Oral Answers to Questions
Denis MacShane Excerpts(13 years, 2 months ago)
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Danny Alexander
I agree very much with that. I believe that it is a quotation from the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling). We are united at the top and we have a credible economic policy, while the Opposition—if I may use the former Chancellor’s phrase—are “not at the races”.
Mr Denis MacShane (Rotherham) (Lab)
Does the Chief Secretary—whom I fondly recall from the days when he was known as “Danny the euro”—agree that a big problem that we all face is the fact that the purchasing power of the pound internationally has sunk to an all-time low? Do we not have a real problem with the Osborne pound, which is now importing inflation, and do we not need to separate the two? We cannot get rid of the pound, because they will not let us, so do we not have to get rid of the Chancellor?
Danny Alexander
The right hon. Gentleman—I shall not tell the House what he was known as—should be aware that the reduction in the value of the pound took place under the previous Government, so he might direct his comments to them. He might also recognise, if he were being balanced, that that is having a beneficial effect on British exporters who are trying to sell into the eurozone, where the difficulties are, of course, affecting us as well.
Sovereign Grant Bill (Allocation of Time)
Denis MacShane Excerpts(13 years, 4 months ago)
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Mr Denis MacShane (Rotherham) (Lab)
It is a serious point that we are rushing through today a fundamental change. Reference has been made to 1760, so we are proposing in two hours, if that, to change what has been in place for more than 200 years. There has been virtually no publicity in the press. For obvious reasons, we have been dominated in the House and in the public sphere by other events since the Chancellor and the shadow Chancellor first spoke on this issue and since the Bill was read the First time two weeks ago. At that time, of course, none of us would have imagined what would be the only story dominating the press.
This is profoundly important. My right hon. Friend the Member for Leicester East (Keith Vaz), who is the Chair of the Home Affairs Committee, has made his significant points; there are others. The one that most concerns me is that if passed—I have questions about the level of financial support—there can never be any change, because the provisions will not be debated in the same way as the civil list is debated each time the monarch changes.
We are setting in perpetuity a system for paying the royal family that cannot be challenged thereafter. Even George III would have baulked at that—[Interruption]— even though some Conservative colleagues from a sedentary position seem to think that it is a good idea. Therefore, should we not put this off? Festina lente. We do not need to rush this through today. We could return to the Bill in the autumn. We could then have a proper debate and proper public discussion, and deal with it properly.
Civil List
Denis MacShane Excerpts(13 years, 4 months ago)
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Mr Denis MacShane (Rotherham) (Lab)
This has been a most enjoyable debate. With the need to refurbish some of the royal households with up-to-date wallpaper, we have learned that the fortunes of Osborne & Little might now increase. We heard from my right hon. Friend the shadow Chancellor some historical evidence of our hon. Friend the Member for Bolsover (Mr Skinner) making interventions from a sedentary position when this issue was last discussed in the 1970s. People listening to this debate from outside this place might have felt that some of the speeches by right hon. and hon. Members were delivered not so much from a sedentary position but, as it were, from a kneeling position, if that were possible in the House. I would say gently to the hon. Member for Northampton North (Michael Ellis) that some of us think that the land in this country that is not in specific private ownership belongs to the people. For us, the notion that the royal family is signing generous cheques to the taxpayer sits a little oddly.
I want to raise one substantial point today. The Chancellor and the shadow Chancellor said that we needed to look back to 1760, but if my history—learned from Linda Colley and other historians of the period—serves me right, it was actually a cunning manoeuvre by the late King George III that substantially increased royal revenues, rather than the act of generosity that it is sometimes presented as. One part of the motion, which I think the House will support, that worries me conceptually is the notion that the time of transition from one monarch to another is not the time for reflection on the arrangements that we want for our Head of State. The notion that we are going to write down a settlement that cannot be debated for another 200 years might therefore need some reflection on Second Reading.
I respect the Queen and I have travelled with other members of the royal family, although I hate the term “minor royals”—it is offensive to the very hard-working men and women who give a lot of their time to public service. If I can, I always welcome in person any of them who come to my constituency, because they are always well received and well liked. Her Majesty came to the Advance Manufacturing Centre in Catcliffe with Prince Philip last November and stood for an hour asking good questions. I was amazed at her stamina and her presence; the visit really cheered up all the people there. This just goes to show that 85 really is the new 55.
None the less, how does one justify 159 butlers, valets, cooks, dressers, housekeepers and the rest for Prince Charles? [Interruption.] We are all reading the memoirs written by the father of the hon. Member for North East Somerset (Jacob Rees-Mogg) in The Times, and there is a lovely entry today about how he and Rupert Murdoch managed to cheer up the Queen at a lunch back in the 1970s; I would not have minded eavesdropping on that. But why on earth, when we keep a royal flight, is Prince Charles taking a jet trip from Mr Joe Allbritton, who is not British at all but some kind of American oligarch and millionaire—
Jacob Rees-Mogg
It seems a little bit mean to object when the royal family employ someone, and then object when they save a bit of money by taking a free flight. I do not think the right hon. Gentleman can have it both ways.
Mr MacShane
I am trying to choose my words carefully, because this is a serious matter. Serious questions would be asked if any Government Minister, acting on behalf of the nation, were to start hopping around in oligarchs’ planes—
Mr MacShane
I do not think that right hon. Member for Tatton (Mr Osborne) was a Government Minister at the time of that yacht trip—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The right hon. Gentleman is in danger of straying into—
Mr Deputy Speaker
No, I will finish. Individual names are being attached to what is being said, and that is not what we should be doing. This is a general debate on the civil list, and we should not refer to individual members of the royal family or to individual amounts spent.
Mr Deputy Speaker
Order. I will go on to the next speaker if the right hon. Gentleman does not accept it.
Mr MacShane
I said that I accept your ruling fully, Mr Deputy Speaker, and I will not say another word, save that—[Laughter.] If it is in order, Mr Deputy Speaker, I should like to say that it is not right for this debate to take place in the Daily Mail, The Daily Telegraph and The Independent but not on the Floor of the House. That is all.
Mr Deputy Speaker
Order. There are clear rules for this House that we have to abide by. The right hon. Gentleman might not like it, but that is the case.
Mr MacShane
I actually believe that a plane should be made available for the use of senior Government Ministers, including the PM. He had to scrounge a lift from Prague to Brussels with the Czech President the other day. He got something out of it, but frankly, every senior Minister in most democracies has that mode of transport available to them. Our planes are continually available to any member of the royal family, while elected Ministers come second.
We then have the problem of explaining why the present monarch and the next one are such giant landowners. Is that an issue that we might be able to debate, Mr Deputy Speaker?
Of course we all enjoyed the royal wedding celebration this year and we will enjoy the diamond jubilee next year. Roman emperors promised their subjects panem et circenses: the current Government are doing their best to reduce the quota of panem with their cuts and cruelties imposed on the poor and handicapped, but they are increasing the availability of circenses through the royal shows.
I do not believe that there is any kind of republican mood in the country. It was interesting to hear the oleaginous loyalty, if I may put it that way, expressed by my hon. Friend the Member for Newport West (Paul Flynn), who had a tremendous enthusiasm for the monarchy, which has surprised many of us. I remember the silver jubilee in Rotherham in 1978, when I am told that 41,000 Union Jack flags were sold in the socialist republic of South Yorkshire.
If we look at the European Union, we see that the states that are monarchies—Sweden, Denmark, the Netherlands and even, with all its troubles, Spain—enjoy less partisan and less conflictual politics. When it comes to growth, distribution and a fair social settlement since the second world war, we find that the EU’s monarchies generally have a much better record than the EU’s republics. The royal families, however, are also much cheaper there. In Spain, with its King, Queen and wonderful royal palace where I had the privilege and honour of having dinner with the Crown Prince of the Asturias and the lovely Princess—and Prince Charles—a few weeks ago— [Interruption.] The food was free, but I paid for my own air fare. The total cost of the whole Spanish monarch is €8.4 million, while the Queen of the Netherlands gets by on €828,000.
I ask only that we do some comparative analysis before simply continuing with an arrangement that, even with the Chancellor’s proposed modernisations, remains deeply anachronistic.
Mr Leigh
Surely we should make a comparison with other major countries. In fact, the cost of the Queen bears favourable comparison with the cost of the Italian and the German Presidents—and who has ever heard of them, and what do they do for their country in comparison with our Queen?
Mr MacShane
I do not really want to get into discussions about German lineages. I recall a previous German President who actually walked the length and breadth of Germany in his summer holiday, and he did not receive anything remotely like what we pay our official Head of State.
It is interesting to note that Scotland’s First Minister, Mr Salmond, has ditched his party’s original republicanism and now asserts that an independent Scotland—if that unlikely event were to take place—would keep the monarch as its Head of State. However, I would like to see any future monarch living a lifestyle in tune and in touch with that of the nation. We can see the Duke of Cambridge, who serves with RAF officers, and his wife living a lifestyle much closer to that of the rest of the nation.
Mr Nigel Dodds (Belfast North) (DUP)
The right hon. Gentleman has referred to people who have ditched their republicanism. Will he join me in welcoming the decision of the Sinn Fein mayor in the Irish Republic who welcomed Her Majesty and shook her hand—despite Gerry Adams’s advice to do otherwise—showing an increasing acceptance of the monarchy everywhere?
Mr MacShane
A law throughout my entire life has been that if Mr Gerry Adams advises anybody to do anything, they will be on the safest ground if they do the opposite.
I do not know whether my right hon. Friend the Member for Barking (Margaret Hodge), the Chairman of the Public Accounts Committee, or the Chair of any other Select Committee could examine the high levels of expenditure that we have discussed this afternoon. I am sure that the Bill will go through without opposition, but if the monarchy is to continue in future years—after the time of Her Majesty—some things will have to change.
I welcome the Bill and the way in which it is being presented, and I think that the Opposition are handling the matter as they should, but a wider debate is needed. Let me say again—not on my knees—that there is nothing that can be discussed in our newspapers, pubs and meeting rooms that cannot also be discussed, in full detail, in this our House of Commons.
Justine Greening
There will be a cap at 15% of the spend by the royal household in the previous year. If the hon. Gentleman waits for a few more minutes, when I will have a chance to present the Bill to the House, he will have even more information at his disposal to understand exactly how that cap will work, how the review will take place, and who will perform it.
The Bill brings accountability arrangements for the royal household into line with those for other Government Departments. Parliament will have an opportunity to scrutinise that expenditure when it—
Mr MacShane
The hon. Lady keeps saying that the royal household will be brought into line with other Government Departments. Does not that imply that there will be a Government Minister who is accountable to the Commons for what the royal household is spending and will, from time to time, answer questions on it?
The Economy
Denis MacShane Excerpts(13 years, 5 months ago)
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David Rutley (Macclesfield) (Con)
The emergency Budget will certainly be remembered for robustly tackling the record Budget deficit, but I believe that its reputation will become much bigger, because it started a shift in the debate on public finances away from spending and cuts to how real value for money must be delivered for taxpayers. That is why it will be seen as a rare game changer in how Government expenditure is measured, managed and even talked about.
We have seen other big Budgets before: Geoffrey Howe’s in 1981, which tackled the rapid inflation that was wreaking havoc in the economy at that time; Nigel Lawson’s 1988 Budget, which significantly lowered the burden of taxes on individuals and created greater incentives for businesses to invest in the UK.
Mr Denis MacShane (Rotherham) (Lab)
In my constituency, according to the National House Building Council, building started on just four new houses in the first quarter of this year. Is it part of the game change to destroy for ever housing construction in our nation?
David Rutley
No, it is part of the lamentable legacy of the Labour party. We are cleaning up the mess; you are just talking about it. [Interruption.] Does the right hon. Gentleman want to intervene again?
However, no other Chancellor of the past 50 years had to face a budget deficit of the scale that confronted the current Chancellor after the election. He was bold and did not duck the challenge. The comprehensive spending review in September last year built on the foundation, and set out the details of how the Government would bring spending under control and achieve their fiscal mandate. As we have heard in the debate, the Government’s action has won plaudits from the IMF and OECD among others. More importantly, on the doorstep during the local elections, I found a pragmatic acceptance that strong action is needed. One year on, the principles underpinning the emergency Budget continue to win the argument about how the deficit should be tackled.
Clearly, in facing the nation’s finances, the opportunity and the Chancellor’s ambitions go well beyond reducing costs. The economic imperative and the tangible change in public mood represent an important moment in time that must be seized. The Government have a once-in-a-generation opportunity to put the spotlight on value for money and bring about a cultural change in the way in which it is delivered to taxpayers, and in confronting that task they are actively learning from positive role models in the public sector. When I worked as a senior executive at ASDA, the aim of lowering the cost of living for customers motivated colleagues throughout the company. Cost control was a vital part of the culture that was committed to delivering value for money to our shoppers. At board meetings, customer outcomes and the return on investment were what counted, not how much money should be thrown at a problem. That commitment creates value for money for hard-working families day in, day out.
Earlier Governments have found it difficult to engender a similar culture in the civil service and our public services, but the sad fact is that the last Government did not even try. Their ill-conceived experiment with “big government” backfired, and despite a period of unprecedented economic growth, the United Kingdom was left with a structural deficit—before the economic crisis—that was consistently bigger than the eurozone average for five years. Just as worrying, but not so often talked about, is the fact that public sector productivity fell by 3.4% between 1998 and 2007, at a staggering annual cost of £58 billion, which equates to 41% of last year’s deficit. That is a legacy that will continue to haunt the Labour party in its struggles to rebuild the credibility of its economic policy.
The coalition Government, however, are committed to putting value for money at the centre of fiscal policy and creating a new yardstick by which future Governments will be judged. They are driving major changes in three main areas: institutions, management tools and, most important, the hearts and minds of both the public and our public servants. They are making strong progress in each of those areas.
The creation of the independent Office for Budget Responsibility is one institutional change that will constitute a lasting legacy from the present Chancellor. The creation of an independent body to forecast and analyse public finances means that Government will no longer be able to cook the books or indulge in what Lord Turnbull, giving evidence to the Treasury Committee, described as “wishful thinking”. The OBR will give both Parliament and the public greater confidence in Government spending plans, and a greater ability to hold the Government to account.
Beyond institutions, change is needed in the way in which public finances are managed. That requires new objectives for civil servants, in which value for money is a critical factor in the judging of their performance and their ability to achieve their promotion objectives. I am pleased to note that the Government are raising the bar in terms of the minimum standard of financial understanding that is required for civil servants. In the past, senior civil servants have been more concerned about avoiding bad headlines or the size of their budgets than about finding more effective ways in which to deliver public services. Those days are now long gone.
Sir Philip Green’s review of expenditure showed that Government need to improve dramatically the way in which they gather information on spending across Departments, and the new efficiency and reform group in the Cabinet Office is identifying ways of tackling that task. It plans to improve the co-ordination of procurement across Government, which will lead to savings of about £3 billion a year. Initiatives like those will help to reverse the downward trend in public sector productivity that we saw under the last Government.
However, the focus on value for money must not be only about the things that Government buy. Public sector pay and benefits represent the largest cost for any Government, and the present Government have had little choice other than to focus seriously on public sector pay and push ahead with much-needed pension reforms. That must happen if a more level playing field is to be created between the public and private sectors which will encourage business-led job creation while also making the taxpayer’s bill more affordable.
The ultimate test of whether value for money has become a real focus of attention lies not in institutions or management tools but in whether there has been a fundamental change in the way that people talk about public funds. I am pleased that the debate is now turning to results and outcomes and not just to the price that is paid for them. Government Members want to move away from and beyond the tired debate about cuts and spending to focusing on value for money for taxpayers.
In the motion, the Labour party looks forward to what it calls “strong” economic growth. Personally, I prefer to think about sustainable economic growth as a far better objective. We saw what happened under the Labour Government when they pressed for strong economic growth fuelled by uncontrollable spending. Labour seems to believe that return to growth is an automatic certainty or a God-given right. One year on, it has completely failed to articulate a credible alternative to explain how it would address the economic crisis. It is as though it has taken a leaf out of the Tommy Cooper school of economics and believes that growth will return magically, “Just like that.” [Interruption.] I will work on it. We on the Government side know that growth will be earned through the hard work and dedication of thousands of businesses across the country. The Government’s deficit reduction plans are creating a platform for the sustainable, private sector-led growth that the country so urgently needs.
Oral Answers to Questions
Denis MacShane Excerpts(13 years, 5 months ago)
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Mr Osborne
The estimate is £51 billion over this Parliament, which I guess is just another nail in the coffin of the shadow Chancellor’s economic credibility.
Mr Denis MacShane (Rotherham) (Lab)
T2. Has the Chancellor by chance seen the interesting analysis by the House of Commons Library showing that the measures in his Budget will affect women three times as adversely as they will affect men? Is he a misogynist?
The Economic Secretary to the Treasury (Justine Greening)
rose—[Interruption.]
Eurozone (Contingency Plans)
Denis MacShane Excerpts(13 years, 5 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Hoban
My right hon. Friend the Chancellor has made it very clear in his discussions with the Finance Ministers of EU member states that we do not want the EFSM to be used in this bail-out—a statement that Madame Lagarde confirmed on British television only a few weeks ago. I welcome my hon. Friend’s congratulations.
Mr Denis MacShane (Rotherham) (Lab)
The Minister is prudent not to join in the glee of the euro’s gravediggers, because if Greece defaults, it will not stop on the Acropolis—Portugal and Ireland will be next—and the nine out of 10 banks in the City that are European and foreign-owned will pay a terrible price. Rather than waiting for the eurozone to disintegrate into a set of competing currencies hiding behind capital-controlled walls—the notion that an open-trade Europe can exist in those conditions is nonsense—we should be very careful about where we are going. Boris Johnson said today that Greece was bankrupt. That is a signal to every Greek to get on his bike and seek work elsewhere. Is that really what we want—a new flood of economic migrants into Britain?
Mr Hoban
The right hon. Gentleman raises a series of points in his speech, but he makes a strong argument for why it is important that the eurozone is strong and stable. That has broad economic and social benefits. Clearly, if that is to happen, it is important for the Greek bail-out to work and be effective.
European Summit
Denis MacShane Excerpts(13 years, 8 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Denis MacShane (Rotherham) (Lab)
Obrigado, Mr Speaker.
The plain fact is that Portugal is our oldest ally. It is in trouble and we should help. When Margaret Thatcher brought the rebate back, she was questioned by a Eurosceptic on the Labour Benches who asked, “Why are you allowing more money to go from the British taxpayer to all these new countries?” She replied: “We should help Portugal”. We should do the same tonight. I hope that our Prime Minister will remember our longest, oldest friendship with any European country, and ignore the Eurosceptic waffle from those sitting behind the Front Bench.
Finance Ministers’ Meeting (Ireland)
Denis MacShane Excerpts(14 years ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Denis MacShane (Rotherham) (Lab)
May I welcome the statement of the Financial Secretary and the Chancellor, and their offer of £6 billion of UK taxpayers’ money to help stabilise the eurozone? We must all welcome the contribution to consolidating the eurozone as a sound economic area. However, what has happened to moral hazard? Most of the money will go to the banks. When will they pay anything—any price—for the crisis they caused?
Economic Governance (EU)
Denis MacShane Excerpts(14 years ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Hoban
My hon. Friend makes an important point. There are many sound arguments against the euro, and that is why we have ruled out joining it. However, it does us no favours to see a weak and unstable eurozone. It is important for eurozone countries to have strong fiscal discipline to ensure stability. The taskforce introduces a mechanism for eurozone countries to try to deliver that.
Mr Denis MacShane (Rotherham) (Lab)
Have you noticed, Mr Speaker, that all the Liberal Democrats have mysteriously disappeared from the Treasury Bench as this subject has been debated? I would welcome the views of the right hon. Gentlemen on the Treasury Bench on housing benefit, but may I say to the Minister that I welcome, I think, his clear statement to the House that he is not prepared to go and dwell on planet Cash? He has made it absolutely clear that the Government are not going to veto the treaty, and I welcome that sensible Euro-pragmatism from the new Government.
Mr Hoban
I am not entirely sure which planet the right hon. Gentleman is on at the moment. We need to ensure that the eurozone functions effectively, but we have secured an opt-out from the sanctions proposals, originally through the opt-out in the Maastricht treaty and reinforced by the Lisbon treaty. That is the right place for this country to be in, and that is why the coalition Government are right behind that position.
Draft EU Budget 2011
Denis MacShane Excerpts(14 years, 1 month ago)
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Mr William Cash (Stone) (Con)
We heard a very interesting and comprehensive analysis from the Minister, and I intend to press my amendment (a) to a vote. I agree very much with the sentiments that lie behind the amendment tabled by my hon. Friend the Member for Clacton (Mr Carswell). I wish only that, before tabling it, he had had a word with me about its wording, because I suspect that we would then have been able to arrive at an agreement. For some reason that completely escapes me, however, he decided to go ahead with his wording.
I went ahead with my amendment, because I have to recognise that the Government are about to engage in some incredibly important negotiations. They have to achieve a blocking minority, which I shall explain in a moment. That is not just a technical question, but a question of whether the Government can, first, get enough people to vote on the conciliation agreement, assuming that we reach such a point, and then achieve a blocking minority so that the Commission has to propose a new budget. That is what we are fighting for.
Mr Denis MacShane (Rotherham) (Lab)
Does the hon. Gentleman agree that to secure such leverage in the conciliation process, it is not helpful if the main Government party is in alliance with those whom the Deputy Prime Minister calls nutters, homophobes and anti-Semites from extreme fringe parties in east Europe, and not in the same family as Mrs Merkel, Mr Sarkozy and other centre-right leaders?
Mr Cash
No, I have heard enough from the right hon. Gentleman. All he does is repeat his old mantras—[Interruption.] I do not accept that: I simply need to get to the next point that I wish to make about the procedure that is to be followed.
It is clear in the light of the current state of affairs that the Government should adopt my amendment and reject the increase. The European Parliament, in the current austerity conditions, is wilfully affecting the economies of the 27 member states, and of the United Kingdom in particular. My European Scrutiny Committee has today agreed to have a full inquiry reaffirming the sovereignty of the United Kingdom Parliament in relation to the assertions of the European Court of Justice on such matters. The Government have agreed to the Committee’s demand for pre-legislative scrutiny, and I am happy to announce that the Minister for Europe will give evidence in public on these critical matters—and that will have an impact on the issues that we are discussing in this debate—as will other experts on the compatibility of Britain’s membership of the European Union with the doctrine of parliamentary sovereignty in the light of the European Union’s own assertions that the parliamentary sovereignty of this Parliament has been overtaken.
The Government have announced that they will introduce a clause to address the question of parliamentary sovereignty, but our Committee will examine the implications of this in the light of the declaration of primacy of European law by the European Court of Justice and as contained in the Lisbon treaty. All these matters require the closest analysis for the sake of our democracy and the electors of the United Kingdom on questions relating to taxation, spending, the European budget, our contributions and all the functions of the European Union. We have an absolute requirement to get this right and we will have a full examination of the issue of parliamentary sovereignty, including the subject matter of this debate.
Mr Denis MacShane (Rotherham) (Lab)
I rise to cast a protective arm over the Economic Secretary as she confronts the massed ranks of well-argued opposition from those on the Benches behind her. The hon. Member for Stone (Mr Cash) gave a masterclass on why the amendment of the hon. Member for Clacton (Mr Carswell) should not be pressed to a Division, but we will see what happens.
This debate is part of a long process of changing our relationship with our partners in Europe, and I do not know where it may end. The hon. Member for Clacton emotionally talked about the nursing jobs that could be saved and the extra soldiers who would not need to be relieved of their duties, but the problem here is not the fault of the European Union. Rather, it is a consequence of a set of decisions that the Conservative and Liberal Democrat coalition has taken. It is seeking to reduce the deficit over four years, much as if I could abolish my mortgage deficit over that period. I wish I could do that—by starving my children, perhaps, or cutting back on other spending. That is the Government’s decision. It is nothing to do with Europe itself. At the end of the day it must never be forgotten that the EU budget represents just 1% of Europe’s gross national product.
Mr MacShane
That proportion is less than when the right hon. Gentleman was a member of the previous Conservative Government.
Mr Redwood
Given that the EU is urging all member states to cut their budgets in order to cut their deficits, why does it not show the way by giving a lead in cutting its own?
Mr MacShane
I have absolutely no objection to that point. The right hon. Gentleman is right. If he wants to advance that argument, however, he does not have to persuade me, and the hon. Member for Clacton does not have to persuade the fellow signatories to his amendment. We have to link up with others, in the right hon. Gentleman’s case with fellow conservatives and centre-right politicians across the rest of Europe.
The hon. Member for Stone brushed aside my earlier intervention, but the plain fact is that a fortnight tomorrow the leaders of Europe—the vast majority of European Governments including those of Mr Reinfeldt, who has just been confirmed in Sweden, and the new conservative-liberal coalition being formed in the Netherlands—[Interruption.] I am so sorry for the disturbance caused by my mobile phone ringing. I shall make a donation to any charity you wish, Madam Deputy Speaker. Those leaders in Europe will sit down to dinner and discuss precisely the points raised here tonight, but there will be a Banquo at that feast: the British Prime Minister.
I am not going to tell the Prime Minister what to do. He did not quite win the election, but he has settled in well as Prime Minister. He has to decide whether his collegial dining comrades at European feasts where decisions are taken should include rather interesting gentlemen from Latvia, Poland and elsewhere. I can quote the Deputy Prime Minister’s description if it helps, but I think most Members have it in their mind.
The other point that we have to consider is that 20 years ago the EU was largely financed by what is called own resources, such as VAT and duty. I know tax is anonymous but some taxes are less in the payer’s face than others. There has been a massive change in the past 20 years in that the EU budget now comes from direct Government contributions. Therefore these arguments are now deeply sensitive in all nations. People in the poorer—perhaps the east European—countries ask why they are signing a big cheque for the British rebate. I am prepared to defend it, but we would be in a much stronger position if more Members were networking across the continent, making the points they are making today and finding allies and friends of weight and seriousness. Frankly, the Conservatives are not doing that at present. I try to make that point more in terms of political science; at this time in the evening, there is no point in seeking controversy.
This is the first of a serious set of debates, and the Government will have to decide. My estimate is that the Economic Secretary to the Treasury, is speaking just as if there had been no change of Government. The European policy of the coalition is no whit different from that of the previous Government in its broad approach to European issues. That may change, but the Conservative party will have to decide whether it wants to confront the deep national interests of this country that have never opted for protectionism or isolationism, no matter how seductively those positions have been put—they have certainly been put that way tonight.