European Union (Referendum) Bill

George Eustice Excerpts

Friday 5th July 2013 Commons Chamber

[Mr Davidson]

So now we have it: the hon. Gentleman wants this Parliament to have the power to put small boys up chimneys. I think he will find that there are rules in the European Union that prevent us from putting small boys up chimneys. I think that is a very valuable clarification, and members of Unite and elsewhere will take it into account.

The Labour party’s view on these matters is best described as being in a state of flux. It is a caterpillar, which, in a short time, will emerge as a butterfly. I believe that we will change our position in a relatively short time, as events change, because we are clearly heading for a crisis in the European Union. I do not believe that the euro is sustainable in its current form for much longer. As the euro degenerates, and as unemployment rises—it already affects 50% of young people in Spain—we will see more social unrest in Europe and there will be an inexorable drive among the members of the euro to change the relationship within that bloc and, in turn, within the European Union.

The Labour party’s policy will change with that. I am confident that in the years to come I will find myself capable of supporting Labour party policy with a greater degree of enthusiasm than I do at the moment. I remember opposing the euro before it was fashionable to do so. I can also remember when the policy changed and it was impossible to find any Labour Member in favour of the euro—indeed, it was almost impossible to find any Labour Member who had ever been in favour of joining the euro. So things will change, as they should.

[George Eustice (Camborne and Redruth) (Con)]

The hon. Gentleman and several other Labour Members, including the hon. Members for Luton North (Kelvin Hopkins) and for Vauxhall (Kate Hoey), were instrumental 10 years ago in launching Labour Against the Euro. They led a group of about 40 Labour MPs which finally finished off former Prime Minister Blair’s attempts to join the euro. We used to call that group LATE, for short, and some of us used to say, “Better late than never”, because it was an eleventh-hour arrival on the battlefield. I know that the hon. Member for Glasgow South West (Mr Davidson) wants to keep us in suspense, but will he tell us how late he intends to leave it before we get this large group of Labour MPs once again calling for a referendum?

[Mr Davidson]

There is no difficulty in identifying a substantial group of Labour MPs who are in favour of a referendum—the issue is about the timing and the terms of the referendum, and I want to discuss that point now. A strong case has been advanced for a referendum now, before the election, but I wish to make it clear that I am completely opposed to that. An in/out referendum now would give us two choices, neither of which I find acceptable. Staying in on the existing terms would give the green light to those who wish to continue their spendthrift ways and want to continue the process towards ever-closer union. Getting out is simply a retreat and a surrender to separatism. I am opposed to that in Scotland, so I am also opposed to it in the United Kingdom.

There is, however, a case for a referendum now on giving the Government the power to renegotiate the terms of membership. A referendum now on allowing the Government to renegotiate—or on demanding that they start renegotiating—would send a signal to our European colleagues that we are serious about this. They, like us, must be doubting how serious the Government are about driving this forward, given that the Prime Minister has already said that he intends to accept whatever terms are on offer.

Europe

George Eustice Excerpts

Wednesday 30th January 2013 Commons Chamber

[George Eustice (Camborne and Redruth) (Con)]

I start by saying that the speech the Prime Minister gave last week was probably the most important speech that a Prime Minister has given on Europe since we joined 40 years ago, and the first time we have seen a Prime Minister showing genuine leadership on the issue. There has been lots of rhetoric from previous Prime Ministers about wanting to lead in Europe, but all too often they have found themselves drifting along with an agenda set by others. For the first time we have a Prime Minister who does not necessarily want to make friends with Europe, and who is challenging Europe’s failure and challenging it to move in a new direction. Such an intervention is long overdue because for many years there has been tension in the European Union between those who wanted to integrate policy making more deeply within Europe, and countries such as Britain who said we should have a broader Europe and bring on board countries from eastern Europe.

The decision to enlarge the European Union to include eastern Europe should have been a triumph for British foreign policy and have led to a situation in which the EU tried to do less but did a few things better. Some powers should have started to return to national Governments, but instead the relentless dogma of ever-closer union has continued. It is high time we called time on that.

We have heard a great deal from Labour Members about pessimism and defeatism, but I will tell them what those things really are. Pessimism and defeatism are seen in those who agree with the analysis that Europe needs to change and reform, and that some powers should return, but who have no confidence whatsoever in their ability to deliver that—they will not even try; they are not prepared to embark on the process. I heard the shadow Foreign Secretary agree with the five principles, but he will not say whether he thinks there should be a new treaty or intergovernmental conference, and he will not commit to any kind of renegotiation. There is a kind of craven fear among those who say they agree with our analysis but are completely unwilling to do anything about it or make a change.

[Mr Kevan Jones]

The Prime Minister is not clear what powers he wants to repatriate—it changes every time the Downing street spin machine gets into gear and whenever he is asked. Negotiations on that basis will mean four, five or seven years of uncertainty, which will damage the UK’s economy.

[George Eustice]

The Prime Minister is clear that we will have a renegotiation and put it to the people. The whole point of a renegotiation is that such things are developed in the negotiation. Labour Front Benchers say they share the Prime Minister’s analysis, but they are unwilling to do anything about it.

Three other aspects of the Prime Minister’s speech were important. First, he was right that the core of the EU is not the euro, but the single market. We are committed to the single market and want to expand and extend it. Research last year by Open Europe concluded that the current arrangement in the single market was better for Britain than the alternatives. It is better because we need to be in the single market for things such as financial services, and because we need to be in the customs union to support our manufacturing, because of complicated country-of-origin rules. For those reasons, we are committed to, and want to expand, the single market. The euro is not the core of the EU, as some would say. In fact, the euro is an optional project. Britain and perhaps other countries will never join it, and some member states trapped in it might yet choose to leave and re-establish their own currency.

The second important point expanded on by the Prime Minister is that we must end the dogma of ever-closer union. It must now be possible for powers to return to nation states. The reality is that the more competences the EU has taken on, the less competent it has become. We must give the EU the power to adapt and the power to let go of things when there is no longer a rationale for deciding them at European level. Who is really on the side of the EU? Is it those like me who say, “Let’s make the EU more flexible and give it the ability to adapt to new challenges in future,” or is it those who say, “It’s all too difficult to change. Let’s just leave it like it is”? Those of us who are arguing for change are on the side of the EU.

The third important aspect of the Prime Minister’s speech was the distinction between willing co-operation between nation states and national Governments, and the integration of policy. There is an opportunity to roll back the jurisdiction of the European Court of Justice in many areas. That has already been done on matters such as justice and home affairs by countries such as Denmark. It co-operates with directives and works with other countries in a spirit of co-operation but does not accept the jurisdiction of the ECJ. We do something similar on foreign affairs, and it works. We co-operate with other European countries and work to have co-ordinated policies on foreign affairs, but we do not have an integrated policy and we do not make foreign affairs subject to QMV.

I conclude by dwelling on whether change is possible. The big challenge in the debate is answering those who say, “It’s all well and good. We agree with you about what needs to be changed, but it’s impossible. What will you do if they say no?” I am more optimistic than many on that point, for a number of reasons. First, the euro has created challenges that mean that the EU will change anyway. I believe there will be growing demands for a new treaty in the coming 12 months if Angela Merkel is re-elected later this year. That demands a policy response from Britain. If other countries say that they want to integrate more deeply and understand that Britain will not follow them, we must at that point have a grown-up discussion on what a new model for Europe looks like.

The second thing to remember is that the differences between countries that are out of the euro and those that are in it can be exaggerated. The truth is that countries such as Germany, Holland and many others see Britain as an ally in liberalising markets and opening up the single market. They want us in the EU because they see us as an ally. The EU needs us because we give it influence in the world. People often say that Britain might be losing influence, but there is a two-way street, because we give the EU influence.

The third thing to bear in mind is that other countries have problems with aspects of EU policy. Germany and Sweden do not like measures such as the data retention directive. Therefore, we should discuss which bits they want to drop and which bits we want to drop.

Finally, the Prime Minister struck absolutely the right tone. He made it clear that Britain wants to be in the EU, but that we want Europe to change. He said that Britain will play its role as a genuine leader and challenge Europe to face up to its failures and make that change. To those who say that is impossible, I say that we should reject such defeatism. People used to say that the euro was inevitable; it was not. There is no such thing as historical inevitability.

--- Later in debate ---

[Martin Horwood]

When the Lisbon treaty was debated in this Chamber, the Liberal Democrats were the only ones who proposed an in/out referendum, not at some hypothetical time in the far distant future, but then and there, yet few Conservative MPs—or, indeed, Labour MPs—joined us in the Lobby that day. We have therefore been very consistent in arguing for referendums at times of major change. What I am highlighting is the lack of certainty in Conservative policy, which has yet again changed in the last few weeks. I might make rather more money than I generally do at the Cheltenham gold cup by betting that within the next four years, before this hypothetical referendum takes place, Conservative policy might just change a little again.

The real problem is not the principle of a referendum; the real problem is what will happen in the intervening years. This whole debate has given those who do not share the Prime Minister’s agenda—which is quite positive about membership of the European Union—an excuse basically to campaign for a British exit. Some of them dress it up in the argument for this imagined wholesale renegotiation of the British terms of membership. There is no reason why that should succeed, because if we start unpicking all aspects of our relationship with Europe, why would the French not start arguing to unpick competition policy? Why would the Germans not start arguing for the protection of their energy markets? Why would quite a lot of countries not start arguing, after perhaps making a few concessions to us, for taking back our rebate, as a quid pro quo? Realistically, I do not think that an unpicking of the whole relationship will happen.

In the meantime, business will be concerned about the uncertainty. Some of the statements from business have been clear. David Sproul, the UK head of Deloitte, has said:

“The Europe debate does not help to create certainty. When I talk to US clients who have not been immersed in the European debate as we have, they say that what they need is clarity. There is no question: it will impact business—it will hit investment into the UK.”

That point is repeated in a number of different quotations.

[George Eustice]

Would the hon. Gentleman acknowledge that all those arguments were put forward during the euro debate and that they were all proved wrong? For example, it was said that the Japanese car companies would all go, but that did not happen. It is a sorry state of affairs when the European Union seems almost incompatible with a democratic referendum or with the will of democratically elected national Governments.

[Martin Horwood]

Membership of the European Union is not at all incompatible with democratic referendums. We have had one and we have advocated another, and the coalition has legislated for a referendum lock if powers should ever move closer to Brussels, so that is not the issue. The real issue is British jobs and British business, and the climate of uncertainty, which is not about the principle of a referendum; it is about the risk of exit and the damage that that would do to the British economy and to the guarantee of peace and freedom across the European continent for future generations. It is also about the risk of losing our place at the table on everything from climate change to world trade. Those are genuine, deep risks, and concern is now being expressed by businesses, by our European partners and by our allies around the world.

Whatever we think about the principle of a referendum, we need to be absolutely clear which way we would vote in a referendum. The Prime Minister has tried to start making the case for a yes vote, and for Britain remaining in the European Union, but he has shied away from making a really firm commitment. The Liberal Democrats are absolutely clear that we would argue for Britain to remain at the heart of Europe, and the more that Members on other Benches stick their heads above the parapet and start to make that case as well, the better.

European Union (Approval of Treaty Amendment Decision) Bill [Lords]

George Eustice Excerpts

Monday 3rd September 2012 Commons Chamber

[George Eustice (Camborne and Redruth) (Con)]

I should start by saying that I agree with much of the analysis of my hon. Friend the Member for Stone (Mr Cash) about what is wrong with the euro and how we got to this situation. However, I disagree strongly with his conclusions about this Bill, because I think it is relatively uncontroversial. As the Foreign Secretary pointed out earlier, the new European stability mechanism is certainly an improvement on the European financial stabilisation mechanism that went before it. Under that previous arrangement, Britain was liable for some 15% of the liability, which could have been a bill of up to £9 billion, whereas the new ESM means that Britain will not be taking on any future liabilities. So, first and foremost, this is a step forward.

Secondly, we must bear in mind that the Bill is not about the establishment of the ESM itself; it is simply about the amendment to article 136. This is just about clarifying the legal basis on which the ESM is set up, and discussion is taking place about whether that even needs to happen, as my hon. Friend the Member for Stone pointed out. This has already been happening under article 122, and it is apparent that it is mainly a concern of the German constitutional court that has prompted this change. The one thing I would say is that if other European countries or all 27 member states are going to acknowledge the concerns of one member state—Germany—by amending the article to reflect its needs, I look forward to the day when that will be reciprocated. I look forward to those moments when Britain is in a minority of one in having concerns about some things European and that, too, is respected by the other member states.

[Mr Jenkin]

I cannot quite believe what I am hearing, because a criticism that my hon. Friend and I have regularly made of the European Union is that what we are categorically assured will not happen then happens, and when we amend the treaty just to tidy up the wording, that makes it more explicit that it was always intended to happen in the first place. May I just read to him what the no-bail-out article actually says? It says:

“A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of another Member State”.

That is what the treaty says now and he is supporting, by a sort of sleight of hand, that being negated and set aside simply because it has already happened illegally. Is that not the grandmother’s footsteps of European integration that he and I have always railed against?

[George Eustice]

I would simply say to my hon. Friend that Britain is not bound by the ESM; it is very clear that only eurozone member states will be affected. Is it proportionate for us to stand in the way of those countries that are wrestling with and trying to decide what is going to happen with the euro? Is it proportionate for us to block that particular tweak to that treaty? I just do not feel that it is. I agree with him in that I want renegotiation and I want it, at some future point, to be put to a referendum. However, we need to pick our battles and pick our moments, and I think it is wrong to nit-pick over what I would regard as a small change.

[Mr Cash]

My hon. Friend was kind enough to say that he agreed with my general analysis of the problems that have led, through the treaties, to the difficulties that the European Union as a whole now represents. That explains why giving more money to this particular fund and doing it in this manner is likely to exacerbate the deep black hole that has already been created. It affects us because we trade so much with the European Union.

[George Eustice]

My hon. Friend makes a point that I was going to deal with. I simply return to what my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) said, as I do not think that by blocking this Bill we are going to stop the ESM. Other countries will continue, because they have decided that they need to do so to try to save the euro.

We also need to give the Government and the Prime Minister credit when they achieve things and make progress. My hon. Friend the Member for Stone and I would like to see faster progress made and a renegotiation sooner rather than later, but we should give the Government credit where they safeguard British interests and improve on the situation we inherited. We should not blame our own Government for the mistakes the previous Labour Government made. They engaged in sloppy negotiation, and, as a result, we ended up with the former arrangements in the EFSM. The situation has now been improved with the ESM and we should support that.

[Mr Jenkin]

Where is the consistency in the Prime Minister’s vetoing fiscal union at 27 in December last year and now implicitly consenting to it by scrapping the no bail-out article? Should we not be extracting a real concession? Should we not be getting the concessions we really want? Should we not be using this opportunity as a fulcrum for renegotiation? Is this not the moment—when these countries want fiscal union to support monetary union—to say, “This is what we want to pull back in return”? Instead, we are just giving this away, and for what?

[George Eustice]

I think that there is a big difference between the fiscal compact that we vetoed last December and this particular one. Again, this comes back to the point about what is proportionate. By vetoing that fiscal compact, Britain was sending a clear signal that we were not going to be part of a wider decision at an EU level for those types of fiscal integration, because we were not affected. That approach was absolutely right on a number of levels. First, it showed that Britain was serious and that, on these issues, when we said we were going to do something, we meant it and we were ready to use a veto. That will help us when it comes to budget negotiations.

Secondly, by vetoing that particular treaty at an EU level, the Government managed to limit its scope, because it was, thus, necessarily just about the eurozone members and it cannot affect the UK. Had we signed up to that particular treaty, we would have faced all sorts of threats and demands, and people trying to put other agendas on the table. We would have had months and months of wrestling over things we did not want, before we would probably finally have had to veto it in any case, so I think that we did the right thing. However, I am just not convinced that such an approach is right in this instance, for the reasons I have set out. As I say, I think it would be disproportionate, as the ESM is not going to affect the UK; there is nothing that will expose us to future liabilities. Would it be right for us to stand in the way of countries that think that it is the right thing to do? There is a question of whether it is the right thing, but would it be right for us to stand in their way?

[Mark Reckless]

My hon. Friend refers to our having vetoed the fiscal compact, but is it not going ahead? Are we not acquiescing in the use of the European institutions to enforce it, just as proposed? How does that increase our credibility in budget negotiations?

[George Eustice]

I would hope that my hon. Friend agrees that it was right to use the veto. We need a bit of a culture change in the Foreign Office, as has been alluded to. Historically, there has been too much of a sense that we need to have a seat at the table at all costs. That has been a mistake, it has been the wrong approach and using the veto in that instance was right. I return to what I said about a veto not being proportionate in this case. As I said, my conclusion is probably and, given the subject, extraordinarily, closer to that of the hon. Member for Cheltenham (Martin Horwood)—this is a step forward from the position that we inherited from Labour and we should recognise that.

It is encouraging that the European Union Act 2011 has had an effect for the first time, as the proposal we are dealing with requires an Act of Parliament. My hon. Friend the Member for Stone made some comments about that legislation, but again we need to give credit where credit is due. It is a major step forward, as it puts the UK on a similar footing to countries such as Ireland and Denmark, in that it will trigger a referendum automatically where there are any transfers of power. None of the Maastricht, Nice and Amsterdam treaties would have been able to go through without triggering a referendum. Perhaps Conservative Members are sometimes guilty of underestimating the significance of that, because it is a major step forward and likely to force what my hon. Friend and I want, which is, at some point, a proper renegotiation of Britain’s relationship with Europe and a new settlement. I say that for the simple reason that other countries are pulling in a direction that we will not follow and the British public’s chance for the first time to say, “We will not follow” will force a new settlement and the sorts of negotiations that we want but that have eluded us for far too long.

[Mr Cash]

I might have agreed with my hon. Friend that the general sense of direction would lead to the conclusions he has drawn, but is he not conscious of the fact that Angela Merkel is now proposing a new union treaty—full political union and all the panoply that goes with that—which is likely to come forward in December?

[George Eustice]

It may come forward, but there will be better opportunities than this Bill to pick the moment to have that negotiation. This is not the Bill or the issue on which to say to other European countries, “Unless you give us a full-scale renegotiation, we are going to veto the proposal.” It is disproportionate to take that approach in this instance.

So much for the areas on which we disagree. I want to come on to some of the areas on which we are probably in agreement and to echo some of the points made. There is a big question about whether the ESM will be a solution to the crisis, or even part of one, and there is also doubt about whether there is any solution to the crisis gripping the eurozone. Although, as the Foreign Secretary said earlier, the polls in all the countries in the euro consistently show their wanting to stay in the currency, in reality they do not want to take the decisions or accept what the euro inevitably entails. That is where the real problem lies.

Let us consider Germany, for example. It is undoubtedly benefiting at the moment, almost freeloading on the other member states and enjoying a lower exchange rate than it would have if it had its own independent currency. The Germans have kidded themselves into believing that it is all down to German ingenuity and marvellous engineering, and granted they have made some improvements in their labour market and sorted out some of the structural problems in their economy in the past decade, but German industry is undoubtedly benefiting significantly from having a lower exchange rate than it would otherwise have. Meanwhile, countries such as Greece and Spain do not want to do what the euro entails in terms of fiscal discipline and so on. They have spent, borrowed a fortune and shown a complete lack of prudence over the past 10 years. Although such countries say that they want the euro, they do not want what the euro means, which is a real problem.

We should not stop member states trying to save the euro. If they want to save it and want to make that attempt, let us let them do it. I think the most likely scenario, however, is that the euro will be partially broken up and some member states will be allowed to leave it. Although I can understand that the Government would not want to entertain any such talk or to spook the markets by commenting on that idea—I do not expect the Minister will do so when he wraps up the debate—I hope that they are developing some serious contingency plans for handling a break-up of the euro, whether it is orderly or disorderly. Despite all the rhetoric when the euro was introduced about its ending volatility and being all about stability and stable growth, we might find that the conditions for stability and stable growth are best created by floating exchange rates, which can help countries adapt to shocks to their economies and changes in the world economy as well as to transition when things go wrong.

I was in the anti-euro no campaign and worked for it for four years, and I remember that a decade ago, when that debate was going on, many people who are now on the Opposition Benches—the right hon. Member for Rotherham (Mr MacShane), who is no longer in his seat, was one of them—accused us Eurosceptics of putting our heads in the sand and of saying, “Stop the world, I want to get off.” Who are the people who have their heads in the sand today? Who is in denial about the realities, particularly the financial realities, of the world in which we live? The fact is that the euro was an incredibly stupid idea. It was introduced only through a triumph of political belligerence on the part of people such as Chancellor Kohl and François Mitterrand over economic reasoning.

Economists at the time pointed out all of the problems that have come home to roost. They warned that there was a lack of convergence and that that was not just about the cyclical convergence of one’s economy and the levels of growth but, more fundamentally, about structural convergence, the make-up of one’s industries and the differences between economies. They were ignored. They warned that we would get asymmetric shocks to the world economy that would hit some countries worse than others, which would cause tensions in the euro, but they were ignored. They warned that to work properly the euro would require fiscal union and fiscal integration, that it would require very painful long-term adjustments in the absence of an exchange rate that could help people through those adjustments, that countries on the periphery would face prolonged periods of high unemployment and would be forced to cut wages, and that we would have to accept large migrations of people within the European Union from deprived areas to areas that were succeeding under the euro. Those warnings have all come true, but they were all dismissed at the time.

The final thing that everybody pointed out when the euro was debated was that we needed political union to make the euro a success, so that there was clarity in decision making. That has been proved right, too, because despite the warning from those on the pro-euro side that we would not have a seat at the table, all we have at the moment is 17 member states around a table squabbling and unable to reach a clear and coherent decision. That is one reason the euro continues to limp forward.

We need to learn the lessons. Why were all those economists ignored? Why was there so much mindless, blind faith in the idea that the euro was somehow historically inevitable? We still see that from some Members on the pro-euro side. The lesson we must learn is that nothing is inevitable. It is not inevitable that the euro will survive, but nor is it inevitable that it will collapse. The idea of ever closer union is certainly not inevitable any more and it is not inevitable that Britain will always be alone as the only country on the outside talking sense. I think it is quite likely that we will gain allies and that our ideas will start to gain traction.

There was a failure under the previous Labour Government and the truth about new Labour is that an unquestioning pro-Europeanism was almost an article of faith. Anti-Europeanism was blamed for the fact that they were not elected during the 1980s and that association was targeted at people such as my hon. Friend the Member for Luton North (Kelvin Hopkins), with whom I have campaigned on this issue many times. That perspective on Europe was very unquestioning and unprincipled. It was simply a political line to take, with no intellectual rigour, and it led to Tony Blair and the previous Labour Government simply going with the flow on whatever emerged on the European agenda.

This Government have made a very good start. The European Union Act 2011 was much more significant than many people on the Government Benches give it credit for, but we need to develop it and to build on what has been achieved to forge a new doctrine for the future of the European Union. That doctrine must end the dogma of ever closer union and encourage the idea of a multi-tier Europe—a pick-and-choose Europe where countries are able to adopt the policies they want and withdraw from those that they do not like and do not work for them. Too often in the past, we faced the problem of people saying that we would not have enough allies to make a point because there were not enough countries to support us. We need to leave such attitudes behind, because unless we begin the debate now we will never end up in the right place. We should be articulating a proactive vision of an alternative European Union, which does not require deeper integration in one direction.

[Mark Reckless]

My hon. Friend says that unless we begin the debate now, we will not end up in the right place. Has not the debate been going on for more than 20 years? Is not a decision needed to give the British people a vote on whether or not we stay part of it?

[George Eustice]

My hon. Friend knows that my position on a referendum is that there should be one, but that it should be after a renegotiation, not before. I do not agree that we should have an in-or-out referendum on the European Union at this point. I think that we should negotiate new terms with Europe and then put them to the country in a referendum, because that is what the majority of people in this country would support and want. In having a referendum, we must not deny the majority of people in this country the choices they would make.

I agree with my hon. Friend that many of us have been having such a debate, but that position was not adopted by the previous Labour Government, for the reasons I have just explained. Their policy was to go with the flow and they simply took a line that meant accepting all things European as a political doctrine rather than holding any kind of coherent, rigorous view about what the European Union should become. We must get over the weakness and insecurity of the obsession with having a seat around the table and instead start to articulate some clear ideas about what we want the European Union to look like in the future. We should be clear that it is our European Union, too, and that we do not care whether we are in a minority initially in making some of those arguments.

--- Later in debate ---

[Mr Lidington]

What it means is that we accept that, as Conservative politicians have argued since the euro was created, for a single currency zone to operate successfully over a number of different national economies there would need to be a measure of fiscal and economic integration, so that those economic differences can be managed successfully and in a stable fashion in that currency union. It is for the countries of the eurozone to work out exactly which economic and political measures will be right for their particular circumstances.

[George Eustice]

The Minister makes an important point about the remorseless logic. Does he not agree that one of the big problems with the way in which the European Union has developed is that it tends to introduce half-baked ideas, knowing full well that it will have to come back, several years down the line, with further measures that will mean further integration? Does he agree that we need to break that logic in some way and do what people really want, rather than creating a crisis that fuels more integration, which nobody wants?

[Mr Lidington]

Ultimately, it has to be for the electorate in each country to decide on the extent to which they want to take part in integration. My experience over the past two years of talking to Government leaders and other politicians in the other 26 countries, as well as following—as far as one can—the movement of opinion among the public in those countries, tells me that there is a greater level of support or toleration for Europe’s political and economic integration than there tends to be in the UK. I am generalising, of course, and there are significant differences among the 26 countries, but the historical experience of the United Kingdom in the 20th century differs from that of much of continental Europe, which helps to explain the difference in political attitudes towards European integration.

Various hon. Friends have raised a number of points during the debate, to which I wish to respond. My hon. Friends the Members for Stone and for Rochester and Strood both asked why the measure that we are debating today should be exempt from the requirement in the European Union Act 2011 for a referendum. The Act requires a referendum to be held when European Union treaties are changed in such a way as to create a transfer of competence or power from the United Kingdom to the European Union. The plain fact is that, as my hon. Friends the Members for Stroud (Neil Carmichael) and for North East Somerset pointed out, this measure does not transfer any such power or competence from this country to the institutions of the European Union. It does not even apply to the United Kingdom.

The amendment that we are debating is an amendment to article 136 of the treaty on the functioning of the European Union, which is the first article under chapter 4 of that treaty. That chapter is entitled “Provisions specific to Member States whose currency is the euro”. So, in that important legal treaty sense, this measure does not apply to the United Kingdom, although our ratification is needed to bring it into effect. Because it does not apply to us and does not transfer power or competence, there is no requirement for a referendum.

Balance of Competences

George Eustice Excerpts

Thursday 12th July 2012 Commons Chamber

[Mr Hague]

I appreciate the fact that my hon. Friend was with me until the second sentence of my statement. However, given that in the first sentence I merely said that I was going to make a statement, I will not take that as a ringing endorsement.

Of course my hon. Friend has a strong view, which is different from mine, about membership of the European Union. However, I think that he will concede that reviews of this kind, which spell out in detail how competence is exercised and, in many instances, what the costs are, and which set out properly the facts of how it is exercised in a single market, in directives and in many other contexts, can at least ensure that any debates about that issue, now and in future, are better informed and take place on the basis of a common understanding of the facts that would otherwise be lacking.

[George Eustice (Camborne and Redruth) (Con)]

I welcome my right hon. Friend’s announcement as a crucial first step towards Britain’s inevitable renegotiation of its membership of the EU. Does he expect the review also to examine the jurisdiction of the European Court of Justice and, in particular, its tendency to widen the scope of certain directives beyond the extent that national Governments originally envisaged?

[Mr Hague]

Yes, it is part of the history of EU competence that it has sometimes been extended, not by treaties and not by the decisions of nation states, but by rulings of the European Court of Justice, or by an expansive interpretation of the treaties by the European Commission. As we go through each of the issues, the way in which competences have developed in the past will be a legitimate factor in the assessment of how competence should be exercised in the future.

Oral Answers to Questions

George Eustice Excerpts

Tuesday 28th February 2012 Commons Chamber

[Mr Hague]

It is a constant cry of the international community, including among the more than 60 nations that met in Tunis on Friday, that humanitarian access needs to be granted, but the regime, which, in the view of the UN commission of inquiry, has committed crimes against humanity, is insensitive even to those demands for humanitarian access or for pauses each day in the conflict—it has refused to do that. We are doing our best to send humanitarian assistance. The UK has provided assistance that will amount to tens of thousands of food rations and other emergency supplies, and we are increasingly co-ordinating our work with other countries.

[George Eustice (Camborne and Redruth) (Con)]

7. What progress has been made in selecting a replacement for the UK’s judge at the European Court of Justice, following the end of the incumbent’s appointment in 2012.

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

We expect to be in a position to nominate a candidate for this position within the next month. The successful candidate should be able to take up the position when the term of the incumbent judge expires later this year.

[George Eustice]

Poland, the Czech Republic and Slovenia involve their national Parliaments in the process of selecting the judges whom they send to the ECJ. Given the power that the ECJ can have on this country’s legal system, what plans does my right hon. Friend have to involve the House in any future appointments?

[Mr Hague]

We have improved the nomination procedure by advertising the position publicly and subjecting applicants to interview by an independent panel of experts, prior to ministerial clearance. My hon. Friend raises a legitimate point. As things stand, parliamentary decisions on this matter are inconsistent with existing constitutional practice in the United Kingdom, and any change to the current procedure would, of course, set a precedent with wider implications. That can be debated in the House. I am conscious of the interest that the House takes and commit to keeping it updated on the progress made.

European Union

George Eustice Excerpts

Tuesday 13th December 2011 Commons Chamber

[Emma Reynolds]

I say to the hon. Gentleman that all our voters are proud patriots, and so are Labour Members. In constituencies across the country, foreign companies have invested in manufacturing facilities that support millions of jobs—Nissan, Honda, Bombardier, Airbus, to name but a few. In my constituency, Indian-owned Tata Jaguar Land Rover is building a new multi-million-pound engine plant, bringing hundreds of jobs. Those companies see the UK as a useful avenue into the single market. Those investments would be at risk if the UK continues to be on the sidelines, as Martin Sorrell, chief executive of WPP, stressed only yesterday when he recounted that he had spoken to an Indian investor who is considering where to locate a plant, and it was already the investor’s perception that the UK is outside western Europe.

[George Eustice (Camborne and Redruth) (Con)]

Is the hon. Lady not aware that all the arguments about inward investment leaving Britain were made when we decided not to join the euro, and they were all proved entirely incorrect?

[Emma Reynolds]

If the hon. Gentleman remembers, it was our Government who kept this country out of the euro.

The UK’s isolation is bad not just in economic terms, but for our influence in the world. Even the Deputy Prime Minister said on Sunday that when we stand tall in the European Union, we stand tall in Washington. But it is not only our standing in Washington that is now of concern. Political and economic power is rapidly moving south and east, to Brazil, India and China. In this new multi-polar world, it is those who harbour a fanciful, nostalgic longing for the empire who naively think that the UK could be more powerful standing alone. The only game in town to further prise open markets in emerging economies and to change the rules of the trade game, is for the UK to act within the European Union—a Union that magnifies our influence. Only this weekend, at the climate change summit in Durban, we saw that by working together with our European partners, we amplify our voice on key global challenges.

--- Later in debate ---

[Chris Heaton-Harris]

I must tell the right hon. Gentleman that times have changed just a tad since then. I believe that the attitudes of the parliamentary Conservative party directly reflect the attitudes of the electorate. They certainly reflect the attitudes of the electorate in England, and they would probably prove to reflect the attitudes of those in Scotland, Northern Ireland and Wales should they ever be consulted, as I hope they will be one day.

Let me say something about the veto that we supposedly exercised. I was a Member of the European Parliament, and I saw negotiations of this type up close and personal on a number of occasions. I saw the French walk out of meetings over the common agricultural policy. I enjoyed seeing the Spanish throw a magnificent strop during budget negotiations, which eventually ensured that the bulk of the Spanish fishing fleet was rebuilt or renewed at the expense of European taxpayers. Those countries were doing what most people do in business: they were setting out a negotiating position on the basis of which they could proceed. The one thing that all Members know is that this process will take months to reach fruition. At least we have the starting block of a solid negotiating position, something that earlier Governments were been unable to secure when embarking on European negotiations.

We have other vetoes that could be used in negotiations. One example is the multiannual budget financial perspective. In 2010-11, our net contribution to the European Union was £9.2 billion. We are the second largest net contributor to this club, but we ask very little in return for the money that we give. Our contributions will average about £8.5 billion for the next five years, and we should be demanding much more value for our money.

So many myths have been circulated. Today’s Financial Times—a newspaper that some people consider to be an accurate record of what is going on, as indeed it normally is—contains an article headed “MEP threat”, which states:

“A British MEP who leads the European parliament’s most powerful committee on economics and financial regulation is facing the threat of being ousted in a post-summit backlash against Britain.”

In fact such positions are decided on the basis of the number of MEPs in a political group, and the only people who can oust Sharon Bowles are fellow members of the European Liberal group. That is a complete misunderstanding, and just one of the myths that are peddled nowadays.

[George Eustice]

Does my hon. Friend expect anything different from a newspaper that thought we should join the euro, and maintained that position for several years after we had rejected the idea?

[Chris Heaton-Harris]

Yes, I do. I expect the highest standards of reporting from out national newspapers, but I take my hon. Friend’s point on board.

European Council

George Eustice Excerpts

Thursday 8th December 2011 Westminster Hall

[Kelvin Hopkins]

I thank the hon. Gentleman for his intervention. Indeed, he is absolutely right, and the Soviet Union is the best example. Many currencies were created after the break-up of the Soviet Union. When Slovakia broke away from the Czech Republic, it created a currency and that was not a problem. I am sure that both economies—certainly Slovakia’s—benefited from that.

From time to time, we have had to adjust the parity of our currency in relation to other currencies. That has been necessary and beneficial. The Bretton Woods settlement made provision for that in 1944; in fact, Bretton Woods wanted to go further. Keynes and others suggest that some countries ought to be required to revalue if they have a very large trade surplus, as indeed one major country in Europe has with the rest of Europe at the moment. Such countries ought to be required to get some balance within the international economy.

[George Eustice (Camborne and Redruth) (Con)]

I congratulate the hon. Gentleman on all the work that he has done over the years to keep Britain out of the euro. Does he agree that a big advantage to a country having its own currency is the ability to act and make decisions? Britain’s experience during the past 10 years has shown that the ability to act is far more important than having a seat at a table where people squabble and cannot agree.

[Kelvin Hopkins]

The essence of democracy must be elected Governments in nation states. Internationalism is not about getting rid of national Governments and international boundaries; it is about working in close co-operation with other countries. We can continue to be internationalist, while retaining our economic independence. That is the way forward.

I shall finish on this note. Things are changing. John Rentoul is a journalist who supported the European idea through decades. Two weeks ago, he wrote in The Independent on Sunday that he has to admit that Peter Shore and Bryan Gould were right to say that the euro would not work. I was friendly with both those great people, and when Bryan Gould was around, I was friendly with him, too. That is a sign that things are changing and that even those who have been what some people unkindly call Eurofanatics are changing their views.

--- Later in debate ---

[Andrea Leadsom]

I thank my hon. Friend. In truth, right now, I genuinely believe that the Prime Minister has to focus his effort on creating the best solution for Britain, and that is what he is doing. As for all the demands for referendums, the fact that I am confused about what my hon. Friend has been saying, although I am quite close to these issues, demonstrates that other people will doubtless also be confused. The demands are seen as our party, at least, trying to cause trouble for the Prime Minister. For that reason alone, now is the time to get behind the Prime Minister, who has promised the British people that he will defend our interests.

Let me come to why defending the City is the key priority at the moment. People talk about renegotiating EU directives that have already been implemented, but as we have found as part of the Fresh Start project work, that is real spaghetti; it is extraordinarily difficult to unwind existing, implemented policies. I am a very practical person, and the best approach in terms of doability is to look at what has not yet been implemented and what the biggest threat to Britain is. On those two counts, there is no doubt that we should focus on financial services.

Financial services account for 11% of Britain’s tax take each year—about £50 billion. It employs nearly 2 million people; it is our biggest export; and it creates a huge positive trade surplus. Given that we have a big overall trade deficit, we would be looking at a far worse trade balance without financial services. Added to that is the fact that the potential for the future growth of financial services is all outside the eurozone; it is in the BRIC countries—Brazil, Russia, India and China—and America and Asia. That is where the potential lies. Yet, before the financial crisis, Britain was in a strong position in creating an EU financial services single market. We were influential. That was all about deregulation, open access to markets, growth and jobs. Britain did very well out of that and so, by the way, did the rest of Europe. Other eurozone countries did extraordinarily well, because the City was the entry-point to European financial services markets. That benefited us all.

Since the financial crisis, however, the agenda has changed. Britain has rightly changed its regulatory environment by greatly increasing controls, the closeness of supervision and the requirements for capital, liquidity and so on. The EU’s goal has been more to ban what it does not like: “Let’s reduce financial activity; we will constrain, prevent and reduce what is going on.” Nowhere in the EU treaties is there any talk of prudential decisions that the EU might make that would go against the fundamental commitment to single markets and growth opportunities, so the 49 EU directives and other proposals on financial services coming down the track are already in breach of the spirit of the EU treaties, which are all about creating better markets and more access.

I want to mention a couple of those matters in particular. First, on the financial transactions tax, people may think, “They will never do it; it would be cutting off their nose to spite their face and the business will simply go elsewhere.” Actually, however, I think many people in the EU are determined to do it, because they do not want the business. They think that Anglo-Saxon light-touch regulation and the success of financial services are partly to blame for the eurozone crisis. They are quite wrong, but that is where they lay the blame, so they would consider a financial transactions tax that would drive business abroad to be a good thing. To anyone who thinks, “They would not do it,” I would say that they would if they had the opportunity. Of course, that would be disastrous for Britain. It would not be a tax on bankers; it would be a tax on pensioners, investors and savers, because it would go straight to the bottom line of every investment portfolio. If anyone said that it would serve bankers right, I would reply that it would affect not bankers but savers. I could not support that.

Secondly, a slightly unbelievable idea has been proposed in the eurozone that a clearing house with more than 5% of its turnover denominated in euros should relocate to the eurozone. That would be daylight robbery and steal our business, and I am glad that the British Government are already challenging it in the European Court of Justice. Where in the single market treaties, which are all about growth and jobs, does that appear? How would it support British growth and jobs? It would not. I am extremely concerned about the tone and extent of EU directives coming down the track. They are not yet implemented; but unfortunately, under QMV, they could be implemented without Britain’s say-so.

[George Eustice]

I agree with my hon. Friend that the Prime Minister is right to prioritise the financial services directives in the negotiations. Is she aware that Open Europe has today published a poll of City institutions showing that more than 60% of them believe that the burden of regulation coming down the tracks from the European Union outweighs the benefits of the single market?

[Andrea Leadsom]

I have not seen the poll—I have been looking forward to seeing it—and I am not surprised by what my hon. Friend says. Although, as I have said, the treaties are all about expanding markets, growth and opportunities, some of the unintended consequences of EU policies have been the complete opposite of that, and never more so than in financial services. I think that a deliberate attempt has been made to reduce financial services activity in the eurozone.

Financial services should be the top priority for the Prime Minister. He has been clear about drawing a marker in the sand to the effect that Britain wants a secure legal agreement that, in the event that financial services legislation is against Britain’s best interest, we can prevent it from being imposed on us.

Oral Answers to Questions

George Eustice Excerpts

Tuesday 25th October 2011 Commons Chamber

[Alistair Burt]

The process of sanctions has been cumulative over time. There is evidence that they are beginning to have an impact on the economy in relation to Iran—above all, targeted on the individuals who are most responsible—but as well as the sanctions track there is a negotiations track. Nuclear powers have made it very clear, as have the E3 plus 3, that there is an opportunity for negotiation with Iran if it would be open about its nuclear policy. We urge Iran to follow that track so that sanctions can be lifted and the world can be convinced of the civilian purposes of Iran’s programme if that is, indeed, the case.

[George Eustice (Camborne and Redruth) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Minister for Europe (Mr David Lidington)]

I am sure that the whole House will want first to send its sympathy to the Government and people of Turkey in the wake of the devastating earthquake that has struck there. My right hon. Friend the Prime Minister has assured Prime Minister Erdogan that the United Kingdom is ready to help in whichever way Turkey thinks best.

At the Commonwealth Heads of Government meeting that opens in Perth on Friday, we believe that the key focus of discussions should be on how to strengthen the Commonwealth for the future. We are committed to working to strengthen the Commonwealth as a force for democracy, development and prosperity and we believe that this CHOGM can and should be a defining one for the organisation.

[George Eustice]

I thank the Minister for that answer. The coalition agreement states:

“We will examine the balance of the EU’s existing competences”.

Will the Minister explain to the House when and how this Government policy will be delivered?

National Referendum on the European Union

George Eustice Excerpts

Monday 24th October 2011 Commons Chamber

[George Eustice (Camborne and Redruth) (Con)]

May I say how good it is that we are having this important debate this evening, but how disappointed I am that the build-up to it has given the impression that the Conservative party is divided on Britain’s approach to the European Union? The truth is that the only real division this evening will be over the wording of a motion, not the substance of our approach to the EU. In reality, Conservatives are united in believing that the EU has accumulated far too many powers, that the status quo is no longer an option and that we must renegotiate a new relationship with the EU and make a fresh start.

I think that three distinct steps need to be taken. First, we need a plan, and in my view the Government should be doing the work right now to identify which powers we would seek to repatriate. Secondly, we need to take every opportunity we have to negotiate and to deliver that plan. Finally, the end of the process should be the point at which we have a referendum and put the renegotiation to the people.

It is because I believe that a referendum should come at the end of the process, rather than the beginning, that I cannot support the motion as it stands this evening. However, I cannot support the Government by voting against it, so I will abstain. The reason I cannot support the Government is that I want them to do far more than they have so far been willing to do to accelerate the plan for a renegotiation. That will be the main focus of my comments today.

It concerns me that the Foreign Office might be ducking the challenge here, and I have been very disappointed by the “jam tomorrow” nature of some of the Foreign Secretary’s comments. The urgent need to get our economy moving again becomes clearer by the day. There are no easy ways out of the current mess. We need radical thinking to get our country moving again, and that should include dealing with the morass of EU laws and regulations. I do not think that it is good enough to say that changing the EU is all too difficult and so nothing can be done for years to come. Sorting out the EU is not something that might be nice in the distant future; tackling the burden of EU regulation is an integral part of the solution to the current crisis and we must act now. We have to find a way of cutting the Gordian knot that has created a situation in which politicians talk about reforming the EU but can never find the moment to deliver real change.

[Charlie Elphicke]

Will my hon. Friend set out how exactly he would cut that Gordian knot?

[George Eustice]

I was about to come on to precisely that.

I do not accept the argument that nothing can be done until there has been an intergovernmental conference or a new treaty. Where there is the political will, there is always a way, and where needs must, the EU has shown itself able to react quickly and then sort out the lawyers and the legal basis for action later.

[Mark Pritchard]

I commend my hon. Friend for his long-standing convictions on these issues. He talks about a White Paper, renegotiating powers and then a referendum. What timetable does he envisage for that referendum?

[George Eustice]

It would come as soon as we had finished the negotiation, and if I had my way, it would happen very quickly and, certainly, within this Parliament.

The bail-outs in Greece and Ireland were technically against EU law, but the European financial stability facility was agreed and implemented within days; three years ago, the bank bail-outs breached EU state aid rules, but again exemptions were created when needs required it. Sweden has technically been in breach of the treaties for a decade, because it does not have an opt-out from the euro, but the EU has had to learn to live with it, as that is the political reality. The Danish Government have unilaterally introduced extra customs checks on their borders, which are in breach of the Schengen agreement, but, again, the EU has had to learn to live with it.

The lesson from those examples is that EU law is a flexible notion. In fact, the European Union Act 2011 explicitly states that EU regulations and directives have force in this country only when Parliament allows them to, so we must be far more willing to set aside the authority of the European Court of Justice, and crucially we should not let dreary treaties and EU protocols get in the way of taking urgent action to stimulate our economy.

Let us say to the EU that we are going to delay the agency workers directive, making it clear to the institution that it will have to learn to live with that and that we will not accept an infraction procedure. Let us make it clear, during the current negotiations on the budget, that we intend to disapply, for instance, the working time directive, which was mentioned earlier, until we get this economy out of recession.

The European Union would complain, but, if the evidence of the examples I have cited is anything to go by, it would probably take it at least three years to get around to doing anything about it. Such a move might do something else, too. People keep saying, “These European politicians have no intention of having a treaty; they just won’t negotiate with us, so we have to give up,” but if we unilaterally did those things we would suddenly find that there was an appetite for a long-term solution to such issues. It would be a catalyst to get negotiations moving.

[Bob Stewart]

Will my hon. Friend give way?

[George Eustice]

I am sorry, but I have almost finished, and I do not want to eat into other people’s time.

Negotiators in the Foreign Office would probably wince at the idea of adopting such a stance, but it is the only way we can cut that Gordian knot, sort out the EU and get our economy moving again, and I very much hope that the Minister takes those comments on board.

Oral Answers to Questions

George Eustice Excerpts

Tuesday 14th June 2011 Commons Chamber

[Alistair Burt]

We are very conscious of those pressures. First and foremost, most of them are being absorbed by the Tunisian people themselves; indeed, it is remarkable how many families have taken into their own homes those fleeing from neighbouring Libya. However, DFID has also been at work providing exactly the support that the hon. Lady would expect from us. Millions of pounds have already been committed, and this support will continue to assist people.

[George Eustice (Camborne and Redruth) (Con)]

9. In what circumstances his Department considers providing financial assistance for legal fees of British citizens charged with offences abroad.

[The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne)]

The Foreign and Commonwealth Office does not provide financial assistance for legal costs for British citizens arrested overseas. We provide information about the local legal system, including whether a legal aid scheme is available. We can also provide a list of local English-speaking lawyers, and we work with non-governmental organisations that might be able to offer support.

[George Eustice]

The Minister will be aware of the plight of my constituent, Stephen Scarlett, who remains in prison in Senegal despite the fact that his sentence ended in February. His family have been unable to get any financial support from the Foreign Office to help them to navigate the local legal system. Does the Minister agree that, in such extreme cases, the needs of such people are the most acute of all? Will he look into providing financial assistance in this case so that Mr Scarlett can be reunited with his family?

[Mr Browne]

I understand the distress felt by Mr Scarlett and his family over the length of time that it is taking to resolve his case. He has been assisted by the British embassy in Dakar, and by the Foreign and Commonwealth Office as a whole. However, the responsibility for ensuring that he receives the best possible outcome rests with his lawyer. I can add that the Foreign and Commonwealth Office supports and part-funds three groups: Prisoners Abroad, Reprieve and Fair Trials International, all of which assist British citizens. We are aware that Fair Trials International has offered its services to Mr Scarlett’s family.