Brexit: Financial Services (European Union Committee Report)

Lord Dykes Excerpts

Thursday 9th February 2017 Lords Chamber

[Lord Dykes (CB)]

My Lords, it is a pleasure to follow the noble Viscount, Lord Eccles. I have always respected the sensible approach he has to these practical matters of markets and business. I add my thanks to the other speakers in this debate, particularly the very distinguished, competent and professional chairman of the committee, the noble Baroness, Lady Falkner of Margravine, and her colleagues who produced this excellent report. This is a complicated area, but the report is not too long.

Unusually, I do not agree with my noble friend Lord Butler who said that he feels very optimistic, in contrast to this report. The report is realistic, but it espouses a not irrational, not excessive, but sensible and proper degree of pessimism about the difficulties we will see in the future.

There are many warnings in this excellent report, and I shall quote briefly two significant parts of it.

“We conclude that, if the current passporting regime is not maintained”—


and we cannot assume that it is necessarily going to be—

“the Government should seek a deal to bolster the current equivalence arrangements for third country access, to cover gaps in the regime and to ensure the continuation of equivalence decisions as financial services regulation develops”.

More fundamentally:

“Negotiations on the UK’s new relationship with the EU are likely to take longer than the withdrawal negotiations under Article 50”.


That is a very serious problem. The report also states:

“A transitional period will therefore be needed in relation to financial services following the completion of the Article 50 process, when the UK leaves the EU. This may need to be adapted and extended in the light of subsequent negotiations on a new long-term relationship with the EU. This will enable firms and others such as regulators to adapt to any new business conditions”.


There has been a lot of coverage in the press of the Article 50 Bill, which has now successfully passed its Commons stages and will come to us when we resume after the mini-recess that is just about to begin. It is very interesting to observe how the intelligent commentaries in various parts of the press—but not all of them, unfortunately—are coming increasingly to the conclusion that it would be much better to maintain the status quo in the relationship between the new separate UK total market—financial and other markets, including physical markets—and the rest of the EU.

I was therefore very impressed when the Prime Minister in her Lancaster House speech outlining her plans and the details said:

“I know that this—and the other reasons Britain took such a decision—is not always well understood among our friends and allies in Europe. And I know many fear that this might herald the beginning of a greater unravelling of the EU.


But let me be clear: I do not want that to happen. It would not be in the best interests of Britain. It remains overwhelmingly and compellingly in Britain’s national interest that the EU should succeed. And that is why I hope in the months and years ahead we will all reflect on the lessons of Britain’s decision to leave”.


Astonishingly it has not been noticed by many people, but in the first paragraph of her Sunday Telegraph article on 8 January the Prime Minister emphasised that the Brexit decision was only part of the reaction as a result of those who voted no in the referendum. The rest of it was a general disaffection with the state of people in the British economy, their feeling of job insecurity, older people feeling they were being left out—although pensions have been more generous in recent years—and, of course, 16 and 17 year-olds were grumbling because they were not included in the voting system this time round.

There was an astonishing mixture of things in an advisory, opinion-giving referendum. We have to bear that in mind. I make no criticism of the Prime Minister; she was not herself elected and she could not be under the system. She took over from the previous Prime Minister, Mr Cameron, whose vote was less than one-quarter of the total voting population. I believe that Theresa May knows that the more she thinks about it, the more she has to sustain the very good relationship that we ought to have with the EU.

Sixty per cent either abstained or voted against the referendum result. That meant that the total amount of the population will have enormous second thoughts. Those second thoughts are developing. We see the post coming in and more and more emails, particularly on the financial sector and worries about the famous London market. I declare an interest tangentially as a member in those days of the London Stock Exchange and a partner in a big institutional firm. We were not part of the financial markets, as such, although we were indirectly. We were all very proud of what the city has achieved and of the London financial markets becoming the leading market in the world. It is a tremendous asset. It is ironic that the very market that has sustained and cultivated the success of the euro itself as a currency—the main market in the world—is in a country where a good number of people have become increasingly psychologically afraid of the euro, because we were driven out of the exchange rate mechanism in humiliating circumstances in 1992. That has lingered as a feeling.

Since the war, there have been eight devaluations of Britain’s currency—three by government action and five in the marketplace. The recent one when the referendum result was announced was modest, and not too bad against the dollar and the euro. That is not a good background for us to be too overoptimistic about our ability to do what we were intending to do for those who did vote in the referendum and voted just about Brexit and nothing else.

I think there was also a blending and mingling of all those emotions, not least the fear of immigrants. Theresa May as Home Secretary was responsible with others for not bothering to invoke some of the articles of the Rome treaty—the TFEU as it now known—that gave some restrictive possibilities to limit the number of immigrants as if there was no reason to have a free-for-all, which we seem to be accepting, including from Romania.

The definition of optimism given by the noble Lord, Lord Butler, is, I think, a little esoteric for the purposes of this debate. It reminds me of the lovely old Hollywood joke: the true definition of optimism was a 98-year old man who got married for the seventh time and deliberately bought a new house near a school—that kind of optimism, maybe. We have to face up to the realities of this difficult matter.

In the debate last autumn in the Moses Room on the single currency, I noticed how the noble Earl, Lord Caithness, praised the euro for being a successful currency. It is now the second world reserve currency after the US dollar. It is getting closer and closer to the US dollar. The European Union, of course, has a much lower overall national or international debt coefficient than the United States. As noble Lords know, the difference is $19 trillion for the federal Government in the USA and $12 trillion for the European Union with 500 million people.

There is a lot to be working for. In this feeling that we have a lot of negotiations to come, I wish the Minister very well in terms of the details and add my congratulations on her new post. The conclusions are more and more to do with somehow leaving the European Union in a formalistic sense, but keeping all the relationships going—the markets, the physical relationships and the acquis communautaire. Of course, it will be put into what is going to be the repeal Bill, if it comes along. I do not use the adjective “great”, by the way, because I have my doubts about it. Therefore, we are ending up with the same kind of bureaucratic input that people who did not like Europe were madly complaining about when they said that the European Union was far too bureaucratic and heavy. All those instructions, regulations and requirements will be inserted into the repeal Bill if we maintain the status quo in all the markets in Europe that we are suddenly so keen on.

The whole thing is becoming more and more shaky as an approach for a mature Government in a mature Parliament in a mature country. This country needs to recover the self-confidence we had as an upstanding and successful member of the European Union, whatever the future structure and decisions may be. The Article 50 Bill has only just started. There is a long, painful and bumpy road to come. No one can predict how it is going to turn out, but I think the second-thought syndrome is becoming increasingly powerful.

The Economy

Lord Dykes Excerpts

Thursday 28th April 2016 Lords Chamber

[Lord Dykes (Non-Afl)]

My Lords, I thank the noble Lord, Lord Bilimoria, for his helpful suggestions. Perhaps one day we should have the ambition of making him more enthusiastic about the European Union in all its aspects because he remains somewhat sceptical. He thinks that it is unavoidable, it has to be done and that it is the best thing for Britain. That is sufficient for the moment. He also referred to the possibility of a person of Indian origin becoming the Prime Minister of this country in the future. If for some interesting and intriguing idea that person was a Parsi, he would to have go to the House of Commons pretty quickly in order to be a candidate for that role, which he would fully deserve, given all the work he does.

I also express my gratitude to my old friend and colleague from our days in the House of Commons, Quentin Davies, now the noble Lord, Lord Davies of Stamford. We have both been European enthusiasts for many years. I shall emulate his excellent example today by being the only other speaker in the debate who will speak without notes, although I shall refer to a piece of paper when I mention one particular fact. The noble Lord was dead right in what he said. It is interesting that this debate, which is about the national economy, has been mostly about Europe and the dangers of Brexit. I am glad about that. I am very grateful to the noble Lord, Lord O’Neill of Gatley, not only for launching this debate, incidentally, but for referring to the European aspects of it and how creating a stronger economy in Britain is dependent on us remaining a member of the European Union economy as well.

Incidentally, I thought that the noble Lord, Lord Bilimoria, was far too pessimistic and unkind about the European Parliament. He has missed out on the developments in recent years, where it shares a legislative function 50:50 with the Council of Ministers. There are more regulations rather than just directives, so the Union is getting stronger by the moment. That includes us as well, despite the fact that we are not in some aspects of it, which is a pity, I think, and a bit slow and tardy on our part. The European Parliament’s record as a developing institution, which was strange, bizarre and remote to most people, is pretty good if compared with, admittedly somewhere that became one single country—the United States—where the turnouts in federal elections after independence, and even after the Civil War, were incredibly low for many years. Indeed, they were dominated mostly by a property qualification, so very undemocratic intrinsically as well. It was not “one man, one vote”.

When did the United States achieve a single currency? It was not until 1910, when it had the US federal dollar on its own. It took a long time there as well, but it became one single country. Probably the European Union will not do that, as the noble Lord, Lord Bilimoria, was inferring. However, we do not know about that; the agenda on that is open for the moment and it may develop because a lot of the other European countries have the strength psychologically of not worrying about this daft notion of a loss of sovereignty—which I suppose last existed even in Britain in 1912. Even then, by the way, a few years later the British Armed Forces in the First World War were under the control of a French commander-in-chief. That is a loss of sovereignty in those old-fashioned terms. Modern sovereignty in the European Union comes from making collective decisions together, many of them through unanimity and treaty decisions where there is no voting and everybody agrees. A lot of progress is being made where that collectivity of sovereignty from the whole Union decision also increases intrinsically and automatically, at the same time and simultaneously, the national sovereignty of each member state.

So none of the other member states worries at all about this British thing of losing sovereignty. It is like an old-fashioned person who went to a posh public school and now that the family has run out of money wanders around saying, “I don’t want to mix with these people because they’re very rough and go to public bars; I am very posh and grand”. It is geopolitical snobbery on a grand scale. It is very disturbing that distinguished people from other countries who come here, such as the noble Lord, Lord Bilimoria, think maybe that sovereignty is in that concept. That is completely out of date. This is a global village, let alone the European Union.

There are aspects of the British economy, too, which hold us back from being stronger in the European Union. I hope that we will be, and I hope that we will remain when the referendum comes. I scribbled a few of them down when listening to some of the things said in this debate. The manufacturing proportion is inadequate, for a country at our stage, at only 11%. It is a strange thing that people say, “Well, it doesn’t really matter. Services are much more glamorous, chic, and so on, while manufacturing is very boring, nerdy and tendentious, so it doesn’t really matter”. I think that it does. With the exception of the motor car industry, which is very successful in exports at the moment, there is no big significant growth in what I would call the long-standing manufacturing industries and sectors in this country.

Low investment, too, persists in net new UK domestic capital formation both in the public and private sectors. Perhaps the noble Lord, Lord O’Neill, would agree with me about the mistake we made by not having a Minister for the economy as well as a Minister for finance at the Treasury, as Germany does, which separates the two functions, ensuring that the real investment coefficients are kept in the forefront of debate in Germany. The trade deficit is ominous—the biggest ever figure. I think I am right in saying that all the other major European countries that export to us all have surpluses with us. A little bit of modesty, please, when we say we are unique and the most successful economy in the European Union. Germany is streets ahead of any other country and remains a very modest country in its geopolitical attitudes on the economy.

We have ominously low productivity, as the Minister referred to, which needs attention in the future. Although apprenticeships have increased in number, we still have a lot of poor-quality, semi-pretend apprenticeships that a lot of people in them feel very disappointed by and grumble about. These things can come together. If Britain stays in the European Union, we can then become a stronger economy.

I was rather disappointed recently to see that, in February, the very distinguished former central bank governor, now a Member of this House, the noble Lord, Lord King, was very sceptical about the single European currency. I think it is a great mistake in this country to have that attitude of, “Thank God we’re not members”. We were driven out of the exchange rate mechanism and now we are actually afraid of the euro. It scares us. We are afraid to be a member and do not think we can actually cope with it. If we all went to psychoanalysis and therapy that is what would come out when we were hypnotised. We would say that we were scared of the euro.

The noble Lord, Lord King, is just writing a book about the impending collapse of the euro. We were reminded that the noble Lord had been wrong on quite a few of the forecasts he made over the years. I remember him saying distinctly, in 2003, that the previous decade for Britain had been NICE, standing for “non-inflationary consistently expansionary”. He also said that 2004 would also be part of a very encouraging decade. That was a few years away from the major financial crisis. He made other predictions that were incorrect. That just shows that predictions are always difficult, particularly when they concern the future, so none of us should make too many predictions; otherwise we will make mistakes.

The financial crisis began totally in the United States. It was not a creation of any other, and there were bank failures here as well. The Labour Government did what was necessary to rescue those banks. Gordon Brown got no credit for it at all in the British press, nor did any of the senior Labour people defend the policy. The noble Lord, Lord Hain, made an excellent speech earlier, and I agreed with very much of what he said. The return of Keynesianism is absolutely essential and unavoidable in this country before we all go insane in economic terms. The noble Lord mentioned Alistair Darling, now the noble Lord, Lord Darling, and his contribution in reducing the deficit, and all the rest of it. Yet, no one—not even he—defended the Labour Government’s position of rescuing this country from the worst financial crisis that had been seen for decades, and then proceeding to run the economy reasonably well just for a very short time before they lost the election. Why did not Labour figures in those days defend what had been achieved by the Labour Government? It is most extraordinary.

I recall, as a Liberal Democrat Peer in those days, having discussions about the construction of the coalition. I think I am right in saying that about three-quarters of Liberal Democrat Peers wanted to deal only with Labour. The sums would not add up. Ed Balls was very difficult and the noble Lord, Lord Adonis, tried very hard to get something going but it was not possible. The other Labour leaders seemed to be concerned with the future: they wanted to move on. They then acquired the reputation of economic incompetence which was unjustified. It is extraordinary that a political party did not defend itself in those terms. It did do damage because it added to the pressure of people to give in and agree with the neo-liberal economic model, which has been a disaster for this country ever since it started in the early 1980s. People have been brainwashed that it is the only show in town.

I once made a very rash speech in Harrow, my constituency in those days, saying that if you create a society where the only thing that matters is making money, the society itself actually gradually disintegrates, even for the people who are trying to make the money. It does disintegrate and becomes a much nastier society. That is what has happened in this country under the neo-liberal economic model. There are lots of things that the Government can do with socioeconomic policies, not just economic policies to revive this country and strengthen it in the future. That does need our membership of the European Union.

Genuine Economic and Monetary Union (EUC Report)

Lord Dykes Excerpts

Wednesday 2nd July 2014 Grand Committee

[Lord Dykes (LD)]

My Lords, I share the gratitude expressed by previous speakers in the debate to the noble Lord, Lord Harrison, the chairman, and his colleagues on the economic sub-committee for a masterly report. I note in the second paragraph of the summary the very realistic description of the tensions within the eurozone, which have been referred to and which are still considerable.

Since the eurozone crisis of the three or four weakest members—it is basically a strong international currency with four or five weaker members struggling to get stronger—began to calm down in early 2010, I, like others, have noted that whenever disarray and nationalism have been replaced by the member states in the eurozone working closely together, the markets have usually reacted very positively, markedly, as we see nowadays, with resumed very moderate yields on 10-year and other bonds.

We need also to express admiration for the bravery of the authorities in the four or five weakest member states. I think of Ireland, Spain, Italy and, above all, Greece, where there were remarkable parliamentary votes, with big majorities, on the austerity programme and where the fascist party was kept at bay. I also include in that, in a different way, Cyprus, where there was an esoteric technical problem as well. The steadfast way in which these countries have gone about recovery, despite enormous social losses, has been very encouraging. They were treated in the British press—in the comics in Britain that masquerade as newspapers, with their anti-European outlook with the utmost scorn, at the very same time, ironically, that HMG were pursuing their own extremely rigid austerity programme.

Furthermore, was it not an extraordinary spectacle to witness the contrast between the US and the EU in their respective struggles for post-crisis control? In the US, the political crisis arose again because it could not increase its already massive and excessive federal debt of $17 trillion. In the eurozone, of course, the very reverse was the case, with attempts to reverse debt whenever possible. Although the liquidity increases achieved by the ECB programmes have unfortunately been modest in comparison with those of the US, and the ECB has not dealt with sovereign debt in the way that many had hoped, it has increased its resources to deal partly with future crises. However, it still has not secured enough power for the future for such operations. Mario Draghi, the quite remarkable former head of the Italian Treasury, has achieved a lot as ECB president with sheer will-power, as has been referred to by other speakers. His words of encouragement calmed the markets. The euro itself as an international currency is, as we see, physically forging ahead in the whole world—although less of course in Asia still.

However, we note that in a number of member states the role of lender of last resort is still denied psychologically to the ECB. Never, therefore, has the threat of continued and indeed worsening deflation been more evident. The old fears of historical inflation—mostly expressed in Germany—are in absolutely no danger of being realised again in the post-war period as far as anyone can ascertain with careful and meticulous analysis.

This fear towards countries that have been fighting hard to curb indebtedness, including France, where I live, goes even as far as rejecting the idea of communitarian sharing of debt burdens. This is surely yet again, alas, old-fashioned nationalism. If Europe wallows in nationalist struggles between member states—particularly the leading ones—the markets notice it at once and failure is almost guaranteed, just as when the global economy gives rise to protectionism and goes backwards in history.

Germany, after all, was responsible for some of the earlier problems when its own short-term public sector debts far exceeded the limits laid down in the pact. It was helped then by the rest of the Community, quite rightly, because of the enormous respect for the economic powerhouse that it had created and for its economic and financial leadership. What if, for example, in 10 years’ time that great country Germany were to suffer an unexpected sovereign debt crisis? I do not, of course, expect that, but I am convinced that, if so, the whole Union would back ECB intervention to save it. Presumably by then the ECB would have the necessary resources.

As time goes on and even the weakest eurozone members recover their strength—a remarkable exercise, particularly in Spain, for example—it is going to be necessary for the ECB to receive full powers of action as the authoritative central bank of the Union. This is very much what is already owed to the smaller and more recent member states, which joined in 2004 and afterwards. The Union cannot after all be run exclusively to appease the more traditional and backward members of the Bundesbank board, worthy though they may be. I am sure that Angela Merkel understands this, but of course she is surrounded by the Bild and the Axel Springer press and mainstream local public opinion in Germany. Therefore, I welcome, as I am sure others here today in this short debate will do, the exhortation in the fourth paragraph of the committee report summary that,

“some degree of debt mutualisation may be inevitable if the single currency is to prosper”.

I agree and perhaps it should be more than that.

If outsiders are able to perceive that the eurozone central banking authority is not plenipotentiary, including in debt management, the next crisis will not be fully resolved. The euro must be a long-term project to which all zone members are fully committed. The member states that have recently joined, such as Latvia and Slovenia, and the others waiting to join are owed nothing less. We must think about the smaller countries in the Union as well.

I commend particularly in this excellent report the warnings in paragraphs 197 and 198 on page 68 of the continuing and future dilemma that must eventually be resolved in what is a historic new control structure born out of a massive and greedy speculators’ crisis, which started in the USA. We need to remember that. The SSM and the SRM are still headachy problems that need full and extensive, not just partial, solutions.

In the final analysis, however, this is not just about the central banking architecture for a community or club of nations willing to show European solidarity, which the Prime Minister totally fails to comprehend. It is at the heart of the political union as well. This is a political project, too. The currency is as much international politics as it is just money and bonds. If ever the euro ceased to be, that would be the end of the most unique political project in world history—apart from perhaps the creation of the United Nations after the war. The monetary authorities of the People’s Republic of China were the first of the great third countries of the world to realise this twin characteristic, years ago. I remember being in Beijing when they started purchasing massive quantities of euros for their second stage reserves, when it first started.

All member states achieving the necessary fiscal discipline and restraint can benefit from the long-term plusses in the Germanic, strong currency system, which creates high currency strength and high savings and investment ratios and spreads worldwide confidence. Recent daily international interbank payment transaction figures are remarkable. They show the euro creeping towards the US dollar as the second reserve currency, with 32.5% of the world total of those daily transactions against 39.6% for the US dollar. The UK has just under 3% of the total and has of course devalued seven times since the war—three times by official action and four times in the marketplace.

Despite the crude nationalism here against the remarkable single currency, in a UK that is still fearful and traumatised after being driven out of the preliminary exchange rate mechanism in 1992—a very painful experience for my noble friend Lord Lamont—I still hope that, eventually, the UK will in the future find the courage to join. I do not expect my noble friend the Minister, when replying to this debate, to give a date for that yet, but I hope that it will not be too long in happening.

EU: Money-laundering Directive

Lord Dykes Excerpts

Thursday 3rd April 2014 Grand Committee

[Lord Dykes (LD)]

My Lords, I am tempted to think that the noble Lord, Lord Willoughby de Broke, is a little overanxious about this matter. That will perhaps come out later on in this debate. However, he made some points that I am tempted to agree with on the background to this. It is a very complex and vast area, and it has dragged on for quite some time.

The latest manifestation is the massive vote in the European Parliament in favour of really significant action in this regard. All member Governments are obliged to respond, and there will be meetings in May and subsequently. Eventually, I presume, the new directive will come from the Commission. That will take time to unfold. Most countries already have some clusters of cultures in these matters of declaration, tax information and all the rest of it. However, once again there is obviously a difference between the UK and Ireland and the others in these general matters relating to trusts. The trust is a particularly Anglo-Saxon vehicle, so one has to bear those things in mind when trying to formulate coherent legislation.

The will of the European Parliament cannot just be laid aside, as it were. The vote was very emphatic. It was not only the numbers but also what was said in both the committees and the debate in plenary, with great emphasis that there was now a need to take action in this field and to establish coherence and equivalence between what the EU does as a collective, the worldwide anti money-laundering legislation of one kind or another and the international move to try to get everybody dealing with these matters in a similar way. It is a vast world problem. The noble Lord, Lord Willoughby de Broke, spoke quite rightly of the very honourable trusts that there are, particularly for young people, and all the rest of that paraphernalia we have of legal protection and that background. None the less, the worldwide money-laundering offence is vast, as we know. Member Governments of the EU, as well as authorities elsewhere and the world institutions, are trying to deal with these matters and work together. It is understandable that new legislation is needed.

The United Kingdom already has strong legislation on this. To my mind, it would be very reasonable and essential for HMG to say that the directive provides the broad outline of background permissibility of the legislation, and then each country will introduce its own Bill, becoming an Act after that, in its own way. I live in France as well, so I declare that interest. The law there is extremely different, but none the less aims for the same things. The French have a deep suspicion of this offshore money that is laundered by criminals, terrorists and gangsters of one kind and another in highly organised large international movements of people, moving large amounts of money. That has to be taken care of and followed up vigorously and with energy.

I believe that trusts must be included. However, the Government, in one of the recent ministerial letters on the subject, said with some justification, rather along the lines of the Prime Minister’s letter, that the Government do not believe that trust registries would necessarily be an effective option in addressing the risk associated with trusts. So I think there is a case, to some extent. Not being an expert I have to put in phrases such as that to limit my own operational ignorance of the details of these matters, although I was a City person for many years and saw the nasty side of some of these things from a distance from time to time.

That is an important question and perhaps the Minister will be able to help us in this debate by saying how the Government would deal with the specific question of trust registries—in the sense already implicit in the draft legislative proposal from the European Parliament, with its massive vote backing it up, as we know, that one should provide in public the minimum amount of detail to give satisfaction in the sense of revealing that it is not laundered illegal money, if that can be done.

Equally, to leave out trusts would be wrong, because obviously lots of villains would immediately switch from companies to trusts. You have only to go to some of the many tax havens that our own empire, rather more than others, unfortunately left as a legacy—rather more than France, which quite rightly takes a very dim view of tax-exile territories. That is where these things occur. The banks themselves have worked on an international comparison and co-operative effort, which is gaining strength all the time, and now includes Switzerland, Luxembourg and Lichtenstein, to try to deal with illegal, laundered money. This is gangster and terrorist money and illicit illegal money of other similar kinds. That background is helpful, too, and I wish the Government well in eventually dealing with this matter in terms of domestic legislation.

Will the Minister help us with one or two points that arise from this legislation? On the question of trusts, it says:

“If the beneficial ownership information of companies but not trusts is made public, the latter will become—

as I suggested earlier—

“the default alternative means to undertake the same criminal activities which the new company rules seek to prevent”.

Is a specific mechanism possible to deal with that particularly immediate problem?

I agree very much with the MEP Judith Sargentini when she says that:

“If we had decided to leave trusts out of the scope of the new legislation, then it would immediately have made them the perfect vehicle for criminals wishing to avoid taxation and launder their illegal money through the financial system”.

When considering the eventual directive that will come out of this legislative proposal, which will take some time, it is necessary to deal with that important problem.

I am also concerned about the phenomenology of the risk assessment procedure and I would be grateful if the Minister could help us there, too. The Explanatory Notes state that the risk assessment should cover at least the following aspects: the overall extent of money laundering and the areas of the internal market that are at greater risk; the most widespread means used by criminals to launder in illicit proceeds; as well as the recommendation to the competent authorities on the effective deployment of resources. The evaluation, by the way, should be done every six months. That may be quite difficult to keep to, although I do not wish to sound complacent about this desperate international problem—we will see.

The document further asserts that, to keep everything in proportion and targeted, member states could adopt, or retain in force, stricter provisions in the field covered by this directive to prevent money laundering and terrorism financing, provided that such provisions are in full compliance with Union law. There will, of course, be variations in the national legislation of each member state.

I exclude the two Irelands from my next comment because they, again, would need different treatment, and there is a historical British taxation background in both those countries. However, the culture of the member states that came in in 2004 will be somewhat different in many cases from that of member states which joined the Union prior to 2004.

Finally, I quote again from the Government’s response contained in the excellent House of Lords Library briefing pack, for which I thank the Library staff. It states that,

“while the Government remains broadly supportive of the Commission’s proposals, there are a limited number”—

[The Deputy Chairman of Committees (Baroness Andrews) (Lab)]

I am so sorry to interrupt, but there is a Division in the Chamber. We will adjourn for 10 minutes.

--- Later in debate ---

[Lord Dykes]

I was just about to finish by asking the Government three quick questions. In the Minister’s letter of 13 December 2013, which I was referring to, the Government broadly supported the Commission’s proposals but a limited number gave cause for concern. I am deliberately not including the gambling points; I am leaving those out because I think that they are empirically rational and sensible. First, what does the Minister estimate will happen when the ECOFIN meeting takes place? What will be agreed? Presumably it will need far longer than that to agree the total package.

Secondly, would the Commission’s proposal discontinue third-country equivalence listing as established under the third money-laundering directive? That needs further explanation.

Finally, the Commission intends—this is in the Explanatory Memorandum of the European Parliament’s legislative proposal—to complement the current proposal by strengthening the EU’s repressive response to money-laundering. Consequently, there is a plan to propose criminal law harmonisation for this offence based on Article 83(1) of the TFEU. That also needs more explanation because there are arguments for and against that concept.

Financial Services

Lord Dykes Excerpts

Thursday 20th June 2013 Grand Committee

Asked by

[Lord Dykes]

To ask Her Majesty’s Government what measures they are taking to support the contribution of the United Kingdom financial services sector to the economy.

[Lord Dykes]

My Lords, I very much welcome this debate and thank the Minister for being in attendance to answer the important points that I hope will be aired. Inevitably, I must deliberately leave out some items. There is so much to cover. The Minister and others in the debate will be delighted to learn, I am sure, that I am not going to try to cover everything. It would be a great mistake to do so.

I begin by congratulating the Minister and his colleagues on the agreement on the markets in financial instruments directive that was reached in the EU the day before yesterday. As the FT said yesterday, this was a good day for Britain in Europe,

“protecting the City of London against discrimination—proof that Britain’s interests are best served when the government sits at Europe’s top table rather than outside the room”.

That is an important lesson for the future.

The Parnassian beauty of this debate is that everybody more or less has the same time—nine minutes for every speaker, I think—as a result of our modest but high-quality list, including my old friend from the City, the noble Lord, Lord Flight. We changed the phraseology of the Question because I did not want the old Question concerning the City of London to obscure the obvious reality that there are many financial institutions elsewhere in the UK, from the West End of London to Edinburgh and other great cities. That is a fact of decentralisation, which is also a good thing.

The overall background is also the vital factor of our membership of the European Union, and I am inevitably going to cover some points about Europe. Membership of the EU is crucial for Britain and I think that the madness of leaving is dawning more and more on sensible people, even some of the more old-fashioned of our colleagues represented by an uncomfortably large group of rather right-wing Tory MPs in the other place. The latest House of Commons Foreign Affairs Select Committee report spells it out loud and clear, although it wisely steers clear of the immaturities implicit in hysterical referendumitis. I welcome the elegant but firm rap on the knuckles for inexperienced British Ministers set out in paragraphs 26, 27 and 28 of the committee’s conclusions and recommendations. I also welcome the bulk, but not all, of the evidence given to the committee by Business for New Europe, which sets out a solid enthusiasm for our continuing membership of the EU for practical reasons.

I declare an interest as a former member of the Stock Exchange and of a large institutional stockbroking firm in the City for many years, and other City interests. Those of us who are proud of the good side of the City of London and its immense contribution to Britain over the years, including assisting the general public in myriad ways with practical financial instruments, were heartened by the flattering words in January of the Swedish Minister for Finance, Anders Borg, who said that for Sweden,

“keeping Britain in the EU is a very high priority. We have a big banking sector and a lot of work goes through the City of London. If the UK leaves the EU it could create a lot of problems”.

A balance is also needed between excessive adulation of the City, which is wrong, and unfair criticism. I hope that my own references to this in the debate that I opened in Grand Committee on 22 April on the dangers of UK isolation in Europe, at col. GC 290, in the last but two paragraphs at the end of my speech, caught that balance. We also need to grasp the fact that the other member states have some hesitations on the bad or toxic side of City financial activities, which came to their monstrous conclusion in 2007-08 and onwards.

Indeed, I detect that some of the right-wing comics that masquerade as newspapers in this country are less keen to say that brilliantly talented spivs who are good at fund management speculation and excessive risk-taking using other people’s money here will go abroad if we deny them lavish and unjustified bonuses or force them—horror of horrors—actually to pay conventional UK income taxes. If they insist, say I, let them go abroad.

Coming back to the positive aspects of our financial services sector, we can indeed be proud of what has been achieved here over the years on a secular growth basis. As we know all too vividly, this country usually has a large and uncomfortable physical trade deficit with most other advanced countries in the world with the possible exception, depending on the latest figures, of the United States, which is also a rather inefficient and heavy importer. Just as Germany is immensely proud of its industry—particularly its motor vehicle industry, which is one of the wonders of the world—we admire our own financial services sector for what it achieves in a non-visible surplus for us in direct and indirect investments, insurance, shipping and, of course, banking and fund management forms.

When government is called on to “protect” a valuable sector, I trust it will always be in the sense of upholding the single market rather than seeking artificial propping-up exercises, which would not be justified. Happily, our present coalition Government have always upheld the principles of transparency, free and open markets—with a genuine single market—and robust competition. The Prime Minister has moved away, thankfully, from calls for what seemed to be special unilateral privileges, as in the bizarre antics of December 2011 in Brussels, to asserting rightly the equality of conditions philosophy. I think that will now persist.

At this stage, I would particularly welcome it if my noble friend the Minister could bring us up to date on government thinking on the eurozone’s proposed financial transactions tax and our most recent responses, since it seems to have stalled somewhat as a formal proposal among some inner core member states. Even if talks resumed soon, I doubt whether it could commence before 2015-16 at the earliest. I assume meanwhile that the City of London Corporation is maintaining its strong opposition, although many foreigners are puzzled when, after all, we have a pretty onerous stamp duty system on quoted investments and property purchases in this country.

However, we remain highly integrated with financial markets within other EU members. I believe we account for three-quarters of foreign exchange trading in Europe, some 85% of all hedge fund assets and well over two-thirds of all interest rate derivatives, despite the fallout from the world crisis in the previous decade—a crisis which, we need to remember, started in the USA, apart from the Northern Rock debacle of the previous year. Just as official circles in the UK quite rightly hammer home the primordial need for the single market to develop more deeply in every sphere so that, EU- wide, consumers of goods and services can benefit from equal conditions in the theoretically perfect market set-up, so the other member states are justified in insisting that Britain remains a good member of the club and accepts freely agreed EU-wide legislation for market conformity in all spheres. The general public interest surely demands this in commonsense terms.

The mid-May ECOFIN meeting in Brussels highlighted some of these imperatives for, as usual, a raft of new Commission objectives in draft legislation were discussed to gain some progress in complex fields. I have already mentioned the markets in financial instruments provision; my thanks again to the Minister for what he has achieved there. There is the latest text of the market abuse directive, the mortgage credit directive, directive IV on capital requirements and the legislation drawn up to deal with money laundering. The amended text of the savings tax agreement with third countries and the Council draft for the EU savings directive were also discussed briefly at that meeting. If my noble friend the Minister has time today to refer to some of these, I will be grateful. I will understand if he is unable to cover them all.

In other large areas, does my noble friend have time to refer to the Government’s responses to the need to return RBS and the other taxpayers’ emergency stake in Lloyds Bank Group to the private sector and to shareholders, how the other leading banks are faring in returning to giving adequate support to UK industry and commerce and, if he has time, what position the Government take on the Co-op Bank crisis, which is a sad development? Finally, if he can deal even briefly with official attitudes to the latest developments in the attempts by the LSE and other leading bourses in Europe to achieve synergy and modernisation, I would be most grateful.

Perhaps it would be reasonable at the current state of play to ponder the future in a wider sense. I believe that the impact and success of the British financial services industry will continue, both as a great national asset and as a solid contributor to the overall strength and cohesion of the Union’s single market. What is disturbing, however, is the way in which subtle and sometimes not-so-subtle elements are creeping into this overall scenario which, particularly at times of severe socio-economic austerity in many parts of the EU, are in danger of increasing irredentism and fissiparous pulls among traditionally friendly allies within the 28, weakening the single market philosophy. We need to acknowledge that the others really and profoundly want us to stay as members, but seemingly not at the price of conceding to us anything other than the normative and steady moderations of the Union’s acquis, which for them is constant reform, and most definitely not the old-fashioned notion of reform that has been expressed in some parts of the other place in recent months.

It is never a weakness in framing sensible policies to appraise what the others think of us. They were not impressed at us being the odd man out so often in recent times. They were contemptuous when we failed to join them in the eurozone when it first started, and of course we were slow to offer them real support when their crisis over a smallish number of weak member states began in 2008. That is now water under the bridge and it is time for us to work together. We are taking the lead, I hope, in pursuing the tax evasion problem, particularly with France, Germany, Italy and Spain, which will also oblige us to deal at long last with our many island tax havens from the old Empire.

Finally, I would just add a reminder. Professor Pauline Schnapper, the leader in British studies at the Sorbonne Nouvelle University, reminded us recently that the EU has actually been evolving in a rather British direction over the past 15 years, showing greater pragmatism and empiricism alongside enlargement. That should help us even more to shun isolationism in the coming years. As I believe the euro will remain and in the future will be an even stronger international currency, I hope that one day we will regain our nerve and even join the eurozone.

Budget Statement

Lord Dykes Excerpts

Thursday 21st March 2013 Lords Chamber

[Lord Dykes]

My Lords, like others I am sure, on these occasions one puts one’s name down for a debate and then perhaps regrets it, thinking it probably will be a mistake or gloomy. I was expecting a gloomy debate because of the background to the Budget—although not the individual Budget measures announced yesterday, many of which are very good. I hope that I will not annoy our colleagues in the larger coalition if I say that, self-evidently, the two best single measures are the abolition of taxation under £10,000 for the lowest income tax payers and non income tax payers if they have a really low level of income, and Vince Cable’s suggestion for an expansion of the housebuilding sector being agreed at just a little above the original figures that were promulgated.

I speak as someone who, in the early 1960s, studied economics at the greatest single Keynesian school in the whole world in those days—the University of Cambridge—just by chance and good luck. I was heartened today because we have had two outstanding Keynesian speeches. Unfortunately, they came from the other Benches and I wish that it had been from these Benches. We heard the first from the noble Lord, Lord Kestenbaum, who is no longer in his place, and then the second more recently from the noble Lord, Lord Haskel. Both gave an alternative message about what now needs to be done in this country on long-term capital and investment accounts and on the long-term realism that this economy needs, and I agree with them.

On the individual measures, it is very difficult to quarrel with the Chancellor. One newspaper writer rather unkindly said that the unique thing about George Osborne was that he was even more unpopular than the austerity measures that he keeps promulgating, which was an interesting description. There will be a reduction in national insurance and the abolition of national insurance at the relevant level. There is the modest start of the housebuilding programme for the future and the reduction in corporation tax. There are many other examples, too, which are all very good and one commends each one individually.

However, the total picture is a huge problem for this Chancellor because, as we all know, this country is locked into the utterances of the past. One of the mistakes of the coalition Government was the spokesmen from the bigger of the two parties repeatedly recalling the mess left by Labour. I suppose each incoming Government always say that about a previous one. But the previous Labour Government were mostly dealing with the international worldwide financial crisis of 2007-08 and its aftermath. Gordon Brown had to handle it very speedily. The amount of taxpayers’ money was colossal in doing that task, which reduced the funds so much so that the outgoing Chief Secretary said that there was no more money left, which was a realistic description.

There was also the excessive harping on and the hysteria in this country about the eurozone’s problems, saying that they are intractable and insolvable. Indeed, I hope that the noble Lord, Lord Marlesford, will not mind my saying that it was not the Germans or the whole Council of Ministers who insisted on the capital levy for the Cypriots. That was their own part of the transactions when the council said that Cyprus had to respond with an enormous amount of money to reflect the vast amount of money that they were getting in the bailout. Germany did not impose a particular suggestion on Cyprus. The Cypriots decided that themselves. As we know, they have now changed their mind and are doing other things. We are waiting to see the details of that as a result of the non-vote in Parliament.

[Lord Marlesford]

If I may very rapidly read from the Minister’s statement, it was the eurozone finance Ministers who announced the package which included that. The eurozone finance Ministers, therefore, approved that part of the package.

[Lord Dykes]

Yes, of course, because the Cypriot Government then submitted those suggestions to them, which were accepted. That was the sovereign decision of the sovereign country of Cyprus, which made its own suggestions in response to the request from the Council of Ministers and the German Government, and quite rightly.

The difficulty now is what we do from now on and where we go. The reality still confronts us in this economy that, to quote another source from many years ago, one has to enlarge long-term public spending on public assets with a high multiplier effect. Government spokesmen in recent years have kept on saying that public sector is bad and wicked, and private sector is good, and that we should rely on the private sector to respond to the inaction of the Government, but that never works. We all know that, and the evidence is there. Huge global corporations will make their decisions irrespective of what national Governments do. Facebook would not be particularly responsive to particular individual national Governments in the world, for obvious reasons, and neither would Microsoft, although the national subsidiaries in different countries respond to some national government decisions, as we know. Equally, sometimes very high-tech innovative companies in different countries themselves make their own decisions and have particularly good fortune such as very strong bank support and other access to capital, which enables them to be free-floating and not respond to government. However, in the vast majority of businesses, whatever their size, and in particular small companies, the reality is that you wait until the Government are expanding the economy. That is not a criticism of the way companies run businesses; if I was running one now as I used to in the old days I would do the same thing.

The noble Lord, Lord Kestenbaum, who is not in his place now, earlier mentioned economies where public sector and private sector activity is mixed up together in a constructive whole. Bavaria, mentioned by the noble Lord, Lord Haskel, is a very good example of that, where a centre-right moderate Government, over many years, never said no to public spending as long as it was on long-term investment assets. It was nothing to do with short-term current account. The British Treasury is still far too short-term obsessed. Therefore, until we change, we will be stuck in that ominous way that was so ably described by the very able business editor of the Evening Standard yesterday, when he referred again to the Chancellor. He wrote that a wiser man, earlier on,

“would have been less aggressive, less dogmatic about the rightness of his policies, so that he would have had room to manoeuvre when they seemed not to be working. But Osborne has closed down all those options so today’s Budget is the work of a man who is in a hole but continues to pretend that the only way forward is to keep digging. The public finances remain in a dire state, and even a bit of sleight of hand with the numbers can’t conceal the fact that we have made absolutely no progress over the last 12 months”.

The terror of the slightest increase in our interest rates in this country will stop further action until there is a big change of heart.

EU: Budget

Lord Dykes Excerpts

Monday 4th March 2013 Lords Chamber

Asked By

[Lord Dykes]

To ask Her Majesty’s Government what representations they have received from the public on the negotiations for the new European Union budget perspective period to 2020.

[The Commercial Secretary to the Treasury (Lord Deighton)]

My Lords, the Government have received a number of representations from the public on the negotiations for the multiannual financial framework 2014-20. These include letters and e-mails from individual members of the public and their Members of Parliament, charities and other non-governmental organisations and universities and research bodies.

[Lord Dykes]

Does my noble friend agree that it was a very good deal for the Union and for this country, bearing in mind the balance of severe spending restraints at one end but long-term real infrastructure investment at the other? Is it not now the job of Conservative Ministers in the coalition to explain properly how the EU budget system works: a modest budget in comparison with other member states, no debts or deficit, no borrowing, payments that are always less than commitments, and a budget that does more and more good with less and less spent on farming?

[Lord Deighton]

I thank my noble friend for congratulating the Prime Minister on the excellent deal he brought back. We accomplished our three main objectives, which were to restrain the size of the budget, to make sure that we kept hold of our abatement and to resist any new EU-wide taxes. We shrank the budget and shifted it away from the more traditional areas, such as the common agricultural policy, into growth-oriented funds. I agree with my noble friend that we are shifting towards a pattern of expenditure that is more consistent with the reformers among us.

European Banking Union: EUC Report

Lord Dykes Excerpts

Thursday 24th January 2013 Lords Chamber

[Lord Dykes]

My Lords, it is always a pleasure to follow the noble Lord, Lord Davies of Stamford, because, whatever other interests and policies he has in his mind, he is always a very robust, fervent and positive European. We need more of that in this country. I am glad, too, that in recent years the Labour Party has become much more positive on Europe following the passage of the Lisbon treaty. That is a very good development for this country. It can emulate the good example of the Liberal Democrat party as being always in the vanguard of the pro-European position—patriotic Britishers, of course, but also enthusiastic Europeans, and those two things can go closely together.

Yesterday the Prime Minister made his sad speech—actually, it was not a sad speech but a sad occasion. One has to acknowledge that there were some good bits in the speech and, as my noble friend Lord Hamilton of Epsom said, he tried to appeal to everyone, and in that sense was quite clever. However, it was a sad occasion because he has unleashed for himself a number of very disturbing things, depending on how they develop in future, that are going to destabilise British politics significantly. I will return to those themes in my concluding remarks.

Many good things have been said so far about the EBU report. I shall refer to it briefly but that is not to decry its quality. In fact, we in this House are used to having reports of high quality from the European Union Select Committee and its sub-committees. I am going to embarrass the noble Lord, Lord Harrison, deliberately by saying that this report is outstanding. I thank him and his sub-committee members for having created this excellent report.

It highlights, in a disturbing and worrying way, the acute complexities of the architecture of the system. A number of significant members, led, I suppose, by the United Kingdom, which, in a way, is the largest of them, are not going to be involved in this important developing system and framework. That is a matter of great concern, and the sooner we have the courage to align ourselves with these proposals, the better. That may take some time, and of course nationalism raises its ugly head all the time and we have to contend with that. My noble friend Lord Hamilton of Epsom would not admit this or agree with me but, as a result of being driven out of the exchange rate mechanism in 1992—that hugely humiliating moment under a Conservative Government—the United Kingdom was subsequently very scared of the euro, afraid of the single currency, nervous as hell about what it might develop into and always looking for things to go wrong.

The fact that the report looks at the way in which this new system will control the banks—the clearing banks, the joint stock banks, the commercial banks and the other banks—in the eurozone area is an outstanding achievement. I want to quote from what was said by President Van Rompuy, but first I will give way to my noble friend.

[Lord Hamilton of Epsom]

Does my noble friend accept that if the United Kingdom were in the eurozone today, with the deficit that we are running and the debt levels that we have, we would be in intensive care?

[Lord Dykes]

I do not agree with that, and anyway it is too theoretical even to consider. By the way, our deficit is £100 billion and we have a free-floating currency that has now been devalued about eight times since the war, either formally in the marketplace or informally. It is interesting to measure and to see where that got us when we were kicked out of the exchange rate mechanism by market forces, when the Treasury was for a moment probably the worst ministry of finance in Western Europe. It has not carried on being like that—it recovered and has produced some very good decisions since then—but that was the lamentable position at the time.

President Van Rompuy, who met the committee, is quoted in the third paragraph on page 57 of the report as saying that,

“the EU was in a better place than a few months ago. No-one was now speaking about imminent eurozone collapse. Although the problems had not disappeared, things were ‘on the right track’ but the EU might ultimately need to give Greece more time”,

which is a very fair point. In the preceding paragraph, he also said that he had to remind the committee that these member states—sovereign member states, all of them—are very lively democracies, so it takes time to reach these decisions. So, although people complained about the process being slow, the slower it was, the better the structure that was emerging, as I hope the Minister will agree.

In the third paragraph of the summary, the committee states,

“we welcome the publication of the Single Supervisory Mechanism proposals as a significant first step towards banking union. We agree that the European Central Bank, to be given ultimate supervisory responsibility for every euro area bank, is the only organisation with the necessary credibility and authority to take on this role”.

When the Minister comes to sum up, will he deal with that matter and the concern that the committee expressed about the concentration of so much power and its practical effects on the institutional banking market place?

In paragraph 3 on page 7, the report states:

“Although the Government have made clear that the UK will not participate in a banking union … the UK’s decision not to participate, should not and need not adversely affect London’s position as the leading financial centre in Europe, nor undermine the single market. The strength of this argument may soon be tested”.

That is quite an ominous point and I would welcome the Minister’s reassurance on that matter.

I repeat my warm thanks for a truly excellent report. It has helped a great deal in taking an immensely complicated subject further. In his distinguished opening speech, the noble Lord, Lord Harrison, set an admirable precedent by referring to yesterday’s referendum decision and so on. I should like to conclude by making a few points on that in this debate.

It was a sad day for the reasons that I have suggested and the effects will be very disturbing as time goes on. I am very glad to see that the Deputy Prime Minister, quite rightly, established a different position—that there might in future be a need for a referendum depending on the outcome of any negotiations, but to threaten one now, when no negotiating posture is being created and there are many years to go before we reach the end year of this decision-making suggestion, will create a great many difficulties and uncertainty, particularly in the business world. There have been many comments to that effect.

It is sad that we have got ourselves into the position of being the bad member of the club. It is a great pity. It is rather foolish of this country to lecture other countries on the crucial importance of competitiveness and efficiency in their economies when we have a terrible statistical deficit in our own trading and do not have a very strong economy. To suggest to the Germans that they need to improve their economy in comparison with English examples is going too far. I wish I did not have to say that, but that is the reality of the situation. The Germans remain modest about their economic achievements.

The sheer awkwardness of examining the subjects in this report while not being in the eurozone will come out more and more as time goes on. If we could only restore our courage and become a mature and enthusiastic member of the European Union, it would be very good for this country.

There were some interesting points made in the press yesterday about Mr Cameron’s speech. In an article today in the best newspaper in the country—the Guardian, of course—Martin Kettle states:

“Cameron’s speech was not brave. It was reckless. The brave stance yesterday was Ed Miliband’s, sticking to Labour’s practical pro-Europeanism and refusing to follow suit. Instead, yesterday marks the moment when Cameron’s pragmatic centre-right political project finally bent the knee to the ideological fantasy about Europe that still grips the Tory party”.

Anthony Hilton, who has been a long-standing supporter of the euro and the eurozone and now feels that the eurozone has passed the danger point—after all, it has never been a weak currency; it has always remained a strong currency despite the crisis and it is only that there were four or five weak members of that currency which had to have assistance provided by collective action—says in today’s Evening Standard:

“If Cameron thinks these concessions”—

to what I believe he used to call the head-bangers—

“are going to appease his lunatic fringe and calm things down, he might equally consider applying to be Prime Minister of the planet Zog. The sad reality of his capitulation to Eurosceptic pressure is it virtually guarantees that Tory backbenchers and their media acolytes will talk about nothing else between now and an election which is still two years off”.

Of course, they might be tempted to cite the Irish as saying that it will be a good occasion, they are quite relaxed and will go along with it, but that is not true either. I quote the Irish reaction in today’s Irish Times, where Arthur Beesley says that,

“it is readily acknowledged in official circles that the British debate and uncertainty over its EU membership have clear potential to destabilise European politics and create friction with other member states”.

Finally, I shall quote my right honourable friend in the other place, Sir Menzies Campbell:

“This was never about the UK; it was always about Ukip. The declarations of satisfaction which came from the Tory right immediately following Mr Cameron’s speech were disturbing for those of us who are supporters of European engagement. Mr Cameron’s speech had nothing to do with Britain’s place in Europe and everything to do with his leadership of a bickering and divided party. Tory leaders of the past who have had to fight sections of their party over Europe have found it an unrewarding experience. Mr Cameron is fated to be among their number”.

I regret that because I think that in many ways Mr Cameron has been an excellent Prime Minister and a very personable senior political colleague, so it is a great shame that he has allowed himself to be put in that position.

As my noble friend Lord Hamilton of Epsom said, there is to be a major debate in this House next week on the decisions that were announced yesterday and the future outlook, in which I hope to take part. I shall therefore leave it at that for the moment, but it is part and parcel of everything that we will examine in our Select Committee and its sub-committees. It is all about the huge complexities of Britain remaining a bad member of the club and refusing to co-operate in these matters when co-operation is absolutely essential.

EU: UK Net Contributions

Lord Dykes Excerpts

Wednesday 24th October 2012 Lords Chamber

[Lord Dykes]

Can my noble friend reassure the House that there will be a friendly compromise on this matter when the full negotiations take place?

[Lord Sassoon]

I would love to see that happen. Of course, I cannot give any assurances about how it will play out.

Eurozone

Lord Dykes Excerpts

Monday 9th July 2012 Lords Chamber

Asked By

[Lord Dykes]

To ask Her Majesty’s Government when they next intend to discuss the plans for a full fiscal, monetary and banking union for the eurozone at forthcoming meetings of the European Union Economic and Financial Affairs Council and the General Affairs Council.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, the June European Council discussed a report by the four presidents on strengthening economic and monetary union. They will conduct further work and report back to the European Council in December with an interim report in October. There is likely to be discussion on aspects of these issues in a number of different fora before and after the December report.

[Lord Dykes]

I thank the Minister for that Answer. I congratulate Her Majesty’s Government on their strong official support for the eurozone summit agreement success, in stark contrast to the negative carping of some Tory MPs and MEPs and of a few voices in the Christian Social Union in Bavaria.

[Lord Sassoon]

I am grateful to my noble friend for confirming the success of the recent European Council, a Council which confirmed among other things that the single market had to be considered in the context of fiscal union, which brought important parts of the new EU patent court to London, and which considered a raft of other growth-related matters.