Treaty on Stability, Co-ordination and Governance

Andrew Percy Excerpts

Wednesday 29th February 2012 Commons Chamber

[Emma Reynolds]

Not for a minute—I have taken a couple of interventions already.

The Prime Minister walked out of the negotiation at the December Council with no additional guarantees or safeguards to protect British interests; no protections on the single market; no additional safeguards for financial services; and not even a seat at the table of eurozone meetings to ensure that we had a voice, if not a vote. In short, he gained nothing apart from the short-lived praise of some Conservative Back Benchers, but even that is changing.

Article 8 of the new treaty states that the Commission, the European Court of Justice and the buildings will all have a part to play in the working of the fiscal compact. In fact, the Government’s representative in Brussels, Sir Jon Cunliffe, stated in a letter to the European Council that articles 3, 7 and 8 all make explicit reference to the role of the EU institutions in the fiscal compact.

Despite profound confusion over the Government’s interpretation of the legal basis for the treaty, the treaty is clear. According to the terms of reference set out in the text of the agreement to be signed tomorrow, the fiscal compact will rely on the operation of the EU institutions upholding the terms and workings of the agreement. The Europe Minister told the European Scrutiny Committee last week that one can argue about the politics of the terms, but they amount to a promise by 25 countries that they want to support doing certain things under the European treaties. He said that in those cases, the use of the European institutions is, by definition, already authorised.

[Andrew Percy (Brigg and Goole) (Con)]

Will the shadow Minister give way?

[Emma Reynolds]

Not for a minute.

Will the Minister therefore state clearly, and once and for all, whether the Government believe the legal status of the agreement, as set out in the terms of the fiscal compact, and specifically in the articles I have cited, is wrong? If it is wrong, what will the Government do to correct it? If they will do nothing to correct it, are we right to assume that that is their way of quietly admitting that they have been forced into a humiliating U-turn?

[Emma Reynolds]

I will not give way. I have given way once to the hon. Gentleman already.

At least the leader of the Conservatives in the European Parliament, Martin Callanan, has been clear. He said:

“There is no doubt that the government’s position has altered since the December summit, when they were insisting the institutions could not be used…I blame a combination of appeasing Nick Clegg, who is desperate to sign anything the EU puts in front of him, and the practical reality that this pact is actually quite hard to prevent.”

Does the Europe Minister therefore agree with the analysis of his party’s leader in the European Parliament?

[Andrew Percy]

Will the shadow Minister give way?

[Emma Reynolds]

Not for the minute.

Does the Minister agree with what the Deputy Prime Minister said on “The Andrew Marr Show” in December? He said:

“Well it clearly would be ludicrous for the 26, which is pretty well the whole of the European Union with the exception of only one member state, to completely reinvent or recreate a whole panoply of new institutions.”

Perhaps there is more agreement between Martin Callanan and the Deputy Prime Minister than first meets the eye. They both believe, as the Opposition do, that the Government have flip-flopped. Despite their initial bravado, they have been unable to veto the use of the institutions.

[Emma Reynolds]

The shadow Chancellor has made it clear that we do not think we will join the euro in his political lifetime.

The ultimate irony is that the Prime Minister, who has previously been so scathing of the EU, has now been reduced to relying on that institution to be the last line of defence in the protection of British interests, because the EU, unlike him, will be in the room. The UK will be barred from key meetings, rendering us voteless and voiceless in future negotiations. Without being in the room, we stand little chance of knowing—let alone influencing—whether eurozone Ministers will stray into areas of decision making that affect the 27.

The Opposition are right to be concerned at that prospect and to doubt the effectiveness of such a system in protecting British interests, and we are right to ask questions on how that situation was allowed to happen.

[Andrew Percy]

The shadow Minister said strongly and clearly that she believed the euro needed to be saved, and that any country leaving the euro would have a negative impact on our country and economy. What evidence does she draw on to support that assertion?

[Emma Reynolds]

A disorderly default by any member of the eurozone could have disastrous implications for that country and knock-on effects for the rest of the EU. There would be a contagion effect that the hon. Gentleman would be naive to think would not take place.

We are right to stress that the response by the Government and centre-right Governments across the EU to the eurozone crisis has been economically inadequate, and any worsening of the crisis will have a devastating impact on our economies. Although we welcome the fact that in January the European Council spoke about the need for growth and jobs in order to ensure the recovery of the eurozone, we are concerned that this is merely an add-on to the current deal rather than an integral part of it. In the light of that, will the Europe Minister comment on the position of the French Socialist presidential candidate, who is visiting the UK today and urging EU member states to reopen the treaty to include more commitments to growth and jobs?

I will cite the words of one Member of the House who seems to share our deep scepticism about the consequence and cause of the Prime Minister’s diplomatic defeatism last December—the Deputy Prime Minister. Earlier this month, he explained:

“The language gets confusing. Veto suggests something was stopped.”

The phantom veto of December has now been exposed. He also said that over time the treaty would

“be folded into the existing EU treaties so you don’t get a permanent two parallel treaties working separately from each other…We all see this as a temporary arrangement rather than one which creates a permanent breach at the heart of the EU.”

According to him, the Prime Minister’s walkout in December was a temporary arrangement.

The crux of the issue was eloquently and pithily expressed by the hon. Member for Rochester and Strood (Mark Reckless) the day after the 30 January European Council, when he asked the Prime Minister:

“Will the Prime Minister explain what it is that he has vetoed?”—[Official Report, 31 January 2012; Vol. 539, c. 687.]

Nothing, it seems. The Government Back Benchers who gave the Prime Minister a hero’s welcome in December have now realised that he did not prevent anything from happening. We said at the time that his walkout was not an expression of the bulldog spirit but a form of diplomatic defeatism.