European Union (Approval of Treaty Amendment Decision) Bill [HL]

Earl of Dundee Excerpts

Wednesday 23rd May 2012 Lords Chamber

[The Earl of Dundee]

My Lords, I join with most others in welcoming this Bill in its Second Reading. The introduction of a permanent stability mechanism is certainly timely. It also makes sense that the United Kingdom should not automatically have to take part. However, as a number of your Lordships have qualified, there will probably be occasions when on an ad hoc basis we and other states outside the euro area may want to contribute all the same.

Although in itself hardly contentious, the Bill throws up a number of matters with which inevitably its confined purpose is still associated, as already demonstrated in this debate. It is with a number of these that we may be much more exercised. Today I would like to touch briefly on three of them. First, there are certain further stability systems or mechanisms which now might usefully follow on. Secondly, there is the connected issue which seems to confuse and divide politicians and economists alike: in Europe, the balance that should be struck between measures of restraint and austerity and those to encourage growth, as indicated by the noble Lord, Lord Radice, and others. Thirdly, regarding the future political direction of Europe, there are the simple forms of guidance and leadership which this country and others should give. Indeed, today many of your Lordships have referred to the future scope of our influence.

So far, the success ratings of European systems and mechanisms may not have been too good. Previous attempts to enforce fiscal discipline in the euro area through the stability and growth pact came to nothing. This was because sanctions were not imposed for breaches of the pact. Yet at the moment perhaps a rather different attitude prevails all round. If so, that prospect would represent one of the silver linings to the cloud of current European economic adversity. Does the Minister believe this to be the case? If so, which adjusted proposals for fiscal discipline and macroeconomic stability does he consider would next benefit Europe and properly work?

The second issue is that of combined measures to achieve restraint and growth at the same time. The first task is to dispel some false dogma. This would claim that you either go for restraint or growth. You cannot achieve both together. Yet in discarding the notion that growth and restraint measures are mutually exclusive, it is perhaps a comfort to reflect that Harold Macmillan would almost certainly have refuted it as well in the same way in which, in his maiden speech in this House, he dismissed the parallel misapprehension that you either had to be a Keynesian or a monetarist. He implied that economists and politicians pedalling that intransigence had not helped him very much. For the future running of the country’s economy, much wiser counsel had instead come to him from his nursery and from his nanny. She knew that you used your common sense and struck a balance. You had to chop and change. Sometimes you fed a cold and other times you starved a fever.

This year, in helping to forge such a balance in Europe, our Prime Minister and the Administration are to be congratulated. At the March European Council meeting a number of important United Kingdom suggestions for growth stimulation have already been accepted. These include deepening the single market in services, tackling the regulated professions and opening up that part of the single market. There had been no reference to deregulation. Now references have been provided with corresponding sectoral targets. There had been no mention of completing the internal energy market. Now there is a deadline to achieve this by June 2014.

Rather curiously, there had even been no mention of trade itself, the key facilitator of economic growth. Now for the June meeting there will be a specific focus upon trade, including trade deals. These provisions, all led by our country, thus constitute a considerable step in the right direction. And they demonstrate how this particular recipe for economic growth comes to function alongside other measures already in place in Europe to achieve economic restraint.

Clearly, there are many more opportunities for growth stimulation. Which of these does the Minister identify for the next stages? As already indicated, the agenda of the March European Council meeting revealed an alarming lack of attention to the relevant details. It is fortunate that our country was able to come to the rescue. What guarantees are there that future agendas will be more focused and pragmatic in the first place? Regarding existing agreed measures and their timetables, what system of monitoring is in place so that the aims themselves do not fall short and there is no procrastination over their corresponding action dates?

This links to my third theme of useful political leadership that our country and others can offer Europe. The March European Council meeting may also have heralded a political breakthrough. It produced a new and unprecedented coalition. Along with us, it brought together Spain, Italy, Poland and many different states from all over Europe. It did not just comprise the usual, traditional allies from the north. Therefore, not only with these new partners but in association with France and Germany, there is a fresh opportunity for our continued advocacy and guidance of a constructive and balanced package of measures to attain both economic restraint and growth. Does my noble friend agree that we may now be particularly well placed to lead such measures and persuade other states of their efficacy? If so, what plans are there to widen our new political coalition to strengthen support for our European economic prescriptions?

Then there is the Council of Europe, on the Parliamentary Assembly of which I have the honour to serve. It is a coincidence that our current six-month chairmanship happens to end today, on 23 May. It has been a fruitful chairmanship, first, in brokering agreement on methods to improve the efficiency of the European Court of Human Rights without undermining its standards; and, secondly, on enhancing delivery to local democracy from within the Council of Europe. I pay tribute to my noble friend Lady Hanham, the Minister responsible for this task within our UK chairmanship. As a result of her efforts, a goodly level of consensus has been reached on ways and means, thus standing to benefit local democracy in the Council of Europe’s affiliation of 47 states.

A connected problem is the need for co-ordination and joined-up writing between the latter and the European Union’s smaller affiliation of 27 states. In Europe there is a great deal of good will towards our country and recognition of our ability to broker consensus and improve results. Does my noble friend agree that we should, therefore, now work towards a different and proper degree of co-ordination between the Council of Europe and the European Union in a variety of fields?

In summary, today’s Bill reveals sound logic and a counterbalance. For good reason, it removes our liabilities within the eurozone. Equally, through counterbalance and in wide context, it reflects our enormous commitments to Europe. However, these are not just commitments to obtain the recovery of its economy. Much more significantly, they are political resolves to protect freedom, democracy and good standards.