Section 5 of the European Communities (Amendment) Act 1993

Ian Davidson Excerpts

Wednesday 27th April 2011 Commons Chamber

[Mr Hoban]

Indeed. If my hon. Friend has studied this carefully, as I am sure he has, he will recognise that large chunks of it are familiar from the Red Book. Of course, chapters 6 onwards are taken from the Office for Budget Responsibility’s economic and fiscal outlook. This information is in the public domain and Parliament has had sight of it before its presentation to the European Commission.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

Will the Minister remind me exactly why we have to produce all this information for the European Union? I have not read it in enormous detail but it seems that Parliament is telling teacher or the boss why we have done what has been done. That places the House of Commons very much in the position of being subordinate to the European Union.

[Mr Hoban]

I do not agree that Parliament has been placed in a subordinate position. We are passing this information to the European Union having already made it available to the House, particularly during my right hon. Friend the Chancellor’s Budget speech, and there is no requirement on us to accept any recommendations that the Commission might make as a consequence of having read the information. We are in a very different situation to those member states that will provide their convergence programmes at the same time as the UK, but before their Budgets rather than after them.

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[Chris Leslie]

I simply note at the outset that we are now engaging in a particular debate. Yes, I am glad that it is taking place on the Floor of the House, but we did not really know that it was going to be on the Floor of the House, in this particular form, with this set of papers and this particular motion, until 24 hours ago. It is curious that the Government, in their relationship with many hon. Members throughout the Chamber, have not made it clear that this is quite an important component of our obligations under European Union treaties. I know that Ministers are keen to abide by their obligations under such treaties, but I just point out that some Members might be less keen.

[Mr Davidson]

Given that this debate is so important, will my hon. Friend clarify whether the programme has already been sent to the European Union or if we will have to wait for the result of this debate before it is posted off second class?

[Chris Leslie]

I presume that the House has to agree the contents of the convergence programme before it can be posted to the European Commission. The hon. Member for Bury North (Mr Nuttall) implied that the Commission could probably glean all the information online, and there is a perfectly reasonable argument that the Commission should follow events in member state countries rather than expect these matters to be handed to it on a platter. I do not think that presenting the information is necessarily genuflecting in front of Brussels, but the obligation to do so is certainly a core component of the treaties. I simply point out that fact.

The point of the motion about which we need to be most wary is the noting “with approval” the Government’s assessment of the economy, particularly given the Chancellor’s and Treasury Ministers’ lamentable failure to understand the need for economic growth. Page 13 of the convergence programme, which was published just 24 hours ago, says that the recovery is in line with previous recoveries. That, of course, is not the case.

In the recessions of the early ’80s and ’90s the economy had clawed back economic strength by this stage in the economic cycle. However, since this Government took office, the trajectory of recovery has stalled. We are already seeing that the information in the document, published just 24 hours ago, is becoming out of date.

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[Jacob Rees-Mogg]

It is relevant to look at the United States economy and at the gold price, which is up at $1,500 and not because more people are getting married and want wedding rings—although I congratulate my hon. Friend on his forthcoming nuptials and I am sure he is buying a large piece of gold for his future wife. The gold price has been so strong because the financial markets have lost confidence in the US dollar and because the American political forces—the President and Congress—have not been willing to tackle the deficit in the way that Her Majesty’s Government have done. The gold price in sterling terms has not risen by anything like so much, because people have confidence in what the Government are doing.

Normally, I take the view that there are two people in this world who should be obeyed. One is the Holy Father and the other is my hon. Friend the Member for Stone (Mr Cash). When my hon. Friend speaks on European matters, he does so with a degree of infallibility that belongs to only one other living person, although I hasten to add that the remit of the Holy Father does not cover European matters. My views diverge slightly from those of my hon. Friend on one point: I think we should be proud of the document that Her Majesty’s Government are sending because of what the Government have got right. The situation they faced a year ago was desperately serious, needed urgent attention and had to be brought under control by their taking measures that are not necessarily popular.

It is important to emphasise that point because all Governments, when they take tough decisions, face gentlemen such as the shadow Minister, the hon. Member for Nottingham East (Chris Leslie). Over the next year or two, as people see the cuts coming through, it will be very tempting to listen to such voices and to think that perhaps there is an easier way and a land flowing with milk and honey that we have not yet found where we can borrow more money, where the financial markets will turn a blind eye, where we can spend money we do not have and not worry about our children and our grandchildren and where the banks will suddenly miraculously lend to bankrupt people to keep inefficient systems going. That is when those on the Treasury Bench must stiffen their sinews and summon the blood and not give way to those voices. At the moment, that is still relatively easy, because there has not been much coming through in the way of cuts. We have not seen the pain that will come from those difficult decisions. Now, however, we are sending our plan abroad. We are telling people not just in this country but in foreign countries of what we are doing and we should be proud of it because it is right. If we do what is right, the economy will begin to recover.

We on the Back Benches, in particular, must support those on the Front Benches when they do such things and when the critics from the other side appear to be doing well in the opinion polls. That is the point of maximum difficulty. Let us think of the great lady in 1981, when 360-odd economists wrote to The Times—a great newspaper with very fine editors—to suggest that the economic policy was wrong. That was two years in and it was the hardest point and that Government stuck to their guns, which led to the recovery we then had.

[Mr Davidson]

The hon. Gentleman has spoken movingly about the need for cuts and indeed for pain—pain that I suspect will not be felt by him. Pain will be felt by poor people whereas bankers, who are rich people, will feel no pain whatsoever. It is the unfairness of what the Government are doing that is causing so much opposition and bad feeling in the country and that is why the Liberals will suffer so badly in the AV referendum and the election.

[Jacob Rees-Mogg]

The fundamental flaw in the hon. Gentleman’s argument is to think that there is a painless way out of a major crisis. It is simply a question of whether we deal with it now and ensure that the problem is resolved and that the economy can grow again or whether we delay it and have a much worse crisis later. The pain I was talking about was political pain for the Government as people notice the cuts. Our approach will reduce the pain for individuals because it will ensure that the economy is rebalanced sooner rather than later. That is the way to minimise pain—not thinking that there is a never-never land with no pain after we have lived on debt and incompetent Government policies for the past 13 years.