EU-UK Relationship (Reform)

Andrea Leadsom Excerpts

Tuesday 18th September 2012 Westminster Hall

[Andrea Leadsom (South Northamptonshire) (Con)]

I am delighted to be serving under your chairmanship, Mr Hollobone, and to be debating a subject that is of great interest to you personally. I congratulate the Minister on his appointment—I believe this is the first time he is responding to a debate in his new capacity.

I am going to talk this morning about the work of the Fresh Start project, which is a group of Conservative MPs who have spent the past year looking at all aspects of Britain’s relationship within the EU and at how we can get a better deal for British taxpayers. In his foreword to the Fresh Start project’s review, which we published in June, the Foreign Secretary wrote:

“The eurozone crisis is setting in train what may well be profound changes in the structure of the European Union. These will pose very important choices for every country in the European Union, inside the eurozone or out.”

He added:

“Public disillusionment with our membership of the European Union has never been so deep.”

A July 2012 YouGov survey shows that two-thirds of those surveyed want a referendum on or before the general election in 2015. If given a choice today, almost half—48%—would pull out and 31% would stay in, but were the Prime Minister to renegotiate a new deal to protect British interests in the EU, the poll suggests that people would vote in a completely different way: most—42% to 34%—would vote to stay in the EU in a post-reform world.

[Mr John Baron (Basildon and Billericay) (Con)]

Given those findings, does my hon. Friend not think it strange that a letter sent to the Prime Minister at the end of June, signed by 100 of his parliamentary colleagues, urging him to consider putting a referendum on the statute book in this Parliament calling for a referendum in the next Parliament has not even been answered? Does she think it would be worthwhile for the Minister to answer that question today? I apologise that I will not be here for his reply to the debate, but I have a Foreign Affairs Committee meeting to attend.

[Andrea Leadsom]

I have been following that matter and know that the Prime Minister has said that he will be responding shortly, so I am sure that my hon. Friend’s question will be noted.

[Mr Brian Binley (Northampton South) (Con)]

Does my hon. Friend recognise the need for contingency planning and negotiation before a referendum? Will she be urging the Minister that contingency plans need to be created now and announced well before the European elections in 2014, and will she tell the Minister that, in this country, the F-word is impolite?

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[Andrea Leadsom]

I almost entirely agree with my hon. Friend. I favour the idea of reform followed by referendum, but I think the reform is absolutely key and the poll survey shows that the British public think so, too. If the public saw reform, they would be content to remain a part of the EU.

What happens next is about politics, not economics. According to Eurostat, at the end of the first quarter of 2012, euro-area Government debt stood at 88.2% of euro-area GDP. On the other hand US national debt is more than 100% of GDP and in Britain it is 86.4% of GDP. My point is that if all euro-area debt were to be consolidated, the position within the eurozone in terms of consolidated debt would be no worse than either the UK or the US. This is about politics, not economics. It is about the extent to which eurozone members are prepared to underwrite one another’s debt. Politicians must make up their minds what they are going to do about the crisis.

Let me quickly run through where the big eurozone countries stand on debt pooling. Germany is firmly opposed to eurobonds at this stage, but supports greater central oversight of national budgets within the eurozone as a way to export German fiscal discipline.

[Emma Reynolds (Wolverhampton North East) (Lab)]

I congratulate the hon. Lady on securing this important debate. Does she recognise that the second largest party in Germany, the Social Democratic party, is in favour of eurobonds? The position of the German Government might well change after the federal election to be held at this time next year.

[Andrea Leadsom]

The beauty of democracy is that it is not over until it is over. It is important to think about who is in power now and not who might be in power in the future. In June, Angela Merkel said:

“I don’t see total debt liability as long as I live.”

She also said:

“Apart from the fact that instruments like eurobonds, eurobills, debt redemption schemes and much more are not compatible with the constitution in Germany, I consider them wrong and counterproductive.”

Angela Merkel has been clear on the fact that she does not believe that debt pooling is the way forward. That does not mean that Germany is opposed to eurobonds in principle; but from Berlin’s point of view, a full fiscal union must be established first. German Finance Minister Wolfgang Schäuble put it very clearly when he said:

“We have to be sure that a common fiscal policy would be irreversible and well coordinated. There will be no jointly guaranteed bonds without a common fiscal policy.”

Italy’s Prime Minister Mario Monti, who is a technocratic, not a democratically elected leader, has said that his position is quite similar to that of Germany in that he believes that central oversight of national budgets is a necessary precondition to eurobonds.

In Spain, the centre-right Government are keen on introducing eurobonds in the next few years and seem to be ready to accept losses of budgetary sovereignty to achieve that. Mariano Rajoy has proposed a three-stage path towards debt pooling: in 2013-14, eurozone countries should adopt measures to meet the fiscal and economic convergence criteria imposed by the European Council; in 2015-16, a European fiscal authority should be created that would oversee national budgets; and in 2017-18, when fiscal targets would be imposed on the eurozone in its entirety, full eurobonds could be issued.

France has not made its position entirely clear. It tends to favour more solidarity immediately and fiscal union later down the track, but in the name of Franco-German solidarity, it seems to have dropped the idea of Eurobonds, at least for the moment.

Most importantly, what about the UK? At the Lord Mayor of London’s banquet, the Prime Minister called for a looser EU

“with the flexibility of a network, not the rigidity of a bloc.”

That is an important indicator of where the UK stands. It is important to recognise that the EU is already multi-layered.

[Neil Parish (Tiverton and Honiton) (Con)]

For a long time, I dealt with the common agricultural policy, which is far too prescriptive to cover 27 countries with different climates and different soils. We want a flexible approach, so that this country can deliver good agricultural and environmental policies.

[Andrea Leadsom]

I completely agree with my hon. Friend.

The concept of a multi-speed Europe is already a reality: some countries opt in to Schengen, the euro, defence co-operation, and co-operation on justice and home affairs, and some opt out. A multi-speed Europe is already a reality, not something we are inventing for the first time.

[Mr David Nuttall (Bury North) (Con)]

Is not the danger in saying that we have a multi-speed Europe that it implies that everybody is going in the same direction albeit at different speeds, whereas there are millions of us in this country who do not want to be going in that direction at any speed?

[Andrea Leadsom]

I entirely respect my hon. Friend’s views and perhaps I should say “multi-tier”, because his criticism is very fair—“multi-speed” is the wrong term. The point that I was trying to make is that there can be different relationships with the EU, not that different countries are all trying to get to the same end-point. His criticism is fair; I apologise for my careless writing there.

The key advantage of the EU for Britain’s national interest is that of a trade area. I think that most people, whether or not they are in favour of Britain’s membership of the EU, would accept that Britain will continue to trade with the EU. In fact, 48.6% of UK goods exports now go to the EU as a whole—

[Mr Andrew Turner (Isle of Wight) (Con)]

Will my hon. Friend give way?

[Andrea Leadsom]

However, one can slightly reduce that figure if one looks at the Rotterdam-Antwerp effect, if that was the point that my hon. Friend was going to make.

[Mr Turner]

Not exactly. I was going to say that we can all be in favour of trading with Europe, but we do not have to be in Europe.

[Andrea Leadsom]

Yes. I thank my hon. Friend for that intervention. I am coming straight on to that point now, so I am very pleased that he has raised it.

The EU is already a significant trading partner, but there are significant opportunities for growth. Services account for 71% of EU GDP, but only 3.2% of that comes from intra-EU trade, and the UK Government continue to push for the completion of the single market, especially in services. Financial services gave us 11% of our tax receipts in 2009-10, providing a trade surplus of £31 billion in 2010. Financial services is an incredibly important sector in which there is enormous capacity for growth. Of course, that is why the Prime Minister used his veto last December.

What are the alternatives to EU membership? There are probably four. First, there is most favoured nation terms, under which around half of manufactured exports to the EU would face an average tariff of more than 5%, with some sectors being particularly badly hit, such as UK car exports, which would face a tariff of 10%. That would have a significant effect on UK business, making us a far less attractive location for foreign direct investment. In addition, the UK would lose its influence on framing EU regulations, so it would be required to buy in to EU regulations in order to trade with the EU but would have no say in framing them.

[Mr Binley]

Will my hon. Friend give way again?

[Andrea Leadsom]

I would just like to get through my list of alternatives and then I will give way, if my hon. Friend wants to make a point. I am conscious that lots of other people want to speak.

The second alternative is the European economic area option, or the Norwegian option. The UK would be outside the customs union and hence subject to complex and costly rules of origin. The UK would still be subject to most EU regulations, but it would have limited or little ability to shape them. Access to the single market for goods and services would be maintained; the UK would not be subject to common agricultural policy, common fisheries policy or regional policy; and the UK budget contribution would probably be significantly reduced.

The third alternative is a free trade agreement or the Swiss option, under which the UK would be outside the customs union and subject to rules of origin, but would not be formally subject to EU social or product regulation. In practice, all product regulation would probably be replicated in order to export to the EU. Again, under this option the UK would not be subject to CAP, CFP or regional policy, and the budget contribution would probably be significantly reduced. Free trade would be subject to a negotiated agreement.

Fourthly and finally, there is the option of being part of the customs union, or the Turkish option, under which the UK would be a member of the customs union, with free access to trade for goods, but services and agricultural products would not be covered by that option. The UK would be required to negotiate free trade agreements with any country with which the EU opens trade negotiations. We would be outside the EU treaties and institutions, so we would not be subject to CAP, CFP or regional policy, and it is not likely that we would have to make a significant budget contribution. We would not be subject to social regulation, but we would be subject to all product regulation with no ability to influence the shape of it.

[Mr Binley]

Mr Hollobone, I must point out that I am sitting on a Statutory Instrument Committee this morning and I know that you would not want me to miss that, so I will have to go very shortly.

Will my hon. Friend destroy the myth and say that, because of the £57 billion deficit with Europe, Europe is not going anywhere in trade, simply because it is not in its interests?

[Andrea Leadsom]

That is absolutely correct in principle, but as my hon. Friend—being a business man himself—would admit, we cannot simply change overnight, so we would be subject to an exceedingly long-term renegotiation with enormous complexities along the way. It is not quite as simple as he puts it, but yes, essentially I agree with him—it is certainly in the EU’s interests to continue to do business with us, even more than it is in our interests to do business with the EU.

Personally, I think that if we were to leave the EU, the world would not end, but my point is that it would be far better for Britain to negotiate better terms and to remain part of the EU.

[George Freeman (Mid Norfolk) (Con)]

I congratulate my hon. Friend on securing this debate and on her leadership of the Fresh Start project. Does she agree that the explosion of the EU’s internal contradictions—the collapse of its relentless drive for federalism based on corrupted economics—creates a huge opportunity for this country, and that the majority of people in this country want us to take the opportunity to set out a positive vision of the Europe that we would be pleased to belong to—a Europe based on sovereign nation states trading with each other, which indeed was the Europe that people voted for when they were last given the chance to vote on Europe? Does she also agree that if we are to trade our way out of the present debt crisis, we need to lessen our dependence on the sclerotic eurozone economies and focus more on increasing our trade with the rest of the world, and that the EU framework needs to support that process? In my own field of life sciences, the EU’s policy on genetically modified products, for example, undermines that process.

[Andrea Leadsom]

I am grateful to my hon. Friend for that intervention; he has made some really good points and I will address just a couple of them. It is absolutely the case that the EU is regulating us into being globally uncompetitive—uncompetitive not only within the EU but outside it as well. There are huge opportunities in China and the other emerging economies for Britain’s services, high-technology, financial services, manufactured goods and so on. Reform is essential.

As for the collapse of the euro project—the European project—it is true that, although we can certainly tolerate those who want to create some kind of federal Europe, at the same time Britain cannot be hampered by that movement. In a sense, therefore, their move to ever-greater fiscal union indicates the need for us to move towards having a far more clearly defined role that works better for British interests.

The Fresh Start project is all about saying that what we need is to renegotiate our EU membership—to remain within the EU but to have our absolutely best attempt at renegotiating a relationship that works for Britain, with full and free access to all EU assets, but without being hampered in a global world by EU regulation. What I want to see is fundamental reform.

What the Fresh Start project started to do just over a year ago, and with the support of more than 120 Conservative MPs, was to carry out a serious research project to see how different policy areas within the EU have affected Britain and British national interests; to make a cost-benefit analysis; and to see what we could change and how we could do that. It has been an enormous piece of work, which makes a splendid door-stop—I see that my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) is weightlifting today as he carries copies around with him. I congratulate him on doing so.

In June, just before the recess, the Fresh Start project published our green paper setting out the options for change. We colour-coded green those things that we can do ourselves, of which there is a surprising number: the British Parliament could simply decide to reform the way that we do certain things and get a better deal for ourselves without even making reference to our European colleagues. Amber options are those where negotiated treaty change would be necessary, but it has often been the case that we have never even attempted to negotiate those treaty changes and we should certainly have a go at doing so. The red options defined in the options for change are those things where we need to say, in Britain’s best interests, that we are no longer willing to entertain EU sovereignty over British sovereignty, and therefore we wish to withdraw.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

On the green options—the things that can be done straight away—does my hon. Friend agree that the present situation is a consequence of the pro-Europe Labour Government, who gold-plated so much EU legislation to interfere in our lives and used the EU as a good excuse to do it?

[Andrea Leadsom]

I absolutely agree with my hon. Friend; he makes a very good point. That was never more true than in relation to the working time directive. Having recently carried out an inquiry with all the royal colleges, I know that the evidence is overwhelming that the training of doctors is suffering seriously as a result of the negotiated on-call hours, which the last Government presided over and allowed to happen, to the detriment of our NHS. They should be ashamed of that.

[Emma Reynolds]

I am sure it was not deliberate, but that is not exactly an accurate account of what happened. We negotiated an individual opt-out, which this country retains. The European Court of Justice interpreted the rules on doctors’ on-call hours in a way that we felt was against our national interest, so we were then trying to negotiate whether being on-call constituted working time. It was no fault of our Government.

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[Andrea Leadsom]

That is absolutely not my understanding, but that is not a discussion for now, so we will have to park that.

The Green Paper was published in June and the Fresh Start project is now moving to phase 2, which is to suggest a manifesto for change by Christmas. I am delighted that 10 Conservative colleagues have each agreed to chair a policy area in which they have a particular expertise, and they will look to get buy-in from other colleagues to achieve a consensus on what specific reforms we will recommend that the Government pursue. By Christmas, we will end up with a specific manifesto for reform, which will be a shopping list of things that Britain would like to see changed.

One of the Government’s biggest challenges is the fact that FCO officials wring their hands when we talk about a shopping list of reform proposals.

[Chris Bryant (Rhondda) (Lab)]

No they do not.

[Andrea Leadsom]

Yes they do. I have had several conversations with FCO officials who say that people can negotiate on only one or two points at a time. That is the way in which EU Commissioners and European parliamentarians squash the genuine national interests of one member state. They say, “You can talk only about the rebate, or only about 0% increase in the budget. You cannot talk about all the other issues that you want to include in your shopping list.” That will be the biggest challenge to any reform.

[Tim Loughton (East Worthing and Shoreham) (Con)]

My hon. Friend’s comments remind me of the story about a man wandering down Whitehall who asks the policeman, “On what side is the Foreign Office?”, to which the reply is, “Hopefully ours, sir.” I congratulate her on the fantastic work she has done with the Fresh Start group, which distractions have not allowed me to take part in, but which I look forward to now.

Is not the real tragedy that those who say that we must stay such a close part of Europe, because we trade more with Belgium than with China, Brazil or India, miss the point that we should have been trading much more with China, Brazil or India, beyond the EU? The tragedy is that this country is not leading the crusade for a much more global, liberalising, deregulating, reforming and pro-competition Europe, and we should be. That is what most of our constituents and we all actually want.

[Andrea Leadsom]

I am grateful to my hon. Friend and am delighted that he will be getting involved with the Fresh Start project himself. He is absolutely right. Is it not interesting that it is since this Government came into office that exports to China, Brazil and India have radically increased in percentage terms from the incredibly low level under the Labour Government, who preferred to create non-jobs in the public sector rather than real jobs in the private sector?

I want to run through a few ideas that have come out of the Fresh Start project and suggest them to the Government for serious consideration. There is no doubt that we have not only the opportunity, but the absolute need to get in there and make British interests very clear, long before the next European parliamentary elections in 2014.

Let me quickly run through some of the green options, which are things that we could be doing ourselves but are not doing at the moment. The UK is a significant member of the EU—one of the big three—and has worked with a number of allies to develop its vision of a free-trading, economically liberal EU. The UK has been enormously successful in achieving its strategic aims of enlargement and deepening of the single market. At the time of crisis in the eurozone, it is key that the UK sets out the vision of the EU that it wants and develops alliances in that direction. It is essential to set out a vision for a free-trade area that is globally competitive and determined to advance in the markets outside the EU and not just within it.

We could improve the scrutiny of EU legislation, including pre-legislative scrutiny. I welcome the European Scrutiny Committee’s inquiry into that and the work of the Hansard Society in looking at much more parliamentary scrutiny, including having specific EU questions, not just FCO questions, and having a Europe Department rather than just a Europe Minister in the FCO.

We should certainly look at pre-legislative scrutiny where, as in Denmark, Parliament gives authority to Ministers before they go to negotiate on our behalf, instead of them coming back to us with something that is almost done that we just need to rubber-stamp at the eleventh hour. There are good examples of where good pre-legislative scrutiny has made a big difference, such as the proposed ban on the short selling of equities. Owing to the excellent work of Members of the European Parliament, that was reduced to a ban on the short selling of sovereign debt only. That was a massive saving grace to liquidity and free financial markets.

Better Brits in Brussels is an important issue. We have 12% of the EU’s population, but now only 4% of Commission staff. That has been allowed to slide abysmally. We have not done enough to allow our brightest and best young people to obtain the language skills they need to pass the European Commission test. I am delighted that the Government have restarted the European fast stream. That is an important move on which we should absolutely spend our time. When we visit MEPs and Commissioners in Brussels, we find that they have all gone native; they even speak with a sort of weird part French, part German, part English accent—if there is such a thing. They lose track of whom they represent. What we need is British people in the Commission representing British interests.

We want to remove gold-plating in social and employment laws as soon as possible. We have interpreted some EU directives in a hard and fast way, not least on the opt-out for doctors. As I understand it, in all too many cases, we offer doctors a contract for up to 48 hours a week, and then invite them to opt out of working only 48 hours a week. That is not exactly a terribly tempting offer. We need to look seriously at gold-plating.

We support deregulation at the EU level. The EU has agreed in principle to subsidiarisation for micro-businesses. It is not an EU competence to delve into micro-businesses if they are British-only businesses. They should not be subject to EU regulation, and we should be pressing as hard as we can to exempt British micro-businesses from any EU intervention whatsoever.

Finally, Britain could be using the European Court of Justice to our own ends far more than we are to challenge EU proposals. An example of a good decision by this Government to challenge the European Union is our challenge of the European Central Bank’s proposal that clearing houses with more than 5% of turnover in euros should be based in the eurozone. That is blatantly stealing Britain’s business in a lucrative area, and we are absolutely right to be challenging that decision at the ECJ. We ought to take those opportunities more often.

Those are just some of the green options for reform that Britain could be doing much more on. Other areas require us to get far more sleeves rolled up and people wading in, and I want to cover two. I recognise that a lot of hon. Members want to speak, so I will hurry up. The greatest of those areas is to achieve a rolling opt-in and opt-out of EU policies. There is no doubt that there will be a fiscal union—[Interruption.] Opposition Members laugh. They are not even prepared to listen, which I find astonishing. They should care that the British public have had enough of their ever closer part in the European Union. It is absolutely astonishing.

We should look at whether, for those who are not part of the fiscal union, we could have some sort of rolling opt-in and opt-out of EU policies. The logistics could be incredibly complicated, but when Governments change, policies are often completely changed. It is ridiculous to have an EU where something decided 35 years ago has never changed and a member cannot opt out of it. It would be far better for the countries that do not intend to be part of a federal Europe if they could opt out. When Governments change, they could have a window of opportunity to decide on which policies they want to remain a part of, and which areas of EU jurisdiction they want to remove themselves from. That is entirely possible. That would give the European Commission something else to do, so it can pay itself even more and employ even more staff, so it should be delighted at the prospect.

Perhaps the most logical major reform of all is to repatriate structural funds. We are in the middle of negotiations for the next multi-annual financial framework, which will determine the EU’s budget strategy from 2014 to 2021. The negotiations are subject to national veto, and so offer a huge opportunity to the UK to seek restraint and sensible reform that will better serve the British taxpayer. Perhaps the best example of that is to repatriate the local bit of EU structural funds.

From 2007 to 2013, provision for EU spending on the structural funds amounts to some €280 billion, which is about 30% of the total EU budget. During that period, the UK will make a net contribution to the structural funds of some £21 billion; that is the UK’s contribution after taking into account the money it receives from the structural funds. We pay £30 billion, and we get £9 billion back after the money is converted into euros, administered and 140,000 full-time equivalent European staff have decided which UK regions should benefit. In fact, under the European definition of UK regions, only two, west Wales and Cornwall, are net recipients of structural funds. All the other regions are paying significantly more for every £1 they get back in structural funds, which is a completely ridiculous state of affairs. Additionally, the European Union determines the allocation, not the British Government.

Spending plans are based on EU regions that simply do not fit economic and political realities. There is a top-down structure in which all spending plans require the approval of the European Commission and must comply with EU guidelines. So structural spending completely frustrates local innovation,

No rigorous performance criteria link disbursement of funds to clear results. The think-tank Open Europe finds no conclusive evidence that structural funds have had a positive overall impact on growth, jobs and regional convergence in the EU. The rules on the administration of the funds are excessively bureaucratic. For wealthier member states, including Britain, the funds completely irrationally recycle large amounts of money, via Brussels, not only within the same country, but within the same regions. The UK could negotiate the repatriation of regional spending to richer member states, focusing the structural funds solely on poorer EU countries, which would reduce the total EU budget for the next multi-annual financial framework by some 15%.

[Mr William Cash (Stone) (Con)]

I am listening to my hon. Friend with great interest. So far, she has not mentioned Mr Barroso’s speech of a couple of days ago. I wonder whether she appreciates that, however sensible her ideas may be on lists of functions and attitudes, the European Union does not have the slightest intention of entering any negotiations in that direction. That is the problem. I agree with most of what she says as a matter of aspiration, but the problem is we are not dealing with a European Union that is remotely on the same page.

[Andrea Leadsom]

My hon. Friend makes an interesting point, but he contradicts what my hon. Friend the Member for Northampton South (Mr Binley) said, which is that the EU will not allow us just to walk away, because the EU needs us more than we need it.

There is an opportunity for reform. There is no doubt that, as a non-eurozone member, we will not be subject to the calls for ever greater union. The absolute burden is for us to define what we want that renegotiation to look like. If we do nothing because we are afraid the EU will not listen to us, we will get nothing. We would then end up in a position in which we are either in or out. Having a good go at reform is the way forward, whether we succeed or fail; doing nothing would not be in Britain’s best interest.

Richer member states are perfectly capable of funding their own regional policy and determining which regions should benefit from structural funds. If we were to repatriate those local structural funds to richer member states, we would end up with a 15% headline cut in the multi-annual financial framework for the next period and every one of those richer member states, bar five, would receive a significant reduction in contributions, which is a win-win and something we ought to look to other member states to support.

There are so many areas of reform that would be in Britain’s better interest. I could go on and on, because the opportunities are widespread and the need for reform is urgent. The Prime Minister has prioritised seeking safeguards for financial services, which is Britain’s most important industry, employing more than 1 million people and generating more than 10% of our tax take every year.

Another key area is the social and working time directive. Do we want our 1 million young people currently not in employment, education or training to get jobs, or de we want to prioritise rights for existing workers? Those are the choices that we have to make, and the social and working time directive is undoubtedly hampering the opportunities for young people to get work.

Do we want more and more EU regulation that affects small and micro-businesses? Do we want to see the training of young doctors in the NHS hampered by EU regulation of on-call hours? The Fresh Start project has raised, researched and sought to answer those questions. By Christmas, we will have produced a short and punchy manifesto for change that will be a shopping list of reforms across all EU policy areas, including business, immigration, justice, agriculture, energy and many others. I know Front Benchers are keen to see reform, and I sincerely hope they will accept and adopt as Government policy the work of such a large group of Conservative colleagues.

[Several hon. Members]

rose—

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[Emma Reynolds]

That was not my point. We have much more influence and weight in international trade negotiations acting as part of the European Union than we do alone. I now want to make some progress.

Our membership of the European Union is also vital to attracting foreign direct investment. I want to agree with one point made by the hon. Member for South Northamptonshire, which is that it would not be in our national interest to be in the position of Norway. A recent report by some Norwegian academics pinpoints a democratic deficit in Norway’s relationship with the EU, because the country is bound by the single market’s rules, regulations and laws, over which it has no say. If we were to put ourselves in that position, it would not be in our national interest, so I agree with the hon. Lady on that.

We are in favour of our membership, but we are not defenders of the status quo. We would like to see a Europe that is more outward looking, that is stronger in the world, that is—crucially, at the moment—better able to deal with the eurozone crisis and that reforms some of its internal policies. We would like to see the multi-annual financial framework more focused on growth and job creation, a reform of the common agricultural policy and, crucially, a completion of the single market in services. The only way to achieve such reform, however, is to have influence in the EU and not to be stranded on the sidelines.

Regrettably, as a result of the Prime Minister’s walk-out at the European summit in December, our stock in Europe sits at an all-time low. [Hon. Members: “ Rubbish.”] If hon. Members visited European capitals and discussed with other politicians the stock of UK influence, they would have a pretty bad surprise. Negative tactics such as vetoes and empty chairs are instruments of last resort; they are open to member states and we should be prepared to consider their use in defence of a vital national interest, but in December no vital national interest was defended. The Prime Minister’s protocol on financial services was rejected as a retreat from existing single market rules, and the rest of Europe simply carried on without us. The Prime Minister’s action therefore incurred a loss of influence for no tangible gain. Ironically, as a result of what he did in December, the Government are more reliant on an institution that many Conservative Members love to hate, the European Commission, which we must now depend on to protect the single market and its integrity.

[Andrea Leadsom]

I have to disagree completely with the hon. Lady. The Prime Minister’s use of the veto, far from giving us less influence in Europe, had the opposite effect. What was astonishing was the complete wall of ambassadors and others from the European Union coming to see many of those known to be interested in the EU to find out what the problem is, what was going on and what it is exactly that Britain wants. So she is completely wrong—what the Prime Minister did was a wake-up call and definitely in the interests not only of the City but of Britain.

[Mr Philip Hollobone (in the Chair)]

Order. Before the hon. Member for Wolverhampton North East (Emma Reynolds) responds, she needs to think about bringing her remarks to a close. She has about two minutes left.

Treaty on Stability, Co-ordination and Governance

Andrea Leadsom Excerpts

Wednesday 29th February 2012 Commons Chamber

[Andrea Leadsom (South Northamptonshire) (Con)]

I find the Opposition’s stance rather astonishing, because it focuses only on micro-details and fails to address the big picture. As an eternal optimist, I feel that the big picture—the opportunity for Britain—has rarely been better, because real change is in the air. As a banker by background, I have very real concerns about the prospects for the euro’s survival, and I think that the European Central Bank’s long-term repo arrangements will not endure beyond the first roll-over and may well collapse long before then. But regardless of the outcome for the euro in the short to medium term, there is no doubt that change is in the air.

I should mention to the shadow Minister that, as I am sure she realises, the treaty is not an EU treaty but a fiscal compact treaty that does not include all the EU member states. She did not seem to make that clear. The fiscal compact treaty will create a euro summit for those who are part of the eurozone and those who have ratified that treaty. The euro summit will consider things such as competition and structures, and inevitably will, therefore, be a forum for caucusing. That is almost inevitable. So change is in the air.

I take great pleasure in the fact that, because change is in the air, there is the opportunity for change for Britain too. The prospect is no longer of a two-speed Europe but of a multi-tier Europe—in respect not just of those in the eurozone and those outside it but of those in the Schengen arrangement and those outside it, and of those great fishing nations interested only in the common fishing area and those who wish to be excluded from it. A multi-tier Europe in which member states can pursue their own particular interests but join together in areas of common cause is the opportunity facing us.

I am delighted with everything I hear from our Government about our approach to that. We should welcome and support those in the eurozone area who wish to work more closely together on further fiscal integration to support their currency, and we should also be pressing for change in the best interests of Britain. In that context, I want briefly to mention the work of more than 120 Conservative Back Benchers in forming the Fresh Start project. I pay tribute to my hon. Friends the Members for Daventry (Chris Heaton-Harris) and for Camborne and Redruth (George Eustice). The three of us, together, have been pulling together an enormous project that looks at every single policy area under the EU and attempts to determine where it acts in Britain’s interests, where it goes against Britain’s interests and what the options are for change. To my knowledge, such work has not been done for a good long time. It was astonishing that the shadow Minister could not come up with any detail, but could only nit-pick at what the Prime Minister has been doing.

I also pay tribute to the hon. Member for Dunfermline and West Fife (Thomas Docherty), who sits on the shadow Minister’s side of the House and who has become co-chair with me of an all-party group. That group has seen significant engagement from both sides of the House in the interests of EU reform and what could be a better deal for Britain.

[Emma Reynolds]

I would like to make it clear to the hon. Lady, who is making an eloquent speech, that the Opposition are in favour of European reform, but not the same kind that she is. For example, we are not in favour of repatriating European social policy, and we also think that, even were it desirable, it would be a pretty unrealistic aim.

[Andrea Leadsom]

I am glad that the hon. Lady made that intervention, because I can assure her that the all-party group on European reform, with which her hon. Friend the Member for Dunfermline and West Fife other Labour Members, Government Members and Members across the House are closely involved, is investigating the options for change. It is not a campaign group but an investigative group. It is a disappointment to me and to others that the hon. Lady has not engaged in that debate, because we have turned up some extremely interesting facts.

As the devil in the EU is in the detail, I would like briefly to mention three areas. The first is financial services. Before the financial crisis, the single market for financial services was a very good thing. It significantly added to British GDP, as well as the GDP of Germany, France and Italy. All the change at EU level was about creating a better single market, including in UCITS—undertakings for collective investment in transferable securities, the most successful financial services export from the UK ever.

Financial services had great legislation; however, since the financial crisis the EU has turned to stopping, slowing down, preventing and shutting down financial services, almost in a sort of act of revenge against the bankers. Indeed, I have heard many EU politicians talking about how City-style financial services are to blame for the problems they have found themselves facing. However, that is simply not true, and our Prime Minister did absolutely the right thing for British businesses and the British economy by standing up for financial services and seeking the safeguards that would enable us to protect the industry, which employs a total of nearly 2 million people in this country and contributes 11% of our GDP on an ongoing basis. He therefore did absolutely the right thing, entirely contrary to what the shadow Minister suggested.

Secondly, the shadow Minister mentioned social policy and the working time directive, and said that the all-party Fresh Start group would repatriate those powers. Not true: we are looking at what the options for change are. She will know, as do many people, that trainee doctors in the NHS are severely hampered. In fact, a coroner in the west country recently attributed the death of one elderly gentleman to the working time directive, which had meant that not enough doctors were on call and that the two doctors on duty were seeing 300 to 400 patients between them. Change is therefore vital.

My third and final point is about structural funds, where we now have a genuine opportunity. Back in 2003, the hon. Lady’s Government’s policy was to repatriate the local element of structural funds. In Britain we have been contributing €33 billion to structural funds over the past seven years. Some €9 billion comes back to the UK, but that is decided by the EU. What on earth is the point of that? We can decide best where to allocate that €9 billion. Interestingly, some of our poorest regions are net contributors to structural funds, not net beneficiaries, so the potential for reform is massive.

[Bob Stewart]

Does that mean that we can change quite easily without any further ado, simply by adopting my hon. Friend’s suggestions?

[Andrea Leadsom]

All the changes that the all-party group is investigating would require negotiation. Some things are more complicated than others, although we are setting everything out in the research that we are undertaking. [Interruption.] I have been asked to finish, so I will.

My two final points are these. For far too long we have tried to avoid the EU and not engage with it, so the other thing that the Government are doing that I welcome is engaging far more and far better with EU policy making at all levels. My second point is about better EU scrutiny in Parliament. We have been rather bad at that in the past, so I am glad that the Minister for Europe will be doing far more of it in future.

[Several hon. Members]

rose—

Falkland Islands

Andrea Leadsom Excerpts

Tuesday 31st January 2012 Westminster Hall

[Guy Opperman]

With no disrespect to the hon. Gentleman, I will not go down that route. One of the few good things to emerge from the Falklands war was the return of democracy to Argentina in 1983. It is entirely right that there have been various analyses of the history of Argentina but, with respect, it is not for me to lecture the Argentines on that history and on what they were involved with. Instead of looking to the past, I hope that we can look to a future of co-operation between these two countries, which already have plenty of trade and many common grounds. The Foreign Secretary, 10 days ago, wrote:

“There are many areas on which we can cooperate—on joint management of fish stocks, on hydrocarbon exploration, and on strengthening air and sea links between the Falklands and South America, as we used to do in the 1990s and ought to be able to be able to so again.”

[Andrea Leadsom (South Northamptonshire) (Con)]

My hon. Friend is making an excellent speech and a good case, but does he agree that one of the problems with the uncertainty currently surrounding the Falkland Islands is that it is extraordinarily difficult for business people to get on and make sensible business decisions? I draw his attention to a British oil exploration company, which I know, that wants to invest but is unwilling to do so until the political uncertainty has been clarified.

[Guy Opperman]

I accept that there is a need for greater economic certainty, but we must understand that the islands have a strong economy and a profitable business community, and that they are effectively self-sustaining. I draw my hon. Friend’s attention to the 1995 agreement between the Argentine and British Governments on oil exploration. In 1995, they signed a deal that identified a discrete area where there was to be joint hydrocarbon exploration. In 2007, the Argentines scrapped that deal to share oil found in that area. They effectively ripped it up, and there has been some uncertainty on development of the way forward on hydrocarbons and oil, but I believe that a robust approach from our Government will provide a better future for companies that want to invest there.

European Council

Andrea Leadsom Excerpts

Thursday 8th December 2011 Westminster Hall

[Andrea Leadsom (South Northamptonshire) (Con)]

I am delighted to follow the hon. Member for Luton North (Kelvin Hopkins) and to find myself agreeing with him yet again—we also agree on high-speed rail. I am also grateful to my hon. Friend the Member for Gainsborough (Mr Leigh) for his history lesson. I confess that I am one of those economists who tends to look at things from an economic perspective, rather than an historical one.

What concerns me about the latest proposals for eurozone crisis prevention measures is that they simply will not work. It boils down to the fact that what makes the difference between sovereign risk and credit risk is the undoubtedness of sovereign debt, backed by a lender of last resort. In the end, if a country is a sovereign risk, its lender of last resort can print money, its currency can devalue and it can get out of its difficulties that way. The eurozone has as yet failed to address that fundamental issue, and the measures that it now proposes mean nothing more than ever-greater fiscal integration, but without the ability to issue proper sovereign debt. Market chaos will therefore not cease for longer than the short term.

[Mr Jenkin]

Does my hon. Friend share my concern that, even if the European Central Bank was turned into a fully fledged sovereign central bank and printed unlimited sums, it might provide liquidity and buy some space for a while, but the fundamental structural problems between the different economies stuck in the eurozone would not be addressed? Austerity packages would still need to be applied, but the EU’s institutions do not have the democratic legitimacy to impose austerity on countries in that way.

[Andrea Leadsom]

Yes, I agree. The key issue is that if these countries are to have sovereign risk, they must completely guarantee and underwrite each other’s debt and obligations. That is very unlikely ever to be achieved in the EU, which just makes the problem of not having a lender of last resort even more existential for the eurozone. I therefore have genuine concerns about whether the proposals actually offer a solution.

Here we are on the eve of a very important summit, which is designed, on the face of it at least, to put the market’s fears to bed once and for all. The Prime Minister has a strong hand, because the German Chancellor and the French President need a treaty at the 27 member state level, for two practical reasons. First, if they started again, with just the 17 eurozone members trying to create a treaty between themselves, they simply could not do that in the time frame that the markets would permit them. That is a very practical issue, which they need to consider. Under the Lisbon treaty, however, treaty changes can be fast-tracked. Secondly, as was pointed out earlier, the 17, as a group, could not simply annex the EU institutions and use them for themselves; they would require the permission of the 27 EU members. For both those reasons, a treaty is needed at the 27 member state level, and that makes the Prime Minister’s hand very strong.

Like other Members, I am pleased that the Prime Minister is absolutely determined to protect Britain’s interests. What does that mean? First and foremost for every EU member, regardless of whether it is in or out of the euro, that must be about stopping the crisis—there is no doubt about that. If the euro descends into a disorderly collapse, that will easily cost 6% or 7% of British GDP, and it would probably push us into a worse recession than the one after the financial crisis of 2008. There is therefore no doubt that our top priority should be to solve the eurozone crisis.

[Mr David Nuttall (Bury North) (Con)]

As my hon. Friend will be aware, this is not the first time European leaders have met to try to resolve the crisis in the eurozone. Why does she think that eurozone leaders and, indeed, the leaders of the whole EU will be any more successful this time than they were on any of the previous occasions when they met to try to come up with a grand solution to save the euro?

[Andrea Leadsom]

I thank my hon. Friend for those remarks. There is a desire to come up with a solution; but as I said, I do not think that it will work, for reasons of economics and the markets’ actions. I hear what my hon. Friend says.

Britain is clearly struggling to recover. The eurozone crisis is testing us and is close to pushing us back into a no-growth, or even a recessionary, period. We therefore need to look after Britain’s interests by not only protecting the eurozone, but ensuring that we create safeguards for our most important industry, and I want to put in a plea for financial services.

There has been a lot of talk about holding a referendum, changing the common agricultural policy or simply repatriating powers, but what do all those things mean? If we hold a referendum, what would the question be? How quickly and easily could people understand enough about the implications of a question such as whether we should allow the 17 fiscally to unite? That is an extraordinarily complicated question, and referendum questions really need to be along simple lines, such as whether Britain should be in or out of the EU. At a time when these things are in flux, that is almost impossible to answer.

[Mr William Cash (Stone) (Con)]

I should like to ask my hon. Friend a simple question. How much more important can things get than when we face a fundamental change in the relationship between ourselves and the EU? It is as simple as that. This is an historic question, and it demands a referendum. Why does she think otherwise?

[Andrea Leadsom]

We will just have to agree to disagree. If people are in government, they govern. At the current moment, a referendum would be extraordinarily important in the history of Britain, but it would be extraordinarily difficult to get the sort of answer that would give the Government a coherent direction. It is for the Government to make the best decision at this moment. For what it is worth, I have always thought that a referendum needs to come at the tail end of a renegotiation of Britain’s relationship with the euro and that it should be used to ratify such a renegotiation, based on the simple question of whether Britain should be in or out of the EU on the basis of a pre-negotiated set of terms with the EU.

[Mr Jenkin]

I could accept that approach, and my hon. Friend has answered her own question about what the referendum question could be. We will not agree the treaty texts at the summit; the meeting will discuss issues of principle and the treaties will then be drafted, but their ratification will take months if not years. We are talking about a referendum some time during that period to ratify a new deal for Britain. Does my hon. Friend not think that that would be a sensible way to go? Would it not strengthen our Prime Minister’s hand if he was to put that view to those at the meeting this weekend?

[Andrea Leadsom]

I am perhaps not understanding. The calls that I have seen in the media are all about our needing a referendum, but now is not the moment for one.

[Mr Jenkin]

If I may say so, my hon. Friend has seen a bit too much of the Government’s propaganda, rather than heard what some of us have been saying. We cannot, of course, ask for a referendum on the spur of the moment; we are asking for a referendum on renegotiated terms of membership, which we desperately need and which this summit demonstrates that we will need. We should be able to tell our European partners, “Go ahead with your proposals for fiscal union. We don’t think they’ll work. It’s a big change for us, so we need these measures in return. As part of the ratification process, we will put this to the British people and recommend a yes vote, as long as you agree our terms.”

[Andrea Leadsom]

I thank my hon. Friend. In truth, right now, I genuinely believe that the Prime Minister has to focus his effort on creating the best solution for Britain, and that is what he is doing. As for all the demands for referendums, the fact that I am confused about what my hon. Friend has been saying, although I am quite close to these issues, demonstrates that other people will doubtless also be confused. The demands are seen as our party, at least, trying to cause trouble for the Prime Minister. For that reason alone, now is the time to get behind the Prime Minister, who has promised the British people that he will defend our interests.

Let me come to why defending the City is the key priority at the moment. People talk about renegotiating EU directives that have already been implemented, but as we have found as part of the Fresh Start project work, that is real spaghetti; it is extraordinarily difficult to unwind existing, implemented policies. I am a very practical person, and the best approach in terms of doability is to look at what has not yet been implemented and what the biggest threat to Britain is. On those two counts, there is no doubt that we should focus on financial services.

Financial services account for 11% of Britain’s tax take each year—about £50 billion. It employs nearly 2 million people; it is our biggest export; and it creates a huge positive trade surplus. Given that we have a big overall trade deficit, we would be looking at a far worse trade balance without financial services. Added to that is the fact that the potential for the future growth of financial services is all outside the eurozone; it is in the BRIC countries—Brazil, Russia, India and China—and America and Asia. That is where the potential lies. Yet, before the financial crisis, Britain was in a strong position in creating an EU financial services single market. We were influential. That was all about deregulation, open access to markets, growth and jobs. Britain did very well out of that and so, by the way, did the rest of Europe. Other eurozone countries did extraordinarily well, because the City was the entry-point to European financial services markets. That benefited us all.

Since the financial crisis, however, the agenda has changed. Britain has rightly changed its regulatory environment by greatly increasing controls, the closeness of supervision and the requirements for capital, liquidity and so on. The EU’s goal has been more to ban what it does not like: “Let’s reduce financial activity; we will constrain, prevent and reduce what is going on.” Nowhere in the EU treaties is there any talk of prudential decisions that the EU might make that would go against the fundamental commitment to single markets and growth opportunities, so the 49 EU directives and other proposals on financial services coming down the track are already in breach of the spirit of the EU treaties, which are all about creating better markets and more access.

I want to mention a couple of those matters in particular. First, on the financial transactions tax, people may think, “They will never do it; it would be cutting off their nose to spite their face and the business will simply go elsewhere.” Actually, however, I think many people in the EU are determined to do it, because they do not want the business. They think that Anglo-Saxon light-touch regulation and the success of financial services are partly to blame for the eurozone crisis. They are quite wrong, but that is where they lay the blame, so they would consider a financial transactions tax that would drive business abroad to be a good thing. To anyone who thinks, “They would not do it,” I would say that they would if they had the opportunity. Of course, that would be disastrous for Britain. It would not be a tax on bankers; it would be a tax on pensioners, investors and savers, because it would go straight to the bottom line of every investment portfolio. If anyone said that it would serve bankers right, I would reply that it would affect not bankers but savers. I could not support that.

Secondly, a slightly unbelievable idea has been proposed in the eurozone that a clearing house with more than 5% of its turnover denominated in euros should relocate to the eurozone. That would be daylight robbery and steal our business, and I am glad that the British Government are already challenging it in the European Court of Justice. Where in the single market treaties, which are all about growth and jobs, does that appear? How would it support British growth and jobs? It would not. I am extremely concerned about the tone and extent of EU directives coming down the track. They are not yet implemented; but unfortunately, under QMV, they could be implemented without Britain’s say-so.

[George Eustice]

I agree with my hon. Friend that the Prime Minister is right to prioritise the financial services directives in the negotiations. Is she aware that Open Europe has today published a poll of City institutions showing that more than 60% of them believe that the burden of regulation coming down the tracks from the European Union outweighs the benefits of the single market?

[Andrea Leadsom]

I have not seen the poll—I have been looking forward to seeing it—and I am not surprised by what my hon. Friend says. Although, as I have said, the treaties are all about expanding markets, growth and opportunities, some of the unintended consequences of EU policies have been the complete opposite of that, and never more so than in financial services. I think that a deliberate attempt has been made to reduce financial services activity in the eurozone.

Financial services should be the top priority for the Prime Minister. He has been clear about drawing a marker in the sand to the effect that Britain wants a secure legal agreement that, in the event that financial services legislation is against Britain’s best interest, we can prevent it from being imposed on us.

[Emma Reynolds]

The hon. Lady is making an eloquent speech. Does she support our idea that, to protect financial services and decisions on the internal market, the Prime Minister should call for all non-euro member states—the 10—to be observers at the euro group meetings that will be held so regularly?

[Andrea Leadsom]

Any attempt that the non-eurozone members make to protect their interests is important, but perhaps an even better way to do it would be to ensure that, if any vote is passed under QMV by the eurozone bloc, there should also be a supporting vote under QMV on the part of the out-group of 10, at a very minimum, to ensure that the in-group could not ride roughshod over the out-group.

[Mr Leigh]

We now know that the policy of Her Majesty’s loyal Opposition is to be an observer.

[Andrea Leadsom]

I thank my hon. Friend for his intervention.

[Mr James Gray (North Wiltshire) (Con)]

I entirely agree with my hon. Friend about the threat to financial services and the importance of focusing on the City and welcome the fact that the Prime Minister has said that he intends to do precisely that at the summit. None the less, does my hon. Friend agree that there is a subtle risk that he could come back from the summit, waving, Chamberlain-like, a piece of paper in the air and saying, “Haven’t I done well? I have protected a number of things that were under threat in the City of London”—despite having ignored the historic opportunity of the summit and allowed several other things to slip by without repatriating anything at all in the process?

[Andrea Leadsom]

That is an important point, because the Prime Minister will not be just having a chat and getting general agreement; he will want to get a firm assurance and put a marker in the sand saying, “We feel your pain and share your goal and will want to protect Britain’s specific national interest by including our own requirement in the treaty.” There cannot be simply a gentleman’s handshake, so that what is agreed can be watered down later. There must be a firm commitment on all sides that Britain’s national interest will be protected.

[Mr Nuttall]

Does my hon. Friend agree that the problem with marks in the sand is that, when the tide comes in, they get washed away?

[Andrea Leadsom]

That is a good observation and I have noticed that, but it was not what I meant, and my hon. Friend knows it. What I have outlined is down to the Prime Minister to achieve. He has committed to do it. We must have confidence in his determination to follow it through.

[Mr Stewart Jackson (Peterborough) (Con)]

I respect my hon. Friend’s intellect and erudition on this issue, but she will be familiar with the story of Pyrrhus and his remark, “One more such victory and we are doomed.” We can very well defeat the straw man of the financial transactions tax, while we ignore the creation of a de facto country, perhaps called Greater Germany, that will militate against the long-term financial, economic and political interests of the United Kingdom.

[Andrea Leadsom]

I do not see things as starkly as that. We are now in a position where the Prime Minister can protect Britain’s interest and is committed to doing so. We need to give him the chance to do that.

I want briefly to discuss things that we can do ourselves. First, there is an awful lot of talk about repatriation and things that we could do differently, but in the long years of the previous Government, the EU was largely ignored and many opportunities to improve how we do things at home were missed. Some quick examples include how we implement EU directives. We have an opt-out from the working time directive, as do 16 other member countries, which makes a majority in the 27, if my maths serves me correctly. We could band together with the other 16 and demand that the EU reconsider the directive in its entirety. I have talked to a British delegation of MEPs who think that there could well be interest in doing that. Why have we not done so, if we all like to think that the directive is disastrous?

Secondly, why do we have so few British workers in the EU institutions? Why are none of our people employed there? Why did the previous Prime Minister choose to put someone in the post of High Representative of the Union for Foreign Affairs and Security Policy, instead of having someone in the financial services commissioner post? It has been left to a Frenchman who does not understand financial services particularly well to do that job for us.

Something that should be entirely within our gift to sort out is scrutiny in Parliament, and we do not do enough of that here. We leave it up to the incredibly overworked European Scrutiny Committee, which is ably chaired by my hon. Friend the Member for Stone (Mr Cash). In areas such as financial services and agriculture, we should pass directives on to the specialist Select Committees, which have the interest and expertise to look at detailed areas, and ask them for their help and support to ensure that, before we receive directives that we then have to implement, we have done the best job that we possibly can for Britain.

--- Later in debate ---

[Martin Horwood]

I will give one example. The hon. Member for South Northamptonshire (Andrea Leadsom) mentioned clearing house regulations. Since that dealt with transactions governing euros, how would we have influenced that legislation had we been outside the European Union? We might have found that by leaving the European Union we had excluded ourselves from such decision making and enabled the EU to take precisely that kind of decision, to the immediate detriment of the British economy and the status of the City of London, which is a European asset as well as a British asset.

[Andrea Leadsom]

Specifically, that would not have happened. It is only because the UK is in the EU that the EU can require London clearing houses to go under this type of legislation. If we were not part of the EU, it would not affect us.

[Martin Horwood]

I hesitate to challenge an expert in her own field, but we might find that the kind of interests that we are able to defend in economic policy, and financial policy specifically, within the European Union would not be so easily defended if we were outside the EU. It is one thing for Norway or Lichtenstein to be allowed access to European markets and to gain the benefits of the European economic area, because they do not pose much of a threat to Germany, France or the other EU economies. It would be different if an economy the size of Britain’s was taking advantage of such a situation or trying to mould the rules to our own advantage. It is critically important to the City of London that we retain our membership of the EU.

Judiciary and Fundamental Rights

Andrea Leadsom Excerpts

Tuesday 22nd November 2011 Commons Chamber

[Andrea Leadsom (South Northamptonshire) (Con)]

I should like to start by putting on the record my congratulations to Croatia on getting this far in its process towards accession to the European Union. I am a big fan of an expanded single market because I genuinely believe that it is in the interests of all EU member states. I share the relief of the hon. Member for Wolverhampton North East (Emma Reynolds) that the aspiration of Balkan countries to accede to the EU has laid to rest some of the final outstanding issues relating back to the tragic war in the Balkans. That can only be good news.

I want to make a few short remarks about procedures with regard to EU legislation generally and the motion specifically. The European Commission’s assessment of Croatian progress towards achieving its obligations under chapter 23 says:

“Across the board an appropriate legal framework and the necessary implementing structures and institutions are generally in place, administrative capacity is being continuously strengthened and track records of results have been established or continue to be developed, thereby ensuring the overall sustainability of reforms. Provided Croatia continues its efforts and meets the commitments it has undertaken, further concrete results should follow.”

That is two cheers, in a way. It is clear that Croatia is not there yet, but there is great hope that it will continue to make progress towards the date of its accession. There are all sorts of safeguards by which the EU could start to impose sanctions against Croatia if it does not continue in that work. It would be of enormous benefit to this House if the scrutiny of such scrutiny were to take place more broadly within Parliament prior to coming to the Chamber for a debate on a specific motion.

In its scrutiny of the proposals, the European Scrutiny Committee concluded that Croatia still has a long way to go before it achieves the standards set by the Commission and noted that Bulgaria and Romania have still not reached those standards since joining in 2007. Although, as my hon. Friend the Minister said, chapter 23 was introduced only in 2010, Bulgaria and Romania could have been expected to have made further progress by now, and there is still the question mark over whether Croatia will make the necessary progress.

I am aware that my hon. Friend is looking at the general question of parliamentary scrutiny of legislation. On 20 January this year, he said in a written statement to this House that EU scrutiny must be enhanced. Under the chairmanship of my hon. Friend the Member for Daventry (Chris Heaton-Harris), the Conservative European research group wrote to my hon. Friend about the need for enhanced scrutiny, particularly of EU legislation.

As a final addition to this little trio of ideas, yesterday a group of us went to meet the British delegation of MEPs in Brussels, and they said that they find that the other House is far better than this House at engaging with EU legislation as it comes down the track. That is a great shame.

[Martin Horwood (Cheltenham) (LD)]

The Liberal Democrats’ international affairs committee also wrote to the Minister on this subject. Would the hon. Lady support one of our proposals, which was for European prospective legislation and documents to be scrutinised by the specialist Select Committees that we already have, as well as by the European Scrutiny Committee, thereby allowing those with expertise in environmental issues to scrutinise environmental legislation and so on?

[Andrea Leadsom]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. We are not discussing the broader question of scrutiny of all European matters. This is specifically a debate that is mainly about Croatia, and I therefore hope that the hon. Lady will now come back to that subject. She has got her point on the record, and so has the hon. Gentleman.

[Andrea Leadsom]

Thank you, Madam Deputy Speaker. I accept your guidance entirely. Nevertheless, I would just like to respond to the point made by the hon. Member for Cheltenham (Martin Horwood). I do agree that scrutiny, particularly of Croatia—

[Madam Deputy Speaker]

Order. The hon. Lady must respond only with regard to Croatia. I hope that she will not respond to the hon. Gentleman’s point about his party’s proposals for scrutiny. We are not discussing that; we are discussing Croatia.

[Andrea Leadsom]

rose—

[Chris Heaton-Harris]

Will my hon. Friend give way?

[Andrea Leadsom]

I will give way to my hon. Friend.

[Chris Heaton-Harris]

Specifically in relation to Croatia’s accession to the European Union, does my hon. Friend think that it would have been helpful if the Foreign Affairs Committee had had purview over this matter so that an extra dimension could have been brought into this debate?

[Andrea Leadsom]

My hon. Friend is absolutely right. That is the proposal that I wanted to put to the Minister. The Foreign Affairs Committee might well have had a useful contribution to make to this debate, as might the Justice Committee. Specifically with regard to Croatia’s accession plans, there are issues with the European arrest warrant, human trafficking, organised crime and so on. As has been said, there are concerns over the accession of some European Union states where those problems have been prevalent. It therefore appears that there might be some benefit if, rather than the current situation where the European Scrutiny Committee is allowed to require or request that specialist Select Committees scrutinise particular legislation, there was a more proactive approach to asking specialist Select Committees to look at legislation in cases such as this before they come to the Chamber. I hope that that point can be applied both generally and specifically to this debate.

I will certainly support Croatia’s accession to the European Union, but with the expectation that the Minister will look carefully at whether some assessment by Select Committees in advance of this debate might have given Members more to go on in deciding whether we are taking a risk or not.

National Referendum on the European Union

Andrea Leadsom Excerpts

Monday 24th October 2011 Commons Chamber

[Mr Burley]

I think that our generation will be given that choice.

I must consider the impact that passing this motion would have on my constituents. That is the key point. Business men have told me that there are signs that give cause for optimism, but that the recovery is fragile.

[Andrea Leadsom (South Northamptonshire) (Con)]

Will my hon. Friend give way?

[Mr Burley]

No, I will not.

Those business men’s fear, and mine, is that the announcement of a referendum, involving the campaign extending to 2013 for which the motion calls, could have a devastating effect on business confidence and investment. This morning I spoke to a business man from my constituency who had come here to be given a tour of the House of Commons. He works for an international company in the private sector which has invested heavily in the United Kingdom and employs several hundred people in my constituency, and he has already been told by the members of his executive board in America that the potential further instability caused by a referendum could cause them to question future investment not just in Cannock Chase, but in the United Kingdom and the whole of Europe.

[Andrea Leadsom]

Will my hon. Friend give way?

[Mr Burley]

I will not.

At a time when business is crying out for stability, a referendum would move it in totally the opposite direction, creating yet more instability when what we need is foreign investment. While that business man would not oppose a referendum in principle, now is simply not the time for one.

I think that the referendum that we all want is coming, and will be a result of the policies that have already been backed by the Government and by the EU itself. However, I think that to hold that referendum now, regardless of the result, would create a significant risk for our economy and for Cannock Chase in particular. I say to every Member who supports the motion, “Ask yourself one question: are you willing to jeopardise the recovery?” [Interruption.]

British people are worried—[Interruption.] Mr Speaker, British people are worried about bread-and-butter issues. They are worried about jobs and about their livelihoods. I do not want to do anything that puts my constituents’ livelihoods at risk. The time will come for people to vote on whether we stay in the EU, but, in my opinion, that time is not today. This is a debate for another day. Voting for the motion would be an indulgence, and I hope Members will vote accordingly. [Interruption.]

European Union Bill

Andrea Leadsom Excerpts

Monday 11th July 2011 Commons Chamber

[Mr David]

It is important that we recognise that the British people have a voice, which is why we have been clear that it is important that referendums are held on major constitutional issues and the issue of a single currency. It is important that the British people are engaged in the debate about Europe in a way that they have not been for a good time. However, the way to do that is through constructive and rational debate. There is nothing wrong with having referendums on big, important issues, but we are firmly against having referendums on paper clips and minutiae.

[Andrea Leadsom (South Northamptonshire) (Con)]

Does the hon. Gentleman regret the fact, then, than when in government Labour did not give the British people a referendum on the Lisbon treaty?

[Madam Deputy Speaker (Dawn Primarolo)]

Order. We are talking about amendments from the Lords on constitutional issues. I am sure, Mr David, that you were going to come to the Dispatch Box and focus on exactly those issues.

--- Later in debate ---

[Mr Jenkin]

Yes, but I am left wondering whether their advice to us from the House of Lords today reflects the advice they gave to Ministers and the policies that Ministers in their day pursued. I am also left wondering whether my right hon. Friend the Minister’s advisers, when they go to the other place, will be advocating the policy he is now pursuing. I think that we are up against the establishment here. The establishment in this country is still wedded to the idea of ever-closer integration and even of joining the euro. I do not think that the British people or the Conservative party, which I think represents the aspirations of the British people on this subject, accept that view. I hope that there is a change of heart in Whitehall officialdom such that when the next generation of civil servants arrives, they will seek to re-establish the independence of the UK within the EU, rather than to carry on weakening it.

[Andrea Leadsom]

Does my hon. Friend agree that the referendum lock will place a new onus on successive Governments, if needs be, to work harder on any further giveaway of powers so that this and future Governments, rather than giving way to civil service opinion, will have to consider public opinion much more carefully and seek to justify any further transfer of powers? That has to be a good thing.

[Mr Jenkin]

I agree that it is a good thing, but I wish that the Bill applied to some of the powers that the Government want to give away now through treaty amendments and opt-ins.

Middle East

Andrea Leadsom Excerpts

Monday 14th February 2011 Commons Chamber

[Mr Hague]

Of course I agree with that; we put out a statement welcoming those measures. The Quartet’s envoy, Tony Blair, played an important part in bringing about those confidence-building measures and I pay tribute to him for that. We certainly welcome those measures, but, nevertheless, the overall assessment of the situation in Gaza is as I described in answer to the hon. Member for Birmingham, Northfield (Richard Burden). It is important to make more significant compromises than have been offered by the Israelis or Palestinians in recent months in order to have real hope that direct talks can take place and succeed.

[Andrea Leadsom (South Northamptonshire) (Con)]

Does my right hon. Friend have a view on the way that social networking sites have affected the direct action in Egypt and Tunisia? Does he think that that is an unmitigated good or is there a risk that rumours and false information could be spread in that way and worsen the problems in the middle east?

[Mr Speaker]

The Foreign Secretary’s views on philosophy are interesting, but we are also concerned about policy.

Oral Answers to Questions

Andrea Leadsom Excerpts

Tuesday 9th November 2010 Commons Chamber

[Mr Hague]

We certainly are doing that. I visited Ramallah last week and met Prime Minister Fayyad of the Palestinian Authority. I also met non-violent Palestinian human rights activists and other leading figures in east Jerusalem. During my visit, I restated the position of this country, and indeed of the whole European Union, which is that we want to see a settlement based on the 1967 borders with a just settlement for refugees and with Jerusalem as the capital of both states. That is the clear British Government position.

[Andrea Leadsom (South Northamptonshire) (Con)]

T4. May I applaud my right hon. Friend’s decision to focus the FCO’s attention on promoting British exports?

[Mr Denis MacShane (Rotherham) (Lab)]

You can, you can!

[Andrea Leadsom]

Thank you. Can my right hon. Friend also reassure me that, as well as promoting exports, the FCO will play its part in attempting to reduce the interminable red tape that is preventing a company in my constituency, Enterprise Control Systems, from servicing the award-winning defence products that it is successfully selling overseas?

[Mr Hague]

My hon. Friend is welcome to applaud that decision and anything else she might wish to applaud; we are grateful to her for that. Cutting barriers to trade is an important part of our approach to expanding British commerce. In many of our meetings with other Governments, we ask for improved market access. If she would like to give me the details of the difficulties that the company in her constituency is experiencing, we will look at that matter specifically.

Oral Answers to Questions

Andrea Leadsom Excerpts

Tuesday 14th September 2010 Commons Chamber

[Mr Hague]

Britain plays an active role in ways that I described in previous questions. In particular, we played an energetic role in encouraging Israelis and Palestinians into those direct talks. We now remain in close touch with what is happening in them—ready to assist in any way—as do so many other European nations.

We are major contributors of aid to Palestinians, and one of our concerns is that there should be a greater flow of goods into Gaza. We welcome the statements that Israel has made, since the Gaza flotilla incident, about improving access to Gaza, but we now want to see that really happen in practice.

[Andrea Leadsom (South Northamptonshire) (Con)]

T3. Will the Foreign Secretary please outline his plans to reinvigorate the Commonwealth? In particular, bearing in mind the historical links between our many countries, will he support the idea of projects, such as one in my constituency of South Northamptonshire, to twin schools in this country and in Uganda?

[Mr Hague]

Yes. Such decisions are for each locality, but I strongly welcome them. Part of this Government’s plan is certainly to reinvigorate, as my hon. Friend says, our approach to the Commonwealth, a subject and organisation that was rather neglected under the previous Government, and I am glad to say that the Commonwealth is now convening an eminent persons group—and even more glad to say that my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) is one member of that group. We look forward to its report early next year, ahead of the Commonwealth Heads of Government meeting in Australia.