European Union (Approvals) Bill
Wayne David Excerpts(11 years, 10 months ago)
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Michael Connarty
I hope that the people of Shipley are not believing the mythical nonsense that has just been spoken. I have sat on the House’s European Scrutiny Committee since 1998, and the reality is that the European Commission can initiate proposals for legislation, but legislation cannot be agreed in the EU unless it is passed by the European Council, and we are one of 27 countries that take those decisions. A number of people do not like the fact that many of those decisions are now taken by qualified majority voting and there is no veto—I know that the right hon. Member for Wokingham (Mr Redwood) is keen on the return of the veto on everything—but that is the decision that was taken by the House through the Lisbon treaty and, before that, through many other treaties. We have participation in a Council that makes the legislation, not the Commission.
Wayne David (Caerphilly) (Lab)
Does my hon. Friend agree that one problem of the European Court of Human Rights is sheer delay? It has a backlog of 150,000 cases and a five-year delay, on average, before a case is heard. That is unacceptable.
Michael Connarty
That is entirely unacceptable. I believe that that point is regularly made in the Parliamentary Assembly by Members from both sides of the House. We have been pressing to change that, so that many cases that are queuing up at the Court of Human Rights, which clearly do not have any chance of being judged positively in that Court, can be dealt with in another manner. Perhaps some of them will not come to the Court—
Mr Chope
Again, I believe in the concept of reasonable expectations. Once a draft Bill has been produced and the Government have said that it will be put before a Joint Committee, I expect the Joint Committee to be appointed within a reasonable space of time. The Committee can then meet and decide its own timetable. However, I would not want to take issue unnecessarily with the Government on a matter such as that, which is relatively small in comparison with some of the other issues on which I have differences with the Government.
I would love to recommend to my colleagues that we divide on this subject, but having heard from the Minister that even if we carried a Division, it would be of no use whatever and might even be counter-productive, I am minded to say that the best thing to do is to hope that the Minister will take back the concerns over the misallocation of resources between the Council of Europe and the Fundamental Rights Agency, and that he will see what he can do to change the system so that the next time we have a debate like this, we have the power to control the agenda and the work programme, rather than being presented with a fait accompli, the alternative to which is even more latitude for the agency concerned.
The next amendment that we will discuss is more wide-ranging and I hope that the Minister will explain in a little more detail why that amendment cannot be accepted by the Committee. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Wayne David
Clause 1 refers to the draft decisions on the Official Journal and the Fundamental Rights Agency.
I will refer to those two issues in a moment, but I would first like to say a little about clause 1(1), which sets out that when a decision is reached under article 352 of the treaty on the functioning of the European Union, or the Lisbon treaty as it is known as, under section 8 of the European Union Act 2011 that decision must come before Parliament for ratification.
As connoisseurs of these matters will be aware, article 352 is quite controversial. It is the so-called flexibility or enabling clause, which allows decisions to be taken when there is no legal base for them. Its predecessor was article 308 of the European Community treaty. When I was a member of the European Scrutiny Committee, we produced an excellent report on article 308.
I am pleased that we have this new parliamentary power under the 2011 Act. I am sure that the Minister for Europe will recall that the Opposition consistently supported more powers for national Parliaments when the Bill was going through this House. The procedure with regard to article 352 is an important new power.
I was, however, concerned that the former Lord Chancellor, the right hon. and learned Member for Rushcliffe (Mr Clarke), said last year in evidence to the European Scrutiny Committee that an Act of Parliament was not required to enact the decision on the Fundamental Rights Agency because it satisfied the exemption requirement under section 8(6)(a) of the 2011 Act. That was rightly questioned by the European Scrutiny Committee. In a letter to the Committee on 22 November, the Government stated that they had had second thoughts and that legislation would be brought forward after all. That is one point to the European Scrutiny Committee.
I find it strange, given the initial difference of opinion between the Government and the European Scrutiny Committee, that there is not even a passing reference in the explanatory notes to why the Government at first considered the decision to be exempt and then had a change of heart. Perhaps the Minister could tell the Committee what changed between the summer and winter of last year that prompted the Government to alter their position. Eventually, the European Scrutiny Committee cleared the document, but it stated that the Government’s uncertainty—I would say vacillation—had led to an inordinate delay.
Clause 1(2)(a) is about giving binding legal effect to the electronic version of the Official Journal, as only the printed version currently has such veracity. This may be called the libation clause. I say that because, as I mentioned on Second Reading, this paragraph is required, in part at least, because of a ruling by the European Court of Justice on a case concerning the importation of red dessert wine into the Czech Republic.
After being fined for breaking customs law, Skoma-Lux, the company that imported the dessert wine, brought an action in a Czech regional court in an attempt to cancel the fine. The company argued that the wine should not be classified as standard red wine and that the Act of accession for the new member states that joined in 2003 was not legally binding because it had not been published in Czech in the paper version of the Official Journal.
After expert examination by the customs technical laboratory in Prague, the wine was indeed reclassified because, unlike most wines, it was made from grape juice that had added sugar and corn spirit. It was said that that did not change the
“organoleptic characteristic of the beverage”
but did cause the wine to have a sweet taste that cannot be achieved by “standard wine production”. Because the regional court was not sure whether that could be discerned by customs officers, the issue was referred to the European Court of Justice. Sadly, I have been unable to find out the view of the European Court of Justice on that matter. Perhaps the Minister for Europe can help us.
Although that is unclear, what is clear is that the European Court of Justice made a number of unequivocal statements with regard to the other point that was brought before it, namely the availability of EU law in the paper form of the Official Journal. The Court ruled that “making the legislation available” on the internet
“does not equate to a valid publication in the Official Journal of the European Union in the absence of any rules in that regard in Community law”.
In the light of that ruling, the European Commission agreed to bring forward a proposal. Political agreement was achieved at the Justice and Home Affairs Council of March 2012. Undoubtedly, easy access to EU law makes for speed and is economic, and it would obviously be advantageous to have legal certainty.
Earlier I mentioned reservations in this House about the use of article 352, but it is worth noting that scrutiny reservations are not confined to this Parliament. I understand that other Parliaments, especially those in the Czech Republic and Germany, also had concerns about article 352 and the possibility of decisions being taken without a given treaty base. On the legal status of the online Official Journal, I understand that Germany entered a parliamentary scrutiny reserve and therefore the German Government were unable to confirm their agreement. Will the Minister confirm whether the situation in Germany has been clarified, and that there are no problems in other member states?
Mr Walter
The hon. Gentleman has cited examples of where the Fundamental Rights Agency is investigating areas into which the European Commissioner for Human Rights—a Council of Europe appointment—has not delved. Surely it would be more logical if we were to use those resources for the benefit of all 47 member states of the Council of Europe. It is in the 20 member states that are not members of the European Union that those rights are inevitably most at risk.
Wayne David
The hon. Gentleman makes the point: there is a mismatch between the Council of Europe and the European Union, not least in terms of the membership of those two constituent organisations. It can become awkward and cumbersome, but that obvious overlap should be recognised and efforts are being made by both parties to minimise the duplication of work. It is significant, for example, that the Council of Europe has an independent expert who sits on the board of the Fundamental Rights Agency. A physical interrelationship takes place, which is to be warmly welcomed.
One conclusion of the important report from the other place was that:
“EU legislation brings a considerable added value over the ECHR in that it can be effectively enforced…It can also cover matters not adequately covered by the ECHR and is more flexible”.
Those are important considerations. We are talking about two different beasts. The work is complementary but it is also different and it is important to recognise that.
In conclusion, it is not my intention to trespass into the debate about whether or not the UK should exercise next year its block opt-out of so-called third pillar issues. That is a debate for another time, but I say simply that these issues need careful and rational consideration. Given the interest in related issues, I hope that this House will have umpteen opportunities to consider the profound decision that will have to be made next year. This clause has the support of the Labour party and we are pleased that time has been allocated for the discussion of the Bill on the Floor of the House. We hope Members from all sides will feel able to support the clause.
Damian Green
I am grateful to the hon. Member for Caerphilly (Wayne David) for the Opposition’s support for this clause. He asked a couple of specific questions including why the Government changed their mind about the applicability of the exemption in the European Union Act 2011 to these measures. Originally, the Government thought that section 8 exemptions applied to a decision previously adopted under article 308 of the treaty. However, having reconsidered the issue of exemptions, and partly owing to the sterling work of the European Scrutiny Committee and its equivalent in another place, the Government concluded that decisions previously adopted under the legal base of article 308 do not fall within the exemptions in the 2011 Act. Therefore, along with future article 352 decisions that were previously adopted under article 308, such decisions will require parliamentary approval through primary legislation.
The hon. Gentleman also asked about the state of play in Germany, and I am happy to assure him that Germany and all other member states have completed parliamentary scrutiny of this issue. The Council is awaiting the decision of the UK Parliament before the decision can be adopted.
We have discussed exhaustively the work programme of the Fundamental Rights Agency, and the hon. Gentleman made a good point that the other part of this clause is about allowing the electronic version of the Official Journal of the European Union to be regarded as an authentic version. I am sure the Committee will agree that in the modern world in which electronic communications are now as normal as paper communications, that is a sensible measure that will not increase costs for the UK and its taxpayers. I commend the clause to the Committee.
Question put and agreed to.
Clause 1 ordered to stand part of the Bill.
Clause 2
Approval of decision relating to number of EU Commissioners
Europe
Wayne David Excerpts(11 years, 10 months ago)
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Mr Cash
I am grateful for that intervention for a very good reason. One of the reasons why I believe it is right for the Prime Minister to insist on the “in or out” question is that now, after all the agonising over all these years—including the Maastricht rebellion, for example, which I was able to participate in and lead at the time—all these things have culminated in this referendum. We have fought for a referendum. Precisely because the question is “in or out?”, it raises the question of the European Communities Act 1972 and whether the British people, having voted in the ballot box, should be expected to receive legislation that comes automatically into law when they might not in fact agree with it. That is the problem: that is why I believe we must have the right question, but it must also be at the right time. As far as I am concerned, if that democratic principle is not upheld, I will vote to come out, because the democratic principle is the fundamental issue for the British people, many of whom fought and died for this country.
I heard my hon. Friend the Member for Croydon South (Richard Ottaway) refer to the fact that he was born in May 1945. I was born on 10 May 1940. That was the day on which Churchill became Prime Minister, and it was over the question of whether or not Britain would be able to govern itself—and much more besides. I follow the line Churchill took about being “associated but not absorbed” with Europe. That is the fundamental question.
In addition, on the economic front, let me make this point. My hon. Friend the Member for Harwich and North Essex (Mr Jenkin) and I wrote a pamphlet about a positive way forward for the single market. We believe that there is a positive way forward for Europe, but that what is happening at the moment is that Europe is creating instability by this concentration on a compression chamber when there are all these diverse countries. As my hon. Friend the Member for Croydon South said, “one size fits all” does not work. We must have an association of nation states. I appreciate that that challenges the centralisation that has gone on for so long in Europe, and I appreciate that it challenges the democratic deficit. I appreciate, too, if I may say so, that this would increase trade, increase opportunities and help to liberalise the rest of the world in the global marketplace. All these things have to be examined, as we move forward in the debate that has now started.
Given the dysfunctionality of the European Union, the determination to repudiate the idea that we should have a referendum is astonishing. The French had two referendums—I took part in both of them in France—and we did incredibly well in Denmark, too, where there were several referendums. There was a referendum in Ireland and in Holland. Who on earth are these people to turn round to us in this country and say, “We can have referendums, but you can’t”? It is beyond belief.
Wayne David
Just so we can be absolutely clear, when would the hon. Gentleman like to see the referendum in this country being held?
Mr Cash
I would like to see it before the European elections. I believe that that is where the focus on the European question will be at its best. Then we can expose the position of the Liberal Democrats, UKIP and the Labour Opposition at the same time. The reality is that the British people deserve to have that vote.
Commission Work Programme 2013
Wayne David Excerpts(11 years, 11 months ago)
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Mr Lidington
I appreciate that my right hon. Friend finds it hard to contain his excitement at the prospect of the Prime Minister’s speech. He will, however, understand if I decline to be drawn into speculating about the contents of that speech today. I am very confident indeed that when my right hon. Friend the Prime Minister makes his promised speech on European policy, it will address the important issues facing both the United Kingdom and Europe as a whole, and will chart a way forward that is in the interests of the people of this country in particular and the peoples of Europe more broadly.
Wayne David (Caerphilly) (Lab)
As the Minister is waxing eloquent about the Prime Minister’s forthcoming speech, could he tell me whether the Prime Minister intends to consult the Deputy Prime Minister and his own Back Benchers?
Mr Lidington
I do not know whether that was a bid from the hon. Gentleman to be involved in the No. 10 drafting team. The Prime Minister will prepare his speech in the way he normally prepares such speeches within Government. The hon. Gentleman will not have to wait long to see the speech and I am sure that he will be first in the queue to express enthusiasm and a warm welcome for what my right hon. Friend has to say.
Wayne David (Caerphilly) (Lab)
I begin with a general point about the European Commission. I am not a great defender or fan of the Commission, but it is important for us to remember that it is not a legislative body. It does not decide laws; it makes proposals and, usually through a process of co-determination or co-decision, other institutions, such as the Council of Ministers and the European Parliament, are then involved in determining the law. That is when democracy comes into play. It is important to keep that perspective.
Mark Reckless (Rochester and Strood) (Con)
The hon. Gentleman says that the European Commission does not make law, but is it not the case that the European Commission has a monopoly on the proposal of law, and is therefore an essential and necessary part of law-making? To that extent, in European structures it does make law.
Wayne David
The hon. Gentleman is right. The European Commission has the sole right to initiate legislation. Nevertheless, it does not have the sole right to agree legislation; the initiatives the Commission formulates are the result of discussions in the European Parliament, and increasingly in the Council of Ministers. When we talk about democracy inside the European Union, it is important to recognise that this Parliament has a pivotal role. If anything has clearly come out of the debate, it is the fact that this Parliament does not take European legislation and formulation as seriously as it ought to do.
Mark Hendrick
Is it not the case that the European Commission is made up of Commissioners directly appointed by democratically elected Governments and they are interviewed by Members of the European Parliament before their appointment? Members of the European Parliament are directly elected as well.
Wayne David
My hon. Friend makes a very good point indeed, and reinforces what I was saying.
I welcome the debate because it occurs at a time when Europe as a whole is experiencing a deep economic malaise. Against the problematic economic climate that we all face, we must assess the relevance and appropriateness of the Commission’s work programme. The situation is most acute in the eurozone, as I am sure Members will agree, although of late, it has stabilised somewhat. The situation is still serious in Spain and Portugal, and in Greece it is extremely serious. However, there are signs of improvement; in Ireland, things are starting to get better. Nevertheless—
Wayne David
Before my hon. Friend intervenes, I take the point that one of the great weaknesses across the European Union as a whole is the macro-economic policy being pursued by member states. There is too great an emphasis on austerity and nothing else. We need to put a firm emphasis on growth and measures to stimulate our economy so that we can work our way to prosperity once again.
Kelvin Hopkins
I want to be persuaded that there are signs of improvement in the European Union. Writing in The Guardian at the weekend, a Greek journalist suggested that the Greek economy will contract by a further 10%.
Wayne David
As I indicated, the situation in Greece is still very serious indeed. As we know, deep-seated structural problems afflict the Greek economy but there are signs of improvement elsewhere. Certainly the contagion that many people feared a few months ago does not appear to be materialising. There are signs of stabilisation, at least, across the eurozone. It is therefore important that the European Commission does as much as it can to make sure that we take that a stage further and have a coherent growth strategy. In that respect, the document before us is somewhat lacking, but it does at least recognise the importance of job creation. I cite its opening statement:
“Today’s absolute imperative is to tackle the economic crisis and put the EU back on the road to sustainable growth.”
That is a good starting point. At least there is recognition of the need to put that four-square on the agenda. However, practical measures to realise that goal are somewhat lacking.
One of the positive things about the document is that it recognises the importance of taking forward the completion of the single market. It states:
“A fully integrated and interconnected European Single Market covering telecoms, energy and transport is a prerequisite for competitiveness, jobs and growth. Achieving this requires affordable, accessible, efficient and secure network infrastructure. Accelerating the roll out of the digital economy will bring benefits across all sectors, through enhanced productivity, efficiency and innovation.”
That is particularly true. It is something that the previous Labour Government and this Government have effectively been arguing for.
The importance of the single market, particularly to the United Kingdom, should not be underestimated. In support of that point, I refer Members to the important new-year message from John Cridland, the director general of the CBI, in which, on behalf of British business, he makes it absolutely clear how important the single market and the European Union are to British business. He points out that 50% of Britain’s exports go to other countries in the EU. He argues the case coherently for completing the single market, and says that the EU is vital when it comes to enhancing our international trading relationships. He goes a stage further: he argues that it is vital that we do not just pay lip service to the single market, and that Britain stands four-square behind the European Union and argues the British case consistently inside the decision-making chambers of the EU. He says:
“It’s essential that we stay at the table to bang the drum for businesses and defend our national interest, particularly protecting our world-class financial services industry to maintain our competiveness internationally.”
European Union (Croatian Accession and Irish Protocol) Bill
Wayne David Excerpts(12 years ago)
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Mr Nuttall
My view is that the Government could negotiate a different set of criteria, which might involve a longer period, if they were linked to an equalisation of the economic imbalances between respective member states. That is the key.
Wayne David (Caerphilly) (Lab)
To be clear on the implications of the amendment, if it were passed, does the hon. Gentleman agree that it would put a stop to Croatia’s membership of the European Union because we would effectively have to go back and renegotiate the whole package for Croatia to enter the EU? It would effectively put an end to that membership.
Mr Nuttall
One can only surmise that that might be the case; I have no doubt that our European neighbours might be more than happy to agree to my suggestions. That prompts a question: if the Government were unable to deliver what is, in the scale of European affairs, a minor adjustment to the arrangements governing member states, how on earth would they ever be able to repatriate the powers Members on both sides of the House talk about so often? I do not want to go down that road, but I was asked the question, Madam Deputy Speaker—
Keith Vaz
I am glad that the hon. Gentleman raises that point, because I understand that the new Governor of the Bank of England will apply for British citizenship, but if he has to wait as long as most people have to wait, his term will have expired before he gets it. Unfortunately, he is already married with two children and so cannot marry an EU citizen in order to get here more quickly. Otherwise, he could become an EU citizen and would not need to apply for British citizenship. Anyway, the hon. Gentleman is trying to distract me into a debate on the merits of citizenship applications, but I will not be tempted, even though I have huge respect for him and his great knowledge of the subject.
This is about exercising treaty rights. The Government have decided to have a seven-year transition period, as the previous Government did with regard to Romania and Bulgaria, uncomfortable though that was, and I think that is the right and sensible course of action. When a country joins the European Union, if it is to be the kind of European Union I want us to belong to, every country and every citizen should ultimately be treated equally. Sadly, some EU citizens are treated differently because they happen to come from certain countries, which I think is wrong.
I appreciate the sincerity, honesty and principles of the hon. Member for Bury North, who was against the treaty in the first place, but once a country signs up to a treaty and successive Governments have endorsed it—the British people have not done so since we entered the EU, which is why I favour a referendum—they sign up to all of it. That is the least the Government can do to protect the labour market, but at the end of the seven years the transitional arrangements will lapse, as they will for Romania and Bulgaria on 31 December 2013, and rightly so in my view.
The Home Secretary announced that she was looking carefully at those arrangements for Romania and Bulgaria and could extend the transition period, but I knew that of course that would never happen. Her view on this aspect of policy, which is that emergency measures could be introduced to prevent people from Greece or Italy coming here if there is a crisis in those countries, has come to nothing. She wrote to me and mentioned work going on, but not much work can be done on laws that we have signed unless we break our work on the treaties. I am absolutely certain that the Foreign Office’s view on such emergency arrangements is different from that of the Home Office because, funnily enough, I have seen no such proposals come before the House to try to stop Greek citizens, for example, coming here. That would be very difficult, if not impossible, to do. All we can do with accession countries is give them a seven-year transition.
Wayne David
I very much agree with the point my right hon. Friend is making, as he knows, but I think that we must be frank with ourselves and recognise that one of the problems in this debate is what happened in 2003, when the Home Office grossly underestimated the number of migrants who would come here from the 10 accession countries. I think that explains in part why many people in this House and beyond are concerned about the enlargement agenda. We must recognise that we got the figures wrong and learn the lessons from that.
Keith Vaz
My hon. Friend, who had a distinguished career as a Member of the European Parliament, is absolutely right. We must have that debate. The Home Office got it wrong on that occasion, but I do not think that any of us clever people sitting in the House of Commons got it right either. Nobody predicted that there would be a flood of people, to use the tabloid expression, rushing into this country. They were boom times, when people were willing to open the United Kingdom’s doors and allow people into the country.
Immigration will always be an emotive and difficult subject. As we speak, the Mayor of London is in Mumbai telling the Government that all their facts and figures on student immigration are wrong. However, we have limited control over EU migration, which is why it has been raised today. The only possible control that the Government could introduce was the seven-year transition, and they are right to introduce it.
Ultimately, however, we have to be fair to EU colleagues and say that if their citizens wish to come here to work, we will process their applications for work permits and accession documents quickly. That is the deal that ought to be done by a nation that, as the Prime Minister said yesterday, is the beneficiary of what my hon. Friend the Member for Caerphilly (Wayne David) did when he was an MEP, what shadow Ministers did when they were on the Government Front Bench and what others did in the 13 years of the Labour Government: they built up alliances with countries such as Poland, Hungary and the other accession countries. They will not forget the stand taken by our country in allowing their citizens to come here to work.
I think that it is absolutely right that we have these transitional arrangements, but let us also understand the fundamental principle: if we sign up to a treaty, we have to abide by its words and ensure that, in doing so, we are fair to the other citizens of Europe and treat them as equally as possible.
Mr Lidington
I simply do not think that we can have 27 countries agreeing unanimously on a treaty text and committing themselves to ratifying it, only for 26 countries to ratify it while one country chooses to do so up to a point and not ratify one particular element. My hon. Friend was right in his earlier intervention that it is legally and constitutionally possible for a separate protocol or derogation to be negotiated at the time of an accession treaty to exempt one or more member states from particular obligations. However, that has not happened with any other accession treaty hitherto.
The United Kingdom, under successive Governments, has been committed to the enlargement of the European Union since Margaret Thatcher championed the idea when the iron curtain began to crumble. I remain, in that respect, an enthusiastic Thatcherite. The entrenchment of not just free and open markets, but, even more importantly, the rule of law and democratic institutions in eastern and central Europe that has been brought by enlargement has been of benefit to the long-term strategic interests of the UK, as well as being in the interests of Europe as a whole.
Wayne David
The Minister has made an important point. He should not hide his light under a bushel. I urge him to make that point more forcefully and regularly to his Back Benchers.
Mr Lidington
My hon. Friends know where I stand on these issues. We always have a good-tempered but serious debate. The points that my hon. Friends have raised this afternoon reflect concerns that are expressed by many thousands of people—
Jacob Rees-Mogg
My hon. Friend is entirely right. It is important to set a precedent in this instance. I do not usually like new precedents; I think that they are rather dangerous. One always wants to find an historic precedent to which one can refer. On this occasion, however, it may be right to set the new precedent of securing the certainty that a country constitutes that smooth piece, with its corners just so, which can be inserted into the jigsaw that is the European Union.
It seems to me that a Government who are as good and as great as this Government—a coalition Government who see these matters in a broad and rounded way—will want to agree with my hon. Friend the Member for Bury North, because surely it is very important that when Croatia joins, Croatia is ready to join. We have found before when we have let countries join early that it is much, much harder to solve the problems when they are in than it was before they were in. Once they are in, they benefit from all that comes from the European treaties. Before they are in, they are of course supplicants, and the power rests with the European Union to decide whether to admit them. It is unquestionably sound and prudent to follow the recommendation of my hon. Friend and to put this final brake on the process, so that it goes ahead only when we are comfortable that the Croatians have really got their act together.
It might be sensible to delegate consideration of this matter to the European Scrutiny Committee, so ably chaired by my hon. Friend the Member for Stone (Mr Cash), who would be able to bring all his knowledge and wisdom to the decision on whether Croatia had met the tests set by the European Union. Otherwise, we shall sow the wind and reap the whirlwind. We shall once again see a European Union that is fiddling its own rules to get what it wants. We shall say “Look what this European Union does: it sets down these rules, it sets down these conditions, it sets down these terms, but once they become inconvenient, it casts them aside and forgets them in order to be able to do what it wanted to do in the first place.”
It is the British Government and the British people who have the backbone and the strength of mind to ensure sure that the European Union is held properly to account, and to ensure that we have a chance to make it do what it says it is going to do, rather than wandering off on the path of allowing countries that are not fit to join to join early.
Wayne David
This is an important amendment, and it is right for it to be discussed properly. As has already been said today, we need to learn from the experience of the enlargement process in a number of respects, but I think it particularly important for us to learn from the experience of the negotiations and preparations relating to the membership of Bulgaria and, to some extent, Slovakia. It has been acknowledged widely, if not as publicly as we would have liked, that not enough care and attention was involved in the preparations in Bulgaria, particularly with regard to justice and home affairs. I think that the Commission and, indeed, the Council have learnt the lessons of that.
I was slightly concerned to read, before I came into the Chamber, a statement from Štefan Füle, the European Commissioner responsible for enlargement and European neighbourhood policy. After visiting Croatia, he said that he thought that there was more work to be done before Croatia entered the EU on 1 July 2013. As we have heard, the final monitoring report of the European Commission is due to be published in the spring, but Commissioner Füle clearly stated that it would be wrong to think that all the work in Croatia had been done and that it is simply a question of our going through the mechanics of approving the accession treaty.
In Commissioner Füle’s view—and no one knows better than he does—major work still needs to be done in Croatia, particularly in regard to competition policy, judicial reform and fundamental rights, justice, freedom and security, and the translation of the acquis into domestic law. He also said that additional efforts needed to be made to improve a number of the chapters that have been negotiated, such as those applying to agriculture, the environment, and the preparations that are necessary for the effective utilisation of the structural funds. In other words, he believes that a fair amount of work remains to be done during the next few months to ensure that Croatia is in an effective state to comply with the stipulations for membership of the European Union. It worried me slightly that he listed such a large number of areas in which further work was needed. He also said that he hoped that further regional issues would be addressed, and that he looked forward to a final resolution of problems relating to relationships between Croatia and its neighbours.
Wayne David
In these times when the EU is strongly criticised in this Chamber and more often outside—sometimes correctly, sometimes incorrectly—it is important for us to focus, every so often, on its two great pivotal achievements, to which the Minister referred. First, the single market has been an undeniable success. Britain was an early advocate of the single market and remains an advocate of the process of completing it. The second great achievement is the process of enlargement. With the single market, enlargement has been part of the lifeblood of the EU—it has given it direction and momentum. Let us not forget that the process has led from the original six member states of the iron and steel community coming together to the step-by-step enlargement of the EU to 27 member states. Before too long, there will be 28. Taken together, those two pivotal developments have helped to shape the EU as it is today, which, in my vision, is an association of independent sovereign states that from time to time pool their sovereignty in their mutual best interests. If those two principles continue to loom large at the centre of the EU, it will be a force for good and prosperity in this world, despite its difficulties and need of reform.
Hon. Members have had a good debate on Croatia’s membership of the EU. Croatia expressed an interest in joining the EU some 10 years ago and has gradually built up momentum. It is now very close to joining the EU, and it is important to reflect on why Croatia is so keen to do so. Let us not forget that in the 1990s, the former Yugoslavia was ripped apart by the most horrendous conflict in modern Europe. Slovenia led the way out of that, preparing to join the EU, and has been followed by Croatia. It is important that people there know that we understand the experience that they have had which has led to their being so firmly committed to the principle of European co-operation.
I am also glad that the EU has learned lessons from that process of preparation and enlargement. There have been numerous references, with regard to Slovakia, and, later, Bulgaria and Romania, to insufficient preparation before accession and how those countries would implement their verbal commitments, particularly on justice and home affairs. I think that those lessons have been learnt in the way the process has been conducted with Croatia.
We had a good Second Reading debate, in which I was pleased to participate, and a very good Committee stage today. The ghost of Simon de Montfort has hovered over the Chamber at numerous points. My historical hero, however, is not Simon de Montfort but Gilbert de Clare, another Frenchman. As I am sure hon. Members know—certainly, the Minister knows it well—he built Caerphilly castle. Gilbert de Clare, an Englishman by adoption, a Welshman by conquest and a Norman by lineage, well personifies the need for us to learn the lessons of the past and to work together in European co-operation.
We had a good debate, particularly on Second Reading, on free movement. I am glad that hon. Members tabled their amendments on the Floor of the House so we could debate them properly. The issue of free movement of peoples is a concern to our constituents—let us be absolutely clear about that. These issues cannot be swept under the carpet. We have to debate them honestly, fairly and rationally, and I believe that we have done so. I am pleased that the Government have opted for the maximum transitional period on the free movement of labour from Croatia.
We also had a good debate on whether there should be a delay in agreeing to the accession of Croatia, and whether it would be appropriate to abide by the recommendation of the European Scrutiny Committee that we should ensure that all the i’s are dotted and the t’s are crossed before we move towards the accession of Croatia. I was glad to hear the categorical assurance the Minister for Europe gave a moment ago. I am pleased to hear that that in part echoes the views of the European Commissioner responsible, Mr Füle. The Croatian Government have to be complimented on the strength of the commitments they have given. There is no doubt in my mind that they are not hollow words. They mean what they say and will introduce all the necessary measures asked of them in the coming months.
We are moving towards the end of this process, but I believe that enlargement remains a central driving force of the EU. I hope that when Croatia becomes a member of the European Union on 1 July 2013, it will be not simply a country marking the end of a process, but a staging post. I hope that the agenda will move forward with regard to Iceland, and to Turkey, although there are significant difficulties with those negotiations. I hope, too, that for the western Balkans, the negotiations and discussions leading to membership will gather momentum. I am concerned that things are not so positive with regard to Bosnia and Herzegovina. Nevertheless, I hope that there will be progress, as I hope there will be with other countries, particularly Serbia and Montenegro.
Finally, as the Minister for Europe correctly said, in some ways it is significant that the other week, the former Croatian Prime Minister Ivo Sanader was sentenced to 10 years’ imprisonment for taking bribes from two foreign countries. That would be a difficult and traumatic experience for any country. It shows, on the one hand, that work remains to be done in Croatia on reforms and tackling corruption, but on the other hand, it shows the determination there to ensure that these abuses and crimes are tackled effectively, strongly and quickly. It is a clear indication that Croatia is well on its way to becoming a successful Member of the EU, and I hope that this country will continue to do whatever it can to ensure that that process comes to fruition.
European Union (Croatian Accession and Irish Protocol) Bill
Wayne David Excerpts(12 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Lidington
I am grateful for that rescue, Mr Speaker. I want to move on to one other element of the Committee’s criticisms.
Wayne David (Caerphilly) (Lab)
I understand that there has been a long-standing dispute about moneys held in the Ljubljanska banca in Slovenia which, it is suggested, belong to Croatia. Has that issue been resolved?
Mr Lidington
I discussed that with both the Slovenian and Croatian Governments when I was visiting Ljubljana and Zagreb earlier this year. We encourage both countries to find a bilateral solution. It is clearly not for the United Kingdom to lay down how that should be done, but they need to find a bilateral agreement that is in accord with the various international treaties to which the two countries are party. We hope that they succeed in the very near future.
The Committee was critical of the Government’s assessment that Croatia was making good progress with the reform of the judiciary and the courts. I am conscious that I have given way a lot and that other Members want to speak, but I want to deal with the most egregious element of the problems with the legal system in Croatia: the backlog of civil cases, to which the Committee drew particular attention.
The backlog in criminal cases in Croatia has fallen for some time and continues to fall, and we ought to pay tribute to the work that the Croatians have done to achieve that. They are still finding it a battle to reduce the backlog in civil cases, but it is important that we should not be misled by grand totals of the number of civil cases before the courts.
According to the figures that I have for the first half of 2012, roughly 844,000 new civil cases reached the Croatian courts; in the same period, roughly 836,000 cases were resolved. Although the total number of cases pending increased slightly, it would be wrong to think that 800,000-plus cases simply sat there in the “pending” tray and never moved. The truth is far from that. There has been a reduction in the backlogs in respect of the older cases—those over 10 years old or over three years old. The Croatians have also assigned a significant number of additional judges to focus on the backlog. Again, although we accept that further work needs to be done, we think that Croatia has made good progress and is committed to completing it. We do not believe that that is a reason to delay its accession.
I move on to migration. Croatia has a modest population of about 4.5 million. The potential impact of Croatian migration is relatively small, but we know that appropriate immigration controls are crucial for stability in our labour market, particularly in the current economic climate. Recently, the Home Office published its intention to impose transitional controls on Croatian workers in line with the Government’s policy to impose such controls on workers from all new member states, under the terms provided for in their accession treaties.
The accession treaty for Croatia sets out the framework within which member states may apply transitional controls to Croatian nationals who wish to work in their country. That framework is as follows. During the first two years following accession, the existing 27 member states can apply either national immigration controls or those resulting from bilateral agreements to regulate access to their labour market by Croatian nationals.
From the third year to the fifth year, member states have the option either to continue to apply the same controls as in the previous two years or, if they choose, to grant Croatian nationals the right to move and work freely, in accordance with European Union law. For the fifth year, member states must grant Croatian nationals the right to move and work freely in accordance with EU law. However, if member states find that they are subject to serious disturbance of their domestic labour markets—this has to be an evidence-based assessment of the kind that we seek from the Migration Advisory Committee—those member states may choose to continue to apply controls for a further two years, taking us up to a seven-year maximum period after accession, having first notified the European Commission.
The Home Office will be bringing forward detailed regulations on the transitional controls early in 2013, so the House will have the chance to debate the detail of those ahead of Croatia’s planned accession date. However, the Government’s intention is that for the first two years at least we would continue with the current arrangements under which Croatian nationals who would qualify to come and work here under the points-based system would be allowed to do so, although we do not envisage further relaxation beyond that.
Wayne David
Has the hon. Gentleman received the legal advice that the Scottish First Minister has clearly not received?
Wayne David (Caerphilly) (Lab)
My comments will be brief and I assure you, Mr Deputy Speaker, that I will not mention Scotland.
If we are honest with ourselves, the European Union often comes in for justifiable criticism these days, particularly on the Floor of the House. However, in many ways it has been a success story, given how the single market has developed and become successful—and will become more successful in future, I hope. It has also been successful in having been one of the contributory factors to western Europe not experiencing a war since the two we saw in the last century.
The big exception is the Balkans, of course. I well remember the appalling loss of life that occurred in the former Yugoslavia in the 1990s and the European Union being unable or unwilling to do anything—relying on NATO and the Americans in particular to intervene to ensure peace and eventual stability in that region of Europe. If there is an eloquent testimony for the need for the European Union to work collectively to ensure that such a thing never happens again, it is the experience of the former Yugoslavia. Linked to that is the third big achievement of the European Union—its gradual increase in size, from its original six members to today’s 27, and we are looking further afield. That is a tremendous success for the European Union. It speaks volumes about how the EU is often perceived by people outside it, rather than ourselves within it, as something worth belonging to. That momentum will continue, albeit in a different way, into the future.
I welcome the Bill. As hon. Members have said, the whole process of Croatia coming closer to the European family has been quite a long one; it has taken at least 10 years. It is important for us to recognise that lessons have been learned from the previous enlargement processes. In particular, the Minister referred to the process by which Romania and Bulgaria joined the European Union, as did Slovakia. Looking at it objectively, things could have been done better in relation to those member states, where the struggle to create a fair and open justice system still has some way to go. I think that the lessons have been learned and are reflected in how Croatia’s accession has been approached. To Croatia’s credit, many of the difficult experiences of the recent past have been confronted by apprehending and bringing to justice war criminals, and that process needs to continue. Painful though it is for some elements in the country, it is important for that process to be firmly set in stone and ongoing.
As a major trading nation, it is important that we do everything possible to open up the Balkans to trade and to establish effective market mechanisms. Croatia has gone through quite a lot of economic difficulty over the past few years, and things are far from easy today. Nevertheless, we need to support its people as much as possible in making sure that they get over the difficulties they have experienced and complete the transition to a fully market-oriented economy, albeit one with social responsibilities.
It is important, too, to recognise that we live in a world that is becoming increasingly integrated—we live in a global economy, as is often said—but we are also seeing the free movement of people around the globe in an unprecedented way. I well remember receiving a briefing from a chief constable in Gwent in which, when I asked him where the major source of crime in Gwent emanated from, he said that it was the Balkans. That brought the point home graphically. Although he might not have been thinking specifically of Croatia, he highlighted the fact that while we are often concerned about tackling the problems in our country, we have to be aware that many of them begin elsewhere. International crime—Members have referred to the trafficking of human beings—is clearly a case in point.
One of the foremost concerns expressed by Members is immigration. Those concerns must be recognised. The Government have correctly said that secondary legislation will be introduced to ensure that we have an effective transition period prior to the free movement of labour, but it is worth bearing it in mind that we have lessons to learn. For example, Lithuania is a relatively small country that is less populous than Croatia, and it has been estimated that the number of Lithuanians resident in the United Kingdom has increased from 14,000 to 128,000. I am not against the free movement of peoples, and I am not against Lithuanians or Croatians coming to live in this country if they have work to do and can contribute to our economy, but we must be careful to ensure that we have in place the proper infrastructure so that those people are fully integrated and the necessary facilities so that they are supported as they should be. Will the Minister provide reassurances about the anticipated number of people who will seek residence in the United Kingdom once Croatia has full EU membership and the transitional period has come to an end?
I hope that Croatia’s accession will not be the end of the beginning of the process of enlargement, but that it will lead to future enlargement. Iceland has been mentioned, as has Turkey for many years. Unfortunately, Turkey has not made good progress recently, but it is nevertheless a key state for consideration. In the western Balkans I hope that the good example of Croatia—and Slovenia before it—will be noted by other states. As the Minister said, it is unfortunate that Bosnia and Herzegovina’s likely membership of the EU has slipped back, but we must be as encouraging as possible to ensure that it, too, has the prospect of joining the European family. Labour Members, and I hope Government Members, welcome this Bill and, with all necessary safeguards and caveats, we look forward to Croatia becoming a member of that European family.
European Union (Approval of Treaty Amendment Decision) Bill [Lords]
Wayne David Excerpts(12 years, 3 months ago)
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The Minister for Europe (Mr David Lidington)
Clause 1 sets out the purpose of the Bill and why legislation is required. It is required by section 3 of the European Union Act 2011, under which primary legislation must be passed to confirm parliamentary approval of certain European Council decisions. The provisions of section 3 relate to Council decisions made under article 48(6) of the treaty on European Union, and the reason for that provision in the Act was that such decisions allow for the revision of European Union treaties. The procedure under article 48(6) is known as the simplified revision procedure. In taking through the 2011 Act, the Government enhanced the role of Parliament in the approval of any such revision of the European Union treaties. The Bill marks the first use of those new provisions.
The purpose of the Bill, as set out in subsection (2), is to approve the
“European Council decision of 25 March 2011 amending Article 136 of the Treaty on the Functioning of the European Union”.
That decision seeks to add a new paragraph to article 136, which recognises that EU member states whose currency is the euro—I stress that the proposed new paragraph applies only to eurozone members—may establish a financial stability mechanism. In other words, it confirms that the eurozone member states can set up a permanent stability mechanism to support fellow eurozone members that are in financial difficulty.
Wayne David (Caerphilly) (Lab)
The former Financial Secretary to the Treasury, the hon. Member for Fareham (Mr Hoban), stated in evidence to the European Scrutiny Committee that
“we do not believe that it is legally necessary for the Article 136 change to be made before the ESM comes into force. It is desirable, but I do not think that it is necessary.”
Have the Government changed their position since that statement, or was the Financial Secretary wrong?
Mr Lidington
It has been our position since the proposal was first made in autumn 2010 that such an amendment of article 136 would give eurozone member states firmer constitutional and legal certainty than if they simply proceeded to establish the permanent stability mechanism without recourse to such a treaty amendment.
Mr Lidington
I will let the hon. Gentleman come in again, but then I want to make some progress.
Wayne David
The Minister is very kind. I am pleased that he has been reappointed. It is good to have a sensible Europe Minister—relatively sensible, anyhow—in place.
May I go back to the point about when the Government established their position? I notice that the former Financial Secretary gave his evidence to the European Scrutiny Committee relatively recently, in March. Is the Minister for Europe right or was the former Financial Secretary right?
Mr Lidington
I simply refer the hon. Gentleman to what I said in response to his earlier intervention. The amendment to article 136 will provide our friends and partners who are members of the eurozone with the additional certainty that they have sought ever since the proposal for a treaty change was first made in the autumn of 2010. He is searching for plots and mysteries where none exists. Over the past two and a half years, in every conversation that I have had with my opposite numbers from the eurozone member states, they have been anxious to find out what position the British Government were taking on the treaty amendment and keen that we should be committed to ratifying it, having agreed to it last year.
Mr Baron
I take your point, Mr Evans. My hon. Friend was clearly not listening, because I was talking about currency blocs, and to the best of my knowledge we were not a member of a currency bloc in 1967. However—I throw this back at him—I do not for one moment believe that he is arguing that our exit from the exchange rate mechanism in 1992 did this country any harm at all. In fact, our economic recovery kicked in, almost to the day, because we left what was in effect a currency bloc.
In summary, I fully endorse the comments made by my hon. Friend the Member for Hertsmere. We should delay the introduction of the ESM. There are too many questions that need answering. I would very much welcome some clarity on the points that I have raised, particularly about the design flaws in the ESM. I would also ask the Minister for Europe to address the fundamental point: why the Government continue to believe that by joining in the political mantra that we need to save the euro, we are doing our eurozone partners any favours. I would point out to him that all the economic evidence suggests that by sticking to that mantra, and indeed by implementing the policy, we are prolonging the agony and delaying the inevitable.
Wayne David
I profoundly disagree with the previous contribution. I am no fan of the Government, but it is simply sensible for the Bill to be agreed and the amendment to be defeated, because it is sensible for us to introduce the European stability mechanism as quickly as is practicable. That is in Europe’s interests, but more importantly it is in the United Kingdom’s best interests. I say that for one simple but important reason: about 40% of the United Kingdom’s trade is with our eurozone partners, so it is in our best interests for stability and eventually prosperity to be achieved and maintained inside the eurozone.
Kelvin Hopkins
I absolutely agree with my hon. Friend that a large portion of our trade is with the rest of the European Union. Of course, we have a massive trade deficit, and one of the reasons why is the effective undervaluation of the German currency. If the eurozone broke up, the new Deutschmark would appreciate and we would become much more competitive with Germany, which would help our manufacturing.
Wayne David
I am afraid that I do not share that confidence. If that course of events took place, it would be a massive step into the unknown. Nobody could say with any definiteness what would happen. Indeed, the converse of what my hon. Friend says could also be true, and there would be greater economic difficulties. It is therefore important to recognise the size of the single market and of the eurozone, and to recognise that much of our trade is dependent on the success of the eurozone.
Mr Andrew Love (Edmonton) (Lab/Co-op)
Contrary to what a number of previous speakers have said, the UK currency has devalued by around 20% over the last two years, yet we have had little or no benefit from our trade with the eurozone area, because of the instability. Would not passing this Bill lead to greater stability and a net benefit for the British economy?
Wayne David
The likelihood is that that would indeed be case. I am not one of those who subscribes to the Government’s recent mantra that all the problems in the United Kingdom are due to the eurozone. However, it is undoubtedly a fact that for this country eventually to increase its economic prosperity with enlightened policies, we need a successful market in the eurozone that will draw in the products we make.
I could cite numerous examples from economists, but I will focus on important examples from my constituency of Caerphilly, which is still a manufacturing constituency, although it has taken a pounding in recent years. Much of its manufacturing is dependent on exports to the eurozone. I do not suggest for one moment that my constituents are enthusiasts about the eurozone, or indeed about the European Union, but I recognise, in purely bread-and-butter terms, that a stable and prosperous eurozone is in their best interests. Ultimately, their jobs depend on the products they make being exported to the eurozone and being bought there.
Kelvin Hopkins
I thank my hon. Friend for giving way again. The problem is a lack of demand—the great chasm where there economic demand should be. That is the case because all the countries in the European Union, including ours, are in a process of fairly savage deflation, including deflation of demand, which means that we cannot sell anything. If the eurozone were to be dissolved tomorrow and all those countries were able to reflate, we would sell more and everyone would be better off.
Wayne David
Indeed; I have some sympathy with that last comment, but it is not an argument against the European stability mechanism. It is an argument, which I fully support, for having austerity and the European stability mechanism, but it is also a reason for having a positive, stimulating policy, across the European Union as a whole, to ensure an increase in demand and in the activity of the economy, which is sadly lacking at the moment.
Mr Lidington
I want to make progress.
There would be an irony to accepting the amendment. I will not use the type of language used by the right hon. Member for Rotherham (Mr MacShane), but it would be a bit odd if we passed an amendment that constrained the freedom of the House of Commons to ratify a treaty that the Government had agreed to. It would have the consequence of allowing the German constitutional court, the European Court of Justice or other courts to determine when our legislation, which we judge to be definitely in the interests of the UK, should come into force. I do not think that delaying this legislation would serve any purpose or help our national interests, and it may do some harm. I therefore hope that my hon. Friend the Member for Hertsmere will be willing to withdraw his amendment.
Emma Reynolds
I could not agree with my hon. Friend more and I recommend that the Minister takes his advice. The Government would have more authority to speak to our European partners about the importance of European growth if our economy were growing, but unfortunately it is not—it is one of two G20 economies to be back in recession, which is a great shame. That unfortunately diminishes the authority of our Government’s voice in proposing the useful measures that my hon. Friend suggests.
I mentioned the Minister using his multilingualism to build bridges with our European partners, which the Opposition believe is essential. Even if it runs against the wishes of Conservative Back Benchers who are nervous about the Government’s continued commitment to European membership, the Minister is right to reassure our European partners that our place is firmly in the EU.
Wayne David
On dialogue, which I agree is extremely important, our dialogue with Ireland, which has the same language, is vital. Will my hon. Friend speculate on what would happen to our good relationship with Ireland if the closeness of our two economies were not fully realised? What detrimental impact beyond the economic could that have on our long-term relations with Ireland?
Emma Reynolds
Our relationship with the Republic of Ireland, which is incredibly important, is testament to the temporary mechanisms put in place in May 2010, which had cross-party agreement. Conservative Members like to tell Labour Members that the mechanisms were agreed unilaterally, but there is proof in a note by the former Economic Secretary—she is now Secretary of State for International Development—of cross-party agreement on setting up the EFSM at a time when the eurozone looked like it might collapse. The EFSM has been incredibly important to Ireland’s recovery, so much so that Ireland has been able to sell Government bonds on the international markets again since July this year.
Wayne David
Both new clauses call for reports to be made to Parliament. There is a strong case to be made for in-depth reports to be debated on the Floor of the House, but there is also room for debate in Committees, and particularly the European Scrutiny Committee. Does she envisage that the debate should be conducted not just on the Floor of the House, but elsewhere?
Emma Reynolds
I agree with my hon. Friend. New clause 1 would mean an annual report by the Chancellor on the economic impact to the UK economy of the operation of the ESM, and new clause 2 would mean the Foreign Secretary submits a report when a loan is made. As my hon. Friend suggests, the reports would be discussed not only on the Floor of the House and the other place, but in the European Scrutiny Committee and other Committees that deem them important.
The success of the ESM is in our national interest. If it is used effectively and appropriately, it could have a positive effect on our economy as well as on the member states to which it gives support. However, what if the ESM’s conditionality is misguided and imposes austere measures?
Emma Reynolds
Conditionality should not be too severe. The ECB’s initiative to buy Government bonds, which was announced by Mario Draghi last week, would be linked to support provided by the ESM. That is why it is vital that the reports asked for in the new clauses are made to Parliament—there is an interaction between the ESM and the initiatives announced by the ECB last week.
Wayne David
That is important. The situation is volatile, nobody knows with any certainty what will happen next, and the interrelationship and co-ordination between different financial instruments—the ECB bond market initiative has a relationship with the ESM facility—are important. That makes a regular, ongoing review to find out how compatible they are in practice all the more important.
Emma Reynolds
I agree with my hon. Friend. The new clauses would introduce annual systematic assessments of the impact on our economy of the ESM and, in specific cases, of loans granted by the ESM. As he suggests, that is becoming ever more important, given the complicated interaction with the ECB’s other initiatives. If ESM conditionality is too harsh, we fear that it could have a detrimental effect not only on the member state to which the support is being granted but indirectly on our own economy, and could shrink the eurozone economy.
Emma Reynolds
It is nice that the hon. Gentleman has made a late entrance but, had he been here from the start, he would have known that the Opposition are not in favour of the Government paying into the ESM. He was not here when I mentioned it, so I shall say again that in May 2010 the then Economic Secretary, the now International Development Secretary, admitted that there was cross-party consensus that if the eurozone collapsed, we would have to agree to the emergency measures drawn up at the last Council, when the then Labour Chancellor, in the interim period after the election, was still in place. So there was cross-party agreement—I can show him the documentary evidence, if he wants to see it.
On new clause 2, it is also important that the Foreign Secretary provides a report whenever a loan is made under the ESM. Both reports will enhance scrutiny in the House.
Wayne David
There is one important element of the ESM with which I am not familiar—I frankly admit—and that is the degree of private sector involvement. In this respect, the IMF is an example of good practice, but given that I and—I suspect—many other Members are not familiar with this element, an effective annual report would be crucial.
Emma Reynolds
I agree that it would be important. It is not clear when the ESM will be introduced—the constitutional court in Germany will rule on Wednesday —or what the significance or extent of the interaction with the private sector will be. It is important for those reasons as well, therefore, that the Chancellor and the Foreign Secretary produce reports in the way suggested by the new clauses. It would enhance the scrutiny of these important subjects in the House and the other place and make it clearer to the general public exactly how the ESM will operate and how its operations will affect the British economy.
Wayne David
I strongly support the new clause. We need to be frank and recognise that this Bill represents a new departure. Inevitably, therefore, we cannot assume that every dot and comma in the European stability mechanism will be absolutely correct, or that there will be no scope for change in the future. There might well be change, and who can tell, in this fast-moving situation, what the demands of the immediate future will be? It is therefore entirely sensible to call for full, comprehensive reports to be provided to the House on an annual basis.
Wayne David
My hon. Friend could well be right. Who knows? I would not be entirely surprised if that were the case. However, it is important that we rise above any internecine squabbles.
We are concerned about the well-being of the country, which is why it is important to conduct comprehensive reviews and to debate them on the Floor of the House. As was pointed out earlier, much of the legislation is of a technical—almost esoteric—nature, and the reports will need to go into some detail. It will therefore be insufficient simply to present them on the Floor of the House. They should also be debated by the European Scrutiny Committee, which is well led by the hon. Member for Stone (Mr Cash). Surprisingly, he is not in the Chamber. This must be the first time in a long time that he has missed a European Union debate. I hope to goodness that he is not ill.
Wayne David
I absolutely agree with my hon. Friend.
This is an important matter, and it should be debated not only on the Floor of the House but by the European Scrutiny Committee. We should also encourage other Select Committees—the Treasury Committee in particular —to debate these issues. It is one of the weaknesses of the House that, all too often, we tend to put European issues into a neat compartment without fully appreciating the fact that they are cross-cutting, cross-departmental and cross-Committee in nature. If we are fully to appreciate their impact, and the need for them to be changed, we need to discuss them in a number of different Committees.
Emma Reynolds
Does my hon. Friend agree that it is regrettable that the Liberal Democrats—who are now in government, not in opposition—should not want increased transparency and scrutiny of the effects of the ESM on our economy? Had they still been in opposition, I am sure that they would have been calling for that today.
Wayne David
I can see that the hon. Member for Cheltenham (Martin Horwood) is straining at the leash to intervene on me. I will give way to him, so that he can give my hon. Friend a comprehensive answer. She has made an astute point.
Martin Horwood
I would like to put on the record, on behalf of the Liberal Democrats, my belief that this House should indeed carry out much more scrutiny of European affairs. I also agree with the hon. Gentleman that that should be done on a broader basis, and that the departmental Select Committees should be involved. Indeed, we have suggested as much in our submission to the current discussions on European scrutiny. I am not sure, however, that we need ever more reports being discussed in addition to all the legislation and everything else that we debate, interminably, on the Floor of the House. He cannot possibly argue that we do not spend enough time debating Europe in this Chamber, as we are doing now.
Wayne David
I do not want to labour this point. I welcome the Liberal Democrats’ desire for more transparency and scrutiny, but experience shows that, all too often, those words come to nothing unless there is a focus on something. The importance of the new clauses is that they would provide that “something” for the debate to focus on. Nothing concentrates the mind better than a report that has a distinct niche in the parliamentary calendar to enable that debate to take place.
Wayne David
My hon. Friend makes an extremely good point. We would not be holding a debate for the sake of it, and we are not talking about transparency for the sake of it. We are trying to underline the importance of the ESM, which is being developed for the first time. It is imperative that we have an ongoing debate.
Geraint Davies (Swansea West) (Lab/Co-op)
Is my hon. Friend aware that, only last week, members of the Welsh Affairs Committee were in Brussels to talk to MEPs and Commissioners about this important issue? Does he agree that that is symptomatic of the enormous appetite for discussion of these strategic issues that have a direct impact on the economic future of Britain?
Wayne David
I was not aware that the Welsh Affairs Committee had been in Brussels, but that underlines my point that this issue is absolutely central to the European Union at the moment. Debates in Select Committees should not be confined to the European Scrutiny Committee; other Committees should debate these matters as well. I have to say that I would not immediately have thought of the Welsh Affairs Committee as an appropriate vehicle for that, but I imagine that much of the discussion in Brussels focused on how Wales would be impacted by the developments in the European Union.
Geraint Davies
As my hon. Friend has questioned the legitimacy of the Welsh Affairs Committee in that regard, I should make him aware that the Committee has recently published an excellent report on inward investment and prosperity in Wales. A key part of that economic activity involves inward investment from and trade with Europe. That is why we adopted a nationally based view—in regard to the nation of Wales—as opposed to the departmental silo-based views. We have a crucial locus on this matter.
Wayne David
I am pleased that my hon. Friend made that intervention, as it takes me neatly to my next point.
The ESM is important for all parts of the United Kingdom—including Wales—because it will help to ensure that the eurozone becomes a stable and attractive market to which we can take products made in our constituencies of Swansea, Caerphilly and elsewhere. That is central to the debate, and it concerns me greatly that some—although not all—Government Members actually want the eurozone to collapse. They want that outcome for a pathological, ideological reason, without realising the immediate material consequences that it would have for jobs in our constituencies.
Jacob Rees-Mogg (North East Somerset) (Con)
I would classify myself as one of the people who does want the eurozone to collapse, because I think that only with the collapse of the euro can the economies of Europe begin to grow again. It was the same when the Asian crisis hit, and the economies that devalued were the ones that grew again fastest and soonest.
Wayne David
I simply do not agree, and there are plenty of academics and learned people who do not agree either. Most importantly of all, plenty of workers and employers in my constituency do not believe it. As I said, I am not suggesting for one moment that the EU and the eurozone are particularly popular with people—they are not, and I fully understand why not—but in the end people are concerned about their livelihoods and their prosperity, which depend on jobs. That is why it is important for this country to do everything we can to ensure that the eurozone is helped to get over its present difficulties and made prosperous once again.
Mr MacShane
Does my hon. Friend accept that we do not have to go to Asia, for example, to see devaluation before our very eyes, because the British pound has been substantially devalued in the last four years, and it has led to a massive loss of jobs, employment and growth, and has brought in a recession? Perhaps devaluation and a sensible Government can help, but devaluation and this Government are a recipe for disaster.
Wayne David
Yes, I agree. If we take the argument of the devaluers to the extreme, having competitive devaluation among different states on the continent of Europe is indeed a recipe for disaster. It is a mistake to believe that, because devaluation might have helped one country in one particular circumstance, we can extrapolate beyond that and assume that devaluation is a recipe for everyone.
I have generally supported the ESM, because I think it is necessary and will make a huge contribution—not an exclusive one by any means, but a huge one—to helping the eurozone in its current difficulties. I am not suggesting for one moment, however, that the EU has everything worked out perfectly, so far as the ESM is concerned. What is needed is an ongoing review, and flexibility is required so that the good things are built on and the not-so-good things altered. That is why new clauses 1 and 2 are so important.
I recently read with great interest an excellent research paper produced by the House of Commons Library, which succinctly summarised a number of the reservations that people have about the ESM; it is quite right that people should have some reservations about it, so let me mention a few of them.
The first relates to the amount of €500 billion being made available for lending capacity. A number of people have suggested that, given how the crisis might develop, that amount could be too small, so we need to contemplate a larger amount in future. That applies particularly if it is not just Greece and Portugal that experience difficulties and if things become more problematic in Spain or even in Italy. In those circumstances, it might be necessary to consider having a facility much greater than the currently envisaged €500 billion.
The second reservation by those concerned about the ESM is, as we touched on earlier, the fact that it is but one of a number of different initiatives designed to help the eurozone. We are particularly aware of the initiatives, perhaps belated, of the European Central Bank and of the desire to intervene in the bond markets. That is one of the terms of reference and intentions of this facility as well. We thus need to ensure that there is complete complementarity, no duplication of effort and no contradiction in these different facilities; everybody must be pulling in the right direction. Co-ordination with other lending institutions and with other bodies and initiatives is very important indeed. Linked to the size of the €500 billion facility is the fact that some people believe that in a worst-case scenario, the rescue funds would be insufficient and would run out of money. It is therefore necessary to have an ongoing review of whether that is likely to happen or not.
Wayne David
Yes, that is an important point, and the role of the ECB is central. Many of us would like to see it being more proactive far sooner than it has been in the past, but its more assertive role could be critical in the future.
Another concern is the circularity of having the facility guaranteed by the same group of countries that might draw on the fund. For example, we all know that Italy’s situation could become difficult, yet Italy is a country that is, at the same time, ensuring that resources are going into the fund that it might itself be required to draw on. That strange relationship and potential incompatibility at the heart of the ESM needs to be thought about carefully. What is important is what is being established here and now. Nevertheless, as situations develop, it becomes all the more important to review the circumstances.
The credit rating of the ESM is another issue. We all know that certain countries, including a number of eurozone countries, have been downgraded in the not-too-distant past. That includes France, which came as a big surprise to many people. The EFSF has been downgraded, too, and we must be sure that that does not develop further with respect to the ESM.
Geraint Davies
My hon. Friend and the hon. Member for Basildon and Billericay (Mr Baron) have made the point that if some countries in a group are both taking and giving money at the same time, it amounts to a problem. What about a simple model of a credit union and a community, from which some people put money in and some take it out? What about a marketplace in which some countries put resources in so that other countries can consume their exports? Is that not part of a system for helping broader growth, which is not a problem at all?
Wayne David
My hon. Friend could well be right, and I hope that he is, but it is an issue that needs to be rationalised and thought through carefully. My feeling is that, at this stage of the ESM’s development, it has not been given serious thought. It may be necessary and desirable, but it must, as I say, be thought through carefully. It must not happen by accident, but by proper design. The fact that it is not in the design of the programme at the moment provides all the more reason to ensure that we have a proper review and some time for the objective to be explicitly stated.
My last point is about private sector involvement. It is assumed that we are talking about public money, which to a large extent we are, but there is also a role for private sector involvement, which will be done in accordance with good practice as established by the International Monetary Fund. That is welcome, but, again, it needs to be monitored carefully. If we need to enhance our programme or provide more stipulations, those things must be done.
Wayne David
I agree that the IMF is an example of good practice, and I think it laudable that the ESM is basing much of its operation on the way in which it has operated, successfully, for a number of years. Don’t get me wrong: I am not against private sector involvement—quite the opposite—but I think that clear terms of reference need to be established and monitored.
For that reason, and for all the other reasons that I have given, I think that both new clauses are eminently sensible. I think they will enhance both parliamentary democracy and the role of this Parliament. I also think that, ultimately, they will send our partners in Europe the extremely positive message that we are serious not only about establishing the ESM, but about ensuring that it works effectively well into the future.
Jacob Rees-Mogg
It is a great pleasure to follow the hon. Member for Caerphilly (Wayne David), who almost made the new clauses sound respectable. In fact, they are some of the most splendidly pointless measures that we have seen in the House; they serve absolutely no purpose.
Wayne David
As the Minister explained, the Bill is narrow and specific. It is very short, but very important. I should like to say a few words to put it in a broader context. I was a Member of the European Parliament for 10 years. I was elected in 1989, so I saw the completion of the single market. I well remember Lord Cockfield, Commissioner for the internal market from 1984 to 1988, arguing forcefully for the completion of the single market. I also remember the Cecchini report, which was essential in winning the necessary ideological battle for progress to be made on the single market.
At that time, many of us in the socialist group at the European Parliament had reservations about how it was envisaged that the single market would develop and concerns about the widening gap between the rich and poor parts of the European Union. The response then was to enhance the structural funds. In particular, cohesion funding was brought forward to address initially the concerns of the four poorest member states and it expanded in size to encompass some of the new countries coming into the European Union. As we all know, the Maastricht treaty was in many ways the logical conclusion of what people saw as a journey from the creation of the single market into a fully fledged economic and monetary union.
Britain, of course, had its famous opt-out and that was probably right. That was certainly recognised by the Labour Government elected in 1997. The five economic tests came forward. A judgment had to be made on joining economic and monetary union. Would it provide the United Kingdom with higher growth, stability and a lasting increase in the number of jobs? It was decided that those criteria would have to be met if Britain were to join EMU.
It is important to stress that although there were economic concerns and reservations, there was a tremendous political impetus in favour of economic and monetary union. That was clearly demonstrated when Greece was allowed to join EMU in 2001. Everything was okay as long as the world economy, and the eurozone economy as it developed, were doing well. But the chickens came home to roost with the monetary collapse of 2008 and the consequences that emanated from it. With the benefit of hindsight, many people would probably argue with the way in which a single currency was created and the speed at which that movement was made, and with the fact that many countries, particularly Greece, were allowed to join it without proper economic consideration being given to that. Nevertheless, the political impetus was there.
Now, of course, the question is how we deal with the problems that have arisen in recent times. It would be a huge mistake if the voices of the Eurosceptics were taken seriously and we stepped back into splendid isolation and not only refused to participate in the European venture but wished the end of the eurozone. I say that not because of any ideological commitment to the idea of the eurozone but because I realise pragmatically that a successful eurozone is important for the British economy and the British people.
Andrew Percy (Brigg and Goole) (Con)
I was not planning to intervene in this debate, but I do so because the hon. Gentleman refers to ignoring the voices of Eurosceptics. Those are the voices of what appears to be the majority of people in this country, if one believes the polls. Perhaps we should allow the public to have a say in a proper referendum, and then it would be for them to decide whether we want to draw back from the EU rather than having pro-Europeans patronising the country about what we should or should not do in relation to Europe.
Wayne David
I think that most people in this country are concerned about its economic well-being. Yes, they are concerned about our national sovereignty; even people who describe themselves as pro-European do not want to give up British sovereignty. Many people see the European Union as essentially a mechanism to pool sovereignty in the collective best interests of those who live on that continent. It is important for that spirit to be carried forward in how we relate to the current difficulties in the eurozone.
I generally welcome the pragmatic way in which the Government have gone about establishing the ESM. As the Minister said, nobody would claim for one moment that the ESM, by itself, will solve the problems of the eurozone—it will not—but it is one important step towards resolving them. I therefore hope that this House will give its endorsement to it. However, to take his comments further, the ESM is not enough. It must be monitored, examined and possibly extended in some way if there is a need for that in future, but we must also pursue policies collectively that will enhance the competitiveness of the European Union.
Just as importantly, we need a growth strategy. That is the crucial issue that faces the peoples of all countries within the European Union. If recent history teaches us anything, it is that austerity by itself is not enough. It is not enough in this country—that is why we are in a double-dip recessions—or in the eurozone. I very much hope that there will be an increasing question mark over the German-led policy of austerity above all else. We need to make sure not only that we have reasonable public finances, that the debt burden on our neighbour countries is reduced and that there is competitiveness, but that our economies are collectively stimulated. That is in the best interests of this country. I believe that if the ESM is agreed, it will be an important step towards a more prosperous Europe for us—but it is only one step.
Balance of Competences
Wayne David Excerpts(12 years, 5 months ago)
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Mr Hague
I do very much, as I mentioned a few moments ago. The envisaged changes to the common fisheries policy do not amount, of course, to a change in competence—the competence remains with the European Union—but if all goes well, the member states will be accorded much more say in how the measures adopted by the EU are implemented. That, I think, will be immensely beneficial to fisheries policies. That illustrates how the use of competence can be changed. We could, of course, debate whether the competence of the EU in certain areas should exist at all, as well as how it should be exercised. I do not think that we have any problem in using that term, and what is happening in the fisheries policy provides a good example of what can be achieved.
Wayne David (Caerphilly) (Lab)
May I press the Foreign Secretary a little on the curious timing of this exercise? To many of us, 2014 sounds suspiciously close to the next general election. Is this not all about preparation for the Tory party manifesto for that election?
Mr Hague
The hon. Gentleman is welcome to use this for the Labour party manifesto, and it might make it a much better informed manifesto than previous ones. I do not see any downside to that. This is a democratic country in which election campaigns are meant to be properly and fully informed. There is no disadvantage to the nation in that happening. Moreover, I intend this to be, and it will be, the most comprehensive exercise ever undertaken in this or any country about the competences of the European Union; it is important that it is fully and comprehensively undertaken. As I have said, it is odd that Opposition Members, who never thought of the exercise, never proposed it and were never in favour of it until today, now want it done at greater speed.
Oral Answers to Questions
Wayne David Excerpts(12 years, 8 months ago)
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Mr Wayne David (Caerphilly) (Lab)
17. The Minister mentioned the OSCE report. It also said that irregularities occurred in up to a third of the polling stations in the Russian Federation. What representations have the Government made to the European Union for it, in turn, to put pressure on Russia to address the situation?
Mr Lidington
I have to say to the hon. Gentleman that he needs to acknowledge that there are limits to the leverage that the UK alone and the EU collectively have with Russia. However, we always ensure, both bilaterally and in European conversations, that the central importance of human rights and respect for democratic processes is brought home to our Russian interlocutors.
Oral Answers to Questions
Wayne David Excerpts(13 years ago)
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Mr Lidington
My right hon. Friend the Chancellor of the Exchequer made it quite clear at the most recent ECOFIN meeting that we would reject an EU financial transfer tax, and he was supported in his opposition by 11 other member states.
Mr Wayne David (Caerphilly) (Lab)
Can the Minister tell us what practical actions his Government have taken to encourage our European partners to complete the single European market?
Mr Lidington
I have discussed this in the past two weeks with senior members of the Commission, and I have encouraged them to introduce measures under the Single European Act. Yesterday, in Berlin, other Ministers and I talked to our German counterparts about joint action both to deepen the single market and to reduce the cost of regulations, especially for small and medium-sized businesses.
North Africa and the Near and Middle East
Wayne David Excerpts(13 years ago)
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Mr Hague
We have done that. The Under-Secretary of State, my hon. Friend the Member for North East Bedfordshire, in particular has been in direct contact with Ministers in Niger, and we have reminded them and other countries in the region of their international responsibilities, which they have assured us they will live up to.
The progress that Libya is making stands in stark contrast to the repression in Syria. The toll of more than 3,500 lost lives since March this year is truly appalling. The UN commission of inquiry report issued today highlights the shocking actions carried out by the Assad regime against its own civilian population, including summary executions, arbitrary arrests, enforced disappearances, torture, sexual violence and the violation of children’s rights. I welcome yesterday’s unprecedented decision by the Arab League to impose sanctions on Syria and seek UN support to address the situation. The decision by Russia and China to block Security Council action on 4 October was utterly wrong and, in my view, has been confirmed as misguided by everything that has happened in Syria subsequently.
Mr Wayne David (Caerphilly) (Lab)
What representations are the Foreign Secretary and the Government making to the Chinese and Russian Governments to ensure that they adopt a stronger position on sanctions?
Mr Hague
We have discussed that at some length, as the hon. Gentleman can imagine. The Prime Minister and I discussed it with Russian leaders, including President Medvedev, on our visit to Moscow a couple of months ago. We are in constant contact about it at the UN Security Council, as are our representatives there. I continue to believe that it would be right for the Security Council to address the issue and we will make further attempts to do so. Of course, passing any resolution will require a different attitude from Moscow.