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.
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.
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.
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.
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 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.
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
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—
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?
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.
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
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.
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.
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.
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.
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.
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.
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.
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?
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.
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.
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 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.
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.
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?
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 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.
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.