Queen’s Speech

Lord Williamson of Horton Excerpts

Thursday 17th May 2012 Lords Chamber

[Lord Williamson of Horton]

My Lords, I would like to make some comments and pose some questions to the Minister about European affairs. As I always do, I declare an interest in that I spent the greater part of my career in the United Kingdom Civil Service on European affairs and a smaller part in the European Commission, as I have pensions from my work.

I begin by noting that in the gracious Speech, the Government will seek approval of Parliament relating to the agreed financial stability mechanism within the euro area. The Bill, which is commendably short, will have its Second Reading on 23 May, and I shall give my comments then, but on examining it briefly, the procedure seems to me to comply fully with the European Union Act of the previous Session and to be strictly limited to the euro area which, happily, we are not in. Subject to further examination of the Bill, I do not see the difficulty.

In the debate today, I recognise that many issues concerning the European Union now relate to economic policy. We have only to open the daily papers day after day to know that that is the case. To that degree, they might have been thought appropriate to the subject matter of yesterday’s debate, but these issues—in particular, the probable departure of Greece from the eurozone and, following the election of President Hollande, a change of emphasis elsewhere in the eurozone towards a stress on economic growth—are extremely important to the United Kingdom’s economy and the world economy, so we need watchful monitoring on the part of the Government, although I realise that they are not susceptible to an immediate answer from the Minister.

For myself, I think that the likely result after a while will be the creation of a lender of last resort in the euro area and, within strict limits, the issue of eurobonds, which would considerably restore an element of stability, which is clearly in the interests of the United Kingdom.

The points I wish to make, however, go wider than the economic performance of the European Union, the eurozone, and I think that the Minister will find the relevant to the UK’s foreign policy and our relationship to our European neighbours. I want the Minister to set out clearly what are the key positive priorities—I repeat, positive priorities—for the Government to obtain advantages for the United Kingdom in our relations with the European Union and in the development of the EU policies in the years ahead. There clearly are such priorities, but I do not see them reverberating around the country or in the media in a period when disillusion with the European Union is clearly strong.

In the previous Session, the Government introduced, and Parliament passed, the European Union Act, which ensures that any transfer of powers or competences to the European Union cannot take place unless the British people, in a referendum, decide to do that. That is a defensive wall, but I do not think that public opinion has fully registered it. It is perhaps inevitable in those circumstances that the debate should move to the assertion that the current powers of the European Union are almost all-embracing. That is surely not correct. There are very wide areas of our public life in which the role of the European Union is marginal: for example, education health and housing. For that reason, the European Union Act was a very important piece of legislation.

I come now to where we are today. It appears that our position on discussions in the European Union is mostly directed to resisting proposals which we do not find acceptable. Of course, we have to do that, although the objective should always be to nip them in the bud and to maximise the number of our allies. I take as an example the current EU budget proposals which, in a period of economic meltdown, are too high. It is said that some of the costs results from projects, such as some regional development projects in new member states, which are now coming to a conclusion so bills must be paid. Is that true and, if it is, where have we identified corresponding savings in other areas?

I yield to no one in recognising the need for a tough stance where necessary. I am proud of the small role which I played in the negotiation of the United Kingdom rebate, which has so far brought about £68 billion to the United Kingdom—figures are always nice to cite—and which cannot be changed without our agreement.

However, my main point is the need to present well our positive objectives within the European Union. Here are some examples. First, there is international trade, in which the European Union is immensely important. Where are we looking for more bilateral agreements to open up trade between the European Union and other nations such as South Korea, Brazil and elsewhere, and what are our priorities? Secondly, there is our influence in foreign affairs—a point I put particularly to the Minister. The decision to put the external delegations, which were under the control of the Commission, into the European External Action Service with input from member states is an important challenge. How do we rate the challenge and what advantage is the UK getting or aiming to get from it? How far has it helped in relation to, for example, the Arab spring and, in particular, the disastrous situation in Syria?

Thirdly, there is maximising the advantages of the world’s biggest single market and the need to encourage growth of the member states’ economies. Of course, the excessive level of public spending in the member states and the high level of unemployment have different causes. That is why I am a bit more positive and optimistic about the future of the euro. Both Spain and Ireland were in fiscal surplus before the crisis hit; their problems stemmed from the massive and unsustainable housing and construction boom. The Italian economy, which we are hearing a lot about, has been running a primary surplus for many years but is overburdened by the legacy of public debt, which predated the euro. Now we have to look to see what we can do in the relatively short term to encourage, if not to create, greater growth within the European Union. Perhaps a growth compact, as suggested by some leaders in the eurozone, could be an advantage.

To summarise, my main point is that the Government should identify and, where appropriate, make public their priorities for advantages for the United Kingdom to be sought and gained within the European Union. This should be at the forefront of government thinking in the year ahead.