EU Membership (UK Renegotiation)

David Lidington Excerpts

Tuesday 5th January 2016 Westminster Hall

[The Minister for Europe (Mr David Lidington)]

It is a pleasure to serve under your chairmanship, Mr Percy, and I hope that this is but the first of a number of such occasions.

I congratulate my hon. Friend the Member for Kettering (Mr Hollobone) on securing the debate. As he said in his opening remarks, he is a long-standing, open and honourable opponent of Britain’s membership of the European Union, and I know he will not take it with any sense of offence if I say that I would have been flabbergasted had there been any conceivable renegotiation by this or any other Prime Minister that would have come near to being satisfactory enough for him to support continued EU membership. My hon. Friend set out his case as I would have expected—lucidly and with conviction—and I want to spend most of my speech addressing some of his points.

As I suspect Members had anticipated, my right hon. Friend the Prime Minister will make an oral statement this afternoon on the outcome of the December European Council, and the House will understand that I will not pre-empt what he may say in that statement and in his answers to subsequent questions.

My hon. Friend the Member for Shipley (Philip Davies) expressed some scepticism about the current negotiation, claiming that everything had been agreed and it was all just a matter of choreography. His view of the choreography seems to have the same generosity of spirit as Craig Revel Horwood shows when assessing the skill of “Strictly Come Dancing” competitors. If only my hon. Friend had been with me at European ministerial meetings! I will even lend him a badge with the blue flag and the gold stars on it if that will aid his passage into the Justus Lipsius building.

I think that my hon. Friend the Member for Shipley would recognise that the arguments of our right hon. Friend the Prime Minister are not being met with an unreserved welcome from our partners. They have made it clear that they wish the United Kingdom to stay in the European Union, and that the European Union itself is stronger for this country’s membership. At the December European Council, Heads of Government raised objections and difficulties in respect of all four areas of policy. In the eyes of our partners, the Prime Minister is pursuing an ambitious and far-reaching set of reforms that challenge a number of the ways in which the European Union has been accustomed to doing its business and thinking about its vocation.

My hon. Friend the Member for Kettering mentioned a number of concerns about which I hope to give him a measure of reassurance. He talked about the Five Presidents report. The report is explicitly and chiefly about the future of the eurozone, and there is a challenge for those of our partners who have decided to commit themselves to that currency union. We can take a view as to whether they were wise to do so, but it was their sovereign decision. It seems logical that a commitment to a single monetary policy, a single interest rate and a banking union has broad implications for the future conduct of fiscal and economic policy, and our colleagues in the eurozone may therefore wish to consider some of the ideas coming out of the report, such as a eurozone treasury function and a single eurozone—not EU—seat on bodies such as the International Monetary Fund. Such decisions would not bind, or create obligations for, the United Kingdom, and if the Five Presidents report were to lead to a new European Union treaty, that would require the unanimous agreement of member states and be subject to primary legislation in the UK. Were any such treaty to include measures that transferred additional competences from the United Kingdom to the European Union, it would also be subject, under the terms of the European Union Act 2011, to a self-standing referendum in this country. I would hope, therefore, that my hon. Friend could take some reassurance on that point.

My hon. Friend also mentioned Greece, and I can tell the House that the UK has, and has had, no liability in respect of Greece, either through the European stability mechanism or the European financial stability facility—EFSM—which are both euro-only. Greece has paid back its bridging loan through the EFSM, but the UK had, in any case, ensured that we would face no liability in the event of Greece defaulting on that obligation. Greece has IMF loans, to which we contribute our usual share, and our IMF liability would continue whether we were inside or outside the European Union.

My hon. Friend also mentioned Turkish accession, which is something that both Conservative and Labour Governments over the years have supported as a strategic objective. Although we are nowhere near such accession at the moment, it would require the unanimous agreement of member states and a treaty, subject to primary legislation here. The Prime Minister has said that he is not prepared to agree to any new accessions to the European Union without reform of the transitional arrangements for migration from new countries, to put them on a much more effective and objective basis than the time limit of five or seven years after which all restrictions fall away.

It is hard to argue both that the EU will be inimical to our interests, resistant to what we want to do and jealous of our freedom of national action and that, in the event of a British exit, it would agree to sign up to our continuing to enjoy all the things we like about EU membership without any of the things that might matter to other countries but which we find irksome. Whatever the outcome of the renegotiation, that will be something that people will have to weigh up. My hon. Friend the Member for Gainsborough (Sir Edward Leigh) said that it will not be the end of the world if we leave the EU, and I agree, but the judgment that the British people will ultimately have to make is whether it is in the interests of the country’s prosperity, national security and worldwide diplomatic influence to be inside or outside the organisation.

When we consider trade, for example, we have to judge the likelihood of getting a free trade agreement outside the EU. In 2014, we sent roughly 44% of our exports to the EU27 but received only about 10% of that bloc’s exports. We would not be in as powerful a leverage position in the hypothetical circumstances as is sometimes argued, nor have Norway and Switzerland found that they can simply have all the benefits of access to the European single market without the obligation to apply EU laws—as the effect of that single market—and to contribute to the European Union’s budget.

I look forward, therefore, to the Prime Minister’s being successful in his renegotiation, to his getting a deal that makes Europe more democratic, prosperous, trade-minded and flexible than it is today, and to campaigning in his support when the referendum comes.

Question put and agreed to.

Resolved,

That this House has considered renegotiation of UK membership of the EU.