Section 5 of the European Communities (Amendment) Act 1993

Anne Main Excerpts

Tuesday 24th April 2012 Commons Chamber

[Mr Hoban]

It would be inappropriate for the UK Government to dictate the economic policies to be followed by those in the eurozone. Members of the eurozone have made it very clear that they wish to remain part of it, and there are even member states queuing up to join it. Indeed, if we have an independent Scotland, it might consider joining the eurozone. There are challenges, but there is a strong political commitment in the eurozone for the euro to remain in place.

[Mrs Anne Main (St Albans) (Con)]

The Minister is making a genuine argument in favour of stability, but the rise of the far right—and Marine Le Pen receiving one in five votes in France—shows that whatever was said before, when all these treaties were signed, may not be current now. There is great unrest on the part of the public about what is being done in their name, both abroad and here.

[Mr Hoban]

It is not appropriate for any of us to provide a running commentary on the French presidential elections, but it is important that Governments, whether inside or outside the euro, make their argument as to why they believe that the measures required to bring about fiscal stability and economic growth are necessary. Those arguments need to continue to be made, because that is vital to Europe’s long-term interests. We will wait and see what the outcome of the French presidential election is and what the view of the new President is on the fiscal compact.

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[Chris Leslie]

People will have their different reasons for opposing the motion, and my hon. Friend is right to state his reason for opposing it. My reason for opposing it is that, essentially, it asks the House to approve the Government’s assessment of the economy. That is the nub of the question. We are being asked to approve the Budget Red Book as their assessment of the economy. Sadly, we know that the Government are out of touch not only with the public but with economic reality. Their grip on what one might call the actuality of the real economy leaves a great deal to be desired.

This is an opportunity not only to take stock of the Government’s approach to the economy as a whole but to look at their analysis of what is happening. We know that they are pursuing failing policies on jobs, economic growth and deficit reduction. The Minister proudly defended the cut in the 50p top rate of income tax for the wealthiest 1% in society. The Government are giving a tax cut of about £40,000 to millionaires at the expense of pensioners and working people. Is it any wonder that their popularity is falling precipitously as a result? I am glad to have an opportunity, every time the Minister speaks at the Dispatch Box, to remind those watching these proceedings of the Government’s priorities. Living standards are being squeezed, and the VAT rise is hitting people hard, as are the cuts to tax credits and the cost of living generally. Independent experts say that a typical family will be worse off by £511 this year, but that is the Government’s choice; they want to give millionaires that advantage.

The motion relates to the Government’s assessment of the economy. Such a poor analysis as that presented in their Budget Red Book betrays either extreme wishful thinking on the part of the Treasury or, more likely, a dangerous detachment from the key decisions that Ministers need to confront. Their understanding of what is happening to business, employment and the cost of living is far removed from the experience of the vast majority of the public.

I urge all hon. Members to look at the facts and to examine the way in which the Budget Red Book is so detached from reality. On page 11, the Government claim that growth is

“strengthening over the forecast horizon”.

Growth was minus 0.2% in the last quarter for which we have figures, and the economy has been flatlining for a long time. It has performed very poorly since the spending review, while that of the United States has grown by more than 2%. The Office for Budget Responsibility is predicting growth of just 0.8% in 2012. Last year, in this very debate, we heard that the OBR was forecasting growth of 1.7% in 2012, and that was after several downgrades. There is clear evidence that the Government’s assessment of the economy is entirely out of touch with reality. The OECD is predicting good things for the United States, Germany and Japan, which are all predicted to grow faster than the United Kingdom this year.

What is worse is that on page 15, the Red Book states that we will experience

“positive growth, consistent with experience from past financial crises”.

Last year’s Treasury Red Book said that we were expecting a recovery that was

“in line with previous recoveries”.

I know that my hon. Friends who are students of these matters will be familiar with the charts and analysis produced by the National Institute of Economic and Social Research and others that compare the progress of recessions and recoveries across the decades, from the great depression to the recessions in the 1970s, 1980s and 1990s. When we consider our present position, we see that we are still 4% off the pre-recession peak. We have not yet clambered out of the hole. This is proving to be one of the longest and deepest financial crises, and the Government have failed to make any headway in ensuring our recovery. Their claims that we are in a parallel situation to previous recessions and financial crises prove that they are not in touch with reality.

[Mrs Main]

I note that the shadow Minister is making a principled argument and that he disagrees with the figures. If he did agree with the Budget figures, would he still feel that we had to submit them for scrutiny? We are a sovereign country. Do we really need our homework to be checked by Europe?

[Chris Leslie]

That is an interesting question. Obviously, I believe in the rule of law, and there is a legal obligation on Her Majesty’s Government to abide by the treaties. This is where we come back to the question that my hon. Friend the Member for Vauxhall asked earlier. She asked the Minister what the consequences would be if the motion were not passed by the House today. That is the key question that all hon. Members should be pressing the Minister on when he winds up the debate. I will give way to him now if he can answer it. What would be the consequences for us if we did not vote in favour of the motion today? I am happy to give way to him. For the reasons that I have suggested, the Government’s poor assessment of the economy does not inspire me to vote for the motion. I do not see why we would want to support their woeful assessment. The Minister is not giving us a reason for voting for it.

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[Mrs Anne Main (St Albans) (Con)]

I just wish to contribute a few words at the end of this debate, which I have listened to with interest. I am extremely concerned, but not because we are having to justify our Budget. I think that our Government are doing absolutely the right thing in cutting back on the deficit left to us by the previous Government, putting our house in order and putting the public first. That is where I would like to be: putting the public first. I do not wish there to be any consideration of whether Europe agrees that we are putting our public first or that we are putting European issues first. The European issues must be sorted out in Europe, among the people there. I do not feel that, as a sovereign Parliament, we should have to submit our Budget, regardless of whether the Opposition oppose or agree with it. It is up to us to decide the best for the British people and deliver the best for the British people—whether or not that causes “convergence” is neither here nor there.

The convergence that was perhaps envisaged in 1993 is not a route we would even want to go down now. As my hon. Friend the Member for Bury North (Mr Nuttall) said, we are not sure what we are trying to converge with. I do not know why we are submitting documents that have the word “convergence” on the front of them, unless people are giving us marks out of 10 for converging with something.

[Mr Cash]

Has my hon. Friend noticed that the motion ends with the words

“which forms the basis of the UK’s Convergence Programme”?

The Government are therefore assuming that there will be a convergence. The questions are: with whom, about what, and for what purpose?

[Mrs Main]

As usual, my hon. Friend is absolutely right. Why do we want to converge? I do not believe that the British public even know that we are converging, given that this is so lost in the mists of time.

[Mr Redwood]

I fear that the convergence programme began so that countries could converge with the Maastricht criteria to join the euro. As it is clear that we do not want to join the euro, we should in no way be talking about convergence.

[Mrs Main]

I shall not be supporting this motion, because I fundamentally disagree with what is on the front of the document—convergence. I do not think that our currency or our country should be converging with anything in Europe. Our sovereign Parliament should not have to hand in its notes to see whether or not they are acceptable to Europe. If there is convergence, I am sure that somebody is marking us out of 10 on how far down the road we have gone. If we have gone down that road, I would happily stop doing so right this minute. I conclude by saying that at some point this Parliament has got to stand up for itself and say, “We are not going to do this any more.” I would like this to be the year when we are not going to do this any more.