Commission Work Programme 2013
Debate between Edward Leigh and Kelvin Hopkins(11 years, 10 months ago)
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Kelvin Hopkins
I thank the hon. Gentleman for intervening. The document talks about solving external crises, but what about solving the internal crises? The European Commission has not shown much ability to do that. The problem is that it has inflicted supply-side measures—most of these are supply-side measures to try to deal with the economic problems—whereas the real difficulty is a serious lack of economic demand. That is the deficiency and macro-economic policy is the problem, as it is failing and is, in most cases, completely misguided. Item 1 in the document refers to an “Annual Growth Survey”—perhaps that ought to be re-titled the “Annual Contraction Survey”.
Item 6 makes the only reference in the whole list to the
“importance of a sound macroeconomic framework”.
I absolutely agree with the importance of that, but there is no sign of such a framework as yet. Indeed, we have the opposite: co-ordinated deflation driving the EU towards deeper recession. Thank goodness this country is somewhat to the side of that. We will of course lose if—[Interruption.] My hon. Friend the Member for Preston (Mark Hendrick) is intervening from a sedentary position, but I cannot quite hear what he is saying. The euro is the primary problem; Greece, Italy, Spain and a number of other countries ought to be able to recreate their own currencies, to depreciate and to reflate behind that.
Mr Edward Leigh (Gainsborough) (Con)
The hon. Gentleman is a notable voice of reason on the Labour Benches on these issues. Does he think he will be able to persuade his colleagues to join us in arguing for a referendum on our relationship with the European Union—on whether we should stay in or not?
Kelvin Hopkins
I certainly think we should have a referendum, and I am actively involved in an organisation promoting the idea of one. More than that, we want to get some sensible economic policies adopted, both in Britain and across Europe. We also want to return to some of the common sense that emerged from Bretton Woods in 1944 and led the post-war world to such success, with full employment, rising living standards, growing equality and so on.
Items 9 and 10 refer to state aid. Lecturing those countries in desperate crisis about not indulging in state aids would be completely unacceptable. If they have to use state aids to regenerate their economies, they should be able to do so. Indeed, state aids in the UK should be decided by this Parliament and not by the European Commission. Some may be against state aids in principle and others may think them a very good idea, but we should decide on that, not the European Commission.
Item 13 refers to:
“Reforming the internal market for industrial products”.
That does indeed need dealing with. One of the great problems—the great problem, in a sense—in the European Union is the massive trade imbalances within it. Germany has a gigantic trade surplus with the other members of the EU, including with this country. If we went back to the principles of Bretton Woods, we would expect, in normal circumstances, that Germany would let its currency appreciate—the Americans were rather against that idea of John Maynard Keynes, but it was a sensible one—and that those with trade deficits should be able to depreciate their currencies. That is one of the measures used to get an economy working again.
I come now to some detailed points. No reference to railways is made in the section dealing with transport, although they are a major force for the future in the transport sector. Surprisingly, after 200 years or so, they have turned out to be the mode of transport for the future rather than the past. I have a great interest in railways, but no reference is made to them in this document.
On cigarette smuggling, we lose billions in government revenues every year because nobody pays taxes on imported cigarettes. They are brought in by the billion, I guess, and if we had proper taxes and duties paid on every cigarette smoked, we would gain billions in revenues—enough to pay many times over for free long-term care for all. Cigarette smuggling is a major problem, which we ought to be addressing as a nation rather than simply through the European Union.
Most of the measures in the list could be undertaken by member state Governments on an individual basis, as they felt they were appropriate. If we wanted to indulge in international agreements, we could do that through bilateral and multinational negotiation. The democratic decisions should be taken in this House, by this Parliament, and by member state Governments in general. We have shown that we can co-operate bilaterally and multilaterally and we do not need a European Commission to determine all these things. I am strongly in favour of democracy, which means democracy at a member state level.
National Referendum on the European Union
Debate between Edward Leigh and Kelvin Hopkins(13 years, 1 month ago)
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Kelvin Hopkins
I entirely accept that point, but I believe that the British people have become wiser about this matter since 1975. At that time, every single organ of the media was in favour of a yes vote; a no vote had no support in the media at all.
Kelvin Hopkins
The hon. Gentleman is absolutely right. I was the agent for the no vote in Bedfordshire in 1975, so I have a track record.
Is our political class frightened that, if the British people voted to leave the European Union, we would no longer be a member of the common fisheries policy? Are they frightened that we might regain control of our fishing waters, stop the fishing free-for-all and see our fish stocks recover? Is it frightened that we would no longer have to subscribe to the common agricultural policy, and that we could instead choose to subsidise our farming, as and when, and where, we considered it appropriate and necessary? Is it frightened that we would no longer have to contribute to the European Union budget, at a cost of many billions a year, and rising? I cannot for the life of me see why such developments are so frightening.
There is also the old chestnut about Britain’s economic dependence on the EU, and the number of jobs that people say could be lost. We have heard a great deal about that tonight. The reality is that we have a massive trade deficit with the EU. In 2010, we bought £53.5 billion more from the rest of the EU than they bought from us. It is laughable that the EU could start a trade war with the UK, when it needs us so much more than we need it.
Eurozone Financial Assistance
Debate between Edward Leigh and Kelvin Hopkins
Kelvin Hopkins (Luton North) (Lab)
It is a great pleasure to speak in this important debate and to support the motion of the hon. Member for Rochester and Strood (Mark Reckless). I hope very much to have the opportunity to vote for the motion as it stands rather than in amended form.
Today of all days is important because the crisis and contagion in the eurozone is spreading. As reported in the Financial Times and other journals, there are serious problems in Spain, where there is youth unemployment of 41%, and where the economy is in serious crisis, and even in Italy. Those are major economies, not small countries. If we are dragged into a mechanism to save the eurozone even in one of the smaller countries, we will be throwing good money after bad, as the hon. Gentleman said. Bail-outs have been required for Greece and Ireland, and there might be one for Portugal, but those are relatively small countries in EU terms. Spain and Italy are much larger, and bail-outs for them would be prohibitive.
As I have said in the Chamber several times before, it is time to urge the EU to accept the recreation of national currencies for countries that cannot sustain membership of the eurozone. As I and many others have argued, strong currencies derive from strong economies, not the other way around. The Deutschmark was a strong currency because the German economy was strong. Weak economies cannot cope over time when a strong currency is thrust upon them. The best example of that was Argentina, which chose mistakenly to link its currency formally to the US dollar. For 10 years, it struggled, and its economy was almost destroyed before it bailed out and recreated its own currency—not before billions of its dollars had gone abroad. The Argentine economy, which had been one of the strongest on South America, became very weak, simply because it adopted a strong currency, and someone else’s currency at that. Adopting a strong currency that an economy cannot sustain is a foolish decision.
The right to flex a currency as of need is a vital component of economic management. Indeed, at Bretton Woods in the 1940s, it was argued that depreciations and appreciations could be appropriate for different countries, even though a stable exchange rate system was agreed after the second world war.
Mr Edward Leigh (Gainsborough) (Con)
Is it not strange that the Government are backing so strongly the candidacy of Madame Lagarde for the position of head of the International Monetary Fund, given that that lady is part of a ruling European elite, and that she is on record as wanting to go on bailing out the euro? Should we not be more independent in supporting a really good, tough candidate for that important post?
Kelvin Hopkins
I have not always agreed with our former Prime Minister, but I agreed very strongly with his position on the euro. Of course, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) might take a more sensible approach to those things, should he be appointed. I think he is something of an outsider at the moment, but Madame Lagarde has not been appointed yet. Let us hope that he still has a chance of the job.
As the hon. Member for Rochester and Strood said, Britain was wise to stay out of the euro. Because of that, we can flex our currency when needs must. Of course, during and after the crisis, we wisely depreciated our currency. Perhaps a bit more depreciation will help manufacturing and our economy. Countries that have their own currency, such as ours, can also choose their interest rates. Two vital components of any economic management system—the ability to flex the currency and control of interest rates—are given away when countries join a single currency. Even beyond that, there are fiscal policy controls. Countries would do well to retain all the components of economic management if they want to succeed.
When countries do well individually, they can do well collectively. Destroying the economies of EU member states or other countries does not help us in any way. Getting them back into some sort of order by permitting, encouraging or helping them to recreate their currencies, and finding an appropriate parity and interest rate for that currency, so that they can manage their economies for their needs, would raise demand for our goods. The shock absorber effect of different currencies would, over time—a fairly short time, I believe—make the economies of Europe work better singly and collectively. Therefore, the recreation of those currencies is in our interest.