Europe

Martin Horwood Excerpts

Wednesday 30th January 2013 Commons Chamber

[Mr Hague]

Often, the best judges on the economic side are the business organisations in the country. The British Chambers of Commerce has said that it supports the Prime Minister’s determination to negotiate a new settlement on the basis of a refocused relationship with Europe. The Institute of Directors has said:

“The Prime Minister’s approach is realistic and pragmatic… It is far better to deal with these issues than to shy away from them.”

The Federation of Small Businesses has said:

“Governments around the world need to do all they can to keep markets open and take barriers away.”

The CBI has said:

“The Prime Minister rightly recognises the benefits of retaining membership of…a reformed EU and the CBI will work closely with government to get the best deal for Britain.”

They clearly think such a strategy is in the interests of the British economy.

[Martin Horwood (Cheltenham) (LD)]

Did not Sir Roger Carr of the CBI also say:

“But the referendum builds in a degree of uncertainty and business never welcomes uncertainty.”?

[Mr Hague]

I am coming to uncertainty in a moment. Uncertainty has been a particular theme of some hon. Members and we need to address it, but the quote that I was giving the hon. Member for Cardiff West (Kevin Brennan) was from the director general of the CBI. If my hon. Friend the Member for Cheltenham (Martin Horwood) wants to invite me to read a long list of business quotations—[Interruption.] Clearly, the Opposition do not want to hear from the other business people of the country.

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[Martin Horwood (Cheltenham) (LD)]

It is a pleasure to follow the hon. Member for Ynys Môn (Albert Owen), who made a passionate, excellent case for accepting and celebrating identity on many different levels. In a way, like him, I am proud to come from Gloucestershire, I am proud to be English and I am proud to be European—indeed, I am proud to be a member of a country that is part of the United Nations as well. We can celebrate and identify with people on many different levels.

We have heard many passionate speeches in this debate. Obviously, we heard from the hon. Member for Stone (Mr Cash), who is not in his place anymore, who revealed that he had voted in two French referendums—so perhaps we should call him the hon. Member for Pierre for now on. We also heard a passionate speech from the hon. Member for Croydon South (Richard Ottaway), who made a strong case for Britain remaining at the heart of Europe. If a referendum one day comes, I have no doubt that he, like the Liberal Democrats, will be putting the case strongly for a yes vote, for remaining in the EU and for keeping Britain at the heart of Europe.

In a spirit of coalition fraternité, let me say that I found much to welcome in the Prime Minister’s speech on Europe, although one would not necessarily have known it from much of the media coverage. He applauded the EU’s contribution to peace and freedom over many decades in Europe and emphasised the value of the single market. He also emphasised the EU’s role in putting Britain at the heart of negotiations on world trade—through free trade agreements and so on—and therefore its value to British jobs and British business. He also stressed its role in keeping Britain at the top table on issues such as climate change. The idea that if we left the European Union and were no longer a member, we would have that kind of access to top tables around the world, to the single market or to the free trade agreements that are negotiated at European level is a bit of fantasy and a misleading argument.

The Prime Minister also emphasised the importance of reform in Europe. I agree with a great deal of what he said in his speech about that. I was talking to consultants at Cheltenham general hospital only recently about the working time directive and the need, perhaps, to reform some aspects of it. We all want the EU budget reduced, in line with these austere times, and there are regulations—from small businesses to fisheries—that can be lightened or brought closer to national decision making. We would all support that. In fact, the Prime Minister made a very good case for British membership of the European Union and the kind of reforms that can be achieved within a process of negotiation and collaboration, positively engaging with our European partners.

However, the Prime Minister rather undermined that with his announcement of this hypothetical in/out referendum, not so much by putting forward the principle of a referendum, but by refusing to say which way he will ask us to vote if such a referendum actually happens, which is quite a big if. Let us look at Conservative policy over the past few years. In 2007 we had the “cast-iron guarantee” of a referendum on the Lisbon treaty. A few years later, that was not so certain. Then, once the Conservatives were in coalition with the Liberal Democrats, we had a clear and legislated-for agreement that there would be a referendum in the event of any powers moving from the British to the European level of government.

[Damian Collins]

We are all enjoying a lecture from a Liberal Democrat MP on consistency in policy, but does the hon. Gentleman not accept that this argument about the Lisbon treaty is totally spurious? The treaty was signed into law by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) as Prime Minister before the coalition Government came into power, so the horse had long left the stables.

[Martin Horwood]

When the Lisbon treaty was debated in this Chamber, the Liberal Democrats were the only ones who proposed an in/out referendum, not at some hypothetical time in the far distant future, but then and there, yet few Conservative MPs—or, indeed, Labour MPs—joined us in the Lobby that day. We have therefore been very consistent in arguing for referendums at times of major change. What I am highlighting is the lack of certainty in Conservative policy, which has yet again changed in the last few weeks. I might make rather more money than I generally do at the Cheltenham gold cup by betting that within the next four years, before this hypothetical referendum takes place, Conservative policy might just change a little again.

The real problem is not the principle of a referendum; the real problem is what will happen in the intervening years. This whole debate has given those who do not share the Prime Minister’s agenda—which is quite positive about membership of the European Union—an excuse basically to campaign for a British exit. Some of them dress it up in the argument for this imagined wholesale renegotiation of the British terms of membership. There is no reason why that should succeed, because if we start unpicking all aspects of our relationship with Europe, why would the French not start arguing to unpick competition policy? Why would the Germans not start arguing for the protection of their energy markets? Why would quite a lot of countries not start arguing, after perhaps making a few concessions to us, for taking back our rebate, as a quid pro quo? Realistically, I do not think that an unpicking of the whole relationship will happen.

In the meantime, business will be concerned about the uncertainty. Some of the statements from business have been clear. David Sproul, the UK head of Deloitte, has said:

“The Europe debate does not help to create certainty. When I talk to US clients who have not been immersed in the European debate as we have, they say that what they need is clarity. There is no question: it will impact business—it will hit investment into the UK.”

That point is repeated in a number of different quotations.

[George Eustice]

Would the hon. Gentleman acknowledge that all those arguments were put forward during the euro debate and that they were all proved wrong? For example, it was said that the Japanese car companies would all go, but that did not happen. It is a sorry state of affairs when the European Union seems almost incompatible with a democratic referendum or with the will of democratically elected national Governments.

[Martin Horwood]

Membership of the European Union is not at all incompatible with democratic referendums. We have had one and we have advocated another, and the coalition has legislated for a referendum lock if powers should ever move closer to Brussels, so that is not the issue. The real issue is British jobs and British business, and the climate of uncertainty, which is not about the principle of a referendum; it is about the risk of exit and the damage that that would do to the British economy and to the guarantee of peace and freedom across the European continent for future generations. It is also about the risk of losing our place at the table on everything from climate change to world trade. Those are genuine, deep risks, and concern is now being expressed by businesses, by our European partners and by our allies around the world.

Whatever we think about the principle of a referendum, we need to be absolutely clear which way we would vote in a referendum. The Prime Minister has tried to start making the case for a yes vote, and for Britain remaining in the European Union, but he has shied away from making a really firm commitment. The Liberal Democrats are absolutely clear that we would argue for Britain to remain at the heart of Europe, and the more that Members on other Benches stick their heads above the parapet and start to make that case as well, the better.

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[Mr Walter]

I thank the hon. Gentleman for that intervention, but I would remind him—I can remember it—that the economy was already in a difficult situation caused by the energy crisis. We had three-day weeks and other problems.

[Martin Horwood]

I think the hon. Member for Ynys Môn (Albert Owen) made a good comparison with Harold Wilson and the 1970s. Like our Prime Minister now, Harold Wilson wanted modest reforms, but was unable to satisfy the Europhobes in his own party. Within five years, that party was voting for exit from the European Union—despite the referendum. Is that not a little bit of a warning from history?

[Mr Walter]

It is a warning from history, but if the hon. Gentleman listens to what else I have to say, I hope that he will accept that I will be campaigning to make sure that that does not happen. I had rather hoped that the question of Britain’s membership had been settled decisively back then—my view has not changed—but I believe that the prospect of a national vote would give our country an opportunity to have a serious national conversation about Britain’s relations with the European Union. I welcome that, because I think that for too long the debate has been dominated and, to an extent, distorted by mistrust and by a suspicion that more EU integration means less sovereignty for the United Kingdom.

We need to set the record straight. For those of us who support the European project, this will serve as an opportunity to explain what Parliament and politicians have done in the people’s name over the last 40 years. It will also give us a chance to expose the myths purveyed by those who would have us turn our backs on both our European history and our European future.

It is true that the Europe we joined in 1973 was created on the basis of a vision of a post-war Franco-German elite. It is also true that Schuman, Monnet and de Gaulle himself saw ever-closer union as meaning an eventual federal Europe. But that was another time, and another Europe. The EU of today is markedly different, and the EU of tomorrow will, I believe, be even more so. In the Commission and, to some extent, in the European Parliament, there are those who still see the EU as a centralising project, but in national Parliaments—including this one—and among the peoples of Europe there is no craving for that original centralised model.

Brussels is not Europe, and the people who work there have no monopoly on the European vision. Schuman’s plan was fundamentally about eliminating trouble, anxiety and distrust from a continent ravaged by centuries of conflict. Today, our focus is not on keeping the peace, but on consolidating prosperity. The treaty of Rome was signed in 1957 by just six countries with a combined population of 173 million. By the time the Lisbon treaty came into force, more than half a century later, the Union comprised 27 member states with a combined population of more than half a billion. With Croatia, we are soon to number 28. Enlargement, one of the EU’s greatest success stories, is set to continue, bringing more change to the character and direction of the European project.

As its membership has changed, the EU has embarked on a different path. If we reflect on the way in which European institutions have evolved since that original blueprint, if we look at the aspirations and stated aims of EU member states—all of which want to protect their identities and interests—and if we consider the actions that member states have taken independently, across a wide spectrum of policies, it is clear to us that there is no great craving for the centralising project envisaged by the founding fathers. The proof is all around us.

After 40 years of British membership, there is really no overarching bureaucracy or executive. The Commission and the Council are small in comparison with many national Government administrations. The Commission’s budget is barely 1% of Europe’s GDP. Countries retain sovereignty over many areas that might have been expected to be transferred in a federal system. Member states have their own foreign policies and their own armies, which they can deploy at will, and they do. Member states can choose to opt out of a raft of agreements that they oppose, and they have: that has been proved.

We should not forget, of course, that treaties require the consent of every member state, even if they are supported by the vast majority of the population of the EU. That is an important point. When consent is not given, Europe must go back to the drawing board, and that has been done. In 2005, France and the Netherlands rejected, by referendum, what was then the constitution. In 2008, Ireland rejected the Lisbon treaty in the same way. Did those countries threaten to leave the European Union? No. Did the EU respond by trying to coerce those countries into accepting a treaty that was judged unacceptable by the people? No. What happened was that the countries returned to the negotiating table, and their Governments renegotiated the aspects of the treaties that conflicted with their national interest. They made the case for their concerns to be addressed, and they were.

I think that there is a lesson here. We in the UK have our concerns and suspicions, and the EU has many shortcomings. We are therefore right to push for reform, but these examples show us that the EU is not heading inevitably and inexorably towards some sort of federal superstate, even if some people within the Commission and the European Parliament still harbour that goal. Every country has its own corner to fight, and it has the power to do so. We are far too reluctant to admit this, but the UK has time and again proven itself to be an influential leader in the EU.

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[Damian Collins]

My hon. Friend makes an important point. That is why a reformed Europe—more liberal, more open and more competitive—is something we all want and would all work towards achieving.

We should realise that even if, at the end of the process, the British people decide that our future lies outside the EU—Britain could decide to leave; that is in the gift of the British people and this Parliament—we cannot abolish the European Union. It is a fact of life and it will continue to work in its own way. It is inevitable that the eurozone countries will see closer co-ordinated integration as part of the solution to the crisis in the eurozone, but it is clear that we will never be part of that inner core. There has to be a view of what Europe means for countries that are not only not in the eurozone, but have no desire ever to be in the eurozone, and what their relationship is with the EU.

My constituency, other than that of my hon. Friend the Member for Dover (Charlie Elphicke), is about the closest to the continent of Europe. From Folkestone, we can see France clearly, and the channel tunnel at Folkestone is a direct link to the continent. Our business links and our trade through the ferry ports of Kent and through the tunnel will continue. Companies’ investments, such as that of EDF in the cross-channel electricity pipe and Dungeness nuclear power station in my constituency, will continue. They make those investments because it makes business sense for them; they are not doing us a favour because we are in the European Union. Those pragmatic business decisions will continue to be taken because Britain is an open, low-tax, competitive economy with a very large consumer market, which is attractive to investors.

[Martin Horwood]

Surely one of the most valuable things the EU can do to help business and trade is negotiate free trade agreements? If we were to withdraw from the European Union, would we be guaranteed the same terms with South Korea or north America? That would pose an enormous risk, would it not?