Balance of Competences

Mark Reckless Excerpts

Thursday 12th July 2012 Commons Chamber

[Mr Hague]

Yes, the review will, and I shall welcome my hon. Friend’s contribution to the review—as I welcome his endorsement of this statement. My friend and colleague Guido Westerwelle and I have quite different views on such issues. He has talked about a European army. I do not believe that can ever be contemplated, and I will maintain quite a strong difference of view with some of my colleagues about that.

[Mark Reckless (Rochester and Strood) (Con)]

The latest opinion poll recorded that 48% of people wanted to leave the EU and that only 31% wanted to stay in. The Foreign Secretary is in the minority therefore, but would it not be more sensible for him to take that view at the conclusion of his audit, rather than prejudging it before it starts?

[Mr Hague]

As I have said, hon. Members and political parties will be able to draw their policy conclusions from this review, and they will also, no doubt, take into account events that happen in the meantime. I am stating the policy of the coalition Government and pointing out that that has not changed, but in doing so, I do not prejudge the opinion that anybody could come to at the conclusion of this review.

EU Charter of Fundamental Human Rights

Mark Reckless Excerpts

Thursday 12th July 2012 Commons Chamber

[Emma Reynolds]

I agree only that it is a very serious question. The EU must promote and protect human rights within its member states, regardless of the majority that a President or Government have received from the electorate. We should not tolerate the judiciary, the media or other such institutions being under the control of whatever Government in whatever member state. Labour Members are proud of our record on human rights while in government. We passed the Human Rights Act and prioritised the promotion of human rights in our external policies, particularly our development policy. Further back in history, the UK was one of the leading architects of the European convention on human rights. We remain proud that the UK is a signatory to that convention, and we are a full and active member of the Council of Europe.

Although we welcome the Government’s position on the documents before the House, it seems that the Government are not always entirely consistent in their commitment to human rights. The Minister has said positive things today, but his Conservative MEPs in Brussels say and vote entirely differently. Regrettably, they sit with a rag-bag of anti-Semites, holocaust deniers and homophobes.

[Mark Reckless (Rochester and Strood) (Con)]

Rubbish!

[Emma Reynolds]

I do not think it is rubbish at all.

We need a Government who will consistently champion human rights in the UK, in Brussels and around the world. The new EU strategy, the action plan and the appointment of a special representative for human rights will hopefully make the EU’s promotion of human rights and democracy more effective. We therefore support the motion.

Falkland Islands Referendum

Mark Reckless Excerpts

Wednesday 13th June 2012 Commons Chamber

[Mr Lidington]

I certainly give the hon. Lady that assurance. We will give all possible help and support to the Falkland Islands Government in their preparations for the referendum. She makes a good point about the young people of the Falkland Islands. Tomorrow the President of Argentina is due to appear before the United Nations special committee on decolonisation. I understand that the Falkland Islands legislators who will represent the views of the islanders at that meeting will bring with them some of the young men and women from the Falklands who can make it clear that they, too, see themselves as British and wish to remain so.

[Mark Reckless (Rochester and Strood) (Con)]

It is enormously welcome that the Falkland Islanders will decide by referendum whether to govern themselves. Does my right hon. Friend agree with the Chancellor that the time is coming for us to follow their example?

Treaty on Stability, Co-ordination and Governance

Mark Reckless Excerpts

Wednesday 29th February 2012 Commons Chamber

[Emma Reynolds]

A disorderly default by any member of the eurozone could have disastrous implications for that country and knock-on effects for the rest of the EU. There would be a contagion effect that the hon. Gentleman would be naive to think would not take place.

We are right to stress that the response by the Government and centre-right Governments across the EU to the eurozone crisis has been economically inadequate, and any worsening of the crisis will have a devastating impact on our economies. Although we welcome the fact that in January the European Council spoke about the need for growth and jobs in order to ensure the recovery of the eurozone, we are concerned that this is merely an add-on to the current deal rather than an integral part of it. In the light of that, will the Europe Minister comment on the position of the French Socialist presidential candidate, who is visiting the UK today and urging EU member states to reopen the treaty to include more commitments to growth and jobs?

I will cite the words of one Member of the House who seems to share our deep scepticism about the consequence and cause of the Prime Minister’s diplomatic defeatism last December—the Deputy Prime Minister. Earlier this month, he explained:

“The language gets confusing. Veto suggests something was stopped.”

The phantom veto of December has now been exposed. He also said that over time the treaty would

“be folded into the existing EU treaties so you don’t get a permanent two parallel treaties working separately from each other…We all see this as a temporary arrangement rather than one which creates a permanent breach at the heart of the EU.”

According to him, the Prime Minister’s walkout in December was a temporary arrangement.

The crux of the issue was eloquently and pithily expressed by the hon. Member for Rochester and Strood (Mark Reckless) the day after the 30 January European Council, when he asked the Prime Minister:

“Will the Prime Minister explain what it is that he has vetoed?”—[Official Report, 31 January 2012; Vol. 539, c. 687.]

Nothing, it seems. The Government Back Benchers who gave the Prime Minister a hero’s welcome in December have now realised that he did not prevent anything from happening. We said at the time that his walkout was not an expression of the bulldog spirit but a form of diplomatic defeatism.

[Mark Reckless (Rochester and Strood) (Con)]

Is the hon. Lady aware of one thing that the Prime Minister seems to have achieved with this veto—as it has been described? In Ireland, the Irish Attorney-General has said that the fact that the compact is outside the EU treaties has influenced the advice that Ireland needs a referendum.

[Emma Reynolds]

That suggests that the Prime Minister’s influence is greater than it is. It is up to the Irish people to decide whether to accept the treaty, whether within the European treaties or outside.

Despite the penny dropping with everyone else, the Prime Minister resolutely clings to his phantom veto. At the press conference after the January European Council, he said:

“There isn’t an EU treaty because I vetoed it; it doesn’t exist.”

That flies in the face of the evidence. The European treaty involves 25 out of 27 of the member states. It involves the European Commission and the European Court of Justice. It sounds like a European treaty; it walks like a European treaty; it clearly is a European treaty. The Deputy Prime Minister is at pains to describe this situation as temporary, but in truth he was powerless to prevent the Prime Minister from putting the Conservative party interest above the national interest, as it was reported he was advised to do by the Foreign Secretary.

--- Later in debate ---

[Mr MacShane]

If the hon. Gentleman will forgive me, I want to give time to other colleagues and do not want to take up my full time.

I should inform the House that I might not be here for the wind-ups, because I have to go and hear Monsieur François Hollande speak at King’s college London. I am excited about meeting Monsieur Hollande, this socialist who is proposing to increase the income tax on people earning €150,000 to 45%—in other words, lower than the business-crushing tax rate that the present Chancellor of the Exchequer imposes on higher earnings. Of course, Monsieur Hollande is not proposing to rip off the epaulettes or the légion d’honneur from bankers he does not like—as our Prime Minister did with Sir Fred Goodwin—nor is he proposing retrospectively to deny bankers their bonuses or to introduce retrospective tax legislation on what bankers earn. We have the most anti-banking Prime Minister in the history of Great Britain. As a low-tax socialist, I will be glad to be at the college listening to Monsieur Hollande, who seems to have a much more moderate and pragmatic policy.

I would be interested to hear from the hon. Member for Stone, who has left his place, why exactly the Royal Bank of Scotland—partly owned by us—and HSBC are running to the European taxpayer, in the form of the European Central Bank, to ask for cheap loans. Why on earth should the European taxpayer bail out appallingly badly run, inefficient British banks that do not lend their money, but continue to try to pad out their bonuses and salaries? I certainly do not object to their doing so; indeed, I hope that the European taxpayer will show some generosity.

[Mark Reckless]

The right hon. Gentleman is commenting about two banks, which he has given as an example, but as for HSBC at least—a large international bank with interests throughout the world, particularly in Asia—the UK is only a modest part of its operations. Frankly, his comments are unjustified in that respect. What is the objection to those banks accessing liquidity ECB support on the same terms as anyone else, and why should they not do so?

[Mr MacShane]

Because of the breathtaking hypocrisy of the Conservative party, in that when action is needed to allow HSBC and RBS—British firms—to continue functioning and operating in a Europe that needs to keep its head above water, and which therefore might need some help from the IMF, all we hear from the Conservatives is that we should not be part of it. However, what is sauce for the RBS and HSBC goose—going and asking for euro taxpayer handouts—has to be sauce for the UK gander. We are all in this together.

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[Mark Reckless (Rochester and Strood) (Con)]

This debate is not just about legality; it is about how we best protect our interests, which are best served by having a strong and vibrant growing European economy. Currently, we do not have that, and the reason we do not have it is the euro. The idea that the solution to that is more euro is no more credible than the Opposition’s suggestion that the solution to a crisis caused by borrowing is more borrowing. If we are to protect our interests, we need to know where those interests are, to be modest and to recognise that our influence on these matters is limited. I believe Greece would be far better off if it were to leave the euro, default, devalue and price its way back into the market. We could encourage our constituents once more to go on holiday in Greece and it would recover in a way that it cannot if it stays within the euro. However, that is a decision for the Greek people and is one over which we have precious little influence.

I shall concentrate on Ireland. Yesterday, the Taoiseach announced there would be a referendum in the Republic to reaffirm, or otherwise, the country’s commitment to the euro. Ireland faces a fork in the road and has three potential choices: to stick with the euro and the programmes being imposed on it; to reinvent its own currency; or to re-establish a relationship with the pound sterling. In December 2010, I commissioned an opinion poll across the Republic of Ireland by a company called RedC, which interviewed a representative sample of 1,000 Irish people, somewhat more than a third of whom agreed that in light of the financial crisis they would support Ireland’s leaving the euro and re-establishing a link with the pound sterling. Earlier, we heard from the Prime Minister that while the eurozone says, “We will only support the Irish people if they vote as we tell them to,” the UK will support the Irish people whatever choice they make in this referendum on their future.

We in this country have very clear interests in Ireland. Last year, we were exporting more to Ireland than to all the BRIC countries—Brazil, Russia, India and China—but that has now changed and we now export 8% to the BRIC countries but only 4.5% to Ireland. That is because the Irish economy has contracted so much that there has been a significant negative impact on the UK, and particularly on Northern Ireland, in terms of our exports. Irish migration has turned from a net migration from this country into Ireland to a very strong migration the other way. That is something we have allowed for many years. I should declare an interest because my mother came to this country from Ireland as a 17-year-old nurse. If the euro prevents Ireland from creating jobs for its young people, we will create those jobs and they will come here and continue to be welcome, but would it not be better if Ireland had a monetary policy more suited to its needs?

The euro is destabilising the Irish economy, and it will do that again, just as it has already done, at great economic cost to Ireland and some economic cost to the UK. In addition, the bail-out we are told that Ireland is getting is a bail-out not of the Irish people but of the European banks. The current position is that the European Central Bank has extended—in my view extremely unwisely—very large sums of money to the Irish banking system, ostensibly as liquidity support, initially for the short term but increasingly for three years, at very low interest rates. The Irish bail-out replaces that credit with official credit that the Irish taxpayers, not just the Irish banks, will have to pay back. Instead of the European Central Bank supplying all the credit, which it is, realistically, unlikely to get back, that credit is being displaced by taxpayer financing from the EU, the eurozone, the International Monetary Fund and, indeed, this country. The Irish people will have to pay that back instead of the European Central Bank suffering the losses it deserves for causing this crisis in Ireland and for having very unwisely extended credit.

Ireland faces a choice: whether to stick with that system, grind further into poverty and give control, in this Carolingian settlement, to France and Germany to lord it over them, or to reinstate its own currency. Were it to do that, it would need capital controls, otherwise there would be capital flight, and it would not have access to overseas capital. It would need to pay the difference between its spending and tax by printing its own money, there would be significant devaluation and probably quite a lot of inflation, and in the short term there would be very severe uncertainty. None the less, that would be better for Ireland than sticking with the current European programme.

Instead, the other option, which, when I question the Chancellor and the Prime Minister, at least appears to be on the table, is re-establishing the old link that Ireland had with sterling within a single currency area. I am talking about a common currency area that makes some sense for similar economies with similar housing markets, in which the interest rate does not lead to the boom-and-bust cycle that the euro that has been applied to the Irish economy so inevitably does. Instead of relying on official European credit with all the terms, conditions and subjugation that involves, and instead of cutting the country off entirely from overseas credit for a period with all the risks that entails, the Irish economy could look to the UK private sector, much as, to a degree, it is now doing, certainly in terms of the property market, to give the support and credit that the Irish banking system cannot provide itself.

When we look at our interests—we have the Royal Bank of Scotland and the Ulster bank—we see that UK banks have already written off or taken impairments for £40 billion-worth of loans to the Irish economy, but the Bank of Ireland, despite negative equity of perhaps £15 billion in respect of its Irish property loans, has taken only a £1 billion impairment. Very few Irish people have had their homes repossessed, and there has just been a carrying on, with massive negative equity and with the interest just about being paid. That cannot be sustained in the long term, and this country should stand ready to support a recovery in Ireland by sharing our currency if necessary, in our own interests, in Irish interests and in Europe’s interests.

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[Neil Carmichael (Stroud) (Con)]

Thank you, Mr Deputy Speaker, for allowing me to contribute to this important debate. I have listened carefully to a large number of speeches, many of which have raised interesting points, including that of my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg). I recognise that there are issues relating to the legality of the proposed treaty, but it is important to stress that this is not an EU treaty. That is the key point and the one on which our case must rest; otherwise, we will get terribly confused. The second key point about the treaty is that it includes not only all members of the eurozone, but aspirant members. However, it does not include us as we are neither members nor aspirant members of the eurozone.

[Mark Reckless]

My hon. Friend suggests that there might be confusion and asserts clearly that the treaty is not an EU treaty, but surely if it was an international treaty it would be in international public law and subject to the jurisdiction, such as the states agree, of the International Court of Justice at The Hague. However, it is actually being implemented through the European Commission and will be subject to the European Court of Justice, both of which are creatures of European Union law.

[Neil Carmichael]

I thank my hon. Friend for his intervention. That does not alter the fact that it is not an EU treaty, and that is the point. The Commission might well take a view on these matters, and that brings me to another key point. It is in our nation’s interests to ensure that the treaty works in protecting the euro in the long run. We do not want the euro to fail, because that would badly affect our economy. It is important that we continue a dialogue with the process but are not actually involved in it. It seems to me that what we have secured through the veto and our continued resistance to being a part of the treaty is essentially an overview on proceedings to ensure that the EU positions are safeguarded, because in so doing we will protect our interests and those of the overall single market.

It is important to note the comments of the US Secretary of State, Hilary Clinton, who noted that the United States was concerned not about our failure to be part of the treaty, but about whether the treaty itself would succeed in its principal mission of enhancing the position of the euro. That is a clear expression of the American Government’s position, and it is consistent with our position because we, too, recognise that that is a fundamental priority. I am not often asked by constituents whether the treaty is an EU treaty or some other kind of treaty; what they are worried about are the economic circumstances in which they live, and that is what we have to start talking about.

Although I welcome the debate, I am disappointed that it was secured only as a result of Standing Order No. 24, and that for that reason we had less than 24 hours to consider it, but it is also necessarily important to talk about what will happen at the European Council, which is almost immediate. At that Council we need to drill down on the key issue of what we need to do to ensure that growth comes to Europe and to Britain.

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[Mrs Main]

No; the hon. Gentleman has made many speeches and many interventions, and I am sure that as the lone representative of the Liberal Democrats today he has had more than his fair share of the debate. I shall not take interventions from him.

I am extremely concerned that we will find ourselves dancing on the head of the same pin as we did in the previous Parliament. The hon. Gentleman was a Member then, so he will remember the Liberal Democrats saying, “We need to have a full EU in/out vote on this, and we will give you a genuine vote,” whereas the Conservatives, in opposition at the time, said that we needed to have a vote because there was a treaty. We were assured, “Oh, no, no, it is not a treaty. It is just something we don’t need to have a referendum on.” Such dancing on the head of a pin is what most of us on the more Eurosceptic side of our party find worrying about this particular treaty-that-is-not-a-treaty, into which we supposedly do not need to have any form of input.

[Mark Reckless]

Does my hon. Friend accept that the difference between our commitment to a referendum on the Lisbon treaty and the Liberal Democrat commitment to an in/out referendum is that theirs is still possible?

[Mrs Main]

I thank my hon. Friend for that intervention. As we know, Liberal Democrats tend to change their minds, so they can always change their minds and retain that possibility. He is absolutely right—

European Union

Mark Reckless Excerpts

Tuesday 13th December 2011 Commons Chamber

[Damian Collins (Folkestone and Hythe) (Con)]

It was stated earlier in the debate that there was some surprise at the British negotiating position in Europe and that other member states were not fully apprised of the stand that we would take. That came as a great surprise to me, because I think that the Prime Minister was incredibly clear about what he was going to do. Last week, he wrote an article in The Times setting out what he would do, and then when he got to the negotiating chamber, and had no alternative, he did what he said he would do. Perhaps if there was surprise in Europe it was at the fact that we have a British Prime Minister who actually does what he says he is going to do and does not roll over in the negotiating chamber at the last minute in the face of pressure from other countries.

The hon. Member for Wolverhampton North East (Emma Reynolds) said that when John Major was Prime Minister he secured, under threat of veto, the British opt-out from the single currency. That is quite right. To my mind, that suggests that it was his Conservative Government who kept us out of the euro by creating the mechanism by which we could stay out. However, that was not the only opt-out that he secured at the Maastricht negotiations; he also secured the opt-outs from the social chapter and the working time directive, which were given away by the Labour Government with nothing in return. One of the reasons we now have a big debate about returning powers to this country and to this Parliament is that those opt-outs were given away, together with the powers that went with them.

As the right hon. Member for Belfast North (Mr Dodds) said, this is by no means a done deal. It is not true that we are isolated and that every other country is lined up against us and is committed to the compact that was set out by the eurozone members. It is clear from what we read in the European press today that the Parliaments of countries such as Denmark and Poland are raising severe doubts about what is in the compact. Speaking from the negotiating table itself, Hungary and the Czech Republic have said that they need to go back to their own countries to ask the permission of their Parliaments.

Given the wording in the compact, it is hardly surprising that people are starting to raise those concerns. For the sake of the record, I should like to share with Members some of the things that it says. For example, it says that the rule on deficit and debt reduction

“will contain an automatic correction mechanism that shall be triggered in the event of deviation. It will be defined by each Member State on the basis of principles proposed by the Commission…Member States shall converge towards their specific reference level, according to a calendar proposed by the Commission…the Commission will in particular examine the key parameters of the fiscal stance in the draft budgetary plans and will, if needed, adopt an opinion on these plans.”

[Mark Reckless (Rochester and Strood) (Con)]

Can my hon. Friend explain those repeated references to the Commission? I understood that the Prime Minister had said that we were not going to allow the fiscal union to use the EU institutions of the Commission and the European Court of Justice.

[Damian Collins]

My hon. Friend makes a perfectly valid point. Of course, this is only a communiqué produced by the eurozone countries, not a binding agreement. However, it is clear that these decisions will be taken at European level. It will be the Commission’s decision, or that of whatever European body is created to police this compact, to determine how quickly countries should reduce their deficit, to decide whether they are keeping on track, to propose what measures of intervention should take place if they fail to do so, and to create what it calls a common economic policy that is the stated aim and objective of these countries. If the eurozone members wish to proceed down that path, then that is a decision that they will take. It should be clear to all that Britain would never go down that path. We would never countenance such a transfer of power and sovereignty over our economic affairs to the European level. In setting out his objections and vetoing a treaty of 27, the Prime Minister clearly reinforced that point. There can have been no doubt and no surprise.

A question that has been asked is, what next for Britain and Europe? The summit in Brussels on Thursday and Friday was not about Great Britain, it was about the eurozone and its crisis. My concern, and that of other hon. Members, is that the crisis has not been fixed and that the measures that have been put in place do not provide the guarantees that the financial markets want. That makes it more likely that there will be a default in the eurozone, and that countries may leave the euro. The economic consequences of that are unknown, but most countries around the world predict that it will not help the world economy and, if anything, will make its problems greater. Europe has to overcome that problem.

European leaders may well reflect on the negotiations in Brussels and say that it would have been better to give the Prime Minister the concessions and reassurances that he was seeking rather than force us out and force us into using the veto, thereby delaying the possibility of a proper and sensible negotiation of a resolution for the eurozone crisis. That will be seen to be an error.

Turning to our own position, there has always been much talk about the amount of trading that we do with the European Union. As a bloc, it is worth more than 50% of our trade. Over the past 10 years, however, our trade with the developing economies around the world— Brazil, India, Russia and China—has been increasing, as has that of countries such as Germany. Those are large, developing consumer markets, and it is reasonable to expect our exports there to increase in relative terms and those to the European markets that have been the major home of our trade in the past to decrease in relative terms.

European Council

Mark Reckless Excerpts

Thursday 8th December 2011 Westminster Hall

[Mark Reckless (Rochester and Strood) (Con)]

I pay tribute to my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), who is not currently in his seat. I first met him 18 years ago as a UK economist for Warburgs, where we argued for Britain staying out of the euro. Warburgs invited my hon. Friend, who was then a new MP, to address a lunch of clients. He explained that we would be better off outside the euro. When a client asked, “But wouldn’t that push up gilt yields, and wouldn’t there be a risk premium for being out of the euro?”, he said, “No. There would be more risk inside the euro. If we stayed out of the euro, in due course, gilt yields would fall below those of German bunds.” That has now happened, and I pay tribute to him for his perspicacity on that issue.

My hon. Friend quoted from a TaxPayers Alliance piece that I found very helpful. It refers to a paper from 2004, which says that we should

“Change our relationship with the EU so that crucial powers are brought back”

and

“take back powers over trade, work and civil rights.”

It states that the British people believe that:

“Giving away power in the hope of influencing the EU has been tried for decades and the EU just gets more power over British life and uses it badly. We should be taking back power, not handing more over.”

Who was the author? My right hon. Friend the Member for Witney (Mr Cameron). Yet, going into the summit this weekend, we now hear that we can ask for only so much back—perhaps not much at all—because our priority must be to save the euro. Then we are told, rather contradictorily, that we cannot ask for too much back, because if we do, they will do it as 17 rather than 27. It cannot be both. In the short term, the only institution that can keep the euro ticking over—I fear it will be no more than that—is the European Central Bank, by printing money and buying Italian and Spanish bonds. Everything else is mood music for German public opinion, but what about our public opinion?

If the euro is to continue, the fundamental issue is competitiveness. Within the euro, the only way to deal with Germany’s overvaluation on competitiveness—it is 30% or 40% better than Italy or Spain, perhaps even more compared with Greece—is to have a significant and sustained period of inflation within Germany. If Germany will not accept that, the only way that peripheral Europe can be priced back into competitiveness with Germany is by a break-up of the euro. I believe that it would be better for that to happen sooner rather than later. It is 18 months since we saw that Greece could not pay its debts, yet it has been patched up, and we now risk throwing good money after bad to keep things going, when it is the euro that is preventing growth in Europe.

I do not dispute that a break-up of the euro will be damaging in the short term, but within two or three years, I believe that growth within Europe will be stronger after a return to national currencies than if we try to keep the euro going. My hon. Friend the Member for Stone (Mr Cash) discussed Germany repatriating its profits. The individual German company can repatriate profits, but Germany as a whole cannot, because Germany has used the euro as the latest manifestation of a system—it started with Bretton Woods, then the snake, then the exchange rate mechanism—to keep its currency artificially low, so that it exports vastly more than it imports. As a result, Germany must recycle its assets into sub-prime US mortgages or Greek Government debt. Only after Germany stops depressing its currency through that system will we come back into balance, and countries such as Greece, Portugal, Spain and Italy will be able once more to compete with Germany. We should focus on that during the summit.

The Prime Minister is going to the summit, and we will see what powers, if any, he seeks to bring back, but it is clear that there has been a fundamental change in the UK-EU relationship. Page 63 of the Liberal Democrat manifesto said that in such circumstances, there should be a referendum of the British people to decide whether we should stay in on those terms or whether, as I would like, we should again be an independent country trading with Europe but governing ourselves.

[Mrs Anne Main (in the Chair)]

I have a correction. I will call the Opposition Front-Bench spokesperson at 5.12 pm.

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[Mr Lidington]

No. We do not know the shape, let alone the detail, of any agreement that might be reached over the next 24 hours or longer. The risk alluded to by a number of my hon. Friends, which perhaps lies behind the hon. Lady’s intervention, is that of caucusing. The risk is that the greater economic integration of the 17, and of more countries over time as other member states join the euro, as is still their intention, will lead to caucusing on single market measures, so that the UK would in effect be presented with a “take it or leave it” option. That is certainly a theoretical risk and I do not want to pretend otherwise. The political reality, however, is, first, that that is not how the eurozone countries have operated up till now. We were given similar warnings when the United Kingdom took the decision to stay outside the euro when it was created, but those dire warnings have not been justified by the events of the years since.

Secondly, when I talk to Ministers from the other 26 member states, I find that neither the eurozone 17 nor the euro-out 10 are cohesive or monolithic blocs. Talking to Dutch, German—in particular—Finnish, Austrian or Irish Ministers, one finds that they all very much want the United Kingdom, with its championship of free and open markets and an outward-looking European Union, to be centrally involved in taking decisions. There is not that drive towards a caucus that a number of my hon. Friends fear.

[Mark Reckless]

Will the Minister give way?

[Mr Lidington]

I will not, I am sorry. I want to leave some time to my hon. Friend the Member for Harwich and North Essex, so I must conclude my remarks shortly.

I will write to those hon. Friends who have mentioned particular subjects, such as my hon. Friend the Member for Cheltenham (Martin Horwood) who spoke about energy. I assure my hon. Friend the Member for South Northamptonshire that we completely recognise the importance of financial services. A thriving City of London is an asset not only to the United Kingdom but to the European Union as a whole. We should go out and sell that case loudly and confidently. We have made it clear that, if a financial transactions tax introduced at EU level were to cost jobs and growth—that is on the basis of the Commission’s own impact assessment—we would veto it. If others wanted to go ahead, foolishly, on the basis of an enhanced co-operation measure, that would be a matter for them.

It is clear that the next few days will be important for Europe. We head into the summit with a clear objective. Yes, we support the eurozone in sorting out its problems, but we will not sign up to fiscal discipline in the eurozone without safeguards and certainly not at the expense of our industries or our independence.

National Referendum on the European Union

Mark Reckless Excerpts

Monday 24th October 2011 Commons Chamber

[Jake Berry]

In my home town of Liverpool people would be burned for witchcraft for signing anything on the internet. The general petition had 100,000 signatures.

I am constantly told that the EU is not a doorstep issue, but when one scrapes the surface and goes out and talks to people, as I did in my constituency last weekend, one finds immense anger. People in my area regard the EU as remote, undemocratic and, more often than not, working against our national interest, instead of in favour of the UK. There is a perception among the people I speak to out there that Brussels is elite and is ramming through a federalist agenda while mere voters, such as people in this country, are onlookers. On the rare occasions that we have within the EU been given a chance to make our views heard, if we have voted the wrong way, Europe has simply dismissed our views.

Five of the last eight referendums in the EU have been against a proposition. When countries and people—for example, Ireland—vote against a proposition, they are told to vote again until the right result is achieved or, as with the EU constitution, we are told that it has only been fiddled around the edges with a change in only a few words or a couple of paragraphs, or that it has been changed and is only a treaty so there is no right to a referendum. That is why there is so much interest in today’s debate. The hon. Member for Vauxhall made a good point when she said the issue is not party political, or a matter of left or right, or not even Eurosceptics versus Europhiles. There is a huge appetite in this country for a genuine conversation about where our relationship with the EU should go.

That brings me to my views on the motion, which I will not support. It is absolutely right and proper to have this debate, and I am delighted that we are having it. I take this opportunity to put on record the fact that we must have a fundamental renegotiation of our relationship with Europe, but we do not live in a bubble, and we must pay attention to the crisis in the eurozone and to politics in our own country. The crisis in the eurozone is like a spark in Pudding lane. If we do not continue to support member states in supporting the euro and in sorting out the Greek problem, the fire will rip through the City of London and our entire economy. A vote today to put in doubt our membership of the EU for up to 18 months would fuel market speculation, fatally wound the eurozone and its economies, and have exactly the same effect here in the UK.

My second reason for opposing the motion is that the mainstream policy, which is supported by my party, to repatriate powers is the right way forward. Now is not the time to tell people that we are taking our bat and ball home. We must fight from within the EU to repatriate powers. There is a coalition behind that point of view beyond this Chamber. The UK Independence party fought the last general election on a policy of withdrawing from the European Union, but it did not win the election. The Conservatives and Liberal Democrats together won with a mainstream policy of repatriation.

[Mark Reckless (Rochester and Strood) (Con)]

Did UKIP not win more votes in more constituencies than the number by which we did not achieve a majority? My hon. Friend spoke about repatriating powers, but that is not Government policy. We heard the Prime Minister and the Foreign Secretary refer to their policy, but it is still to be agreed with our coalition partners.

[Jake Berry]

It is the Government’s policy. We heard the Prime Minister give commitments today on the referendum lock and future treaty negotiations. I and, I hope, my constituents take comfort from the words from the Front Bench. I will not support the motion today, but I am relying on those commitments, and I and my constituents want them to be honoured.

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[Mr Graham Stuart (Beverley and Holderness) (Con)]

It is a great pleasure to participate in tonight’s historic debate. We have heard many great, passionate speeches from both sides of the House, but none more so than from the Government Benches, many Members seeing this as an opportunity to strike out against over-whipped government and to seek a return to more democratic values.

I consider myself to be a Eurosceptic, so I find myself in a strange position: I will vote against the motion, but not because I have been leant on by any Whips. I came to that conclusion prior to the first call. It is an insight into the co-ordination of Whips that you tell one at length, then another one rings you up anyway. They could get more co-ordinated.

To follow on from the hon. Member for Birmingham, Selly Oak (Steve McCabe), it is a shame that tonight has gone the way it has, though it is unfair to say that the Government have not allowed debate. From a party political management perspective, it may have been naïve to do what the Government have done. They brought the debate forward to today, the Prime Minister through his statement was able to participate, and the Foreign Secretary led for the Government. Far from stifling debate, therefore, the Government at the highest level have engaged with it. Whether that was wise party management I leave to others to judge, but I think it probably was not.

In response to my hon. Friend the Member for Clacton (Mr Carswell), who gave a powerful speech, I believe in parliamentary democracy. I do not believe parliamentary democracy puts down the small people. I know my hon. Friend has strong beliefs, which he has espoused over many years, including a belief in direct democracy. He has an agenda for direct democracy. He does not believe in the representative democracy that I believe in.

I do not believe that we are delegates. I am not about the percentage of my constituents who believe a particular thing. I should be out there listening to them, and I was out there on Saturday at my street surgery. The previous weekend I spent all day going round the villages listening to people and hearing from them, but it is not my job to do whatever the percentage majority tell me to do. My job is to come to this place and do the best I can by the people whom I represent.

[Mark Reckless]

Can representative democracy work only if we keep our promises to the electorate? On this issue, all three major parties promised a referendum and we are not giving it.

[Mr Stuart]

With the greatest respect to my hon. Friend, that is one of the great myths that has been peddled. He does a disservice to the party. As I said in an intervention earlier, I honestly believe that the Prime Minister was not reneging on the promise on Lisbon when it had been ratified. If I had promised a board meeting before a payment goes out and someone else pays it out, the cheque is cashed and I do not hold a board meeting to discuss the cheque that has already been cashed—I am not reneging on anything; I am simply recognising the reality. I do not believe that the Conservative party or the Prime Minister reneged on any promise.

The manifesto on which I and my hon. Friend stood in 2010 made no promise of any referendum whatsoever. What it did promise—I say this gently to my colleagues tonight—was to bring in a referendum lock if there was to be further treaty change. I recognise and my hon. Friends point out that some powers leak and leech away without a treaty in prospect. The passage of a European Union treaty, however, was historic in this Parliament and this democracy. There will come a time when a treaty triggers the provision, and it will not be far off—I do not believe that the Government can slip vast powers under it. The truth is that that time is coming and we are winning the argument. The last thing we need to do is fight among ourselves. We must recognise that we are carrying the British people, who are more Eurosceptic, with us.

I continue to believe that we are better off within the European Union, although I am open to persuasion that we could be better off out. Some colleagues who believe that passionately are using today’s debate as a Trojan horse. I respect their view, but I think that the three-part nature of the motion is confusion and that the suggestion that we can somehow mandate the Government to renegotiate is false. I do not see how we can do that. The Government must lead and get the best position they can. When they come back with a treaty, as I am sure they will in the not-too-distant future, it will be put to the British people. That will be the time to do it. I do not think that it is disingenuous to talk about timing.

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[Mark Reckless (Rochester and Strood) (Con)]

I am sure that the constituents of East Surrey will have followed the speech made by my hon. Friend the Member for East Surrey (Mr Gyimah) with great interest this evening.

In the 1975 referendum, the country was assured—by a Conservative Prime Minister, I am afraid—that there was no question of any erosion of national sovereignty. The people were told that we would have a veto over any important issue, yet those same people have now seen that what they were told was a common market has become a political union in which we can be outvoted, whether we like it or not. They see other countries not following the rules when our country does follow them, and they see an institution whose accounts have not been signed off for some 20 years, yet we continue to give it money year after year. In the coming year, we are giving the European Union £10.9 billion. That is the net contribution, taking account of what we get back. Indeed, in every year except one, we have given more money to the EU than we have got back. That one year was 1974, the year before we last had a referendum on this matter. That was the only year in which we received more money from the EU than we gave. Members who have yet to make up their mind might like to reflect, in the light of that £10.9 billion, that when putting pressure on the EU to reduce our budget contribution, nothing would concentrate its mind more than the knowledge that this country might hold a referendum on our membership of the EU.

There now has to be a referendum. The people have heard too many promises, made by too many parties over too many years. They now want to decide for themselves what our future in Europe, or as an independent country, might be. There has been significant movement on this side of the House during today’s debate. My hon. Friend the Member for Keighley (Kris Hopkins) asked why we were having this discussion, 18 months into the Parliament, and why there was so much disagreement. He wondered why the coalition did not agree on this matter. The reason is that the 57 Liberal Democrat coalition Members were given the referendum on the alternative vote that they wanted, yet a far larger number on the Conservative Benches have not been given the referendum that we want on our country’s position in the EU.

[Martin Horwood]

We have discussed this already. The Conservative manifesto did not make a commitment to an in/out referendum; it committed to a referendum lock, which we have achieved through the European Union Act 2011.

[Mark Reckless]

The Conservative party had offered a referendum on Lisbon. The Liberal Democrats had offered a referendum with a choice between the EU with Lisbon and leaving the EU. However, what the country got, through the coalition agreement, was the Lisbon treaty and no referendum on anything. Three or four days ago, the Liberal Democrats’ website was still campaigning for an in/out referendum, but that has now been removed. Not only have they gone against what they told the electorate on student fees, but they have done the same on Europe.

[Sheryll Murray]

I voted in the last referendum in 1974. It was the first time I had—[Interruption.] The question was whether we wanted to stay in the European economic area. We have never had a referendum on whether we want to be members of the European Union.

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[Mark Reckless]

My hon. Friend is quite right. We have the opportunity this evening to give our constituents that referendum—to decide whether they want to be governed by people whom they elect, whom they can hold to account, whom they can throw out if they do not agree with how we vote, whether we make the decisions for them, or whether instead a qualified majority of 26 other countries will decide what the law of this country should be while we pay £10.9 billion a year for the privilege. That is the decision. It is no longer a decision that we can hope to keep within this Westminster bubble, without our constituents having their say. Sooner or later, that decision is going to be made.

We heard earlier that there was going to be a referendum and that a Conservative-led or a coalition Government of some stripe would renegotiate sooner rather than later. The Prime Minister and the Foreign Secretary told us that they were going to bring back powers over social and employment policy, but what is key now is whether our constituents will get to vote on the outcome. Do they want to stay in with whatever improvements we have been able to negotiate, however great or otherwise they might be, or do they want to come out and be an independent country, trading with Europe but governing ourselves? I say to Members, particularly those who are undecided, that that decision must now be our constituents’ decision. That is the way in which we will restore belief and trust in politics.

European Union Bill

Mark Reckless Excerpts

Monday 11th July 2011 Commons Chamber

[Mr Lidington]

My hon. Friend puts his point well. There have been parliamentary by-elections where the total turnout was less than 40%, and I do not think anybody argued at that moment that the election of that Member was in any way invalid.

[Mark Reckless (Rochester and Strood) (Con)]

My right hon. Friend presumed earlier that the Lords had inserted the amendments to protect parliamentary sovereignty. Is it not possible that some noble Lords voted to insert the amendments because, in the circumstances outlined by the hon. Member for Luton North (Kelvin Hopkins), if 39% of people vote against something to do with the EU and 0% in favour, they would prefer it if the 0% won? In this context, is my right hon. Friend aware that some noble Lords are in receipt of EU pensions? Would it not have been better if that financial interest had been declared?

[Mr Lidington]

My hon. Friend has put matters on the record. I am content to take the arguments and reasons given by Members of the House of Lords as justification for the amendments in which they believed.

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[Mr Lidington]

Providing the formal response to my hon. Friend’s question is clearly a treat that is yet in store for me. I will obviously give him a proper and considered response when the question reaches me, but everything I have observed about how my right hon. Friend the Prime Minister has acted in respect of the European Union since the general election has shown his utter determination to maximise the interests of the United Kingdom and the British people in every negotiation at European level in which he has taken part. Everything that he, the Deputy Prime Minister and other members of the Government do, from conversations with colleagues to meetings of the Council of Ministers, is about trying to get the best possible advantage for the United Kingdom from our membership of the EU.

[Mark Reckless]

In that case, although Ministers had such great success in preventing the use of the EU-wide financial stability mechanism in the case of the Greek bail-out, will the Minister explain why it was simply nodded through with respect to Portugal?

[Mr Lidington]

I think that I would test the House’s patience if I were to go into that in detail, particularly as there was a debate on bail-outs a few weeks ago, in which I think my hon. Friend participated, and to which my hon. Friend the Financial Secretary to the Treasury responded at some length. I am sure that there will be other opportunities to question Treasury Ministers about that.

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[Mr David]

I very much hope that in this Parliament that will not be the case. I have taken heart from the rebellious comments and actions of the hon. Gentleman. I very much hope that Parliament will assert itself through the course of this Parliament and that his concerns will prove to be mistaken.

I hope that most Members of this House would uphold the time-honoured doctrine, despite the qualifications that have been expressed, of one Parliament being unable to bind its successor. I hope that Members do not question that. We should never seek to dictate in one Parliament what should happen in the next. I concede that, strictly speaking, the European Union Bill does not bind future Parliaments because, as has been said, those future Parliaments could modify the legislation. Nevertheless, at the very least, the Bill questions that principle and strongly goes against its spirit. I say that because the heart of the Bill will effectively come into operation during the next Parliament.

In the other place, Lord Howell said from the Government Front Bench that the Bill will be “operative” in this Parliament. He cited the Government’s commitment to bring forward an Act of Parliament on the European stability mechanism, the so-called bail-out mechanism, and its inclusion in the treaty. The Minister has just said that an Act of Parliament will be brought forward if Croatia accedes to the European Union. The Government have said consistently that they will not agree to any transfer of sovereignty to Brussels during this Parliament. That is an important qualification. There will therefore be no need to hold a referendum. Of course, we may see a significant transfer if the Government decide to opt in to the European Court of Justice opt-in provisions. The Government are illogically against holding a referendum if they decide to opt in. That reinforces the point that the main intention behind the Bill is to influence future Governments and Parliaments. What happens during this Parliament under the Bill will be relatively small beer. We are talking about a piece of legislation that will have a direct influence on the Governments and Parliaments of the future, after the next election. That is the fundamental point. Despite the qualifications that have to be expressed for the argument to hold up, that is an important and telling point.

[Mark Reckless]

Is not the key point about the Bill that it makes provision for referendums at some potential future date on various aspects of our relationship with the EU? What the British people really want is a referendum now on our membership or otherwise of the EU.

[Mr David]

That might be the true voice of the British Conservative party, but it is not the voice of the hon. Gentleman’s Government and it is most certainly not the voice of the Opposition.

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[Mark Reckless]

Will my hon. Friend, as an ex-Member of the European Parliament, explain the difference between his position and that of the individuals he has described who, in some cases, have a pension from the European Commission? Does he agree that, were they to speak or act in a manner that was contrary to the interests of their previous employer, they might have their pensions taken away?

[Madam Deputy Speaker (Dawn Primarolo)]

Order. That is not relevant to the amendments that the hon. Member for Daventry (Chris Heaton-Harris) is addressing. He should come back to them and to his reasons for disagreeing with them.

European Union (UK Permanent Representative)

Mark Reckless Excerpts

Tuesday 10th May 2011 Westminster Hall

[Mr Carswell]

Absolutely. When the chairman of the BBC Trust was appointed recently, it was made clear that he would be appointed only following a confirmation hearing. It is one of those great things—it does not actually require primary legislation, or even a change in the Standing Orders of the House, to bring into effect.

The Liberal Democrats have supported measures to strengthen the legislature over the Executive for as long as anyone can remember; I hope that they remain as committed now that they have joined the Executive. In opposition, the Prime Minister specifically championed the idea of reforming Crown prerogative. In government, he threw his weight behind the idea of confirmation hearings, insisting that Chris Patten face such a hearing before being confirmed as chairman of the BBC Trust. Why not hold a similar confirmation hearing for the man who, more than any other, will be responsible for negotiating our future in Europe? As its own website states, UKRep

“represents the UK in negotiations that take place at the EU level, ensuring that Britain’s interests are heard”.

Kim Darroch, the current head of UKRep, apparently

“represents the UK’s interests at weekly meetings of heads of mission from all 27 Member States.”

At what point do those who profess to represent our national interests answer to the nation for the deals that they strike in our name?

We fight general elections with politicians promising, to one degree or another, to change policy on Europe, yet in what sense are those who make European policy answerable to the people’s tribunes? The conventional model of accountability for European policy via Ministers no longer works. The Brussels agenda is too vast and all embracing, and the scope of deal making too wide for Ministers to track how it works two or three days a week from London. That leaves too many Ministers signing deals that they did not actually author, and nodding through agreements that they have not properly considered.

Ministers in Brussels might make key decisions about what is on the wine list, but in Brussels the real business is conducted all too often by permanent officials. As the great diarist Alan Clark—some of us may have read his books—commented about a Council of Ministers meeting run by UKRep, way back in 1983:

“A succession of meetings, but no possibility of getting anything changed…Everything is fixed by officials in advance. Ministers shaking hands are just window dressing”.

I suspect that very little has improved in the past 28 years.

[Mark Reckless (Rochester and Strood) (Con)]

My hon. Friend speaks as if the appointment of Mr Cunliffe as our next ambassador to Brussels is a done deal. Did he not read two weeks ago in The Sunday Times a profile of the Prime Minister by Anthony Seldon, which said that the Prime Minister was taking a close, personal interest in this appointment?

[Mr Carswell]

I did, and I glean the pages of the newspapers for little hints and Whitehall leaks as to who may fill that vital role. Precisely because we are led to believe that the Prime Minister takes such a keen interest, I have every hope that he may do the right thing and allow the people’s legislature to have the final say on whether that man should indeed occupy that important position.

I suspect that if Ministers and ex-Ministers today were as honest and candid as Alan Clark, they would perhaps admit that much the same happened at the two ECOFIN meetings last May, with officials making key decisions that Ministers nodded through. The Economic Secretary to the Treasury, my hon. Friend the Member for Putney (Justine Greening), wrote candidly in a letter dated 18 July to a Lords Select Committee about the decision to participate in a bail-out mechanism:

“While these decisions were taken by the previous Government, this Government judges them to be an appropriate response to the crisis.”

I am not sure how easily that sits with the Government’s claims that we are necessarily reluctant participants in the bail-outs. Perhaps that conveys the impression that Ministers may change, but the permanent officials and the policy that they determine remain the same.

Requiring Mr Cunliffe—or Sir Jon, I should say—to appear before the Foreign Affairs Committee to explain why he is the best man to negotiate for Britain in Brussels begins a process of changing all that. Regardless of whether Sir Jon is given the job, the process of confirmation hearings would end the appointment and promotion of senior Europe diplomats without scrutiny.

When George Shultz was US Secretary of State in the 1980s, he had a routine for appointing US ambassadors. He would ask them to come into his office and to point to their country on a large map in his office. They would duly point to Kenya, Uganda, Guinea Bissau or wherever. “Nope,” he would tell them while tapping the USA, “this is your country.”

It is perhaps no coincidence that the US, which has always had a degree of legislative control over both appointments and treaties, has a clearly defined strategic vision and a readiness to deploy proportionate force in defence of its interests. Nor can it be entirely coincidental that, when Parliament was supreme and our diplomatic service small and subordinate, we, too, were willing to project our interests. Without effective parliamentary oversight, however, our salaried officials negotiating with Brussels last May managed to make us liable to bailing out a common currency of which we are not even a part.

For too long, Westminster politicians have contracted out large chunks of international relations to the permanent functionaries in Whitehall. Regardless of whether they come from a background in the Treasury, the Cabinet Office or indeed the Foreign Office, we should no longer defer key policy making to unelected officials.

Hugo Young, not a man I quote often, was a convicted —sorry, convinced—Europhile, Guardian journalist, author of “This Blessed Plot” and perhaps the foremost federalist of his generation. He understood how contracting out policy to permanent officials had profound consequences for the development of Britain’s Europe policy. As he perceptively grasped, it meant that Britain’s Europe policy was driven by diplomats rather than by their elected, albeit nominal, masters or bosses:

“By 1963, a corpus of diplomats was present in and around the Foreign Office who saw the future for both themselves and their country inside Europe. The interests of their country and their careers coincided. It was an appealing symbiosis.”

Sir Oliver Wright, who served as ambassador to Germany and the United States, describes the phenomenon as “déformation professionelle”—the skewing of someone’s outlook by his career imperatives. It happens to Whitehall officials as much as to us politicians. The Europeanism of the Whitehall grandee is just one manifestation of his déformation professionelle.

Unchecked by the people’s tribunes, our salaried officials negotiating with Brussels have brought home a succession of dreadful deals. If Sir Jon is to get the role of chief deal maker with Brussels, he must come before this House to explain why he is the best man for the job. In doing so, he might at last start to realign the policy that officials pursue in our name with the kind of Europe policy that the rest of the country would like to see.

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[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)]

I congratulate my hon. Friend the Member for Clacton (Mr Carswell) on securing this Adjournment debate and bringing the issue before the House today. I also thank my hon. Friend the Member for Daventry (Chris Heaton-Harris), who has huge experience in all matters European, and my hon. Friend the Member for Bury North (Mr Nuttall) for their contributions. They have obviously spoken on the issue in the past, but my hon. Friend the Member for Clacton has great expertise, and he always brings his passion to bear.

The position of the UK permanent representative to the European Union is important. He and his team play a crucial role in advising and negotiating on behalf of the Government on a wide range of issues, promoting and protecting UK interests in the EU. In promoting and defending national interests, the permanent representative and the representation, in working groups, negotiate important draft documents ahead of councils and European Council meetings. To do so effectively, they monitor closely and interact with other permanent representations and EU institutions, principally the Commission, the Council secretariat, the European External Action Service and the European Parliament.

Let me briefly give some recent examples of where our mission, UKRep, has played an invaluable role, so that my hon. Friends get a flavour of the work done in Brussels. In the domestic sphere, UKRep has helped to defend UK interests by preventing disproportionate legislation on, for example, the pregnant workers directive and the soil directive. Under this Government, it is being extra vigilant in taking pre-emptive action against any job-destroying employment and social measures. It has also helped to secure outcomes in the UK interests on cross-border health care, as well as on a range of environmental legislation dealing with industrial emissions, hazardous substances and limiting CO₂ from vans.

On foreign policy, UKRep has played an instrumental role in forging and maintaining a strong European political stance towards the recent crisis in Libya. It has taken forward with skill the names of people identified by our bilateral posts by successfully negotiating the detail of the sanctions and travel bans for Egypt, Libya and Syria, as well as for Burma and Zimbabwe—in the latter country in particular, we have specific interests.

[Mark Reckless]

Would the Minister include in that description of UKRep’s various diplomatic successes negotiation of the euro bail-out funds around the weekend of 10 May last year?

[Mr Edward Leigh (in the Chair)]

Order. This debate is about the appointment process for the UK permanent representative. It is perfectly in order for hon. Members and the Minister to introduce the subject, but we must now return to the appointment process, which is the subject of the debate.

European Union (Amendment) Act 2008

Mark Reckless Excerpts

Wednesday 16th March 2011 Commons Chamber

[Mr Lidington]

No, I am afraid I do not agree with my hon. Friend on that point. As I have said, it is in the interests of the United Kingdom for there to be stability in the eurozone. To some extent, the measures that the eurozone countries are now taking are a response to the kind of critique that he and other Members of this House made 10 or 11 years ago when the euro was first created. They—I was very much in this camp—argued that it would cause huge difficulties to create a currency union involving a single interest rate and single monetary policy that did not have some way of reconciling very different rates of growth, inflation and unemployment in the countries in that single currency area.

I want to finish on the procedural points and then move on to the content. If the draft decision is adopted by the European Council, all 27 member states will have to approve the treaty change and ratify it in accordance with their respective constitutional requirements before the decision enters into force. The treaty amendment cannot come into effect until we—and everybody else—ratify the adopted decision.

My right hon. Friend the Foreign Secretary and I have already given an assurance at this Dispatch Box that this and every other future treaty change will be considered in accordance with the terms of the European Union Bill, once that enters into force. That Bill will require Ministers to lay a statement before Parliament within two months of the commencement of part 1 of the Bill, explaining whether the treaty change would fall within clause 4 of the Bill—namely, whether it would involve a transfer of competence or power from the United Kingdom to the European Union.

The treaty change will then have to be ratified by primary legislation—a full Act of Parliament—before the United Kingdom is able to say formally that it has completed the ratification process, so even when we get to that stage, the final version, agreed by all 27 Heads of Government, has to come back to Parliament for ratification and will be debated in all the stages of primary legislation. Tonight is therefore not the only opportunity that my hon. Friends will have to debate the measure.

[Mark Reckless (Rochester and Strood) (Con)]

Surely the key point about this debate is that we have a veto, and that gives us a lever? Most people in this country feel that EU integration has already gone far too far. Is it not the case that the Minister’s refusal to use that lever can only mean that our relationship with the EU will, sooner or later, have to be resolved through an in/out referendum?

[Mr Peter Bone (Wellingborough) (Con)]

rose—

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[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I intend to speak very briefly. First, let me thank my right hon. Friend the Minister for clarifying the procedural issues. I wrote in a note to colleagues that I understood that this would be the last occasion on which we could scrutinise the process before ratification. I now understand that that is not correct, although certainly the decision will be set in stone, and we shall not have an opportunity to change it unless we vote down the Act of Parliament that will be implemented. However, I should like one further clarification.

I understood that whatever amendment was made to the text of the treaties would require an Act of Parliament, regardless of whether the European Union Bill was passed, because that is the way in which we have always implemented treaty changes. To that extent, the EU Bill means no change. It would be a shame if we lost the opportunity to discuss matters before they go to the Council, but I accept the point made by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) that it is up to the European Scrutiny Committee to bring them before the House.

In the few minutes for which I intend to speak, I shall concentrate on what was said by my hon. Friend the Member for Stone (Mr Cash) and by the right hon. Member for Rotherham (Mr MacShane). The Government should be worried when there is agreement between those two Members. On this occasion, they agree that momentous events are afoot. My hon. Friend seemed to be saying, in so many words, that while we had always opposed the formation of a federal Europe which would inevitably be dominated by Europe’s major economic superpower—Germany—we were now facilitating the creation of a federal Europe, at least within the eurozone.

The text that we are approving states:

“Member States whose currency is the euro may establish a stability mechanism to be activated”,

and so forth, but there is no explicit exclusion of countries that are not participating in the euro in terms of its effects. What exactly is a mechanism? We have in mind some kind of bail-out fund, but the annex to the Council conclusions that were produced in December contains a draft decision that refers in more detail to what this instrument might actually concern. It states:

“The ESM will complement the new framework of reinforced economic governance, aiming at an effective and rigorous economic surveillance, which will focus on prevention and will substantially reduce the probability of a crisis arising in the future.”

All that sounds extremely beneficial and positive, but, as we know, the problem is that although specific sanctions do not apply to non-euro state, there is no exclusion of economic governance over all member states. Everything that the EU does implies that one day all its members will be members of the euro. That is clearly the direction in which it wants things to travel.

[Mark Reckless]

Is my hon. Friend aware that the issue is clarified by the decision made on 11 March on the pact for the euro? Annex I contains four guidelines. Guideline (b) refers to “Participating Member States” and guideline (d) to “Euro area Member States”. Guideline (c) states that we must consult our partners

“on each major economic reform having potential spill-over effects”,

and that that applies to “Member States”, but it makes no reference to the euro or to participating. It does involve us.

[Mr Jenkin]

I am grateful to my hon. Friend for pointing that out. It underlines the fact that we are at a crucial crossroads in the development of the European Union and our relationship with our European partners.

A few months ago I attended a private discussion, and those present included some very senior recently retired Government figures. One of them said—Chatham House rule, I am afraid—“You must be very pleased, Bernard, that the new Government are going to consider all this, because obviously there will be a consolidation of the eurozone area, and Britain will have to establish a different relationship with the European Union because we will remain outside it.” I said, “Well, I’d love to think the incoming Government have thought about all these things, but it seems that their minds are closed. I don’t think they want to think about this at all.” The result is that events are sweeping us along. We are not setting the agenda. The agenda is being set for us, and we are not even looking ahead at the consequences of what we are agreeing to.

That could have profound consequences for the future of our relationship with the EU. Indeed, I would say that it brings forward the inevitability of the United Kingdom finishing up having to make a dramatic in-or-out decision. If the Government have a lever in their hands but are still unwilling to exercise leverage to start drawing the distinction between those who want to consolidate the euro area and those who want to remain outside it, we do not have a European policy worth the name. We will therefore be driven into deciding on this binary question of whether we stay in or get out—and I hear that the Labour party may be beginning to flirt with the idea of holding the referendum that it denied the British people when it was in office.

We should consider the vote achieved by the UK Independence party at the recent by-election, as there has been a constant upward trend in every by-election since 1997. If we do not recognise that a part of the despair with politics that we experience in our daily contact with our constituents is a result of our powerlessness, and of our denial of the real choices and issues facing this country, we will drive those who feel such despair into the hands of more extreme parties than the mainstream ones where we all wish to be.

I leave the following thought with my right hon. Friend the Minister. As this Parliament progresses, this debate will not subside or go away. Instead, it will become more intense, particularly as the economic realities of the euro are based on denial. It is rather like the denial that there was for a period in respect of the European exchange rate mechanism before it broke up. However, because it is so much harder to break up the euro, the denial will go on for longer and the pain inflicted will be much more intense. There will be riots in the streets of European capitals before this situation is resolved, because I do not think it is possible for countries to make the kind of adjustment that the euro is currently imposing on them without the flexibility of separate currencies, which is why it is an accepted fact among many economists that at least some of the southern European states will leave the euro before this crisis is out.

Several Hon. Members: rose—Order