EU: Economic Governance

Lord Newby Excerpts

Wednesday 27th October 2010 Lords Chamber

[Lord Sassoon]

My Lords, if anybody proposes a treaty change that has not yet been proposed, it will be considered on its merits. To be completely clear, any proposed treaty change that has any suggestion of transferring powers from the UK to Europe will be subject to a referendum. If something is proposed, we will look at it on its merits and respond accordingly.

[Lord Newby]

My Lords, does the Minister find it strange that the UK is in the unique position of being able to impose fines on everybody else within the EU in co-operation with other EU member states and yet, however fiscally ill disciplined a future UK Government might be, the EU cannot impose sanctions against us? Are there any effective pressures under this set of proposals that, in future, the EU will be able to bring to bear against a British Government who were behaving profligately?

[Lord Sassoon]

My Lords, I welcome the question from my noble friend. It enables me to restate that it is perfectly right and proper that the UK should be subject, as it is, to the financial disciplines of the stability system in the EU. This means that we are required to exercise fiscal discipline. Indeed, the July council expressed itself satisfied. It said that the new UK Government’s proposals for deficit reduction were adequate to meet our responsibilities. It is quite right that we should go that far but, equally, we are not members of the eurozone. The system of sanctions that applies in the eurozone escalates to fines, as my noble friend said. The sanctions can start by requiring interest-bearing deposits, then non-interest-bearing deposits and finally fines. It is completely appropriate that those should apply to the eurozone and not to the UK.