Loans to Ireland Bill (Allocation of Time)

Mark Reckless Excerpts

Wednesday 15th December 2010 Commons Chamber

[Mr Bone]

This Government have put us in a Catch-22 situation, which the previous Government used to put us in too: time for debating guillotine motions is taken out of time on Second Reading. That never used to happen; it was something that the previous Government got into the habit of doing. That means that all these people on the Government Benches want me to shut up, so that we can get on with Second Reading. [Hon. Members: “Hear, hear.”] Well, my colleagues behind me are going to be disappointed. The newer Members of this Parliament are going to learn—I know that they are keen on this, because they want parliamentary scrutiny, not rubber-stamping—that there is a simple way for all my colleagues on the Government Benches and for Opposition Members to get into the debate, which is to defeat the guillotine motion in a vote.

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

We may have heard one or two “Hear, hears”, and I am certainly someone who wants to speak on Second Reading, but let me make clear my appreciation for what my hon. Friend is doing. Any responsibility for the curtailment of time for Back Benchers should rest squarely where it belongs, which is with those on the Treasury Bench.

[Mr Bone]

I am grateful to my hon. Friend for his support. If we do not get it right today, this coalition Government and future Governments will use the same trick again and again.

What I am doing is not a wrecking manoeuvre; nor is it about stopping the Bill from making progress. All we need to do is defeat the guillotine motion now, and then there will be a full Second Reading debate, followed by the Committee stage and Third Reading. The current situation is an abuse of Parliament and its democracy. Normal rules are being abandoned so that the Government can get things through on the nod. Surely I am not mistaken that the only possible reason for proceeding today would be if the Minister had written a cheque for £3.25 billion last night and handed it to the Irish Government. Then I might be inclined to agree that we should get on with things today. However, the Minister does not seem to be leaping to the Dispatch Box to confirm that.

One argument for pushing the Bill through could be the lack of space in the parliamentary calendar and an inability to spare any more time to debate it, but we all know that that is not true. Even with recess upon us, we could have abandoned the Backbench Business Committee debate tomorrow—Thursday—and had the Committee stage and Third Reading instead. However, if that was not the flavour of the will of the House, we could have used Monday, for which a general debate is listed. If the general debate were abandoned, Government business would not be lost, and the debate could be rescheduled for another time. Alternatively, if there really is an emergency and the Bill really does need to be progressed now, let the House sit this Friday until the business is complete.

Parliament could be allowed a full day on Second Reading, which would occur after the allocation of time motion were defeated, and the Government could then choose Thursday, Friday or Monday for Committee and Third Reading. That would in no way hold up progress; nor could it be interpreted as letting our friends in Europe down. Indeed, the idea that they do not take our word for it that the Government are serious is also, I have to say, not believable. If the Government say that they are going to give £3.25 billion to Ireland in a loan, they know that that is what will happen, so that argument is just an excuse to push the Bill through in one day.

Autumn Forecast

Mark Reckless Excerpts

Monday 29th November 2010 Commons Chamber

[Mr Osborne]

My hon. Friend is absolutely right. This is one of those issues that is perhaps less commented on, but very relevant. We are reducing the debt interest payments that we inherited from Labour, and the debt interest bill—the money that we have to pay out to private bondholders and foreign Governments to borrow—is coming down from the number that we inherited. That is £19 billion that would otherwise, if we followed the Labour party’s plans, be being paid to foreign Governments and private bondholders. That is how Labour Members want taxpayers’ money spent; we have other plans for it.

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

Instead of lending to Ireland to repay the European Central Bank and bolster bank capital relative to large impaired assets, might it not make more sense to help Ireland to de-leverage by buying some of those written-down assets directly, particularly where they are in the UK and are not well managed by the National Asset Management Agency?

[Mr Osborne]

The support for Ireland had to be a co-ordinated international effort with the IMF and other European member states, and we have taken our part in that. I do not think that coming up with our own unilateral package would have been particularly easy when, as I said, the IMF was organising this international effort. I have already said in reply to an earlier question that of course we will want to look at the impact of the banking reorganisation in Ireland on some of the assets that are managed in the UK, and I will keep the House informed about that.

Financial Assistance (Ireland)

Mark Reckless Excerpts

Monday 22nd November 2010 Commons Chamber

[Mr Osborne]

Yes. The shadow Chancellor read out the same quotation.

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

Is not the fundamental problem that Ireland has the wrong interest rate and the wrong exchange rate, and that Irish politicians made a fundamental mistake by joining the euro? Does the Chancellor agree that we must stand and support Ireland, and that should Ireland seek a return to sterling, it must have a seat on the Monetary Policy Committee?

[Mr Osborne]

The first time I met my hon. Friend was when we were both at university together, and he gave a speech about exchange rates and the European exchange rate mechanism. He was absolutely right in his prediction of what would happen shortly thereafter, so it is good to hear him talk about exchange rates here in the House of Commons. I would make this observation: decisions on people’s currencies must, as I am sure he would agree, be decisions for the nation state involved. I have made the observation—just because there has been some interesting speculation about this—that much of Ireland’s sovereign debt is denominated in euros, which would remain whatever its currency was.

European Union Economic Governance

Mark Reckless Excerpts

Wednesday 10th November 2010 Commons Chamber

[Mr Hoban]

I am not going to go down that route, but it is important that information be available. Over the course of the financial crisis—not just in the EU, but globally—we have seen the importance of understanding structural imbalances and their impact on other economies. This is an important strand of debate and it will be continued when the G20 meets later this week. It was certainly an important strand in the G20 Finance Ministers’ meeting last month, and, indeed, in the IMF’s annual meeting in October. There is nothing new in discussing these issues.

There is an existing mechanism for surveillance in place through the broad economic policy guidelines, but the warning mechanism has been used only twice: it was used for Ireland in 2001, and Greece received a warning in February this year. An improved mechanism would help towards achieving greater economic stability and it is particularly important for the eurozone, where the effects of imbalances and instability have a greater impact on its members, as has been apparent in recent months. That is why eurozone member states support a sanctions regime, penalising eurozone members whose economic policies undermine the stability of the currency and the eurozone economy. The sanctions do not apply to us, as I have said. I give way—

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

rose—

[Mr Speaker]

Order. Before the hon. Gentleman intervenes, I note that the Minister has been on his feet for 21 minutes and has attended most assiduously to a number of interventions, and that is perfectly in order. However, I emphasise that there is an hour and a half for this debate, and a substantial number of Back-Bench Members have indicated to me that they wish to speak. It would be a very sad and unsatisfactory state of affairs if contributions from those on the Front Bench were to exceed in total those from Back Benchers. On that basis, I feel sure that the Minister, who is an adroit fellow, will be bringing his remarks to a close ere long.

[Mr Edward Leigh (Gainsborough) (Con)]

rose—

[Mark Reckless]

rose—

[Mr Hoban]

I will not give way. I listen carefully to the guidance of Mr Speaker.

To secure fiscal discipline, strong fiscal frameworks are required, as our experience in recent years demonstrates. The fiscal rules developed by the previous Government failed, because their flawed design and remarkable flexibility meant that, despite the rules being met, this country still ended up with a financial crisis. A strong fiscal framework is necessary if we are to have strong public finances. We have shown leadership on that, for example in creating the Office for Budget Responsibility, a move that has been welcomed by the IMF and the European Commission. Our reforms meet the highest possible standards, and we support responsible fiscal rules at home and abroad. We have achieved that through the mandate the Chancellor set in his emergency Budget.

[Mark Reckless]

Will the Minister give way?

[Mr Hoban]

Although strong fiscal frameworks are vital, we also believe that fiscal sovereignty is crucial, and that is why the frameworks—the mandates, mechanisms and institutions—should be decided by national Governments and not by European legislation. That position is reflected in the taskforce report, and it is the position that we will adopt in discussions with the Commission.

--- Later in debate ---

[Mr Speaker]

Order. Members are free to try to intervene whenever they wish, and Ministers can respond accordingly. I simply want it to be understood that the House can do as it wishes, but it should do so with its eyes open.

[Mark Reckless]

On a point of order, Mr Speaker. Did not the Minister agree to take an intervention, before the intervention from the Chair?

[Mr Speaker]

That is not a point of order at all. The hon. Gentleman should resume his seat and not dilate. Mr Christopher Leslie.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Thank you very much, Mr Speaker.

Lurking on the future business section of the Order Paper for some weeks has been a motion for the House to note the European Union taskforce report on European economic governance. Although that gestation period seems to have been overtaken by the events that have transpired following the European Council, it is a pity that an urgent question from the hon. Member for Stone (Mr Cash) was required before light began to be shed on any of the details being considered by the real power brokers in Europe. Our Prime Minister was clearly left on the sidelines in many of the discussions. If I were generous, I might say that that was fair enough, given that we are outside the eurozone. However, the European Council meeting at the end of October showed clearly that the Germans and the French are very much in the driving seat, leaving the Prime Minister with a few scraps to hold aloft as pseudo-trophies in the European Union budget discussions while clearly being unsure how to cope with the prospect of a new treaty being dropped in his lap.

[Mark Reckless]

As the Front Benches appear to be in agreement on this issue, may I ask the hon. Gentleman a question? Surely the point is that, as he said, France and Germany, which are in the eurozone, need something from us. We had a veto, yet we agreed to this notwithstanding the veto. The 2.9% had already been agreed by the Council. We had a veto on the Next Perspective. What do we get in return?

Draft EU Budget 2011

Mark Reckless Excerpts

Wednesday 13th October 2010 Commons Chamber

[Mr James Clappison (Hertsmere) (Con)]

I congratulate the Economic Secretary to the Treasury on an excellent and most competent speech. I listened to her and to the right hon. Member for Rotherham (Mr MacShane), so may I say to him that the last thing she needs is his protective arm around her? He could do worse than to put his arm around himself, because the end of his speech contradicted its beginning. At the end he told us that now, more than ever, our contribution to the European Union budget comes from general Government expenditure. Therefore, if our contribution increases, we have to increase taxation, cut expenditure or run up a bigger deficit, at a time when we are trying to reduce the one we have. He would do well to reflect on that.

I noted that in all the advice the right hon. Gentleman and the Opposition Front-Bench spokesperson, the hon. Member for Bristol East (Kerry McCarthy), gave us, neither of them told us—we will be watching this—how they would advise MEPs to vote when this matter comes before the European Parliament once again, under its procedures. Will MEPs vote in favour of the Council to keep the budget down or are they going to vote in favour of the Commission and for more spending on the European Union? The hon. Member for Bristol East may not want to answer the question tonight, but her MEPs will have to vote or abstain in the European Parliament. They will be watched as to how they vote and we will remind them of the effects that this measure would have in this country.

I was a member of the European Scrutiny Committee and I wholeheartedly supported recommending this document for debate, because it is precisely the sort of thing that this House ought to debate. Something caught my eye in the figures that the Economic Secretary put before the House: the European Commission was seeking in its budget this year an increase of 5.8% or £7 billion in payment appropriations—at this of all times. That comes after increases in the past three years of 3.9%, 1.6% and 2.3%. That raised a question in my mind: how on earth at a time like this, when this country and other member states are facing such stringency in their public expenditure and are seeking to reduce their deficits, could the European Commission have the instinct to seek an increase in its spending? A cynical mind might say that the European Commission made proposals to increase spending on such a scale thinking that they might be trimmed back and that it was aiming for what it would get when those were trimmed back.

Be that as it may, the Economic Secretary is doing exactly the right thing, exercising her powers and this country’s influence to the utmost. I would like those powers to be greater, but they are what they are and they are being used to restrain the European budget, to seek alliances with other member states and to seek to bring about the reductions that she has talked about. It is in this country’s interest that she should do that, and I am sure that all hon. Members on the Government Benches wish her good luck in her endeavours.

Reference has been made to the rebate, so I do not propose to dwell on that. However, because this country’s rebate has been abated in part—in 2005, somewhat inexplicably, when this country had a veto and could have prevented any such abatement—we must have to bear a higher proportion of any increase in European expenditure than would otherwise have been the case. As has been rightly said, that means that our net contribution to the European budget is set to rise progressively from £3 billion in 2008-09 up to £9.5 billion in 2014. That is a substantial increase, which is inexplicable. Historians will have an interesting time examining the motivations of those who took part in the relevant discussions in 2005, when the case for this country was put by the previous Prime Minister but one.

The thing that strikes me more than anything else as I peruse this document and the various budget headings is how little attempt seems to have been made to economise on the part of the European Union—and not only that, but how little attempt has been made to cut back on planned expenditure. It seems that the European Union is ploughing on as though nothing had changed in the world.

Talking of planned expenditure, one of the worst examples, I am afraid to say, is the European External Action Service. We were promised originally—I remember taking part in the debate with the right hon. Member for Belfast North (Mr Dodds)—that it would be budget-neutral and the rumour was that nobody in the European institutions believed that. Surprise, surprise, after we were told that it would be budget-neutral and given a solemn assurance to that effect by the European Commissioner, the European Commission started coming back for more increases in expenditure. So far, in the brief time that has elapsed since it started to put that organisation into place, it has already breached the principle of budget neutrality twice, with increasing amounts being sought—the most recent was an increase of £35 billion for an extra 190 posts.

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

Does my hon. Friend agree that in the current financial circumstances we should be talking not about budget increases or even budget neutrality but about reductions in the EU budget, as proposed in the excellent amendment (b)?

[Mr Clappison]

If there were a search for economies in the European budget, one of the best places to start would be the External Action Service. I have a suspicion that although some of its activities might be worth while, the prime motivating force behind the establishment of what is in effect a diplomatic service is the promotion of the European Union itself rather than the interests of member states or their citizens. I suspect that there might be scope for economies.

Let us be clear that what is being sought is planned increases in the External Action Service. Let us spell out the facts of what it will cost so far as it stands—as the Economic Secretary made clear. So far, the cost of the External Action Service, which is on the record under the so-called budget neutrality, is €400 billion. The diplomatic service has 3,700 employees and posts in about 130 nations in the world, many of which already have British diplomatic representation. Spending of that magnitude compares, I am afraid, with the search for economies that is being made in our Foreign Office, where savings of much smaller amounts of money are sought all the time in the face of the demands that have been made to try to economise. It would be sad to see the Union flag taken down in some countries in the world while the European flag was run up. I would regret that, as I think our Foreign Office does a good job in the world and represents the interests of our country. Its prime consideration is to represent this country and our citizens’ interests, rather than searching for exterior political objectives to do with the European Union.

This has been a very good debate. I commend the line that has been taken by the Economic Secretary. The facts are stark and anybody who reads these budget documents will be shocked that such increases are sought by the European Union at this of all times. It also prompts a question about the relationship between the European Union institutions, the Commission of the European Union, our constituents and the man on the street in every European state. What must be the attitude at a time when there is so much concern about the economy, when people are suffering and when cuts are being made if the European Union somehow feels that it is immune from those pressures and can go on increasing its expenditure?