Multiannual Financial Framework

Debate between Chris Kelly and William Cash

Wednesday 31st October 2012 Commons Chamber

[Mr William Cash (Stone) (Con)]

The Labour party—the Opposition—will of course vote with us this evening, not the other way round. As the hon. Member for Bolsover (Mr Skinner) correctly pointed out, exactly the same happened with the Maastricht treaty.

The amendment spoken to so ably by my hon. Friend the Member for Rochester and Strood (Mark Reckless) is absolutely right. It deals not just with the mechanics or the technicalities, but with what is really going on under the surface. The real questions are, “Where is the money coming from?” and “What is the object of this multiannual financial framework?”

I have been to many conferences in the past year in my capacity as Chairman of the European Scrutiny Committee—in Cyprus and Denmark, and, before that, elsewhere—and I have attended similar conferences with my right hon. Friend the Member for Aylesbury (Mr Lidington). They are living on another planet: that is the real problem. The main feature of that big landscape is where we are today. This is part of a picture that must be dealt with.

I know that my right hon. Friend the Prime Minister is conscious of that. He knows that Mr Barroso’s speech calling for a federal Europe, which was made only a short time ago, has put us at a crossroads. We cannot continue to assume that what was being considered before that date still applies. We are now on a different journey. They are on one planet, and we are on another. We have to make a stand, and that is what this is all about.

A letter dated 18 December 2011 from the Prime Minister and from the Prime Ministers of several other member states, included the following passage:

“European public spending cannot be exempt from the considerable efforts made by the Member States to bring their public spending under control.”

We are cutting here; we need growth. They are not cutting, but increasing. That is the point.

[Chris Kelly (Dudley South) (Con)]

I know that my hon. Friend has a great deal of empathy with the private sector. The private sector is the engine of growth in our economy and it becomes more efficient every year, but does my hon. Friend agree that in Brussels the only thing that increases is the appetite for our money?

[Mr Cash]

Absolutely. It is impossible to make any public expenditure—including our contributions to the whole of the public sector: health, education, local government, the lot—unless the money comes from reasonably taxed small and medium-sized enterprises. Yet the whole of the Commission’s paper—which is at the heart of the 2020 strategy and at the heart of why the Commission is asking for this increased amount of money, which it calls an investment for growth—contains only one reference to small and medium-sized businesses, in one line. That is the problem we are up against. We cannot give money to the public sector unless we get it from private enterprise on a reasonably taxed basis.

The Prime Minister’s letter continues:

“The action taken in 2011 to curb”—

“curb”: that is the word he uses—

“annual growth in European payment appropriations should therefore be stepped up progressively over the remaining years of this financial perspective and payment appropriations should increase, at most, by no more than inflation over the next financial perspectives.”

The situation was wrong then, and it has got worse since. That was in December 2011. We are now in October 2012, and we know what the picture is, and it is getting progressively worse. That is why we had to call for a reduction rather than merely what the Prime Minister describes as an

“increase, at most, by no more than inflation over the next financial perspectives.”

Treaty on Stability, Co-ordination and Governance

Debate between Chris Kelly and William Cash

Wednesday 29th February 2012 Commons Chamber

[Mr Cash]

I will not give way again. I have listened to what Mr Speaker has said and I have no intention of giving way. I have given way a great deal already, as I am sure Mr Speaker appreciates.

Even today, the European Central Bank is departing from its established rules in providing what some suggest is as much as a trillion euros of guarantees, and flooding the markets with unearned money to support countries which are failing to run their economies properly. There is a further problem, which is an increasing trend towards coercion, again in pursuit of ideology.

There is an increasing tendency by Germany to impose its will on other member states, but it should not be forgotten that although Germany pays vast sums into the European Union, it benefits enormously from that, and it could be argued that both French and German banks have played roulette with the Greek economy, and are now, through the rules and the treaty, seeking to obtain repayment and bolster their own banks and their own economies by imposing new rules to suit their requirements. Germany, of course, wants to help the euro. It has an enormous investment in it, but I would argue that the tendencies to coercion are not in the interests of Germany, the European Union or the United Kingdom. Indeed, today, we read that the constitutional court in Germany yesterday blocked the powers of a special parliamentary panel to fast-track emergency decisions affecting the rescue fund.

The new treaty is described as the “treaty on stability, co-ordination and governance” in the EU, yet it is not, contrary to what the Opposition said at an earlier stage, an EU treaty. The Lisbon treaty lays down specific requirements before changes can take place. They specify that the rules shall not be changed unless everyone agrees. The false assumption underlying the new treaty between the 25 is that, despite the failure to achieve unanimity, and even though the rules on enhanced co-operation have not been used, they claim that it remains legitimate to obtain those ends by a different route. I put that to the Minister for Europe the other day—namely that the treaty is based on the dangerous assumption that the end justifies the means, and that they would argue that, even if it is unlawful, the requirement to introduce the treaty for political reasons overrides the law. The question is whether it is lawful for the EU institutions, such as the Commission and the European Court, to be involved in such an agreement.

The new treaty is the triumph of expediency over the law. Professor Paul Craig sets out his arguments in 11 pages of carefully analysed argument. I am certain that the Government know all that and I am glad that the Attorney-General is here. If he wishes to intervene, I shall be only too happy. As a former shadow Attorney-General, I am sure that my right hon. and learned Friend knows the parameters of the unlawfulness of this treaty, which is why I suggested that he should come today.

I believe profoundly that the Government know that the treaty is unlawful and, in the words of Professor Paul Craig, it is important to consider whether it can

“confer new functions on EU institutions.”

He continues:

“I believe this would be contrary to the existing Lisbon treaty and to legal principle.”

He then examines articles 7 and 8, which I have no time to go into, as well as articles 3(2) and 273. They all raise questions that are before the European Scrutiny Committee about detailed matters, which we will tackle in due course in our report.

[Chris Kelly (Dudley South) (Con)]

Will my hon. Friend encourage people who wish to find out more to visit the European Scrutiny Committee’s website at www.parliament.uk/ESCOM?

[Mr Cash]

I certainly would, as I said earlier.

Angela Merkel is quoted in The Wall Street Journal a few days ago as saying:

“As Chancellor of Germany, I should and sometimes must take risks but I cannot embark on an adventure.”

I cannot think of any more dangerous adventure than moving away from the rule of law and inviting the tendency to coercion, which is increasingly evident in German policy making. Indeed, I believe that new rules of law are being asserted to break the rule of law. I am sorry to say that in Germany they seem to believe in government by rule. We believe in government by consent.

The process will not work. We are now in the period of a phoney war. Those who have seen the play “Three Days in May”, about 1940, may well wonder whether it is now obvious that, if we were to acquiesce in imposing the new and unacceptable rules, and in using EU institutions, that would become a new process of appeasement. Fortunately for us, in those dark days, Churchill refused to accept Halifax’s advice at the end of that fateful month.

The letter that the Prime Minister has sent, through Sir Jon Cunliffe, to the secretary-general of the European Council makes it clear that we have serious reservations. We now have two Europes, both built on sand. It is essential that we have a referendum in this country so that the people can have their say because there are such profound questions—