Multiannual Financial Framework
Debate between Bernard Jenkin and Denis MacShane(12 years ago)
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Mr Bernard Jenkin (Harwich and North Essex) (Con)
The speech by the hon. Member for Preston (Mark Hendrick) sounded more like a speech in favour of an increase in the European budget, albeit disguised as a speech in favour of a cut, because that happens to be what he is being asked to vote for today.
I note that passions are high in this debate, not least among my hon. Friend the Member for Banbury (Sir Tony Baldry) and the hon. Member for Ilford South (Mike Gapes). Let me assure them both—because I think they come from the same European stable—that the last thing those of us who support the amendment want to do is wreck Europe or to wreck our relationship with our European partners.
But something very big is happening in British politics—much bigger than this debate. We are debating the European multiannual financial framework, but there is something rather familiar about the positions being adopted by those on the two Front Benches. One could almost imagine that, if they were to change places, each would be making the other’s speech. Indeed, in the last Parliament, one felt that that was exactly what was happening. There is something deeply disconnected about the debates that we have been having in the House about our future relationship with the European Union, and about the aspirations of the British people and what they want that relationship to be.
I would caution my right hon. and hon. Friends against taunting Labour Members over their volte face on this issue. I have no doubt that they have made a volte face on the question of European spending, but for us to accuse them of doing so will cut absolutely no ice with the voters. I would note, however, that the Labour party’s volte face represents a big shift in the politics of this country and in the politics of our relationship with the European Union. Labour is an opposition party that is hungry for power. Even Labour Members can now sense the tide of opinion that is flowing against the European Union among our voters. They are picking up the vibrations from their constituents and from the voters they need in order to get elected, and they have discovered a new principle in order to reflect that: they now want to cut the European budget.
Mr MacShane
I am deeply grateful to the hon. Gentleman. Whether this is a volte face or a volte farce I am not quite sure, but he is quite right to say that the tide is flowing; it is flowing to Labour and away from the Conservatives.
Mr Jenkin
I believe that the Labour party is picking up the anger of the British people about the idea of spending more money on European policies when we are having to cut back on policies of our own.
There is something rather chilling about the exchanges between those on the Front Benches, which tacitly suggest that a veto is a defeat and that it could lead to a worse budgetary outcome for the United Kingdom than could a negotiated settlement. That seemed to be the burden of the argument put by the hon. Member for Nottingham East (Chris Leslie). I should just like to point out to him what that says about the relationship that we now have with the European institutions. Those institutions are so overpowering and so powerful that even the veto of the Prime Minister of the United Kingdom cannot stop the European train on its way to its destination. The British people feel that something has gone wrong with that relationship. This was not the basis on which we were sold membership of the institution, and it was not the basis on which all the assurances were given by successive Governments that each treaty represented no substantial change and was just a “tidying-up exercise”.
Mr Denis MacShane (Rotherham) (Lab)
To every thing there is a season, and a time to every purpose under the heaven. Without indulging in some of stronger language and rhetoric of different colleagues, I say that this may be an important parliamentary moment, because the British people decided in May 2010 not to give any of us a majority. I think they wanted a different kind of Parliament to emerge, one that was a bit freer, a bit more liberal and a bit less whipped; I am a party animal myself and the Whips are necessary, but perhaps tonight some signal can be sent that we are listening.
There are technical points that can and cannot be made. I would dearly love to see, in South Yorkshire or perhaps in Northern Ireland, every public servant’s salary reduced to €100,000—about £80,000. If that salary level was applied, there would be a revolt in Whitehall, and among Cabinet Ministers and senior Ministers of State, if not perhaps among junior Ministers of State.
We have heard the language of “betrayal” used, and I think that is silly, because the country is going through a serious discussion about what its future relationship with Europe will be. The people have never elected Mr Nigel Farage or the UK Independence party to a seat in this House, although they have elected him to the European Parliament. However, his spirit has been present in much of tonight’s debate.
We are facing a fundamental divide, as there are two approaches to European politics. We heard one earlier today, when the ten-minute rule Bill was introduced. It was supported by a large number of Conservative Members and it called for the end to the free movement of people in Europe. It was a well-argued case, but of course it utterly destroys the purpose of the European Union if we are to have passport checks at every border and not allow people to live where they wish.
We are now finding that there is a big debate about the money we spend. I take all the points that have been made about cuts, but we could have the same argument about the Department for International Development’s spending, and I might argue about whether the £13 billion we spent in Afghanistan is money wisely spent. Underneath it all is this dichotomy over Europe. There is a debate about being in or out—an honest debate that we are beginning to have—and another debate among those of us who believe we should stay in the European Union about what kind of European Union there should be.
The voting of money is, of course, what determines what kind of policy we have. This budget is the wrong budget, drawn up by conservatives and cautious, complacent centre-right bureaucrats and politicians. It is inappropriate and it keeps the European budget in the same old tramlines of protectionist common agricultural spending and ineffective regional spending.
Mr MacShane
I will not give way. I am very happy with the Speaker’s reduction of the time limit.
Last week, Labour MEPs voted against that budget and for a different priority that would focus on growth, on jobs and on what is needed. That is what I believe should be done, which is why I am happy to vote for the amendment tonight. I am not sure what will happen thereafter. This country will have to face a big question. Tonight it is right that Parliament asserts its authority. That does not mean the end of the debate; it is just the beginning of the debate about whether we stay in the European Union or not.
European Union (Approval of Treaty Amendment Decision) Bill [Lords]
Debate between Bernard Jenkin and Denis MacShane(12 years, 2 months ago)
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Mr Denis MacShane (Rotherham) (Lab)
It is always a pleasure to follow the hon. Member for Stone (Mr Cash). He is the Private Frazer of our European debates. For nearly 20 years I have been listening to him saying, “We’re doomed! We’re doomed!”, “There’s no hope at all”, “Europe is schizophrenic”, “Europe is extreme”, or, “Europe is locked in riots and difficulties.”
That is a good description, frankly, of our country. It is only 12 or 13 months ago that London was set ablaze for three days. The state completely lost control of the streets, and the rioting, looting and burning spread to other cities. We are now the recession queen of Europe. It seems that we are in a triple-dip recession. While the hon. Gentleman complains about the threat of inflation and the printing of money, we are the great printers of bank notes—it is known as quantitative easing—and we are printing them as fast as we can, just as the United States is. By comparison, the European Union is relatively restrained. It has been our banks—some nationalised still, some still in private hands—that have been going to the European Central Bank to avail themselves of cheap-cost euros, to the tune of several billion. My point remains, as always, that we are all in this together.
I am not sure whether the hon. Member for Stone is quoted in Bundestag speeches as Eurosceptics there look for a friendly British voice to pray in aid, just as he assiduously reads The Economist and the Financial Times. Indeed, in the many friendly debates that I have had with him, both in this House and outside, he always has a quotation to sustain his case. However, as somebody who reads the German press a little bit, let me gently say to him that there are quotations and opinions like that bubbling up every day, just as there are in this country. The broad thrust of German economic policy is for stability and open markets. The notion that Europe’s currencies and Europe’s trade should be balkanised is of no advantage to the German economy at all. Far from creating an über-Germanised Europe, Mrs Merkel and the Social Democratic party—I was with some of its leaders at the weekend at a congress in South Africa—are very conscious of the fact that they carry a heavy responsibility. Part of the reason is that they took some tough decisions at the beginning of this century—to hold down wages, recapitalise industry, and transfer a lot of technology offshore to Poland and integrate the new EU member states into the broader German economic zone—while we, sadly, were over-fetishising banks. Now Britain is associated with LIBOR, the collapse of other banks and the great problem of illegal trading in offshore money in Mexico.
We really ought occasionally to put a mirror in front of our noses before we patronise and condescend to other countries. We have always lent money to countries in need. We poured money into Greece in the 1940s after the war and in the 1950s to stabilise it. We did so again at the beginning of the 1960s, when there was a great deal of turbulence in connection with the end of British rule in Cyprus. That has always been a British tradition. Quite intelligently, we prefer to use our treasure rather than shed our blood when things break down in Europe.
We are out of the current arrangement—this kitty of €500 billion. As the Foreign Secretary said—I could not find much to disagree with in his speech, and I am sure that the Bill will receive its Second Reading—we are not directly concerned. However, he went to such great pains to point that out that I thought he was over-striving for effect. Indeed, the hon. Member for Stone is absolutely right on one point: the so-called euro referendum Act, which the Foreign Secretary prayed in aid, is a piece of completely phoney jiggery-pokery. It gives the Secretary of State the sole, exclusive right to say whether there has been a significant transfer of competences or sovereignty to the wider Europe Union. If he alone decides that, he triggers a referendum; if he does not, as with this Bill, there will be no referendum. This is not about a referendum lock or allowing the British people or Parliament to have greater scrutiny or a greater say over European affairs; it is a completely cynical piece of legislation, which frankly is irrelevant to the broader European debate.
Mr Jenkin
Does the right hon. Gentleman not think that there is an inconsistency in saying that we do not want a referendum on this issue, yet vetoing the fiscal union treaty in December? We are effectively consenting to the process of fiscal union by allowing the treaty amendment to go through almost on the nod, effectively abolishing the no bail-out clause, which will be the foundation of fiscal union.
Mr MacShane
The hon. Gentleman makes a fair point. The Prime Minister found himself, through no fault of his own—inexperience, 2.30 in the morning, exhaustion—thinking that he was speaking for half of Europe, but at the end only the Hungarians were left. We created a British-Hungarian empire overnight, and even they peeled off in the end. It was deeply embarrassing. I do not think the Prime Minister actually understood how European decision making works or how to present our case effectively. That is part of the price that the Government pay for opting out of any political engagement with European partners. Working in the European context is a learning curve. It is about building relationships, networking, trading, and give and take. At times, certainly, it is about stamping our foot and not allowing something to go through. Indeed, I was a witness to all sorts of European countries and leaders doing that when I was Minister for Europe. However, in this case the Prime Minister found himself not so much naked in the conference chamber as utterly alone, without anybody else in the slightest bit interested in anything the United Kingdom had to say.
As a result, we will now move forward to a new treaty—the hon. Member for Stone is absolutely right about that. The German Government are quite determined. I was talking to a senior associate of François Hollande over the weekend, and the French now accept that quite soon we will be moving to a serious banking union—a serious treaty—that will do for banking what the Coal and Steel Community did in 1950 and what subsequent treaties did, in placing under broad supranational supervision a good and important chunk of the European economy. There is a huge debate about how far that process should go. Should it, for example, include the small regional banks and savings banks—the cajas, as they are called in Spain? Should banks be closed down, as happens quite regularly in the United States? When banks there are no longer able to stand on their own two feet, they are not bailed out—they are closed down.
Some supranational authority is now being created, however, and the British banking and financial system will not be able to operate wholly independently of that authority, because banking systems are permanently intertwined. Anyone walking through the streets of Madrid, Munich or Geneva will see British high street names such as Lloyds and Barclays operating there. Those banks will come under the control of any banking union. The more we pretend to ourselves that we can stay out of that arrangement, the less influence and say we will have over the new rules as they come into being. That is what really worries me. The notion that expelling Greece from the eurozone and re-drachmatising, if that is the right word, the Greek economy—I always prefer to use a Greek term, so I prefer “grexodus” to “grexit”—will somehow save the British bacon is just foolish.
The hon. Member for Stone is fond of citing YouGov polling in Germany. I did not know that YouGov—“Anything you want, guv”—was now a polling company in Germany as well. If we look at the Irish vote on the referendum to accept quite onerous conditions, we can see that they voted by 60% to 40% to stay in the euro, and any Greek polling will show a massive majority—up to 80%—in favour of staying in the eurozone. Those countries are mature enough to realise that it is their internal policies, not the existence of a currency, that lie at the heart of their economic difficulties. For example, there was no housing boom in the Netherlands, which had low-interest euros to play with, just as the Spanish and the Irish did. Why not? Because people in the Netherlands have to put between 5% and 10% down before they can buy a house or a flat there. In other words, economic, administrative and political decisions could be, and are being, taken in all the countries concerned.
However, it is quite right to criticise those countries, and especially the accounting in Greece, where the shipping industry and the Greek Orthodox Church—the country’s biggest land and property owner—pay no tax. Greece spends twice the share of its gross domestic product as we or the Turks do on defence, rather than ensuring a clean taxation system. This moment of truth is, very painfully, forcing those countries to take new directions and new decisions, yet paradoxically, if for some reason the euro were to dissolve into drachmas, pesetas and lira, that would take all the pressure off the political and administrative classes in those countries to take new decisions.
Yes, there will be enhanced supervision of those countries’ economies and budgets, but that also happened after the war as a result of the Marshall plan. Along with the credit from the United States came the Marshall planners—technocrats who sat in ministries to ensure that, in accordance with the broad remit of the plan, there was no improper abuse of the credit lines that the United States was providing.
My plea is rather more philosophical. I feel sorry for the Foreign Secretary—who is not in his place— because he has consistently championed out-and-out Euroscepticism. He has encouraged all the false hopes. Let us remember his famous statement before the 2001 election, when he warned the British people that if they voted Labour, Britain would become a foreign land. That was about as sensible as the earlier remark made by the right hon. Member for Wokingham (Mr Redwood) that signing the treaty of Amsterdam would mean the abolition of Britain. We have constantly been told by leaders of the Conservative party that being in Europe was bad for us. The hon. Member for Stone presents the most brutalist version of Conservative party thinking, but he is swimming in the same sea as many members of the Cabinet. He is simply rather more honest in describing the endgame that he wants to see.
I am fundamentally opposed to that aim; I do not want to see the eurozone break up. The entire western liberal market-economic world is going through a great crisis, as evidenced by problems in America and China, but there is a wider crisis, as evidenced by the difficulties in India, Russia, China and even Brazil, whose economy is now slowing down. How we get out of that is a huge challenge for all of us, but it is naive in the extreme to suggest that dissolving the eurozone would present a magic solution that would instantly liberate productivity, growth and employment and ensure the disappearance of extremist parties so that all the nation states could enter into a happy-clappy relationship.
This debate signals the firing of the first serious shot in what will be a much greater debate in our nation. The €500 billion in the kitty to bail out distressed countries sounds like a lot of money, but it is actually very small beer. We are going to have to take much bigger decisions about the future of Europe.
Over the summer, I was concerned to see a lot articles in the European press saying that Britain was about to withdraw from Europe. The language of repatriation and referendums was being used and, for the first time, a British Prime Minister said that he had no problem with linking the word “referendum” with Europe. He might not have any such problem, but neither Lady Thatcher nor any other British Prime Minister has used that language since Britain joined the EEC in 1973. Those headlines were appearing all over Europe, however, and the Minister for Europe, the right hon. Member for Aylesbury (Mr Lidington) had to be rushed out to comment on them. I was leafing through my copy of Le Monde one day and I was surprised to see his by-line in it; I thought I had an exclusive franchise to write in that newspaper. He said that Britain was not going to leave Europe, and that we were very committed to the EU. I have not brought the article with me, so I cannot read it out. Dagens Nyheter in Sweden said the same thing.
The Government went into total panic mode as they realised that a lot of people in Europe thought that the hon. Member for Stone spoke for the Conservative party, and that we were on our way out—[Interruption.] I hear cheers and “Hear, hear” from the Government Back Benches. I am delighted that we now seem to have buried the proposals for boundary changes, so that all those right hon. and hon. Gentlemen can perhaps be returned to the House at the next election. They will then have to make big decisions, however, on whether Britain should remain part of this thing or not. We are approaching a fundamental turning point in our nation’s life. I remain firmly committed to our staying a partner of the other countries in Europe, although I agree that there are huge problems to be resolved, and I agree with a lot of the reform agenda that is advanced by right hon. and hon. Members on both sides of the House.
The Bill gives the first flavour of the much greater debate that is about to come, but the Conservative party seems wholly ill-prepared for the seriousness of some of the decisions that we are going to have to take in the next two or three years. I am confident that, with greater study and work, our eminent shadow Europe Minister and the Labour party will become fully prepared to take part in that debate, but I fear that the possibility not just of a “grexodus” but of a British exit is now seriously on the table. We would be foolish if we did not accept that Britain could now be on the point of taking a fundamental decision that would significantly alter the nature of our lives and our nation.
Voting by Prisoners
Debate between Bernard Jenkin and Denis MacShane(13 years, 9 months ago)
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Mr MacShane
The hon. Gentleman takes me on to my next point. In other EU countries, prisoners can vote according to the sentence. In France, a judge adds a loss of civic rights to sentences for serious crimes, which is a compromise that satisfies the European Court of Human Rights and could easily be introduced here. However, sadly we are turning out backs today on more than a century and a half of prison reform. Retribution seems to be the order of the day for those who commit crimes. My view is that although someone may enter prison as a criminal, we should hope that they leave prison as a future citizen. Allowing people to take part in, think and read about, and ultimately—for non-serious cases—vote in elections would help the osmosis of turning criminals into future citizens.
Strategic Defence and Security Review
Debate between Bernard Jenkin and Denis MacShane(14 years, 2 months ago)
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Mr MacShane
I was not, but I am nervous of service patriotism. I understand it, but I wonder whether the RAF should also have military regiments, whether the Army should also have an Army air force and whether there is not some rationalisation that could be applied.
On the question of the nuclear deterrent, I entirely agree with the hon. Member for New Forest East (Dr Lewis) and others. If Britain substantially reduces its nuclear deterrent capability, others may be tempted to step into the breach. We are lucky that in one of the richest regions of the world only two mature democracies —France and Britain—have a nuclear capability. If either of us were to let go or significantly reduce our nuclear deterrent profile, what other major European power might be tempted to feel that it might need one?
Mr MacShane
From a sedentary position, the hon. Gentleman makes a crack about Poland. [Interruption.] I have a lot of Polish background and I would not suggest that it is very helpful vis-à-vis Russia to talk up any question of Poland’s becoming a nuclear power. It is far better that we are one and that the French remain one.
Mr MacShane
I am glad that the hon. Gentleman agrees with me.
We have the new rising powers in the world that do not respect the rules of democracy, whereas at the same time the democratic world is leaderless. President Obama, whom I like and admire—he is in my political family—is not a strategic world leader. There is no European leader who is a strategic world leader. The Chinese know what they want, the Russians know what they want, and Iran and North Korea know what they want. Many of the so-called Islamic republics know what they want. However, do we know what we want?
That is why the debate is important—not just in terms of my constituency interests, or firing ranges in the Western Isles or the absolutely correct need to talk with trade unions and others in the industry, or to help our wounded soldiers when they come back, for which the hon. Member for Beckenham (Bob Stewart) so eloquently appealed. It is about a bigger strategic set of choices. We have to lift our horizons and think about the new threats not just to our country but to the wider set of values of ourselves and our allies. I hope that the Government—I wish them well—can rise to that challenge. If they cannot, the House must make them.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I commend my hon. Friend the Member for Canterbury (Mr Brazier) for the passion and sincerity that he regularly brings to our debates about defence and his excellent suggestion to reduce costs by depending more on reserves. It is obvious, as I shall say in a moment, that we cut equipment or cut manpower. That is it. If we cut equipment, we reduce future capability; if we cut manpower intelligently—I am afraid that the civil service cuts must come before armed forces cuts, and substantial cuts in the civil service must be made—it can be rebuilt much more quickly. We can maintain reserves of manpower, but we cannot retain reserves of equipment that we have not built. I commend his suggestion to the House.
The right hon. Member for Rotherham (Mr MacShane) mentioned strategy. Let me say first that the Defence Committee has alerted us to the startlingly compressed timetable for the review. We know that there is only one reason for that. It is to fit into the spending round. There is no doubt that we are in danger of having an FDSR instead of an SDSR—a financial defence and security review rather than a strategic defence and security review.
Mr MacShane
On whether we cut expenditure on manpower or equipment, does the hon. Gentleman feel any of my concern that a great deal of DFID money goes to countries with massive military expenditure that represents a disproportionate level of their national income? I wonder whether we should look a little more closely at whether DFID money should go to prop up the military machines in India, Pakistan and some of the African states.
Mr Jenkin
I am grateful to the right hon. Gentleman for his suggestion, but I am not going to be drawn into that. I want to return to his mention of strategy. I am Chairman of the Public Administration Committee, which is conducting an inquiry entitled “Who does UK grand strategy?” We have had evidence from the Foreign Secretary and this morning the Chief of the Defence Staff gave evidence. There is a widespread feeling, expressed by the CDS himself, that we have lost the art of strategic thinking.
An article in the RUSI Journal by General Paul Newton and others states:
“The problem with the UK ‘debate’ on strategy, and defence matters more generally, is that for many observers there does not seem to be one.”
I am afraid that that is the vulnerability of this defence review—that it is being conducted in the absence of a coherent strategy. As the CDS said, we have lost the “habit of strategic thought”—the kind that looks 20 years ahead and asks what sort of country we want to be. The decisions that are made in the SDSR will define what sort of country we are in 10, 15 or 20 years’ time. It seems as though we are following Sir Humphrey’s adage about producing Government documents: “Always get rid of the difficult bit in the title—it does less harm than in the text.” Thus strategy is referred to in the title, and not to be dealt with in the substance of the text.
Yes, deficit reduction is the main effort of Government under the present circumstances; nobody in the defence world resents or disputes that. Indeed, economic security is one of the fundamental qualities of a secure state. However, the SDSR should concentrate on maintaining what I call minimum recoverable capability, so that however far we pare down current capabilities, they are recoverable in the event of an emergency. It is a risky business in this world. In the 1930s, we planned for a three-year warning for going to war, yet three years was hardly enough. As was pointed out in evidence to our Committee, it was the fighters—the Hurricanes and the Spitfires—coming into service at just the critical moment that saved this country from annihilation.
That is the kind of risk analysis that has to be made in this defence review. If the debate is about what capability we are employing and what capability we do not need because we never use it, that misses the point. Defence is about preparing for what we do not expect or anticipate. It is about being ready to use capabilities that we hope never to use, the strategic deterrent being a case in point. The danger of the SDSR is that it is being cost-driven—that it will permanently relegate this country from the first division of global powers, and that we are losing capabilities that once lost will never be recovered. We nearly did that in 1982. Paradoxically, it was the invasion of the Falklands that saved us and completely changed the situation. In fact, it brought back into being the whole concept of expeditionary warfare, which was a very alien concept in cold war terms.
The CDS referred to the financial envelope that the Ministry of Defence has been given. That sends shivers down my spine. The Treasury cannot be allowed to define £500 million spent on defence in terms exactly equivalent to £500 million spent on quangos and bureaucracy. The saving of £500 million on defence will cost far more strategically to this country than that of £500 million on quangos and bureaucracy. That qualitative judgment must be understood.
We have talked about Trident, although perhaps, for the sake of brevity, today is not the time to have that debate. If we delay Trident, we are not only doing something extraordinary that the Treasury has decried and despaired about so often in relation to defence, but putting off a programme that will cost more. If we are trying to get the deficit down over a 20-year period, then adding to costs in five years’ time will not reduce the deficit. It is like the pension problem whereby we store up future liabilities instead of facing up to them today. It is better to spend the money today than store up a bigger liability later on. We also run the risk of reopening the debate and creating an atmosphere in which cancellation becomes an option, and eventually an inevitability because of the cost increase.
If we are going to have a deterrent, then it is not about firing those weapons but about being ready and evidently prepared and determined to do so if necessary. It is about resolve, intent and sending signals to the wider world about what sort of country we are and how determined we are to defend our interests and our allies. If we falter on the upgrade of Trident, we will falter on the intention and resolve to defend our country, our wider interests and our allies. That is why we should not go down that road.
The alternative that we face in the defence review is Trident crowding out everything else, because there would be a bulge in expenditure on the procurement budget between 2015 and 2024. We would lose the aircraft carriers, the fast jets, the joint strike fighter, the transport aircrafts or the tanks, and they all have to be included in the mix. The problem is that the relationship between the Treasury and the Ministry of Defence has become dysfunctional. The MOD is evidently the most dysfunctional Department in Whitehall and became so under the previous Government. If I were in the Treasury, I would be exasperated at the constant moving of the goalposts, the additional costs, the cost over-runs and the incompetence that we have seen and that the Gray report exposed.
The Prime Minister will have to intervene in that dispute between the Treasury and the Ministry of Defence, to safeguard vital defence capability, despite the MOD’s incompetence, and give it a chance to sort matters out. Otherwise, we will finish up abandoning vital capacity, and non-economic strategic considerations will simply be ignored.
Perhaps the real SDSR will start after the spending review, because this SDSR has such a short time scale. The real strategic thinking—the installation of capacity for strategic thinking throughout Whitehall—has to start after this SDSR, and then we have to rebuild on the foundations that are left after the spending round. But what this spending round must not do is permanently relegate this country to the second division.