EU: UK Isolation

Baroness Warsi Excerpts

Monday 22nd April 2013 Grand Committee

[The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)]

My Lords, I congratulate the noble Lord, Lord Dykes, on securing this important debate. Our discussions on this subject are timely as the Government continue to work effectively with partners across the EU to agree on practical, pragmatic reforms that are good for the UK and the European Union. I hope that the noble Lord, Lord Liddle, realises that in that statement I have probably answered his second question.

My noble and learned friend Lord Howe of Aberavon is right to say that the UK needs a positive vision. I believe that we have one. The Prime Minister has set out his vision for keeping the UK at the heart of a reformed EU. It is a vision of a more competitive, adaptable and flexible EU with a strong mandate from the citizens of the EU. I thank the noble Lord, Lord Birt, for his positive comments and assure him that the Prime Minister’s approach is one of reform and commitment, not of obstruction and exit. Unfortunately I disagree with much of what the noble Lord, Lord Hannay, said, but I can assure him that policy reform is a key element of the Prime Minister’s speech, and I agree that the European Union is about much more than just a single market. There is more that we can do to make the common foreign and security policy more effective and to step up the agenda on enlargement, trade development and other matters.

The noble Lord, Lord Jay, referred specifically to a coherent EU of 27 members. I believe that the Prime Minister has set out his vision that tries to address that, based on boosting the competitiveness of the EU as a whole and ensuring fairness for those inside the eurozone and also for those outside it.

I shall return to the original question raised by the noble Lord, Lord Dykes. His question is quite clear; I want to be equally clear in my response. The UK has not been, and is not, isolated in the European Union. The proposals the Prime Minister has set out for reforming the EU ensure that this remains the case. This view is shared by others. The responses of many of our European partners to the Prime Minister’s speech in January acknowledged the key role the UK plays in the life of the EU.

Many also agree on the need for reforms: countries such as Portugal, Sweden, Austria and Estonia have all said so recently. The Netherlands, Finland, Hungary, Portugal, Belgium and the Czech Republic have all said that they too want a more flexible, diverse and democratic European Union. The Prime Minister of Italy at the time, Mario Monti, said he shared the Prime Minister’s opinion that prosperity and growth must be Europe’s priority. Noble Lords can see that the idea of the UK being isolated from partners such as these who are on the record as agreeing with the importance of our reform agenda does not stand up to scrutiny.

The supportive words of our European partners are valuable, but I want to talk about actions, not words. I ask noble Lords whether an isolated member of the EU could achieve the scale of progress we have recently achieved in reform-focused decisions across so many EU policy areas. The Government have, as usual, been busy, influential and successful. Let me share with you some examples. The noble Baroness, Lady Quin, asked specific questions on policy areas, and I hope that some of these examples will answer those questions. Last December, we worked with partners such as France and Germany to secure an agreement on banking union which preserved the integrity of the single market. In February this year, we led efforts to finalise a deal on a unified patent court which will reduce costs for businesses and encourage innovation. Just last month, we worked with other states including Denmark, Germany, Sweden and the Netherlands to abolish the policy of discarding caught fish as part of a wholesale reform of the common fisheries policy.

We delivered the first ever cut in the multiannual financial framework. This is an excellent example of how we have worked with our European partners. Few were happy with the idea of reducing the budget when we started negotiations, but we worked hard to form a coalition and persuaded all member states to agree a good deal for European taxpayers. In the European Union, you cannot reach agreements like those with 26 partners if you are unsupported and isolated.

The EU and the US recently announced their decision to pursue negotiations on a free trade agreement. It is influential member states such as the UK which drive this process behind the scenes. Such agreements are of critical importance to growth and prosperity across Europe and the United Kingdom.

In 2011, we concluded a free trade agreement with South Korea. Last year, we reached agreement with Singapore. This year, the UK is continuing to play its usual leading role as we come close to concluding talks with Canada. If we completed all of the negotiations on agreements currently on the table, it would be worth an additional €60 billion for the EU every year, according to the European Commission. From free trade to fisheries reform, from banking union to bailout rules, we continue to agree sensible changes to benefit the UK and the European Union.

The noble Baroness, Lady Quin, raised the specific issue of banking union, as did other noble Lords. Our key objective is to gain member states’ support that no banking union measures harm the unity and operational integrity of the single market. Banking union is a single currency and not a single market issue. As the UK is not a member of the eurozone, we have been clear that the UK will not participate in the sharing of eurozone risk or the new supervisory system. However, while it is for those who will join the banking union to design the framework, the UK will continue to play an active role during negotiations to ensure that the operational integrity of the single market is protected.

The noble Baroness also raised concerns that the Government are in the minority on the issue of bankers’ bonuses. This is clearly a very politically sensitive issue within the European Union at the moment. This made the debate very difficult. We voted against Capital Requirements Directive IV. Obviously we are not satisfied with the outcome. We have argued that the agreement on remuneration will have an adverse effect on financial stability. But this should not obscure the fact that many aspects of the agreement represent a positive achievement for the UK such as on higher prudential standards and the treatment of investment firms.

The right reverend Prelate the Bishop of Exeter asked, “Is this reform or repatriation?” as detailed in the Prime Minister’s speech. I can assure him very clearly that this is reform. The Prime Minister’s speech does not mention the word “repatriation”. We all need to help re-engage what the European Union means to European citizens and what citizens want. He also spoke about the common good and not to lose the soul of Europe, but I am sure he would agree that we will lose the soul of Europe if the current democratic deficit is not addressed. I hope that he and the church will feed into the balance of competences review.

My noble friend Lord Bowness referred to the balance of competences and to France and Germany’s contribution. The balance of competences review will give us an informed and objective analysis of the UK’s relationship with the European Union. Several foreign partners have already responded in the first semester along with a number of international organisations. Ultimately, the analysis will be focused on what the EU means for the UK and our national interest. We have already received 500 pieces of evidence and we will publish the full list of those who have fed into the review when the first reports are published in the summer, later this year.

The noble Lord also raised issues about UKIP and Conservative candidate selection. My views on both are on record from when I was party chairman.

The noble Lord, Lord Kakkar, raised some very specific issues in the area of health. I hope that he, too, feeds into the first semester of the balance of competences review, which reports in summer later this year. But in relation to the specific issue about the working time directive, the coalition Government have committed to seek to limit the application of the working time rules. We are continuing to work with EU partners whose votes we need to bring this about.

A question was raised in relation to Schengen. The UK already participates in some parts of the Schengen acquis where it makes sense, such as co-operation in managing borders. However, I can assure noble Lords that in 2012 more than 31 million people visited the UK, according to VisitBritain. The noble Lord, Lord Bilimoria, referred to the Business for Britain campaign, which called for a national drive to renegotiate the terms of Britain’s membership of the European Union. I welcome his contribution and the contribution of that campaign on how the UK can continue to be an active member of a reformed European Union. The voice of business is essential to that debate.

The noble Lord, Lord Dykes, referred to our opt-outs on the JHA in 2014. Discussions are ongoing and we have committed to a vote in both Houses, which will take place in good time. Of course, the national interest will be a key factor in deciding which measures we agree to rejoin. The noble Baroness, Lady Coussins, referred to foreign languages. This has been a longstanding issue and we recognise the importance of increasing UK nationals in EU institutions. We have reintroduced language training and indeed, the language school at the Foreign and Commonwealth Office. We have also supported the European fast-stream work and foreign languages in curriculums in schools.

The noble Lord, Lord Giddens, set what seemed like a series of undergraduate questions. He was clearly back in academic mode and I quickly went into undergraduate mode, with sweaty palms, and realised that I had not crammed enough to answer his questions, but I will try to answer them in writing. The noble Baroness, Lady Valentine, stressed the importance of EU free-trade agreements and trade with Europe. The Prime Minister has been very clear that the UK’s national interest is best served as an active member of a reformed EU. We seek reform of the EU for the benefit of all member states, and many European partners agree with us. I fully agree with the noble Baroness on the importance of the EU concluding free-trade agreements, and the Government are actively supporting an ambitious programme.

The noble Lord, Lord Judd, raised the issue of common security and defence policy. The UK has successfully driven common security and defence policy in the EU and we have made it a useful tool for delivering British objectives, whether in the Horn of Africa or the West Bank, and whether it was to improve policing in Palestine, Kosovo or in Georgia, British personnel were in key positions of influence and multinational efforts to help local populations deal with the legacies of conflict. The noble Lord, Lord Judd, also realises that there are flaws and weaknesses in the system, and it is those that we are attempting to deal with, and what the Prime Minister attempted to deal with in his speech.

This has been a thoroughly interesting debate and I thank the noble Lord, Lord Dykes, for giving us the opportunity to examine the issues once again. I thank all noble Lords who have contributed from across the House. As with all matters on Europe there is a full spectrum of views and opinions about the fundamental principles of the debate, but the noble Lord, Lord Dykes, talked about steps taken. In the snapshot of the most recent events I have given today, I hope that the facts speak for themselves, but this is not just about what the European Union is doing now; it is about what the EU wants to do as part of the future. The Prime Minister started the debate in January and it has aroused healthy discussions. We do not deny that there is a range of views across Europe; it would be odd if there were not, but I hope that I have made it clear that this Government dispute any notion of UK isolation. We will continue to put the case to our partners and continue to deliver changes to encourage growth now. We will continue to lead the wider debate on reform to secure long-term prosperity in the United Kingdom and the European Union.

[Lord Bowness]

Before the noble Baroness finishes, I have two specific questions which she did not deal with. Will she repudiate the policy advocated by UKIP of leaving the European Union and will she commit the Government to a categorical support of the four freedoms, to which I referred in my speech?

[Lord Giddens]

Mine were not undergraduate questions but Socratic propositions.

[Baroness Warsi]

On the question asked by the noble Lord, Lord Bowness, the primary supposition is very clear. It is very apparent that the Conservative Party’s policy is one of renegotiation. In my last job I spent many hours touring the country speaking to Conservative members. When I asked them whether they wanted out, in as it is now or renegotiation, more than 90% always went for renegotiation. That is the Prime Minister’s position and I hope that it is clear.