Euro Area

Steve Baker Excerpts

Tuesday 21st July 2015 Westminster Hall

[Mr Steve Baker (Wycombe) (Con)]

It sometimes feels like we need a new language in which to have this conversation about the European Union and our relationship with it. I am grateful that, over the course of his career, my right hon. Friend the Prime Minister has on many occasions given us that language by saying things such as:

“It is the last gasp of an outdated ideology…that has no place in our new world of freedom”.

I agree with him.

A new nation state is hoving into view, and people should be clear about what we are discussing. The question is: should we continue on the path into that new nation state? There can now be no doubt that that is the trajectory of the eurozone. Advocates of European Union membership on substantially the current basis are in danger of being blindsided. We can see from this debate’s attendance that people are not paying close attention to the important issue of what the five Euro-presidents have said. By the way, the “five Euro-presidents”—the ridiculousness of it is palpable.

The five Euro-presidents have set out a new nation state, and it is clear that those who advocate membership on a substantially unreformed basis have not kept up with events. Too often it seems that people complacently assume that there will be a yes vote and that things will go on as before in a kind of status quo, but there will be no status quo on the ballot paper when the referendum comes. The choice will be either to continue on a substantially unreformed basis, if the Prime Minister does not get what he wants, or to say no and continue on a fundamentally different basis. Of course, I hope that the Prime Minister succeeds in delivering everything that he has ever set out. When the day comes, I would like to see yes meaning a fundamentally different relationship with the European Union that we and the Prime Minister can wholeheartedly support, and I would like no to turn out to be something that we do not need to consider.

The five Euro-presidents have set out a path to a new European nation. I fear that the truth is that they will not be willing to allow us to move to a fundamentally different path and that, in due course, the choice will be either the wild ride to political union that my right hon. Friend the Member for Wokingham (John Redwood) set out or the conservative, moderate choice of sticking with our Parliament, our British courts, our British Lords and our ability to govern ourselves in the way that seems fit to us and that is accountable to the British people.

[Dr Julian Lewis (New Forest East) (Con)]

I am grateful to my hon. Friend, and to my right hon. and hon. Friends who spoke earlier, for their efforts in delving so deeply into the questions without completely losing the will to live, but can he explain to me how, despite all their sufferings, the Greek people seem to regard membership of the euro as the addict regards the use of heroin? It does them enormous harm, yet they do not seem to be able to give it up.

[Mr Baker]

My right hon. Friend makes a good point, and it may be that through the euro system Greece has done rather well in the past, through the fact that money was very easy for Greece—probably much easier than it should have been—and a nation that had probably been quite parsimonious was encouraged to take advantage of cheap credit and get into bad debt problems. It may well be that that system encouraged Greece to believe that a new way of living beyond one’s needs was possible; but as good Conservatives we will recognise that one must live within one’s means and balance the books. One must have low taxes, small government and sound money. However, I do not want to divert my remarks too far down that path.

I want to pick up on something that my hon. Friend the Member for Stone (Sir William Cash) said about Germany. It has been an interesting journey, considering how people reflect on Germany. I am inclined to think that German commitment to the EU project is not malicious or controlling. It is not a problem, except that, perhaps because the EU is perceived as an anti-war project, the German people and their leaders have pursued the project far beyond what was reasonable, just and right, out of a sense of war guilt and a historical sense of shame. We as good individualists, in rejecting collectivism, may have to look at today’s generation of German people and say that they are not responsible for the horrors of the past. They must forgive themselves and move beyond the corrupting view that they have the responsibility to take forward, in a way that is quite dangerous, a project that can now be seen to have failed. History may not repeat itself, but it sometimes rhymes. We have had a horrible financial crisis.

[John Redwood]

My hon. Friend made a funny remark about the apparent absurdity of the five presidents, but does he agree that they are not figures in a Gilbert and Sullivan opera, but are enormously powerful figures commanding billions and influencing the lives of hundreds of millions of people across Europe? Just as they took the exchange rate mechanism well beyond the point at which it did untold damage, they could do untold damage with their euro scheme. Is not that a reason why we should try to let them get it right, rather than making it more difficult for them?

[Mr Baker]

My right hon. Friend is right, and it is not for us to choose the destiny of the other peoples of Europe. We might offer them our advice in different ways, but since they now have the euro as a currency they had better make the best of it—although, again, I do not want to be drawn too far off into ideas about money and banking. We are in a fix. I agree with my right hon. Friend that since those people are extremely powerful, they had better make the best of it, and we should not get in their way.

I was saying that history, while not repeating itself, sometimes rhymes. We had an enormous credit expansion, which broke the banks and led us into a position of desperation in several countries of Europe. We should not in such circumstances cast aside democracy and assemble a supranational state that is not accountable to its people. There we would be running the risk of a tragic rhyme in history—a cataclysmic mistake, possibly, should it go wrong—and it really might. The evidence of history is that it might.

I want to mention four things: we should undo what I would call the spell of Plato—the idea that a guardian class can look after us, free of democracy. We should get off the road to serfdom. We should make sure that we reject the omnipotence of government, and we should overturn this managerial revolution. I refer of course to books by Popper, Hayek, Mises and Burnham, all books written during the period of war in the first half of the 20th century. They are books that I would commend to anyone, lest, while not repeating history, we rhyme with the tragic events of the past.