EU Council

Baroness Royall of Blaisdon Excerpts

Monday 17th December 2012 Lords Chamber

[Baroness Royall of Blaisdon]

My Lords, I join the Leader of the House and the Prime Minister in sending deepest condolences to President Obama and the people of the United States. The Connecticut shooting was an appalling tragedy, and all the families affected are in our thoughts as they cope with their loss and grief.

I am grateful to the Leader of the House for repeating the Statement on the European Council given to the other place by the Prime Minister. I shall touch upon three main areas: Syria, banking union and the wider context of treaty change.

Let me associate these Benches with the concern expressed in the Statement about the ongoing loss of life in Syria. The international community must continue to work together to end these atrocities immediately and speak with one voice in favour of a transition to a new Government. The noble Lord mentioned the arms embargo while also noting that Syria is attracting,

“a new cohort of Al Qaeda-linked extremists”.

In that context, are the Government urging the EU to end its arms embargo or merely to amend its terms? Do the Government recognise the dangers inherent in this?

We welcome the agreement on the next steps on banking union. It is right for the European Central Bank to have a supervisory role in the eurozone. However, does the Leader agree that the most important issue is not who supervises which banks, but who takes responsibility for bailing out failing banks in the euro area? That is what will deliver the firewall that we need between bank and sovereign risk. Did the Government make the case for urgency on this matter at the Council?

It is good that progress was made to protect the integrity of the single market. Was there discussion at the Council of how the new system will cope in the event of changing circumstances; for example, if more countries join the banking union and, in particular, if EU members currently outside the eurozone join the banking union and the “out” group shrinks to three or four member states?

Beyond questions of banking, is not the real issue for Europe the failure to deliver a plan for growth? The Minister mentioned a list of disparate steps, but on a real comprehensive plan for growth, we saw no progress, just as we saw no progress on wider eurozone political and economic integration. All the Council did was set a timetable—June 2013—to set a timetable.

For some considerable time we have been promised a long-awaited speech on Europe by the Prime Minister. We are now told it is being delayed again—that is three times. First it was set for the Conservative Party’s autumn conference, but we understand the FCO intervened. Then it was set for before the EU budget negotiations and now we hear that he has delayed it again, this time until the new year. In the absence of the Prime Minister’s speech, will the Leader of the House answer three simple questions?

First, the Foreign Secretary has said about an in/out referendum,

“this proposition is the wrong question at the wrong time … It would create additional economic uncertainty in this country at a difficult economic time”.

We agree with the Foreign Secretary. Does the Conservative Party? Secondly, the Prime Minister said last week:

“I don’t want Britain to leave the European Union”.

We agree with the Prime Minister, but why does he let member after member of his Cabinet brief that they are open to leaving the EU, including most recently the Education Secretary? Thirdly, British business is deeply concerned that the drift in the noble Lord's party and the direction of its policy mean that we are sleepwalking towards exit. We share that deep concern. Do the Government? The repeated postponement of the Prime Minister’s speech catches the point about the Government—at least the Conservative part of the coalition—on Europe. They are caught between the national interest for staying in and the Conservative Party, so many of whom want out. Britain deserves better.

[Lord Strathclyde]

My Lords, I thank the noble Baroness for what she said at the start of her speech, joining us—as I am sure the whole House does—in sending our deepest condolences after the horrors and tragedy that occurred in America. Our hearts must go out to these families and to the nation as a whole. As for the questions that the noble Baroness raised about Syria, particularly the arms embargo, I am glad to say that we think it is right to look at the arms embargo and seek to amend its terms. It is right to keep the embargo against the regime. We will see how matters unfold over the next few weeks and months, and join our colleagues and partners in the EU and beyond in making sure that we come to the right decisions on this question.

The key to the noble Baroness’s speech was what happened at the European Council, particularly on banking union and the future relationship between this Government and the EU. The most important aspect of the banking union is that there has been a big breakthrough: non-eurozone members will have a say on eurozone rules that could affect them. Before this council, many people said that we would not achieve that. As for the important question about changing circumstances, we have agreed that there should be a review of the decision rules when the number of non-participating members reaches four. That could be some time away. Subsequently we have ensured that this review will report to the European Council, where the decision about what to do next will be taken by consensus.

The noble Baroness asked what we were doing about growth. It will not be news to this House that all countries in Europe have immense fiscal challenges and we must focus on what can help best. We believe that some of the changes that we have effected over the past two and a half years, on international trade deals, deregulation and completing the single market are not designed just to help us here in Britain, but also the rest of Europe. There is good news on some of this; at least in the United Kingdom. There are more people working in the private sector than ever before and the number of those claiming the main out-of-work benefits has fallen by almost 200,000. That is all a step in the right direction.

The noble Baroness went on to ask three simple questions—she might have thought that they were simple, but they raise important issues for the future. On the question of an in/out referendum and what the Foreign Secretary has said, I do not think that any of that creates a great deal of uncertainty. It is an issue that is live in the country today. People are asking about it. I very much believe that neither option—in or out—is the right question to ask. Europe is in a state of flux. Enormous changes are going on as a result of the eurozone that will give us and people who think like us an opportunity to look ahead and gently to forge a Europe that will serve all the people of Europe in future.

The noble Baroness also most unfairly criticised the Prime Minister and the Government for not doing what British business wanted us to do. She felt that we are drifting towards the EU exit and that British business was uncomfortable with that. I do not accept either premise. We are not drifting to an exit from the EU; therefore, British business is not concerned about that. British business is concerned about increased regulation, centralisation and bureaucracy. Those are all things that we can agree on. The noble Baroness shakes her head, but when you talk to British businesses, those are the things that they are concerned about. They do not believe for one moment that we are about to leave the EU; and nor are we.