Queen’s Speech

Lord Harrison Excerpts

Thursday 5th June 2014 Lords Chamber

[Lord Harrison (Lab)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Flight, who, like the noble Lord, Lord Marlesford, who spoke earlier, has been a dedicated and engaged member of Sub-Committee A with our inquiries into European Union financial and economic regulation. I join in the praise of the noble Lord, Lord Davies, who is a more recent recruit to that committee.

I hope that I will give some comfort to the noble Viscount, Lord Trenchard, on one of the subjects that our committee has tackled: the financial transaction tax and our potential alienation from the wider European Union. To his credit, the Chancellor of the Exchequer indicated that the health of the UK economy depended on the health of the eurozone. To his discredit, now that the eurozone has recovered under the decisive leadership of the European Central Bank president, Mario Draghi, George Osborne has claimed that the faltering UK recovery was all his own work. However, a faltering UK economy it was and is, and the ambition of the Chancellor to rebalance that economy has palpably failed. Those are not just my words but those of the European Commission. In its recent pronouncements on the European Semester process, with which members of Sub-Committee A are all too familiar, it identified some of the shortcomings within the United Kingdom’s economy: for example, the public finances still being in excessive deficit, as mentioned by the noble Lord, Lord Flight; the failure to broaden tax breaks; and the distortions in property taxation.

As regards the financial sector, I welcome the Bill on small businesses, which I hope we can explore further. The distortions of the housing market most recently were criticised on the “Today” programme by the noble Lord, Lord Wolfson, who described the Help to Buy measure as simply a sticking plaster. As the European Commissioner rightly said, we need a further boost to housing supply. Let us remember those golden days when Lord Macmillan was Housing Minister and we built 300,000 homes a year, as well as the house price increases that have happened in the United Kingdom.

Unlike the Prime Minister, who appears, in the word of Lady Thatcher, frit to tell us the nature of the proposed reforms of the European Union, the CBI has come out with some very clear statements. One concerns the failure in trade, as illustrated earlier by my noble friend Lord Adonis, and our ability as the United Kingdom to succeed in increasing trade. Recently, in a debate in this Chamber, I discussed the imbalanced economy because of our failure in trade; I will not repeat that. However, the siren voices of UKIP suggest that leaving the European Union will somehow return us to cheap butter and lamb from New Zealand: that will not be so. The truth is that the UK trades more with Belgium than with China.

The single European market is the great opportunity for the United Kingdom. It is not just a single market in which we can trade but the incubator for making us more competitive to sell our services and goods in the world outside and to achieve new markets. As for the idea of leaving the European Union, all those massive trade deals—one of which was concluded by the noble Lord, Lord Green, with the WTO, following the Doha round, or the TTIP, which is the great broad alliance of the two major economic continents bestriding the Atlantic and is with us at the moment—would not be achieved for the benefit of British people if we were not part of the European Union. That is not just what I say: President Obama said that, were we to leave in 2017, he did not have the stomach to have a separate trade deal with the United Kingdom.

The CBI’s second point of what we should be doing to reform the European Union is to complete the single market. After all, it was the inspiration of Arthur Cockfield in this House—when he was Mrs Thatcher’s appointed commissioner—which, inspired by Jacques Delors, created the single market, which was the biggest cutter of red tape and bureaucracy throughout the European Union. How nice it would be to hear from a Minister of the Crown that they too believe in the worth of the single market. Mr Cameron has often said that the single market is important but he has done nothing to further United Kingdom domestic and economic interest by extending it. Can the Minister name three examples in the past four years where the United Kingdom working with others has extended and broken down barriers to free and fair trade within the European Union? We have failed to make friends and influence people. As I said earlier, in Sub-Committee A we often talk to the ministries of the United Kingdom Government and ask them not just to block other people but to work and combine with other member states to open up the paths to the freedom of the single market.

The third element that the CBI talked about is the protection of non-eurozone interests and this is where the noble Viscount, Lord Trenchard, comes in. We have severely criticised the financial transaction tax. But the Government, in their first reply, said that they were for the financial transaction tax, as long as it was applied globally, which was never possible. It would be a huge imposition on the City of London. We have fought that, united, on Sub-Committee A, and I am glad to say that we have finally woken the Government up to take action on that distinct threat to the prosperity of the City of London as the European Union’s—not just the UK’s—premier financial market.

The Liberals are still in confusion. The other day, Danny Alexander said, “Oh yes, the financial transaction tax—that’s fine they can go ahead and do that”. However, the worry that has been expressed by the noble Viscount, Lord Trenchard, is that gradually we will have 18 members of the European Union out of 28 who are part of the eurozone. As more and more join—and they will and they do—our protection, which has been secured by this Government, will fail as the number goes down below four.

Incidentally, colleagues may have heard the other day that Angela Merkel was called up to be on a quiz show in Germany. As we know, she carries around her Blackberry. She was called as part of the quiz where you can phone a friend for help. It was not clear whether the caller was David Cameron, but that seems to be the United Kingdom’s approach: phone a friend. Phone Angela Merkel. She is friends with us and she will see us all right on the night. But the world is changing and we had better wake up. There are more and more members of the European Union’s single market and we had better ensure that when we speak we make friends with everyone, not just Angela Merkel.

Important decisions are shortly to be made about the European Commission’s President. We have taken against Mr Juncker. He is not my favourite person, but there we go. I proposed Pascal Lamy, who recently retired from the WTO, or Christine Lagarde, who of course has been associated with the IMF. They will go before the European Parliament to be interrogated by MEPs as part of the democratic process. Andrew Lansley has possibly been identified as our potential commissioner. Why should he not come before a Select Committee of the House of Lords? Why should he not, as part of his learning process about the European Union, come before us? We have been saying on the Select Committee that we should increase the work of national Parliaments in the scrutiny of the European Union. There is a ready example. Perhaps the Minister would like to reply to that suggestion.

The European parliamentary elections have been broadly misread. The two major pro-European Union blocs will remain in the European Parliament—the EPP and the Socialists and Democrats group. Apparently the socialists are now democratic, although that was not the case when I was there: we were simply socialists. I thought that would be of interest.

I hope that we can ask the media to put the spotlight on the lazy UKIP Members of the European Parliament. I want to pay respect to and say something light about the Liberal Democrats, which happens so rarely in this House. Some outstanding people have been lost in the European parliamentary elections, including Sir Graham Watson, and of course Sharon Bowles is to retire. I hope that they both find a place here. Perhaps I may also mention Cathy Ashton, who has been absolutely outstanding despite the rubbish printed in the press. She has been working hard behind the scenes, just as she did when she was the Leader of this House. She has highlighted a problem for Andrew Lansley. He will not get any sort of economic brief; he will just be given something such as culture, which is fine. However, too few Brits, only 4%, are aspiring to and getting major positions within the European Union, although it is worth noting that some 12% of those positions should be occupied by British civil servants. What can the Government say about that?

I have little to add to the excellent speech of my noble friend Lord Adonis, which set out what Labour will do. One of the things we will not do—I am so pleased that our leader has said it—is have this absurd referendum in 2017. Did no civil servant advise the Prime Minister that 2017 is the next time that the presidency of the European Union will be held by the United Kingdom? Imagine being President of the European Union and saying, “Oh, by the way, we are just voting to leave”. That will build confidence enormously.

I did say that small businesses are to feature in a Bill, but I want to conclude with a few words about local authorities. I was a member of Cheshire County Council for a decade, and was very proud to be so. I was also involved in Merseyside. The noble Lord, Lord Heseltine, gave inspiration to ensuring that we develop more financial and economic centres in Britain than just those in London. I know of the Labour Party’s proposal to set up two banks to help small businesses and the regions. These are areas that need promotion and it is right that we should do so.

In the single market of the European Union we have a golden opportunity. We need to find friends and to speak some of the languages they understand. We need better co-ordination between this Parliament and the European Parliament and the UK Members of it. In that way, we will be able truly to rebalance the economy, which as yet we have failed to do.