European Union Fiscal Union

Andrew Smith Excerpts

Wednesday 14th September 2011 Westminster Hall

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

I shall try to be brief and will therefore quickly congratulate my hon. Friend the Member for Stone (Mr Cash) on securing a debate of such importance. There is no doubt that the eurozone is contemplating its very existence, so the debate is not only timely but vital. The whole thing could blow up in our faces in the next four or five weeks, and I want to be assured by the Minister that contingency plans for that possibility are well established. I hope that he is not over-affected by what appears from the outside to be the culture of Treasury officials, who have not been over-helpful on this issue for a long time.

It is a truism that what has happened in the European Union in recent months will have profound consequences for the eurozone and a wider region, including Great Britain. It is unlikely that future efforts to provide protection for the failing currency will have any more success than those undertaken to date. The truth of the matter is that the euro is a failed currency and had within its creation the very traits for its destruction. Those are coming into view at a time when pressure is being applied.

The euro is in trouble not only for that reason, but because its membership does not understand what a properly conducted fiscal society means. I visited Greece three months ago and went to the Greek Parliament. I had to be smuggled in. I talked to a Greek politician and said, “Is tax evasion really widespread?” He said, “Of course.” I said, “Who are the people who do it?” He said, “Everybody.” I said, “Are you?” He said, “Yes.” I said, “What are you doing?” He said, “I’m buying gold.” What a story! Greek politicians are begging us to prop up their currency, yet they are getting out of it and buying gold. I hope that the Minister will take serious account of that.

We all know that Italy has deliberately—I shall use a kind word—misled people ever since the creation of the eurozone. Many would say that it lied—I would not say that in this place—about its situation. Many would say that other nations accepted Italy’s deceit, and therein lies another problem. There is no proper monitoring or policing of any fiscal measures in any eurozone country. How can we expect those nations suddenly to become as white as white on the application of a united fiscal unit? Of course it will not work, and we know it.

We face two possible measures. The eurozone could shed nations—those to the south, mainly—that cannot compete with the price of the euro, and never could, or the eurozone could dissolve completely, which would be very expensive for this nation. What might the Minister do to protect business if that happens?

I accept the figures given by my hon. Friend the Member for Stone, but business is worried about the impact of the eurozone dissolving. It has had a tough time for three years, and has not been overly helped by Governments of either party in this country, and it certainly does not want another great deluge of problems. Will the Minister refer to business when he responds? This country must make a decision, and it might need to do so quickly.

[Mr Andrew Smith (Oxford East) (Lab)]

I am following the debate carefully. The hon. Gentleman refers to the possibly cataclysmic effect on this country of dismemberment of the eurozone, or of some states leaving and contingency measures being required. Might that be precisely why the Prime Minister and the Chancellor have been arguing the case for fiscal union within the eurozone, and what does he think about that?

[Mr Binley]

That might be. I did not say “cataclysmic”; I said there would be problems for British business. I would be grateful if, when the right hon. Gentleman puts words into my mouth, he used the words I used.

[Mr Smith]

It is a serious problem.

[Mr Binley]

The problem is serious, and I simply want to hear what the Minister has to say about it, because we expect our Government to recognise the impact on business and to do something about it. But that does not mean being involved with or part of the creation of a fiscal Europe in the eurozone. That is not the way to go, and I would rather go the other way: free up British business and restore some of the ancient and traditional markets that we have neglected for some time.