John Bercow
Main Page: John Bercow (Speaker - Buckingham)Department Debates - View all John Bercow's debates with the Cabinet Office
(12 years, 11 months ago)
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Mr Speaker
Order. The House must calm itself, taking whatever medicaments are required for the purpose, and the Prime Minister’s statement must and will be heard.
The Prime Minister
Thank you, Mr Speaker.
I went to Brussels with one objective: to protect Britain’s national interest, and that is what I did. Let me refer to what I said to the House last Wednesday. I made it clear that if the eurozone countries wanted a treaty involving all 27 members of the European Union, we would insist on some safeguards for Britain to protect our own national interests. Some thought that the safeguards I was asking for were relatively modest. Nevertheless, satisfactory safeguards were not forthcoming, so I did not agree to the treaty. Let me be clear about exactly what happened, what it means for Britain and what I see happening next.
Mr Speaker
Order. I apologise for interrupting the Prime Minister. I hope that Members have now got it out of their system. The statement will be heard. Right hon. and hon. Members on both sides of the House will have ample opportunity to question the Prime Minister, but courtesy and parliamentary convention dictate that the statement will be heard.
The Prime Minister
Thank you, Mr Speaker.
Let me take the House through the events of last week. At this Council, the eurozone economies agreed that there should be much tighter fiscal discipline in the eurozone as part of restoring market confidence. That is something that Britain recognises as necessary in a single currency. We want the eurozone to sort out its problems. That is in Britain’s national interest because the crisis in the eurozone is having a chilling effect on Britain’s economy too, so the question at the Council was not whether there should be greater fiscal discipline in the eurozone, but how it should be achieved.
There were two possible outcomes: either a treaty of all 27 countries, with proper safeguards for Britain; or a separate treaty in which eurozone countries and others would pool their sovereignty on an intergovernmental basis, with Britain maintaining its position in the single market and in the European Union of 27 members. We went seeking a deal at 27 and I responded to the German and French proposal for treaty change in good faith, genuinely looking to reach an agreement at the level of the whole of the European Union, with the necessary safeguards for Britain. Those safeguards—on the single market and on financial services—were modest, reasonable and relevant. We were not trying to create an unfair advantage for Britain. London is the leading centre for financial services in the world, and this sector employs 100,000 people in Birmingham and a further 150,000 people in Scotland. It supports the rest of the economy in Britain and more widely in Europe.
We were not asking for a UK opt-out, special exemption or a generalised emergency brake on financial services legislation. They were safeguards sought for the EU as a whole. We were simply asking for a level playing field for open competition for financial services companies in all EU countries, with arrangements that would enable every EU member state to regulate its financial sector properly. To those who say that we were trying to go soft on the banks, nothing could be further from the truth. We have said that we are going to respond positively to the tough measures set out in the Vickers report. There are issues about whether this can be done under current European regulations, so one of the things we wanted was to make sure we could go further than European rules on regulating the banks. The Financial Services Authority report on RBS today demonstrates just how necessary that is—[Interruption]—and perhaps instead of talking Opposition Members will remember their responsibility for the mess that they created.
Those who say that this proposed treaty change was all about safeguarding the eurozone, and so Britain should not have tried to interfere or to insist on safeguards, are fundamentally wrong as well. The EU treaty is the treaty of those outside the euro as much as it is for those inside the euro, so creating a new eurozone treaty within the existing EU treaty without proper safeguards would have changed the EU for us, too. It would not just have meant a whole new bureaucracy, with rules and competences for the eurozone countries being incorporated directly into the EU treaty; it would have changed the nature of the EU—strengthening the eurozone without balancing measures to strengthen the single market.
Of course, an intergovernmental arrangement is not without risks, but we did not want to see that imbalance hard-wired into the treaty without proper safeguards. To those who believe that that was not a real risk, I tell them that France and Germany said in their letter last week that the eurozone should work on single market issues such as financial regulation and competitiveness. That is why we required safeguards, and I make no apology for it.
Of course, I wish those safeguards had been accepted, but frankly I have to tell the House that the choice was a treaty without proper safeguards or no treaty—and the right answer was no treaty. It was not an easy thing to do, but it was the right thing to do. As a result, eurozone countries and others are now making separate arrangements for the fiscal integration that they need to solve the problems in the eurozone. They recognise that this approach will be less attractive, more complex and more difficult to enforce, and they would prefer to incorporate the new treaty into the EU treaties in future. Our position remains the same.
Let me turn to what this means for Britain. Britain remains a full member of the European Union, and the events of the last week do nothing to change that. Our membership of the EU is vital to our national interest. We are a trading nation, and we need the single market for trade, investment and jobs. The EU makes Britain a gateway to the largest single market in the world for investors; it secures half of our exports and millions of British jobs; and membership of the EU strengthens our ability to progress our foreign policy objectives, too, giving us a strong voice on the global stage on issues such as trade and, as we have seen in Durban this week, climate change and the environment.
So we are in the European Union and we want to be. This week there will be meetings of the Councils on Transport, Telecommunications and Energy, and Agriculture and Fisheries. Britain will be there as a full member of each one, but I believe in an EU with the flexibility of a network, not the rigidity of a bloc. We are not in the Schengen no-borders agreement, and neither should we be, because it is right that we use our natural advantage as an island to protect ourselves against illegal immigration, guns and drugs; we are not in the single currency, and while I am Prime Minister we will never join; we are not in the new euro area bail-out funds, even though we had to negotiate our way out of them; and we are not in this year’s euro-plus pact.
When the euro was created, the previous Government agreed that there would need to be separate meetings of eurozone Ministers, and it is hardly surprising that those countries required by treaty to join the euro chose to join the existing eurozone members in developing future arrangements for the eurozone. Those countries are going to be negotiating a treaty that passes unprecedented powers from their nation states to Brussels. Some will have budgets effectively checked and re-written by the European Commission. None of this will happen in Britain. But, just as we wanted safeguards for Britain’s interests if we changed the EU treaty, we will continue to be vigilant in protecting our national interests.
An intergovernmental treaty, while it does not carry with it the same dangers for Britain, is none the less not without risks. The decision of the new eurozone-led arrangement is a discussion that is just beginning. We want the new treaty to work in stabilising the euro and putting it on a firm foundation. I understand why they would want to use EU institutions—but this is new territory and does raise important issues that we will want to explore with the euro-plus countries. So in the months to come we will be vigorously engaged in the debate about how institutions built for 27 should continue to operate fairly for all member states, Britain included. The UK is supportive of the role of the institutions, not least because of the role they play in safeguarding the single market, so we will look constructively at any proposals with an open mind. But let us be clear about one thing: if Britain had agreed treaty change without safeguards, there would be no discussion. Britain would not have proper protection.
Finally, let me turn to the next steps. The most pressing step of all is to fix the problems of the euro. As I have said, that involves far more than simply medium-term fiscal integration, important though that is. Above all, the eurozone needs to focus, at the very least, on implementing its October agreement. The markets want to be assured that the eurozone firewall is big enough, that Europe’s banks are being adequately recapitalised, and that problems in countries like Greece have been properly dealt with. There was some progress at the Council, but far more needs to be done. The eurozone countries noted the possibility of additional IMF assistance. Our position on IMF resources remains the one I set out at the Cannes G20 summit. Alongside non-European G20 countries, we are ready to look positively at strengthening the IMF’s capacity to help countries in difficulty across the world. But IMF resources are for countries, not currencies, and cannot be used specifically to support the euro—and we would not support that.
There also needs to be greater competitiveness between the countries of the eurozone. To be frank, the whole of Europe needs to become more competitive. That is the way to more jobs and growth. Many eurozone countries have substantial trade deficits as well as budget deficits. If they are not to be reliant on massive transfers of capital, they need to become more competitive and trade out of those deficits. The British agenda has always been about improving Europe’s competitiveness, and at recent Councils we have achieved substantial progress on completing the single market in services, opening up our energy markets, and exempting micro-businesses from future regulations. This has been done by working in partnership with a combination of countries that are in the eurozone and outside it. Similarly, on this year’s EU budget, it was Britain, in partnership with France, Germany and Holland, that successfully insisted on no real increases in resources—for the first time in many, many years in the EU.
On defence, Britain is an absolutely key European player, whether leading the NATO rapid reaction force or tackling piracy in the Indian ocean. Our partnership with France—[Interruption.]
Mr Speaker
Order. I apologise for having to interrupt the Prime Minister. Those on the Opposition Front Bench, at the moment, are making the most noise. [Interruption.] Order. This is not acceptable. The Leader of the Opposition will have an opportunity to reply on behalf of the Opposition, and his colleagues must conduct themselves with a degree of reserve.
The Prime Minister
Thank you, Mr Speaker.
Our partnership with France was crucial in taking successful action in Libya. Britain will continue to form alliances on the things we want to get done. We have always had a leading role in advocating the policy of enlargement and, at this Council, we all celebrated the signing of Croatia’s accession treaty. That was one European treaty I was happy to sign.
Let me conclude with this point. I do not believe there is a binary choice for Britain: that we can either sacrifice the national interest on issue after issue or lose our influence at the heart of Europe’s decision-making processes. I am absolutely clear that it is possible to be a full, committed and influential member of the European Union but to stay out of arrangements where they do not protect our interests. That is what I have done at this Council. That is what I will continue to do as long as I am Prime Minister. It is the right course for this country. I commend this statement to the House.
Edward Miliband (Doncaster North) (Lab)
May I start by thanking the Prime Minister for his statement? We all note the absence of the Deputy Prime Minister from his normal place.
The reality is this: the Prime Minister has given up our seat at the table; he has exposed, not protected, British business; and he has come back with a bad deal for Britain. The Prime Minister told us that his first priority at the summit was to sort out the eurozone, but the euro crisis is not resolved. There is no promise by the European Central Bank to be the lender of last resort, there is no plan for growth and there is little progress on bank recapitalisation. Will he first tell us why his promise of action did not materialise and what that will mean for the British economy in the months ahead? At the summit that was meant to solve these problems, the Prime Minister walked away from the table.
Let me turn to where that leaves Britain. Many people feared an outcome of 17 countries going it alone. Few could have anticipated the diplomatic disaster of 26 going ahead and one country—Britain—being left behind. The Prime Minister rests his whole case on the fact that 26 countries will not be able to use the existing treaties or institutions. That is apparently the win that he got for this country. However, can he confirm that article 273 of the treaty on the functioning of the European Union allows those countries to use the European Court of Justice? No doubt they will end up using the Commission’s services and, yes, even the buildings—the point that he made in the negotiations. In case anyone had any doubt, that was confirmed yesterday by the absent Deputy Prime Minister, who said:
“Well it clearly would be ludicrous for the 26, which is pretty well the whole of the European Union…to completely reinvent…a whole panoply of new institutions.”
The Prime Minister will not even be sent the agenda for the meetings that will start in January. He will read about decisions affecting British business in the pages of the Financial Times.
The Prime Minister’s next claim was that he did not want to sign up to the fiscal rules being imposed on euro area countries. Can he confirm that no one even proposed that those would have applied to Britain? The next claim in his statement was that he did what he did because the treaty posed a grave threat to our financial services industry. However, over the whole course of the weekend, he has been unable to point to a single proposal in the proposed treaty that would entail the alleged destruction of the City of London. Will he tell us what the threat was?
In any case, there is nothing worse for protecting our interests in financial services than the outcome that the Prime Minister ended up with. Will he confirm that he has not secured one extra protection for financial services? The veto on financial services regulation—he did not get it. The guarantees on the location of the European Banking Authority—he did not get them. Far from protecting our interests, he has left us without a voice.
The sensible members of his party understand that as well as anyone. What did Lord Heseltine say—[Interruption.] Oh, how significant! That is what the Tory party now thinks of Lord Heseltine. What did he say at the weekend?
“You can’t protect the interest of the City by floating off into the middle of the Atlantic.”
It is no longer the Conservative party of Lord Heseltine; it is the Conservative party of the hon. Member for Stone (Mr Cash), who went out on Friday saying that this was exactly what he had always wanted.
What about the rest of British business, which the Prime Minister does not seem to have been thinking about? The danger is that the discussions about the single market, on which it relies, will now take place without us. Only this Prime Minister could call that leadership. The Deputy Prime Minister clearly does not agree with him. He said that the outcome leaves Britain “isolated and marginalised”. Does the Prime Minister agree with that assessment? How can he expect to persuade anybody else that it is a good outcome when he cannot persuade his own deputy?
The Prime Minister claims to have wielded a veto. Let me explain to him that a veto is supposed to stop something happening. It is not a veto when the thing that you wanted to stop goes ahead without you. That is called losing. That is called being defeated. That is called letting Britain down. I have not finished with the Prime Minister yet. Next, I want to ask him—[Interruption.]
Mr Speaker
Order. I am worried about the health of the right hon. Member for Mid Sussex (Nicholas Soames). He must calm himself and have a lie down, if necessary, while we listen to the Leader of the Opposition.
Edward Miliband
Next, I want to ask the Prime Minister about how he ended up with this outcome. The proposals he tabled, when he tabled them and his failure even to try to build alliances for them suggest someone who did not exactly want a deal. Can he confirm that what he actually proposed was to unpick the existing rules of Lady Thatcher’s Single European Act as regards the internal market? Given that those proposals would have changed 25 years of the single market, why did he make them in the final hours of the summit?
Where were the Prime Minister’s allies? If he wanted a deal, why did he fail to build alliances with the Swedes, the Dutch, the Poles and Britain’s traditional supporters? If he really did want to protect the single market and financial services, why did he not seek guarantees that those issues would be discussed only with all 27 members in the room?
In any case, the Prime Minister should not have walked away, because the truth is—[Interruption.] Just calm down. The truth is, the treaty will take months and months to negotiate. Other countries have carried on negotiating and carried on fighting for their national interest. The real answer is this: he did not want a deal, because he could not deliver it through his party. He responded to the biggest rebellion of his party in Europe in a generation by making the biggest mistake of Britain in Europe for a generation.
So this is a bad deal, which we ended up with for bad reasons, and it will have long-lasting consequences. It is a decision that means we are on the sidelines, not just for one summit but for the years ahead. The Prime Minister said in this House on 24 October that what mattered
“is not only access to that single market but the need to ensure that we are sitting around the table”.
He went on:
“That is key to our national interest, and we must not lose that.”—[Official Report, 24 October 2011; Vol. 534, c. 38.]
Well congratulations, Prime Minister, that is exactly what you have done. He has done what no Prime Minister ever thought was wise—to leave the room to others, to abandon our seat at the table.
The Prime Minister says he had no choice. He did. He could have stayed inside and fought his corner; he should have stayed inside and fought his corner. Faced with a choice between the national interest and his party interest, he has chosen the party interest. We will rue the day this Prime Minister left Britain alone, without allies, without influence. It is bad for business, it is bad for jobs, it is bad for Britain.
The Prime Minister
A lot of sound and fury, but one crucial weakness—the right hon. Gentleman has not told us whether he would sign up to the new treaty. He had about 15 minutes, and he could not tell us whether he is for it or against it. Has it got enough safeguards in it, or has it got too few safeguards? Would a Labour Government back it, or would they veto it? Let me tell him: if you cannot decide, you cannot lead.
Inasmuch as there were some specific questions, let me try to answer them. The right hon. Gentleman asks what the threat was to financial services. Why cannot he understand that if you allowed a new treaty of 17 members within the EU, without proper safeguards, huge damage could be done to the single market and to financial services? He asks what will happen when this new organisation goes ahead. Of course, a new organisation cannot do anything that cuts across the existing treaties or the existing legislation, so he does not even understand how the European Union works.
The right hon. Gentleman asks what we gained from the veto. I will tell him: we stopped Britain signing up to a treaty without any safeguards. That is what we gained.
On the issue of the City and financial services, the right hon. Gentleman completely fails to understand that this is a nationwide industry. It is not just the City of London; it is the whole of our country. I have to say, there was not a word about the report today showing that Labour was to blame for the appalling regulation of the Royal Bank of Scotland. Then, of course, we had a lecture—[Interruption.]
Mr Speaker
Order. Members must calm down. I have my eye on one hon. Gentleman from the north of England who entered the House 32 years ago and should know better.
The Prime Minister
Of course, then we had a lecture on how to negotiate. I have to say that I am not going to take any lessons from people who gave in time after time to the comfy consensus rather than ever stand up for Britain. Just look at the record: the previous Government joined a bail-out scheme even though it was not protecting a currency that they were a member of; they gave up the rebate even though they got nothing in terms of the reform of agriculture; and they signed up to the Lisbon treaty but never had the courage to put it to the British people. Every time, they just go along with what others want.
The Leader of the Opposition also talked about growth and jobs. Let me just say this: his plan, alone in Europe, is to spend more, borrow more and increase debt by more. All the while, if he wants to join the euro, he needs to understand that the treaty that is being established would actually make that illegal. The very thing he wants to do in Britain he wants to ban in Brussels.
But the key question the right hon. Gentleman cannot answer is this: does he back this treaty or not? If the answer is yes, he should have the courage to say so. If the answer is no, he should have the honesty to say that I was right to keep Britain out of it. And let me just say this: just because the right hon. Gentleman is in opposition does not mean that he should oppose Britain’s interests.
The Prime Minister
For all the right hon. Gentleman’s experience, I think that he is very naive about what is happening in Europe over financial services. Time and again—[Interruption.]
Mr Speaker
Order. Members must calm themselves. I am concerned for them, and I also feel that the Prime Minister must be heard.
The Prime Minister
There have been any number of examples of frankly discriminatory legislation against financial services in the European Union that have affected Britain very badly. Let me give the right hon. Gentleman one example. At the moment, the ECB is taking Britain to court on the basis that we should not be able to clear euros through London. So we would be put in the extraordinary position that banks in Britain could clear Swiss francs, dollars and yen, but—even though we are in the single market—we could not clear euros. That is one example of discriminatory legislation. When you are faced with a situation in which the 17 eurozone members want to go into a further treaty within the European Union, with all the powers and force that would have—[Interruption.] They are not going to have a treaty within the European Union: they are doing it outside—it is right to seek safeguards. That is why the right hon. Gentleman is naive not to understand that.
The Prime Minister
I am afraid that I missed the beginning of the right hon. Gentleman’s question.
Mr Nicholas Brown
Will the Basel III regulatory regime for financial services apply in the United Kingdom?
Mr Speaker
Order. If I am to accommodate the large number of Back Benchers, as I always wish to do, we will require brevity, a textbook example of which will now be provided by Mr Chris Bryant. [Laughter.]
Chris Bryant (Rhondda) (Lab)
I think, Mr Speaker, that that was an example of irony.
The single most important thing that our voters have seen over the past weeks and months has been the crisis in the economies across the whole of Europe, which is depressing the economy in this country as well. They want to ensure that they have jobs to go to next year. Last week, the Prime Minister surrendered an opportunity to do that; he surrendered his seat; and he surrendered to his Back Benchers. Is he not ashamed of himself?
Malcolm Bruce (Gordon) (LD)
Given that we are facing the worst financial crisis in living memory, does the Prime Minister agree with me that the UK coalition Government have a policy for dealing with it and that unfortunately the eurozone does not? What we now need, surely, is to work in parallel to ensure that we have outcomes that are not divergent, but deliver a strong pound and a strong euro.
Keith Vaz (Leicester East) (Lab)
Given the current economic crisis in Europe, does the Prime Minister believe that the Europe 2020 strategy still has a future as a successor to the Lisbon benchmarks, and is he confident that we will achieve those shared goals?
Mr Speaker
Order. Short, single-sentence questions and the Prime Minister’s characteristically pithy replies would enable me to get in all Members who are still standing. I ask them to help me to help them.
Mr Peter Bone (Wellingborough) (Con)
I have received an important message to pass on to the Prime Minister: “The efforts of the Prime Minister on Thursday night gave me great pleasure. Yours ever, Mrs Bone.”
Mr Speaker
Order. The House will want, without exception, I hope, to hear Mr Graham Stringer.
Graham Stringer
Thank you, Mr Speaker.
Europe would not be in the economic and political mess that it is in now if we had not had to wait nearly 40 years before a British Prime Minister came back and said that he or she had used the veto. Can the Prime Minister tell us how, and when, he is going to repatriate some of the powers that have been so carelessly given away?
The Prime Minister
I am very grateful to my hon. Friend for looking at Twitter or whatever else it is that the Leader of the Opposition now uses. I gather that it is possible for the Leader of the Opposition to come back on that. Perhaps he can confirm whether he would have signed the treaty. I am happy to give him a few more minutes if we get a bit of clarity.
Mr Speaker
I think that the sensible approach, in conformity with convention, is to stick to questions to and answers from the Prime Minister in this Chamber.
Bill Esterson (Sefton Central) (Lab)
In the words of one business leader today,
“Margaret Thatcher was a constant thorn in the side of European leaders, but she never vacated the negotiating table; I am anxious by the implications of what the prime minister has done.”
When will the Prime Minister give business in this country the reassurance that it needs about the impact that his walking away will have on jobs and the economy?
Mr Speaker
Order. I simply say—[Interruption.] Order. I am perfectly capable of handling these matters myself. If I wanted help, I certainly would not ask Back Benchers of any party, or anybody else for that matter.
I simply say to the hon. Gentleman that he asked his question earlier, and it was perfectly in order for him to do so, but we are here discussing the European summit and the Prime Minister’s statement on it. The hon. Gentleman is an ingenious fellow—
Mr Speaker
Order. I am being helpful to the hon. Gentleman. I have known him since we were at university together 29 years ago, and I have probably forgotten more about him than he knew in the first place. I am being kind to him and he has said enough for today. He can use other methods to get his point across, and I am sure that he will.
Stephen Mosley (City of Chester) (Con)
It is only the tough action taken by my right hon. Friend’s Government to tackle our own deficit that has made us a safe haven in Europe and given us a choice last week. Is it not the case that if we had followed the economic policies advocated by the Opposition, it would not be the eurozone asking us for help, but us going to beg Europe to bail us out?
The Prime Minister
I thank my hon. Friend, who has made a number of sacrifices on my behalf over the last 18 months, one of which is waiting to the very last in this marathon question session. I am delighted that he believes that we have done the right thing for Britain and for Brighton, and I praise him for his very hard work in his constituency.
Mr Speaker
I am extremely grateful to the Prime Minister and other colleagues, as 101 Back Benchers had the opportunity to question the Prime Minister in the 88 minutes of exclusively Back Bench time on this statement. I thank colleagues for their co-operation.