EU: Recent Developments

Lord Dykes Excerpts

Thursday 16th February 2012 Lords Chamber

[Lord Dykes]

My Lords, I expected to enjoy and appreciate the speech of the noble Lord, Lord Radice, and I have done so even more than I thought I would. I shall embarrass him deliberately by thanking him for a speech which I envy because I wish I had had the chance to make it myself. However, I forgive the noble Lord because some years ago he said to me—I am happy to apologise if my memory is at fault—that despite having a distinguished Italian name, he is not a linguist and does not speak Italian. None the less, he has been a strong European over the years. I recall that in the mid-1990s he succeeded me as chairman of the European Movement in Britain and we have carried on not only a friendship, but also often a mutual appreciation of European matters to such an extent that all I would need to do today, if only the rules of procedure would allow it, would be to cross the Floor of the House, get the text of his speech and read it out again, such is the common sense and wisdom of many of his remarks.

I share with the noble Lord his appreciation of the positive tone in the speech of my noble friend Lord Howell. It certainly ended on a strong upbeat note by stressing the need for Britain to be fully engaged in developments in the European Union. I do not criticise him, but because of the circumstances of receiving notes which one does not have time to read at the Dispatch Box when they are handed to you, he stumbled a bit on the issue of the clarification of the safeguards. I can understand why because unfortunately, and through no fault of my noble friend Lord Howell, the issue remains a product of imagination rather than reality. It remains to be seen what will actually be done by the Government to rectify this most extraordinary omission in the history of international and European negotiations from 9 December onwards. It is not something you would normally expect. To be fair, the UK Government have come forward substantially and since then have been more positive by realising that we really do have to help our colleagues in the eurozone, both indirectly and no doubt directly in some ways. That is the priority and it helps us as well, not just through trade but also in other things, not least the long-term development of the European Union.

I also pay tribute to the interesting, sensible and wise speeches made by the noble Lords, Lord Mandelson and Lord Grenfell. They themselves do not represent the more recent change in many Labour politicians and spokesmen to being keener on Europe than they were in the past; that really was consolidated when the Lisbon treaty was passing through both Houses. I now perceive Labour, particularly in this House but also in the other place, generally as a positive and pro-European party. There is a small number of exceptions among the rather older Labour MPs, but I do not see any other difference.

As our involvement in the EU grows with the passing years, I wish that that was so in the main party in the coalition. However, there have been setbacks in recent years which surprised me before the election and, indeed, surprised me afterwards. Normally, the old historical feature was that parties would become anti-European when they went into opposition. That was the pattern set by the Edward Heath Government, who as a Government were very keen on Europe with Edward Heath pointing the way forward when we first joined the Community. That pattern has been replaced by a new phenomenon of the main party in the Government now being more and more strongly anti-European. A huge number of Conservative MPs in the other place are viscerally opposed to Europe and all its works. Just look at the words they use in speeches in various European debates, and the glee and triumph that greeted the Prime Minister at Chequers when he returned from the 9 December meeting with his so-called deal, which obviously was beginning to unravel almost as soon as the ink was dry in the face of the reality of the situation in this country vis-à-vis our partners and fellow EU members dealing with eurozone problems. It is sad to note that the Conservative Party is like that now and I hope that it sheds this view as quickly as possible, given the reality of our position in the world and the need for us all to work together to deal with the worldwide crisis and the European recession.

The noble Lord, Lord Radice, may have inferred it but did not say it, but I imagine he would agree that you cannot have a genuine, full, single market—to which we are addicted and keep saying as much as a leitmotif—without having a single currency; that has to come. It may be painful on the way, but the European authorities, the heads of government and one head of state in the different countries, mainly France and Germany, are dealing with it and gradually getting there. Although it is a panicky and jittery process, which is inevitable given that these are enormously complicated negotiations in which people often lose their tempers—all the sovereign countries have to be fully consulted, which is very difficult—they are getting there step by step. Enormous progress has been made towards solving the eurozone problem.

I am also very optimistic that there will be a solution for Greece over the next days and weeks. Indeed, everything will have to be in place for the next bond auction date in, I think, the third week of March. I believe it will happen because it has to. It is very distressing to see the animosity that has broken out in the international press, now picked up by the British press, between Germany and Greece, with the leading figures from both countries having a go at each other. That may be a function of the stresses of the day in trying to get the agreement going, and thus is understandable, but it is not something that is of any lasting significance. There is a great relationship historically, although of course I am not referring to the Second World War, over the long term not only between Germany and Greece but also between all other European countries, including ourselves. Greece does need help and she will respond. We shall see the details of the agreement very soon.

I pay tribute to the way this has been achieved very patiently by the people involved. We must now support it more and more rather than waiting with relish for things to collapse. The obsession, unfortunately again mainly in Conservative circles but also in UKIP and among other smaller political parties, with the concept of national sovereignty is now truly outdated and has to be overtaken by events as countries work more and more closely together. There is also an idea that we can shrug off the pronouncements of the credit rating agencies by saying that it does not matter if they downgrade various countries. The United States and, I think, France have now had a downgrade, but we still have our triple-A rating. However, the rating agencies are themselves flawed institutions and make lots of mistakes. They certainly did on their triple-A predictions for the credit rating levels of several institutions that then went bust a week later, sometimes even less than a week in the case of one or two hedge funds and housing loan corporations in the United States.

The United States is a heavily indebted, technically bankrupt federal system, and most of its individual states are technically bankrupt. If they were individuals or companies, they would already be in the bankruptcy court. They can do it because they are states and a federal country, with a $16 trillion debt burden that is incapable of being reduced by the American political process. Those matters should be of greater concern to Conservative politicians than the temporary problems of the eurozone as we get through this very difficult period, which, as the noble Lord, Lord Radice, said, was quite likely caused by the international banking and speculators crisis from which we are all still suffering.

I add my words of praise to what has been said about the euro area crisis. We thank the noble Lord, Lord Harrison, and his team for having produced a very positive report on the way in which, once again, the eurozone is coming through this crisis. On 31 January, the Prime Minister said:

“The principle that the EU institutions should act only with the explicit authorisation of all member states remains. Let me be clear: this is a treaty outside the EU. We are not signing it”.—[Official Report, Commons, 31/1/12; col. 678.]

Since then, the Government have seen the light about the need to work with the other countries. I agree strongly with paragraph 150 of the EU Committee’s report, which states:

“It is unacceptable that the Government have not released appropriate details of the safeguards which the Prime Minister sought at the December European Council. This makes it impossible to form a balanced judgement about the outcome. Coming to the present, we invite the Government to indicate what necessary safeguards they think have yet to be achieved, and what provisions … in the proposed treaty are objectionable to them”.

Until the Government give us that essential information, there will be no underpinning of the emotional support that we want to give them now for sounding more positive about European matters.