EU Referendum: Timing
Bernard Jenkin Excerpts(8 years, 10 months ago)
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Mr Dodds
My hon. Friend reinforces the point strongly. I look forward to reading the Select Committee’s report when it comes out. It will provide a very useful contribution to the debate in Northern Ireland and indeed more widely.
We have provided for a body to administer these things. The Electoral Commission is not wholly without fault or flaw, but it has been consistently clear on how this referendum should best be conducted. It has said that administrative necessity, the needs of the other elections in the first half of this year and fairness all combine to suggest that the referendum should not, in my view, be on 23 June. Of course, the Electoral Commission is not in charge of the process—the Government are. Indeed, they took to themselves additional powers to determine how this very referendum should be run.
It is interesting that the designation process for lead campaigners is still murky and uncertain, and I wonder who benefits from that. By way of contrast, long before the regulated campaign began in Scotland, both Yes Scotland and Better Together had been designated lead campaigners for their respective sides on the ballot paper. What is the point and what is the reason for the Government to flout for the very first time their own guidelines, as issued by the Electoral Commission? To do so is very telling—and not in a good way.
The Electoral Commission has said:
“We currently do not know when we will be able to run the process to appoint lead campaigners.”
It is now February, and the Government are planning to hold this referendum in June. Frankly, this is not fair play, but foolish game playing. Having taken to themselves the power to set both the date of the referendum and the date of designation for lead campaigners, this puts in front of the Government the temptation, in some people’s eyes, to rig the process. They would be very foolish to succumb to that temptation. Let me say to the Government that the Prime Minister and his successors will sorely regret any perceived fixing of this referendum. We have already debated some of the issues surrounding purdah and so forth, and I think the Government should learn from that debate, as well as from the 40 years of debate within the Conservative party on this issue.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
On the advice of the Electoral Commission and the timing of designation, there is a growing concern that the designation process will finish up overlapping the referendum period. In a letter to me, the chair of the Electoral Commission, Jenny Watson noted that the commission had
“recommended that the statutory six week process for the designation of lead campaigners should take place shortly before, rather than during the first weeks of the referendum period. This ‘early’ designation would provide clarity earlier for voters and campaigners about the status of campaigners.”
Does the right hon. Gentleman agree that it would be unforgivable if the Government were to allow, by sleight of hand, what amounts, frankly, to corruption of the designation process?
Mr Dodds
I agree with the hon. Gentleman. The Government really need to get on with this and get the matter resolved. Frankly, it would be scandalous if matters were allowed to drift and to drag. Again, that would call into question the Government’s handling of the referendum and its fairness. It would give cause for people to question whether they have made the final decision on this matter. If the Government were wise, they would want to ensure that once the people had spoken on this matter in a referendum, everyone would accept—from whatever side and whatever the outcome—that the decision had been properly taken by this country under the proper rules and that everybody will respect it for the foreseeable future. To do otherwise is short-term opportunism.
In conclusion, we need to face up to this crucial issue of the timing of the referendum. We need to ensure that the Government respect the Electoral Commission and that they respect the devolved Administrations in Northern Ireland, Scotland and Wales. On an issue of such import, we must put the national interest above every other consideration. We must respect the rights of the people who go to the polls in May. We must allow for the fullest possible debate on the biggest decision to be made by this country for generations. For those reasons, I commend the motion to the House.
John Penrose
I am just referring back to my notes, because I do not think I said that we did anything in that regard. I said that “both those dates are expressly excluded in the primary legislation that we passed last year”—that is, the legislation that this Parliament passed last year. I will leave it to Kremlinologists and others to decide whether that was done under pressure, with grace or in any other way. None the less, I hope the right hon. Gentleman will agree that the will of Parliament was expressed and that it was listened to extremely carefully.
Mr Jenkin
I am sure the Minister will know that the Public Administration and Constitutional Affairs Committee, of which I am Chairman, is taking an interest in the matter of the date. I also declare my interest as a director of Vote Leave, one of the potentially designated campaigns. May I press him on an assurance that he gave the House in September last year? He said that
“it is important that the designation process means that the decision on who are the lead campaign groups for the in and the out campaigns is properly arrived at that and those groups are clearly designated before the start of the 10-week campaign”.—[Official Report, 7 September 2015; Vol. 599, c. 157.]
Does the Minister stand by that assurance, or is this going to be fudged?
John Penrose
I remember that moment clearly. In fact, I think I was responding to a question from my hon. Friend the Member for Stone (Sir William Cash) in making that point. What I was trying to put across was that I had what I thought was a brilliant solution to the potential problem of any compressed timetable, should there be one, in order to find enough time for both the designation and the full referendum timescale. The original point I was making at that point in our discussions—I think it was during the Bill’s Committee stage, but I could be wrong—was that we could have dealt with the designation process through a negative statutory instrument, which could be made when it was laid, thus allowing the designation process to start early and finish before the beginning of the referendum period. I think that that is what everyone was driving at, at that time.
However, the equivalent of the Joint Committee on Statutory Instruments in the Lords felt that a negative statutory instrument was inappropriate and said that a positive statutory instrument should be used. That has made it rather more difficult, as my hon. Friend will appreciate, for me to achieve the aims that we were discussing at that point. If I may, I will take his earnest and strongly made point, and the point that he made earlier to the right hon. Member for Belfast North, to indicate a strong preference for starting the designation process as early as possible, should there be a compressed timetable. I am sure that the various campaigns are already working on their designation submissions and that, were it to be necessary, my hon. Friend would be able to aim for a shorter and very efficient designation process in order to avoid an overlap between the end of the designation and the start of the referendum process.
John Penrose
Does my hon. Friend want to come back to me, perhaps to assure me that I have understood him correctly?
Mr Jenkin
I am most grateful to the Minister for that explanation. However, I believe that he will be bound by his commitment unless the Government put on record before the House agrees to that affirmative resolution procedure that the consequence of agreeing to that procedure might be that the campaigns may not be designated until the referendum campaigns had already started. If there is going to be a referendum on 23 June, which seems to be a possibility, either the regulations will have to be expedited in order to foreshorten the period and allow us to start the designation process earlier or the Minister must put back the date. I am as keen as anybody to get on with this referendum, but not on the basis of undesignated campaigns going into the referendum process without the necessary resources and authority and without being able to plan what they are going to do.
John Penrose
It is helpful for my hon. Friend to remind me of the point that I made last year. We are all subject to the will of Parliament, and because the Lords—in this case—decided in their wisdom to change the process that I was laying out at that point, it is now difficult for me to be bound by anything other than the later expressed will of Parliament. However, I appreciate his point that it would be a superior outcome if we could possibly avoid any overlap between the two processes. I think he is saying that he would prefer to see a rapid process for designation, and to start it as promptly and efficiently as possible, should that be necessary. I will take his strongly expressed point back and ensure that we strain every sinew to accommodate him if we can.
I am conscious that other Members want to speak in the debate, so I shall omit my further comments about the other aspects of the Electoral Commission’s advice that we have either been following or not. I want to make it clear that the process from here on is clearly laid out by Parliament in the European Union Referendum Act. The Act requires the Government to bring forward a number of statutory instruments that are subject to the affirmative process—as we have just been hearing—before a poll can be held. They will cover the conduct rules—the detailed plumbing of how the poll will be held—which are already laid before the House and which I hope are uncontroversial, plus regulations setting the date of the referendum period and the start date of the designation period. Those regulations have not yet been laid, but when they are, this debate will be able to move, at last, out of the conditional tense and into action.
Pat Glass
I, too, hope that we will be able to make a positive case for remaining, but there are clearly risks to business of delay, and they get greater the longer the delay goes on. There are very good arguments to support the view that, as soon as the Government’s European renegotiations are complete, they should get on with having the referendum and ending the uncertainty, which is bad for the whole UK—for jobs, growth, investment and working people.
The motion says that a
“needlessly premature date risks contaminating the result”.
In what way would a referendum five months from now contaminate the result? If there is evidence that holding the referendum on a specific date, whether in June 2016, September 2016 or April 2017, would in any way contaminate the result or lead to greater or lesser risk of electoral fraud, let us see it. I have not seen any such evidence, so I can only assume that what is meant by that statement is that a shorter campaign is more likely to lead to a remain vote. Given that we have had more than 40 years of hearing one side of the argument, are we really being told that the leave campaign arguments are so lacking in substance that four months of campaigning from the other side will devastate its arguments and campaign?
The motion goes on to say that
“a subject as fundamental as EU membership should be decisively settled after a full and comprehensive debate”.
I absolutely agree, but I say again that we have already had 40 years of debating the UK’s place in Europe, so this is not a surprise and it is not happening quickly. It has been 40 years in the making.
Mr Jenkin
The hon. Lady’s party set up the Electoral Commission when it introduced the Political Parties, Elections and Referendums Act 2000, presumably, so that the commission would give advice that the Government would generally accept. The Electoral Commission argues that there should be a six-month period between the regulations and the referendum date, but the Government are set to ignore that. Like her, I am enthusiastic to get on with this, but what consideration has she and her party given to the designation being compressed with the referendum period? Has her party expressed a view on that matter, or does she believe that she and I should discuss it, with a view to when this referendum should be?
Alex Salmond
Another scare story set to rest, as my hon. Friend points out.
Mr Jenkin
The right hon. Gentleman talks about how outrageous it would be to have just a six-week referendum period, but if the designation of the two campaigns is delayed some weeks into the 10-week referendum period, that is what we will finish up with. Does he agree that it would be outrageous for the Government to corrupt the process of this referendum by delaying the designation of the in and out campaigns in the way the Minister suggested might be the case?
Alex Salmond
I agree with the hon. Gentleman. We also agree on another aspect: purdah in referendum periods has not previously been properly observed in this place and by this Government, although it has been observed by the Scottish, Welsh and Northern Irish Administrations. Having a long purdah period, with a purdah period for the Scottish, Welsh and Northern Irish elections, and then a further purdah period for a referendum on European issues, would mean that those Administrations had a double purdah period, which cannot be a good thing for governance. I know that that point will not be lost on the hon. Gentleman.
Let me get to the nub of my concern, apart from the patent lack of respect. We have already seen the start of the European referendum campaign, and a thoroughly depressing start it has undoubtedly been. Yesterday’s ludicrous exchange about on which side of the channel there will be a giant refugee camp just about sums up this miserable, irrelevant debate. The truth, of course, is that it does not matter; it will take at least five years to withdraw from the European treaties, and by then we could have 10 times the number of refugees or indeed none at all. No one knows how the bilateral arrangements between Britain and France will be affected. This is a pointless, pathetic, puerile debate, typical of what looks like it will be a depressing campaign—the political equivalent of a no-score draw.
As we anticipated, the lead responsibility for this state of affairs lies with the Prime Minister—this whole mess is of his creation. The time to propose a referendum is when we want to achieve something important, such as Scottish independence, not when we want to achieve nothing at all, as is the case with his sham Euro-negotiations on points of little substance. He has set out the terms for this depressing campaign, which is, to quote the Scottish play,
“full of sound and fury,
Signifying nothing.”
The chance of those who are anti-European Union of winning has always been greatest if the campaign is reduced to a competition of scare stories—a war of attrition—to find out who can tell the biggest porkies. That is exactly what is unfolding before our eyes. It is almost as if the Better Together campaign from the Scottish referendum had split in two. We now have two versions of “Project Fear” from opposing sides in the Europe poll. At this rate, the only thing these two campaigns will scare is the voters—away from the polling stations.
The Prime Minister is gambling this country’s entire European future on his sham negotiation and this shame of a campaign—even Jim Hacker would have fought on a more visionary platform on Europe. We need to fight an entirely different campaign in Scotland. People want to hear how we can build a Europe that acts on the environment; faces down multinational power; shows solidarity when faced with a refugee crisis; acts together when faced with austerity; respects the component nations of Europe; co-operates on great projects such as a supergrid across the North sea; and revitalises the concept of a social Europe for all our citizens. That will be a Europe worth voting for, not the Prime Minister’s teeny-weeny vision of nothing much at all.
European Union Referendum Bill
Bernard Jenkin Excerpts(9 years ago)
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Peter Grant
I welcome the fact that the hon. Member for Stone (Sir William Cash) is inclined not to press at least one of his amendments. It seems to me that there is, and will be, a need for information about the likely consequences of an in vote and of an out vote. I do not think it is right that that should be left entirely to individual campaigns, because we already know that there are arguments about who runs the campaigns and how they are going to be funded, and by definition they will tell at best one half of the story. It is perfectly in order for the UK Government to publish appropriate information that sets out the background to the referendum. A survey done about a month ago indicated that the EU member state whose citizens are worst informed about what the EU actually means is the EU member state whose citizens are going to have a vote as to whether or not they are going to leave. We cannot allow that to continue; we cannot allow the referendum to come upon us with a significant number of our citizens not really understanding what they are voting for, not because they cannot predict what the future might be if we leave, and not because they cannot predict what the future might be if we stay, but because they do not actually know what the present is. Too many people do not understand what the EU does for good or for bad right now. If we simply leave this to partisan partial campaigns, people are going to end up confused rather than better informed. Incidentally, it is one reason why this might be the time to extend the franchise, because we think that 16 and 17-year-olds do not understand it, but that their lack of understanding probably puts them less far behind adults than in most other election campaigns. That vote has been and gone, however, so we will leave it at that.
I do find it a bit surprising and ironic—I will not go as far as to say hypocritical—that, as we saw when the Bill went through its earlier stages, so many Conservatives express the concern that during a referendum campaign a Government might publish information that was a wee bit one-sided. Most Members would not have received what a number of SNP Members received shortly before the referendum last year, which was a glossy full-colour booklet published by Her Majesty’s Government making sure that we understood the wonderful benefits that accrued to us from membership of the United Kingdom. The UK Government recently advertised for a post, in the Department for International Development of all places, whose main job would be to persuade the Scots how lucky we were to be part of the Union. As long as that kind of stuff goes on, I do not think that we need to take any lessons from anybody on the Government Benches about the dangers of letting Governments get involved in a partial way in a referendum campaign.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
The Committee I chaired in the last Parliament, the Public Administration Committee, conducted an inquiry into civil service impartiality in referendums in respect of the Scottish referendum. It is one thing if there is a Government in Edinburgh on one side of the argument and a Government in London on the other, each publishing arguments for and against a particular proposition, but where will the balance be in this referendum, given that there is only one United Kingdom Government who will only be on one side of the argument?
Peter Grant
It is perfectly in order for the UK Government to take an impartial, neutral stance once we get closer to the referendum. We do not know what stance they will take. There is a question as to whether it was appropriate for somebody else’s Government to interfere in our referendum, but I know that that is not an argument we will win just now. However, that degree of interference probably contributed to the fact that on most days these Benches are significantly more crowded than they were before. If the Government do not produce information, as opposed to campaigning opinion, about how the EU works now, who will produce it? If we are happy for the two opposing camps to produce the information, then they can go ahead and do it, but we know before we start that all that will happen is that people will be drawn to believing statements of fact because of their opinion of the politician or TV personality who has associated their name with them, rather than being presented with a factual, well-researched document that sets out how things are just now.
Peter Grant
My own personal views about how political campaigns and parties are funded probably would not get a huge amount of support here, but that might be something for a ten-minute rule Bill some time over the next four and a half years. The hon. Gentleman makes a valid point. It is important that nobody has the opportunity to buy a referendum any more than anyone should be given the right to buy electoral success. I certainly would not want to see us going the way of America where people need billions of dollars behind them before they can even stand for election.
We are still not addressing the fundamental problem that, no matter how well or badly funded the individual campaigns are, if we are starting from the position of having the least well-informed electorate in Europe on this important issue, someone is going to have to provide the necessary information to bring people up to a better level of understanding of, for example, what “ever closer union” means and does not mean—because it does not mean what it keeps being presented as meaning, even by the Prime Minister.
People need to understand which aspects of immigration to the UK the European Union is involved in and which aspects it is not involved in. They need to understand which aspects of our welcoming of refugees, or our failure to welcome them, involve a European Union decision, and which aspects come under the auspices of the United Nations, for example. These are massively important issues, and the debate in this Chamber over the last months has not always helped to increase public understanding and appreciation of what the European Union does and does not do.
If there are concerns that the Government might not be impartial, or that they might be over-enthusiastic towards one side or the other, I would be quite happy for the Electoral Commission to publish guidance and to require the Government and everyone else to comply with it. It would be inappropriate to ask the Electoral Commission to scrutinise, veto or censor Government documents in the first place, but it would be perfectly in order for it to issue guidance on the conduct of the referendum, including on the kind of information that could and should be funded and published by the Government.
I find myself in the strange position of almost telling Government Back Benchers that they are wrong because the amendment seems to be based on an unwillingness to trust Her Majesty’s Government. I am not the biggest fan of this Government, and I am not the biggest believer that we can trust them, but if they cannot be trusted to present a fair case to the public in this matter, we are in trouble. The media will not present such a case; the print media absolutely will not do so. The political campaigns will not do so because it is not their job to be impartial. It is their job to be partisan, although perhaps not in a party political sense, on the issues that they are campaigning on.
I welcome the fact, if it is confirmed, that the hon. Member for Stone is to withdraw his amendment (a) to Lords amendment 5. I hope that he will not press his amendment to Lords amendment 6 as well. There is a crying need for reliable, well-researched information to be put into the public domain. Let us not forget that, a few yards from here, we have one of the most highly regarded research facilities anywhere in the world. It is highly regarded not only for the quality of its research and the speed with which it is done but, most importantly, for its impartiality. If we cannot rely on the research facilities within this House to provide reliable, well-documented information, who can we rely on?
Mr Jenkin
I point out to the hon. Member for Glenrothes (Peter Grant) that, whether he thinks it an irony, an accident or something more sinister, it is the people who are in favour of Britain remaining in the European Union who are championing Lords amendment 6, while those who support the leave campaign regard it as a bit of a Trojan horse that would enable the publication of a lot of subjective judgments loaded in favour of one side and not the other.
I referred to the report published at the end of the last Parliament by the Public Administration Committee entitled “Lessons for Civil Service impartiality from the Scottish independence referendum.” The reason that we produced the report was to look at the question of impartiality. There is a rather modern, corrosive view that the concept of impartiality, when applied to civil servants, means simply that they should be prepared to work for whichever party happens to be in office, that by so doing they are therefore impartial and that their conduct can then be quite partial and loaded under the Armstrong doctrine, which states that they have to support the Government of the day. Actually, I think most people in this country regard impartiality as a rather more imprecise quality, with a higher moral tone. They see it as having something to do with objectivity, with balance and with not being compromised into becoming a mere cheerleader for one point of view or another.
Sir William Cash
My hon. Friend should bear in mind that the White Paper that led to the European Communities Act 1972, which went through by only six votes in this House, contained a very precise promise that the use of the veto in our national interest would never be abandoned, because to abandon it would be to endanger the very fabric of the European Community itself. Is that not an example of how unreliable White Papers and other Government reports can be?
Mr Jenkin
Indeed, but it is unavoidable that the Government are going to produce information of this kind.
The second duty, in Lords amendment 6, is not something that I expected to see. The Lords amendment asks the Government to produce judgments and opinions on a vast topic, using examples that, by their very nature, will be subjective. I am not at all surprised that the Electoral Commission has decided that it would be far beyond its competence to make a judgment about what such a document might be. The Government have accepted this amendment, but if they are to justify retaining it—as I expect them to do—they will have to answer some questions about it.
What do the Government mean by the word “publish” in the amendment? It would be one thing to place a learned, detailed and technical paper in the Library of the House of Commons in order to present the depth of analysis that the hon. Member for Glenrothes believes would be justified, but would the Government produce such a subjective document in a form that could be circulated to every household? How would we feel about that, 10 weeks before a referendum? It is reasonable for the Government to explain the outcome of their negotiations, but it would not be reasonable for them to use public money to present their entire world view on European Union membership as part of a campaign to remain in the EU.
Mr Jenkin
That is a good question. We all expect that, before long, there will be agreement among Ministers that some will not be toeing the Government line on this question. It is too big a question for it to be otherwise. The reason that we have referendums is that the questions split parties. We could not have a general election on a question that split the parties on both sides of the House. It would be impossible to decide on the issue in that way.
It would be absurd to have a referendum and then try to corral all the Ministers into one point of view. The precedent in 1975 was that collective responsibility was abandoned, although that does not mean there is not still a Government view—there is a Government view and a dissenting view. That is how it will work in this case, assuming that a vast number of Ministers do not leave the Government’s view too isolated to be any longer credible as being that of a Government.
Simon Hoare (North Dorset) (Con)
Does my hon. Friend not agree that the country at large still has trust in “the Government”—in the governance of this country— whether or not we think it is right to hold that view? Our electorate would therefore find it strange if, during a referendum campaign, they could not point to what the Government’s view was. The Government of the day would continue after the referendum, and people will want to know what the Government, whether collective or otherwise, think about the issue.
Mr Jenkin
I am grateful to my hon. Friend for his intervention. I have already said that the first publication is perfectly justified, as the Government are entitled to explain what they have negotiated and to give their opinion on that. If he would like to do so, he might explain how they are going to give
“information about rights, and obligations, that arise under European Union law as a result of the United Kingdom’s membership of the European Union”
in a concise and simple fashion which is not loaded. Perhaps he could tell us which countries should be used as
“examples of countries that do not have membership of the European Union”
in order to explain the consequences of leaving the European Union. We are talking about very subjective judgments, and of course that is what the debate between the yes and the no campaigns will be about.
My hon. Friend is right to say that people trust what the Government say, which is exactly why what they say should be curtailed and limited: it has a disproportionate effect on the voters. There is absolutely no doubt about that. If a leader of a party says something, that has less of an effect than if the Prime Minister says something. That is why we have a purdah period, and the House has forced the Government to accept that there will be a proper purdah period. Otherwise, if we have what we had in 1975, whereby the Government can carry on regardless, being the Government and yet expressing partisan views on one side of the argument and not the other, an unfair referendum would be created. That is why all referendums throughout the world have systems to try to contain what Governments do during the final phases of the referendum, in order to try to create some fairness.
Mr Steve Baker (Wycombe) (Con)
I wonder whether my hon. Friend has seen, as I have, the poster produced by the pro-EU BSE—Britain Stronger in Europe—campaign which co-opts the Governor of the Bank of England under the headline “Think UK’s economy is stronger in Europe”. BSE has also co-opted the President of the United States and the Prime Minister of India. Does my hon. Friend share my concern that it appears that the campaign to remain in is willing to co-opt public officials, who ought not to be dragged into one side of such a campaign?
Mr Jenkin
I have to be mindful about whether that is taking us beyond the scope of what we are discussing, but it reminds me of a very controversial element of the Government’s conduct of the Scottish referendum, and I have some sympathy with arguments that have been made on this point. I refer to the use of a permanent secretary to give a speech on behalf of the Government’s view while this was purporting to be the publication of advice to Ministers. Such advice should never be published. On any orthodox analysis, the opinions of civil servants in the form of advice to Ministers should never be published, but this was used as part of the propaganda. Many Scottish National party Members would regard that as a gross misuse of civil servants during a referendum period, and we need to try to avoid that.
I leave two questions for the Minister as he responds to this debate on Lords amendments 5 and 6. First, what does “publish” actually mean? What do the Government intend to do by way of the publication of these two reports? Are they just to be White Papers or are they to be propaganda circulated by the Government in some way much more widely? Secondly, how will he ensure that this is done in the highest spirit of impartiality, using that word in the way most people would expect it to be used? How is he going to ensure that these publications are genuinely objective and not just a means of advancing one side of the argument against the other?
Mr George Howarth (Knowsley) (Lab)
Does the hon. Gentleman not accept that the Governor of the Bank of England giving advice, for example, with the Monetary Policy Committee on interest rates, is in a very different position from other public officials, because his advice is often made public? It is perfectly clear that if he has any advice on this, it should be a matter of public interest.
Mr Jenkin
The Governor of the Bank of England is a different case. He is not a civil servant, so he is not bound by the civil service code and he does not advise Ministers as a private civil servant—he gives his advice very publicly. Although I was prompted by that example, I think it is reasonable for the Governor, judiciously, soberly and carefully to proffer his advice. I think his advice on the currency question in the Scottish referendum was very germane, but I do not think it was necessary for the permanent secretary at the Treasury to give similar advice. On the speech that the Governor made on the European Union, the remarkable thing about it was how little he was prepared to say which supported the Government’s view. He did not put himself out on a limb. It was an incredible damp squib of a speech as far as the remain campaign was concerned, and it had extraordinarily little impact, because he was very careful about what he said. That might be because he sees that both business and the country are divided on whether we should remain in the EU and that the arguments are much more finely divided than on the currency question in the Scottish referendum.
I wish to deal with Lords amendment 13 and amendment (a) proposed thereto, which stands in my name and that of my hon. Friend the Member for Stone and other colleagues. This relates to another startling change made in the other place on the designation of organisations to campaign for or against the particular proposition. I should declare an interest here—it is not a remunerated interest. I am a director of the company Vote Leave, which will be applying for designation
The Lords amendment added a provision that suggests that it is perfectly okay for the Electoral Commission to designate one campaign supporting one proposition but not another campaign supporting the opposite proposition. The reason why that has been put into the Bill is perfectly understandable; in the 2011 referendum in Wales there was no application from a no campaign and therefore it was impossible for the Electoral Commission to designate a yes campaign, even though there was a very respectable yes campaign. It was suspected that there was an element of sabotage by the no campaign, because it wanted to prevent the yes campaign from getting designation as the no campaign was going to be incredibly weak, whether or not it was designated.
The result of this provision, which was included in the Scottish legislation passed by the Scottish Parliament in order to prevent the same thing from recurring, is extraordinary. It offers the possibility that the Electoral Commission “may” designate one campaign and not another without any restraining factors. In good faith, I do not think we should question the bona fides of the Electoral Commission as to whether it would ever do such a thing, but this is what the Lords amendment actually contemplates. It would be unconscionable, in this of all referendums, for there to be only one designated campaign. It would be intolerable if Parliament let this go on to the statute book without even a discussion about what the consequence would be. It would completely invalidate the result, it would destroy the purpose of having a referendum and it would mean that this issue was not settled in a fair manner at all. We have framed an amendment to the new clause, which I hope will at least draw the Minister out to explain how everything might work.
Kevin Foster (Torbay) (Con)
Let me thank my hon. Friend for giving way, and say that I am enjoying listening to his observations. Does he agree that, if the Electoral Commission was to take the bizarre decision to designate only one campaign when there was clearly a coherent and legitimate campaign for the other side, it would be clearly open to judicial review on that point?
Mr Jenkin
I am waiting to hear what the Minister has to say on that point. The proposed amendment changes the wording. It now says that it should be allowed to make that decision only if
“no permitted participant makes an application to be designated under section 109 as representing those campaigning for that outcome except for a permitted participant whose application the Commission states is, in its opinion, vexatious or frivolous.”
That would mean that, provided there are two legitimate applications for designation, the obligation would be clear in the Bill that the commission has to designate two campaigns. That is not clear in the Bill at the moment. If one such campaign was “vexatious or frivolous” and was clearly just there to spoil in some respects, the Electoral Commission would have to justify its action. I hope the Minister will tell us that he can accept our amendment. If he cannot do so, I hope that he will make it clear that the substance of the amendment should be understood, and that it would be unconscionable to have only one campaign designated in this referendum. If an application is made in such a way as to be construed as vexatious or frivolous, such an application would have to be considered. We should be in no doubt that there will be an application in respect of both sides of this campaign.
Sir William Cash
I endorse what my hon. Friend has just said. Let me repeat for the sake of clarity that these amendments are the result of ping-pong between the Commons and the Lords, which is not the best way for them to be considered. We have not had enough time to have a really good look at this matter, and I hope that the Minister will take that into account when he gives us the very full explanation on amendments 5, 6 and 13.
Mr Jenkin
In closing, let me add that in all three amendments we have been discussing the potential role of the Electoral Commission. In respect of amendments 5 and 6, the Electoral Commission has shrunk from the possibility of being given an obligation for which it is not fit. It is worth reminding ourselves that we have already developed one new role for the commission during the passage of this Bill, which is that it will give its advice about possible new regulations on the restriction of section 125 of the Political Parties, Elections and Referendums Act 2000 in respect of purdah. It did not want that obligation, but we gave it to it. Electoral commissions in countries such as Ireland or Denmark have a very much more active policing role in respect of fair referendums, and that is a role that we, in this country, have not set up the Electoral Commission to undertake.
Sir William Cash
With both amendments 5 and 6, we need to bear in mind that a duty would be imposed. That duty would imply and carry with it the potential for judicial review. If there were any failure in carrying out that duty in the manner that was expected under all the precepts of administrative law, the Minister should accept that there is more than a high probability of a challenge in the courts. That challenge could arise not only because of the manner in which a report arose, but if any of the information were misleading in any way.
Mr Jenkin
I agree with my hon. Friend, and will add that, where the Electoral Commission clearly has a duty, its decision can be judiciously reviewed. In respect of the designation of only one campaign, I have absolutely no doubt that there would instantly be a judicial review, and I speak with knowledge aforethought.
In the absence of the duties on the Electoral Commission —for example, to provide for impartial and objective information from the Government—it is a moral imperative on Ministers to ensure that they undertake their obligations in the spirit of a fair referendum, and not to abuse the trust that this legislation places on them with regard to the publication of that information.
Mr Alan Mak (Havant) (Con)
On 9 June, I began my parliamentary career with a maiden speech on this very Bill. I am incredibly grateful to be given the opportunity to speak again on this matter as the Bill makes its way through this House.
Deciding on whether we should continue to be a member of the European Union is one of the most important issues of our generation. We should be thankful about some elements of our relationship, particularly our access to the single market, and our non-involvement in Schengen and in the euro. There are other areas in which we are not getting a good deal, and the Prime Minister is right to renegotiate our relationship to request a better deal. He and the Secretary of State for Business, Innovation and Skills, along with other Members, have said that we should not be afraid to leave if we find that the deal is not good enough for our country and our future.
As the country makes its decision, and as the referendum period begins, I am mindful that the public will need information about the offer on the table. They will need factual and speculative information about what “in” and “out” mean, and about what our future might be under a different arrangement. The public will also need legal, political, financial and economic information. Above all, they will need a well-run and well-administered referendum, and therein lies a key role for the Electoral Commission. The public will also need information on what the Swiss and Norwegian models look like to see which would be a good fit for this country, and whether we are better off staying in a reformed European Union.
Mr Lidington
Amendment 6, as it currently stands, was tabled by my noble Friend Baroness Anelay, following debate in the Lords, as a way to try to build consensus in that House to enable it to give passage to the Bill.
Perhaps it would be useful for me to explain, in response to comments made in this debate, how the Government interpret the obligation imposed on us by the amendments and how we would propose to see those obligations implemented. By “rights”, as set out in amendment 6, we mean rights that the United Kingdom has as a member state of the European Union, and also the rights granted to individuals and businesses as a result of our membership, such as access to the single market. By “obligations”, we mean the things that our membership of the European Union commits us or obliges us to do. Most obviously, this is at member state level, but there would also be implications for businesses or individuals. An obvious example is our obligation as a member state to transpose EU law in particular areas and to accept the primacy of the EU so long as we are a member of the European Union. The duty written into amendment 6 does not require the Government to set out information about every single right and obligation. Such a report would not be meaningful, and the purpose of the duties is to provide useful and relevant factual information to allow for greater public understanding.
Amendment 6 requires the Government to describe some of the existing arrangements that other countries that are not EU members already have with the EU.
Finance Bill
Bernard Jenkin Excerpts(9 years, 1 month ago)
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Alison Thewliss
As I suspect the hon. Gentleman well knows, the Scottish Parliament does not have jurisdiction over this matter, but the SNP feels sufficiently strongly about it that we put it in our party manifesto for this place, and the First Minister has been vocal in speaking out in support of zero rating for sanitary products. We would very much like this to happen, and we will give any support that we can in the Scottish Parliament as well as from our Benches here.
This issue has been very protracted over many years, and this House cannot resolve it alone, but we can make a start. VAT has already been reduced by a previous Labour Government, and we have a good deal of cross-party support here tonight. I think that we can do much better than the Prime Minister, who, during the election campaign, described this as a “difficult” issue and said that he “can’t remember the answer”. The answer, of course, is that we can take a lead on this. In June 2015, the European Commission, which is yet to have a female President—perhaps that would make a difference on such issues—gave an answer that was not entirely positive. It set out the background to its reasons why this cannot be done, but it also said:
“As part of its upcoming work on a definitive VAT regime based on the destination principle, the Commission will assess the functioning and possible improvements to the system of reduced rates.”
So we have an opportunity to get involved in this debate to say that this is an important issue for us as a nation and for women across Europe.
We have an opportunity and an obligation to try again to resolve this issue. Members may not know this, but the Republic of Ireland entered the European Union at the time of a 0% rating on sanitary products that it was able to retain in much the same way as we have derogations in different areas, so there is already a precedent within the EU of a zero rating in a European member state. I urge the Government to take a lead on this for women across these islands and across the EU. Let us end this bloody unfairness.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
This debate is like history coming back to me, because not only does the hon. Member for Glasgow Central (Alison Thewliss) now represent the constituency that I stood for in 1987, but I was first made aware of this issue by the hon. Member for Walthamstow (Stella Creasy), who, when she was an A-level student in my constituency, berated me for the inequality of this tax. Ever since, I have been convinced that it is an unjust tax. Indeed, on that occasion I raised the matter in the shadow Cabinet, which was then under the leadership of William Hague. I got a very frosty and uncomfortable reception for raising such a matter in a semi-public meeting, including from some of our right hon. and hon. Friends who are female and hold extremely senior positions in Government to this day.
That demonstrates an important point about how attitudes change. Whatever we might have agreed to in our original agreements with the European Union that lock this tax in place, albeit reduced by the previous Labour Government to the minimum of 5%—I celebrate that—we are now, within the European Union, operating in a system based on a different principle—the principle that taxes should be harmonised as part of the single market. I refer the House to article 113 of the treaty on the functioning of the European Union, which says:
“The Council shall, acting unanimously…adopt provisions for the harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation to the extent that such harmonisation is necessary to ensure the establishment and the functioning of the internal market and to avoid distortion of competition.”
So taxation has crept into the idea of being part of the single market. At the point at which this country signed up to the Common Market, or even at the stage of the Single European Act or of the Maastricht treaty, this principle crept into the acquis communautaire of the European Union rather than being something that was expressly agreed by this House.
I very much hope that the Government will negotiate something fundamental on this particular tax, and I am looking forward to what the Minister has to say about it. However, I make no apology for raising the far more general principle that different taxation regimes in different countries represent different social settlements and the development of our societies in different ways at different paces. That is why we are separate nations and separate peoples with separate democracies.
The attempt to use the pretext of the single market to harmonise taxes is one of the most democratically regressive manoeuvres the European Union could adopt. France puts VAT on food and children’s clothes, but this country would not put VAT on such items. Ever since we adopted the cheap food policy following the abolition of the corn laws in the 1840s, that has been part of the fabric of our social settlement. It is the right of an individual nation state to continue to evolve its social settlement, and the conduct of Government and the imposition of taxes are inseparable from that democratic social settlement.
The treaties as currently formulated are a denial of national democracy. This House should not have to go and beg 27 other member states in order to change a rate of tax on an issue that we think is socially important. This is a matter of national democracy, and that is why the treaties are unfit for purpose.
Mr Jenkin
That is absolutely correct. Having observed the history of 40 years of membership of the European Union, as it is now called, we know that it is not going to stay like this. The European Union will continue to develop. The trend of taking more taxation powers away from the member states, in the name of the single market, is enshrined in article 113, so it will continue to do so. Yes, we have a veto, but the European Court of Justice tends to accelerate the pace of tax harmonisation just when we do not expect it to do so. It is the ECJ that extended VAT to certain items and categories of goods when we did not expect it to do so.
The group of amendments also addresses the renewables obligation incentives and seeks to adjust the feed-in tariff regime. Why are we able to reduce taxation on renewable energy products to only 5%? It is because of the European Union. Why could the previous Labour Government not abolish VAT on fuel, which they said they wanted to do after it had been applied by the Major Administration? It is because of the European Union.
Tim Loughton (East Worthing and Shoreham) (Con)
I agree with everything my hon. Friend is saying, although I am slightly alarmed by his statement that the shadow Cabinet is a semi-public meeting.
Surely the harmonisation of tax fails on two fronts. First, different countries treat these products at the higher rate, the lower rate or at no rate. Secondly, on equality of treatment, is my hon. Friend able to think of any other product that is taxed so discriminately that it affects only one half of the population of the European Union, who just happen to be women? Is that not the most discriminatory and iniquitous measure that the EU has come up with?
Mr Jenkin
My hon. Friend makes an interesting point and raises the spectre of a case to bring before the courts—perhaps even the European Court of Justice—on the basis of discrimination. Perhaps that would be one way of resolving this particular problem.
I am shamelessly using this example as an opportunity to make a far broader and more important constitutional point.
Hannah Bardell (Livingston) (SNP)
I am glad the hon. Gentleman has admitted to his own shame, because it seems somewhat shameful to fudge the issue. We may not have all the powers to change the situation, but this House has an opportunity to send a clear message to Europe on something that is very wrong and about which so many people feel strongly. I cannot believe that the hon. Gentleman is using that as an excuse to not support us on an issue for which there is clear cross-party support.
Mr Jenkin
I point out to the hon. Lady that my name is on new clause 7. I support it, but I will wait to hear what the Minister has to say before deciding whether to vote against my own Administration. I am sure she will understand that. There have not been many rebellions among the SNP yet. The point about being a political party in this House is that we are all individuals and we are all allowed to do what we choose. In fact, that is our responsibility.
Sir William Cash
Surely what this really boils down to is that the European institutions intend to—and actually do—tax women on these products in order to get the money to run the very system that is discriminatory.
Mr Jenkin
Our problem with the EU’s VAT directives is that they are a one-way street. Once the EU has adopted powers to regulate a particular tax, that power cannot be taken back by the member states. We are then left begging the EU as to whether we can set the tax rates for which the British people vote, as opposed to setting them ourselves. It strikes me as ironic that the Scottish National party wants independence from the United Kingdom in order to do its own thing, but it is happy to go on giving up more and more power to the European Union, so it will have even less freedom and less voice than it has in the UK.
The problem is that once VAT rates on any product are set above 5%, the European Union does not allow any member state to reduce them to below 5% again. We therefore have an anomaly whereby there is a zero VAT rate on sanitary products in the Republic of Ireland because it has never charged VAT on them. Had we started from the principle of charging no VAT on sanitary products, we would be in the same position as Ireland, but because we already charged it we cannot take it away. What a mess.
Jess Phillips (Birmingham, Yardley) (Lab)
I wonder whether the hon. Gentleman recognises all the good things the European Union has done for women. As somebody who has had to suffer periods and pay this unfair tax, I was also afforded maternity rights that I would never have had if it had not been for some of the pressures exerted by the European Union.
Mr Jenkin
I certainly acknowledge that what has happened in other member states has influenced what has happened in this country, but the hon. Lady enjoys no rights in this country that we could not have afforded ourselves through our own political processes. The question of the possibility of leaving the European Union is about taking back control over those policies, not deciding them in a different way from that which she would like. Long may we continue to agree on the importance of equal rights for women in as many areas as possible—in fact, in every area that we can possibly legislate on.
Pauline Latham (Mid Derbyshire) (Con)
Does my hon. Friend agree that this tax is very unfair because it is not about the equality of sexes? The tax is not equal because men do not need any of these products. If we had thought at the very beginning that this would impact on women only, I am sure people would have thought much harder about putting tax on sanitary products, which every woman, mainly, needs for a long period in their life. It is not fair.
Mr Jenkin
I am not going to give way again.
I congratulate the hon. Member for Dewsbury (Paula Sherriff) on tabling new clause 7. She may be a little surprised at how many Members support it, but, sadly, we have to have this debate not because it is the British Government’s policy to levy the tax, but because it is the EU’s policy to do so. That is a fundamental freedom and control that we should bring back to this House in the future.
Jess Phillips
I feel the need to make all sorts of declarations of interest in this debate, having used sanitary products pretty much all my life.
I wish to pay credit to a number of women who have brought this subject to the House over the years. Without women in this place, I am certain that this issue would never have been raised, although I am delighted that so many men interested in Europe are in the Chamber to talk about it. Dawn Primarolo, a working-class woman brave enough to dare to speak up in Parliament about the taboo subject of women’s periods back in the year 2000, should be commended.
Today, when such topics are far easier for us to discuss, I have already received a number of sideways glances from colleagues around the estate on speaking about the subject and there is a certain desire among Conservative Members to say the word “products” instead of tampons. I know from speaking to my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) today that, at the time, it was considered vulgar and even shameful that Ms Primarolo brought forward the subject. She was brave. Today, our brave woman prize goes to my hon. Friend the Member for Dewsbury (Paula Sherriff). Regardless of what has been said on the other side of the House, doing nothing achieves nothing.
It is completely ridiculous that women are taxed, even at a 5% rate, for a product which, in my experience, is more than essential. The fact that we still have the tax is probably down in no small part to the fact that most of the people in the House and in our sister Parliaments all across the EU do not have wombs. The reason why we must force the Government to have a conversation with our European partners is that, without force, I fear that they will be too squeamish to talk about women’s periods. But they should not be: every person in the House exists only because their mother had a period. Today, with half term, Parliament has been teeming with children—my own have been on the slides in Portcullis House—who all exist only because their mothers had periods. It is nothing to be scared of, and nor should any man or woman ever feel that we should not talk about periods.
Such a revision in taxation may seem a marginal change, but it would make a huge difference to the women in this country. Having worked in a women’s refuge, I know that the things we had to stock up on the most—because they presented a challenge to the budgets of the women in our care—were nappies, tampons and sanitary towels.
Stella Creasy
I will come on to issues of gender and equality on an international level, but I give the hon. Gentleman warning that I will not take any more interventions from him unless he uses the terms “sanitary towels” and “tampons”. It is important to use appropriate wording in the House.
The inequality that women have faced in having to pay this tax has existed for generations. The question for us all is what we can do to change that, which is why I add my name to those who have congratulated the former Member for Bristol South, Dame Dawn Primarolo. She is a hero to many of us for her persistence in fighting to reduce the rate of VAT on sanitary towels and tampons in the European Union in 2000. I have talked to her at first hand about those negotiations—she had to use the appropriate terms and explain that if we did not resolve this issue, men and women could be sitting next to each other, with women experiencing their periods and the difficulties that can come from that, but without that same protection because of the cost of these products. Her work was visionary.
Talking to Dame Dawn Primarolo, it became clear that this is not about VAT rates but about VAT descriptions. I am looking forward to hearing what the Minister has to say about this, because there is common agreement that we wish to resolve this issue and a recognition that in 2015, a tax on women—a femitax, a vagina tax, or whatever we want to call it—is unfair. The issue can be resolved not necessarily by considering VAT rates, but by considering the way that VAT is described and ascribed to certain products. That is where the inequality has come from—the concept of what is a necessity.
Stella Creasy
I will of course give way to the hon. Gentleman. It is like 20 years ago.
Mr Jenkin
I do not remember the hon. Lady giving way 20 years ago. She was at the very fine Colchester county high school for girls, which is a grammar school. In parenthesis, I am delighted that, through the reforms we are pursuing, this Government are doing more for educational opportunities for the least advantaged than any Government in living memory.
Why does the hon. Lady think that Dame Dawn Primarolo was unable to remove the 5% VAT on tampons and sanitary towels when she succeeded in reducing the things that we had discretion over? Why did she not take this initiative to the European Union? It was because she found that the Government of the day felt that they had other, more important fish to fry in their negotiations with the European Union. We should get away from such an unsatisfactory give and take to national interests by leaving the European Union.
Stella Creasy
I thank the hon. Gentleman for mentioning the school that I attended. I was incredibly lucky to get there, having failed the 11-plus the first time I took it. I shall always be against selection because I recognise the benefits that I received from being able to take that exam a second time and get that education. That school taught me to do my homework, which is why I know that one of the rules and challenges of this issue is that zero-rated VAT is different from reduced rate VAT. At the time, Dawn Primarolo found that the issue was not about unwillingness but about the way that the rules on what a zero-rating—as opposed to a reduced rating—could be applied to had been changed. That is why she was able to secure a reduction in VAT to 5% from 17.5%—I am sure that the hon. Gentleman will agree that that was progress—but this issue is about the way that products are described.
I am sure that the Minister knows his history of value added tax, how a product is described and what is described as a “necessity”. It is important to have a concept of what is currently described as a “necessity” and is therefore zero-rated. I wonder whether Conservative Members will agree that when we change these definitions, progress can be made.
For example, Jaffa Cakes are zero-rated. I am not a fan of Jaffa Cakes—let it be known that if I am offered a Jaffa Cake, I will refuse. I do not consider them to be essential to my life; I can give or take them. I recognise that razors are zero-rated, and judging by many Conservative Members the opportunity to shave every day is a human right. They are cleanly shaven, and I am sure they would be concerned to be charged a higher rate of VAT. Pitta bread is zero-rated—we can probably all agree that that is a necessity. What is the kebab without a good pitta bread around it? It is a necessity. When we start looking at what is described as a “necessity” and what is a “luxury”, we see the inequalities in this debate. As I said earlier, those inequalities existed long before we joined the European Union and long before we started to work on value added tax.
The question for all of us is not how to have similar rates of taxation, but how to recognise the similar descriptions. That is the way that this issue can be resolved in the European Union. It is also why working with our colleagues in other countries matters to us. I come back to the concern expressed by the hon. Member for Stone about gender inequality, because he is absolutely right: our sisters in France are paying 20% on their tampons and sanitary towels because they do not have the reduced rate. This is therefore not about sanitary towels and the rate of taxation across the European Union; it is about the way in which different countries have interpreted the concept of necessity and essentials.
Craig Mackinlay
I certainly hope his visits around various European capitals have an awful lot on their agenda. Following today’s debate, I hope this issue will be one such item. The issue is one of exclusivity in setting VAT rates on products important to us in this place, not elsewhere.
Mr Jenkin
In response to the hon. Lady’s intervention, is not the point that there are so many issues we want our Prime Minister to raise in the European Union? There is an increasing number of myriad issues, such as how much contribution we make, the free movement of people and how we control our borders. It is these little things—I say “little” mistakenly, because of course it looms large as an equality item in our minds—that get set aside in favour of other things. This is a rotten way of running a continent.
Craig Mackinlay
I agree with my hon. Friend. I hope progress can be made on very many areas, not least on this one.
We should not be like a colony pleading with an empire power. This is clearly a rate that should be set here. I thank again the hon. Member for Dewsbury for raising this issue, which, important in itself, has opened a Pandora’s box on who governs this country.
Wes Streeting
In this as in other respects, I have always favoured a woman’s right to choose. It is, of course, for women to decide which is the appropriate form of sanitary product. My hon. Friend is quite right that the moon cup does indeed have the environmental benefits that she mentions. I was glad to add my name in support of new clause 7 proposed by my hon. Friend the Member for Dewsbury (Paula Sherriff), which would tackle this issue. I am glad to see so much cross-party support, but I am disappointed to hear some of the language used this evening about our partners in Europe.
Apparently, according to the hon. Member for Harwich and North Essex (Mr Jenkin), this is the most iniquitous measure that the European Union has put in place. No wonder there is such representation in the Chamber. I hope that the Out campaign is not going to be predicated on VAT on sanitary products, as proponents are likely to find it a struggle to get wider traction. I find it objectionable that so many Conservative Members talk about negotiating with our European partners as “begging”. It is no different from our constituents coming to lobby us and having a reasonable conversation with us. If this is how the renegotiation strategy is going to work, we really are in trouble as a country.
Wes Streeting
Well, we have the European Parliament and the Council of Ministers, which are accountable to their respective Governments and, of course, the Commission itself is in many ways accountable. I would like to see reforms to some of the accountability mechanisms, but as the old saying goes, “you’ve got to be in it to win it”. On Europe, as on climate change, inheritance tax and the debate taking place in the other place on tax credits, we have seen in virtually every clause debated this evening that this is not the new modernised Conservative party; it is the same old right-wing Tories. They have hung their Chancellor and Prime Minister out to dry, and I hope that the Opposition’s reasonable, centre-ground amendments will be supported by Members from all parts of the House.
Mr Gauke
Doing full justice to that question in the five minutes available for me and for the hon. Member for Wolverhampton South West would be a challenge. This has been part of the VAT regime since 1973, but on this specific area, as we have heard, time has moved on and it is right that we look again at it.
Greece
Bernard Jenkin Excerpts(9 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Osborne
I make the broad observation that ultimately countries have to live within their means; we see what happens if they do not. On the Greek debt situation and the burden of Greek debt, eurozone members were in discussions about the terms of debt repayments and the like, but those negotiations were broken off on Saturday because of the unexpected announcement by the Greek Prime Minister on Friday.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Does not the eurozone states effectively endorsing a plan for fiscal and banking union, as proposed by the five eurozone Presidents, regardless of the treaty that the Prime Minister vetoed in December 2012, underline the urgency for the Chancellor to deliver on the dilemma that he outlined in a speech on 15 January 2014, when he said:
“The…Treaties are not fit for purpose.”
He also said:
“If we cannot protect the collective interests of non-eurozone member states then they”—
meaning we—
“will have to choose between joining the euro, which the UK will not do, or leaving the EU.”
Can he explain why those words have been taken down from the Downing Street website?
Mr Osborne
I have absolutely no idea; I thought it was one of the better speeches I gave over the past five years. My hon. Friend will be glad to know that I repeated exactly those arguments, including the phrase about the challenge of Britain having to choose, in the Mansion House speech that I gave just a couple of weeks ago. That is certainly up on the Treasury website.
European Union Referendum Bill
Bernard Jenkin Excerpts(9 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr McFadden
We know the costs of being in. The point of the amendments is to assess the costs of being out. Amendment 5 calls for each Secretary of State to produce a report at least 10 weeks before polling day on the possible consequences of exit for their area of responsibility. I will resist the temptation to get back into the issues of collective responsibility by saying that a report from each Department might test that. That is not the point of the amendment; the point is that EU membership touches many parts of what the Government do, and the public have a right to know about them.
Most obviously, there are the trade issues. What would exit mean for exports, inward investment and some of our great companies that operate across borders? For example, Airbus president Paul Kahn has said:
“If after an exit from the European Union, economic conditions in Britain were less favourable for business than in other parts of Europe, or beyond, would Airbus reconsider future investment in the United Kingdom? Yes, absolutely.”
Vodafone chief executive Vittorio Colao said recently:
“As a company we think it is in the interests of our shareholders and our customers that Britain does not leave the EU.”
ManpowerGroup Solutions UK managing director James Hick said last week:
“Our position on Europe is clear: leaving the EU would threaten jobs and harm Britain’s prospects”.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
On a point of order, Mr Hoyle. Excuse me, but I thought we were discussing amendments, not the views of certain businessmen about the EU. Surely we should stick to the amendments.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
The Chair can decide what is in order and what is out of order, but I thank the hon. Gentleman for his intervention.
The Chairman
Thank you, Mr Jenkin. We do not need any applause. We can save that for another occasion.
I was giving the right hon. Gentleman some time, but we now need to get on to the amendments. As important as Wolverhampton is to him and me, I am sure that discussion of the amendments would be more welcome in the Chamber.
Mr McFadden
I am not aware of any other occasions.
When my right hon. and learned Friend the Member for Camberwell and Peckham asked the Prime Minister, he gave two justifications. First, he said that,
“because the European issue is so pervasive, I do not want a situation where, in the four weeks before a referendum, Ministers cannot talk about the European budget, make statements about European Court judgments, respond to European Councils and all the rest of it.”
He then said the second issue was a bigger one:
“When the negotiation is complete and the Government have taken a clear view, I do not want us to be neutral on this issue; I want us to speak clearly and frankly.”—[Official Report, 10 June 2015; Vol. 596, c. 1179.]
On Second Reading, my right hon. Friend the Member for Leeds Central (Hilary Benn) said:
“Everybody in the House would agree that the referendum must be fair and must be seen to be fair, but at the same time the Government—any Government—are entitled to argue their case.”
He had said a few moments earlier:
“It would not be sensible for any Government to find themselves constrained from explaining to the people the Government’s view, because the people are entitled to hear from the Government of the day”.—[Official Report, 9 June 2015; Vol. 596, c. 1059.]
The Foreign Secretary sought to reassure the House, telling a fellow Member that if his concern
“is that the Government are thinking of spending public money to deliver doorstep mailshots in the last four weeks of the campaign, I can assure him that the Government have no such intention. The Government will exercise proper restraint”.—[Official Report, 9 June 2015; Vol. 596, c. 1055.]
We read overnight that the Government would have more to say on the issue, and we wait with interest to hear it. How will they reassure the House that there will not be abuse of the lifting of the purdah provisions, and that there should be the legal framework that has been called for by the Leader of the Opposition? Our amendment does not seek to reinstate the purdah provisions in full, but it does seek clarity on what exactly the Government intend to do or to publish during the referendum period. More clarity is needed than has so far been made available in ministerial statements. What form will expressing a view take, and what form will it not take? The Government need to provide more information, more clarity and more reassurance.
Mr Jenkin
I thank the right hon. Gentleman for giving way, and for the pertinent questions that he is putting to Ministers. They and I have been engaged in similar discussions. May I ask, however, why his party has decided not to support amendment 11, which would reinstate purdah, until he has received those assurances? Why is he letting the Government off the hook—or is it part of a Euro-stitch-up to rig the referendum?
Mr McFadden
As my right hon. Friend the Member for Leeds Central said on Second Reading, we do not object to the Government’s taking a view, but we want to see a fair referendum.
Will the Government agree to publish a report, a document or a code of conduct, or to provide the clarity that we seek in some other way? If so, what form will that information take? Will it set out clearly what kind of reports or statements the Government think they may need to make? What assurances will the Minister be able to give us about the use of taxpayer funds, beyond the funds that are channelled to the official yes and no campaigns in the normal way, through the Electoral Commission?
Mr Jenkin
The Government argue—I think we have to accept their argument—that these detailed and broad restrictions are too prescriptive and that they would not be able to carry on with the normal course of government, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) has explained. Does my hon. Friend not agree that there would be too much interference in the normal conduct of government?
Sir William Cash
I just do not think that makes sense. The bottom line is that we are now so invading the ability of the voters in the referendum to make a free and fair choice, by canting the process and taking all the things to which I have just referred out of the equation, that we could seriously undermine the whole democratic process with respect to referendums. This is simply not a tenable position. If it was good enough for the Scottish and the Welsh, why is it not good enough for the referendum on the EU, which will go even further towards infringing—as we would put it—the role of this Parliament and our democratic freedoms?
I also want to discuss what publishing means. Section 125 of the 2000 Act is very general on this point, and this is what hon. Members are being asked to repeal this afternoon. It states:
“‘publish’ means make available to the public at large, or any section of the public, in whatever form and by whatever means”,
and the relevant period
“means the period of 28 days ending with the date of the poll.”
There are profound reasons for maintaining the status quo at this stage and for retaining the restriction, because once it has been repealed, we would then have to reinvent the wheel, as it were, on Report. That could open a huge can of worms for the Government. The question is: what would the Government not be restrained from doing, compared with some of the things that it is currently stated they would be restrained from doing?
The Minister for Europe has sent us a letter today, 16 June, in which he says:
“It is our clear intention, through the Bill, to provide a straightforward, fair and effective framework for the referendum.”
I have to say to him that I must cast some doubt on that in relation to the questions that are being raised. He goes on to say that it would be “inappropriate” to
“prevent Ministers from effectively conducting the significant amounts of ordinary day-to-day business between the Government and the EU that will necessarily continue during the pre-poll period.”
I have been Chairman of the European Scrutiny Committee for five years, and I just do not recognise this at all. There are things that go on in the monumental amount of material that comes in from the European Union, but in my judgment there is no suggestion that anything of this nature would be affected by retaining section 125. The section was applied during the Scottish referendum, which had a European dimension. The same applied to the Welsh Assembly. If it was all right for Ministers to continue to make statements in those circumstances, we should keep section 125 and do as the Foreign Secretary suggested during the Second Reading debate. The Minister for Europe’s letter states:
“The Foreign Secretary said during the debate that the Government will exercise proper restraint to ensure a balanced debate during the campaign.”
This is the moment to ensure that we get this right by keeping the restriction for the time being, having discussions and coming back with specific proposals on Report, on which we can then vote.
I acknowledge that the Minister for Europe has conceded that we have more than a reasonable case. His letter goes on:
“Working out a system that will reassure colleagues and voters that the referendum is a fair fight, yet will preserve the Government’s ability to act in the national interest is not straightforward.”
Well, it would be very straightforward if we kept section 125. He adds:
“It is important that it is legally clear and robust.”
It would make things very unclear and very unrobust if we were to remove the provisions in section 125, which are based on common sense and fairness and on giving voters a proper opportunity to make a fair choice.
Hywel Williams (Arfon) (PC)
I support amendment 16 and new clauses 3 and 4 in the name of my right hon. Friend the Member for Gordon (Alex Salmond) and other hon. Members.
I hope I can welcome some clarification from the Government later on the question of holding the referendum on the same day as the elections in Scotland and the elections for the Assemblies in Northern Ireland and Wales. An aspect that has not received much attention is that of the effects of the franchise. EU citizens have the right to vote in our general elections in Wales and in Scotland. The Government here in London propose to exclude them from the referendum. If the referendum and the election were held at the same time, one can picture the spectacle in Northern Ireland, Scotland and Wales when EU citizens turn up to vote, cast a vote and then are cast out. They are being prevented from voting on our future in the EU. That spectacle would cheer the hearts of despots throughout the world, from Moscow to Damascus to Pyongyang.
On the declaration of the results and the so-called quad lock, there are particular EU issues pertaining to Wales. I would say that these are national issues. On Second Reading I referred to the value that we as a multilingual society derive from membership of a multilingual and multicultural European Union. This may not figure as largely elsewhere in the UK as it does in Wales—it is a particular Welsh issue.
Wales is one of the poorest parts of Europe—it is at the same level as some former Soviet bloc countries—and we have derived much benefit from EU regional policy. Again, that is of national significance to Wales. We are also very dependent on EU agricultural support. There are other issues relating to manufacturing and demography, but I will not go into those now. All those factors might or might not decide the result in Wales—I cannot say whether they will—but they are legitimate national interests and should be respected as such.
We have a particular national interest. It might be different from the national interest of our neighbours. As the Government intend, their national interest will trump ours. I think that there are only two ways to go on the respect issue: either to respect or not to respect. The current proposals potentially will not respect, which is why we will support amendment 16.
Mr Jenkin
I will endeavour to be as brief as possible in order to allow other Members to speak. I will speak primarily to amendments (a) and (b) to amendment 11, which stand in my name, but also in support of amendment 11, which stands in the name of my hon. Friend the Member for Stone (Sir William Cash). I thank my right hon. Friends the Minister and the Foreign Secretary for the positive way in which they have engaged with the entire party on these questions. We are grateful for that dialogue. I think that absolutely proves that we are not in some re-run of previous grief. This debate is not even about Europe; it is, in fact, about how to conduct a fair referendum.
I have some experience of referendums, because I set up the “North East Says No” referendum campaign in 2004, which turned around a two-thirds majority in favour of a north-east Assembly into a 4:1 defeat. We operated under the provisions laid down by the Political Parties, Elections and Referendums Act 2000, which worked pretty well. The purdah provisions restricted what the Government did, although they are probably not tough enough. They did not prevent the then Deputy Prime Minister, John Prescott, changing the Government’s policy on what powers that putative Assembly would have only a few days before the postal votes went out. When we rang up the Cabinet Secretary to complain that the Deputy Prime Minister had breached the purdah rules, we were told, “That’s a matter for the Minister, not for me.”
That underlines the argument that the purdah rules are not tough enough, rather than that we should not have them at all, because they prevented civil servants from becoming embroiled in referendum questions, or being used by Ministers to promulgate the case that the Government wanted them to promulgate, and that is the vital protection. It is principally towards the impartiality of civil servants that I want to address my remarks, particularly given that, I am proud to say, I have been elected unopposed to the Chair of the Public Administration and Constitutional Affairs Committee. I very much hope to persuade my fellow members of the Committee to address some of these issues during this Parliament.
I am disappointed that the Labour party has abandoned the principled position it adopted on purdah when it implemented the 2000 Act, which is quite extraordinary. I ran into Jack Straw, the former Foreign Secretary, this morning, and he was thoroughly disappointed to hear that the Labour party was backing off from supporting the constitutional legislation that it had implemented. Those ideas did not just come out of nowhere; they were ideas for a fair referendum that arose from the unfairness of the conduct of the first Welsh referendum, which were addressed by the Neil committee, which became the Committee on Standards in Public Life—the key is in the name. It was regarded as essential to have a period when the machinery of government cannot be involved in supporting one side or the other in a referendum campaign. The Electoral Commission would like 10 weeks, rather than just four weeks.
There are certain myths about purdah. The Government do not grind to a halt during a general election. Ministers even attend meetings of the Council of Ministers during general elections. However, during a general election a Minister cannot use their Department to promulgate information or to brief the press in a manner that is intended to affect the outcome. We want the same to apply in the referendum.
The letter from my right hon. Friend the Minister for Europe, which the right hon. Member for Gordon (Alex Salmond) has now seen, does not actually provide the reassurance that is required. In fact, by explaining what is contemplated, it confirms precisely the opposite. For example, it states that the Government,
“having taken a position on the outcome of our negotiations with the rest of the EU, will naturally be obliged to account to Parliament and the British people.”
There is absolutely no problem about accounting to Parliament in any purdah period about any matter at all, because it is privileged. There are no purdah rules that apply to anything that any Minister would say on the Floor of the House of Commons.
But are we seriously to believe, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) indicated, that civil servants should be used to put out press releases on matters that are being addressed by the referendum question, because that is what he is saying? That is precisely what should not be allowed. The idea that this will prevent Ministers from saying anything, and that somehow Ministers will not be able to take part in the referendum campaign, is clearly tosh. I seem to recall the Prime Minister being very vociferous in the run-up to the Scottish independence referendum, right to the last day of the campaign. However, he was unable to use his ministerial car, fly at ministerial expense or use the machinery of government to promulgate the messages he wanted to get across. There might have been a rather frustrating moment when he said, “I want to put out a statement”, and the Cabinet Secretary would have had to tell him, “I’m sorry, Prime Minister, but you can’t do that now that we are in purdah. You will have to do that through the no campaign or through your party.” That is exactly right. What is the point of the expenditure limits for the yes and no campaigns if the Government have 80 special advisers and thousands of press officers able to issue press releases, brief the media and organise media tours for Ministers? That is precisely what should not be available to Ministers during the closing stages of a referendum campaign.
Kate Hoey (Vauxhall) (Lab)
I support that amendment, of course. Does the hon. Gentleman agree that it would be even worse if we happened to get to a situation in which the leadership of the two main political parties were campaigning on one side? That is an even more important reason to have a proper purdah, if the referendum is to be seen as a free and fair.
Mr Jenkin
It is a simple matter of principle, which is why I think we would be right to press this to a vote if necessary, unless the Government accept our amendment. I really hope that they will, because it would simply put purdah back into the Bill, where it should be. I commend my right hon. Friend the Minister for saying that he wants dialogue on what the problem actually is and on how it can be addressed by amending the purdah regime, rather than scrapping it altogether and relying on assurances based on advice from civil servants who have clearly got it wrong.
I want to focus in my final remarks on the impartiality of civil servants, because this is really about what they can and cannot do. They must be in a position to protect their impartiality. They must be able to say to a Minister, “No, Minister, we are in purdah, so I cannot do that now. You must do that yourself or through some other organisation.” If they are not subject to purdah, it is the job of civil servants to support the Government of the day by carrying out the instructions of their Ministers, so they will be obliged to put out press releases, to help Ministers make the case and to use the machinery of government unfairly to support one side or the other.
I draw the Committee’s attention to the report that the Public Administration Committee produced just before the general election, “Lessons for Civil Service impartiality from the Scottish independence referendum”. The report shows that the Scottish Executive abused their position by sending out a rather political White Paper, some parts of which read more like an SNP manifesto than an objective Government document—that is always the danger with Government publications—but at least they did not send it out in the purdah period, at the most sensitive moment.
Not only that, but the advice of the permanent secretary at the Treasury, Sir Nicholas Macpherson, on currency unions was published in a completely unprecedented move on the basis that he had to “reassure the markets”. That was his excuse, and I am afraid that we regarded it as only an excuse. Are we to say that Ministers will agree to civil servants publishing their advice during the purdah period? Perhaps they might even be instructed to publish their advice during that period.
Alex Salmond
The hon. Gentleman makes the point that what Governments do outwith the purdah period is quite different from what they can do within that period. Is he aware that there was referendum unit in the Treasury, which during the 28-day purdah period was briefing in favour of the no campaign in the referendum? Can that possibly be right? Should not that sort of practice be stopped before an upcoming European campaign?
Mr Jenkin
There is a serious question about whether civil servants should be closely involved in referendum campaigns over a period much longer than 28 days. There is a serious problem for the civil service if it allows such things to happen. That is why one of the main recommendations of our report is the addition of a paragraph to the civil service code to the effect that what applies to civil servants in general elections should apply to them equally in referendums. That would prevent civil servants who are put in difficult positions, and perhaps asked to do things that they know are not in the spirit of the code, from acting in such a way.
The underpinning of the principle of civil service impartiality during a referendum now rests on section 125 of the Political Parties, Elections and Referendums Act 2000. If we do not press the amendment, we consent to the removal of that protection from the Bill. My right hon. Friend the Minister cannot ask us to do that. It is an issue of principle, and he is asking us to accede to completely the wrong principle. As I have said, I believe that he has been given very wrong advice. Far be it from me to speculate about how many Eurosceptics there are among the permanent secretary community, who might want a bit of extra freedom about what they get Ministers to do during a referendum campaign.
I am deeply disappointed that the Labour party has abandoned all its principles, but we know that it is split on the matter. On Second Reading, it was in favour of scrapping purdah. At Prime Minister’s questions, it was against scrapping purdah. Last night, Labour Members were going to vote for amendment 11, but today they are no longer going to do so. I think that they are in a bit of a muddle, and I suspect that quite a few pro-EU Labour Members would like to help to rig the referendum in favour of the yes campaign. [Interruption.] I see I have provoked the hon. Member for Rhondda (Chris Bryant). In the interests of brevity, I shall not invite him to intervene.
Unless we insist that the provisions for purdah remain in the Bill, we are acquiescing in the dilution of an important principle.
Mr Geoffrey Cox (Torridge and West Devon) (Con)
My hon. Friend has insisted, and I understand this, that any safeguards relating to a purdah period should be in the Bill and should be made clear by statute. As I understand it, the Government’s undertaking, by means of the Minister’s letter, is to table amendments on Report, which would go into the final Act of Parliament and have legal force. It is not a matter of relying on the assurances of civil servants; it is a matter of law. If that is correct, it may go some way to alleviating the concerns of Government Members.
Mr Jenkin
I am grateful to my hon. Friend for drawing the Committee’s attention to that point. We should all be grateful for the fact that the Government have listened, but they are still requesting that we withdraw the amendment. To do so would be to concede the principle that purdah might not exist in statutory form. The Labour party’s amendment on purdah would not actually create purdah; it would require the Government to produce a list of things. What we want in the Bill is purdah. If the Government are not prepared to accept that principle now, on the Floor of the House, I fear that we will have to force the amendment to a vote, because it is a matter of principle.
John McDonnell (Hayes and Harlington) (Lab)
He is not in his usual place, but may I commend the hon. Member for Stone (Sir William Cash), whose health is fragile today but who has still turned up to fulfil his parliamentary duties? I apologise for the fact that I had to leave the debate for 20 minutes to chair a meeting.
I want to speak about amendments 46 and 47, but before I do so, I will say a few words about purdah. I remember the original legislation going through the House. It came about as a result of concerns expressed about what had happened prior to other elections and referendums. At the time, I thought that a number of lessons had been learned about the need to ensure that purdah existed, so that confidence could be expressed in the outcome of a referendum. For the life of me, I cannot understand why the Government are varying the procedure this time. They have not advanced any consistent argument in which I can have any confidence. When we are dealing with such a controversial matter, why stir up such controversy over such a relatively minor point? I do not understand the Government’s motives.
I am minded to support amendment 11. Although the Government have assured us that we will return to the matter on Report, I would like some certainty at this stage, which we might vary on Report. I am quite attracted to the idea of a fairness commission, as proposed in new clause 4. I was a bit anxious when I learned who might be a member of such a commission, but I agree that there needs to be a mechanism for dealing with any unfairness.
I will be brief, because we are running out of time. I have tabled two amendments concerning the Transatlantic Trade and Investment Partnership. Several hon. Members have campaigned doggedly for openness and transparency regarding the negotiations on that proposed partnership between the EU and the US. I accept that it would be out of order for me to go into any detail about that, but the principle is this. For two days in the Chamber, we have debated sovereignty and democratic rights in relation to Scotland and the EU. TTIP may result in Parliament handing over sovereignty and democratic decision making not only to the EU but to transnational corporations and an investor dispute panel of corporate lawyers, meeting in secret. Their decisions could affect regulations governing health and safety, food safety, labour rights and even our recent attempts to achieve some sort of regulation of our finance sector, but we have not had any debate that resulted in a democratic decision of the House. We have had Adjournment debate after Adjournment debate, but there has been no report from Government on the progress of the negotiations. Why? Because the negotiations are held in secret. There was a debate in the European Parliament only last week. When a report was eventually produced, 200 amendments were tabled, and the EU Commission has backed off and delayed the matter.
Mr Grieve
I appreciate my hon. Friend’s point. Governments, like the world, move in mysterious ways. If I may gently coax the Government back to the path of righteousness, as I think we are probably succeeding in doing, I, for one, will be broadly content.
On hearing assurances from my right hon. Friend the Minister that the Government will reconsider this and return on Report with a proper amendment, I will be quite prepared to continue to give them my confidence in this matter. However, if the Government were to be using this as a device to come back whenever Report takes place and try to wriggle out of this obligation again, I would regard that as a rather infamous thing to do, and I am afraid I would not be in a position to support them at all on this matter.
Mr Grieve
My hon. Friend makes a very important point. Certainly, I would be much happier to see the return of section 125 and the introduction of some one-off qualifications for the purpose of this particular referendum. That would be the ideal, because it would preserve the principle of section 125. That would be better than coming back with a set of regulations. I have read the letter. It has a whole series of assurances, but that is not a proper way in which referendums should be conducted. The problem historically—not necessarily in this country—is that referendums have been systematically abused, with many assurances being given. That why this House should, on this matter, fix the Government with a clear responsibility to come up with a legal framework. I see my right hon. Friend the Minister nodding.
Mr Lidington
My hon. Friend is obviously free to take legal opinion of his own, but if he looks again at the wording of section 125 and applies it to the conduct of EU business, he will find that there would be very serious problems in carrying out day-to-day business in the national interest at EU level if the section is left untouched.
We believe that applying the section would be inappropriate because the referendum is taking place as the result of a clear manifesto commitment to negotiate the terms of the UK’s relationship with the European Union and to put them to people in a referendum. Section 125 could make it impossible to explain to the public what the outcome of the renegotiation was and what the Government’s view of that result was.
The Government must be able, and legitimately should be able, to offer their views, including up to the day of the referendum. However, as I have said, the Government are not a campaign: it is not the Government’s job to supplant the role of the lead campaign organisations during the referendum campaign, and it is certainly not our intention to act in that way. We recognise and understand the strength of feeling that exists on this issue, and I am grateful for the constructive and courteous tone in which the debate has been conducted both this afternoon and in private conversations outside the Chamber.
Mr Jenkin
I rise briefly in connection with some amendments standing in my name, such as amendments 32, 29, 22, 30 and 26, relating to provisions in the Bill that struck me as very strange to begin with. They seemed to envisage that royal charter bodies and certain types of charity should become permitted participants as campaigners in referendums and permitted donors to referendum campaigns. The matter of charities and the function of the Charity Commission is the responsibility of the Public Administration and Constitutional Affairs Committee, and it is something we have taken a great deal of care and interest over. I have made inquiries of the Charity Commission, and I am extremely grateful that it has furnished me with a comprehensive note explaining that this is a slightly bizarre tidying-up exercise. It brings the provisions in this Bill into line with what was agreed in the Lobbying Bill which is now an Act from the last Parliament. The Charity Commission is very clear that the Political Parties, Elections and Referendums Act 2000 does not give the charities it covers a general power to campaign or make donations to campaigns.
I will be grateful if the Minister replying to this debate makes it clear that there is no suggestion that charities are being empowered to be donors or participants under this Bill. They are of course governed by charity law and the regulations set down by the Charity Commission. Those are still enforced. This Bill does not alter charity law. When we were conducting the north-east says no campaign, some charities—I shall not embarrass them now by naming them—did allow their logos to be used on the yes campaign website. We quickly made our concern about that clear to the Charity Commission, and they were quickly instructed to take down their logos as this was a misuse of charitable funds and of their logos.
Charities are not intended to be involved in political campaigning. Of course, many of them are involved in campaigns that have political implications—for example, anti-slavery and child trafficking campaigns are legitimate campaigns—but they are not allowed to get involved in party political campaigns. Charities can be punished for making donations to political parties, and it is important for them to understand that this also applies to donations and participation relating to referendums, as set out in the Political Parties, Elections and Referendums Act 2000. That is all that these provisions are intended to do. I therefore do not intend to press my amendments to a vote.
It strikes me that any intervention by a charity would pale into insignificance when compared with the imbalance that is being locked into the Bill. My hon. Friend the Member for Gainsborough (Sir Edward Leigh), when speaking to amendment 53, drew our attention to the fact that political parties would be allowed to participate pro rata according to the vote they received in the general election. Incidentally, the European Union was not a major issue at the general election. It was an issue, but not the major one, and the election result hardly constitutes a mandate for spending on this scale.
If the Government were released from purdah, or if we could not contain what the European institutions were able to do during the referendum, the issue of charities would be very small beer. It is important, none the less, for the charities to realise that they must not get themselves into difficulties by misinterpreting the provisions of the Bill. I would be grateful if the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Weston-super-Mare (John Penrose), would reiterate that that is the case.
Mr Jenkin
I should correct the right hon. Gentleman. The correct title of the group to which he referred, to which I and others such as Mr Speaker and one of the Deputy Speakers, the hon. Member for Epping Forest (Mrs Laing), belonged, was called the White Guard.
I want to pick up the right hon. Gentleman’s point about the letter. It says that the Government wish to use civil servants to explain the position arising from the renegotiation during the purdah period. If the referendum is not going to be about the Government’s deal with the EU, what is it going to be about? The letter says that the Government want to use the government machinery for precisely the purpose that they should not be allowed to use it for.
Alex Salmond
That is an excellent point. I bow to the hon. Gentleman’s memory as to the White Guard as opposed to the White Rose group. I am delighted to receive the information that Mr Speaker was a member. I cannot believe that he was unsuccessful in an election anywhere, but I am delighted to have that information. No doubt I shall use it at some point in the future.
I am afraid that I have just got the letter through Twitter and have not had a chance to examine it fully. The hon. Gentleman makes a serious point that goes to the heart of the profound issues that he and others have raised.
Sir William Cash
I do beg my hon. Friend’s pardon. He was a Whip a short time ago, but he has now been promoted, on which I congratulate him. I hope he will pass back the message that we really must have a substantive response to this question.
Furthermore, the amendment will extend the minimum referendum period to 16 weeks, thus providing for a minimum 10-week post-appointment period. I am glad to say that the Electoral Commission supports my amendment; indeed, it supports the majority of my amendments. It says that extending the period to 16 weeks
“would go some way to giving designated lead campaign groups the time needed to get their messages to voters, including to plan and effectively use free mailing and TV broadcasts.”
As a matter of fairness—that hallowed expression—I cannot think of anything more important.
Mr Jenkin
I commend my hon. Friend’s amendment, to which I have added my name, but does that not presuppose that the Government will conclude the negotiations and report them to the House well before the 16-week period kicks in, and that it is not legitimate for them then to use the Government’s machinery to explain the deal that they have reached through the purdah period and the 16-week period up to polling day? Does that not suggest that the Government will try to pull a fast one? Would it not be better if they made it clear now that they are going to conclude the deal long before the referendum is called so that there can be a proper and dispassionate debate about it?
Sir William Cash
I very much agree with my hon. Friend and I will go further and say that in the period between now and Report there will be substantial issues of this kind that we will need to dig into. There are references to counsel’s opinion on the purdah period and views that have been expressed by the Electoral Commission. We had a Bill before us without our having any idea of the outcome of the negotiations. This is not a satisfactory way to proceed.
As one who spent 25 years in very senior practice as a constitutional and administrative lawyer dealing with matters such as the dispute between Canada and Quebec, I can only say that counsel’s opinion is not the basis on which to make political decisions. We as lawyers may be very good at coming up with legal answers, but when I get my hands on that counsel’s opinion, as eventually we did on the Iraq opinion, there will be quite a lot of question marks. As my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) said in an earlier intervention, the Government can take their counsel’s opinion; we will take ours.
That is the position on that important amendment. The Electoral Commission supports the principle behind it. Will the Minister be good enough to give us a substantive reply and support amendment 9? I might not hold my breath about that.
The other amendment in my name, amendment 10—again, I am grateful for the support of hon. Members who have signed it—would ensure that no funds or support provided directly or indirectly by European Union bodies have a bearing on the outcome of the referendum. Is there any conceivable basis on which the Committee of the whole House would think a proper and fair referendum could be conducted if the entire resources of the European Commission and the European Union can be deployed in order to support a yes vote in the United Kingdom? By the way, there is no chance whatever that those bodies will not use all that money. They may have problems with Greece and they do not want a Grexit, but that pales into insignificance.
This is a very important proposal. The Electoral Commission takes the view that it already has controls on direct and indirect sources of campaign funding. Before I come to that, I refer to the situation as it applied in Ireland. I have spoken, debated and been at mass meetings when campaigners have been good enough to invite me in the run-up to referendums in France, Ireland, Denmark—all over Europe. There one sees the power of the state, pouring money down the throats of voters, and the machinery that underpins the yes campaign. I have come across some figures suggesting that in the second Irish referendum the amount of money deployed by the yes campaign after the machinery was geared up was around 15 times the amount available to the no campaign. That shows the scale of the problem.
Sir William Cash
The hon. Gentleman is seeking to draw me down that path, but I have been in this place for 31 years and will not buy that one. I am very glad that we got the vote we did last September, but that does not prevent me from being critical of the manner in which the procedures were followed.
I want to say something else. We have mentioned Mr Barroso. Here we are in the Westminster Parliament, described as the mother of Parliaments, and yesterday the celebrations for the Magna Carta were seen all over the world. The fact is that the traditions of those two things are illuminated around the world. We have fought in two world wars, against unprovoked aggression, and through our Parliament—through Churchill in this Parliament—we managed to save not just the United Kingdom, but Europe. They managed to drop a bomb on this place on my first birthday. Indeed, on the day I was born Hitler invaded Holland and France and Churchill became Prime Minister, but that is another story. The fact is that we have played a massive part in relation to democracy. What really worries me is that allowing the European Union to use its financial resources to manipulate the system is very dangerous.
According to the Electoral Commission, a central principle of its regulatory regime is to ensure—this is important—
“that foreign sources of funding do not have an undue influence on our democratic process.”
As hon. Members know, I have an eagle eye for the danger points. The Electoral Commission states that the 2000 Act, which sets out that regulatory regime,
“already provides that referendum campaigners are only able to accept donations over £500 from certain ‘permissible’ sources. In general, the permissibility rules provide that funding can only be accepted by referendum campaigners from certain UK-based sources. There are also rules and offences related to using permissible donors as agents to circumvent the rules.”
The Electoral Commission therefore put in place its regulatory arrangements. What it goes on to say is extremely important, and I still believe that my amendment would achieve this, because it uses the words “directly” and “indirectly” when talking about moneys, resources or support from any source within the European Union. The Electoral Commission states:
“It is important that the legislation is clear about those organisations that can and cannot participate in the referendum. The Commission’s view—
wait for it—
is that the European Commission does not fall within the list of bodies that can register as a campaigner or donate to other referendum campaigners. This amendment is therefore unnecessary.”
However, the analysis that I have provided shows the reach of the tentacles of the European Union, driven by Mr Barroso and his successors—Mr Juncker and all the others. We must never forget that Mr Barroso has said that the European Parliament, and only the European Parliament, is the Parliament for the European Union. He and his successors do not believe in this Parliament. There is a lot of talk now about national Parliaments, but his comments are on the record.
The Electoral Commission’s view is that the European Commission does not fall within the list of bodies that can register as campaigners. We should look into that carefully, because if the Electoral Commission were wrong, the European Commission might manage to worm its way in, on the scale that it has at its disposal, and subsidise the yes vote. I understand that that happened in Ireland, not to mention other countries throughout the European Union.
The Prime Minister has said that we can find an answer to the problems inherent in the purdah question. The Government acknowledge that there are problems with section 125 of the 2000 Act, but they say that they will get around them. That would include dealing with the civil service, but we must remember that the civil service includes permanent representatives. Members who are new to the House may not know about COREPER, the Committee of Permanent Representatives, which is the most powerful body in the European Union bar none, because it stitches up deals between all the member states. As Chairman of the European Scrutiny Committee, I took evidence from our chief representative on that body. I emphasise to the Committee that the evaporation of section 125, combined with the monetary intrusion of the European Union, represents a monumental challenge to our democratic system.
Mr Jenkin
My hon. Friend is explaining coherently how even though the European Commission does not consider itself to be a permitted participant or a permitted donor in a UK referendum campaign, its ability to fund bodies that will be participants or campaigners is unlimited. What about the Brussels-backed CBI, which has already received funds from the European Union, presumably to promote the EU? What is to prevent the CBI from receiving further funds? What restrictions will the Bill place on the CBI’s ability to receive such funds if it wants to donate to other campaigns?
Sir William Cash
This is vital territory. In a nutshell, we will have to get it right. Opening the floodgates on that money would be devastating, especially if it were to be employed alongside the lifting of the restrictions in section 125, which would bring the whole panoply of the civil service into play. That would be a nightmare scenario, but it is a genuine possibility. I am not convinced that the European Union is not a foreign source, although I will look into that. We passed an Act of Parliament, the European Communities Act 1972, under which we absorbed into our legislation all the treaties and all the functions of the bodies in the European Union. Because they became part of our constitutional settlement—for the time being, I trust—I believe that it would be an uncertain, if not a dangerous, assumption to make that the European Union and the European Commission would not be construed as being based in the United Kingdom as well as in all the other EU countries, in other words, as not being a foreign source. This matter will have to be looked at very carefully. I shall consult and confer with my colleagues as to what we do about these amendments.
John Penrose
We have already discussed that, and I understand that promises were made from the Dispatch Box earlier this afternoon by my colleague the Minister for Europe. Further proposals will be brought back to the House in due course, and I hope that the right hon. Gentleman and other colleagues will be pleased by what is brought back at that point.
Clause 3 therefore introduces schedules 1 and 2, which make further provision, and it modifies PPERA in relation to the campaigning and financial controls that will apply for the referendum. It also introduces schedule 3, which makes further provision, and it modifies PPERA in relation to the framework for administering the referendum.
Rather than spending a great deal of time on the detail of those schedules, I will move on to the Government amendments and then try to respond to the other amendments in the group, particularly those tabled by colleagues on the Government side of the Committee. The Government have tabled two amendments, which I will briefly explain. Amendment 14 will increase the spending limits for permitted participants at the EU referendum. The limits will apply instead of those provided for by PPERA. The increase takes account of inflation since PPERA was passed in 2000 but goes no further. The changes will apply to the spending limits for all those campaigners who are eligible to become permitted participants on both sides of the debate, including the designated lead organisations and political parties. It should be fair for both sides.
Amendment 15 gives effect to a recommendation of the Electoral Commission. It provides that where campaigners register as permitted participants but do not incur regulated spending, the responsible person must submit to the Electoral Commission a declaration that no regulated expenses were incurred. It will apply only for the purposes of this referendum. It is a technical amendment. Under the current provisions, there is no provision for a nil return. Although that can perhaps be seen as a logical approach in the event of a campaigner not spending, it creates a challenge for the Electoral Commission in undertaking its statutory duties. When a registered campaigner does not submit a spending return after the poll, it is not always clear whether that is an act of non-compliance, or because they have not incurred regulated spending. The amendment will make the situation clearer. Every registered permitted participant will be required to submit a return or declaration of some sort. Failing to do so without reasonable excuse will be a criminal offence. That should help to ensure that the Electoral Commission can focus its attention on clear cases of non-compliance. Given that it applies only to people or organisations that have already registered as campaigning groups, it ensures that transparency will be paramount.
Let me move on to some of the other amendments in the group. I will begin with amendment 9, tabled by my hon. Friend the Member for Stone, which a number of colleagues have addressed. The amendment seeks to extend the referendum period from the currently envisaged 10 weeks to up to 16 weeks. Having listened to my hon. Friend’s speech, I think that he is particularly concerned because at the start of any campaign the Electoral Commission needs to go through a process of designating the lead campaigning groups, and in the past there have been great concerns. In fact, the designation process has occasionally lasted for five or six weeks. If that six-week period begins at the start of 10 weeks of referendum campaigning, we will effectively end up with lead campaigning organisations being designated as such, and getting the public funds to which they are entitled, with a period of only four weeks to go before polling day. My hon. Friend rightly pointed out that that might put a crimp in the way in which the campaign was run, for both sides, which would not leave enough time to air important issues or make preparations. His proposed solution is to extend the period from 10 weeks to 16 weeks. I suggest a slightly more flexible alternative, which I hope will achieve the same outcome.
The Bill states that Parliament must agree to an affirmative statutory instrument to fix the date of the referendum in law. As my hon. Friend knows, an affirmative SI takes about six weeks to go through Parliament. Therefore, after the announcement of the election date, the House will consider the SI for a period of about six weeks before it approves the date of the referendum, and only then can the 10-week period start. Clearly, that will not help unless the designation of lead campaigning organisations can be done in parallel.
As my right hon. Friend the Member for Wokingham and others have mentioned, stirrings of campaigns are already under way. Campaigns are already gearing up, and the organisations involved are already co-operating and co-ordinating with each other, although we are at an early stage. I encourage those on both sides of the debate to engage at an early stage with the Electoral Commission, because both sides will, in all probability, start campaigning unofficially long before the eventual official start of the referendum campaign. Because they will be able to start engaging with the Electoral Commission at an early stage, not only will we be able to begin designation six weeks before the beginning of the 10-week period, but we stand a decent chance—with the Electoral Commission’s blessing, of course—of getting through the designation process rather faster than we otherwise could.
Mr Jenkin
To assist the Committee, and indeed the whole House, in the scrutiny of the Bill, will my hon. Friend undertake to produce a d-minus chronology of events that details all the steps between the Government’s decision to proceed with the referendum and the referendum itself? Presumably, that chronology could include the latest possible date for the conclusion of negotiations. We are concerned because some of the Government’s statements suggest that negotiations will conclude after the Government have triggered the referendum process.
John Penrose
I will happily produce a d-minus election schedule. What I will not be able to do, because it has less to do with the Bill, is to say when negotiations might be complete. However, we will be able to work back and produce a schedule that indicates how the process could and should look.
Women and the Cost of Living
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Gloria De Piero
That provides extraordinary evidence of why freezing energy bills is so important.
Netmums found that one in five mums are regularly missing meals so that their kids can eat. One mum said:
“If it’s a choice between me or the kids eating, I will feed them. I have lost so much weight my clothes don’t fit but I can’t afford to buy any more.”
This is Tory Britain.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
The hon. Lady is making a powerful speech, and we should all be concerned about the issues she raises, but will she reflect on the fact that it was the last Labour Government who piled the green levies on our energy bills, which are now hitting women harder than men?
Trident Alternatives Review
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Danny Alexander
I agree with many of the things President Obama has said, including in his recent Berlin speech. I would point the hon. Lady, however, to the Government’s own threat assessment in the strategic security and defence review, which says that state-on-state nuclear attacks are a tier 2 threat. I will come to the threat analysis in a moment.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
This is the nub of matter. That is just one threat assessment, but no serious conflict with which this country has been involved over decades—extending even to the second world war—has been expected. Wars are unexpected, so why does the right hon. Gentleman rest any assurance on a single threat assessment? How does he know that that threat assessment will not have to be changed in a few days’ time, let alone in 10 or 20 years?
Danny Alexander
I will address that point as I move through my speech, although I am glad to have taken my hon. Friend’s intervention. All I would say is that the degree of readiness of our conventional weapons and forces is scaled to the threats of the time, and my precise proposal is that we could adopt a similar approach here.
John Woodcock
Absolutely. On the Liberal Democrats’ official figures, the savings will not even start to accrue until 2025, but by that time work would have to be well under way in Barrow shipyard and the supply chain to make the costly preparations for the Astute successor submarines. The Liberal Democrats need to come clean about the extra cost, because it makes a mockery of what the right hon. Gentleman rightly said are incredibly modest savings over a 30, 40 or 50-year period.
It should be remembered that the capacity to build nuclear submarines is one of the very few sovereign protected capabilities deemed so important and sensitive that the overwhelming majority of construction must be carried out on British soil. The submarine supply chain—centred in Barrow, but stretching from Aberdeen to Plymouth—is so advanced and finely tuned that any period in which it is left idle risks destroying it entirely. That is the lesson of the mass redundancies in my constituency in the 1990s. It is a great shame that some of those who now have the privilege of governing do not seem to have learnt a thing.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
On a point of order, Mr Speaker. I am distressed to raise this point, but for some reason the Chief Secretary seems to have adopted a posture of preserved deterrence—that is, he is not here. He left the Chamber shortly after the Opposition spokesman sat down, in a three-hour debate of such importance. I am afraid that I regard that as rather a discourtesy to the House. Did the Chief Secretary give a reason when he left the Chamber and, if not, should he not have done so as a courtesy to the House?
Angus Robertson (Moray) (SNP)
I am pleased to be able to take part in a debate on the alternatives review, which many people with different views on deterrence theory believe to be fundamentally flawed because it did not consider all the alternatives. That is more relevant to Scotland than it is to many other places because Scotland probably has the highest megatonnage of weapons of mass destruction of any nation in the world.
The Liberal Democrats must be living in a parallel universe if they think that people in Scotland do not think it important to consider all the options, not least because the majority of our public representatives have voted against Trident renewal. In the Scottish Parliament on 14 June 2007, 71 Members of the Scottish Parliament voted against Trident renewal; only 16 voted in favour. In this place, on 14 March 2007, 33 Scottish MPs voted against the Trident renewal proposals, with only 22 voting for them.
This is the view not only of parliamentarians; it is consistently the view of the majority of people in Scotland. In October 2012, a YouGov poll showed that 57% of people in Scotland thought that the Scottish Parliament should have more powers to bring about the removal of Trident from Scotland. In September 2011, an Angus Reid poll for the Sunday Express showed that 57% of people in Scotland did not agree that Trident should be based on the Clyde. In 2010, a YouGov poll showed that 56% of people in Scotland believed that we should not buy a replacement for Trident. It goes on and on.
Mr Jenkin
Let me draw the hon. Gentleman’s attention to the report produced by the Public Administration Committee, which experimented with deliberative polling to find out how to inform national strategy at the heart of government by engaging with the public. What did the poll conducted on our behalf show? The final question asked whether the United Kingdom should order four new submarines or give up nuclear weapons altogether. In Scotland, 49% were in favour and 43% were against.
Angus Robertson
As the hon. Gentleman knows, there are always outliers in polling—[Interruption.] I reflect on the fact that the Scottish National party is the only majority Government in the United Kingdom, receiving more votes than all of the three UK parties combined on the second vote. The hon. Member for Harwich and North Essex (Mr Jenkin) can laugh, but he represents a party that is the worst-performing centre-right party in the industrialised world. That is how badly it performs in Scotland. Even when his friend Lord Ashcroft polled in Scotland, he found that in principle 48% of Scottish respondents oppose the UK having nuclear weapons.
The Liberal Democrat review would have been worthy, as the former Defence Secretary the right hon. Member for Coventry North East (Mr Ainsworth) suggested, if it had taken evidence and spoken with other people—people outside the Ministry of Defence, people outside government. The Lib Dem spokesman could have met the Scottish Trades Union Congress and spoken to its general secretary, Grahame Smith, who said that renewing Trident “will cost Scotland jobs”. We might not all agree with those views, but they are views of important people, and if we are going to have a review that looks into alternatives, surely the relevant people should be spoken to.
Did the right hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) meet the Scottish Trades Union Congress? No, he did not. Did he meet Unison, whose Scottish general secretary condemned the Government’s decision to replace Britain’s Trident nuclear fleet?
Sir Gerald Howarth (Aldershot) (Con)
I pay tribute to my hon. Friend the Member for North Devon (Sir Nick Harvey), who was a very good and collegiate colleague in the Ministry of Defence. I am sorry that he was not able fully to carry out this work, because had he done so, I suspect the result would have been a lot better than this inadequate document that has been presented to the country today. It has taken two years to produce what has amounted to a mouse.
It is important that we remember the context. In 2009, the leader of the Liberal Democrat party, who is now the Deputy Prime Minister, said in this House that
“we should admit that we neither need nor can afford to replace Trident.”—[Official Report, 1 July 2009; Vol. 495, c. 297.]
That is where the Liberal Democrat party was a few years ago. It now appears to agree that we should continue with the deterrent, albeit on a part-time basis. However, this is not the end of the story. This is not the party’s defined position. The document does not represent the settled policy of the Liberal Democrats. That is to be settled by their whacky members at their party conference later this year. Therefore, whatever is said from the Dispatch Box, or by Liberal Democrat Members, is not the final word on this matter of huge importance. One thing that can be said of the document is that at least it has sparked this important debate, which has produced some extremely impressive speeches that I hope will gain wider currency across the country.
I wish to make three points. First, the deterrent has deterred. It has worked. We therefore do not need to invite people to make an act of faith.
Mr Jenkin
I listened carefully to the honest and courageous speech by the hon. Member for Brighton, Pavilion (Caroline Lucas), in which she said that the more countries that have nuclear weapons, the more likely it is that they will be used. Does my hon. Friend agree that the only time nuclear weapons have been used was when only one country had them, and that as more countries have acquired them the likelihood of their being used has decreased? No nuclear weapon has been used since more than two countries have had nuclear weapons. Does that not tell us something?
Sir Gerald Howarth
It does, but, if I may, I will come on to my hon. Friend’s point in a moment.
My second point is that, yes, the deterrent has worked and it worked during the cold war. The argument is that the cold war has ended and so we no longer need the deterrent. However, as my right hon. Friend the Member for North Somerset (Dr Fox) said, we cannot predict what threats we might face in the next 30 or 40 years. While there appears today to be no immediate nuclear threat to our country, we know that other countries either have, or intend to acquire, a nuclear capability, and that there are approximately 17,000 nuclear weapons in existence.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I will confine my remarks to just a few points. I congratulate the hon. Member for Bridgend (Mrs Moon) on bringing out the NATO side of the debate. Our continuous-at-sea deterrence is an important contribution to NATO. It is a pay-back to the United States for being the ultimate guarantor of European security. We should not imagine for a minute that if we started downgrading our deterrent, the United States would remain as interested as it is now in maintaining security in Europe, with all the benefit for this country.
This debate has demolished the credibility of the document. The idea that it came as a surprise that submarine-launched cruise missiles with new nuclear tips were going to be fantastically expensive represents a scale of political dishonesty that stretches the imagination even for Liberal Democrats. I cannot imagine how anybody has ever taken the document seriously.
The debate has essentially been about continuous-at-sea deterrence or not. The document damns the idea of a part-time deterrent. Paragraph 33 states that a non-continuous posture depends upon political confidence that
“a potential aggressor would not launch a no-notice pre-emptive attack”—
there is no guarantee of that;
“with sufficient warning, the UK could re-constitute back-to-back patrolling”—
there is no guarantee of that;
“such back-to-back patrols could then be sustained long enough to cover any emergent crisis”—
and there is no guarantee of that if we have only three or two boats.
The point that I wish to make briefly is what defence policy is really about. It is not about predicting the future and working out what we might use. It is not about pretending that we can assess threats and that then settles what we need for the future. The whole point about defence planning and defence policy is that it is about preparing for what we do not expect, making contingencies for what we cannot foresee. That is what the whole document fails to do. The idea that we now live in a different world from the one we lived in during the cold war, and therefore that the global environment has given us permission to downgrade our nuclear capability, is clearly nonsense.
There is another misunderstanding. This is not a weapons system that we have not used, do not use and are unlikely to use. The importance of our continuous-at-sea deterrent is that we use it every day. It shapes the global environment in which we live. Why is state-on-state warfare a second-tier threat rather than a primary threat? Why has state-on-state warfare between the major powers become unthinkable since the end of the first half of the 20th century? It is because those major powers have nuclear weapons. Were we to start destabilising the credibility of our continuous-at-sea deterrence, we would be destabilising the very global environment that the Liberal Democrats believe gives them permission to go part-time on our deterrent. My hon. Friend the Member for Aldershot (Sir Gerald Howarth) put it well. The part-time deterrent is no deterrent. We might as well pack it in unless we are going to stick with continuous at-sea deterrent.
Financial Transaction Tax and Economic and Monetary Union
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Greg Clark
That goes to the heart of our concern, because under the mechanism set out, we would be under such an obligation, which we consider to be a breach of the protections we enjoy, in particular not to have to incur costs when the benefits do not flow to a non-participating member state. That is precisely one of our objections.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Does the proposal not expose the beguiling attraction of allowing enhanced co-operation as a gesture of good will to our European partners, when in fact it is a trap enabling them to exercise powers through qualified majority voting, without our participation, which then creates obligations in relation to our own financial transactions, even though they might be taking place outside the EU? My right hon. Friend expresses support for co-operation between free, sovereign states in their tax affairs, but that is not what we are talking about here, because enhanced co-operation is likely to result in obligations that are enforceable in European Community law, even though we have not had a chance to vote on them.
Greg Clark
My hon. Friend makes a powerful point. That is precisely why we are challenging the legitimacy of the proposal. The enhanced co-operation procedure is available to member states provided it is legal and compliant with the treaty, and our view is that it is certainly not. In particular, the extra-territorial effects—exactly what my hon. Friend is concerned about—are contrary to article 327 of the treaty on the functioning of the European Union, as it fails to respect the competences, rights and obligations of the non-participating member states. Furthermore, the decision to proceed with the FTT has extra-territorial effects for which there is simply no justification in customary international law. The Select Committee has been prominent in its scrutiny of that, and no doubt its Chair will have something to say about it.
We should consider the economic effects of the tax as well as the legal issues. What we are discussing is obviously very important to the economy of the United Kingdom, where 2 million people are employed in financial and related professional services. That sector has created a trade surplus for the country at a time when I think all nations should be trying to increase their trade, and its activities are highly integrated with those in other EU countries. Our best estimate is that 30% of over-the-counter derivatives trading in London involves a counterparty in a proposed FTT zone country; similarly, about 30% of investors in UK gilts are located overseas, which means that the FTT is even likely to affect UK Government funding costs.
However, it is not only the financial sector that would be affected. The European Association of Corporate Treasurers, which represents those who manage companies' finances throughout Europe, has said, very explicitly, that the FTT
“will fall on companies in the real economy, and compound the negative effects of the financial crisis.”
In this country, the CBI agrees.
Greg Clark
The hon. Gentleman makes a powerful point, and I was wrong in seemingly indicating that it was only Government Members who share some of these concerns. He has a long and distinguished record of being not only concerned but an active force in drawing attention and suggesting remedies to some of these matters.
On the proposals before us, one suggestion that has been made is that there should be new mechanisms to increase the level of co-operation between national Parliaments and the European Parliament to contribute to this process—it certainly will not be the end of the matter. It has been stated that how it is done is a matter for the Parliaments to determine themselves. I understand that the Conference of Speakers of EU Parliaments agreed in April to set up such an inter-parliamentary conference to discuss EMU-related issues. The conclusions of that meeting state that the conference
“should consist of representatives from all the National Parliaments of Member countries of the European Union and the European Parliament”.
That reflects one of the recommendations in the Select Committee’s report.
The Government have consistently highlighted the importance of these issues since the December European Council. For example, it was highlighted by the Prime Minster in his Bloomberg speech in January, when he set out his agenda for EU reform. He was clear that the future European Union we need must entail a bigger and more significant role for national Parliaments. He said:
“It is national parliaments, which are, and will remain, the true source of real democratic legitimacy and accountability in the EU”.
My right hon. Friend the Foreign Secretary has said that
“if the European Parliament were the answer to the question of democratic legitimacy we wouldn’t still be asking it.”
He went on to outline a concrete set of ideas, including the proposal to have an EU “red card” system that would allow national Parliaments, working together, to block legislation that should not be agreed at the European level. Furthermore, we have said that we would support calls by this House to summon a European Commissioner to explain a proposal directly to this Parliament if the Committee demanded it.
Mr Jenkin
I wholeheartedly support the principles set out on the primacy of national Parliaments in the Prime Minister’s Bloomberg speech, but neither of the proposals that the Minister has just mentioned—the red card and the summoning of an EU Commissioner—addresses the primacy issue. The red card just creates another opportunity for our national Parliament to be outvoted by other national Parliaments, and summoning an EU Commissioner has no legislative effect whatsoever. What are the Government going to table in concrete terms that will assert the primacy of national—
Mr Deputy Speaker
Order. Mr Jenkin, I have mentioned that we want short interventions. That was your second intervention and you are hoping to speak as well. If you want Members to get in, we are going to have to use the time well—it is going very quickly.
Chris Leslie
It is a sentence that takes note of something self-evident. Of course there is a challenge—we all know that there is a challenge and that the Minister’s agenda is to try to throw a spanner in the works and do what he can to stop that European variant of the FTT. He should consider what is in the motion; we did not particularly want to remove any of those other aspects of it. Taking note of the challenge was quite a good bit to leave out. Let me restate the case on which we must focus.
Chris Leslie
I want to make some progress, as there is not much time.
For the longer term, we must recalibrate the contribution of financial services to society. Of course, we must nurture a revival and restoration of the City of London’s primacy as the most trusted and professional place for financial transactions, but we cannot ignore the fact that most other jurisdictions are revisiting how banking and finance pays into society and what sort of responsibility we seek.
We have heard already from my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) about the IMF report after the G20 in 2009, which sought to think through new ways for the financial services sector to make a fair and substantial contribution to meeting the costs associated with Government interventions to repair it. In this country the interventions, in one form or another, cost near £1 trillion.
When in government, we started with the bank bonus tax, a payroll tax implemented by my right hon. Friend the Member for Edinburgh South West (Mr Darling), the former Chancellor. We thought that was a good idea then and we still think it is a good idea today. The Government then came along with the bank levy; we think that it is a good idea, but it has been poorly enforced. Ministers promised £2.5 billion in every year, but two years ago it raised just £1.8 billion and last year just £1.6 billion. Ministers keep coming back to the House and saying, “Don’t worry, we’ll deal with this shortfall.” The Minister has said that on numerous occasions, but we will believe it when we see it.
A bank levy and a bank bonus tax can only be part of the bigger picture. We must recognise that there is an ongoing systemic risk from financial services innovation and trading beyond the mainstream banks.
Economic Growth
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Mr Bernard Jenkin (Harwich and North Essex) (Con)
The right hon. Gentleman has seen the Prime Minister’s draft Bill. If it became an Act of Parliament requiring a future Government to move an order to set a date for a referendum before 2017, would he do so?
Ed Balls
I have just explained that we do not support the idea of legislating now for a referendum four years ahead, for precisely the reasons that the Engineering Employers Federation, London First and Lord Heseltine have set out and I have set out in our amendment, as have my colleagues. I think that it would destabilise investment and jobs.
Mr Osborne
As our Scotland analysis papers show, Scotland would have to apply to join the European Union as it became a new state. I am glad the Scottish National party is taking part in this debate on economic policy. Perhaps we will get a clearer view from SNP Members, after the shambles of the past three weeks, of what their policy is on the currency that Scotland would use, should Scotland vote to leave the Union. We have not had a clear answer. Some members of the SNP have said that Scotland should have its own currency, others have said that Scotland should join the euro, and still others have said that they would negotiate a monetary union with all of us in order to keep the pound. There is complete confusion in the SNP ranks and until they have a clear answer to that, they will not be listened to on much else.
Mr Jenkin
Does my right hon. Friend agree that the Government are committed to what one might call a policy of negotiate and decide, although that has a familiar ring to it? Would it not help the clarity of this debate if the Government set out exactly what they intend to negotiate on? That has not been clear from anything they have so far said.
Mr Osborne
As my hon. Friend knows, and he takes a close interest in these matters, this is the beginning of a process of setting out what we want to achieve in a renegotiation, and in a conversation about that. Of course, we will then seek to achieve that renegotiation, achieve that new settlement—I am confident that after the election the Prime Minister and a Conservative Government will be able to achieve that—and put it to the British people in a referendum.
Richard Ottaway (Croydon South) (Con)
As a secondary modern schoolboy, I am always pleased to follow the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke).
In the regrettable absence of a debate on foreign affairs, I will use today’s theme to focus on the EU’s rule in economic growth. The British economy is not an isolated beast. It is part of a global economy and, in particular, a European economy focused on the EU. That European economy needs reform, but we need to be part of it.
Global economic success is to be found in single markets around the world. We should look at the economic growth in Brazil, Russia, India, China and the USA. What do those countries have in common? They are all single markets. The EU single market, an invention of Margaret Thatcher, which stretches from Athens to Oslo, is the largest single market in the world. We in the UK are 60 million in a world of more than 7 billion—less than 1%. Do we want to face the global markets alone or as a member of a trading bloc that represents 500 million people?
What is the alternative? Perhaps we could be outside the EU, negotiating our own terms of trade. Perhaps we could be an independent sovereign state, calling the shots on our own terms like Norway and Switzerland. Those propositions may sound attractive, but I disagree with the Secretary of State for Education, who says that life outside the EU would be “perfectly tolerable”. Norway and Switzerland do not call the shots. They pay billions every year for access to the single market and Switzerland has been forced into renegotiation.
We would have to renegotiate our own free trade agreements. The holy grail of trade agreements is an EU-US deal. We would look pretty dumb if we were leaving the EU just as it was signing up to such a trade agreement. Imagine the impact on our car industry, which exports five out of every six cars made in the UK, if it had to pay the EU import tariff on cars of 9.6%. Where would a foreign car manufacturer invest, faced with that situation?
Mr Jenkin
The United Kingdom has a trade deficit with the other 26 EU member states of £70 billion. I cannot imagine that the EU would want to cut itself off from the British market by getting into a trade war with the United Kingdom. May I also point out that we export more to the rest of the world than to the EU? The EU is declining in relative terms, whereas markets in the rest of the world are expanding. Surely we are a global trading nation, not just a regional trading nation, and that does not require us to be a member of the single market.
Richard Ottaway
We can all trade statistics on who trades what with whom, but about 50% of our exports are to the European Union. We export four times as much to the EU as to the United States.
Richard Ottaway
I will not give way.
We sell more to Sweden, which has a population of 9 million, than to India, which has a population of 1.1 billion. That is the truth of the matter.
Richard Ottaway
I am not giving way.
The EU is not going to let us set up an offshore free trade island like Hong Kong, undercutting its industries. We will have to pay for access to the single market. The EU will dictate the terms of trade, and we will still be under the thumb of Brussels. I say to my hon. Friend that that is not gaining sovereignty, it is losing it. The plan to impose an EU-wide financial transaction tax is just a warning shot. As a member of the EU, we can go to the European Court of Justice and challenge it. Outside the EU, it would simply be imposed and we would just pay the tax.
I say to the Economic Secretary that his policy on the eurozone is spot-on. Supporting policies that will stabilise the single currency area and encouraging growth through integration is exactly the right approach. At the same time, we expect the Treasury to keep a watchful eye on the national interest in the single market. A good example of that is the agreement on the single supervisory mechanism in the banking union, which shows the clout that we still carry in the EU and how we protect our position inside the single market but outside the eurozone. He should continue with that approach. That example also illustrates how far we have come in building alliances inside the European Union since the veto in December 2011. Inside, we simply have more strength.
No one denies that the EU needs reform, and I am no great Europhile on this. [Interruption.] May I say to my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) that that sort of contemptuous laugh does no good to the debate whatever? No one denies that the EU needs reform. Primarily, it has to choose between being a social market economy and being something tougher. In his Bloomberg speech, the Prime Minister set out a course of action that recognises British Euroscepticism but keeps us at the table, using our influence. Within the EU, the UK will continue to thrive as a major player on the world stage and our economy will be stronger, but outside, I believe that the future will be bleak.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
When I received, somewhat to my surprise, a telephone call from my hon. Friend the Member for Basildon and Billericay (Mr Baron), inviting me to add my name to an amendment that regretted the absence of an item in the Queen’s Speech, I confess I was somewhat astonished. I think it a mark of the enormous shift in opinion that is taking place on what has for decades been a matter of fundamental consensus in British politics that we find ourselves straining the conventions and normal behaviour, and even the Standing Orders of the House, to accommodate this debate. I say to my hon. Friend the Member for Croydon South (Richard Ottaway) that I utterly respect the sincerity of his views, and I was expressing no more than frustration that he would not allow me a spare minute of his time to explain the statistics on which I think this fundamental debate should be based.
I agree with the terms of the amendment and will support it, although I might not have tabled it myself. I doubt that some of the noise and discord around this issue has impressed those who failed to support us in the elections two weeks ago, reflecting a certain and widespread despair about the ability of all three main parties to keep their promises on referendums, which has become an emblem of the distrust in which so many of our voters hold the British political establishment.
Mrs Anne Main (St Albans) (Con)
Many members of the British public, whether they hold the views of my hon. Friend the Member for Croydon South (Richard Ottaway) or those of my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) and indeed myself, would like to have the discussion. We went into a referendum on the alternative vote with a discussion led by the Prime Minister, who was not in favour of it, and other Members held honourable positions on the issue. This is about giving the discussion to the British public, however they would like to view it.
Mr Jenkin
I am grateful to my hon. Friend for that intervention. I will not debate at length the quality or timing of an EU referendum, although I think that those who voted for UKIP and are likely to do so in next year’s European elections will not be impressed unless we make every effort to hold a referendum as soon as possible, rather than when it suits the three main political parties for whatever reasons we have to continue putting it off.
I wanted to say to my hon. Friend the Member for Croydon South that I have the figures from the House of Commons Library, and our total earnings from abroad constitute 44% of our GDP. We are a global trading nation and trade a higher proportion of our GDP than any other major European state. Trade with the EU comprises 19% of GDP, and 25% with the rest of the world. The rest of the world is the growing proportion; the EU is the declining proportion. Manufacturing is the only part that would be excluded, by virtue of the tariffs that were mentioned earlier by my hon. Friend, and manufacturing exports to the EU comprise 10% of GDP, and 10% to the rest of the world—a substantial and important part of our economic activity.
The point is that there is no evidence that we would not continue to trade that proportion of our manufactures with the European Union—incidentally, the figures are inflated by what we know as the Rotterdam-Antwerp effect because a lot of what we export to the EU is instantly exported to the rest of the world. We are regulating our entire economy and burdening our taxpayers with the costs of the contribution—rising to £19 billion gross—with our membership of the European Union. One hundred per cent. of our economic activity is burdened with those regulatory costs for the sake of less than 10% of our overall GDP.
Sir Bob Russell
May I ask my neighbour and parliamentary colleague whether anything he has just said could not have been said by a member of UKIP?
Mr Jenkin
I totally agree. The irony of this debate is that a lot of people in UKIP are saying things that are similar to what is felt by a lot of people who would like to vote Conservative at the next election. There is a majority in this country, and I think the Prime Minister was right to say that he wants a different relationship—a new relationship with our European partners.
This entire debate is conducted on the premise that membership of the single market is indispensable to our national interest, is it not? Those who say we must remain in the EU come what may believe that the single market is indispensable to our national interest, but here are the facts. I have already mentioned how little of our GDP that we export in goods would be subject to tariffs were we not to have a free trade arrangement with the EU—probably around 8.7% of GDP. The idea that 3 million jobs are dependent on exports to the EU and that we would lose them if we left is a myth. There is no substantial evidence that we would lose any jobs. On the contrary, if we had a freer and less regulated economy, we would probably create more jobs by trading more easily with the rest of the world.
The EU is in long-term structural decline and our non-EU markets are expanding. The UK enjoys a trading surplus with the rest of the world—with which we trade much more effectively—and we have a £70 billion trade deficit with the EU. The rest of the EU would therefore not want a trade war with the UK; it would not be in its interest. The idea that Ireland, or even Germany, would enter a trade war with the UK is absolutely ridiculous.
By the Commission’s own admission, EU red tape costs 4% of the EU’s GDP. The single market does not reduce the costs of doing business in the EU; it is a regulatory burden on trading in the EU.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Will the hon. Gentleman give way?
Mr Jenkin
I am not going to give way.
The EU internal market has become an end in itself—it is a means of promoting political integration. We must accept that, in the minds of our European partners, the single market is indivisible from the treaties. Even if the UK were to leave the EU altogether and apply for article 50, the EU would be legally required to negotiate free and fair trade with non-EU countries, so we would continue to have access to EU markets. That different perspective, which voters and large parts of business are beginning to appreciate, is shifting the burden of the debate.
Are we doing the right thing in creating such long uncertainty by putting off a referendum until 2017? Should we not have the referendum much sooner to bring the debate to a head? Are we too scared of our own voters to face the truth?
Mr William Cash (Stone) (Con)
Basically, I regard the whole question of having a referendum as fundamental. I led the Maastricht referendum campaign, and the question now is about the same fundamental questions we were addressing then. This is the problem: nothing has changed, but much has got worse. The real problem is one of urgency. This is not just about an abstract theory of sovereignty; it is about the economy, who governs Britain and whether we can achieve economic growth, which is what the debate is actually about. We cannot achieve economic growth in the circumstances I shall now describe. In my judgment, it would be wrong to wait until 2017, given that the situation is so urgent, as hon. Members will hear in a moment. The British Chambers of Commerce, which represents 104,000 businesses and 5 million employees, is concerned about the delay and the uncertainty that goes with it and about over-regulation.
It is generally acknowledged by all parts of the House that our relationship with the EU has to change, but the trouble is with the institutional treaty changes, on which I have had meetings in Brussels. I saw Mr Van Rompuy only 48 hours ago and also Mr Olli Rehn, and the fact is that they are on a railway line, and are continuing along it. They talk about destiny, contracts with other countries—unenforceable as they might be—and more centralisation. The European Scrutiny Committee had an interesting meeting on that.
Mr Jenkin
In his travels around Europe, has my hon. Friend gained the impression that there is any appetite in the Commission or among our European partners for substantial treaty change that would allow the United Kingdom to have a different relationship with the EU while remaining signed up to the existing treaties?
Mr Cash
It is my opinion, based on extensive discussions yesterday and over several months, that there is absolutely no prospect of any changes that would even begin to alter the circumstances we are now in and which are pivoted on the existing treaties.
The problem is one of debt and deficit. We cannot pay for the public services needed in the country, whether health, education or whatever. I hear the point from Opposition Members and I agree with some of their arguments—it is not right that people should be deprived of services—and I do not believe that the entire answer depends on cuts. It depends on the subject of this debate, which is economic growth. We can grow with the rest of the world. We are running a trade surplus of about £13 billion with the rest of the world, other than the EU, with enormous potential in south-east Asia, India and Africa, which is where the emerging markets are. This is where we have to concentrate our efforts.
On our trade relations with the other 26 member states, I ask hon. Members to take account of the following very alarming figures. Two weeks ago, during a debate on the Maastricht treaty and the convergence criteria, I gave what was then the latest figure, which was that we were running a trade deficit with the other 26 of £47 billion. Now, some might think a deficit of that scale is an awfully big loss, but the following Monday the new figure came out. In one year, the deficit had risen from £47 billion to £70 billion. Furthermore, the German surplus, which was running at £30 billion, rose to £70 billion between 2011 and 2012. It is essential that we take note and hold this referendum—and hold it urgently—because we have to deal with fundamental changes in the relationship that will enable us to disentangle ourselves from the spider’s web that we have got caught up in and which we have not asked the British people about since 1975. It is a vital question of national interest, and I beg hon. Members to listen.
Mr Jenkin
Is not the corollary of what my hon. Friend is saying that if we follow the programme of the Labour party and continue to pursue a policy of closer integration and more burdens on our economy, it will mean more cuts, more borrowing, slower growth and more unemployment than if we sort out this relationship?
Danny Alexander
I was not aware of that fact, but the House will remember what happened in 2009 and who was responsible.
The single market helps the UK to attract inward investment. As part of the largest single market in the world—it has 500 million people and is worth £11 trillion —the UK hosts more headquarters of non-EU businesses than France, Germany and the Netherlands combined. UK consumers benefit from EU regulatory standards, and the collective voice of EU member states helps to advance UK interests and influence throughout the world, as the US President said only this week.
Mr Jenkin
What evidence is there that the United Kingdom would be unable to negotiate a free trade agreement of its own with the United States if we were not part of the European Union and that we would not be able to negotiate a free trade agreement with the European Union if we were outside it? The treaties say that the EU would have to do that.
Danny Alexander
I respect the sincerity of my hon. Friend’s position. He has expressed those views for very many years and has done so coherently. As a politician, I believe, however, in breaking down barriers between peoples, not erecting new barriers, and I was making this point at the Scottish Affairs Committee today on the subject of Scottish independence. So of course it would be possible to strike these agreements, but the net effect on the UK economy of such an approach would be much less advantageous than being part of the largest single market in the world. The collective voice of the EU helps to advance UK interests.
Banking Union and Economic and Monetary Union
Bernard Jenkin Excerpts(12 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Greg Clark
My hon. Friend is entirely right. I do not think that we should be shy about insisting on protecting something that is very important to us. The single market in financial services is essential, and the current proposals would compromise it.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I, too, welcome my right hon. Friend’s approach, but may I caution him about the double-edged invocation of the single market? We are threatened not just by the voting rights in the European Banking Authority, but by those in the Council of Ministers. It is equally possible that the member states of the eurozone that are in the banking union will caucus in the Council and use a single-market measure to create a single market in banking services to reflect the policy already adopted by the banking union. How are we to be protected from that?
Greg Clark
My hon. Friend is right to be alert to those dangers and risks. One of the clear principles on which we have insisted throughout all our negotiations on all the different dossiers is that we will accept nothing that would compromise our ability to participate in the single market.
Let me say a bit more about our stance on the EBA. What is currently proposed would not just require but enable members of the eurozone to caucus and adopt positions, which poses the clear risk that the ECB could dominate EBA decision-making. Given that 17 of the 27 EBA members are in the eurozone, that would constitute a blocking minority on all issues decided by qualified majority voting, and indeed a qualified majority under the new Lisbon rules.
Moreover, such action by the Commission would create an asymmetry of treatment between supervisory bodies. The proposal reflects the legal position that, as an EU institution, the ECB cannot be legally bound by EBA decisions on binding mediation, whereas the Bank of England could be. We have argued since the start of the negotiations that it would be inequitable and unacceptable if the Bank of England could be directed in that way but the ECB could not. We are pleased that our concerns are finally being acknowledged, but the asymmetry must be resolved if there is to be any final agreement.
As is required by both the motion and the amendment tabled by the Chairman of the European Scrutiny Committee, my hon. Friend the Member for Stone (Mr Cash), we will certainly use what the amendment describes as our
“best endeavours to ensure that the proposed changes…in the European Banking Authority are not adopted”.
In fact, that is an uncharacteristically mild form of words from my hon. Friend. We will insist that those changes are not adopted, and we will require full protection for the position of the United Kingdom and the other non-eurozone members in the EBA.
Greg Clark
I am grateful to my hon. Friend for that. I am not as familiar as he is with what went on in the previous exchange of correspondence, but I can say that it is essential that the arrangements need to be legal. There is no point marching up a hill of banking union if the whole thing falls apart—I mix my metaphors, but he understands what I mean. There are also other matters on which we will need to be satisfied before any of the proposed measures can be adopted.
Mr Jenkin
My right hon. Friend made an important point when he said that the British Government would reserve their position on the legality of this new instrument and how it might be used. Will he just expand on that? Would it not be sensible for UKRep to write a letter similar to the one written in the case of the fiscal union treaty, at the very least, in order to make that clear?
Greg Clark
I do not think that there is any difference between us on this. It is essential that this arrangement is legally sound. At the moment, the negotiations are continuing and the shape of the regulation is evolving, but the sensible commitment I have given is to make sure not to proceed unless we are satisfied that it is legally robust.
Let me talk about some of the other measures we need to bear in mind. We must make it absolutely clear that both now and in the future there should be no requirement, for example, for clearing houses that handle significant amounts of euro-denominated business to be located geographically in the eurozone, as proposed by the ECB—a proposal against which we have launched legal proceedings. That blatantly undermines the single market and the United Kingdom’s financial services industry. It is a poor indication of the ECB’s attitude if it intends to proceed in such a way. We need to be clear, too, that London is home to more clearing houses than any other EU capital and such proposals are unacceptable.
As the House will see, there is some way to go before the banking union proposals are acceptable to the Government. They will not be agreed by the United Kingdom unless and until we are satisfied that the UK’s position in the single market has been secured.
Let me turn briefly to the document known as the four presidents’ report, which was published on 12 October. It is an interim report that gives a general overview of the measures that the euro area member states might want to consider taking to improve the functioning of the euro. At this stage, there is little detail in the report apart from in the area of banking union and a great deal more discussion will be needed before there is agreement even on which issues should be explored further. The House will have a particular interest, however, in the discussion about democratic legitimacy and accountability.
I emphasise again that although the UK will not be part of the arrangements, it seems to me to be important that when significant decisions are being taken at the eurozone level about national matters, national Parliaments should be able to scrutinise those decisions, just as the Bank of England, the UK regulatory authorities and not least Ministers are accountable to this House and the House of Lords.
Chris Leslie
It is right for the hon. Gentleman to voice that anxiety. I do not want us to be on the margins, unable to promote the best interests for our nation and our economy. Given that our financial services sector represents approximately 40% of the total of the European Union’s financial services sector, that is absolutely at the core of our vital national interests. It is therefore imperative for us to remain an active driving force in the EU single market in financial services.
Mr Jenkin
It seems to me that the hon. Gentleman is trying to have his cake and eat it. Either he is going to be in the room—in the banking union—or not. If he is not going to be in the banking union, the question that he is failing to grapple with is this: what safeguards and protections do we need given that we will not be in the room because we will not be in the banking union? Perhaps he could provide an answer to that question instead of just waffle.
Chris Leslie
The hon. Gentleman is too kind, as uncharacteristic of him as that may be.
I am afraid that this is a tall order for the Government to negotiate. It is a conundrum. I do not in any way shrink from the mountain that needs to be climbed in squaring this circle, if I may mix my metaphors in that way. I am just concerned that the Government’s approach—perhaps an echo of their approach to the EU budget—is not ambitious enough. I urge hon. Members to talk to institutions across the City of London and to financial services practitioners across the country. They are very worried about their position if they are not able to be part of a single market. They know very well that there are forums in which the rules will be made and shaped, and yet of course they want to reserve our rights from a UK position. Somehow, we have to try to forge a negotiating strategy that manages to do better.
Mr William Cash (Stone) (Con)
I beg to move amendment (a), in line 10, leave out from ‘and’ to end and add
‘whilst welcoming the Government’s desire to seek safeguards for the UK, calls on the Government in respect of Regulation (EC) No. 1093/2010 to use its best endeavours to ensure that the proposed changes in the voting rights in the European Banking Authority are not adopted, to use its veto in respect of European Union Document No. 13683/12 so as to ensure that the powers of the Governing Council of the European Central Bank are not unlawfully delegated to the Single Supervisory Mechanism without an amendment of the treaties and/or to refer that matter to the European Court of Justice for adjudication of that proposal.’.
I am deeply troubled by the wording of the motion. In my judgment, it simply does not make sense to state that the House should welcome
“the Government’s decision to remain outside the new supervisory arrangements while protecting the single market in financial services.”
We acquiesced in to the Lisbon treaty, the Labour party agreed to the transfer of jurisdiction over the City of London to the EU, which was wrong—the Single European Act was never remotely intended to produce such a result—and, furthermore, views I have received from the City clearly demonstrate that it does not believe that the proposals in the motion will protect the UK or a single market in financial services.
There is another massive issue about the rule of law in Europe. The Foreign Secretary, in his speech to the Körber Foundation conference in Berlin a fortnight ago, said that what bound us together in the EU and the reason for the Government wanting to remain part of it was that it
“has helped to spread and entrench democracy and the rule of law across Europe.”
The tragic reality is that the EU does not subscribe to the rule of law. On 17 December 2010, Madame Lagarde said about the first bail-out fund, the European financial stability mechanism:
“We violated all the rules because we wanted to close ranks and really rescue the euro zone.”
Germany and France themselves broke the stability and growth pact. Furthermore, both the Government and the Attorney-General are clearly of the view that the agreement on the fiscal compact was unlawful, but in reality nothing has been done—hence my call for the legal reserve on this matter, although the legal reserve issued before has never been implemented.
The Government know that the proposals referred to in the second part of my amendment are unlawful. The Council of Ministers’ own legal adviser, in a lengthy opinion which I have seen and which the Government cannot dispute, states that there will have to be an amendment to the treaties if the powers of the governing council of the ECB are to be delegated to the single supervisory mechanism.
The legal opinion says on the proposal amending the EBA regulation, in effect, that in terms of the EBA’s dispute resolution powers there is no justification for treating the ECB differently from banking authorities in non-eurozone member states by exempting it from those powers. To do so would be a clear breach of the principle in law of non-discrimination.
As to the proposal giving the ECB prudential oversight of credit institutions in the eurozone, the legal opinion states that in establishing the single supervisory mechanism the council must respect the legal framework for decision making within the ECB set by primary law—that is, the treaties. This framework does not allow the ECB’s governing council to delegate decision-making functions on banking supervision to a subsidiary body such as the SSM. There is nothing in the legal base for the SSM proposal, in article 127(6) of the treaty on the functioning of the European Union, which would permit secondary law—that is, this draft regulation—amending the rules laid down in primary law. There is no question about it and the Government know that.
Non-eurozone member states are not entitled to participate in the ECB’s decision making, so they can have no formal decision-making role in the SSM as conceived. Furthermore, the law on banking supervision in the EU will be made up of directives to a significant extent. This is a requirement of the treaties. That means that the ECB cannot propose one-size-fits-all legislation on banking union. Rather, it can propose legislation which allows for differences in national transposition.
We simply cannot countenance a situation in which there is a wilful breach of the rule of law and where the dysfunctional European Union vaunts the rule of law, yet deliberately breaks its own rules. This is precisely what led to the kind of constitutional crisis that we have seen in our own history when Governments from the Stuarts onwards claimed a divine right to rule but then broke the common law. This is the primrose path to constitutional disaster not only for the United Kingdom, but for Europe as a whole. I hope the House will understand my concern, as I suggested back in the 1990s that this would happen.
I hear what the Minister says but I cannot understand why and how, given comments that I have received from the City of which I am sure he is aware. Those in the City make it clear that the single market would be put at risk by an imperfect single market in financial services in which rules differed by level of membership of the EU. Furthermore, they say:
“It is essential that voting arrangements within the European Banking Authority are clarified so as to avoid members of the Banking Union voting together en bloc and imposing financial regulation on non-Eurozone members through qualified majority.”
For “clarified”—
Mr Jenkin
Does my hon. Friend agree that for us to invoke the single market is doubled-edged, because in the end it will be the Commission that invokes the single market as a pretext for levelling the playing field which has been unlevelled by measures taken by the banking union? We will therefore finish up with measures that we do not want being imposed on us by qualified majority voting.
Mr Cash
That is precisely right. It was never intended when we voted—and I voted at the time, with a reservation about the sovereignty of the United Kingdom Parliament, which I was not allowed to debate—that we would be in this very position. That was in 1986 when I voted for the measure, but it was with that reservation.
To complete my point, where the comments from the City say “clarified”, I would say changed. We must change the rules, not merely clarify them, but we cannot do so because of QMV. That is the problem and it comes from the Single European Act.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
In some respects, this is a modest debate compared with last week’s, although it is worth reflecting that employment in the City, as reported by City AM, has collapsed by more than 100,000 since the peak of 2007. Some of that was self-inflicted, but much of it was inflicted by increased regulation. The Centre for Economic and Business Research reports that employment in the City is set to fall much lower. Most of the jobs are highly paid, high-taxpaying jobs, on which the economy in general and the economy of London and the south-east in particular depend very deeply.
I commend the sincerity of my right hon. Friend the Minister’s approach. He is in a difficult position. The difficulties he is confronting are a microcosm of the conundrum of the UK’s place in the EU. We are not in the room, so we cannot function as a positively engaged member of the EU on our current terms of membership, but we are also not negotiating the alternative terms of membership that would protect us from the effects of the treaties we have already signed.
It needs to be pointed out that banking union simply was not envisaged in the Lisbon treaty. We now find ourselves confronted with a new institution and a reform that simply was not regarded as necessary when the Lisbon treaty and its predecessors were signed. The treaty is not fit for purpose for a banking union.
The problem is that no arrangements that nibble at those problems will protect the UK’s interests—a wholesale change in our relationship is the only way to protect them. Sadly, the motion represents the Government yet again passing up a substantial opportunity to start laying the foundations of a different relationship and to start leveraging the renegotiation of our terms of membership. That is a matter of great significance.
Andrea Leadsom
I am grateful to my hon. Friend, but I have to challenge him, because I think that the Government are absolutely committed to renegotiating. Why does he think that they are not?
Mr Jenkin
Unfortunately, our party’s leadership does not intend to start substantive renegotiation of our relationship until after 2015, long after this particular opportunity will have passed us by. If we attempt to remediate this measure and its effects on our interests, we will not succeed. This is happening in case after case—the fiscal union treaty is another example.
Mrs Anne Main (St Albans) (Con)
Does my hon. Friend agree that we should use every opportunity and not waste any of them? We have an opportunity to make a difference. If we just keep noting everything and do not use our opportunity, that will be another chance gone and the electorate will not forgive us for it.
Mr Jenkin
I am afraid that my hon. Friend is right that failure to get the maximum leverage out of these opportunities means that they will be forgone for ever. We may well get to 2015 and find that all the major decisions to federate the eurozone will have already been taken and our opportunities to then renegotiate will look slim and incredible.
I will close by picking up on the contribution of my hon. Friend the Member for Stone (Mr Cash), who is the Chairman of the European Scrutiny Committee and whose comments add a Götterdämmerung-like quality to this debate. Hitherto, the architects of European integration have, like the gods in “The Ring”, attempted to construct their Valhalla on the basis of principles and the rule of law, yet they are now compromising those very principles, on which the legitimacy of this structure depends, and, in doing so, sowing the seeds of their own destruction.
If this was being done properly—I invite the House to reflect on this—it would be a treaty change and there would be an intergovernmental conference. There would be a huge amount of debate about what other changes needed to flow from an intergovernmental conference and we would end up with a whole Act of Parliament, which would have to pass through both Houses of Parliament in this great building. The issue, however, is being debated in a mere 90 minutes on a quiet Tuesday afternoon before the Minister is sent—haplessly, perhaps —to the Council of Ministers to either agree or disagree with these momentous changes.
Major changes are being made in a more casual manner as the European Union becomes more desperate to shore up its previous mistakes. “Macbeth” comes to mind: the worse a situation gets, the more rash and irrational the actors become in defence of the indefensible. I hope that right hon. and hon. Friends will remember this debate, because the move from legality to illegality is a very big step, yet that is what we are witnessing as the Government approach this particular decision. I hope yet that they will see sense and veto the proposal.