Section 5 of the European Communities (Amendment) Act 1993
Debate between Alec Shelbrooke and Jacob Rees-Mogg(13 years, 10 months ago)
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Jacob Rees-Mogg
That is a good point.
I had not intended to speak until we heard so eloquently from the shadow Minister about the virtues of reckless spending—it is tremendously important to stop that view of the world. We have to get back to some of the debate we had yesterday, which is why it is worth supporting the Government’s financial outlook position and policy. The reason for that is that the situation will be increasingly difficult. The economy was left to us in a terrible mess, in terms of not only the public finances, but private sector debt. The idea that this will easily be recovered by getting people to borrow again or banks to lend again is simply wrong.
The hon. Member for Luton North (Kelvin Hopkins), who is an hon. Friend on European matters but an hon. Gentleman on other matters, talked about getting more people to spend and taking money off the rich so that it can be spent by poorer people, who have a greater propensity to spend. That might be fine when the banks have money to lend, but we need to get the loans-to-deposit ratio for the banks as a whole in the United Kingdom below 100%, so that the banks have the liquidity to lend. Until we are able to do that, the idea that we can have debt-fuelled re-growth is simply mistaken.
On Government debt, I wish to return to a point made yesterday by the shadow Chief Secretary on Ricardian equivalence. She does not believe in Ricardian equivalence and I do not think that many people do in exactly the terms that Ricardo spelt it out. None the less, his underlying point was completely sound: the debt of Governments will ultimately have to be paid back through tax income raised. Intelligent electors realise that and know that if the economy is growing on the basis of Government debt, that will eventually be a charge to them. It might not affect their behaviour over one or two months, but over one, two or five years it certainly does. Economies that run indefinitely on debt find that their growth levels are neutered, and anybody who doubts that should look at the Japanese economy.
If we look at what has been going on in Japan since 1990, we see that the Japanese have increased their public sector debt from next to nothing to 200% of their GDP and that in that period they have had absolutely no growth—their economy has been stagnant. Their tax revenues were lower in 2010 than in 1985, because the level of growth in the Japanese economy has been so low.
Alec Shelbrooke
Would my hon. Friend like to bring things up to date and comment on the US economy and the fact that the Americans decided to pour a lot of money in, found that that did not work and are now considering very strong austerity measures?
Jacob Rees-Mogg
It is relevant to look at the United States economy and at the gold price, which is up at $1,500 and not because more people are getting married and want wedding rings—although I congratulate my hon. Friend on his forthcoming nuptials and I am sure he is buying a large piece of gold for his future wife. The gold price has been so strong because the financial markets have lost confidence in the US dollar and because the American political forces—the President and Congress—have not been willing to tackle the deficit in the way that Her Majesty’s Government have done. The gold price in sterling terms has not risen by anything like so much, because people have confidence in what the Government are doing.
Normally, I take the view that there are two people in this world who should be obeyed. One is the Holy Father and the other is my hon. Friend the Member for Stone (Mr Cash). When my hon. Friend speaks on European matters, he does so with a degree of infallibility that belongs to only one other living person, although I hasten to add that the remit of the Holy Father does not cover European matters. My views diverge slightly from those of my hon. Friend on one point: I think we should be proud of the document that Her Majesty’s Government are sending because of what the Government have got right. The situation they faced a year ago was desperately serious, needed urgent attention and had to be brought under control by their taking measures that are not necessarily popular.
It is important to emphasise that point because all Governments, when they take tough decisions, face gentlemen such as the shadow Minister, the hon. Member for Nottingham East (Chris Leslie). Over the next year or two, as people see the cuts coming through, it will be very tempting to listen to such voices and to think that perhaps there is an easier way and a land flowing with milk and honey that we have not yet found where we can borrow more money, where the financial markets will turn a blind eye, where we can spend money we do not have and not worry about our children and our grandchildren and where the banks will suddenly miraculously lend to bankrupt people to keep inefficient systems going. That is when those on the Treasury Bench must stiffen their sinews and summon the blood and not give way to those voices. At the moment, that is still relatively easy, because there has not been much coming through in the way of cuts. We have not seen the pain that will come from those difficult decisions. Now, however, we are sending our plan abroad. We are telling people not just in this country but in foreign countries of what we are doing and we should be proud of it because it is right. If we do what is right, the economy will begin to recover.
We on the Back Benches, in particular, must support those on the Front Benches when they do such things and when the critics from the other side appear to be doing well in the opinion polls. That is the point of maximum difficulty. Let us think of the great lady in 1981, when 360-odd economists wrote to The Times—a great newspaper with very fine editors—to suggest that the economic policy was wrong. That was two years in and it was the hardest point and that Government stuck to their guns, which led to the recovery we then had.
Jacob Rees-Mogg
The fundamental flaw in the hon. Gentleman’s argument is to think that there is a painless way out of a major crisis. It is simply a question of whether we deal with it now and ensure that the problem is resolved and that the economy can grow again or whether we delay it and have a much worse crisis later. The pain I was talking about was political pain for the Government as people notice the cuts. Our approach will reduce the pain for individuals because it will ensure that the economy is rebalanced sooner rather than later. That is the way to minimise pain—not thinking that there is a never-never land with no pain after we have lived on debt and incompetent Government policies for the past 13 years.
Alec Shelbrooke
We hear about fairness from the Opposition, but which does my hon. Friend feel is more unfair: bringing in higher taxes to get us out of this problem or letting the economy run away and allowing interest rates to rocket, thereby leaving thousands of people’s homes to be repossessed?
Jacob Rees-Mogg
My hon. Friend is absolutely spot on. This is one of the great virtues of the Government’s policy, which is being welcomed by the gilt market.
It is also worth noting what the late John Maynard Keynes said on such matters. Everyone in opposition quotes him and says that we should follow his policies but one of his policies, to quote the Chancellor, was that Governments should mend the roof while the sun shines and should build up reserves in the good times. My godfather interviewed John Maynard Keynes late in life and asked him, “What happens if Governments do not do this? What happens if they spend money in the good times?” to which Keynes replied, “If they do that I shall make a speech in the House of Lords and that will put them off.” Sadly, he was not here between 1997 and 2010 to make a speech in the other House to tell the other side of the policy failures when the economy was booming, so there was no money when the economy went wrong.
Time is short and I have a point to make about the presentation of the document to Europe. I hope that we have a Division because it will be delayed until after the deadline for sending in the papers. I hope that Her Majesty’s Government will show their independent-mindedness and ensure that the House’s approval comes before the requirements of a foreign international body. It would be a great discourtesy to the House if the document were presented to the European Commission before the deferred Division that we are likely to have on Wednesday.
Question put.
The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 5 May (Standing Order No. 41A).
Fixed-term Parliaments Bill
Debate between Alec Shelbrooke and Jacob Rees-Mogg(14 years, 5 months ago)
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Jacob Rees-Mogg (North East Somerset) (Con)
May I begin by congratulating my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) on his excellent maiden speech? I agreed with every bit of it other than, I am afraid to say, his conclusion.
There are three things that I would like to look at briefly: first, the broad constitutional issues; then some of the detail of the debate; finally, the process. I hope that I can do that in the time allowed.
On the broad constitutional issue, I think that fixed-term Parliaments are a mistake. It is unfortunate to undermine a constitutional monarchy. A constitutional monarchy needs to preserve some role for the sovereign within it—some purpose in having that final arbiter of the system that is above and beyond politics. I am very nervous about giving that role to the Speaker, as this Bill proposes, because, first, it is a bad idea to have a Head of State and a quasi-Head of State—one is quite enough for me, and a hereditary Head of State, which we have had for the best part of 1,000 years, seems a pretty good one to have. Such an approach would also bring the Speaker, who will not be advised by the Prime Minister in this area, into the murky part of party politics. There is a risk that the Speaker could give his certificate for a general election—the most important part of our democratic process—as a matter of political controversy, and that cannot be wise. Let us consider the recent discussion on whether or not something is a money Bill, because that is already putting the Speaker in the political spotlight. A money Bill is an obscure procedural measure, whereas a general election is at the heart of everything that we do. So bringing the Speaker, you, Mr Deputy Speaker, and your colleagues into this murky business will be a mistake.
That leads to the issue of where the courts come in—a matter that has been discussed in this debate. I am not a lawyer, but I can say that the thing to bear in mind about Bradlaugh’s case is that the House of Lords ruled that it should not intervene in the procedure of the House of Commons, because at that point the highest court in the land was, of course, one of the Houses of Parliament. That is no longer the case, and with the Supreme Court outside Parliament, the constraint does not apply, so the courts may be willing to be more enthusiastic in their interpretation of statute than they were when the House of Lords was our supreme court. Those are the broad constitutional issues that give rise to concern.
We must then consider the Bill itself and what it contains. The problem with the Bill is that perhaps the best reason for voting for it is that it is pointless. The Whips have certain powers, authority and wise influence that they bring to bear and they could say to me and to other hon. Members that it might be best if we were absent when another hon. Member had tabled a motion of no confidence—they might suggest that we went on a nice trip, to the Seychelles or some such place. That motion would then pass, the Speaker would have no choice but to issue his certificate and, hey presto, we would have a general election at the time of the Prime Minister’s choosing. That is a rather foolish approach to legislation.
I doubt whether the 65% hurdle would ever come into effect, but it would be objectionable if it did get into law because it would set a requirement for more than a simple majority, for the first time in the history of this Parliament. That would be a procedural mistake; one vote ought always to be enough. It would also require a percentage of 66 and two thirds of those who are available to vote—not of those who actually vote. Interestingly, a Government who are introducing that into legislation are reluctant, so I hear, to have a turnout threshold in a referendum on the alternative vote. One may see some implicit contradiction in those two suggestions. So, the Bill is rather a hollow shell.
Alec Shelbrooke
I want to pick up on that point about the alternative vote and what the hon. Member for Perth and North Perthshire (Pete Wishart) said about spoiled ballots in Scotland. Does this not further the case that a first-past-the-post election is by far the most effective?
Jacob Rees-Mogg
I am in entire agreement with my hon. Friend, and I am glad that he did not take us back to the local elections in Leeds—I thought that we were at risk of that.
I come to the process of the Bill and how we have reached this point. How did we come to consider a fixed-term Parliament? I am not aware that many of my hon. Friends put this proposal in their election addresses—they may have done if they were Liberal Democrats, but not if they were Conservative. It is not a Conservative proposal in any sense. It got into the coalition agreement late at night, in what would have been a smoke-filled room had not the previous Government banned smoking in office spaces. This therefore took place in a smoke-free environment—a healthy and politically correct room—and late at night it was decided that it would be a good idea to shore up the coalition for five years.
The political arguments for this Bill are first class, but it changes the constitution—a constitution that has evolved. Pitt the Elder, a Whig Prime Minister—it is always nice in the spirit of coalition to quote the Whigs—talked of the “genius of the constitution”. Let us invoke that genius, which has let our constitutional processes evolve and develop. This has not been done because the coalition needed some quick fix to make sure that the next election would clash with elections in Scotland and Wales—that is, of course, an inadvertent result of what has happened. The coalition did not come to this agreement with the possibility of extending the life of a Parliament beyond five years. I am sure that all hon. Members have read the note from the Library pointing out that this legislation will not be subject to the Parliament Act if the other place disagrees, because it extends the life of a Parliament by another two months should the Prime Minister, by order, so wish to do. This is an accidental Bill, thought up in the late hours of the night. It takes away that wonderful flexibility that our constitution has had to meet the needs of circumstances and to evolve.
One way in which the constitution was beginning to evolve, which the electorate seemed to want, was that a Prime Minister’s resignation part way through a Parliament should lead to a general election. When I knocked on doors in my constituency, people did not tell me that they wanted fixed-term Parliaments, the alternative vote or any of that. However, they did ask who had voted for the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). People in North East Somerset of course knew his constituency, because they are a knowledgeable lot. They asked who had elected him to be Prime Minister. Although the constitution is clear that we can change Prime Minister as often as Her Majesty sees fit, the mood of the country is for that constitutional evolution. That is how our constitution works and how it has done for hundreds of years—at least since the Glorious Revolution. Let us hope that it continues to work like that and that this Bill is amended on the Floor of the House out of all recognition.