Caribbean Nations

Lord Harrison Excerpts

Wednesday 29th February 2012 Lords Chamber

[Lord Howell of Guildford]

Yes, we agree that there should be. A Royal Fleet Auxiliary Ship is there all the year round. It has a royal naval presence on it for six months of the year, and it has had some success. The noble Lord is absolutely right.

[Lord Harrison]

Will the Minister report on the levels of trade between the United Kingdom and the Caribbean and whether it is on an upward or a downward trend? Can he further report whether he has confidence in the Commonwealth Business Council to promote that trade?

[Lord Howell of Guildford]

On the second point, we have both confidence and hope: the Commonwealth Business Council has gatherings in the Caribbean and is very much on an upward trend as an organisation. As the noble Lord will know, down at the Heads of Government Meeting in Perth, which was attended by most of the Caribbean nations, there was a vast concourse and an enormous deal-flow generated by the Commonwealth Business Council. So I think that it can certainly help. As for direct bilateral trade between this country and the Caribbean region, it is the biggest chunk of trade of the whole area, taken for Caricom as a whole. It is, I think, on a steady upward trend, and it is one that we certainly intend to encourage.

EU: Recent Developments

Lord Harrison Excerpts

Thursday 16th February 2012 Lords Chamber

[Lord Howell of Guildford]

Yes, I would like to tell the noble Lord a great deal more and detail the reasons why the decision was taken not to make this into a total EU treaty. Before I answer him in detail, the larger point is that it would have profoundly changed the whole nature of the European Union. That was the essential reason why my noble friend recognised and argued that if there was to be an attempt at a fiscal union pact and it was to go ahead, it would do so without the United Kingdom. That is why he stood back from it.

On the details, let me give four very strong reasons why it did not make sense to go ahead with agreeing with the treaty—I have to find the precise bit of paper in order to do this, which is not so easy.

My right honourable friend the Prime Minister made it clear that our preference was to move forward as 27 with the protections of the single market. That is what we sought. The Prime Minister in his post-assembly European Council statement explained the safeguards that the UK was proposing, which were modest, reasonable and relevant to ensuring that the integrity of the single market was preserved. The Government do not confirm the authenticity of documents or published informal draft texts proposed during the negotiations.

There were four areas where we felt our involvement might damage the single market and our national interests. First, we were concerned about the voting powers on financial levies; secondly, we were concerned when we sought assurances, including on the voting procedure for handing powers to European adviser agencies; thirdly, we were concerned about the freedom that member states had to wreck their own financial stability regimes. I believe that we also sought a fourth assurance. None of those assurances was forthcoming.

I apologise to the noble Lord for my hesitation in putting my finger on all these issues, but they were complex and our concerns were very precise. Those safeguards were not provided.

[Lord Harrison]

My Lords, in setting up ESMA, the European Securities and Markets Authority, have we not already given away that power in order to frustrate credit default swaps legislation?

[Lord Wallace of Saltaire]

My Lords, I think it would appropriate if we continued with the debate. The Minister has sat down. I will answer some of these questions when it comes to winding up.

--- Later in debate ---

[Lord Harrison]

My Lords, this is a timely and important debate, as the European Union is facing its most serious crisis since its inception. Only this week, we have continued uncertainty about the future of Greece against the background of widespread unrest, falling GDP figures, threatened ratings downgrades by one of the credit rating agencies and the danger of fragmentation, with France pushing ahead with its financial transaction tax. What happens in the euro area has a direct bearing on the economic development of this country. Earlier this week, the European Union Committee produced its latest report on the euro area crisis. It was based on the work done by the Sub-Committee on Economic and Financial Affairs, and International Trade, which I chair, and by the main Select Committee, chaired by the noble Lord, Lord Roper. The sub-committee focused on economic and financial aspects of the crisis; the Select Committee focused on the institutional aspects and is responsible, in particular, for the chapter on the proposed fiscal compact treaty.

The crisis is actually a series of overlapping crises—financial, economic, political and institutional. Alone, any one of them would have challenged the European Union leaders. Taken together and reinforcing each other, the challenges are monumental. Professor Buiter, commentating on the alacrity of EU leaders in addressing the problem, described it as a “caterpillar hurdling”. EU summits have come and gone. There has been a series of announcements and agreements but they have so far failed to resolve the crisis, and there have been major difficulties in implementing things that have been agreed.

The committee examined an outline agreement reached at the EU summit on 26 October last year on recapitalising European banks, writing down Greek debts and increasing the financing of the European rescue funds. However, the details were left to be worked out subsequently and are taking too long to finalise. For example, on recapitalising banks, the agreement was aimed at boosting the capital held by banks, and it specifically warned that banks should not achieve a higher capital ratio by deleveraging. It was put to us that giving the banks nine months to achieve their new capital ratios would lead to exactly that—a deleveraging with a failure to invest in future industries.

We examined the role of the European Central Bank. The bank states that Article 123 of the Treaty on the Functioning of the European Union prevents it buying euro area debts directly from euro area states. However, over the past months it has greatly increased its purchases of sovereign bonds on the secondary markets, and in December it offered long-term loans to banks at very low interest rates. Indeed, 500 European banks took up an extraordinary €489 billion in loans. The bank is expected to repeat the operation at the end of this month. We caution against seeing the ECB as a panacea, but we judge that further ECB action is likely to prove essential, at least to preserve the functioning of credit markets.

The Select Committee examined the proposed fiscal compact treaty, which was negotiated after the European Council in December. The Government said that they went into that meeting with the view that the “optimum outcome” would have been an agreement at the level of all 27 European Union member states with the interests of the United Kingdom protected. However, the Government have refused to publish the details of the safeguards to which the other member states did not wish to agree. Again, I say to noble Lords on the Front Bench opposite that it would be extremely helpful and useful if the proposals that we found so difficult were published. It is impossible for parliamentarians and others to form a balanced view about the outcome of that meeting, on which the Government remain dumb.

I turn to the agreement itself. There has been a high-speed series of negotiations, which have resulted in a draft treaty on “stability, co-ordination and governance in the economic and monetary union”. It is intended that only the euro area countries will be bound by the requirements of the treaty, unless any other country volunteers to follow these rules, and many are. The treaty includes, in particular, measures on budgetary discipline, which will have to be translated into national law,

“through provisions of binding force and permanent character, preferably constitutional”.

One witness, the former Prime Minister of Italy, Mr Giuliano Amato, suggested that the treaty would not be enough by itself to resolve the crisis but that it was necessary to restore trust. He said that,

“trust may be the main outcome of this treaty on which you can build what in the treaty itself is missing”.

In principle, the committee considered that the euro area states must be free to take the steps they consider necessary to strengthen the euro, including in the key area of fiscal integration, but that matters relating to the single market must remain the preserve of all 27 EU member states. Again, I urge the Front Bench opposite to consult the evidence of Professor Craig, who came before the Select Committee, on the ambiguity of having a treaty between the EU 27 as currently formulated and having the fiscal compact treaty. There is no doubt that one thing that might become contaminated is the single market. Incidentally, I think that in this Chamber there is a universal view of the benefits of having a proper and functioning single market.

The Select Committee highlighted a number of legal and other issues raised by the proposed treaty, including the relationship between it and the EU treaties and laws made under the existing EU treaties; the proper role of EU institutions in relation to the treaties; and the overlap between the new treaty and requirements under existing EU laws. Some of the difficulties would disappear if the proposed treaty were folded into the main EU treaties. Article 16 of the proposed treaty suggests that this should happen, after a review of experience with implementation. In principle, the Select Committee could see no reason why this should not happen in due course. It is worth emphasising that, even if it does happen, the key provisions will still apply only to countries using the euro. I ask the Government whether they will contemplate folding in the treaty and joining in with that enterprise.

We accepted that budgetary discipline is necessary to make progress in resolving the crisis, but ultimately it is the resumption of sustainable economic growth that will hold the key. We mean this both in general terms across the European Union and specifically to boost the competitiveness of certain areas of southern Europe compared with the north. It is hugely concerning that the potential of the further development of the single market to enhance such growth has faded from view during the crisis. Perhaps the most important challenge facing policy-makers now is to find policies to support economic growth which can be implemented effectively during the period of budgetary austerity.

I draw the House’s attention to other things that are going on which are contingent on the development of the European Union. For instance, this morning my committee interviewed Commissioner Šemeta on the financial transactions tax, and I hope that noble Lords will have the opportunity to read the transcript. My committee has published the sovereign credit rating agencies report, which has come back into focus again with, extraordinarily, one of the CRAs predicting the rating of Scotland were it to leave the United Kingdom. We also now have in place the European new supervisory financial framework. There have been some major changes in the way we oversee the financial services which appertain to London, including the creation of various European supervisory authorities. These things are happening. As the noble Lord, Lord Mandelson, said, we have to be alert to these changes and we have to be actively engaged if we are to ensure that the United Kingdom’s interest is preserved in the future.

Northern Cyprus

Lord Harrison Excerpts

Wednesday 1st February 2012 Lords Chamber

[Lord Howell of Guildford]

I fully agree with my noble friend. Of course, these are unacceptable conditions for any citizen. The whole aim of working for a comprehensive settlement must be to make all those kinds of treatments and suffering, and the anecdotes associated with them, a matter of the past.

[Lord Harrison]

My Lords, I renew my previous request to the Minister to ensure—

[Lord Hannay of Chiswick]

My Lords, does the noble Lord agree that since the deadlock in the talks at the moment is at least half the responsibility of Mr Eroglu, it is pretty odd to be discussing the matter on the Order Paper today?

Cyprus: EU Presidency

Lord Harrison Excerpts

Tuesday 20th December 2011 Lords Chamber

[Lord Howell of Guildford]

We want to see progress on all sides on this vexed question of property. The commission that my noble friend mentions is making a positive contribution. Ultimately, we believe that the whole property issue can be solved only as part of a comprehensive settlement. We certainly support any efforts to resolve the issue, whether in the north or in the republic. I cannot say more than that at the moment.

[Lord Harrison]

My Lords, I, too, declare a pecuniary interest as having returned from northern Cyprus on a visit sponsored by its Government. Does the Minister recall a Question that I laid earlier when I asked the British Government to use their best interests to bring together both sides so that the presidency will bring renown to the island of Cyprus and to its two peoples? Unfortunately, there is little working together for a common purpose, as was demonstrated during our visit.

[Lord Howell of Guildford]

I do indeed recall the noble Lord’s earlier Question in which he rightly expressed the hope, which we frankly all share, for decisive progress. The next meeting in the UN process under the Secretary-General of the United Nations takes place at the end of January, and we all hope for further progress. At the latest meeting, the stance was not totally negative but there was not much progress, and we hope that they will do better this time. The gains for all sides from a successful advance in the UN process are so enormous that one longs to see it move forward, but so far, I am afraid, we have been disappointed.

Cyprus: EU Presidency

Lord Harrison Excerpts

Wednesday 9th November 2011 Lords Chamber

Asked By

[Lord Harrison]

To ask Her Majesty’s Government what action they will take to ensure that both the Greek and Turkish Cypriot communities will be involved in Cyprus’s presidency of the European Union in the second half of 2012.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, as the noble Lord may be aware, President Christofias has publicly stated that he would like to achieve a settlement before Cyprus’s presidency of the European Union, and it is the United Kingdom’s hope that this is achieved to the benefit of all Cypriots. In such circumstances, both the Greek Cypriot and Turkish Cypriot communities will be part of Cyprus’s EU presidency.

[Lord Harrison]

My Lords, the United Kingdom is, thankfully, one of the guarantor powers for Cyprus, and we are in an ideal position to bring sensible people together from all sides in an attempt to ensure that the presidency of the European Union, over which Cyprus will preside from July of next year, brings credit to all members and all people in Cyprus. Will the noble Lord contemplate thinking about how to ensure that the two sides do joint planning, and that the venues for the six-month presidency are shared so that all can participate in this enterprise?

[Lord Howell of Guildford]

This would clearly be the ideal objective, and at the moment many people are working hard on it, including HM Government. Of course Alexander Downer is playing his role as adviser and mediator; and there was the meeting with the UN Secretary-General about a fortnight ago in which there was—I am advised to say—some progress but no breakthrough. So it was not totally negative, but obviously there is a long way to go. The next meeting is in January and we hope that there will be a further basis of agreement after that, as we move towards the kind of solution that many of us have sought and longed for for so long.

EU: Polish Presidency

Lord Harrison Excerpts

Thursday 30th June 2011 Lords Chamber

[Lord Howell of Guildford]

These matters remain under constant discussion. Everyone recognises that the common agricultural policy continues to have its flaws and challenges, given the ways in which it promotes exports out of Europe at great expense to poorer countries and farming communities. We will certainly discuss all these matters on a continuous basis.

[Lord Harrison]

Will the Minister confirm what the noble Lord, Lord Tomlinson, said, which was confirmed by Commissioner Viviane Reding this morning on the “Today” programme, that the MFF stretching from 2014 to 2020 is a 5 per cent increase over that seven-year period, and should not be understood to be an annual increase?

[Lord Howell of Guildford]

This is very recent news. Initial reactions have not been favourable in other countries or this one, where we are thinking in terms of austerity in order to promote sound budget discipline and the basis for sound recovery without soaring interest rates and other deterrents. I cannot add more beyond the initial reaction that these things will be looked at very carefully indeed. The spirit of common austerity practices by the European Union in all its parts as well as the member state countries will have to be reflected.

European Council Decision: EUC Report

Lord Harrison Excerpts

Monday 21st March 2011 Lords Chamber

[Lord Harrison]

My Lords, the importance of this debate is that the decisions will be made by the European Council at the end of this week, on 24 and 25 March. I speak as the chair of the Economic and Financial Affairs and International Trade Sub-Committee, which has had correspondence with the Government on this. The matter has also gone to your Lordships’ European Union Select Committee for scrutiny. It was thought appropriate in the light of the importance of this debate that this report should be provided on amending Article 136 of the Treaty of the Functioning of the European Union in order to help colleagues to come to a decision.

The noble Lord has rightly pointed out the origins of the problem and the creation of a response to the financial crisis brought about by our Greek colleagues. That relates to the establishment of the European financial stability facility, which is agreed by member states within the eurozone, and the EFSM, the separate mechanism that draws on the European Union budget and, therefore, involves the United Kingdom.

As the Minister said, the matter was raised under Article 122(2) of the European Union treaty, which points out that, in exceptional circumstances that are beyond the control of any one member state, action can be taken to help out that member state. We wrote to the Government and asked whether they felt that that conflicted with Article 125, which is the no-bailout clause, but the Government replied to us insisting that the EFSM provided loans not bailouts and that, therefore, there is a distinction. Incidentally, we have also drawn on the report, which we hope will be cleared by the Select Committee tomorrow, on EU economic governance. Within that report we interviewed many experts on these matters in looking at the basis for the decisions made. There is agreement that this was the right and proper way forward.

We arrive at a situation where a new permanent crisis mechanism has to be created at the end of 2013 when the mechanism and the facility are abandoned. On 16 and 17 December 2010, the European Council decided on the new mechanism, which is to be called the European stability mechanism. It is also the case that Article 122(2), the exceptional circumstances clause, is no longer to be used. Instead—I think that it is true to say that there was pressure from Chancellor Merkel of Germany, who wanted not to fall foul of the German constitutional court—there was insistence on having a treaty change and hence an amendment to Article 136 as printed in the document that we have submitted and which is being proposed now. The process is that, under Article 48(6) of the European Union treaty, amendments to part 3 of the Treaty of the Functioning of the European Union, which includes Article 136, the subject of the debate this evening, can be appropriate. Therefore, as the Minister has explained, we have the simplified revision procedure as the mechanism for achieving that. Perhaps we should say that this is the first use of that procedure.

Foreign and Commonwealth Office: Educational Allowances

Lord Harrison Excerpts

Monday 1st November 2010 Lords Chamber

[Lord Howell of Guildford]

I agree with the noble Lord, who obviously speaks with enormous authority on this subject. I would just add, referring back to my Answer to the noble Lord, Lord Campbell-Savours, that we are looking at ways of bringing the cost of this operation down. However, the basic requirement is that these children are educated; we do not want only childless diplomats. Therefore, we have had to make the provision that the noble Lord has just described. I believe that it should continue and that it is essential for an effective diplomatic effort by this country.

[Lord Harrison]

Further to his first Answer, will the Minister say in simple pounds, shillings and pence what is the annual maximum tax-free contribution that can be made to the education at a secondary school of a child of a Foreign Office official? Secondly, will he rebut in their entirety articles in the Daily Mail and the Telegraph suggesting that this Government will abolish the continuity of education allowances which are so important to our Armed Forces and, indeed, the Foreign Office?

[Lord Howell of Guildford]

There is no suggestion, as I made clear, that these allowances will be discontinued for the Diplomatic Service. I cannot comment on other branches of the Crown service or other public services because that is another question for which a rather different set of arrangements apply. The figures for which the noble Lord asks are that the ceiling for junior boarders in the current year is £7,239 per term and £8,236 for senior boarders, which is a reduction of £100 since last September. The figures are considerably lower for those attending as day pupils.

Queen's Speech

Lord Harrison Excerpts

Wednesday 26th May 2010 Lords Chamber

[Lord Harrison]

My Lords, I too have long admired the experience and expertise of the noble Lord, Lord Howell, in the field of foreign affairs. I have also admired his agility over the years in outflanking the right-wing Eurosceptics on his Back Benches, and I hope that he forms a coalition within the coalition with my Liberal Democrat friends to ensure that that is reinforced.

I would have appreciated it if the Minister had been present when the trio of Ministers set off for Afghanistan and fell out within that narrow coalition, such that Dr Fox told us that the British Government were not there to promote women’s education as an example of soft power and Mr Mitchell replied that he was. Perhaps the noble Lord, Lord Astor of Hever, whom I also welcome to the Front Bench, could explain what the line is.

I welcome the fact that the international development section of the proposal says that the Government will honour the aid commitments, particularly to live up to the 0.7 per cent gross national income ambition by 2013—a very early date. This is indeed ambitious; the Labour Government achieved a change from 0.28 per cent to 0.52 per cent over the period of their government, and I would like to know what the Minister is planning in order to achieve that. If it is inscribed in legislation as something that has to be done, what happens if there is a failure in such an ambitious plan?

One of the purposes of aid has been demonstrated by the commitments given by Prime Ministers Blair and Brown, especially about Africa in the Gleneagles agreement. This week we have had a report from the One Campaign, headed by Bono and Bob Geldof, to demonstrate that Africa is changing because aid has been put in and more democracies have appeared. That is very welcome, and let us see what happens in future. As the Government are proposing that Africa has a seat on the United Nations Security Council, perhaps the Minister will give us some ideas about how the representative might be chosen.

I welcome the commitment to the Commonwealth, strengthened as a focus for promoting democratic values and development. That is good, but what are the new ideas and what are some of the challenges ahead? One such challenge is that in time the Queen will no longer be with us, much to our regret, but it is not true that Prince Charles will inherit the position of head of the Commonwealth. What is the coalition’s thinking about that?

In terms of new ideas, I would like it recognised that this House is very much the House of the Commonwealth. We have many representatives of those who have been brought up or lived their lives in the Commonwealth and have great engagement with it. Does the coalition agree with that? Can we strengthen some of those ties? Let us be a bit imaginative. Could we invite members of other Parliaments elsewhere in the Commonwealth to attend here on an occasional basis?

Added to that, I caution colleagues opposite in the coalition that if they are to reform the House of Lords in the way that they describe: please do not lose the baby with the bathwater. We have enormous expertise in this House regarding not just the Commonwealth and foreign affairs but Europe. I give as an example the late Lord Dahrendorf; he was a German commissioner in the European Community of those days and ended up as a distinguished Member of this House who enormously improved what we could do. Please do not lose that.

What plans does the coalition have about appointing Peers? I thought that it was an excellent innovation by our Labour Government to appoint some excellent Members to the peerage to represent us on the Front Bench. I give just one example: the noble Lord, Lord Malloch-Brown, brought in from the United Nations. That was very good.

The Commonwealth is also represented here by the Commonwealth Parliamentary Association. I hope that the coalition can try to deal with some of the scepticism found in the British media and press. I give the example of the CPA visit here to witness the elections. A very dusty and sceptical interview took place on the “Today” programme. Sad as I was that we made mistakes during the election in terms of not having sufficient ballot papers and not enabling people to vote, it showed that we have things to learn from the Commonwealth—it is not just a one-way matter.

I bring to the attention of colleagues opposite the fact that I recently attended the British Islands and Mediterranean conference as a regional executive of the CPA. There is much to learn from the smaller and the new Administrations that are represented there. They, like small businesses, often have the ability to innovate, change and think afresh. I was pleased when I visited our Dutch friends last year—I hope that this too will be copied—that our then Foreign Secretary David Miliband had visited them and that his visit had gone down very well. We must take care of the smaller countries within the European Union as well.

Represented at this conference on the Isle of Man were of course the Channel Islands, Malta, the Isle of Man and Cyprus. The Minister will know that today the Cyprus talks have been reconvened, with the Turkish Cypriots in the north no longer represented by President Talat, for whom I have great sympathy, but by Mr Eroglu. I hope that we do whatever we can. Here is an opportunity for the new coalition to try to help the restarted talks and see whether some initiatives can be made there.

I was sorry to see that in the document produced by the coalition there was no mention of the single European market and its completion, or at least its further deepening. This to me is a classic example of where we could coalesce as a House of Lords by promoting the lodestone, in my view, of the European Union: to create that open and free market, which would be of enormous benefit to all those who work within it.

I am sorry to say that I have not been able to make remarks on the growth of the Members of the European Parliament. I hope that we are better engaged with those. I praise our own spokesman, my noble friend Lady Kinnock, who is a distinguished former Member of the European Parliament, as now are members of the coalition Government, such as Nick Clegg and other colleagues. We should re-engage with the European Parliament. I hope that the Conservatives will rethink their allying themselves with some of their stranger bedfellows on the European continent.