European Council

Kelvin Hopkins Excerpts

Thursday 8th December 2011 Westminster Hall

[Kelvin Hopkins (Luton North) (Lab)]

First, may I apologise for arriving slightly late for the introductory speech? I congratulate the hon. Member for Harwich and North Essex (Mr Jenkin) on initiating a very important debate at this historic moment. It is important that Government Members and, indeed, the people of this country know that some of us on the left take a strongly critical view of the European Union and what it is doing at the moment, both in democratic terms and on economic grounds. I will not speak for long because many others want to contribute.

As powers have been transferred to the European Union, we have had a consistent erosion of democracy. Within the European Union itself, real power is not with the European Parliament, although it can make a lot of noise; real power is with the Commission. The Commission is a completely undemocratic body run in a secretive way by the Eurocrats who want to govern our lives bureaucratically, rather than democratically. We have already seen the beginnings of bureaucratic government in Greece and, indeed, in Italy. At some point, the people of those countries will react against that, particularly when they have increasing austerity and unemployment rammed down their throats.

I am concerned about how the economy is being run at the moment. The view is expressed in the media and by our politicians and some of our leaders that somehow dismantling the euro would be a total disaster and that we must do everything that we can to save it. That is not true. Some people who occasionally write in our journals say that dismantling the euro would not be that damaging. In fact, we need a controlled deconstruction of the euro for those countries that clearly cannot sustain their membership because their real exchange rate is way out of line with that of Germany and others. We must create a situation whereby those countries can recreate their own currencies, find an appropriate parity and start to reflate their economies behind those currency barriers.

I think that everyone now accepts that Greece will leave the euro at some point, and when that happens, it will re-establish the drachma. Greece will devalue substantially—30% or 50%—and all of a sudden, it will become the cheapest place in Europe to have a holiday. Everyone will go to Greece for their holidays and the Greek economy will recover, as it will do in so many other ways. Greece will not be able to buy as many BMWs and Mercedes from Germany, but it will start to regenerate its internal economy and its people will start to live a decent life again. Other countries that are much bigger than Greece are in a similar position, and so others will need to follow.

I do not agree with the idea that such an approach would be disastrous for us all. If those countries can get out of the euro, re-establish and start reflating their economies, their economies will start to grow. If we insist on their staying in the euro and having increasing austerity, that will mean more unemployment and a fall in demand, and the whole economy of the European Union will start to go into a deep black hole.

I have said this many times: the idea that being critical of the European Union or wanting to re-establish a national currency is being anti-European is nonsense. I see myself as a passionate European. I am European by history and by virtue of where I live. I love everything about Europe. I love the music, the culture, the languages and the people. I also stand shoulder to shoulder with working-class people in Europe. As a socialist, people would expect me to do that. Working-class people will not benefit from the continuation of this stupid system of a single currency. They will benefit only when their countries can re-establish some independence and start to reflate their economies.

Many millions of working people in those countries feel that their leaders have left them behind. Indeed, during the past two weeks, I spent several days in Copenhagen last week and two days in Brussels this week. I have heard people bemoaning the fact that they are drifting away from their politicians and that there is a gulf between the political class and the people. If people in many of those countries were asked what they want, they would probably say that their views are similar to ours.

The Eurobarometer shows that there is increasing Euroscepticism across the European Union. We are run by a bureaucratic elite who want unity at all costs on their terms and who are leaving behind their own people. We must avoid that. At least we have a more serious Eurosceptic voice in Britain from hon. Members on both sides of the Chamber and, indeed, among our electorate. I hope very much that our leaders will recognise that and start to suggest that we should have separate currencies and go back to a world where we perhaps even have pegged currencies at appropriate parities. Each country should be able to manage its own affairs with its own interest rates, its own fiscal policy and its own parity with other currencies. That is the world that worked in the post-war period, and it has been destroyed by those who want to create a country called Europe—or part of Europe, at least.

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

To reinforce that point, the hon. Gentleman may want to reflect on the fact that, since 1945, there have been around 80 situations in which countries have left currency unions. In the vast majority of cases, those countries benefited from that devaluation. It is an economic fact that devaluation allows greater competitiveness, and the austerity packages in Italy and Greece would therefore not need to be so severe.

[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.