Foreign Affairs and International Development

Chris Heaton-Harris Excerpts

Tuesday 15th May 2012 Commons Chamber

[Mr Hague]

We have made very clear representations about it. I have discussed the case personally with the Foreign Minister of Ukraine, and our ambassadors right across the EU have made strong representations about that case and other trials that do not appear to have followed what we would regard as due process. While the difficulties remain, the stabilisation and association agreement that has been negotiated between Ukraine and the EU is not being brought into force, so there is a standstill in progressing relations between EU countries and Ukraine. We welcome the recent developments such as the provision of medical care to Mrs Tymoshenko with the assistance of Germany, and we will continue to pursue that case and others vigorously with Ukraine.

Returning to the subject of the Balkans, continued progress in relations with Kosovo will remain vital to Serbia’s path towards EU membership. We also want Bosnia-Herzegovina to be able to make its own leap forward to EU candidate status and full membership of NATO. We intend to develop our co-operation with Russia where it is in our interest to do so, particularly in our economic relationship and in addressing key issues affecting global security as members of the UN Security Council, and I will shortly visit Moscow again.

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

My right hon. Friend failed to mention one country in the Balkans area, which was Macedonia. Given that the Greeks might not exactly be as strong as they used to be in negotiations in the EU, surely we can give a bit of oomph to Macedonia’s negotiations to enter the EU should it want to?

[Mr Hague]

The whole of Europe wants to see the name dispute resolved, of course. That requires an agreement with Greece, which of course requires a Greek Government to be able to take the initiative and come to such an agreement. My hon. Friend will be aware that as we came into the Chamber for the debate, the news was that a caretaker Government would be appointed in Greece pending fresh elections on 10 or 17 June. We certainly hope that whoever is elected in Greece, facing formidable challenges, will include the resolution of the name issue among their priorities.

The EU has an important role to play further afield, including in Burma. The House can be proud that we never wavered in our support for democracy there and insisted on real political and human rights reform as the condition for any move towards an open relationship between Burma and the EU. We are starting to see real reform, although the gains are not yet irreversible and serious human rights concerns remain. The bold leadership shown by President Thein Sein and by Daw Aung San Suu Kyi has finally placed the country on a hopeful path, and every Member will have been moved by the sight of Aung San Suu Kyi taking her seat in Burma’s Parliament on 2 May. It will be a huge honour if she visits Britain this summer for the first time in 24 years.

I visited Burma in January, and our Prime Minister was the first western leader to visit after the recent by-elections. We led the way in calling for and securing the suspension, rather than the complete lifting, of EU sanctions, and we have announced that we have lifted our policy of discouraging trade with Burma, although we maintain an arms embargo. We believe that at this moment, the right kind of responsible trade and investment can help aid that country’s transition.

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[Mr Alexander]

I am flattered and touched by the interest that the hon. Gentleman takes in my record as Minister for Europe. If he had been in the House at the time, he would have known that there was broad bipartisan support for the accession of the eastern European countries to the EU. If he is respectfully suggesting, seven years on, that somehow there would not be consequences for the European budget from the accession of 10 former eastern European countries, I would respectfully differ. If he wants a job for reading out the Whips’ briefing, he has to work a little harder than that.

[Chris Heaton-Harris]

rose—

[Mr Alexander]

Somebody else can have a go.

[Chris Heaton-Harris]

I was a Member of the European Parliament when the right hon. Gentleman was giving away most of our rebate, and I remember the discussions distinctly. What did he get in return for giving away that amount of the rebate?

[Mr Alexander]

What we managed, which most people would recognise, was the successful integration of 10 former eastern European countries into the world’s largest single market. There were also some changes in the common agricultural policy in 2008, which followed as a consequence of the budget deal that was struck in December 2005. But, as I say, it is simply an attempt to rewrite history for Government Members to suggest that there would never be consequences for Europe’s budget from the inclusion of 10 former eastern European countries.

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

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

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

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

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

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

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

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

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

[Madam Deputy Speaker (Dawn Primarolo)]

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

[Chris Heaton-Harris]

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

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

[Mr MacShane]

rose—

[Chris Heaton-Harris]

I am happy to give way to the right hon. Gentleman, as I am struggling with my “yous”.

[Mr MacShane]

Might not another answer be for the people to whom you are exporting to say, “Right, stop buying BMWs, stop buying Mercedes, stop buying Siemens goods”? That could be a response, which is why I think that the Germans have understood that keeping money in circulation is not necessarily bad for Germany now, nor has it been in the past 50 or 60 years.

[Chris Heaton-Harris]

I do not disagree with the right hon. Gentleman’s case—

[Mr MacShane]

What!

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[Chris Heaton-Harris]

I am sorry, but I refuse to disagree with the right hon. Gentleman all the time.

Just because this country is not in the European stability mechanism does not mean that UK taxpayers are not contributing massively to the European Union. We do contribute massively to the EU budget. The 2013 budget is up for negotiation now, and the next multi-annual financial framework—the EU budget between 2014 and 2020—is just about to go through the negotiating process. Let me make a pitch for how much money might be involved. The right hon. Member for Rotherham (Mr MacShane) alluded to how much it was under a different Prime Minister, and, following the giving away of our rebate, the net contribution by the UK to the EU budget in 2011-12 was £8.7 billion. The net contribution over the entire period between 2011 and 2016-17 is forecast to be £59.6 billion. We have a very big vested interest in the EU budget and a number of issues in it need to be addressed.

Owing to its inflexible design and poorly targeted spending schemes, the EU budget is particularly ill suited to deliver the jobs and growth that Europe needs, but the window for opportunity for radically reforming it is swiftly closing. Before the end of the year, we could reach a conclusion on what the EU budget will look like until 2020. Despite the austerity facing Europe, the European Commission has asked for a 6.8% increase in EU spending in 2013 while cutting only six of almost 41,000 European Community jobs. The European Commission has proposed to increase the next long-term EU budget post-2014 by yet another 5% while offering only very minor reforms in substance. At the same time, the European Commission’s accounts are not being signed off. That was another omission from the shadow Secretary of State’s speech: the negotiations in which our rebate was given away also ensured that the extra money we gave was not spent properly.

We must properly consider many of the issues with the EU budget in the future. I hope that we can rely on our Lib Dem coalition partners to want value for money at a European level for the huge amounts we put in and can therefore have a very constructive and bullish attempt at trying to reform the EU budget in the coming months.