Section 5 of the European Communities (Amendment) Act 1993
Debate between Jacob Rees-Mogg and Philip Hollobone(11 years, 2 months ago)
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Jacob Rees-Mogg (North East Somerset) (Con)
I welcome my hon. Friend the Member for Loughborough (Nicky Morgan) to her new post as Financial Secretary. It is an enormous pleasure to see her there and one of the great outcomes of the recent reshuffle. I also thank her for her courtesy to this House, which has not always been achieved by her predecessors, for holding this debate before the documents have been given to Brussels, which is an improvement. There was no suggestion on this occasion that the matter be debated in a Committee; it has come straight to the Floor of the House. I am grateful for that as it is important that this House has the ability to discuss such matters properly.
I apologise for the other members of the European Scrutiny Committee, who are meeting at this time. My hon. Friend the Member for Stone (Mr Cash), the Chairman of that Committee, can achieve many things, but unlike Padre Pio, that noted saint, he is unable to manage bilocation. No doubt, in a few years’ time, he will be able to achieve the ability to be in two places at once.
Mr Hollobone
Does my hon. Friend think that it is slightly cheeky or that it is just a matter of coincidence that the timetabling for this measure before the House should coincide exactly with when the European Scrutiny Committee is sitting?
Jacob Rees-Mogg
I think that it is an unfortunate concurrence of atoms. If we had not had a statement earlier, it would have been possible to fit in both, and that is how things go at the end of a Session. I am not so cynical as to think that this could possibly have been planned.
I want to answer immediately the point about savings made by the hon. Member for Birmingham, Ladywood (Shabana Mahmood). In all that she said on savings, she missed the reclassification of savings that the Office for National Statistics has just introduced. It has roughly doubled our savings rate, because it has reclassified the amounts that private companies put into pension funds as saving rather than as expenditure. That has transformed our savings rate, and therefore the UK economy has had a much higher savings rate than the figures have captured for many years. We should be rather pleased with the savings rate that we have and that we continue to have. Her point on savings, therefore, is, regrettably, fundamentally misfounded.
I want to come on to what underlies this whole debate. People with long memories will be aware that the Government—the British nation—had an opt-out of only stage 3 of monetary union. They did not have an opt-out from the earlier stages, and that included the convergence criteria to be ready to join the euro should that be the wish of the British people at any stage. These documents are part of the convergence criteria to show that we are making headway towards the requirements set out by the European Union under a number of agreements, the latest of which was in 2011, which basically ask for a deficit to be no more than 3% and for the national debt to be no more than 60%. It is about meeting those convergence criteria so that we could if we wished join the euro. It is important to bear that in mind. I am glad about the way the Government have approached this. Had they decided to prepare a whole new set of papers, devoting a great deal of energy and resources on the matter, as the previous Government did with their eurozone entry team, which cost millions of pounds and went on running for years, they would be buying into stages 1 and 2 of convergence for entering the euro. By simply sending the rather splendidly recycled—not just 75% but 100% of the fibre in this document has been recycled—to the European Union, it shows our deep suspicion of the whole process. In the reading of the documents, I could find only two references to performance against EU targets and convergence: on page 22, which runs to a mere three lines, and in the chapter headed “Excessive deficit procedure” on page 53.
I am pleased that the Government are taking an approach of saying, “This is what we understand is happening with the British economy. You, the European Commission, can have it, look at it and chew it over, but we are not running our economic policy in accordance with the convergence criteria.” I was reassured by the Minister’s comments that our policy is not determined by the requirements of convergence, and thank heavens for that. The convergence criteria have been at the heart of the ruination of European economies. There has been one crucial thing that the Government have been able to do since 2010, which the previous Government started, and that is to run a loose monetary policy with a tight fiscal policy. That has ensured that we have been able to get the deficit down without crunching the economy to pieces and without running the risk of a deflationary and elongated depression. That is possible only because we have not been aiming to meet the convergence criteria in the midst of a credit crunch/ depression. We have been able to set our own policy because we have had our own currency and therefore have not been trying to maintain the exchange rate at any particular level. It is notable that, throughout this process, the exchange rate has acted as one of the crucial automatic stabilisers for the economy. In 2009, the sterling-dollar rate bottomed at $1.35 and is now above $1.65, and that has acted as an automatic stabiliser on monetary policy during the process of this downturn—all of which has been dependent on our having our own currency, and has allowed both this Government and the previous one to be tighter on the fiscal side than would otherwise have been possible. It has avoided the absolute disaster affecting the eurozone countries, of having a tight monetary policy and a tight fiscal policy at the same point, which has led, in some countries, to riots.
I am broadly reassured, but there are inevitably some concerns. As I have mentioned, this is about meeting the convergence criteria that allow us to enter the euro. The European Union has no specific enforcement powers, but there are certain commitments that we have made. We are obliged, as are other EU member states not in the euro, to submit a convergence programme focused on the national fiscal policy. From 2011, EU legislation on economic governance introduced a new obligation on member states, including the United Kingdom, to take due account of EU guidance issued to them in the development of their economic, employment and budgetary policies before taking key decisions on their national budgets for the succeeding years, and progress will be monitored by the Commission.
Amendment of Standing Orders
Debate between Jacob Rees-Mogg and Philip Hollobone(11 years, 7 months ago)
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Mr Hollobone
I know for a certain fact that my hon. Friend is not a charlatan and a fraud.
Jacob Rees-Mogg (North East Somerset) (Con)
On a point of order, Mr Speaker. Is it in order for an hon. Member to refer even to himself, who is by virtue an honourable Member, as a charlatan and a fraud?
Mr Hollobone
I strongly encourage my hon. Friend the Member for Broxbourne to withdraw his motion at the appropriate point and to come back to this matter on another day.
Jacob Rees-Mogg
As I understand it, Mr Speaker, for a motion to be withdrawn, it requires the consent of the whole House, and one Member opposing it can stop that withdrawal taking place. It is too late for my hon. Friend, the Chairman of the Procedure Committee, to withdraw his motion.