Future Relationship Between the UK and the EU

Andrew Lewer Excerpts

Wednesday 18th July 2018 Commons Chamber

[Mr Baker]

Thank you, Mr Speaker. I will try most sincerely not to be too indiscreet, but before Christmas—I believe it was September or October but my detailed, copious notes are at home and so not available to me—I was asked by a very senior person what the political consequences would be of choosing an EEA-lite deal. I explained that it would be a political cataclysm for the Conservative party and there would be a great political explosion if such a thing were chosen. We discussed it at some length.

Shortly after Christmas, after the Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Fareham (Suella Braverman), joined the Department, I will reveal that we had a ministerial meeting at which all the Ministers looked at the proposals in advice, and we all agreed we should build from a free trade agreement Canada-style rather than take an EEA-lite deal. Yet, despite proceeding on that collective basis in our Department, here we are with a proposal before the House that requires a mandatory degree of high alignment to EU rules. It is an EEA-lite proposal, not a Canada-plus proposal, if I may put it in those terms, despite a long history of Ministers rejecting that.

I have to conclude that it has long been the intention of those providing advice that we should arrive at such a relationship. Those proposing this category of close relationship, with the up-front choice of mandatory alignment, have two profound problems. First, the project of the European Union is in real difficulty. I take no pleasure in that, and no one need take my word for it—Jean-Claude Juncker said on 14 September 2016:

“Our European Union is, at least in part, in an existential crisis.”

Monsieur Macron said in Strasbourg on 17 April this year:

“There is a fascination with the illiberal, and that is growing all the time…Month after month we are seeing views and sensibilities emerge which call into question certain fundamentals. There seems to be a sort of European civil war.”

That is the most of extraordinary thing to have been said, yet it was said by a man who supports the European project. George Soros, who famously supports the project, has said:

“The European Union is mired in an existential crisis. For the past decade, everything that could go wrong has gone wrong.”

[Andrew Lewer (Northampton South) (Con)]

I thank my hon. Friend not only for his words today but for the hard work he put into trying to get us to the right place. Does he recall that it was my view as an MEP at the time, and that of the British people, that it was the EU’s very direction of travel and the concept of it not as a static, safe, solid entity with which we are entering some sort of new relationship but an organisation moving in a particular, disturbing direction, that led the British public to make the decision they did, and it is our responsibility to fulfil that?

[Mr Baker]

I agree with my hon. Friend, but I would extend his remarks by saying that it is clear, across the European Union, that the project is running into the problem, as its proponents have said, that it lacks democratic consent for what is being done. This is a profound problem that should alarm all of us.

If we look at Hungary, we see that almost 70% of the vote share is for parties that could be considered populist. In Germany, Alternative für Deutschland has risen from obscurity to be the third largest party, forcing Frau Merkel into a coalition—an unwanted coalition—to keep it out. In the Netherlands, the major parties have announced that they would do everything they could to keep the so-called Freedom party out of power, refusing to form coalitions with it despite the Freedom party getting the second largest share of the vote. I am very grateful to those in the Italian Parliament for passing a helpful motion, but I hope they will not be offended if I say that their parties are not necessarily considered mainstream. The rejection of the status quo in Italy is indicative of a trend right across Europe where, politically, the project is being rejected.

On the economy, I would just say that, according to the House of Commons Library, the European Central Bank has, in total to date, purchased €2.5 trillion of assets, which includes €2 trillion of Government debt. By the end of 2018, the figure is scheduled to be €2.6 trillion. That is equivalent to about 23% of annual eurozone GDP. This is the most extraordinary economic and monetary period in history. I personally believe that the distortions sown by quantitative easing on such a scale will unwind, and will do so in a very harmful way. That is the first problem faced by those who propose a high-alignment scenario such as this one. It seeks to cling on to institutions and a kind of political economy that are running out of public consent and have economic difficulties.