EU Reform

Richard Shepherd Excerpts

Tuesday 18th November 2014 Westminster Hall

[Dr Lewis]

Indeed. The process has become such a habit that the mask slips very rarely; but there was one notable occasion when the mask did slip. On new year’s eve just over a decade ago, when the European single currency was about to come into force, I saw the then President of the European Commission, Romano Prodi, being interviewed at midnight, and he was asked the following question: “This is a political project, isn’t it?” For once he let the mask slip, and he smiled beatifically and said, “It is an entirely political project.”

[Sir Richard Shepherd (Aldridge-Brownhills) (Con)]

I am grateful to my hon. Friend for allowing me a brief intervention. In the 1980s the mantra of Conservative Governments and Ministers was “No essential loss of sovereignty.” That was haunted right through and dragged across the nation as if there was a truth in it. Any time anyone suggested that sovereignty is a perfect construction in itself, they immediately wanted to tell us why sovereignty was no longer sovereignty, having said there would be no loss of sovereignty.

[Dr Lewis]

I pay tribute to my hon. Friend who, like my hon. Friend the Member for Stone and my right hon. Friend the Member for Wokingham, has done so much over the years to try to arrest the slide to a destination that nobody in this country actually wants. The reality is that if there is a single currency, it will only work if there is a single economy. And if there is a single economy, it will only work if there is a single Government. And if there is a single Government, it will only work if there is a single country, which is what the architects of this scheme want us to have. Although they admit to each other that it is political, what they say to us is that it is economic and that it all depends on our economic and trading relationship with Europe. I conclude by saying that just because one has a strong trading relationship with other states, it does not mean that one has to merge one’s currency, one’s economy, one’s population, one’s foreign policy or one’s country with those other states. We want a good relationship with Europe, but we are our own country, which is how we intend to stay.

--- Later in debate ---

[Mr Lidington]

“Since 1990,” my hon. Friend reminds me. And as I will make clear in my remarks, there are some things that we agree upon and other things where there are perhaps some divergences in our respective approaches.

I will start with those areas on which I can find ready agreement with what my hon. Friend said in his opening remarks. I agree with him and other hon. Members when they say that the current levels of unemployment and low growth in Europe are a scandal and a cause of human misery, as well as an important cause of the widespread public discontent and anxiety that we see right across the continent. I also agree with those who have argued today that those economic challenges need to be addressed by a vigorous programme, primarily of supply-side reform, at both national and European level, focusing on the liberalisation of markets, especially in services, on deregulation and on embracing the opportunities offered by free trade. Those economic reforms are right not only for the UK but for Europe as a whole. I also say to hon. Members, frankly, that whether this country were in or out of the EU, endemic low growth and high unemployment in the rest of Europe are very bad news for businesses in this country, given the high proportion of our trade that is done with other EU companies and member states.

I agreed with what my right hon. Friend the Member for Wokingham (Mr Redwood) said when he expressed relief that this country had decided not to take part in the euro. I agree that that would not have been in this country’s interests and I continue to believe that it is not a project that it is in our interests to take part in.

I also agree that for those partners that have committed themselves to membership of the euro, the logic of a single currency and a single monetary policy must be for closer integration of economic and fiscal policy decisions, and in turn for there to be political arrangements to hold such decisions accountable. One of the central political questions for the EU in the years to come—the next decade or so—will be whether we can construct arrangements within Europe that permit those who have committed themselves to a single currency to integrate more closely, while genuinely respecting, and in full, the rights of those who choose to remain outside the euro. That also means ensuring that the EU, in both its rules and its working culture, guards against the kind of caucusing that my hon. Friend the Member for Stone warned us might be a possibility—a caucus among eurozone countries, effectively to write the rules for everybody else regardless of others’ interests or views.

I also agree with the case for more wide-reaching political reform at European level. The EU is too centralised, and is often too bossy. As the hon. Member for Strangford (Jim Shannon) said, we need to have an EU that shows greater flexibility and that is better able to accommodate the diversity that is needed among the 28 member states that there now are, rather than the six member states the EU started with.

There was some discussion about defence. I agree with those who argued that it is NATO and not the EU that is, and should remain, the key alliance for the maintenance of the security of this country and of Europe as a whole. As my hon. Friend the Member for Aldershot (Sir Gerald Howarth) said in an intervention, we still have a veto in regard to Europe’s common security and defence arrangements and we have exercised that veto in the way that he described.

[Sir Richard Shepherd]

The Minister will remember the visit of Mrs Merkel to the House of Lords, where she said she was absolutely convinced that what had held Europe peaceful was the EU, whereas I think most people in Westminster Hall today would think that it was, in fact, NATO that did that. Is it not NATO that is really the basis of the security of Europe?

[Mr Lidington]

I will come to that point a bit later on, but I do not think we need to say that those two institutions are polar opposites. It is true that it was NATO that defended democratic western Europe from Soviet militarism and aggression for more than half a century, and in doing so held out the hope of liberty for the enslaved nations of central Europe. I will come on to the role that the EU has played in the past 25 years in cementing democracies in those countries once they escaped from Soviet rule.

I will briefly continue on defence. Any treaty change that provided for EU armed forces would now need not only the agreement of the UK’s Government, under the requirement for unanimity, but, under the European Union Act 2011, an Act of Parliament and a referendum. Those things would be needed before such a change to treaties could take place.

The UK and Germany have different experiences of Europe. My hon. Friend the Member for Stone drew attention to how Germany, in the mid 20th century, saw the collapse or failure of national identity, institutions and culture, whereas for us that period in our history is very much about the vindication of those things. However, if we look at what has happened in the EU in the past quarter of a century, we have seen not only greater prosperity but how the peaceful collapse of the Berlin wall and the integration of the eastern Länder into the Federal Republic was followed by the establishment of the rule of law, democratic institutions and human rights in parts of our continent where those things had been crushed for most of the 20th century. And contrary to the argument of the hon. Member for Aldridge-Brownhills, I believe that it has been the accession process leading to EU membership that has made possible the institutionalisation of those reforms and entrenched them in a way that did not happen when infant democracies were formed after the treaty of Versailles at the end of the first world war.

The question of the UK’s membership of the EU should be based upon a clear-eyed assessment of our national interest, and in my view it ultimately needs to be decided by a referendum of the British people. However, the House needs to acknowledge that any relationship with Germany, or with the EU generally, that preserves simply the things that we like about membership and none of the things that we find difficult or irksome is not within the bounds of political possibility, and the same is true of the notion that leaving the EU would somehow free this country from the EU’s influence or rules. That has not been the experience of Norway or Switzerland, which can trade freely with the EU but also have to implement EU laws, pay into the EU budget and accept freedom of movement, without having any say or any vote upon those matters.

I think there is the prospect of serious EU reform; I also think there is growing recognition around the table in Brussels and in national capitals that that reform is necessary for the prosperity and the continuation of peaceful democracy throughout our continent; and I believe that under the Prime Minister’s leadership that is what we shall achieve.