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

Jacob Rees-Mogg Excerpts

Monday 10th September 2012 Commons Chamber

[Wayne David]

I am pleased that my hon. Friend made that intervention, as it takes me neatly to my next point.

The ESM is important for all parts of the United Kingdom—including Wales—because it will help to ensure that the eurozone becomes a stable and attractive market to which we can take products made in our constituencies of Swansea, Caerphilly and elsewhere. That is central to the debate, and it concerns me greatly that some—although not all—Government Members actually want the eurozone to collapse. They want that outcome for a pathological, ideological reason, without realising the immediate material consequences that it would have for jobs in our constituencies.

[Jacob Rees-Mogg (North East Somerset) (Con)]

I would classify myself as one of the people who does want the eurozone to collapse, because I think that only with the collapse of the euro can the economies of Europe begin to grow again. It was the same when the Asian crisis hit, and the economies that devalued were the ones that grew again fastest and soonest.

[Wayne David]

I simply do not agree, and there are plenty of academics and learned people who do not agree either. Most importantly of all, plenty of workers and employers in my constituency do not believe it. As I said, I am not suggesting for one moment that the EU and the eurozone are particularly popular with people—they are not, and I fully understand why not—but in the end people are concerned about their livelihoods and their prosperity, which depend on jobs. That is why it is important for this country to do everything we can to ensure that the eurozone is helped to get over its present difficulties and made prosperous once again.

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[Wayne David]

I agree that the IMF is an example of good practice, and I think it laudable that the ESM is basing much of its operation on the way in which it has operated, successfully, for a number of years. Don’t get me wrong: I am not against private sector involvement—quite the opposite—but I think that clear terms of reference need to be established and monitored.

For that reason, and for all the other reasons that I have given, I think that both new clauses are eminently sensible. I think they will enhance both parliamentary democracy and the role of this Parliament. I also think that, ultimately, they will send our partners in Europe the extremely positive message that we are serious not only about establishing the ESM, but about ensuring that it works effectively well into the future.

[Jacob Rees-Mogg]

It is a great pleasure to follow the hon. Member for Caerphilly (Wayne David), who almost made the new clauses sound respectable. In fact, they are some of the most splendidly pointless measures that we have seen in the House; they serve absolutely no purpose.

[Mr Love]

The hon. Gentleman seems to be arguing against scrutiny of the European Union by this institution.

[Jacob Rees-Mogg]

I am all in favour of scrutiny. I am a member of the European Scrutiny Committee, and I am the greatest admirer in the House of my hon. Friend the Member for Stone (Mr Cash), who scrutinises with an eye like a hawk and ensures that every aspect of scrutiny is carried out to the fullest, most proper and deepest effect. However, I thought that the new clause might be an example of the socialist sense of humour, which involves tabling a motion that is completely and utterly meaningless and, indeed, the opposite of what the Bill is all about.

Perhaps the Members concerned did not listen to my right hon. Friend the Minister, who explained—beautifully, elegantly and with charm—what the Bill was all about. He also explained what the treaty was about, namely getting us out of responsibility and liability for the eurozone mess so that we would not have to pay to prop up the eurozone. The new clause proposes that the poor old Chancellor of the Exchequer, who has quite enough to do—for instance, he has a growth strategy to draw up, and his infrastructure Bill will be presented to us next week—must write a report on why a fund of which we are not part, and to which we do not contribute, has had an effect on the propping up the stability of the eurozone, which is a matter for the people—

[Emma Reynolds]

rose—

[Jacob Rees-Mogg]

Of course I give way to the shadow Minister.

[Emma Reynolds]

I could not agree more with the hon. Gentleman. The Government need to cut through the dither, and the Chancellor needs to see to that as a matter of urgency. However, I do not really understand why the hon. Gentleman objects to the Treasury’s conducting an impact assessment of the operation of the European sustainability mechanism. He takes a great interest in European matters, and I find it surprising that he does not welcome further transparency and further scrutiny of such an important issue.

[Jacob Rees-Mogg]

The hon. Lady flatters me. I do indeed take an interest in the issue.

It is extremely important for the Government to be scrutinised on what they do in terms of European policy, but I do not think that we should scrutinise Her Majesty’s Government in relation to what the Germans or the French do, because that is a matter for them. We are outside this mechanism. The whole point is that a new mechanism is being set up to ensure that there is no liability for the UK taxpayer. What is the Chancellor supposed to say? Must he send a letter to Parliament saying “Something over which I have no authority, something to which we have made no contribution, something which is not actually British in any sense, has worked”, or has not worked? We can read that for ourselves in the Financial Times, or in other reputable newspapers.

We really do not need the Chancellor to be bogged down in more bureaucracy. There is a difference between scrutiny and bureaucracy. Scrutiny is about challenging Her Majesty’s Government to ensure that the Government’s decisions are in the best interests of the British people. These decisions—the European stability mechanism decisions—will not be Government decisions in any sense once the treaty is passed, and once this Act is enforced. They will be decisions over which we will have no control, and that is the whole point. We do not want to have any control, because we are not part of the eurozone, and most sane and sensible people hope that we never will be. It is our aim and ambition to be out of the eurozone.

[Mr Love]

If we take the hon. Gentleman’s argument to its logical conclusion, we must assume that he is urging all Government Back Benchers not to call for countries that are in the eurozone to leave it.

[Jacob Rees-Mogg]

The hon. Gentleman is confusing two completely different things. One is placing an obligation on Her Majesty’s Government, and the other is expressing an opinion.

I might wish to give advice to the central bank of China. I might wish to say that it was about time that it cut its interest rates—which I think it should—and used its reserve requirements for the banks. It has been putting the rates up, and it is about time that they came down. I think that China needs a monetary boost. But are the Chinese Government listening, and have they the slightest interest in my opinion of their monetary policy? I very much doubt it. [Hon. Members: “Of course!”] Hon. Members flatter me again, but I fear that even the Chinese ambassador, most assiduous gentleman though he is, will not report the opinions of the House of Commons on China’s monetary policy. I fear that even if the Foreign Office, our most esteemed and distinguished Foreign Office, that Rolls-Royce Department—possibly a Rolls-Royce made rather more recently, in the 1970s, with a little bit of engine trouble and a little bit of oil leakage, but none the less with very fine leather inside and looking very nice—sent a message to China saying what its monetary policy should be, the Chinese would not take any notice, and the same applies to the new clause. This is not our business; it is a matter for the eurozone countries. We specifically excluded ourselves, and then the Opposition came up with this wonderful wheeze.

I suppose that that is admirable, in a way. The Opposition have to think something up. As Disraeli said, the job of the Opposition is to oppose. All the finest socialist brains in England were sitting around discussing how to amend a Bill consisting of a handful of clauses saying nothing much except that Her Majesty’s Government would be saved from further liability for the euro. “What shall we do? What bold step of policy shall we take? How shall we strive to convince our electors that there will be a new dawn, the new Jerusalem that the socialists are always looking for? We must ask the Chancellor of the Exchequer for a report that is so hard-hitting, forceful and solid that it constitutes a new policy.”

[Mr MacShane]

rose—

[Jacob Rees-Mogg]

The right hon. Member for Rotherham (Mr MacShane) looks as if he wishes to intervene, and I will of course give way to him.

[Mr MacShane]

I assume that this will only be reported in Hansard, and will thus remain a state secret. The hon. Gentleman is pretty much making my speech for me.

That said, I think that the Chinese should listen to the hon. Gentleman. I think that the clatter of chopsticks in North East Somerset should be heard in Beijing when it comes to policy. It should also be noted that we do about £48 billion-worth of trade a year with the other EU member states, and what they do matters to us. The notion that if we do not sign the treaty the continent will be cut off has been a traditional approach throughout the ages of the Tory isolationists of whom he is the most wondrous representative in today’s House.

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[Jacob Rees-Mogg]

I am grateful to the right hon. Gentleman, but I must disappoint him. I support the treaty. For once when it comes to a European issue, I think that the Government have got it right, because what they are doing gets us out of the problem. That is the whole point. Once we have got ourselves out of the problem, how Europe deals with it and funds it is a matter for Europe. Yes, it is important that we trade with them, and yes, it is important for there to be stability within the eurozone—although I would prefer a new stability without a euro and with individual currencies, as I think that that would be a better and more prosperous stability—but a report by the Chancellor of the Exchequer to the House on the matter is not going to sell an extra widget to Belgium.

[Andrew Bridgen]

My hon. Friend is as eloquent as ever. Does he agree that, given the speed at which events unravel during the eurozone crisis, even if this were our business—which it is not—an annual report would be at best irrelevant?

[Jacob Rees-Mogg]

My hon. Friend’s intervention is incredibly helpful, because it has reminded me of the one important point that I wanted to make in this little speech against the new clauses. Absolutely the only risk posed to us by the treaty is that it will not lead to repeal of the regulation setting up the EFSM, and that we will remain liable or another article 122 bail-out fund will come through. That is the only risk left to us, and if such a situation were to arise, the House would want to scrutinise it immediately, rather than wait for some pedestrian report to be delivered.

These new clauses are glorious in their way—glorious in their irrelevance and in their failing to appreciate what the whole point of the treaty is. They are a delightful effort to make sure that there is some debate, and they have given me an opportunity to speak when I had, for once, intended to be silent in a European debate. Because of their rank irrelevance, I could do nothing but speak out against them. I have every confidence that Her Majesty’s Government, with a careful operation by the Whips Office, will ensure that they are firmly defeated.

--- Later in debate ---

[Jacob Rees-Mogg]

It is a real pleasure to speak in favour of this Bill, because it is surprisingly important. The more we have debated it, the more clear its importance has become. It is important because it saves the British taxpayer risking substantial amounts of money. When the treaty was agreed, I was disappointed that we had not asked for more, because Her Majesty’s Government had a strong negotiating position and might have been able to start the process of renegotiation and ask why we did not have a more à la carte Europe, to use a French term, if I may, Mr Deputy Speaker, against the preferred guidance of “Erskine May” that one should stick to English.

The Government have achieved something considerable by appearing to be very modest. We have seen the clawback of powers from Europe for almost the first time. Under article 122 of the Lisbon treaty, we had opened ourselves up to substantial and potentially unlimited liabilities for the failures of the eurozone. Once it was accepted that article 122 could be used for emergency bail-outs and the regulation was not challenged, it was conceivable that further regulations could be introduced and that, although each one would have been subject to challenge individually, once the first was accepted, there could have been a continuous chain of bail-outs, resulting in billions and billions of pounds’ worth of liabilities for us.

If I may make a cheap party political point—there is an occasion for such a thing—it is worth noting that it was the previous Labour Government who signed us up, during their dying days, to this almost unlimited liability.

[Emma Reynolds]

It is always a pleasure to intervene on the hon. Gentleman. I have in my hand an explanatory memorandum by a previous Economic Secretary, who is now the International Development Secretary. It states:

“The Government regrets that the Scrutiny Committee did not have time to consider this document”—

meaning the document on the establishment of a European financial stabilisation mechanism—

“before it was agreed at Council. It should be noted that whilst agreement on behalf of the UK was given by the previous administration,”

to which the hon. Gentleman has referred,

“cross-party consensus had been gained.”

[Jacob Rees-Mogg]

When the hon. Lady started with, “I have in my hand”, I thought she was going to say, “a piece of paper”, and that we were going to be promised peace in our time, but, sadly, she offered party political disagreement instead. It was more like a battle than peace. All I would say is that the Government of the day were Labour. I accept that the incoming Government failed to challenge the use of article 122—they should have done that and it was a pity that they did not—but that was where we were: socialist extravagance spending our money and signing us up to bailing out the whole of Europe over and over again.

What did we get in place of that? We got a sound Conservative Government, with the help, for once—the worthwhile, marvellous and delightful help—of our Liberal Democrat coalition partners, who were robust enough, which some might say is most out of character, to support us in getting powers back from the European Union, which has almost never happened before. That is important because the whole basis on which the powers of the EU have been built—the acquis communautaire—has been one whereby it gets powers and never gives them away again. It is the doctrine of the occupied field that once Europe has taken over a policy area, it is in control of it and it never goes back to the nation state.

It is therefore a real triumph for the Government to have got this agreement on the treaty on the functioning of the European Union and that the article 122 mechanism has been cast to history. Although that is not being said officially—we do not have a signed document saying that article 122 will not be used—we have a very strong political agreement between all the Heads of Government and Heads of State, signed up to by the Commission, and, most importantly of all, a new mechanism.

The other good thing about the mechanism and the treaty approach that has brought it to us is that we have a proper parliamentary procedure to ratify it. It is so marvellous and commendable of this Government that they are taking parliamentary accountability and democracy seriously. They could have done it differently. They could have just bulldozed it through on a quiet Wednesday afternoon in a debate lasting an hour and a half or two hours, but they chose not to do that. They introduced a Bill that required a proper process and they actually allowed time for the debate—so much time that we may even finish early. That is another good argument for parliamentary scrutiny—time is not used up unnecessarily in the House of Commons; it is used for proper consideration of what the Government are doing.

This new Session’s resolution can therefore be: let us support this marvellous Government and let us support the Front Bench and Treasury Bench representatives as they go boldly forth. They stand up, show backbone and act like a lion—not, as somebody may have once said, like Bagpuss—against Europe. They make sure that the British position is put clearly and forcefully and that powers are returned home.

There is a great lesson for Her Majesty’s Government in this: when they show backbone, force and courage, not only do they receive rapturous support from Members on the bustling Back Benches, but they receive support from the country at large. As the Brussels directives are sent away and batted back home, so the opinion poll rating rises. I hope that the Government will learn from this and act on it in future.