UK’s Withdrawal from the EU

Debate between John Baron and David Lidington

Wednesday 27th February 2019 Commons Chamber

[Mr Lidington]

I place rather more faith in this House than the hon. Gentleman would appear to do, because I do not think there is any appetite in Parliament for what he described as a “slash-and-burn approach” to standards.

We believe that our deal is the right one for this country and no better one is available on the table. I also believe, as do the Government, that leaving with our deal is better than leaving without a deal.

[Mr John Baron (Basildon and Billericay) (Con)]

rose—

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[Mr Lidington]

I will give way to my hon. Friend, as he tried valiantly to persuade you to accept an amendment, Mr Speaker, but was unsuccessful.

[Mr Baron]

Unfortunately, amendment (j) was not selected, but I am sure my right hon. Friend will agree that the Government will have no problem in accepting in principle, and I look forward to hearing about that. Many of us who have wished the Prime Minister well recognise that compromise is required on both sides in these negotiations. The transition period is not brilliant but the backstop does have to be sorted out in respect of its indefinite nature. In recognising that, is the Chancellor of the Duchy of Lancaster at all concerned that the next steps as outlined by the Prime Minister yesterday might make a good deal less likely, because the EU may hope that Parliament does its work for it by taking no-deal off the table and extending article 50?

[Mr Lidington]

I genuinely do not fear that, because what I am finding increasingly in my conversations with politicians in different parts of Europe is that they want this issue sorted out. Frankly, they have politics of their own. They have important decisions to make on a range of subjects: the future of the eurozone; the negotiation of a multi-annual financial framework without a UK contribution; the tensions that exist between some of the central European and western European powers within the EU; and the continuing problem of the very large-scale movement of people from Africa into southern Europe. It would be a mistake for hon. Members to think that the leaders of the other 27 countries spend every waking hour thinking and worrying about Brexit matters.

Oral Answers to Questions

Debate between John Baron and David Lidington

Wednesday 6th February 2019 Commons Chamber

[Mr Lidington]

As the hon. Gentleman will appreciate, I am not familiar, as he is, with the details of his constituency case, and I was not certain from how he posed his question whether the problem was with the documentation alone or whether there was a more substantive problem, but the Immigration Minister or another relevant Minister will happily talk to him to try to sort this out.

[Mr John Baron (Basildon and Billericay) (Con)]

Does my right hon. Friend agree that Brexit provides us with the opportunity to introduce a controlled and fair immigration system that no longer discriminates against the rest of the world outside the EU and that that system should be the least bureaucratic possible?

[Mr Lidington]

I agree with my hon. Friend on both those points. It is important that in the future we have a system that is fair, makes it easy for the brightest and best in the world to come and work and study here and judges people not by the country they come from but on the skills they bring to this country and their commitment to this country.

Oral Answers to Questions

Debate between John Baron and David Lidington

Tuesday 12th April 2016 Commons Chamber

[Mr Lidington]

Both Chancellor Merkel and President Hollande have made it clear that they believe the United Kingdom contributes a huge amount to the political and economic weight of the EU in the world, and they want to see us vote to stay within the EU. They are also clear that this is a decision for the British electorate to take, and they respect that fact.

[Mr John Baron (Basildon and Billericay) (Con)]

In answer to the Minister’s question, our vision of the UK outside the EU is very simply that we would be like most other free trading nations around the world: trading as we see fit. I suggest the Government are playing with fire, because the more they wade in in favour of remaining during this referendum debate, the more the referendum will be seen as being unfair, and that could create further uncertainty, particularly if the vote is narrowly for staying.

[Mr Lidington]

The Government are not going to be silent or neutral on an issue that we believe is central to the future prosperity and security of the United Kingdom. I am glad that my hon. Friend seems to believe, on leaving, we should continue to be part of the European single market, but he is yet to say how that would involve not having to accept freedom of movement, agreement to all European rules although we would have no say or vote on them, and contributing to the EU budget. That is the situation Norway and Switzerland are in today.

EU-Turkey Agreement

Debate between John Baron and David Lidington

Wednesday 9th March 2016 Commons Chamber

[Mr Lidington]

Yes. That is why the statement issued after Monday’s summit said explicitly that the agreement we were seeking had to comply with international law.

[Mr John Baron (Basildon and Billericay) (Con)]

This agreement relates to a wider issue of underfunding of refugee camps across the middle east by the international community. What are the Government going to do to reinforce the message from the United Nations that many of our international partners—not the UK; we have done our fair share—are not stepping up to the plate when it comes to the funding of these refugee camps, and that includes many countries within the EU?

[Mr Lidington]

My hon. Friend makes a very fair point. I think we can trace the surge from Turkey into Europe last summer in large part to the decision that the United Nations had to make to cut food rations and restrict educational opportunities inside the camps, which led more people to feel that they had no option but to place themselves in hands of people traffickers. As I think my hon. Friend will know, the United Kingdom co-hosted a Syria donors conference in London a few weeks ago, which produced pledges from the international community of more than $10 billion. That is a welcome step forward, but I would be the first to say that we must now ensure that those pledges are turned into real money to help the people who are in desperate need.

Oral Answers to Questions

Debate between John Baron and David Lidington

Tuesday 14th July 2015 Commons Chamber

[Mr Lidington]

I do not know whether the right hon. Gentleman was present when my right hon. Friend the Chancellor made his statement on Greece last week, but he made very clear both his sympathy and the long-standing friendship between this country and the people of Greece. When this Government were elected in May, the Prime Minister made an offer to the Greek Government of technical support for things such as improving the efficacy of their taxation system. That offer remains open.

[Mr John Baron (Basildon and Billericay) (Con)]

Which circumstances would lead the Government to advocate a no vote to leave the EU in the forthcoming referendum?

[Mr Lidington]

I do not blame my hon. Friend for his question, but I would not think he really expects me to speculate about the outcome of negotiations—certainly not at this stage. The Prime Minister has made it very clear that he is aiming to secure reforms in Europe that are good for the prosperity and democracy of Europe as a whole and that help the United Kingdom feel comfortable with its place in Europe—and that if he cannot get those reforms, he rules nothing out.

Oral Answers to Questions

Debate between John Baron and David Lidington

Tuesday 9th June 2015 Commons Chamber

[Mr Lidington]

We have not been asked by the United States for such a location. If we received such a request, we would consider it on its merits in the way that successive British Governments always have done.

[Mr John Baron (Basildon and Billericay) (Con)]

Given that evidence was submitted to the Foreign Affairs Committee that the Foreign and Commonwealth Office had no in-house Crimea experts at the time of the Russian annexation, does the Minister agree that greater investment is required in our analytical capabilities?

[Mr Lidington]

We have an extremely talented team of analysts working in the eastern European and central Asian directorate within the Foreign and Commonwealth Office. In the light of events over the past 18 months, we have taken steps to strengthen the capacity of that side of the FCO. It is fair to say that most Governments throughout the world had hoped on the basis of the past 25 years’ experience that Russia was moving towards integration in a rules-based international order. It is clear from the actions that Russia has taken in the past year that that cannot be guaranteed and we need to respond accordingly.

Oral Answers to Questions

Debate between John Baron and David Lidington

Tuesday 3rd March 2015 Commons Chamber

[Mr John Baron (Basildon and Billericay) (Con)]

Given our admission that we were unsighted over Russia and Crimea, and given that we were short of Arabists following the Arab spring, is there not a case for spending more on our foreign policy capabilities? Would that not only ensure that we were better sighted, but reduce costs in the longer term because we would be able to avoid making further mistakes?

[Mr Lidington]

The Foreign Office makes a huge effort, in difficult fiscal times, to focus our resources on key elements of policy analysis and capability, including those involving the middle east and Russia, which, as my hon. Friend suggests, are particularly important. About 170 of our officers are now registered as having ability in Arabic, and a similar number are registered as having ability in Russian.

Government Strategy Against IS

Debate between John Baron and David Lidington

Friday 12th September 2014 Commons Chamber

[Mr John Baron (Basildon and Billericay) (Con)]

(Urgent question): To ask the Minister of State to make a statement on Government policy and strategy against IS.

[The Minister for Europe (Mr David Lidington)]

The Government believe that ISIL needs to be confronted in both Iraq and Syria. The creation of an extremist so-called caliphate represents a direct threat to the national security of the United Kingdom. In seeking to establish its extremist state, ISIL is already seeking to use the territory it controls to launch attacks against the west, including this country.

As my right hon. Friends the Foreign Secretary and the Prime Minister have outlined to the House this week, the Government are committed to tackling the threat of ISIL using the full range of instruments at our disposal—humanitarian, diplomatic and military.

So far as humanitarian efforts are concerned, in addition to air drops carried out by UK forces, we have committed £23 million in new assistance in northern Iraq, and £12.5 million has been delivered to the International Committee of the Red Cross and £5 million to UN partners to provide life-saving assistance to 150,000 people. We have also provided more than £600 million in Syria since the crisis began.

Secondly, we are working with our American, European, Arab and other partners to ensure a united front to stem the expansion and activities of this exceptionally dangerous movement.

In Syria, we continue to support a negotiated political transition to end Assad’s brutal rule and to pave the way for a political solution to this appalling conflict. In Iraq, we are supporting the new Government and welcome Prime Minister al-Abadi’s commitment to reform and to an inclusive approach that meets the needs of all of Iraq’s diverse communities.

Thirdly, the political and humanitarian response in Iraq must be backed up by a security response that will defeat ISIL on the ground. We are delivering military equipment to Kurdish forces, providing surveillance and, as the Prime Minister set out on Monday, looking at training Kurdish battalions.

We welcomed President Obama’s statement on Wednesday. As the global resolve to tackle ISIL strengthens, we will consider carefully what role the United Kingdom should play in the international coalition.

The Government have outlined a broad and comprehensive approach to responding to ISIL, which should command the support of the entire House.

[Mr Baron]

Thank you, Mr Speaker, for granting this urgent question. I also thank my right hon. Friend the Minister of State for responding as he has. Many colleagues welcome Government assurances that there will be no intervention in Iraq or Syria without Parliament first debating and voting on the issue. Many colleagues also have questions about the feasibility and the policy of conducting air strikes in Iraq. We have questions about the fact that IS cannot be defeated by air strikes alone. We urge that regional powers and allies play their full role in this. The symbolism of the west defeating this caliphate would be too profound. We also believe that questions should be asked about the elephant in the room—the Iraqi army—and about how durable defeating IS in Iraq would be if the politics are not in place.

Many other colleagues have even graver doubts and questions about air strikes into Syria itself. It is not just the legality of the issue and the fact that Syria has robust air defence systems supplied by the Russians, but the fact that we have not yet had an answer to the question: who would take IS’s place? The morphing of one extremist group into another has been a notable feature of this civil war in Syria and many extremist groups lurk in the shadows.

The Foreign Secretary, in his address to the House on Wednesday, expressed that caution. He made it clear, in answer to me and to others, that striking into Syria would be a much higher risk strategy. President Obama’s address to the American people yesterday morning—under Greenwich mean time—seemed to go much further than the Government had hitherto been comfortable with. He talked about destroying IS, air strikes into Syria and supporting rebels, even in Syria, against IS. I ask the Minister for some clarity on the Government strategy on IS? It appears that there has been an element of discrepancy between the Foreign Secretary and No. 10. On Wednesday in this place, the Foreign Secretary expressed caution both in his address and in direct answers to questions; I do not think that anybody could go away with a message other than that. Yesterday in Berlin, he seemed to rule out British involvement in air strikes in Syria altogether, yet No. 10 seemed to row back almost immediately and said that no options must be removed from the table and that everything must remain in play. I ask my right hon. Friend where exactly Government policy is on this issue. In answering, may I remind him that this House passed resolutions last year, making it clear that there could be no lethal support for any Syrian rebels without Parliament’s express say so? Again, President Obama’s address seemed to lay open that possibility. What is the Government’s position on that?

I make no apologies for tabling this urgent question on a Friday, and I apologise to those who want to get through their business, but given our errors in our interventions in the past—whether it is going to war in Iraq on a false premise, the disastrous morphing of the Afghanistan mission into one of nation-building or even our intervention in Libya—it is right that Parliament asks these questions, particularly as we are about to enter the conference recess. We must not allow events to get ahead of Parliament or Parliament to be presented with a fait accompli upon our return.

[Mr Lidington]

As my hon. Friend the Member for Basildon and Billericay (Mr Baron) said, this is a subject that quite rightly arouses great interest, concern and debate in all parts of the House. The Prime Minister’s statement and subsequent answers to questions on Monday, the Foreign Secretary’s extensive evidence session with the Foreign Affairs Committee, of which my hon. Friend is a distinguished member, on Tuesday and then the Foreign Secretary’s speech and subsequent debate in this House on Wednesday has shown that we take very seriously our responsibility both to keep Parliament informed of the Government’s developing policy and to allow ample opportunity for Members of Parliament, both in the Chamber and in Committee, to question those Ministers responsible and to express their own opinions.

On that particular question about the role of Parliament in respect of any—at the moment hypothetical—military action by British forces, my right hon. Friend the Prime Minister set out the position in detail on Monday in answers to questions following his statement. I draw the House’s attention to his words in Hansard, column 663.

We want to see the broadest possible international coalition involving regional partners as well as European and American partners in combating ISIL, which is a threat to all of us, and not just to the United Kingdom and European countries.

My right hon. Friend the Foreign Secretary made it clear in answer to questions in Berlin that we are not yet at the stage in which decisions about any putative British military action have to be taken. His precise words were:

“We have ruled nothing out. We will look carefully at our options and decide how we will make a contribution but we are clear that we will make a contribution.”

Effective political, humanitarian and possibly military action by a broad-based international coalition will be necessary to meet the very grave threat that is posed to us all by ISIL.

Oral Answers to Questions

Debate between John Baron and David Lidington

Tuesday 22nd July 2014 Commons Chamber

[Mr John Baron (Basildon and Billericay) (Con)]

Given the appalling events in eastern Ukraine and the fact that our EU neighbours seem reluctant to adopt a robust line against the bully in the playground, has the time not come for the UK to lead by example and to close our financial services to Russia?

[Mr Lidington]

I think that it will be important to make sure that whatever sanctions are imposed on Russian interests are effective and do not just lead to Russian money migrating somewhere else, and to make sure that they have a sound legal basis. That is what we are working to achieve. The Prime Minister has made it clear that we regard financial services as very much on the table in such discussions.

European Council

Debate between John Baron and David Lidington

Tuesday 7th January 2014 Commons Chamber

[Mr Lidington]

As my right hon. Friend the Secretary of State for Work and Pensions has said in this House before, one of the difficulties we have had is that the previous Government chose not to collect statistics for social security benefits categorised by nationality of claimants. He and his team at the DWP are now changing that, and I am sure that they will produce those figures in due course, but they do not exist for the period of years that the right hon. Gentleman wants, because his Government did not bother to collect them.

[Mr John Baron (Basildon and Billericay) (Con)]

I suggest that the vast majority of immigrants come here for work and not for benefits. Nevertheless, as the Prime Minister suggested at his press conference after the Council meeting, if not during it, the issue of migration needs to be addressed. Will the Minister enlighten the House on how the Prime Minister proposes to move this issue forward in negotiations with his EU partners, given that this is a fundamental right and freedom which might require treaty change by all members?

[Mr Lidington]

We are at an early stage of those discussions. As my right hon. Friend the Prime Minister made clear when he wrote for the Financial Times just before Christmas, he wants to start a debate about how we should manage these matters better in the future. As my hon. Friend the Member for Basildon and Billericay (Mr Baron) knows, this subject causes concerns, particularly among Interior Ministers and Social Security Ministers in a number of different European countries. The conversations are being taken forward by my right hon. Friends the Home Secretary, the Secretary of State for Work and Pensions and, of course, the Prime Minister. We are at an early stage, but we will be taking the discussions forward over the next 12 months.

Oral Answers to Questions

Debate between John Baron and David Lidington

Tuesday 4th December 2012 Commons Chamber

[Mr Lidington]

I fear that the hon. Gentleman wrote his question before he saw the outcome of the European Council at the end of last month. Given the emphasis he places on trade, I am sure he will have warmly welcomed our Prime Minister’s intervention to secure the free trade agreement between the EU and South Korea, which is already delivering opportunities for British businesses. I am sure he will also welcome the British Government’s strong support for the opening of trade negotiations between Europe and Japan, which was agreed last week.

[Mr John Baron (Basildon and Billericay) (Con)]

Now that the penny has finally dropped within the eurozone that it cannot have monetary union without fiscal union, which in turn leads to closer political and economic union, what guarantees can the Government give that a caucus within the eurozone will not override UK interests within the single market?

[Mr Lidington]

This is something to which we are giving priority both in the immediate discussions on banking union and in all future negotiations on the future of the EU. I can give some reassurance to my hon. Friend. The requirements of the single market are written into the treaties and the terms of numerous items of EU legislation. On top of that, all 27 Heads of State and Government have made repeated commitments at European Councils that they are committed to defend the integrity of the single market.

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

Debate between John Baron and David Lidington

Monday 10th September 2012 Commons Chamber

[Mr Lidington]

I am grateful to my hon. Friend for that clarification.

Clause 1(3) fulfils the requirements of the European Union Act 2011 relating to the referendum lock. It demonstrates compliance with the condition in that Act that exempts the approval of certain European Council decisions from the requirement to hold a referendum. Section 3(1) provides that a Minister may not confirm the approval of a decision made under article 48(6) of the treaty on European Union unless three requirements have been met: first, that a statement has been laid under section 5 of the Act; secondly, that the decision has been approved by Act of Parliament; and thirdly, that the referendum condition, the exemption condition or the significance condition has been met.

The 2011 Act provides that a decision under article 48(6) is not subject to a referendum if its provisions apply only to member states other than the United Kingdom, and that is the case here. The decision amending article 136 applies only to member states whose currency is the euro, and therefore not to the United Kingdom. It therefore falls within the exemption provided for in section 4(4)(b) of the Act. My right hon. Friend the Foreign Secretary laid a statement before Parliament under section 5 on 13 October 2011 stating that in his opinion the decision amending article 136 fell within the exemption in section 4(4)(b) and therefore did not attract a referendum. To comply fully with the exemption condition, the Bill includes the provision in clause 1(3) stating that the decision does not fall within section 4 of the 2011 Act. I commend the clause to the Committee.

[Mr John Baron (Basildon and Billericay) (Con)]

I stand briefly to question my right hon. Friend the Minister—I, too, welcome him back to his post—on whether he believes that the European stability mechanism risks prolonging the agony of the eurozone crisis. Although we are not members of the ESM, is it drawing us in yet further and adversely affecting us as a result? The eurozone crisis was caused by excessive debt—that is well established; it was Governments borrowing beyond their means. Being built on debt, we all accept that we cannot borrow our way out of this problem and crisis, yet numerous summits have basically moved debt around the system and between banks or Governments and, quite rightly, the markets are getting tired of that.

I suggest to the Minister that the best solution to the problem is economic growth, and to grow our way out of the problem for the sake of all eurozone countries and the EU as a whole. Where are the measures to encourage greater competitiveness? Where are the supply-side reforms? They are simply not there. I therefore put it to the Minister that he should consider whether the ESM prolongs the agony and delays the inevitable, and whether our interests, as such, are being adversely affected by the position we are taking on this treaty change.

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[Mr Lidington]

The legal position is that yes, that is possible, and it would be by qualified majority voting. That flows from the decision taken on the final day of the last Government’s time in office. It may be some reassurance to my hon. Friend, though, if I say that the EFSM has tended not to feature in the discussions over the past year. The discussion has been very much about the EFSF, which can draw on a much larger sum and can therefore command much more credibility with the markets.

I say to those of my hon. Friends, and Opposition Members, who have been extremely critical of the European Union, that I have found that there is an understanding in other member states, whether among Heads of Government, Finance Ministers or Europe Ministers, that the EFSM is a sensitive and delicate subject for the United Kingdom and particularly for the House. I do not get the impression that our European Union colleagues want to push us into a corner for the sake of it. What they hope for, and reasonably so, is our co-operation, not in sacrificing our vital interests but in helping them solve the existential financial and economic crisis that the single currency area faces.

[Mr Baron]

My right hon. Friend rightly referred to the fact that the ESM is much larger than its predecessor. Will he therefore address the questions that I put to him about the weakness of the fundamental design of the ESM? By agreeing to it, we are signing up to a system that has many flaws. Does he recognise those flaws, and if not, why not?

[Mr Lidington]

I think my hon. Friend is trying to draw me into writing my own blueprint for a permanent European stability mechanism. I will not be tempted on this occasion, because it would be pretty extraordinary if British Ministers were to start laying down the law in public about the design and scope of a mechanism to which we have chosen not to be a party and into which we do not propose to put a penny of our taxpayers’ money. We should not give such lectures to countries that have decided to put their taxpayers’ money on the line, because they will have to deal with any political reaction among their own electorates. As a democratic House, we need in this instance to respect the sovereign, democratic decisions of the eurozone member states.

Treaty on Stability, Co-ordination and Governance

Debate between John Baron and David Lidington

Wednesday 29th February 2012 Commons Chamber

[Mr Lidington]

I will not give way, but I take seriously the point that my hon. Friend the Member for Wellingborough (Mr Bone) made about the Backbench Business Committee wanting to have predictable times at which it can schedule such debates. The Leader of the House was listening carefully when he made his remarks and, I am sure, will be attentive to that particular point. I draw my hon. Friend’s attention to the fact that a review of the procedures suggested by the Wright Committee is due in the near future.

I did not agree with my hon. Friend the Member for Stone when he laid strictures on individual EU countries. Greece and Italy may do things differently from how politics is done here, but everything that has happened in those countries so far has been within the bounds of their constitutions. The legislation that the Governments of those countries take through has to be enacted by the democratically elected Parliaments.

My hon. Friend the Member for Stone was right to point to what I believe to be a genuine, underlying tension in European affairs at the moment between two important pressures. The first is the economic logic, which prescribes that if we had a single currency, interest rate and monetary policy, logically we would have to move towards greater fiscal integration. That, after all, is one reason why I and most members of my party opposed the United Kingdom entering the euro. We felt that that was the inherent logic of the project. Against that, there is the political challenge, which is whether, if there is to be greater fiscal integration among countries that share a single currency, there is a sufficient sense of common political identity, not just for the Governments of those countries, but for their voters, that they can accept major decisions in economic policy being taken at, and democratic accountability being transferred to, the European institutional level, rather than being based solely at national level.

[Mr Baron]

My right hon. Friend is well respected in his post. Can he highlight the concrete and substantive guarantees that will exist to prevent the two-tier Europe that is being created through the establishment of the fiscal compact from acting against the best interests of this country?

[Mr Lidington]

There are two parts to my answer. First, the action that the Prime Minister took in December ensured that what other countries chose freely to do, through sovereign decisions, will not be binding on the UK through European law. Secondly, as a number of my hon. Friends have said, the Government are determined to work actively with other members of the European Union in pursuit of common interests. Although this might not give the assurance that can be given by a rule book, the culture that I see at work in the European Union week by week is one in which countries come to the table with interests and views of their own. Countries do not act as a predictable bloc or cohesive caucus because they happen to belong to the euro. There are eurozone countries lined up with us to support budgetary discipline. Other eurozone countries—largely net recipients—want to see a greater EU budget. There are also euro-outs that are net recipients and that want to see a bigger European budget. The way in which countries line up on particular issues does not follow logically from where they stand in relation to the fiscal compact or from whether they are members of the eurozone.

European Council

Debate between John Baron and David Lidington

Thursday 8th December 2011 Westminster Hall

[The Minister for Europe (Mr David Lidington)]

I congratulate my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) on securing the debate. While the debate was going on, I was thinking that he and I have known each other for more than 30 years. Although it is fair to say that we have not always managed to agree on political subjects, I have never had any doubt whatsoever about his integrity or his patriotism. I pay tribute to him for the way he put his case today.

We are, indeed, in the rather unusual position of debating a meeting that is about to start and that, to judge from what President Van Rompuy said on Monday, may well go on for many hours after dinner tonight and into tomorrow morning. I therefore need to preface anything I say with the caveat that events may overtake us. I will also be quite straight with hon. Members and disappoint the hon. Member for Wolverhampton North East (Emma Reynolds) by saying that I am not going to go into detail about the Prime Minister’s negotiating position. The only people who would benefit—indeed, who would be delighted—by a full disclosure of the Prime Minister’s negotiating tactics would be the Governments of other countries represented around the table, who might not necessarily share identical negotiating objectives.

I want to try to respond at least to the broad questions raised during this debate. I certainly agree with everybody who has said that the British Government have a duty to be vigilant and to defend vigorously the national interests of the British people. As the Prime Minister made very clear yesterday, we will support the objective of securing fiscal discipline in the eurozone, but not at the expense of either our industries or our independence. The crisis in the eurozone is forcing the European Union and the eurozone 17 in particular to confront fundamental choices. It matters hugely to the United Kingdom that the eurozone is successful in sorting out its problems.

One point on which I agreed with the hon. Member for Wolverhampton North East was the interconnection between this country’s economy and the economies around the wider Europe. Many of the statistics are well known. The eurozone accounts for roughly 40% of United Kingdom trade, and its stability matters globally. Around 15% of United States trade is with the eurozone and one can measure the concern of the United States Government by the fact that the Treasury Secretary, Mr Geithner, was dispatched on rapid visits to Paris and Berlin earlier this week.

The hon. Member for Luton North (Kelvin Hopkins) talked about wanting an orderly deconstruction of the eurozone, which was far too sanguine. He slightly skated over the fact that in every conversation I have had with Ministers of any of the 17 Governments of the eurozone, they have said that they are committed to keeping the eurozone project going. In addition, as far as one can tell from opinion research, the populations of those countries still consider the euro to be an essential part of the national interest of their country. Hon. Members may think that those views are misplaced, but they are the views of the countries that have chosen to join the euro, and, ultimately, we have to respect their sovereign decision.

What I am clear about is that the instability in the eurozone is already having what the Chancellor has described as a “chilling effect” on the United Kingdom’s economy, and a collapse of the eurozone or a prolonged recession in the eurozone as a result of financial instability persisting will be thoroughly bad news for jobs and for hopes of economic growth in our country. It is not only important but urgent to try to sort out the problems of the eurozone. As a number of hon. Members have said, many of us argued from the start that there were flaws in the way that the euro had been designed and that it seemed illogical to have a currency union and a single monetary policy and interest rate without some common agreements and structures in place to govern wider economic and, in particular, fiscal policy.

We can argue that those problems should have been tackled at the start and that the warning signals should have been read when countries breached the stability and growth pact and no action was taken, but we are where we are. I certainly believe that there is a sense of real urgency and of peril among serious-minded leaders of other eurozone countries. They are now speaking in terms of an economic catastrophe that will spread much more widely than the single currency area if this instability is not resolved, and resolved swiftly.

[Mr Baron]

My right hon. Friend is of course right. In the history of the world, there has not been a monetary union that has worked that has not also had to include fiscal union. It is fundamentally flawed. What is more important now is not history but the future. I suggest to my right hon. Friend that perhaps the one reason eurozone leaders are so passionate about the euro is that it is part of a political project for political union, and that they are therefore overegging the economic consequences. Where history can also help us is to remind us that since 1945, as I have highlighted—there has been no riposte from the Minister on this point—we have had 80 instances in which countries have left currency unions. The vast majority have benefited in growth terms from having left a currency union. I suggest to the Minister that he should think carefully. Perhaps the motive of these eurozone leaders is that they see the euro as a weapon that is crucial to political union.

[Mr Lidington]

My hon. Friend makes a perfectly sensible point about the fact that other countries have departed currency unions since the second world war. It is fair to say that we have not had such a break-up of a currency union on this kind of scale, with economies that are so closely integrated, and in an age when information and capital can be moved rapidly, not just in national jurisdictions but globally, at the click of a computer mouse. Studies that I have seen say that it would be much, much more damaging and risky for the eurozone to break up, particularly if it broke up chaotically, than it was for some of those other currency separations, such as those of the Czech Republic and Slovakia. Incidentally, Slovakia, having broken with the Czech Republic, then decided to enter the eurozone and has engaged in some challenging austerity and competitiveness measures in order to try to make a success of that commitment.

Where I would agree with my hon. Friend is that this has been seen, by those who took part, as a political project as well as an economic project. However, to an extent that we sometimes do not appreciate in this country, those political ambitions have a much greater resonance among the wider electorates in many countries on the continent of Europe than they do here. That is due to all kinds of historical reasons with which we are fairly familiar. I want to emphasise that the prime objective of the summit ought to be to sort out the issues that remain unresolved from the eurozone meetings of 21 July and 26 October. Whether we talk about the European financial stability facility, bank recapitalisation or the detail of the Greek write-down, there is detail that has yet to be finalised, and that needs to be addressed rapidly. So, too, does the need for competitiveness, not only in the peripheral eurozone economies but in the global context of the European Union as a whole. It needs to be embraced as a priority by every single one of the member states and the European institutions. If I have time, I will come on to that. There is some evidence that that challenge is starting to be recognised and addressed.

I accept too—I will make this point very briefly—that if eurozone countries choose to push forward with greater economic integration, there will be a democratic challenge as well. How are economic policies to be made democratically accountable? I accept that that is a challenge for those countries. It is clearly for them, as independent sovereign countries, to decide how they individually address that.

Many hon. Members raised the issue of possible treaty change, and the safeguards that the United Kingdom would require should the eurozone follow that path. Let me set out the options in broad terms. One way to introduce stronger rules for the eurozone, which of course would not apply to the UK, would be a change in the treaty governing all 27 members of the European Union. That would be the most comprehensive way to provide tough sanctions to ensure that eurozone countries stick to their own rules on debt. A second option would be to allow the 17 countries of the eurozone to create a separate intergovernmental treaty of their own. That has happened before, with the Schengen agreement on open borders and with the European stability mechanism. The 17 are free to do that again. The likelihood, however, is that the signatories to such a treaty would want to draw on the EU institutions that belong to all 27 member states to monitor and enforce compliance with any new rules on tighter budget discipline. In both instances, we would have the power of veto. Treaty change at 27 requires unanimity and, while the content of an intergovernmental treaty at 17 is a matter for the 17 signatories, it cannot cut across the provisions of the existing EU treaties, nor can it seek to use the EU institutions without the specific agreement of all the EU 27.

European Union (Amendment) Act 2008

Debate between John Baron and David Lidington

Wednesday 16th March 2011 Commons Chamber

[Mr Lidington]

It would have been possible for the member states of the eurozone to have come to such an intergovernmental agreement, but they chose not to do so. In addition, a number of the other member states which have not joined the euro but aspire to do so and which have an obligation in their accession treaties to do so in due course would prefer any necessary treaty change to be agreed by 27 states, rather than dealt with on an intergovernmental basis alone.

[Mr John Baron (Basildon and Billericay) (Con)]

Given that this vote will have to be unanimous and we therefore have veto, is this not an ideal opportunity at least to try to extract concessions from the EU? We could take such an approach on, for example, the working time agreement, in line with the coalition agreement.

[Mr Lidington]

As I hope to demonstrate to my hon. Friend’s satisfaction later in my speech, my right hon. Friend the Prime Minister secured an extremely good bargain for this country when he took part in the negotiations that produced this amendment. First, however, I wish to deal with the points raised by my hon. Friends the Members for Kettering (Mr Hollobone) and for Harwich and North Essex (Mr Jenkin).

This kind of motion has not been debated in this place before and should the European Union Bill, which this House agreed without Division on Third Reading last week, become law, we will not have this particular procedure here in the future. I want to give a firm assurance to the House that, in particular because of the provisions in that Bill, this evening is only the first opportunity for the House to have its say on the proposed treaty change; a second opportunity will be provided through the process of ratification.

I have to say to the House that the previous Government left this country with a system of both popular and parliamentary control over treaty change that was grossly inadequate. Under the inherited arrangements, this motion would have been all that was required by way of parliamentary approval, at least in terms of an affirmative resolution. If the European Union Bill were not to become law, a motion of this type leading to the adoption of a proposal for treaty change would, on ratification, still have to come back to Parliament and be laid before both Houses, but it would then be for Parliament to pray against the provision which had been laid before the House. Obviously the usual problems are involved in terms of what amounts to a negative resolution procedure in giving effect to an understandable desire for full and effective parliamentary scrutiny. However, as I have said, the Government, through the new legislation that we are taking through Parliament at the moment, want to provide a much stronger assurance for the future that this particular proposal and any others that might conceivably come forward will be given much greater and more rigorous parliamentary scrutiny.

--- Later in debate ---

[Mr Baron]

Will my right hon. Friend return to the power of the veto that we have? I accept that the matter will come back to this place and that we will discuss it again, but surely we should now be trying to extract concessions in return for not using our veto. I ask him again, because he uncharacteristically did not address the point last time, whether we could be using our veto to extract concessions on the working time agreement—an aim that was, after all, in the coalition agreement.

[Mr Lidington]

On the working time directive, I completely share my hon. Friend’s objectives. Work is going on involving, in particular, my right hon. Friends the Secretaries of State for Business, Innovation and Skills and for Health. We judge that the appropriate time to seek to give effect to the objectives set out in the coalition programme for government will be when the Commission comes forward with its own proposals to change the terms of the working time directive, which we expect will be some time in the next 12 months. That is the moment that will give us the opportunity to do this. However those changes to the working time directive might be given effect, there will have to be a legislative procedure involving not only the Council of Ministers but the European Parliament. It is at that time that we will need to deal with the matter.