Informal European Council

John Bercow Excerpts

Tuesday 31st January 2012 Commons Chamber

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I should like to make a statement on yesterday’s informal European Council.

Countries right across Europe need bold action to recover their economic dynamism, to get to grips with their debts and to secure growth and jobs for the future, and that was rightly the focus of this Council. So, first, we agreed important measures needed to restore Europe’s competitiveness; next, we discussed the separate intergovernmental treaty on fiscal discipline in the eurozone; and, finally, we issued a statement on Iran, Syria and Burma. I am going to take each in turn.

Britain’s agenda in Europe is to promote growth, competitiveness and jobs. We have said repeatedly that the best way in which the EU can drive growth and create jobs is to complete the single market, establish trade deals with the fastest growing parts of the world and cut the regulatory burdens on business. At this Council we made important progress on all those issues.

We agreed to establish a fully functioning single market in services, where there are still 4,700 professions across Europe for which access is regulated by Government, and in digital, where there are more than a dozen copyright regimes in what should be one single market. We will take action to secure what should be a fast-growing area right across Europe. The changes on services and digital alone could add more than 6% to EU GDP within a decade. We also agreed to complete the energy single market, which has the potential to cut costs for businesses and consumers across Europe.

On free trade, we said that 2012 should be a “decisive year” in which to move ahead on trade agreements with major partners such as Japan, India, Canada and the United States. On regulation, we agreed to a growth test, for the first time, to ensure

“that all actions at the European Union level fully support economic growth and job creation.”

We also agreed to reduce regulatory burdens, especially for small and medium-sized enterprises and micro-enterprises, and to complete a patent package to support innovation. That has been discussed in Europe for more than a decade and finally we are making decisive progress.

We want the eurozone to sort out its problems, which are having a chilling effect on our economy. Tackling them is one of the best ways in which we can help to secure growth in Britain and right across Europe. As I have said repeatedly, short-term steps—the so-called October package—must be taken, and taken properly. Europe’s banks must be recapitalised properly, the uncertainty in Greece must be brought to a decisive end, and the firewall that needs to be constructed must be big enough to deal with the full scale of the crisis and the potential contagion. In the longer term, proper fiscal discipline in the eurozone is clearly an important part of the solution. Britain recognises that that is necessary. The question has never been whether there should be greater fiscal discipline in the eurozone, but how it should be achieved.

I went to the European Council last December prepared to agree a treaty of all 27 countries, but only if there were proper safeguards for Britain. I did not get those safeguards, so I vetoed the treaty. As a result, eurozone countries and others are now making separate arrangements outside the EU treaties for strengthening budgetary discipline, including by ensuring that there are much tougher rules on deficits. At this Council, 25 EU member states agreed a new treaty outside the EU. Britain and the Czech Republic have not signed up and we will not be taking part.

Let me deal directly with the issue of the institutions. The new agreement sets out roles for the European Commission and the European Court of Justice. Although some of those roles are permitted through existing treaties, there are legal questions about what is planned. As I have said, it is in Britain’s interests that the eurozone sorts out its problems. It is also in our interests that the new agreement outside the EU is restricted to issues of fiscal union and does not encroach on the single market. The new intergovernmental agreement is absolutely explicit and clear that it cannot encroach on the competences of the European Union and that measures must not be taken that in any way undermine the EU single market. Nevertheless, I made it clear that we will watch this matter closely and that, if necessary, we will take action, including legal action, if our national interests are threatened by the misuse of the institutions. [Interruption.]

[Mr Speaker]

Order. There is a fine line between jollity and hysteria. I fear that the hon. Member for Rhondda (Chris Bryant) is in danger of having crossed it. He must calm himself, by whatever means necessary.

[The Prime Minister]

The principle that the EU institutions should act only with the explicit authorisation of all member states remains. Let me be clear: this is a treaty outside the EU. We are not signing it, we are not ratifying it, we are not part of it and it places no obligations on the UK. It does not have the force of EU law for us, nor does it for the EU institutions or for the countries that have signed it, and there will be no inner group of European countries distorting the single market from inside the EU treaty. That is the fundamental protection that we secured with our veto in December, and that protection remains.

We also made an important statement on developments in Iran, Burma and Syria. Britain has played a leading role in getting Europe to act together on each of those issues. On Iran, last week all EU countries agreed an unprecedented oil embargo, which shows our determination to keep up the pressure on the regime to turn away from any plans to develop nuclear weapons.

In Burma, for years Aung Sang Suu Kyi has been an inspiration to her people and to the world. Britain has supported her at every stage and has been at the forefront of EU sanctions. Now there are signs of a new moment of opportunity for democracy, and we should be prepared to relax those sanctions, but only in stages and only in response to reforms. When I spoke to Aung Sang Suu Kyi on Saturday, she emphasised the importance of credible and free by-elections in April. I can assure the House we will be watching that very closely.

On Syria, the Council condemned the continuing violence and the repression of the Syrian people. Reports suggest that more than 60 people were killed on the streets of Syria last week alone. In total, more than 5,000 people have been killed, 400 children murdered and tens of thousands of people detained. Today, the Foreign Secretary is in New York to support the Arab League’s call for Security Council action condemning repression and supporting a transition of power. All 27 EU member states backed that call for UN action, and if the violence does not end, we agreed that we would tighten EU sanctions further. Our message is clear: we will stand with the Syrian people. It is time for all members of the UN Security Council to live up to their responsibilities instead of shielding those who have blood on their hands. The killing must stop, and President Assad must stand aside.

This was an important Council for Britain. On competitiveness, the single market and trade, Britain is setting the agenda. On action to face down dictators and dangerous regimes in Iran and Syria, Britain is leading the way, and by saying no to a new EU treaty we have protected Britain’s interests. I commend this statement to the House.

[Edward Miliband (Doncaster North) (Lab)]

I thank the Prime Minister for his statement and associate myself with his remarks about Iran, Syria and Burma. On those issues there has been a bipartisan approach, and the Government have our full support in the effort they are making.

Having heard the Prime Minister’s statement on Europe, the whole House now knows the truth—that with this Prime Minister, a veto is not for life, it is just for Christmas. He said—[Interruption.] Calm down, dear, calm down. He said that it was a real veto on the use of European institutions, and his Back Benchers believed him. Even his Cabinet believed him. What did the welfare Secretary—where is he?—say just this weekend? He could not have been clearer. He said:

“The fact is the Prime Minister vetoed them using the institutions”.

There was not a glimmer of doubt in his mind. He was asked whether the structures of the EU would be used for the fiscal compact, and he said:

“The Prime Minister has already made it clear…he vetoed any such possibility of that happening.”

It is no wonder the welfare Secretary said that, because it was what the Chancellor said the day after the summit. He said on the Saturday morning:

“If we had signed this treaty…we would have found the full force of the…European court, the European Commission, all of those institutions enforcing those treaties using that opportunity to undermine Britain’s interests…We were not prepared to let that happen.”

Can the Prime Minister now confirm that the treaty will be ruled on by the European Court of Justice? Article 8 of the treaty says yes. Can he tell us whether the European Commission will implement the treaty? Article 8 says yes.

What about the Prime Minister’s line in the sand? We know that at 4 am on that fateful Friday morning, he laid down the law to his fellow European leaders and said, “You won’t be able to use the buildings.” So can he now tell us whether the buildings of the European institutions will be used? Apparently, the answer to that is yes, too. On the European Court, the Commission and the buildings, the phantom veto of December is now exposed.

What does the Prime Minister cling to? What did he say at the press conference yesterday? He said:

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

The agreement involves the European Court of Justice, the European Commission, the European buildings, 25 out of 27 countries, and he says that it is not really a treaty. [Interruption.] Here is the treaty. It talks like a European treaty, it walks like a European treaty—it is a European treaty.

For Britain, the Prime Minister has secured no protections at all. He says that he has secured protections about discussions on the single market, but the treaty says that the contracting parties shall take actions in the following areas:

“Fostering competitiveness. Promoting employment. Reinforcing financial stability.”

It sounds like the single market to me. Can he confirm that the United Kingdom will not even have observer status at the regular meetings of the 25 to find out what is going on and whether the single market is being discussed? The Prime Minister needs to answer the question: who will protect the British national interest at those meetings? I think his Back Benchers will be interested in that. [Interruption.] It is all right, Mr Speaker, Britain will not be represented at those meetings, but the Prime Minister has a last line of defence—the European Commission. You could not make it up: the Prime Minister reduced to relying on the people he calls “the bureaucrats from Brussels” to represent him at the meetings. In the Prime Minister’s topsy turvy world, that is all he has left: his thin blue line against the 25 countries exceeding their mandate.

Instead of ending up in that position, the Prime Minister should not have walked out of the meeting in December. [Interruption.] No, he should not. [Interruption.]

[Mr Speaker]

Order. I apologise for interrupting the Leader of the Opposition. I exhorted the Opposition Benches to some calm; I now do so to the Government Benches. I say to the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) in the nicest, kindest and most public-spirited way possible that if he insists on gesticulating, which he should not, it is pretty silly to do it when he is standing next to me.

[Edward Miliband]

Instead of constructing phantom vetoes, the Prime Minister should have been getting a solution to the problems of the eurozone—our largest export market. Of course, he cannot do that. He is committed to failing austerity at home, so he cannot oppose collective austerity abroad. There are growing fears that the scale of austerity required under the treaty will not work. Will the Prime Minister therefore tell us whether the economic strategy in the fiscal compact will work? If he does not believe that it will work, why is he not arguing for change?

The summit has been bad for Britain. There is still no solution to the problems of growth in Europe. In the cold light of day, the Prime Minister’s veto that never was has been exposed. He made a grand promise, which turned out to be worthless. No wonder that even his Back Benchers say that they cannot believe a word he says.

Britain stands with less influence than we have had for a generation. It is bad for business, bad for jobs and bad for families. Britain deserves better.

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[The Prime Minister]

I tell you what: I will deal with my Back Benchers, you deal with yours. [Interruption.]

[Mr Speaker]

Order. Mr Ellis, you were apologising to me yesterday for losing your cool. You should not be a recidivist. I want to hear the Prime Minister even if you do not.

[The Prime Minister]

Thank you, Mr Speaker.

Let me say to the Leader of the Opposition that there are two problems with the approach he is taking. The first is that he cannot actually tell us whether he is in favour of this treaty or against it. The Government are clear: we are not signing it and we do not agree with it. That is why we vetoed it being within the EU treaties. That is our position. What is his position? He has had all of his Christmas to make up his mind about whether he would sign the treaty or not.

Last night—[Interruption.] This is very important, so let me explain. Last night at the meeting of the European Council, every European country had to say whether it would sign up to the treaty or not. Britain and the Czech Republic said we would not. Everyone has to make a decision, but the right hon. Gentleman cannot do so. He has had 53 days to make up his mind.

The right hon. Gentleman’s second problem is that he keeps saying this is an EU treaty, but it is not an EU treaty. There was a treaty of Maastricht, a treaty of Nice, a treaty of Amsterdam and a treaty of Lisbon. On each occasion, the Labour party was in favour. There will be no EU treaty of Brussels because we vetoed it.

The right hon. Gentleman asked specifically what effect this treaty could have on the EU single market. The treaty is clear. Article 2 states:

“The provisions of this Treaty shall apply”

only “insofar”—[Interruption.]

[Mr Speaker]

Order. The House must now calm itself. With all that gesticulation and hand-waving from the shadow Chancellor, I thought he was playing with his cooking utensils—[Interruption.] Well, he was pointing somewhere. Like the House and the country, I genuinely want to hear the Prime Minister, as I hope they also wanted to hear the Leader of the Opposition. Let us hear the Prime Minister.

[The Prime Minister]

Thank you, Mr Speaker. We know why the Opposition Benches are so depleted—Opposition Members have been eating the shadow Chancellor’s lasagne and are recovering. The point is absolutely clear in article 2, which states that the provisions

“shall not encroach upon the competences of the Union to act in the area of the economic union.”

The fact is that Labour always fails to stand up for Britain. That is what we know. The previous Labour Government gave away the EU rebate. What did they get in return? Nothing. They signed up to the bail-out mechanism. What did they get in return? [Hon. Members: “Nothing.”] They signed up to the social chapter. What did we get for that? [Hon. Members: “Nothing.”] The Opposition opposed our referendum lock, and even now they are telling us that Brussels does not have too much power, and that if the Leader of the Opposition were Prime Minister for long enough, he would join the single currency. He has had 53 days to make up his mind whether he wants to sign this treaty or not. As usual, he cannot make up his mind whether he is muddled or weak. The fact is he is both.

[Several hon. Members]

rose—

[Mr Speaker]

Order. There is enormous interest and I am keen to accommodate it. What is required is brevity, of which the right hon. and learned Member for North East Fife (Sir Menzies Campbell) is a past master.

[Sir Menzies Campbell (North East Fife) (LD)]

We will see whether your prediction is justified, Mr Speaker.

I begin by praising the pragmatism of the Prime Minister, although I confess to being somewhat surprised that my support for it is not shared throughout the Government Benches. It is especially welcome that he pursued over the weekend a policy of re-engagement with our European partners, which is essential to his long-term objectives of the promotion of growth and the extension of the single market.

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[Several hon. Members]

rose—

[Mr Speaker]

Order. There is still a very significant number of colleagues seeking to get in. I would like to try to accommodate as many as I can, but if I am to do so, brevity is essential.

[Mr Julian Brazier (Canterbury) (Con)]

My right hon. Friend the Prime Minister outlined in his speech at the Council several criteria needed for a successful monetary union, none of which have really been met by the changes, however welcome, outlined there, so may I urge him to continue to plan, while doing everything that he can to co-operate constructively, for the likely eventual break-up of the eurozone?

--- Later in debate ---

[The Prime Minister]

It is important to remember that the financial services industry is not just the City of London; it employs 100,000 people in Birmingham and more than 100,000 people in Scotland. It is important that we stand up for those people. Obviously, there is still the danger of eurozone countries going ahead with financial transactions taxes. However, Britain is making the case strongly that there are ways to ensure that the financial services industry pays its fair share through bank levies and the stamp duty on share transactions, without having a financial transactions tax, which would drive these activities to areas of the world that do not apply it. It does not work and the European Commission has said that it does not work. That is why we should reject it.

[Mr Speaker]

I thank the Prime Minister and the House for their succinctness, which enabled 72 Back Benchers to question the Prime Minister in 66 minutes of exclusively Back-Bench time. That shows what we can do when we put our minds to it. I am grateful to colleagues.