Foreign Affairs and International Development

Baroness Primarolo Excerpts

Tuesday 15th May 2012 Commons Chamber

[Mr Alexander]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I am sure that you will not presume to speak for me, Mr Alexander. I think that the hon. Member for Stockton North (Alex Cunningham) was asking you for your view, not mine, and when you answer him will you make sure that you address the whole Chamber? Thank you.

[Mr Alexander]

Of course, Madam Deputy Speaker. I listened with interest to my hon. Friend’s question. I am not familiar with the grant of which he speaks, given that the principal EU grants I encountered when in government, as I recollect clearly, both related to the EU Co-ordinating Office for Palestinian Police Support and provided facilities, training and support for the Palestinian Authority to develop their own security capability, something that has been one of the glimmers of light in the enveloping darkness of recent years. Significant support has also been provided for economic development in the west bank. Alas, that has not proved possible in relation to Gaza, because of the continuing security blockade there, but there has been real economic development that has been secured in part thanks to EU funding.

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[Chris Heaton-Harris (Daventry) (Con)]

It is a pleasure to follow the eminently wise speech by the hon. Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) on both the subjects he chose.

I listened to the Gracious Speech last week, and I noticed a seemingly small passage—[Interruption.] I thought it was a good idea to listen to the Queen’s Speech; it was one of the things I was keen to do, having been elected to this place. This seemingly small bit related to measures in the field of foreign affairs. One measure—the European Union Bill required for our ratification of the treaty changes to allow the European stability mechanism to have some legality—particularly took my eye. It highlights a problem that the European Union has with the eurozone, the consequences of which, if we do not act in certain ways, will be huge for us.

Like many other countries in Europe, this country has lived way beyond its means for way too long. We borrowed too much, as did many other eurozone countries. As every family and business in the country knows, when you borrow too much, you have to repay it; otherwise, you suffer consequences that you really do not want to suffer. You encounter this horrible thing, whereby other people tell you how you should spend your money and what you should spend it on. We have suffered this in the past from the International Monetary Fund and, unfortunately, this is what is happening to other eurozone countries now.

What is going on in our economy, and what is increasingly now happening elsewhere, is that people are realising that they have spent too much. But, as with the gambler who has won big in the past but has since blown it all, the realisation that the game is up is a particularly hard one to come to. It is almost natural to blame other people or to try to carry on as normal, but if you do not take action to change your spending habits, you might well end up losing your shirt.

In the past couple weeks, interesting and important elections have been held in the eurozone. France elected a new socialist President, who won 52% of the vote. I believe the BBC called that a “clear” and “decisive” victory, which contrasts with its description of a “narrow” victory when Boris Johnson won in London with 51%. Monsieur Hollande was hardly swept to power on a tide of euphoria in France. He narrowly defeated an unpopular, not particularly conservative and frankly unappealing President who had wasted the opportunity to reform his country. The French people ejected a social democrat and elected a socialist in his place. Much has been made of the fact that President Hollande will now attack the City of London, try to impose a financial transaction tax, attempt to scrap the UK’s EU rebate and demand an agenda of further job-destroying social legislation from the EU, but has that not been France’s position for years? Plus ça change, plus c’est la même chose.

President Hollande seems to believe that there is a stark choice between austerity and growth, but he is simply wrong. Most people are savvy enough to understand that you need to live within your means and do what you can to ensure your means grow to enable you to live that bit better. We, in this country and across Europe, need to get back to the simple understanding that you need to create wealth before you can redistribute it. What many Labour Members believe is that the money tree will continually sprout cash; the current student language of constantly attacking and wanting to penalise those who make money does only one thing: it ensures that less money is made, as people earn elsewhere, less tax is paid and so less can be redistributed.

Greece has also held elections, the results of which did not bring about a Government—we have just heard the news that there will be further elections in Greece. It was noticeable in Greece that people did not want to have the choice presented to them. They wanted a Government to reflect their true views; they do not want to be dictated to by foreign countries, and they hate the troika of the EU, IMF and the European Central Bank telling them what their Government should do. But Greece is bankrupt and it has been for months, if not years. It cannot pay its bills without help from the IMF and the EU. So it is no surprise that it is going to have fresh elections, but the most important decision about Greece’s future will be made not in Athens, but in Berlin.

Many in this Chamber, on both sides, have said that Greece should be allowed to fall out of the euro. I tend to agree, but, as ever, nothing is as simple as all that. Just for a moment, put yourself in the shoes of an ordinary German. You have heard all the horror stories from your own family history about what happened to your relatives and your country when hyper-inflation struck after the second world war finished, and your gut tells you that you should avoid inflation at almost any cost. You are therefore amazingly protective of your currency. Indeed, any threat to it is a threat to you, your family and your community’s livelihood, so you will do all you can to protect both it and its value. However, a political decision that you were not really a part of, taken ages ago, puts you now in the same currency as a batch of other people miles away who are threatening your economic stability. You have two choices and you are happy with neither: you can just throw money at your costly currency partners—

[Madam Deputy Speaker (Dawn Primarolo)]

I am allowing the hon. Gentleman to make his speech, but he knows the form of address and that when using “you” constantly, he is actually referring to the Chair. I may look old, but I am not that old that I go back to the second world war.

[Chris Heaton-Harris]

As you know, Madam Deputy Speaker, the voices in the Tea Room believe you are very young—a peach among all the Deputy Speakers that this place has ever seen—and I apologise for my use of the word “you”. [Interruption.] It is worth a try.

A political decision taken ages ago puts your family—not your family, Madam Deputy Speaker, but this particular person’s family—into the same currency as a bunch of people who are threatening your economic stability. The two choices you have are to throw money at your very costly currency partners—money that you have had to earn and pay in tax—or, as a German citizen, to say, “Enough is enough”, get rid of your costly neighbours and concentrate on ensuring that this can never happen again.