European Council

Steve Baker Excerpts

Thursday 8th December 2011 Westminster Hall

[Martin Horwood]

No, we need to move on from safety regimes. Is the hon. Gentleman seriously suggesting that that will be a more effective approach than trying to reach a common position across the European Union?

[Steve Baker (Wycombe) (Con)]

I am a chartered aerospace engineer who has a friend who is a chartered aerospace engineer working in the nuclear industry, and we agree that nuclear industry standards are quite poor. When I was a kid, the Eurofighter Typhoon was flying quite successfully as the EAP, with just British Aerospace backing it. What slowed that project down was making it pan-European. I do not share his optimism about the idea of pan-European technical standards, which is not borne out.

[Martin Horwood]

I congratulate the hon. Gentleman on his qualifications.

Apart from the eurozone, the other key issue that will be discussed at the summit is, of course, the accession of Croatia. We very much look forward to the accession of Croatia, which is a brilliant example of the transformative process of applying for membership of the European Union. Croatia has managed to address so many issues relating to its judiciary, economy and the reform of its political processes. That is an example that should be followed by other candidate countries looking to accede to the Union. It is inspiring to remember that in the area of Europe most recently torn apart by war, those in the Balkans still see European Union membership as something that helps to guarantee future peace. That is one of the founding principles of the European Union and one that we should not lose sight of in the current melee over the eurozone and possible treaty reforms.

The third, and obviously the most important, issue that the Council has to address is the crisis in the eurozone. Here, I think, we are on common ground in realising that the threat of a disorderly collapse in the eurozone is of enormous importance to this country. If the eurozone goes down, it will do considerable damage to the entire world economy, let alone to the British economy. It should be our No. 1 national priority at the Council to advance the process of securing the future of the eurozone, however it happens to proceed. That the eurozone countries have not yet agreed the treaty process or the rules that ought to surround it is a matter of enormous frustration and anxiety. It reflects badly on the leaders of those countries that they have not yet come to such an agreement.

The second clear national priority has to be to defend Britain’s interests in the process, which is rightly the instinct of the Prime Minister at the Council. To come with a list of unrealistic demands that would hamper and threaten the whole process of resolving the crisis, however, would be spectacularly reckless and playing politics with Britain’s national interest. I apologise to the thinly attended Labour Benches, but I am afraid that as a country we are still deep in the process of cleaning up the mess left to us by the previous Government. Our economy remains in a fragile position, which is possibly more fragile than we had expected at this stage.

--- Later in debate ---

[Steve Baker (Wycombe) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Main. I congratulate my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) on securing this debate.

I confess that I was for a long time a great fan of the European Union. I was very pro-Europe and internationalist, as indeed I still am, but the Lisbon treaty caused me to look closely at the nature of the European Union. I do not have to find my own words for what I discovered the European Union to be, because I can quote, and I think I have done before, what the Prime Minister said in Prague in 2007, according to the BBC:

“It is the last gasp of an outdated ideology, a philosophy that has no place in our new world of freedom, a world which demands that we fight this bureaucratic over-reach and lead Europe into the hope and potential of a new, post-bureaucratic age.”

Hon. Friends might have heard me use the last part of that quotation in my question to the Prime Minister yesterday. I agree fully with what he said in 2007, but have we not been dropped into an awful pickle?

I want to say something about the remorseless logic of customs union to complement what the Chancellor has said about the remorseless logic of monetary union. It seems to me that the founders of the European Union were absolutely certain that they wanted peace and prosperity, so they set up a customs union and a free trade area between nation states. However, the problem was that those nation states were interventionist.

The argument runs as follows: economic intervention requires a territorial monopoly on the use of force. If capital and labour are not to move as a result of such interventionism not meeting its stated aims, that promotes protectionism and capital controls. In turn, that promotes autarchy as nation states struggle to provide everything for themselves in the face of their own barriers, which then promotes expanding borders. In the European Union, we find a customs union with trade barriers around it and a tendency to keep trying to expand. The ultimate outcome of that direction of travel is said to be militarism. I do not claim originality for that argument; it is set out in great detail in a book called “Omnipotent Government: The Rise of the Total State and Total War” by a classical liberal political economist, Ludwig von Mises. He was an interesting man, an Austro-Hungarian Jew who predicted the collapse of the Deutschmark and the rise of political radicalism and then had to flee the Nazis.

I am very interested in that argument. It is the inevitable direction of travel of an interventionist customs union. The crux of the matter is that if the nations of Europe will not abandon their policies of economic interventionism, there are only two directions of travel: either a return to nation states, fragmentation, economic nationalism and all the frictions and difficulties that that will cause, as well as a tendency to promote militarism, which was the worst fear of the founders of the European Union, or, on the other hand, strict centralisation, a territorial monopoly on the use of force and the raising of economic nationalism to the level of the customs union. That, in my view, is what the European Union has done. It is a terrible tragedy. While seeking to defeat economic nationalism, it has raised it to such a level that the continent is suffering what appears to be an imminent currency collapse.

In my view, everything is at stake this weekend. I encourage the Prime Minister to have the courage to believe what he said in 2007 in Prague, which was that the European Union is

“the last gasp of an outdated ideology, a philosophy that has no place in our new world of freedom.”

I hope that the Prime Minister and my right hon. Friend the Minister for Europe (Mr Lidington) can lead Europe into the hope and potential of a post-bureaucratic age.