European Council

Baroness Royall of Blaisdon Excerpts

Monday 24th October 2011 Lords Chamber

[Baroness Royall of Blaisdon]

My Lords, I am grateful to the Leader of the House for repeating the Statement by the Prime Minister.

On Libya, I join him in expressing deep and abiding gratitude to members of the British Armed Forces. Over the last seven months in Libya, once again our service men and women have been a credit to our nation. We take pride in their role and in the role of NATO. We on these Benches have maintained that, after UN Security Council Resolution 1973, there was not just a right but a responsibility to act—a responsibility to the Libyan people and a responsibility to uphold the will of the United Nations. That is why we have supported the Government in their actions.

If I may, through the Leader of the House, I commend the Prime Minister on the role that he has played in taking the right and principled decisions on this issue. It is for the Libyan people to determine their future, but they must do it in the knowledge that the international community, including the European Union, stands ready to provide support. Do the Government agree that alongside the responsibility to protect is the responsibility to help rebuild and, in particular, to provide the expertise that the new Libya will require? We all have great hopes for the future of Libya, and its people rightly have high expectations and aspirations. Does the noble Lord agree, however, that embedding institutional and structural change in Libya will take time? We must not be too impatient.

I now turn to Europe. We in this House all know that the other place is today debating the question of a referendum on remaining in the European Union and on other related matters. It is not our job in this House to replicate either the arguments within the Conservative Party over Europe, which have sharply re-emerged, or the political arguments of the other place. However, we on these Benches are clear, and we have been consistently clear, that getting out of the European Union is not in our national interest. Does the noble Lord the Leader agree that cutting ourselves off from our biggest export market makes no sense for Britain? The overwhelming majority of British business, whatever their feelings may be about this or that aspect of the EU, knows that too. What is more, at this moment of all moments, the uncertainty that would ensue from Britain turning inwards over the next two years to debate an in/out referendum is something that, frankly, our country cannot afford.

The context for the debate about Europe is the huge dangers facing the UK and eurozone economies. Growth has stalled in Britain since the autumn and is now stalling in Europe. Unemployment is rising—a particular concern is youth unemployment—and we now face the threat of a new banking crisis. That is why acting together is so important. We need to stop standing on the sidelines. I welcome the commitment in the Statement that all decisions relating to the single market should be taken by the 27 member states; that is right. It is important, though, that Britain should at least be present in all discussions pertaining to the European Union. My fear is that, with a strong inner core, Britain is going to be sidelined in discussions generally, not just those relating to economic policy.

We should have been arguing for weeks, probably for months, that the problems of Greece were not being met by the austerity solution. We should have been pointing out the need for the recapitalisation of the banks. We should have been arguing for a plan for growth in Europe. So I have some questions for the Leader of the House.

On banking, do the Government believe that the amount of recapitalisation being discussed is sufficient to ensure financial stability across the European banking systems? In particular, can the Government explain why the estimates of recapitalisation at €100 billion by the European authorities are half the €200 billion that the IMF suggested was needed?

On Greece, do the Government believe that the lessons of previously announced Greek bailouts are being learnt and that this bailout will provide a genuinely sustainable solution?

On growth, do the Government understand that Europe will not get to grips with its debt problems until it gets to grips with its crisis of growth? What actions will the Government be taking to work with colleagues across the European Union to ensure growth across our continent?

Jobs and growth must be our priorities in the EU. We do not believe that it is in Britain’s interests to see the Conservative Party—not, significantly, the coalition as a whole—trying to resurrect its old issues of trying to get out of the Social Chapter, to withdraw employment rights and to renegotiate Britain's membership of the EU. This matters because in December the Prime Minister is likely to be negotiating with our European allies on the nature of treaty change and what Britain wants out of this. We say that it is not in the interests of Britain for us to spend our political capital trying to water down employment rights by getting rid of four weeks’ paid holiday and maternity leave provision. That will not help jobs and growth in Britain.

Instead, the completion of the single market—CAP reform, budget reform, reform of state aids policy—should be our priority. The Government’s job is to act in the national interest and in the interests of Europe and the world economy. With globalisation, isolation cannot be the answer. Our national interests have to be considered in the wider economic context. As the debate in the other place is showing today, the Government are entangling these interests with the interests of the Conservative Party.

The issues facing Europe are serious—too serious to see Britain’s national interests being caught up in party interests. We on these Benches urge the Government to put their party interests aside and act in the national interest, because by working with and within the EU we will then be able to deal with our crisis of jobs and growth. We urge the Leader of the House now to make a clear statement that it will indeed be jobs and growth that will be the real priority for our Government in the European Union.

[Lord Strathclyde]

My Lords, I begin by thanking the noble Baroness for the tribute she paid to the people of Libya who have fought so bravely over the course of the last seven months, and some for far longer, against the tyranny and dictatorship represented by Colonel Gaddafi. I also thank the noble Baroness for what she said about our Armed Forces and for commending the Prime Minister. I very much agree with what she said. I also agree that embedding change will take time and that the process will be long and difficult. We, the European Union and many others will be involved in that. Libya is an important country and we have been much involved with it. It is right that we should continue to help and support the National Transitional Council and the new regime, whenever that comes, for as long as they want us.

On the European Union, the noble Baroness began by saying there was no need for this House to replicate the debate happening today in the House of Commons. I agree with that, although I am sure that there will be an opportunity in the next 20 minutes or so of Back-Bench time to deal with some of these issues. The noble Baroness reminded us that the Labour Party is opposed to leaving the EU. She did not tell us about its line on joining the euro, but I am sure that that was an omission. The noble Baroness shakes her head, so I presume that means the Labour Party would not join at the moment. That is a good thing indeed.

The noble Baroness said that we needed to act together. I agree with that. It is the same reason why we are opposed to an in/out referendum. We need to act together. Major decisions are being taken about the single market—both this weekend and again on Wednesday—which is something that successive British Governments and British Prime Ministers have been championing since the days of Margaret Thatcher. The single market is an immensely important mechanism for us. The fact that the single market is not yet complete is something that should concern us; the fact that the European Commission now wishes to complete it is something that we should welcome enormously. I also agree that these decisions should be taken by the 27 member countries and not by a small group. The noble Baroness fears that we may be sidelined during the course of this process if there is a core eurozone caucus, for want of a better word. We would very much like to avoid that, and we are doing everything we can to bring that about.

The noble Baroness asked some specific questions, particularly about the amount of recapitalisation that has taken place in the banks and whether it is enough to ensure future stability. That was exactly what the ECOFIN meeting was about on Saturday. The Chancellor of the Exchequer spent 10 hours in the meeting to ensure that the system in place was proper and correct. As far as whether lessons have been learnt from previous bailouts, decisive action has been taken and it was right to do so.

Where I agree most with the noble Baroness is on growth. This has slowed in Europe and there are a number of structural reasons for that, such as bureaucratic centralisation. We will not get to grips with many of the financial problems without addressing the growth issues. That is why we support what the European Commission is doing on growth, particularly on completing the single market. What is also required is real political leadership. I am pleased that in this country at least, in the Prime Minister and Deputy Prime Minister, the Foreign Secretary and the Chancellor, we have a united leadership developing the way forward.

I will not join the noble Baroness in her praise of the Social Chapter. I take the view that all those things that the noble Baroness thinks are important are important, too, but they could just as well be decided in a British Parliament by British Members of Parliament and, indeed, British Peers.

The noble Baroness finished by saying that these are serious questions, which is right. The issue of Europe is always taken immensely seriously, not least in this House. I like to think that we always put the national interest first; that is one of the reasons why I am a member of this Government. These are extremely difficult and complicated times, and it is vital that we put the national interest first to get the solutions that we need.

[Baroness Royall of Blaisdon]

My Lords, in answer to the noble Lord the Leader of the House’s question about the euro, I remind the House that it was my Government who decided not to go into the euro and that they did so in the national interest.