European Union

Mike Gapes Excerpts

Tuesday 13th December 2011 Commons Chamber

[Mr Dodds]

The hon. Gentleman is right to point to the effects if the EU had targeted the financial services sector, unfairly penalising the UK. The tax revenues of which he speaks are enormous and the contribution to employment—not just directly—is significant for the UK. There are arguments for measures such as the Tobin tax, but they have to be applied universally. The UK alone should not be picked out.

Some say that the Prime Minister’s action will cost jobs and damage British business, but the EU’s share of world trade is decreasing. Who believes that the EU would want to stop exporting to a market of some 60 million people, or inhibit trade that would cost the jobs of millions of people in the EU? That simply will not happen. All the scaremongering about that, as in the past, is not based on economic reality.

We must guard against the inevitable pressure that will come—and is already coming—behind the scenes from diplomats, mandarins and others who will try to drag the Prime Minister away from his current stance and use the back door to achieve the UK’s acquiescence. The Prime Minister has already hinted at some sort of compromise on the desire of the euro-plus countries to use the EU institutions. He needs to be careful about that. If they want to do that, we need to ask what they are prepared to do for the UK in return. I hope the Prime Minister will not accede to the pressure being exerted to allow that to happen by the back door.

Of course, it is important to recognise the limits of what has happened. As a result of what happened at the Council, 26 countries—or however many it will be in the end—cannot themselves implement agreements on financial services or other things that have an impact on the single market. That must be done through the single market Council. However, therein lies a problem. Yesterday in his statement the Prime Minister alluded a couple of times to the risks involved in the intergovernmental arrangement. As I said in my contribution yesterday, the very real risk is that other EU member states will gang up on the United Kingdom and outvote us through qualified majority voting.

[Mike Gapes (Ilford South) (Lab/Co-op)]

Is not the reality that nothing has changed with regard to financial services? Twenty-six cannot impose qualified majority voting; nor can 27. At the end of the day, therefore, the so-called veto was not a real veto, because 26 have gone ahead. The reality is that we still have the right to block changes in that respect under the Single European Act.

[Mr Dodds]

I do not agree with the hon. Gentleman. The Prime Minister is right to say that it would have been entirely wrong, without sufficient protections, to have a treaty that, as he put it, would have hard-wired the situation into the European Union treaties. The hon. Member for Ilford South (Mike Gapes) alluded to protections, but QMV does not provide the UK with much of a protection. As has been said already in the debate, given some of the vindictive language being used in European capitals at the moment, we must be very careful indeed. It is clear, in my view, that the status quo cannot stand in the medium to long term.

--- Later in debate ---

[Emma Reynolds]

First, had we been in government, we would not have been asleep at the wheel for the first nine months of this year. Secondly, we would have built alliances, not burned bridges, and we would not have found ourselves in a situation at the summit in which nobody agreed with us. We had no support from any of those member states.

It is clear that the Prime Minister spectacularly mishandled the summit by failing to prepare the ground, failing to talk to European leaders in advance and failing to build alliances. The Foreign Minister of Poland, until fairly recently one of our strongest allies, singled out the UK for criticism in a recent speech. It now transpires—[Interruption.] Conservative Members might be interested to hear about this. It now transpires that even our lead diplomat in Brussels, the British permanent representative, learned of the Government’s negotiating position only 48 hours before the summit. What a cack-handed way to prepare for important negotiations. No wonder the blame game has started in Whitehall between the Treasury and the Foreign Office.

[Mike Gapes]

My hon. Friend should also be aware that none of the ambassadors, based in London, of the other 26 European Union states knew in advance what the British Government were trying to get out of this summit. How on earth could they report back to their countries in advance what might be the necessary concessions to get agreement if they were not told in advance?

[Emma Reynolds]

As my hon. Friend has eloquently pointed out, the Government’s attempt to get agreement at the summit was amateur—they did no preparation. As a result of the Prime Minister walking out of negotiations, it is even more likely, not less, that vital British interests will not be taken into account when key economic decisions are taken at EU level. The eurozone 17 and the other nine non-eurozone countries will meet more frequently and take decisions that affect the UK, without the UK being in the room. How on earth do Conservative Members think that is a success? Without a voice, British business is more vulnerable to decisions that our Government are powerless to change or influence.