European Council Decision: EUC Report

Debate between Lord Eatwell and Lord Howell of Guildford

Monday 21st March 2011 Lords Chamber

[Lord Eatwell]

Would the Minister explain why he is asking this House to agree to a Motion that he asserts is going to be in the best interests of the UK when he does not even know the mechanism that the Motion will create?

[Lord Howell of Guildford]

For the obvious reason that, in order to go ahead with the design of the ESM, there has to be first this Motion and then the alteration of the treaty, which under our new provisions of the EU Bill will also be debated in this House. We have to start the process off. If the proposition is that we cannot start until we know everything and that we are not going to know everything until we start, the noble Lord is asking me to go around in circles. That is often the fate of those in government, but in this case I prefer to begin to proceed on a process. Of course, I cannot stand here and say that what is going to emerge for the ESM and members of the eurozone will all be wonderful and work perfectly and that the eurozone will be happy for ever. The noble Lord could not reasonably expect me to be able to say that. I have no idea, as there are major issues of a geopolitical, political and economic nature lying ahead for the organisation of a financial structure for the eurozone, and none of us can be dead certain how these things will turn out. What one can say is that this is a move in the direction of trying to stabilise the eurozone, which the Government believe is in the interests of the United Kingdom. The noble Lords, Lord Pearson of Rannoch and Lord Stoddart, took different views, but that is what we believe and that is the Government’s position.

--- Later in debate ---

[Lord Eatwell]

My Lords, I want the eurozone to succeed. That is why I was particularly concerned about the structure of the ESM, as agreed last weekend. I asked several rather technical questions about that. I am content if the noble Lord does not feel that it is appropriate to answer those questions this evening, but I wonder if he would undertake to write to me and answer them.

[Lord Howell of Guildford]

I will undertake to write if I can get hold of the propositions that the noble Lord is asking about. If he is asking me to describe exactly how the ESM will work, I cannot yet do so because it has not been designed. We are taking a step towards the point where design of the ESM can begin. The noble Lord, Lord Pearson of Rannoch, would rather we did not take that step forward. However, the noble Lord, Lord Eatwell, who is extremely expert in this field, and his party want this to go ahead. We should take this first step. I know I will not be able to satisfy the noble Lord, Lord Eatwell, in describing the exact design of the ESM system because the mechanism is under construction.

The noble Lord also had some fun—it was rather enjoyable—by asking how we could hold two views that he believed to be contradictory. One is that the ESM would directly benefit the UK or, to put it negatively, that failure to go ahead with the ESM would greatly damage the UK. At the same time, we were not involved in it. The remark of, I think, an American philosopher passed through my mind: the mark of an intelligent mind is to be able to hold two contradictory thoughts at the same time. It may be that it is the mark of an intelligent Government to do the same. It is of course possible to argue, as I have this evening and I stand by it, that standing in the way of this next step is standing in the way of a step that may lead to better things and greater stability for the eurozone. We judge, contrary to the views of the noble Lord, Lord Stoddart, that this is an improvement and is good for the British economy, British prosperity and the British people.

That is not the same as saying that we are involved in the powers, competencies and arrangements of the ESM. We are not. We have been in the EFSM and we were liable. We will cease to be liable in the future, once we can get this system in place. The first step is now required and it is one that the Prime Minister wishes to take, quite rightly, in the interests of this nation at the European Council meeting at the end of this week.

There will be, I repeat, a second opportunity to debate this treaty change during ratification, in line with the provisions of the EU Bill once it becomes law. Your Lordships will be addressing their minds to it at Second Reading tomorrow. Under the EU Bill, all treaty changes require primary legislation to be ratified, so this is not the end of the matter by any means. It is a start and it is a good start—the right start in the interests of this nation.