidington]

No, if the hon. Gentleman will forgive me.

The Government are not waiting until 2015. I agree with most of what my hon. Friend the Member for Stroud (Neil Carmichael) said about how the coalition is working to shape change at European level in a way that benefits the prosperity and security of people in the United Kingdom.

Hon. Members on all sides have emphasised the importance of Europe for trade and investment in this country—a point made powerfully by my hon. Friend the Member for South West Bedfordshire (Andrew Selous). Our membership of the single market makes it easier for United Kingdom companies to sell goods and services to the rest of Europe without tariffs, without port checks and with common or mutually recognised standards applying. That point was put to me very clearly by Scottish business leaders when I met them in Edinburgh earlier this week. Our location in the single market makes us a more attractive destination than we might otherwise be for foreign direct investment, with the UK still getting a larger share of that than any other member of the European Union.

It is true, as many hon. Members have said, that we need to do far more to step up our trade with the emerging economies of Asia and Latin America. Frankly, if the UK could match the success of Germany on that count, our economic performance would benefit significantly. We still sell more to one German land—North Rhine-Westphalia—than we do to the whole of India, so I do not see a strong economic partnership with the European Union and vigorous initiatives to promote trade and investment with the emerging economies as somehow alternatives. It is in the interest of people in the United Kingdom that we are successful in doing both.

In the various contributions to the debate from Labour Members, there have been two chief criticisms of the way in which the Prime Minister spoke last week. The hon. Members for Sunderland Central (Julie Elliott) and for Sedgefield (Phil Wilson) and particularly the hon. Member for Birmingham, Erdington (Jack Dromey) denounced the idea of having a referendum on the grounds that it would cause uncertainty and drive away investment. As my right hon. Friend the Prime Minister said last week, the

“question mark over Britain’s place in the European Union…is already there and ignoring it won’t make it go away.”

He said that people who refused to think about “consulting the British people” were making it “more likely” that the whole population would become increasingly discontented with the European Union and more likely to vote to leave it when the choice was finally put to them, as one day it will be. He said he did not wish them to take that decision.

What is ironic is that the criticisms from the other side ignore the fact that, as their own spokesmen have been at pains to say, although they will not express support for a referendum now, they might change their policy and advocate a referendum within the next two years—despite the fact that their own supporters are saying that that would create enormous business uncertainty. I do not think anything could demonstrate more clearly than that contradiction the incoherence of the Labour party’s position.

I am confident, on the basis of the work that the Government have already done, that we will be successful in reforming the European Union to enhance the prosperity and security of the people of this country, and I support the approach laid out by the Prime Minister last week.

Question put and agreed to.

Resolved,

That this House has considered the matter of Europe.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

On a point of order, Mr Deputy Speaker. You will recall that yesterday, during Treasury questions, the Chancellor was rebuked by Mr. Speaker for claiming that my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Chief Secretary, was not “being completely straight” when she drew attention to figures published by the Office for Budget Responsibility showing that

“in the first three years this Government are spending £12.8 billion less”

on capital projects

“than the plans that they inherited.”—[Official Report, 29 January 2013; Vol. 557, c. 770.]

Now that it is clear that the Government have not matched the plans that Labour had for infrastructure investment—according to the Channel 4 News FactCheck verdict, the latest figures from the Office for National Statistics show that the Chancellor’s claim to have spent more on infrastructure than Labour had planned to spend was wrong—have you been given any notice that the Chancellor is available to come to the House this evening to apologise again for getting his facts completely incorrect?

[Mr Deputy Speaker (Mr Nigel Evans)]

I have been given no notification that the Chancellor or, indeed, any other Minister will make a statement from the Dispatch Box this evening, but if the position changes, the House will of course be notified in the usual manner.

Business without Debate

Wednesday 30th January 2013 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Immigration

That the draft Immigration and Nationality (Fees) (Amendment) Order 2013, which was laid before this House on 19 December 2012, be approved.—(Mr Syms.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Council Tax

That the draft Local Authorities (Conduct of Referendums) (Council Tax Increases) (England) (Amendment) Regulations 2013, which were laid before this House on 8 January, be approved.—(Mr Syms.)

Question agreed to.

European Pig Industry

Wednesday 30th January 2013 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Syms.)

19:01

[Mr Richard Bacon (South Norfolk) (Con)]

It is an enormous pleasure, especially following our debate on Europe, to speak in an attempt to protect the British pig, a noble beast, from the depredations of the European Union.

On 1 January this year, a European directive, Council Directive 2008/120/EC, came into force throughout the EU. It lays down minimum standards and requirements for the welfare of pigs, and, most notably, outlaws the use of systems, known as stalls, which in fact confine sows in individual metal stalls. It was originally passed in 2001, and in this respect—as in so many areas of animal health and welfare—the United Kingdom has been in the vanguard.

The Minister is a former pig farmer, as is his predecessor, my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice), who is also present this evening. I only wish that I too had been a pig farmer: I should have liked that very much. My right hon. Friend and the Minister will know—as, indeed, will many other Members—that Parliament placed a complete ban on sow stalls in 1999, and that the United Kingdom had already achieved full compliance with the directive when it came into force this year. Unfortunately, however, that is not true of all member states.

In June 2012, the European Commission reported that 18 of the 27 member states expected to meet the January 2013 deadline for full compliance with the directive. Despite assurances given to the Commission, however, figures leaked from the Standing Committee on the Food Chain and Animal Health in December 2012 showed that 80% of member states were expected to fail to comply with the ban.

[Neil Parish (Tiverton and Honiton) (Con)]

I welcome the debate, because I want to draw attention to a difficulty affecting Europe’s enforcement of the directive. One of the problems with EU legislation is that it is only when it has actually become law that the European Commission can take action. It should be able to take action before the event: that would enable the practice of keeping pigs in stalls to be stopped in Denmark and in all member states.

[Mr Bacon]

My hon. Friend is absolutely right. In this country, once the rules come into force on a given date—1 January 2013, in this instance—that should be it. There is a huge difference between our approach to the law, what we do with it and how we obey it, and the approach of many countries on the continent, where law and the making of law are more of an aspiration than a statement of what is and how things should be. I do not want to dwell on that point too much, because it is outside the terms of the debate, but I think that it highlights one of the fundamental differences between us and many European countries, which makes the melding of our countries—should we wish it, which we do not—almost impossible.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on bringing this very important issue before the House. My constituency used to have 30 pig producers, but we now have just one, although it is a large one. The problem has been that we in the UK have religiously followed the regulations, to the detriment of local pig farmers. Does the hon. Gentleman agree that the supermarket chains should give a commitment to sourcing pork from local farmers, rather than buying from across the rest of Europe?

[Mr Bacon]

Yes, that is important, and the evidence is that where supermarkets—such as Waitrose and Morrisons —have made such a commitment, it has had very favourable consequences and customers like it.

As a result of 80% of EU member states not being expected to meet the deadline, many illegal farms are likely to operate well into 2013. Only five nations—the United Kingdom, Austria, Estonia, Luxembourg and Sweden—achieved full compliance with the directive by the 1 January 2013 deadline.

As the Minister will know, at the Council of Ministers meeting on Monday of this week, fresh figures on the extent of compliance with the directive were provided. The latest data from Agra Facts revealed that an additional five member states—Bulgaria, Latvia, Lithuania, Slovakia and Romania—are now fully compliant, taking the total number of compliant countries to 10. It is interesting that some countries that might have faced more difficulties and that are less economically developed have been able to achieve full compliance, while other countries, such as France and Germany, have not. That speaks volumes about why compliance has not been achieved. The reality is that it has not been achieved because it was not in those countries’ interests to achieve compliance, as they can get more profit by flouting the law, and they have done that up to, and beyond, the last possible moment.

Many of these countries export to the UK in significant volumes, including Denmark, the Netherlands and the EU’s largest pork producer, Germany. To take Germany as an example, one quarter of the EU’s pigmeat—some 5.6 million tonnes—is produced by German pig farmers. Recent Eurostat figures show that Germany has 27.4 million pigs, over six times the number of pigs in the UK, and 18.5% of the overall EU pig herd. The website for German Meat, the joint export promotion organisation of the German meat industry, proudly proclaims:

“The production of pork has a long tradition in Germany. Production methods and structures today are of a high standard and undergo constant further development in terms of animal genetics, animal health, production technology and hygiene.”

However, the December 2012 figures for compliance show that fewer than half of Germany’s pig farmers—just 48%—had achieved full compliance with the directive. That figure now stands at 73%—so still more than a quarter are not compliant—and both figures place Germany at 24th place out of 27 member states in terms of the percentage of pig farms in full compliance.

In December, four member states had compliance rates of below 50%: Germany, Portugal, Belgium and France. Together, they produced 49.7 million tonnes of pork and pigmeat. By contrast, the five countries that were fully compliant by December 2012 produced 9.4 million tonnes. These figures help to illustrate the scale of the challenge. Europe is awash with cheap pork produced illegally, forcing down the price of pork and other pig products and adding yet more pressure on Britain’s already hard-pressed pig farmers, who are complying with the law, unlike many of their major competitors.

[Sir James Paice (South East Cambridgeshire) (Con)]

I, too, congratulate my hon. Friend on raising this hugely important issue for our pig industry. May I caution him about the use of the word “compliance”, however? We are talking here about compliance with the EU directive, but that directive does not meet the standards on our statute book in this country. The EU directive allows farmers in other member states to continue to keep sows in stalls for, I think, the first 21 days, while they are being served —or mated—for the future. Therefore, every other farm in Europe is entitled to have some sow stalls on their farm for that reason, but they are completely banned in our country, so even European farmers who are in compliance with the regulation are not necessarily keeping their pigs to the high standards we uphold in this country.

[Mr Bacon]

I am very grateful to my right hon. Friend, who has probably forgotten more about this subject than I will ever know, for pointing that out. In a way, that makes my point even more strongly: even though the word “compliance” must be treated with care, such farmers are not able to reach even that lower standard, which shows how much further there is to go.

Of course, in this country we do have farrowing crates for sows that are giving birth, which I support. That is the safest and best method. I have been in pig houses and watched the process, and it is the right thing to do. The British Pig Executive is sponsoring research into other methods, but at the moment that is the best technology we have, and I support it.

The problem, however, is that, of the top 10 pigmeat-producing nations in the EU in terms of production tonnage, only Romania and the UK are fully compliant, and they are ninth and tenth respectively. The top eight countries, by volume of meat produced, are non-compliant. They include Germany, with 6 million tonnes; Spain, with 3.5 million tonnes; France, with just under 2 million tonnes; and Poland, with 1.8 million tonnes. The vast majority of the big producers are not compliant. In other words, the biggest pork producers are those who have made the least effort to comply with the law and who have benefited accordingly from lower costs. This is more than a question of fairness or a matter of principle. Poor harvests last year have resulted in very high feed costs. That is fine for wheat farmers, but for pig farmers, who rely on buying feed, it is not fine at all, and means that many farmers are under great financial pressure.

If illegal farms either complied with the law, as they should, or stopped producing pork altogether, that would tighten the supply chain and lift pork prices, creating a much brighter future for those who have made substantial investments in making sure the pork they produce is legal. It now falls to the European Commission to work with member states to enforce the protection of pigs directive. However, the Commission’s attempts to enforce it are already going awry. An inadvertent and unofficial derogation has already been granted to Ireland and France, after the European Commission gave them an extension to the deadline for applying for funding for pig farmers who have yet to convert their pig houses. Ireland has until September 2013 to access the funds. In the case of France, a quarter of French pig farmers remain non-compliant.

Together, Ireland and France account for 2.25 million tonnes, or just over 10%, of EU pork production. Interestingly, that is more than the total combined production of the 10 member states that are fully compliant, which between them manage only 2.23 million tonnes, or 9.97%, of EU pork production. Ideally, the money should be withheld until the French and Irish farmers expecting these funds can prove that any illegal sow houses have been empty since new year’s eve, although I recognise that in practice that would be very difficult to achieve.

However, there are three things the Government can do now that would make a real difference to British pig farmers and help to stop illegal pigmeat entering the UK. First, effective enforcement of the directive must begin at home. The Government must ensure absolute clarity in their own buying standards for pork and other pigmeat products. This affects purchasing for schools, the NHS, the armed forces, local government canteens and every other public sector body. By now, every tier of government, from Whitehall to the town hall, should be making sure they are not buying meat that has been produced illegally, and that they know they are not. The Government need to make sure that people in the public sector are aware of this obligation.

However, it is not enough for Government buyers simply to rely on suppliers’ assurances of compliance. The Government must show leadership by making certain that all their suppliers operate a traceable supply chain that procures pork and pigmeat from legally compliant sources. The Minister will recall that at the pig industry summit which I hosted in November, he undertook to write to Government Departments reminding them of their obligations. I look forward to receiving an update from him on this matter and hearing more about what the Government are doing in this area.

Secondly, retailers and food service companies, having been shown leadership by the Government in the way I suggest, should be strongly encouraged to adopt full traceability, so that any pigmeat products they sell are guaranteed to come from legal sources. Such companies should then be expected to have fully transparent systems in place to guarantee that to their customers. The need for full and open traceability has been aptly demonstrated by the recent detection of horse DNA in beefburgers. That discovery not only inspired the largest accumulation of equine puns known to mankind, but illustrated the importance of a fully transparent supply chain.

Tesco chief executive, Philip Clarke, wrote the following in his “Talking Shop” blog:

“We expect our suppliers to deliver to a standard, and to meet basic food traceability rules. But our customers shop with Tesco, not our suppliers, so you won’t find us hiding behind suppliers. It’s our job to ensure they are meeting our high standards.”

I commend Tesco for its speed in reassuring customers and withdrawing suspect products from sale, but the key lesson to take from the scandal is that food traceability rules need to be strengthened significantly. Retailers, processors and food manufacturers know that improved traceability is difficult, but they also know that it is possible. They need to be pressed for commitments to guarantee traceability that extend to branded products such as Wall’s, as much as to supermarkets’ own brands. Claiming either to have assurances from a supplier or to have no control over branded products can no longer be regarded as sufficient.

I am indebted to the National Pig Association for sharing with me an encouraging letter from Mr Martyn Jones, corporate services director for the supermarket Morrisons, to NPA chairman Richard Longthorp. The letter stated that Morrisons’

“commitment to the integrity and transparency of our offer remains paramount. For the pork and pork products we are importing from the EU, we have been clear to suppliers of both branded and tertiary products that this must meet the requirements of the new pig welfare directive”.

I very much welcome Morrisons’ commitment to the transparency of the supply chain. Every company within a supply chain should have sourcing policies that can prove beyond doubt that the pork they are using or selling was legally produced. I am sure that the Minister will join me in encouraging other retailers to follow Morrisons’ example. I would welcome his comments on how that might be achieved.

Finally, what must be avoided at all costs is a further protracted period before 100% compliance across the EU is finally achieved. The European Commission has a responsibility in that regard; it can and should be demanding to see deliverable action plans from non-compliant countries. In the meantime, we should stop illegal pork and pork products from entering the country. Non-compliant nations must be pressed for specific guarantees on when they intend to reach full compliance, rather than some vague promise to be delivered by some indeterminate date. To encourage them, we should refuse to allow illegally produced meat to enter the United Kingdom.

Member states have had more than a decade to move towards full compliance with the directive, so there are no excuses. We used to have to say that British farmers faced unfair competition from imported meat that was produced overseas using methods that would be illegal in the UK. Now, British pig farmers face unfair competition from imported meat produced overseas using methods that are illegal overseas, too—we cannot accept that. We must bear in mind what happened in the poultry industry. It had a far greater number of regulations, agreements and testing regimes than the pig industry to help enforce the directive on the welfare of laying hens. Nevertheless, a year on from the original January 2012 deadline, an estimated 5% of Europe’s egg production still comes from chickens in conventional battery cages.

The British pig industry receives no subsidies—pig farmers live and die by the market—yet farmers across Europe who are in full compliance with their obligations are being undercut by illegally produced pork and pigmeat. Above all, what pig farmers across the UK want, and indeed what compliant pig farmers across the continent want, is a level playing field. Those nations edging towards full compliance have the largest number of pigs in the EU and they have also had more than a decade to get their house in order.

Of course, I would ideally wish to see British pork as the first and only choice for consumers, retailers, the Government and the whole public sector. But right now what matters most is preventing British pig farmers from being continually undercut by illegal pig products that should not be on the shelves at all and should not be in this country at all. The UK’s pig farmers have had to put up with an unfair market for 13 years, and that is far too long. The law is now finally on their side, and I expect the Government to ensure that the law is enforced.

19:19

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)]

I congratulate the hon. Member for South Norfolk (Mr Bacon) on securing this important debate. He described me as a pig farmer, but I ought to say that that slightly overstates the case. I had four pedigree Tamworth sows. I do not think that quite constitutes a farm. It does mean, however, that I have farrowed a pig and got my hands dirty, so perhaps I have some affinity with the industry.

The provisions in the EU pig welfare directive, which bans the use of sow stalls from 1 January, represent a significant welfare advance across the EU. It has been a long time coming. As my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice) said, although it does not level the playing field entirely, as European pig producers, unlike UK producers, will still be allowed to keep sows in close-confinement stalls for the first four weeks after service, it means that when all member states achieve full compliance there will be far greater parity for UK producers—provided that we have that full compliance. The hon. Member for South Norfolk probably knows the old saying, “Dogs look up to you, cats look down on you, but pigs is equal.” UK pigs are not quite equal at the moment and that is what we need to achieve.

It is very disappointing that so many member states were not fully compliant with the sow stall ban on 1 January, particularly as it is the second of Europe’s flagship animal welfare measures on which there has been large-scale non-compliance across Europe. The first, as the hon. Gentleman said, was the ban on the keeping of hens in conventional battery cages, which came into force in January 2012.

The UK pig industry is understandably extremely concerned that non-compliance across Europe will continue to disadvantage UK producers who went through the process of investing heavily in converting to group housing systems to comply with the UK’s unilateral sow stall ban in 1999. I assure hon. Members that I recognise and share the industry’s concern about non-compliance. We have been working very closely with it over the last year and it is extremely frustrating that we have been unable to achieve compliance across the EU on a ban that was agreed almost 12 years ago.

I also recognise that non-compliance is a huge challenge for the Commission and some other member states. We are continuing to work to ensure that the ban is fully and effectively implemented across the European Union as quickly as possible. That is essential to avoid damaging compliant businesses and to demonstrate that the EU can deliver agreed long-term policy.

As the hon. Member for South Norfolk shared with the House, the Commission reported at the Council of Ministers on Monday that 17 member states are not compliant with the sow stall ban. The figures are changing rapidly, but as at mid-January 10 member states were more than 90% compliant, three were less than 90% compliant and four were less than 75% compliant, so there is certainly an issue. As the hon. Member for Tiverton and Honiton (Neil Parish) said, the problem is—we should stress this—that the Commission could not take any action until the ban was in force. So we are starting from where we are now.

At the Council of Ministers on Monday, Commissioner Borg demanded that member states provide regular updates of progress with implementation. That goes quite a long way towards what the hon. Member for South Norfolk was saying about a clear map of progress towards full implementation. Commissioner Borg urged member states to apply dissuasive sanctions to non-compliant producers and we will have to wait and see what exactly they comprise. Most importantly, he said that he will commence formal infraction proceedings against non-compliant member states at the end of February. That is quite quick action on the part of the Commission compared with what sometimes happens.

The Commission has held two stakeholder meetings to discuss compliance and enforcement, the most recent this Monday. Commission officials remarked on the rate of progress with compliance in the last couple of months and put the onus squarely on the competent authorities in member states to take tough action against non-compliant producers.

What are the Government doing? We are using every opportunity to press the Commission to take a firm stand, as the priority must be to protect producers across the whole EU from illegal production. My right hon. Friend the Secretary of State and I met Commissioner Borg on 17 January and raised our concerns about non-compliance. At the Council of Ministers on Monday, the Secretary of State led a call for the Commission to pursue a level playing field vigorously, so that compliant producers are not disadvantaged by inaction elsewhere in Europe.

I will be clear: enforcement on imported pigmeat is challenging. There are no marketing rules to prevent imports from non-compliant systems. The Government thoroughly investigated the possibility of taking unilateral action and bringing in a UK import ban on egg and egg products at the end of 2011—I suspect that my right hon. Friend the Member for South East Cambridgeshire has some recollection of that—because at that time it was clear that many member states would not be compliant with the conventional cage ban. It was not a realistic option for eggs, however, and I fear it is not an option for pork and pork products either, because of the legal and financial implications of introducing such a ban and the practical difficulties of enforcing it. The Commission has repeatedly made it clear that it will not allow member states to impose unilateral trade restrictions for welfare reasons, so we have to rely heavily on the competent authority in each member state to take responsibility for ensuring that their producers comply with the directive.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

Does the Minister agree that retailers and supermarkets have a huge responsibility? We have seen in the past two weeks that when they want to clean up their supply chain quickly, they can do it. Why can they not do the same for pigmeat and eggs?

[Mr Heath]

I agree, and I was coming to that point.

The UK relies heavily on imports, being only 40% self-sufficient in pigmeat and 20% self-sufficient in bacon. Denmark and the Netherlands are the largest suppliers of pigmeat to the UK; both countries are more than 90% compliant and are already taking tough action against non-compliant producers. I have spoken to the Danes and the Dutch and I believe that they are serious about reaching full compliance, so the major importers to the UK will come into compliance.

[Mr Bacon]

I was disappointed but not surprised by what the Minister said about competent authorities. I take his point about the Danes, but of course the reason the pig herd here is now so much smaller than it was is precisely that other countries were not enforcing the rules because they did not have to. Does he not understand the broader point, which is that if the competent authorities on whom he says we must rely were competent, we would not be in this mess?

[Mr Heath]

The hon. Gentleman is absolutely right—I do not disagree with him at all on that point. That is why we must make sure that if those authorities are not prepared to be competent, somebody must make them competent—in effect, the Commission by taking infraction proceedings. I think that is the right approach.

To answer the hon. Member for Banff and Buchan (Dr Whiteford), an essential part of our enforcement approach is to ensure that retailers, processors, food manufacturers and the food service industry have stringent traceability in place to ensure that they source pigmeat only from compliant production systems in other member states. In October last year, I met representatives of the whole pig supply chain and they assured me that they will use their best endeavours to source from compliant systems. There is clearly a significant reputational issue here for individual companies and trade associations. I followed that up by writing to the major pork product manufacturers to seek their individual assurances on traceability, and I will have a further meeting with the supply chain to take stock on 6 February. Let me make it absolutely clear: the major retailers in the UK have promised me that they will not sell illegally produced pork products. In some cases, that will be difficult to implement—I know that—but I will hold them to that promise.

We agree with the broad thrust of the request to ensure that the Government buy pork and pork products that comply with the new directive which came into force this year, and I have been taking action, as the hon. Member for South Norfolk says. I hope he accepts that, although it is complicated, we are making progress. I will of course report back to him on progress in due course. The Government buying standards are mandatory for central Government Departments and voluntary for the wider public sector—hospitals, for example. If we can get this built in, we will have made a significant contribution to ensuring that we do not buy from non-compliant sources.

This is a timely debate and an important one for pig producers around the country. I want to make it clear on behalf of the Government that we are doing everything we can to ensure that member states that are not compliant are made to be compliant. The weapon that we have at our disposal is the pressure we are able to apply on the Commission, but to be fair to the Commission, it is equally adamant that it wants full compliance from member states and it is prepared to back that up. We need to deal with the use of non-compliant meat products in this country, and we have assurances from retailers and others that they will not use such products. We also need to make the general public aware that this is an issue. If they value the welfare standards that we have in this country, they should follow that action with their purchasing.

I am grateful to the hon. Gentleman for securing the debate. I hope what I have said demonstrates how seriously Ministers and the Department view the issue. We need to protect UK pig producers. That is paramount and we will continue to do all we can to ensure swift compliance across Europe.

Question put and agreed to.

19:30

House adjourned.