Section 5 of the European Communities (Amendment) Act 1993

David Nuttall Excerpts

Tuesday 24th April 2012 Commons Chamber

[Chris Leslie]

(Nottingham East): My hon. Friend the Member for Vauxhall (Kate Hoey) asked an extremely pertinent question, and I want to come back to it later. First, however, I commend hon. Members from both sides and all parties for spotting that this debate was so relevant. The motion, as framed, does not leap out from the Order Paper, and when hon. Members go to the Vote Office to find these convergence documents, they are met with a little mystification. Let us turn to page minus-2, so to speak, of the Budget Red Book.

[Mr David Nuttall (Bury North) (Con)]

This is last year’s speech.

[Chris Leslie]

Indeed, I was here this time last year making a very similar, uncannily parallel speech, but I will point it out again. Underneath where it talks about Crown copyright, the ISBN number and where it says:

“Printed on paper containing 75% recycled fibre”,

it reads:

“The Budget report, combined with the Office for Budget Responsibility’s…fiscal outlook, constitutes the Government’s assessment under section 5 of the European Communities (Amendment) Act 1993”.

That is relevant to today’s debate. It is written in very small font for those who might have difficulty reading it. It mentions the European Communities (Amendment) Act, which sounds like a very British piece of legislation, but, being eagle-eyed, hon. Members will have spotted that all that Act does is refer to the Maastricht treaty, article 2 of which states:

“The Community shall have as its task…a harmonious and balanced development of economic activities, sustainable and non-inflationary growth”.

Of course, it also relates to article 103, which talks about economic policies being a “matter of common concern” that should be co-ordinated within the Council. These are the sorts of words that some find difficult to stomach, but the article continues:

“For the purpose of this multilateral surveillance, Member States shall forward information to the Commission about important measures taken by them in the field of their economic policy”.

In a sense, the right hon. Member for Wokingham (Mr Redwood) was right to say that this is the homework that has been set by the European Commission, and we are completing our homework today.

--- Later in debate ---

[Kelvin Hopkins (Luton North) (Lab)]

Let me say first that the Minister is heroic to take this brief, which is—to understate the matter—a difficult one. I do not envy him his job of having to try to sell it.

There are two good reasons for not sending the Budget report to the European Union. One reason, on which the Opposition agree, is that it is not a good Budget. The other reason, on which many of us on both sides of the House agree, is this: why should we send our Budget report to the European Union? If the EU wanted a copy, it could buy a copy. It is not a problem.

[Mr Nuttall]

The EU could just look it up for free on the internet.

[Kelvin Hopkins]

I am not as skilled as the hon. Gentleman in using the internet. Old-fashioned though it may be, I go to shops and buy books, I am afraid.

As for the Budget, the reality is that it will not solve our economic problems. Our problems are not really about the deficit; they are to do with unemployment. Looking back, another time when we had an enormous public debt and enormous deficits was the second world war, after which the then Labour Government ran a full-employment economy, which was the way they overcame our problems. If our Budget was directed towards creating employment, we too would solve many of our problems. The important thing is to generate directly in labour-intensive areas, which are not expensive. We are talking about relatively low-paid workers in the public services or the construction sector—labour-intensive sectors with low import content, which are just the sort of sectors where we want to be generating. However, public services and construction are the very sectors we are cutting.

If we had a massive Government-driven house building programme, along with the creation of more public service jobs, we would bring down unemployment and people would be paying taxes rather than living on benefits, and over time the deficit would solve itself. That is what the Labour Government did after 1945. We were living in Keynesian times then, and I think that Keynes was absolutely right. I like to think that if he were here now, he would be saying what I am saying, albeit possibly in a more sophisticated way.

--- Later in debate ---

[Mr David Nuttall (Bury North) (Con)]

As always, it is a great pleasure to follow the hon. Member for Luton North (Kelvin Hopkins). He referred to the fact that only a few Conservative Members voted with the then Labour Opposition on the Maastricht treaty—I rather suspect that I may have been one of them at that time.

May I correct the hon. Gentleman on one matter, however? He referred to our sending the Red Book. I wish that it were so, but we are not sending the Red Book; instead we are sending the 210 pages of the “2011-12 Convergence Programme for the United Kingdom, submitted in line with the Stability and Growth Pact”. It is a specially produced document. As last year, I oppose the submission of this convergence document to the European Union.

No doubt by contrast to the previous speaker, I entirely accept that the Government are pursuing a sensible economic policy that is designed to enable this country to start to live within its means once more. Of course there is a debate to be had in the House about whether taxation is at the right level in certain areas or whether public expenditure should be reduced further and faster, but those matters are not what this debate is about. It is specifically about whether the Government assessment of our economic position should be approved

“for the purposes of section 5 of the European Communities (Amendment) Act 1993”,

which requires this country to submit an assessment every year of how well we are progressing on convergence. I object to that, as, I suspect, do many millions of my fellow Britons.

I wish to raise three questions about this convergence. First, what are we supposed to be converging with? Is it the eurozone? It probably is, and I certainly suspect that that is what the Eurocrats want us to do, but why on earth would anyone want to converge with the eurozone at present? It has a failing currency and is based on a failed idea that is continuing to survive in its current form only thanks to bail-out after bail-out and the failure of European leaders in Brussels to wake up and accept the reality that, as any sensible independent commentator can see, it is folly to try to tie together the economies of different countries with such widely divergent characteristics. Such a plan is doomed to fail.

Secondly, who are we supposed to be converging with? Surely not the struggling economies of southern Europe. Things are still going very badly wrong across the eurozone, as we saw only yesterday with the collapse of the Dutch Government because of the fall-out from the eurozone crisis. In addition, there are the economic data: first-quarter GDP shrank by a further 0.4% in Spain, and the eurozone’s own composite purchasing managers index—a useful measure of progress in the eurozone—has slumped to 47.4 in April, down dramatically from March’s 49.1, and we must note that any index figure of less than 50 means contraction. That collapse was both in services, down from 49.2 to 47.9, and in manufacturing, down from 47.7 to 45.0. Even the mighty German economy is being affected by the struggling eurozone. Its overall purchasing managers index figure is down to 50.9, with even German manufacturing at a 33-month low of 46.3. It is clear, therefore, that despite all the bail-outs and the firewalls and the new IMF fund that has just been created, the eurozone remains mired in deep crisis, and I submit that we do not want to converge with it.

Thirdly—and perhaps most importantly—why are we converging? Has anybody bothered to ask the British people if they want to be converging with the countries of the eurozone? We ought to be pursuing the policies that are right for this country, regardless of what the unelected bureaucrats in Brussels think.

[Mr Hoban]

May I reiterate an assurance that I gave earlier? We are following the policies that we think are right and are in this country’s interests. We are not going to be dictated to by Brussels bureaucrats.

[Mr Nuttall]

I am most grateful, as I am sure are all Members, for that confirmation from the Minister. That answer raises the following question, however. No doubt many officials at the Treasury have been engaged in the preparation of this convergence document, spending many hours of precious time and energy on it, but why? What a complete waste of time! As was ascertained last year, anybody who is interested in this information could glean all of it from the internet, without any need to move any paper about. This is a complete, gigantic waste of time. It is a giant, paper-shuffling exercise.

[Mr Cash]

As someone who took a very active part in the Maastricht debates, I can say that this current debate is a case of déjà vu. As my hon. Friend said, we are being required to submit this report under the provisions of section 5, even though everything has changed and it is utterly impossible for us to set out to achieve the stated objective, because it is impossible for us, in the national interest, to attempt to apply the convergence criteria. The whole thing is a complete mess, which is why we need to have a referendum on the whole issue, including our relationship with the European Union.

[Mr Nuttall]

I entirely agree with my hon. Friend on both those points: first, this is a complete waste of time, and secondly, we certainly ought to have a referendum. That is not, of course, the matter before us tonight, however. Instead, this is the question under discussion tonight: what is the point of sending this document to Brussels?

The Minister admits that we pay no attention to what Brussels says to us, and that we govern our own affairs, so what is the point of producing this document? We should be honest with the people in Brussels and say, “Look, we’re not going to listen to you anyway. We’re independent in these matters, and we’re going to stop sending you this document every year.” It is a complete waste of time to send it this year—and I would be very interested to know what happened to last year’s document.

[Mr Redwood]

Does my hon. Friend also agree that it is a cruel paradox that the EU lectures member states to get their deficit down and then demands more money from them by way of public spending?

[Mr Nuttall]

My right hon. Friend makes a very good point, and it prompts the following: if the bureaucrats in Brussels are keeping an eye on the eurozone, something has gone pretty badly wrong because right across the eurozone nobody is sticking to the rules and regulations. The growth and stability pact went west years ago. If the bureaucrats had stuck to it a bit more closely, all the bail-outs, mechanisms and IMF funds would not have been necessary. If they had spent a little less time reading convergence documents and a little more time concentrating on the problems in the eurozone, our country might be better off because our European neighbours might be better off too and would therefore want to buy our goods and services.

There is no useful purpose to our constituents in this document being sent to Brussels, and I urge the House to vote against the motion.