Europe

David Lidington Excerpts

Wednesday 30th January 2013 Commons Chamber

[The Minister for Europe (Mr David Lidington)]

I am grateful for the opportunity to reply, only briefly, to the 37 right hon. and hon. Back-Bench Members on both sides of the House who have spoken, in addition to the two Front Benchers. Beneath all the knockabout and the genuinely strong views that we have heard on the different sides of the debate, there has been a common recognition that the European Union is changing already and is likely to have to change further, as a consequence of three inexorable trends that are affecting how it operates.

My hon. Friends the Members for Croydon South (Richard Ottaway) and for South Northamptonshire (Andrea Leadsom) and the hon. Member for Preston (Mark Hendrick) emphasised how the dynamic inherent in the single currency union is pushing its members towards closer fiscal and economic integration and that, over time, that will require further political integration to make those fiscal and economic decisions democratically accountable. They suggested that that, in turn, would mean that at some stage in the next few years, all members of the European Union would have to sit down and have what my hon. Friend the Member for Camborne and Redruth (George Eustice) called a grown-up conversation about how we can get right the political and institutional architecture to make the European Union work with different levels of integration, with some countries having committed themselves to much closer, deeper integration on some aspects of policy than others, but with those others still remaining full participants in the EU.

As my hon. Friends the Members for Mid Norfolk (George Freeman) and for Macclesfield (David Rutley) pointed out, Europe is having to contend with the dramatic rise of the emerging economies. Therefore, Europe as a whole—as well as the individual countries—needs to raise its game quickly. Otherwise, the blunt truth is that none of us will be able to afford either the material standards of living or the social protection that current generations in Europe have come to take for granted. That does not mean sweeping away all social protection, however.

If the hon. Member for Sheffield Central (Paul Blomfield) and other hon. Members who raised that scare story look at European debates on the working time directive, the pregnant workers directive or the posted workers directive, they will find that the United Kingdom is far from being the only member state that questions whether we need a one-size-fits-all policy, or whether the Commission or the Parliament need to be quite so prescriptive in trying to harmonise different systems that are based on national traditions, laws and practices in relation to employment protection and social benefits.

Given the need to respond to the global economic challenge, Europe as a whole needs to focus on the further deepening of the single market. We have already accomplished a great deal in terms of goods, but the single market in services is woefully underdeveloped. It is profoundly in the interest of the United Kingdom and of Europe as a whole that we should be successful in promoting those reforms further.

It is also essential that the United Kingdom should work energetically within the European Union, as the Government are doing, to promote greater free trade between Europe and other countries around the world. During the lifetime of this Government, we have achieved free trade agreements with Singapore and South Korea, and there is now an ambition to obtain an historic free trade agreement with the United States that would in effect set global regulatory standards, as well as sweeping away tariffs and non-tariff barriers. That objective is among the top priorities of our Prime Minister and of the German Chancellor, as well as of other leaders around the European Union.

We need a practice and a culture of legislation and regulation at European level, as at national level, that seek always to reduce the burden that such law and regulation impose on the flexibility of our businesses, particularly small and medium-sized enterprises. In answer to the hon. Member for Plymouth, Moor View (Alison Seabeck), I would say that the plan to extend the deregulatory exemption for the smallest business is not some plot dreamt up in the nether recesses of Conservative central office. It is a policy objective that has been endorsed by the European Council on more than one occasion and that is supported by the Heads of State and Heads of Government of all 27 member states—conservative, liberal and socialist alike. I hope that, on reflection, she will welcome what is happening in that regard.

The third driver for change is the need to strengthen democratic accountability. As I would have expected, much has been said in the debate today about the United Kingdom’s desire for a greater role for national Parliaments in how decisions are taken at European level. My right hon. Friend the Foreign Secretary has pointed out that discontent with the current state of Europe manifested itself in the voting in the French presidential election. If we look at countries such as Hungary and Greece, we can see manifestations of an ugly strand of European politics that we hoped had been defeated for good at the end of the second world war. Those undemocratic populist movements are exploiting genuine grievances against, among other things, the way in which decisions appear to be taken over the heads of ordinary people. It would be to the disadvantage of the European Union as a whole and of democratic traditions and values in Europe if they were not dealt with.

[Mr Cash]

Would my right hon. Friend care to take this opportunity to repudiate the statement in the Barroso blueprint that the EU Parliament and only the European Parliament is the Parliament for the European Union?

[Mr Lidington]

I do not agree with that statement. The European Parliament has a role that is set down in the treaties, but if giving extra powers to the European Parliament were the answer to discontent over the democratic deficit, the transfer of those additional powers in successive treaties over the past 15 or 20 years would have remedied the problem. It clearly has not, and it is not just in the United Kingdom where politicians are starting to think about how to involve national Parliaments more in European business than they have been in the past. Europe is changing and needs to change further.

[Michael Connarty]

Will the Minister give way?

[Mr Lidington]

No, if the hon. Gentleman will forgive me.

The Government are not waiting until 2015. I agree with most of what my hon. Friend the Member for Stroud (Neil Carmichael) said about how the coalition is working to shape change at European level in a way that benefits the prosperity and security of people in the United Kingdom.

Hon. Members on all sides have emphasised the importance of Europe for trade and investment in this country—a point made powerfully by my hon. Friend the Member for South West Bedfordshire (Andrew Selous). Our membership of the single market makes it easier for United Kingdom companies to sell goods and services to the rest of Europe without tariffs, without port checks and with common or mutually recognised standards applying. That point was put to me very clearly by Scottish business leaders when I met them in Edinburgh earlier this week. Our location in the single market makes us a more attractive destination than we might otherwise be for foreign direct investment, with the UK still getting a larger share of that than any other member of the European Union.

It is true, as many hon. Members have said, that we need to do far more to step up our trade with the emerging economies of Asia and Latin America. Frankly, if the UK could match the success of Germany on that count, our economic performance would benefit significantly. We still sell more to one German land—North Rhine-Westphalia—than we do to the whole of India, so I do not see a strong economic partnership with the European Union and vigorous initiatives to promote trade and investment with the emerging economies as somehow alternatives. It is in the interest of people in the United Kingdom that we are successful in doing both.

In the various contributions to the debate from Labour Members, there have been two chief criticisms of the way in which the Prime Minister spoke last week. The hon. Members for Sunderland Central (Julie Elliott) and for Sedgefield (Phil Wilson) and particularly the hon. Member for Birmingham, Erdington (Jack Dromey) denounced the idea of having a referendum on the grounds that it would cause uncertainty and drive away investment. As my right hon. Friend the Prime Minister said last week, the

“question mark over Britain’s place in the European Union…is already there and ignoring it won’t make it go away.”

He said that people who refused to think about “consulting the British people” were making it “more likely” that the whole population would become increasingly discontented with the European Union and more likely to vote to leave it when the choice was finally put to them, as one day it will be. He said he did not wish them to take that decision.

What is ironic is that the criticisms from the other side ignore the fact that, as their own spokesmen have been at pains to say, although they will not express support for a referendum now, they might change their policy and advocate a referendum within the next two years—despite the fact that their own supporters are saying that that would create enormous business uncertainty. I do not think anything could demonstrate more clearly than that contradiction the incoherence of the Labour party’s position.

I am confident, on the basis of the work that the Government have already done, that we will be successful in reforming the European Union to enhance the prosperity and security of the people of this country, and I support the approach laid out by the Prime Minister last week.

Question put and agreed to.

Resolved,

That this House has considered the matter of Europe.