EU Council

Baroness Royall of Blaisdon Excerpts

Monday 2nd July 2012 Lords Chamber

[Baroness Royall of Blaisdon]

My Lords, I thank the Leader of the House for repeating the Statement by the Prime Minister on the outcome of the European Council meeting.

On the tragic news from Afghanistan, all our thoughts are with the families and friends of the soldiers concerned. This news reminds us once again of the risks our troops face daily and of our duty to do everything we can to protect them.

The Prime Minister in the other place included in his Statement on Europe a statement on banking. Leaving aside the admirable vote of confidence in his Chancellor, who is following the Prime Minister's Statement with his own Statement on banking, we on these Benches believe that it is right that the Prime Minister has reconsidered the position that he set out last week on the need for a full inquiry. However, we are not convinced that the way forward on this issue is the Joint Committee that he is proposing. It does not suggest that the Government have grasped the scale of the problem. We know that politicians investigating bankers will not convince the people of this country; nor is it the way we can build the consensus that is needed for real change. After all, there have already been a number of Select Committee reports into the banking crisis.

The crisis surrounding the banks now demands an inquiry similar to the inquiry into press behaviour currently being carried out by Lord Justice Leveson. We appreciate that the Leveson inquiry has been uncomfortable for politicians on all sides, but that is exactly how it should be. We will continue to argue for a full and open inquiry, independent of bankers and politicians, and we will table an amendment to the Financial Services Bill to this effect in order to get a proper inquiry that will be trusted by the people. We do not believe that we will rebuild public trust by having politicians investigating bankers. Like the Leveson inquiry, an inquiry needs to be searching, to expose what has been happening and to get to the truth. Furthermore, as we on these Benches hope will be the case with the Leveson inquiry, it needs to bring forward remedies to stop the practices, whether in journalism or in banks, that the public and all Members of this House oppose. That is how eventually trust will be rebuilt.

I turn now to Europe and the European Council meeting. On Syria, let me associate these Benches with what the Statement said. There was an agreement reached at Geneva on Saturday, but in truth there was little progress. The divisions within the international community on this issue mean that too little is being done to bring the escalating violence to an end. In that context, can the noble Lord, the Leader of the House, update your Lordships’ House on the position of Russia regarding a future for Syria without President Assad?

The European summit took place against a backdrop of the continuing crisis in the eurozone, a global recovery faltering, and a double-dip recession here in the UK. The central challenge is how we can have a Europe not of austerity and unemployment but of jobs and growth. On that central issue, the Government cannot be part of the solution because the Government are part of the problem. They have no answers and nothing to offer. On growth, the Prime Minister used an instructive phrase in his post-summit press conference. He said that,

“just as we had to tackle the euro crisis, so we have to tackle the growth crisis”.

He then added:

“Britain has been driving this debate”.

That really does suggest someone getting increasingly out of touch with reality because as the Prime Minister was speaking figures were coming in showing that the double-dip recession, created in Downing Street, was worse than we thought. The UK is one of only two countries in the G20 to be in a double-dip recession, with long-term youth unemployment having doubled during the past year. The summit agreed extra resources for the European Investment Bank for youth unemployment. Why do the Government appear to support action on this crucial issue in Europe while failing to act here at home? There can be no solution to the growth crisis unless we tackle the crisis of demand in the European economies and globally. Did the Prime Minister advocate any measures at the summit to bring this about?

On the banking regulator, what specific legal safeguards will the Government seek to secure between now and December’s final proposals to protect Britain’s interest in the single market? On the eurozone and bank recapitalisations, it is welcome that direct help can be provided to eurozone banks, but do the Government really believe that the funds that eurozone countries are making available are adequate? On the Patent Office, the Prime Minister says that the outcome is a sign of his success, but, as he argued for the office to be headquartered in London, how could the decision to base it in Paris be a diplomatic triumph?

I turn finally to the Prime Minister's position—or should I say positions?—on Europe. On Friday, the Prime Minister ruled out a referendum on Europe, saying:

“I completely understand why some people want an in/out referendum … I don’t think it’s the right thing to do”.

However, hours later, 100 Conservative Back-Benchers in the Commons and the former Defence Secretary called for an in/out referendum. Then, mysteriously, on Sunday, the Prime Minister hinted that he was ruling in a referendum. The Foreign Secretary then went on television and said:

“The Prime Minister is not changing our position”.

Three days, three positions. First, it was no; then it was yes; now it is maybe. Can this House have some clarity about the Government’s stance? First, has there been a change in the Government's position? Secondly, the Prime Minister spoke about a referendum being connected to the renegotiation of powers. Are the Government now saying that they might be in favour of withdrawal from the European Union if they do not get these powers? That would be a new position. Is it the Government’s position? Thirdly, can the Leader of the House explain the following? The Prime Minister said last October that,

“there is a danger that by raising the prospect of a referendum … we will miss the real opportunity to further our national interest”.—[Official Report, Commons, 24/10/11; col. 27.]

Why is the Prime Minister doing precisely that now?

Will the Leader of the House confirm that the Prime Minister’s raising this issue has nothing to do with the national interest? He is doing so not to sort out the crisis of growth here at home or across the EU, or to tackle the disgrace of youth unemployment, but in an effort to manage the divisions in the Conservative Party.

Five years ago, then in opposition, the Prime Minister said that his party should stop banging on about Europe, but now he is the man getting out the drum. The country is confused about this Government and Europe—a veto that never was, a referendum which may happen, but not now. This is a party, the party opposite, talking to itself and not to the country. Britain deserves better. It is time that the Government started doing better for the people of this country.

[Lord Higgins]

My Lords, could my noble friend make it clear whether we are having one Statement or two?

[Lord Strathclyde]

My Lords, perhaps I may clarify to my noble friend that there will be two Statements this afternoon, the second of which will be repeated by my noble friend Lord Sassoon, as is laid out on the screens, and will come immediately after Back-Bench time on this Statement.

As ever, I thank the Leader of the Opposition for her remarks. She asked plenty of questions and I shall try to deal with them fully. She expressed dissatisfaction at the Prime Minister having said that there should be an inquiry into banking and the LIBOR problem, because it was the wrong sort of inquiry. She said that her party would put down an amendment to a Bill before this House. She expressed disappointment with what the Government were doing, which is a pity, because I would have thought that one place where there is a good deal of expertise was in Parliament. To have a Joint Committee of both Houses looking at this matter, with Members of our Economics Affairs Committee sitting with their colleagues in the House of Commons, should surely be enormously welcome. It should also be able to respond quickly. We hope that it will get to work straightaway, call witnesses over the next few months and report by Christmas so that recommendations can be included in the Vickers Bill in the New Year. That seems to be an appropriate way forward.

The noble Baroness asked for our thoughts on Syria. She correctly recognised what a difficult situation it is. The situation remains grave, with hundreds of people dying every week. However, the Foreign Secretary was engaged this weekend in intensive talks in Geneva on a transition plan which included the Foreign Ministers of Russia, China, and other countries. The result is one step forward, which is worth having. We agreed with Russia and China that there should be a transitional unity Government in Syria, which should be made up of people from the present Government, the opposition, and other groups on the basis of mutual consent. It would of course exclude President Assad. We must now try very hard to bring this about. We are putting a great deal of energy into doing so, but nobody is under any illusions of just how complex all of this going to be, given the situation that exists in Syria.

The noble Baroness, the Leader of the House—

[Baroness Royall of Blaisdon]

If only!

[Lord Strathclyde]

Sorry, the noble Baroness the Leader of the Opposition, the former Leader of the House, also talked about the Europe of jobs and growth. She said that the Prime Minister could not deliver this in the United Kingdom, and asked why he therefore thought he could deliver it in Europe. That is to completely misunderstand what this Government have been doing, and, of course, to misunderstand quite deliberately. We want to rebalance the economy, with private sector growth taking the place of government deficits. We want prosperity shared across all parts of the UK. We want to become a world leader in advanced manufacturing and knowledge-based industries and services, and to remain the world’s leading centre for financial services. We have done this by cutting corporation tax, ensuring access to finance, dealing with the red-tape challenge, and many other brave and sensible pieces of action which will take the Government forward, from where we were under Labour’s misrule towards long-term growth and prosperity based on real jobs.

The noble Baroness asked about the European Patent Office. She said that it was not going to be based in London. This has been discussed and debated for over 23 years. It is an area in which Britain excels. The Council has decided that the patent office should be based in three parts of the European Union: in London, Paris and Munich. The most significant part of it as far as we are concerned—pharmaceutical and life science industries—will be based here in London. It will bring a turnover of over £100 million-worth in legal services into the United Kingdom.

Much of what the noble Baroness asked about concerned the referendum. I have believed for a long time that the real muddle on European policy lies in the party opposite, and not in our party at all. We said that an in/out referendum is not the answer right now, and we stick to that. A referendum on a choice between the status quo and coming out completely when Europe is changing would be the wrong choice. It would be a bad time to make a decision. Europe is changing a great deal, probably more so currently than it has done for very many years. Indeed, it is entirely right for my right honourable friend the Prime Minister to look at how we want to change our relationship with Europe, and as the end point becomes clear, to consult the British people either in a general election or a referendum. I regard that as a very strong position. If the Labour Party disagrees with consulting the British people, they should say so.