Cyprus

William Cash Excerpts

Tuesday 17th July 2012 Westminster Hall

[Mr David Burrowes (Enfield, Southgate) (Con)]

It is a pleasure to speak in this debate on Cyprus under your chairmanship, Dr McCrea. I welcome the Minister, who is not the Minister for Europe, but his portfolio includes responsibility for human rights. The issue of human rights transcends the boundaries of Cyprus and should be a matter of concern to us all. Indeed, some years ago, the Minister was on the campaign trail in Enfield, Southgate and may know about the issue of Cyprus. It is certainly of great concern to my constituents and others.

In the past 40 years there have been many debates about Cyprus in this House. Over the seven years that I have been in Parliament, and particularly given my constituency interest, I have inevitably been involved in speaking on Cyprus and securing many such debates. This time it is a particular pleasure to have secured a debate, because this month Cyprus has assumed the presidency of the European Union. It is a great historic achievement of a small but important island in Europe. It is a cause for celebration of the independence and sovereignty of Cyprus. Its leadership comes at a crucial time, given the travails in Europe. I am sure that the House will wish the Cyprus presidency well over the next six months.

But—sadly, with Cyprus politics there is usually a “but”—the reason why there have been so many debates over nearly four decades is that Cyprus remains divided, with the north occupied by Turkish troops. Ministers—and perhaps the Minister here today—will visit Nicosia during the next six months. That city is the only divided capital in Europe; part of the island in the north remains occupied by troops from a foreign country—Turkey—leading to the north being one of the most militarised places in the world.

During this six-month period, pressure needs to be put on Turkey to properly recognise the Republic of Cyprus. The threats made by Turkish leaders to freeze relations with the European Union while Cyprus has the presidency should not wash with the United Kingdom or the Government. If—as many want—Turkey wants in time to be a member of the European club, it needs to play by the rules, which include respecting the rotating presidency and also respecting European agreements, not least the customs union. It is extraordinary that, although a key aim of the presidency is developing European Union maritime policy, Turkey refuses to fulfil the Ankara protocol and to accept Cyprus ships at its ports. I hope that the Minister will be able to assure me that during the next six months the Government will do all they can to put pressure on Turkey to recognise Cyprus and not let it off the hook during a period that can be seen too easily as a vacuum period.

The subject of the debate is Cyprus, but I have already spent time talking about Turkey. When I spoke in a debate two weeks ago about UK relations with Turkey, I spoke about Cyprus. Sadly, Turkey’s influence and involvement in Cyprus are significant. We and no doubt the Minister will want to reaffirm that the future of Cyprus must be properly determined by Cypriots, but Turkey calls the shots in the north. It is therefore incumbent on Britain to help to ensure that Cypriots— Greek and Turkish Cypriots—have the freedom and capacity to determine their future as a reunited island based on the principles of the United Nations framework of the bizonal, bicommunal federal solution.

[Mr William Cash (Stone) (Con)]

Having been to Cyprus on two separate occasions in the past six weeks as Chairman of the European Scrutiny Committee, I very much endorse what my hon. Friend is saying. We are conscious of the problem that he has identified, and it would be extremely helpful if the present Cypriot Government addressed the problem of fraudulent titles, which is a problem for some 2,000 people in the UK who have interests in the land. A Minister in the Ministry of Foreign Affairs in Cyprus told me that they would try to sort it out. Does my hon. Friend agree that, just as we have to sort out the Turkish question, the Cypriots have a responsibility to sort out the problem of fraudulent titles?

[Mr Burrowes]

I welcome my hon. Friend’s intervention on the issues of fraudulent titles and illegal occupation of land. The Foreign Office website advises UK citizens to be clear about property ownership in the north. It advises against exploiting the situation and highlights the illegality in the north. It is a huge problem that needs to be resolved.

I imagine the Minister who took up the brief today may have approached the debate with some weariness given the stalemate in the talks between the Cypriot leaders. The House is familiar with the debate. The main purpose of the debate today is to seek to break new ground and to urge the Government not to sit on the sidelines or just cheer or cajole from the terraces, but to take seriously our historical responsibilities and our responsibilities as a guarantor power. We have responsibilities to many of those represented here. I see my hon. Friends here. The Minister of State, Department for Transport, my right hon. Friend the Member for Chipping Barnet (Mrs Villiers), has a significant number of Cypriot constituents, as do my hon. Friends the Members for Enfield North (Nick de Bois), for Hendon (Dr Offord) and for Congleton (Fiona Bruce). It is clear that many Members are concerned that we do not simply let the next six months pass.

One of the areas of new ground is curiously an old one: religious and cultural heritage. Last May, I led an all-party group delegation, including my hon. Friends the Members for Enfield North and for Hendon and the hon. Member for Paisley and Renfrewshire North (Jim Sheridan), to clean up some cemeteries and churches in Cyprus. Some of the cemeteries had been neglected, but most had been desecrated. Having visited the north last November, I witnessed for myself the desecration and damage. I resolved that the next time I returned we would do something practical about it.

Our delegation did not visit national political leaders, which is what usually happens. We wanted to focus on the local communities and villages to try not only physically to restore respect to trashed cemeteries and pillaged churches, but to restore the link between the village associations—both Greek and Turkish Cypriot—which, through the conflict, has sadly been lost.

Our visit’s aim was not to try to change the world or to solve the Cyprus problem—or indeed to restore all religious and cultural heritage—in a few days. The aim was to take some small but practical steps through cleaning a cemetery or a church to rebuild confidence and to make the point that, as British Members of Parliament with responsibilities, along with the Cypriots who were with us, we would not tolerate the desecration of religious heritage.

We will not accept the status quo. We made the point loud and clear that the situation cannot just be accepted and allowed to carry on. The memories of loved ones and the places of worship that people want to go to matter. Such respect transcends faiths, backgrounds and countries. It is about respect for common shared values. In building those small steps of confidence, the aim was to lead to a better future.

--- Later in debate ---

[Mr Burrowes]

We agreed to go across the whole island, so we visited Limassol, Larnaca, Dromolaxia, Kivisili and Kalo Choiro, as well as Afania, Assia, Genagra, Pigi, Peristerona and Nicosia. That was important. For example, we went to the Limassol mosque which, not long before we visited, had been partially burned by vandals. We were able to visit the mosque with Bishop Porfyrios and Imam Shakir, who were affirming their united support for a greater respect for religious and cultural heritage. The problem is not one of division or religious division—that is not a problem at all. They were saying that we can look at the issue of religious cultural heritage as one where we can respect religion, which can be a uniting, not dividing, force, to build confidence and trust for all Cypriots. I ask the Minister to support such confidence-building measures in areas of religious cultural heritage. Citizens from this country will be going to Cyprus to carry out such visits in the future.

This is a current issue, and there is a concern that it is not all positive. There are reports this week that the cemetery in the village of Trachoni in the north has been completely destroyed to make way for the building of a new police station. That does not help at all when we want to build a common future for Greek and Turkish Cypriots, and I ask the Minister to condemn that approach.

[Mr Cash]

Would my hon. Friend be kind enough to take another question which relates, as I understand it, to the refusal of the Turkish Government to recognise the law of the sea and the exclusive economic zone in relation to gas? That is a huge issue that raises massive questions about good faith.

[Mr Burrowes]

I was going to come on to that. The discovery of hydrocarbon reserves is a wonderful opportunity—a natural resource for the whole of the island of Cyprus—to help resource a reunited island. There are struggles in the region both with energy and finance, and that provides hope for a brighter future. That is why it is depressing that, at this time, Turkey is being provocative in bringing ships around to show an aggressive approach, and not fully recognising that this is a resource for Cyprus. Outside powers should not be trying to get their hands on it. As a guarantor power, Britain has responsibility for the independence of the island. This is a threat to that independence. I understand that the Minister for Europe has been vigorous in making representations, and I ask the Minister present to reaffirm that respect for the integrity of that resource for the benefit of the island, which offers real hope for the future—a dynamic that can happen now and can be assured.

This period could lapse into a vacuum period of six months where the talks are stalled, but we can make practical progress. In Famagusta, the fenced-off Varosha area has been looted, uninhabited and decaying for nearly 40 years. Will the Minister reaffirm what the Prime Minister has said—I am sure that he will want to do so—in response to my reference to this on behalf of other hon. Members? The Prime Minister said:

“We fully support all the relevant Security Council resolutions, including UNSCR550 and UNSCR789. We have raised this with the Turkish authorities”.

I urge the Government to continue to do that. The Prime Minister recognises

“that measures to build confidence between the communities in Cyprus can have great value in facilitating efforts towards a comprehensive settlement. We continue to encourage all parties to the Cyprus problem to develop such measures.”

Famagusta is one such area that can come under UN supervision and properly allow, in compliance with those United Nations resolutions, for the return of lawful inhabitants. Hon. Members believe that that would help to facilitate efforts towards a settlement. That does not need to wait for a settlement; progress can be made, as it can in the area of missing persons. There was a protest yet again last week by the relatives of missing persons. The relatives are still literally crying out for basic information about their loved ones, despite the great efforts of the communal committee for missing persons—work supported by the European Union, and by the UK taxpayer, too. Unfortunately, the whereabouts of those relatives are in the domain of Turkish authorities, in military bases and in Turkey itself. There must be compliance with the European Court of Human Rights judgments to allow the whereabouts of those missing people to be established.

It is important that we do not rely simply on the fact that the talks have stalled in the past six months, on what will be said, which is that we want to ensure that the Cyprus problem is resolved by Cypriots, and on the UN framework. Obviously, we want that, but we want to ensure that Britain takes its responsibilities seriously and that we as a Government step up our pressure on Turkey to recognise Cyprus when Cyprus has the European presidency. We also encourage Cypriots to step up and civil society to take a place where there are political talks and restore religious heritage and other things beyond that. We will be right behind them, supporting them every step of the way. We are doing that on behalf of British Cypriots and because of our historical responsibilities, so that we can, at long last, end the need for such debates in Parliament.

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[The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne)]

It is a great honour to serve under your chairmanship, Dr McCrea. I pay tribute to my hon. Friend the Member for Enfield, Southgate (Mr Burrowes). He is right. I belong in the elite group of people who have stood in Enfield, Southgate in a general election. He belongs in the even more elite group of people who have won in that constituency. I pay tribute to all colleagues who have joined us for this important debate, specifically my hon. Friend, who has a deep, consistent interest in this subject, which is a cause of great importance to a large number of his constituents and in which he takes an interest more widely.

Let me make a couple of points in response to specific issues that my hon. Friend raised, then touch on three themes that came out of the debate: cultural sites, missing persons and natural gas and mineral reserves, which were mentioned in an intervention by my hon. Friend the Member for Stone (Mr Cash).

The United Kingdom fully supports Security Council resolutions 550 and 789, which my hon. Friend the Member for Enfield, Southgate mentioned, and we will continue to raise those issues with the Turkish authorities. We urge Turkey to implement the additional Ankara protocol when we have a suitable opportunity to bring that to its attention. It is important that the European Union and Turkey find a way to make progress on this issue.

My hon. Friend was right to draw the attention of the House to this significant moment in the long history of Cyprus, because from 1 July until the end of this year it holds the presidency of the Council of the European Union. There are close links between our countries: Cyprus is one of only three EU member states in the Commonwealth; more than 80,000 British citizens live on the island; more than 300,000 Cypriots live permanently in the UK, many of them in Enfield and other parts of north London and across the country; a million British people visit the island annually; and 11,000 Cypriot students attend British universities. I strongly take on board the point that was made about our historical obligations and our contemporary interest in events happening in Cyprus.

[Mr Cash]

Will the Minister commit to looking into the question of the fraudulent title to land? Many thousands of English—British—people have land in Cyprus. I raised that matter when I visited. Will he commit to taking that forward, to ensure that there is a proper resolution in the courts so that these titles can be remedied?

[Mr Browne]

I will happily undertake to task the Department with looking into that. The Minister for Europe or I will write to my hon. Friend.

I have mentioned the three areas that I want to talk about in the five minutes available to me. First, on missing people, there are significant efforts to help families discover the fate of their relatives and give them the opportunity to bury them with respect. We understand that this is an important and sensitive issue for all Cypriots and recognise the need for it to be resolved. The work of the committee for missing persons is of great significance. Since its establishment in 1981, it has been one of the only institutionalised bi-communal committees in Cyprus. To date, the remains of 853 individuals have been exhumed from different burial sites located across the island and 321 remains of individuals exhumed within the framework of the CMP project have been identified through this process—255 Greek Cypriots and 66 Turkish Cypriots.

Of course, to complete its vital work the CMP must be granted access to all areas where it needs to excavate. I therefore urge all those in control of such areas, including the Turkish military, to co-operate fully with the committee. The Committee of Ministers responsible for the supervision of the Turkey v. Cyprus case in the European Court of Human Rights case has also underlined the need for Turkish authorities to take concrete measures in relation to the missing persons, and particularly in relation to the CMP’s access to all relevant information and places.

Secondly, the cultural heritage of the island, which my hon. Friend the Member for Enfield, Southgate discussed at some length, is a sensitive area and the technical committee on cultural heritage, established in April 2008, has the mandate to work on improving the situation. The committee has developed an action plan to protect vulnerable buildings. It has already started work on some projects and hopes, with further funding, to be able to implement more of its plan. The UK Government strongly believe that respect for religious and cultural buildings is a key element in building trust between different communities, including through the preservation of churches, mosques and other buildings of religious and cultural heritage.

Thirdly, and finally—I am conscious that I am slightly skimming through these areas, but I know that hon. Members will want to hear the response to specific points—my hon. Friends the Members for Stone and for Enfield, Southgate mentioned the discovery of substantial gas reserves in Cyprus’ exclusive economic zone, which we regard as good news for the island. There has never been any doubt about the United Kingdom’s support for the right of the Republic of Cyprus to develop the reserves that lie within its exclusive economic zone. Along with the international community we have publicly stated our recognition of Cyprus’ sovereign rights to do so.

We welcome President Christofias’s saying that the gas reserves should benefit all the people living in Cyprus. We hope that the Government of the Republic of Cyprus will take further steps to demonstrate to Turkish Cypriots that they have a clear interest in the development of these reserves. We call on all parties to handle the issue in a way that does not undermine the settlement process and urge both sides not to escalate the issue.

I express once again, on behalf of the Government, my gratitude to my hon. Friend the Member for Enfield, Southgate for raising this subject and reiterate that the Government remain committed to seeing a comprehensive settlement in Cyprus.

EU Charter of Fundamental Human Rights

William Cash Excerpts

Thursday 12th July 2012 Commons Chamber

[Mr Lidington]

I have explained why the measure does not cut across British national policy, but I will come in greater detail to the relationship between the EU special representative and the Council of Europe.

I turn to the action plan. The European Scrutiny Committee noted that it is a comprehensive text and suggested that it constitutes a departure from the approach outlined in the previous joint communication. The High Representative has described human rights as

“a silver thread that runs through everything that we do in external relations.”

That is very much how the Government see human rights, too. In 2010, early in the Government’s life, my right hon. Friend the Foreign Secretary said that

“values are part of our national DNA and will be woven deeply into the decision-making processes of our foreign policy at every stage.”

The action plan is comprehensive, because integrating a human rights perspective across all areas of the EU’s external action is the best way to ensure that the European Union maximises its influence on these issues.

We did not just agree to the action plan on the nod. We conducted a line-by-line assessment of the items, and we are content that what is proposed is in line with our policy objectives and does not pose a risk of competence creep. In addition, the Council has formally agreed that the action plan will fully respect the existing division of competencies. Although it is a comprehensive document, it both builds on the original joint communication and has been examined closely by the Government on precisely the question of competence that concerns my hon. Friend.

[Mr William Cash (Stone) (Con)]

rose—

[Mr Lidington]

I will give way, but I am very conscious that a lot of hon. Members wish to speak.

[Mr Cash]

It is also true that the Minister is at the Dispatch Box and has a responsibility to answer these questions. There are four pages under the headings of outcome, action, timing and responsibility. Is he seriously suggesting that in every single respect, given the general nature of all these things and the fact that the legal consequences will ultimately end up in some court or other, he is right in making such a general assertion?

[Mr Lidington]

Yes, of course the action plan is expressed in general terms, because the intention is that those general principles should be applied to the European Union’s human rights activity across the range of EU dossiers and areas of external policy action.

On the common foreign and security policy—CFSP—the freedom of the EU special representative or the High Representative to express a view and develop a policy on behalf of the EU collectively will depend on whether a CFSP position has been unanimously agreed for a particular country, region or crisis. The action plan describes in general terms how the EU and its High Representative and special representative should determine their priorities for action, but we cannot sit down in July 2012 and write down in detail which countries and crises will be involved and in what manner such work should be undertaken. Foreign Ministers in the Foreign Affairs Council and national representatives in the Political and Security Committee will consider these matters case by case.

The European Parliament saw a role for itself on the CFSP following the Lisbon treaty, and we were equally clear that the CFSP would remain intergovernmental. The High Representative has made a gesture to the Parliament in a non-binding declaration on political accountability, which says that she will seek the views—nothing more than that—of the European Parliament on CFSP matters. As one would expect, the European Parliament has taken a keen interest in the new human rights package. In accordance with article 36 of the treaty on the European Union, the mandate for the special representative provides that he or she

“may be involved in briefing the European Parliament.”

However, such briefings may take place only in a committee or sub-committee configuration and never in plenary debates, in which only the High Representative may participate. This reflects the arrangement, which we firmly support and uphold, that on issues pertaining to the CFSP the High Representative may be replaced in plenary only by a Minister of a member state.

I want to move on to the possible overlap with the Council of Europe, which concerns several Members. I start by acknowledging the important work that right hon. and hon. Members in all parts of the House play as Members of the Parliamentary Assembly of the Council of Europe. I recall the very pleasurable visits that I made to the Parliamentary Assembly during the United Kingdom’s six-month presidency of the Council of Europe. It is clearly important that there be effective, mutually trusting co-ordination between the Council of Europe, particularly its human rights commissioner, and the EU’s new special representative on human rights. That is reflected in the wording of the mandate, which I will describe shortly.

I note that the two roles have distinct responsibilities. The Council of Europe’s human rights commissioner is mandated to promote awareness of and respect for human rights within the member states of the Council of Europe. The EU special representative’s role is different; it is to promote human rights globally as part of the EU’s unanimously agreed CFSP. Both office holders will be involved in work on promoting respect for human rights in states of the Council of Europe that are not EU member states. To avoid any risk of unhelpful overlap and duplication, article 11(3) of the EUSR’s mandate expressly requires him or her to

“liaise and seek complementarity and synergies with other international and regional actors”.

To turn that jargon into English, it means that the special representative should maintain a regular dialogue with the commissioner to avoid duplication. The secretariat of the Council of Europe has expressed no concern to us about the creation of this role. Indeed, subject to proper co-ordination, it welcomes an increased focus on human rights within the EU’s external action.

During the UK’s presidency, I discussed with Secretary-General Jagland the relationship between the Council of Europe and the European Union. I was pleased to learn from him and other senior officials in the Council of Europe that, over the past year or so, there had been a distinct improvement in the quality of liaison and co-operation between the two organisations. There was a feeling, certainly among the secretariat, that there was no longer the pressure from the EU that there had been for its institutions to take over the work of the Council of Europe; rather, efforts were being made on both sides to agree the areas where each was likely to be the most effective actor.

--- Later in debate ---

[Emma Reynolds]

I agree with my hon. Friend that the protection of the human rights of the Roma community is incredibly important and that those rights are at risk in Hungary. Their human rights have been threatened in other member states, too—I will not mention a former President of the French Republic and some of the things he said about that community.

The fundamental law extends the Hungarian Government’s control over various bodies that should be independent, such as the central bank and the courts. In particular, there are concerns about the independence of the judiciary. We believe that an independent judiciary is a vital safeguard of human rights. The European Parliament and the Commission have raised concerns about democracy and the accountability of the Hungarian Government, and it is clear that human rights must be protected within the EU and its member states, if the EU is to have an authoritative voice on human rights in external countries. I would appreciate it, therefore, if the Minister could shed some light on these matters by answering the following questions: does he think that the situation in Hungary weakens the EU’s voice on democracy and human rights in third countries; and will he update the House on what discussions he and his colleagues, including the Foreign Secretary and the Prime Minister, have had with the Hungarian and other EU Governments about the new Hungarian fundamental law and its the implications for the human rights of the Hungarian people?

[Mr Cash]

Is the hon. Lady aware of the enormous majority that the President, Prime Minister and Government of Hungary have as a result of free and proper elections? Does she think it the right and duty of the EU or the Venice Commission to tell a member state how it should behave, when it has such a massive democratic mandate? This is a very serious question.

[Emma Reynolds]

I agree only that it is a very serious question. The EU must promote and protect human rights within its member states, regardless of the majority that a President or Government have received from the electorate. We should not tolerate the judiciary, the media or other such institutions being under the control of whatever Government in whatever member state. Labour Members are proud of our record on human rights while in government. We passed the Human Rights Act and prioritised the promotion of human rights in our external policies, particularly our development policy. Further back in history, the UK was one of the leading architects of the European convention on human rights. We remain proud that the UK is a signatory to that convention, and we are a full and active member of the Council of Europe.

Although we welcome the Government’s position on the documents before the House, it seems that the Government are not always entirely consistent in their commitment to human rights. The Minister has said positive things today, but his Conservative MEPs in Brussels say and vote entirely differently. Regrettably, they sit with a rag-bag of anti-Semites, holocaust deniers and homophobes.

--- Later in debate ---

[Mr William Cash (Stone) (Con)]

I have listened to the hon. Member for Wolverhampton North East (Emma Reynolds), and my concern about this whole debate is that it seems that, somehow or other, there is a universality about human rights, without reference to democracy in individual countries. The question I have to ask is: how do we define what a human right is?

It is not so simple. I believe in human rights; I believe in the manner in which we legislate. However, we are already having a massive debate in the House of Commons about the Human Rights Act 1998, and about the commission that has been set up as a result of the coalition agreement. There are also massive questions being raised about the manner in which our judiciary is interpreting human rights—in relation to extradition, deportation, Abu Qatada, and so on. I have even noticed some Opposition Members showing an increased interest in whether human rights can be regarded as entirely generic and universal, when it is actually up to individual member states and individual Parliaments, based on the votes cast in general elections, to decide whether a particular human right is or has been contravened.

[Jo Swinson (East Dunbartonshire) (LD)]

rose—

[Mr Cash]

I will happily give way to the hon. Lady, because I am getting increasingly fed up with these people who continually assert, with their political correctness, that they know what a human right is. It is down to Parliament, based on what is decided by the voters in general elections, to determine those questions. It is a matter of law, not just some generic universality. I will be the first to fight for habeas corpus or trial by jury. What worries me is all these generic expressions—I will come to that in the middle of my speech—and this whole concept, which is promoting more and more generic human rights creep.

[Jo Swinson]

I sometimes wonder whether it is better not to encourage the hon. Gentleman, but I want to challenge him on universality, because I believe, as do many others, in the universality of human rights, as have been signed up to by our Government through the United Nations conventions. Does he really think that we in this country have no role in arguing and campaigning for changes abroad, and that if, for example, even a democratic country elsewhere in the world decided that it would persecute Christians—torturing them, and so on—just because of their beliefs, that should be of no concern to us whatever and that we should not try to change minds or persuade others to take action to change it?

[Mr Cash]

No, I do not. As a matter of fact, I have been very much personally involved in the Jubilee campaign, standing up for the rights of people in other countries who are being persecuted. Indeed, as the hon. Lady will know, I have also promoted the issue by forming the all-party group on water and sanitation in the third world. I stand absolutely 100% behind people’s rights in that regard. What worries me is when the whole thing is codified—as it is in the papers before us and the strategic plan—and interwoven with the universality matrix, and then buttressed by legal requirements. Therefore, when I hear the Minister saying, “Well, we will exercise the veto as and when it is appropriate”—if I can put it in generic terms—I simply do not believe that to be a realistic way of dealing with the issue.

This is another example of the European Union engaging in European creep on a monumental scale. I am not against the individual defence of people in relation to human rights questions, and there are many things that crop up in the European strategic framework and action plan that I would strongly support in an individual context. What worries me is the universality, not only because of the panoramic view that is taken of all these matters, but because of the panoramic way in which it will be applied in practice, headed by the European representative. This is essentially a practical question.

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

Is it my hon. Friend’s assertion that, while he has no objection to a democratic country expressing strong views about abuses of human rights in other countries, democracies or otherwise, his real objection is that the European Union is seeking to take on this role without constituting a democracy in its own right?

[Mr Cash]

That is exactly the point. This is almost a jurisprudential question. It is not about fancy philosophy; it is about how we make decisions relating to individual, practical instances. My hon. Friend is entirely right to make that point. It is difficult to imagine that we will be able to make a choice, once the machinery is moving forwards. I shall give the House an instance from among the wide range of activities in the many pages of the strategic framework and action plan that has been adopted by the EU Council. By engaging in this proposal, we are effectively endorsing European creep. I know that my right hon. Friend the Minister says that that will not happen, and that we will have the opportunity to exercise the veto, but I just do not see this as a practical way of working.

The Council has adopted the measure, and we have demanded this debate on the matter for very good reasons. We want to examine exactly what the measure contains. There simply is not enough time, in the one and a half hours allotted to us, to go through the incredibly complex questions that arise from the matter or to deal with the interaction of the decisions and the impact that they will have on human rights law in this country or in others.

I shall give the House a flavour of what I am talking about. Anyone listening to or reading the debate might like to look at the range of matters in the action plan. I mentioned that it is divided into outcomes, actions, timings and responsibilities. It is divided into seven chapters, and it sets out a variety of external policy activities. This has been agreed by all member states. Seven headings cover 36 policy areas and 97 potential actions, and that deals with the matter only in the generic sense. When we reduce this to individual cases, we are effectively saying that the EU will have a supervisory responsibility, subject only to the caveat that we will be able to exercise the veto, as my right hon. Friend the Minister said. I do not see that happening, however, once the machinery has been set up.

This is very much like the External Action Service. Indeed, it is very much like the EU itself. I said in 1992, or whenever it was—it seems a very long time ago now—that once the Maastricht treaty had gone through, once the European governmental system had been created with all the qualified majority voting that went with it, once we had created the mechanism and endowed it with resources, and once we had increased and implemented its legislative capacities and functions, we would have constructed an enormous creature that was incapable of being restrained. That is exactly what has happened, with disastrous consequences.

To come back to the main issue, let me provide a few examples. In the first place, the action plan refers to

“Human rights and democracy throughout EU policy”.

For those who are interested, this is taken from a Library note dated 9 July. It is also referred to in the papers before us and it has been looked at by the European Scrutiny Committee. The plan refers to the need to

“Incorporate human rights in all Impact Assessment”,

and to

“Insert human rights in Impact Assessment, as and when it is carried out for legislative and non-legislative proposals, implementing measures and trade agreements that have significant economic, social and environmental impacts, or define future policies.”

I would like to know what is not included in that, and what the opportunity would be for any restraint on the use of such provisions in the strategic plan.

The plan also refers to

“Genuine partnership with civil society”,

and that

“Heads of EU Delegations, Heads of Mission of EU Member States, heads of civilian missions and operation commanders shall work closely with human rights NGOs active in the countries of their posting.”

I would be the first to support NGOs in their individual activities, but this is a mandatory requirement, going beyond what I would describe as voluntary activity. Then there is the need to

“Present EU performance in meeting the objectives of its human rights strategy in the annual report on human rights and democracy in the world.”

I would be on the side of all those campaigners when it comes to individual human rights matters. I see in his place the hon. Member for Islington North (Jeremy Corbyn), who knows that I campaigned with him on issues relating to the Chagos islanders. Going further back, I was also involved with the issue of aboriginal rights in Canada. I could provide a whole list to show that I have been as much at the forefront as anyone else when it comes to campaigning against abuses of human rights. Where I differ, and why I object to these arrangements, is in respect of this overarching determination to get away from specific campaigns into this idea of universality, whereby I think we miss the wood for the trees.

[Jeremy Corbyn]

I acknowledge the hon. Gentleman’s genuine support for human rights issues in many parts of the world and the fact that he campaigns on them. Does he agree with me, however, that the issue of the Chagos islanders is now before the European Court of Human Rights and that it will take a decision? Both the hon. Gentleman and I want it to go in the same direction. Is this not one possible way of bringing about justice for the people who were treated so abominably in 1982?

[Mr Cash]

I would rather have the hon. Gentleman leading the campaign for the Chagos islanders than the EU representative who is being appointed under these documents. It is the individual commitment that counts. If I may say so, it is rather like John Bright, who campaigned for people’s rights throughout the world—in our colonies and our empire—in the 19th century. It is the individual passion and determination to stand up for people that I look towards. That is what Wilberforce was all about. I doubt whether William Wilberforce would have been deeply impressed by the manner in which this is being done. I really have to ask that question, because in my judgment, it is not desirable to end up creating this universal approach.

The second chapter is

“Promoting the universality of human rights”.

With the outcome of “universal adherence”, it specifies the action:

“Intensify the promotion of ratification and effective implementation of key international human rights treaties, including regional human rights instruments”—

and so it goes on and on, page after page, and I am reading from a tightly compressed printed version. In an intervention, I think I mentioned four pages, but there are seven pages of this. All I need to say is this: is this really the right way to go? Baroness Ashton and the entire External Action Service are, I believe, simply another manifestation of the problem. On the very day we have been told that we are to examine all the workings of the European Union in relation to the United Kingdom —all its competences—the central question is being lost, and a globalising, universal approach is being taken to something that will have to form part of the review announced by the Foreign Secretary.

On the very day we have advocated an analysis of the manner in which the European Union functions, we seem to be effectively endorsing a strategy that goes in exactly the opposite direction to the views of all those Members who support not only the review, but the repatriation of powers and the resolution of the human rights questions that are so bedevilling the relationship between Parliament and the judiciary and the whole question of extradition, the whole question of immigration policy, and the whole question of the application of law in this country on matters pertaining to human rights.

I view this development with grave concern. I do not refer to its individual application to individual cases; I refer to the attempt, through what I consider to be European federalisation or European creep, to convey the concept of a European Union that is acting on behalf of all of us. If a country such as Hungary has made a decision in its own Parliament, I think that that should be respected. Through their electors, through general elections and the democratic will of their own people, individual nation states, or member states, should be allowed to decide these matters, rather than having their decisions overridden by universality of the kind that these documents represent.

Court of Justice of the European Union

William Cash Excerpts

Thursday 12th July 2012 Commons Chamber

[The Minister for Europe (Mr David Lidington)]

I beg to move,

That this House takes note of the draft Regulation 2011/0901A(COD) of the European Parliament and of the Council (amending the Protocol on the Statute of the Court of Justice of the European Union and Annex 1 thereto) and draft Regulation 2011/0902(COD) (relating to temporary Judges of the European Union Civil Service Tribunal) and, in accordance with section 10 of the European Union Act 2011, approves Her Majesty’s Government’s intention to support the adoption of draft Regulations 2011/0901A(COD) and 2011/0902(COD) of the European Parliament and of the Council.

The debate covers two draft regulations that reform the Court of Justice of the European Union with the aim of improving its efficiency. The European Scrutiny Committee has described the two regulations as

“a modest but useful package of reforms”,

and the Government endorse that verdict.

This is also the first time that the House has had the opportunity to debate such draft regulations under the new provisions of section 10(1)(d) and 10(1)(e) of the European Union Act 2011. Section 10 covers a small number of articles in the European Union treaties, and its provisions require each House of Parliament to approve a motion on the draft measure concerned before the Government are able, on behalf of the United Kingdom, to vote in support of the measure in Brussels.

As hon. Members on both sides will know, the role of the European Court of Justice is to ensure that European Union law is observed. It is a key role, and it is only right and proper that Parliament should oversee the Government’s approach to any reforms to that important European institution.

[Mr William Cash (Stone) (Con)]

Does my right hon. Friend agree that implicit in what he says is the rule of European Union law, but is he also aware that the European Scrutiny Committee, in its report on the recent fiscal compact, made it clear that it did not regard European Union law as having been fulfilled, and that the Government themselves still retain their own position of reserving their views on the legality of the compact? What are the Government doing about that?

[Mr Lidington]

I know, not least from my own 90-minute evidence session in front of my hon. Friend’s Committee, how strongly he and other members of the Committee feel about that subject. However, it would be moving beyond the terms of this afternoon’s debate if I responded in detail about the Government’s approach to fiscal union and their decision to reserve their position on the use of the institutions for the implementation of the fiscal compact. Ministers have corresponded about that with the Committee and I am sure that there will be other opportunities for us to go into that matter.

--- Later in debate ---

[Mr William Cash (Stone) (Con)]

The report of the European Scrutiny Committee has been referred to by the Minister.

I will start by setting out the importance of the proposed reforms and putting them in context. As a practitioner of law over an extended period, I know that the volume of law has been increasing exponentially, particularly since we became a member of the European Union—or the European Community as it was then—in 1972. I do not think that anybody can put an accurate figure on the number of pages or statutes that have been effected in this House under section 2 of the European Communities Act 1972; suffice it to say that it is monumental.

The European Court of Justice is being reformed because of its vast work load. That is the problem. We discussed the extension of EU competences a little earlier with the Foreign Secretary. Those competences impact on the daily lives of people not only in the United Kingdom, but across the European Union, and the excessive legislation strangles small and medium-sized businesses. That is all part and parcel of a much deeper problem than the surface question whether the Court needs a few more judges. The Court may need more judges, but that is because of the increase in its work load.

I will refer very briefly, Mr Deputy Speaker, to the ancient history of codification. No less a person than Justinian had to decide whether the state could cope with the vast increase in law that had taken place. Eventually, he decided to reduce the volume of law from a monumental 3 million lines of legislation to 150,000 lines. His example demonstrates that it can be done.

The problem is work load and the volume of law. It is perfectly clear from the various papers that have been supplied to us that the length of proceedings, which now averages 17 months, also presents serious problems. The Max Planck Institute for Comparative and International Private Law, based in Hamburg, has stated that the European Courts are under pressure because of their work load and that the greatest problem facing EU judges is the dramatic rise in the number of cases. The number of preliminary ruling cases increased from one in 1961 to 385 in 2010; and the number of cases at all three EU Courts had risen to 1,406 by 2010. Mr Rösler, who conducted the study, stated:

“That’s the highest level in the history of the EU Court of Justice.”

He went on to say that

“the EU Court of Justice has the biggest workload of any international court”.

The more law there is, the greater the work load. Mr Rösler believes that the EU’s geographical expansion is just one reason why EU judges face an excessive work load.

There is also the question whether we are having reform or a facelift. Mr Rösler states that reform is the only way out of the predicament, and his call is backed by the EU judges. In a very unusual public statement, the president of the Court, Vassilios Skouris, highlighted the Court’s excessive work load. He called for 12 new judges to be appointed to the European General Court. That has become a matter of dispute, as the Minister said. The question is what is being done. Mr Rösler mentioned the effect of having 12 more judges—I understand that that has stalled because the actual number has not yet been decided—saying:

“The expansion of the Court is urgently needed, but does not resolve the multi-faceted issues.”

In a statement I think some Members may regard as highly controversial, Mr Rösler says that a system of judicial federalism needs to be developed between member states and the European Courts. That is the direction in which all this is going. Above all, he says, the aim should be structural reform that establishes a new European judicial architecture. He says that would require the Court of Justice to specialise in relevant areas.

Mr Rösler goes even further, saying that the EU judiciary must open itself up to its citizens so that they can call upon the Court of Justice directly. It has already been accepted that the Court’s work load is absolutely enormous and arises from the vast increase in the amount of legislation affecting the daily lives of all the people in the EU, including people in the UK. Now, distinguished professors and others who are highly influential are suggesting that the whole process should be opened up to individual litigants. The idea is simply extraordinary.

Mr Rösler regards new, codified European legislation on conflict of laws and procedural law, which he says will significantly facilitate the enforcement of law before foreign courts and the EU Court of Justice, as a worthwhile long-term objective. There is almost no limit to the ambitions of those engaged in European jurisprudence. The problem is that the more law there is, the greater the distraction from the real problems facing Europe as a whole, which I do not need to go into today because they are well understood by the House.

We ought also to think about how to streamline the Court’s procedures and maximise its productivity through strategic changes to its personnel. That goes to the heart of the impact of European law. The European Court of Justice lies at the heart of part of the problem that the Foreign Secretary addressed in his statement earlier, and it ought to be put on his agenda.

The background to the debate is also influenced by the qualifications of the individual members of the Court. The Court is manned by people who, I have no doubt, could be regarded as generally proficient in law, as they are professors and celebrated advocates; the problem is that the members are not drawn from judges alone. That needs to be seriously considered. In the UK, it is unimaginable that members of a senior court at such a level would not be drawn from the senior judiciary. That in itself may be one reason why the European Court’s work load has increased so greatly in recent years.

The Court of Justice is currently composed of 27 judges and eight advocates-general, who are appointed by common accord of the member states after consultation with a panel that is responsible for giving an opinion on prospective candidates’ suitability to perform the duties involved. I personally believe that the system needs to be tightened up, so that only those with judicial experience are members of the court, rather than it being merely a question of their suitability.

I would be grateful if the Minister addressed the fact that the great majority of evidence received as the measure was being conceived recommended an increase in the number of judges of the General Court as the best solution to the work load problems. Why did that aspect of the negotiations stall, and what is the Government’s policy on increasing the capacity of the General Court?

I say that without reference to my other remarks, because the increase in the work load is the consequence of the vast increase in the functions and competences that have streamed like a tsunami to the European Union. I opposed the Lisbon treaty in opposition. I proposed amendment after amendment, greatly supported by the current Foreign Secretary, and opposed every provision in the treaty, but the House ended up implementing it because it accepted that ratification had taken place. I did not agree with that, and despite the fact that we were given a cast-iron guarantee of a referendum, we did not have one.

I have some questions for the Minister. What is the expected cost of the amendments to the statute and the appointment of temporary judges to the civil service tribunal, and does he regard that as good value for money? How much will it cost to establish the office of the vice-president of the Court of Justice, and how will the office benefit a litigant? How much will it cost to establish the office of the vice-president of the General Court, which was previously known as the Court of First Instance, and how will that benefit a litigant? How will altering the composition of the Grand Chamber benefit a litigant? Do any of the reforms introduced by the amendments save money? If so, how much?

Some influential voices, such as former Advocate-General Jacobs, who will be well known to those who take an interest in these matters, and current Advocate-General Sharpston—both UK appointees—believe there is little scope for reducing the time taken to litigate cases before the Court of Justice through further procedural reform. The Minister might well ask himself why and consider it carefully. The reasons, it is said, include the Court’s translation obligations, the reliance on written procedure and the privileged status of member states to intervene. Does the Minister regard the views of former UK Advocate-General Jacobs and current Advocate-General Sharpston as correct?

I accept the apology the Minister makes in his letter to me of 11 July, which hon. Members have in front of them. There was uncertainty about what was contained in the provisions. I am grateful that he has made it clear that, on taking legal advice, the matter had to be rectified. The letter states that the

“appointment of temporary judges to the Civil Service Tribunal…at the CJEU also fell within Section 10 of the Act”.

The Government believe that the reform will be beneficial, as the Minister has said, and the European Scrutiny Committee takes the view, given the general comments I have made, that this is a modest but useful package of reforms. Well, it is a modest but useful package of reforms which takes account of the overarching volume of legislation that has generated the work load. Some hon. Members desire not merely to repatriate powers, but to reduce the volume of legislation as Justinian was able to do. That was at the end of the Roman empire—the fall, not just the decline. In that context, it might be observed that the last act of the Romans before the Visigoths and the others moved in on Rome was to try desperately to reduce the volume of legislation. Such action is now well overdue.

In our conclusions, having thanked the Minister for inviting us to comment, we express our regret at the lack of time given to us to do so. Indeed, our report was only published today, so for practical purposes we have all been put under a great deal of time constraint. Having said that, the real question seems to be: by how much can we reduce the amount of law that is leading to the excessive work load and to more judges, which in turn means increased costs? What practical impact will this have on litigants? I trust that he will not encourage the idea of personal litigation of the type recommended by the gentleman I quoted earlier. I ask the right hon. Gentleman to answer some of those questions as best he can, difficult though that might be.

--- Later in debate ---

[Jacob Rees-Mogg]

I am extremely grateful to the hon. Gentleman, who is so wise in these matters. We ought to be looking at the inefficiencies in the European Court of Justice and saying, “Could these matters be decided in our own courts?” Is there a way in which, instead of saying, “Give them more power; give them more money; and give them more judges,” we can say, “Let these laws be determined in our country.”?

It is interesting, as my hon. Friend the Member for Stone said, that one of the reasons for the increase in the European Court of Justice’s work load is that our courts are sending it judgments for preliminary approval and guidance on what European law says. Would it not be better to repatriate that? Indeed, when we are in the process of negotiating on the European Court and how to make it more efficient, this is surely the opportunity to do so.

[Mr Cash]

On the preliminary reference procedure, Mr Rösler says:

“The judges in Luxembourg constitute a supranational court beyond national jurisdiction, dealing with an incredibly diverse range of issues that no national judge is faced with”.

He goes on to say that

“in contrast to national judges, the EU judges are not specialized in specific fields.”

Is it any surprise that they make such a mess of things?

[Jacob Rees-Mogg]

It is a rather terrifying thought that we have a court that its own friends say does not have judges with the expertise to rule on issues, but that instead of saying, “Well, let’s decide it in our own courts, where we have judges of proper expertise and standing,” we should be just appointing more second-rate judges to Europe, to get them to sort it out. That cannot possibly be the right approach to take.

We in the United Kingdom have a very high view of judges. We have been fortunate in this nation to have judges who have been rigorous figures of the law. They have not been political participants. However, the European Court is not of that category or standing. It is part of the operation of the European Union; and, along with the Commission and the European Parliament, it is in a constant battle and struggle to take powers from the nation states. Anything that we do to reform the European Court should mean bringing powers back to our own courts, where they will be judged on their merits and not on a scheme to push forward the programme of ever-closer union.

It is worth remembering, if anyone questions whether that is true, what happened in the United States in the 19th century, when the Supreme Court was avowedly federal in its approach and the 10th amendment was increasingly ignored to empower the central authorities. The European Court of Justice is doing exactly the same thing. Therefore, I go back to the intervention that I made on the Minister: the more the system is gummed up, the better. The fewer opportunities there will be to interfere in the nation state, the more opportunity we will have to repatriate powers to our own systems and our own judges. Therefore, although the matter before us is minor and essentially trivial, let it go through, but let us watch like hawks any further changes that the European Court may seek to make, to ensure that this drift of power to the continent ceases.

--- Later in debate ---

[Mr Lidington]

My hon. Friend has made his point clearly for the record.

My hon. Friend the Member for Stone asked about the risk of further efforts to enhance the powers and the jurisdiction of the European Court of Justice. He referred in particular to the possibility of the introduction of a right to petition the Court and take cases there. I can assure him that, notwithstanding what learned professors might say, no such proposal is on the table at the moment. No such proposal forms part of the regulations before us. The subject has not crossed my desk and it is not a matter of live discussion among Governments at present.

My hon. Friend also asked about the timing of the debate and expressed concern at what he believed to be an absence of time for the European Scrutiny Committee to consider this matter. I would challenge him on that. Looking back at the record, I see that we provided explanatory memorandums to that Committee at various times during the course of the negotiations: first, on 28 April 2011, then on 24 June 2011, 30 September 2011 and 20 April this year. I wrote to him last week to advise him of the latest developments and to request that the Committee clear these measures from scrutiny.

As for the most recent developments, we are working against the decision by the Cypriot presidency to table these measures for discussion and decision at a Council meeting in the very near future. My concern in writing to my hon. Friend as I did was to ensure that his Committee was aware of the need for urgency if the Committee and Parliament were to have the opportunity to express their views and, in the case of Parliament, to take a decision about the UK’s approach to these regulations ahead of that Council meeting.

The final point on which I was questioned—

[Mr Cash]

Will the Minister give way?

[Mr Lidington]

All right, I will, but then I will move on.

[Mr Cash]

My hon. Friend should not show his impatience; that is not a wise thing to show to the Chairman of the European Scrutiny Committee. I think that his demeanour should be a little more relaxed.

Let me say simply that I have put a number of questions to the Minister and I can see that he is not going to answer them, so I should be grateful if he wrote to me when he has had a chance to look at the transcript of the debate. As it happens—I do not say this with any stricture—he was talking to the Whip on duty when I asked him the questions that had been formulated carefully by our advisers. I should be grateful if he replied to me in writing, as he is clearly not going to respond at the moment.

[Mr Lidington]

I can assure my hon. Friend that, when it comes to dealing with him, my patience is infinite. I will certainly check the record and I will write to him if there are any points on which we have not given him an adequate answer. I ask him to look at what I have said about the nugatory costs of the measures, because questions on that matter formed a considerable part of the series of questions that he put to me during his speech.

The hon. Member for Wolverhampton North East asked about the Government’s attitude towards the proposal to appoint additional judges to the General Court. My answer is that we do not rule this out. We can see why this is being advocated as a means of reducing the significant backlog of cases at the General Court, but before we agree to an increase in the number of judges, with the additional costs that that would undoubtedly entail, we certainly want to be absolutely clear that every possible efficiency measure had been taken to reduce the General Court’s spending and to improve its productivity. We view this question—and the possible costs arising out of an increased number of judges—as one that needs to be addressed in the broader framework of the financial pressures on the EU and its member states and in the context of the negotiations over annual EU budgets and the multi-annual financial framework.

Another point in reply to the hon. Lady is that, in addition to our concern about costs, we would want to be satisfied with the judges concerned if additional judges were indeed appointed. The United Kingdom—England and Wales in particular, where a common law system applies—will be concerned as a country to make sure that judges with a knowledge of common law systems are properly represented when cases are considered by the European Court of Justice.

I have tried to respond to the points raised in the debate, and I hope that the House will now agree to the motion.

Question put and agreed to.

Resolved,

That this House takes note of the draft Regulation 2011/0901A(COD) of the European Parliament and of the Council (amending the Protocol on the Statute of the Court of Justice of the European Union and Annex 1 thereto) and draft Regulation 2011/0902(COD) (relating to temporary Judges of the European Union Civil Service Tribunal) and, in accordance with section 10 of the European Union Act 2011, approves Her Majesty’s Government’s intention to support the adoption of draft Regulations 2011/0901A(COD) and 2011/0902(COD) of the European Parliament and of the Council.

Balance of Competences

William Cash Excerpts

Thursday 12th July 2012 Commons Chamber

[Mr Hague]

Stripping away one or two of the remarks about political parties, I think that amounted to a welcome for the announcement, as the right hon. Gentleman said that he had “no objection”. That is as near as we get to enthusiasm from Opposition Front Benchers on this subject, so I am grateful to him for what counts as a very strong welcome and I look forward to the Labour party submitting its evidence to the review in due course.

Given that the right hon. Gentleman got into party political matters, let me say that it is a pity that Labour never conducted such a review. It might have helped the Labour Government when they were handing over so many competences without understanding what they were doing, without subjecting them to proper scrutiny in this House and without having a referendum. We remember—[Interruption.] Opposition Members are talking about particular treaties, but it was in the Nice treaty that Labour gave up the veto, which ended up with our being implicated in eurozone bail-outs under qualified majority voting—something from which this Government have now extracted the United Kingdom. The Opposition will therefore benefit enormously—and could have benefited in the past—from this kind of analysis, and I am glad that they have no objection today to its being undertaken.

The right hon. Gentleman asked about our priorities in the coming months. They are, of course, to protect the integrity of the single market. There is much talk about banking union, for instance, although different countries and different commentators mean different things by the term. We will protect the integrity of the single market, but above all our priority is to support measures that will really bring growth to the EU. They include removing barriers to business and pursuing free trade agreements with countries such as Canada and Singapore. Much of that agenda was endorsed at the June European Council.

The right hon. Gentleman went on to ask other questions about the future, and to suggest that the timetables were somehow amiss, but he himself said in an article in The Guardian on 1 July that

“there are also those within the Labour party who have speculated about the possibility of a referendum… We should not decide now because the pressing priority…is…securing Britain’s interests and protecting the single market”.

That is exactly what I have been saying. He went on:

“And we cannot sensibly decide now because none of us can fully predict where Europe will be in a few months, never mind a few years.”

So he does not want to answer the questions that he has just been putting to me about the longer-term future. What we do know is that, whatever happens, we will be in a better position if we have undertaken this work. It should have been undertaken before. It will inform our negotiations, improve our discussions with our partners and allow the public to be engaged in the process. Perhaps it will also lead to Governments undertaking more successful negotiations than the one that he will remember from his time as Minister for Europe, when he gave away £7 billion of our rebate. There is much to learn if we are to avoid negotiations that are so memorably, comprehensively and disastrously unsuccessful as those.

[Mr William Cash (Stone) (Con)]

Naturally, we all welcome this initiative. Does my right hon. Friend agree, however, that it is not only about specific powers but about democratic power as a whole, and that that raises the question of the sovereignty of Parliament, and of the wording of the European Communities Act 1972 and its impact on the daily lives of the people of this country? Does he also agree that it is essential to incorporate all those questions in the review, as well as on the necessity of holding a referendum as soon as one can possibly take place?

[Mr Hague]

It will be a wide-ranging review and I am expecting a substantial contribution to it from my hon. Friend, given his knowledge of and long-standing opinions on so many aspects of EU competences. We are not restricting what people can submit in their evidence or what subjects can be addressed. The review will involve the majority of Government Departments, and, of course, all the analysis of the competences taken together will prompt major questions about how democracy works and about the appropriate levels at which decisions should be made. It is not a review about a referendum. We passed legislation last year that deals with the circumstances in which referendums will be held, and it is for each political party to explain the circumstances in which they would hold a referendum. My right hon. Friend the Prime Minister and I have recently discussed that matter, as my hon. Friend knows.

Oral Answers to Questions

William Cash Excerpts

Tuesday 19th June 2012 Commons Chamber

[Mr Hague]

The Prime Minister is fully entitled to say what he believes should be done, as are many other world leaders at the G20. There is no reason the UK should be unable to give its views about what should happen in the eurozone, given that the United States and many other countries are free to do so. The eurozone economies have an important effect on our economy, and what is happening there is having a chilling effect on our economy, so we are fully entitled to give our views, as well as to show strong leadership in controlling and bringing down the excessive deficits left to us by the Labour party and in having a safe haven status that is the envy of much of the rest of Europe.

[Mr William Cash (Stone) (Con)]

My right hon. Friend is a great historian as well as Foreign Secretary. Does he accept that the eurozone crisis is not only a eurozone crisis but a European Union crisis, and political, economic and democratic in nature? Given that it affects the daily lives of 450 million people in Europe, has the time not come for a convention, not of the kind held last time, but one based on the principles of democracy and the defence of the British nation?

[Mr Hague]

I will go so far with my hon. Friend, as usual, but not all the way, as usual. I absolutely agree that the crisis is having a major effect not only on those in the eurozone but more broadly, and that it is having major political as well as economic ramifications. As for drawing together, in whatever form, reflections on the future of Europe arising from the crisis, however, it would be better to do that when one can discern how the crisis will end and progress and develop over the coming months.

Treaty on Stability, Co-ordination and Governance

William Cash Excerpts

Wednesday 29th February 2012 Commons Chamber

[Mr William Cash (Stone) (Con)]

I beg to move,

That this House has considered the matter of the legal and other action now to be taken by the Government in upholding the rule of law and protecting UK interests in respect of the nature and content of the Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union.

Thank you, Mr Speaker, for approving my application for this debate. I am also deeply grateful to all those Members—some 100 or so—who rose so spontaneously and strongly to support the proposal that I put to the House yesterday afternoon. This is only the fifth emergency debate since 2001. The debate is about the rule of law: not only the rule of law as it affects the United Kingdom but, inevitably, the rule of law in Europe as a whole. The Prime Minister, to his great credit, rightly exercised the veto to protect UK interests, but this is not simply a question of the single market and financial services, however important they may be to the UK economy.

The rule of law is inseparable from democracy, which, based on freedom of choice, leads to the making of law through general elections in line with the wishes of the voters. That is as important as it is simple. Unfortunately, the European Union, despite its much-vaunted claims and aspirations, has increasingly departed from democratic principles and from the rule of law in the pursuit of ideology. We are now witnessing ever-increasing tendencies towards bureaucracy, and even the imposition of technocratic Governments on individual member states, as in Italy and Greece. Yesterday, as it has in the recent past, the Bundestag voted on European bail-outs. According to opinion polls, about 80% of the German people are against the bail-outs, yet the German Government and the Bundestag passed the proposals by a massive majority.

[Mr Denis MacShane (Rotherham) (Lab)]

This line about European technocrats imposing technocratic Governments all over the place is very fashionable. However, the truth is that the current crisis, which is very serious—the hon. Gentleman is right to hold this emergency debate—is about the raw power of politics. It is about the politics in Germany in not wanting to bail out Greece; the politics here; the politics in Greece, where people voted pretty overwhelmingly to accept the bail-out package, with parties splitting up; and the politics in Italy, where people dumped the wretched Berlusconi and put in quite a good guy, Monti, for the time being. The Commission is not involved in this; the technocrats are out of the game; the Eurocrats are off the pitch. It is about raw politics. We are in the driving seat, and the hon. Gentleman might be as well.

[Mr Cash]

I am grateful to the right hon. Gentleman, who makes an important point. However, this is not merely about technocrats but about the brutal fact that the political game as it is now being played is increasingly coercive. That is part of the problem that I shall address.

[Henry Smith (Crawley) (Con)]

Following yesterday’s announcement of the Irish referendum, does my hon. Friend share my concern that if the result is the wrong one as far as the European establishment are concerned, it will be ignored and overruled by some method or another?

[Mr Cash]

I do indeed. A new rule is being imposed through the arrangements under this treaty which involves a kind of qualified majority voting for referendums whereby if member states do not have the requisite number of referendums in which they say that they do not want the treaty, they will simply be ignored. I hope that when it comes down to it and the Irish people have this explained to them, that will be a spur to their voting no, because people are being taken for a ride.

[Mr John Baron (Basildon and Billericay) (Con)]

I congratulate my hon. Friend on securing this emergency debate. Does he share my concern that with democracy having been suspended, in effect, in two countries, with a deepening democratic deficit across the eurozone as rules are bent, and with a eurozone fiscal compact that seems to undermine the EU institutions, we could fast be reaching a tipping point as regards the EU’s credibility and legitimacy?

[Mr Cash]

Absolutely. For those of us who have been critical of the European Union, but not of Europe, because we believe that we need stability and prosperity in Europe, my hon. Friend’s remarks are entirely justified. We are now facing the breaking of the rule of law through the imposition of European rules. It is an extraordinary paradox that the law should be used to break the principle of law itself.

[Chris Bryant (Rhondda) (Lab)]

How is the hon. Gentleman going to vote on this motion? As I understand it, his idea is that the treaty should not go forward, but if the motion is agreed to, we will have decided that we have considered the matter, and the Government will therefore be able to proceed with the treaty.

[Mr Cash]

The hon. Gentleman is rather missing the point. The question before the House is that we should have a proper debate about legality. There will not be a vote, as far as I am concerned, because we need to have an open discussion among Members of Parliament, not only in the European Scrutiny Committee, as has been the case so far. We have heard evidence from many distinguished lawyers and economists, and from the Minister for Europe, although sadly, and deeply regrettably, not from the Foreign Secretary, who has twice declined to come before us. He did say that he would come on 27 March, but that is far too late for the purposes of our proceedings. The most important thing is that we have an open and transparent debate about questions that otherwise would not get across to Members of Parliament, let alone to the people at large.

I have just spent two days in Brussels as Chairman of the Committee, with my hon. Friend the Member for Hertsmere (Mr Clappison). We had an extremely constructive dialogue with members from the national Parliaments and Members of the European Parliament. The only remedy that is provided in this time of economic and, I submit, political crisis in Europe is more Europe, not less. That completely misses the point.

As I discovered only a few months ago at the multi-annual surveillance framework meeting, some people want further European institutional change towards greater political union. In effect, they say that the solution to the problem is the European Parliament, rather than the national Parliaments, although they do want us to be involved so that we can sign our own suicide note. On economic matters and the multi-annual surveillance framework, they want more money to be spent, irrespective of the failure of the European economic systems that they have put in place. The Minister for Europe, who was at that meeting, will recall that he, I and others who were being realistic about this matter were simply astonished by the continuing stream of determination to seek more and more money for the European Union, through the financial transaction tax, by increasing its resources and through the common commercial tax base.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

No one can beat the Chairman of the European Scrutiny Committee for diligence. However, I will not be staying to take part in this debate for one reason: I am disappointed at his timing. The Committee has yet to hear from the Financial Secretary to the Treasury, we have not yet finished our evidence sessions and we have not yet presented our report. I know that the Government are desperate for something to fill the gap in this debating hall, which has frankly turned into a disappointing—

--- Later in debate ---

[Mr Speaker]

That is an interesting point, like many of the hon. Gentleman’s points, but it is not a point of order for the Chair, as he knows perfectly well.

[Mr Cash]

That was not really a point worthy of comment, but I will certainly reply to the hon. Member for Linlithgow and East Falkirk (Michael Connarty), who is my colleague on the European Scrutiny Committee. The question of legality has already been canvassed. The Government have demonstrated that in the letter written by Sir Jon Cunliffe, on their instruction, to the secretary-general of the European Council, which expresses severe reservations about and, in effect, disputes the advice of the legal adviser to the European Council. Without wishing to prejudice what the European Scrutiny Committee may conclude in our report, the fact is that there is already sufficient notice of the concerns over legality for the matter to be considered by the whole House, rather than just in the Committee, as important as that is. There is one simple reason for that: silence or acquiescence can be assumed to be consent. I will explain that point in a moment.

While the question of legality is allowed to continue without challenge, and while it is decided whether the European Court of Justice should be called upon to make a judgment about this matter, which will itself take time, we are depending on the action, legal or otherwise, of the Prime Minister, who is going to the Council tomorrow. It is therefore important for us to at least indicate our view in this debate, in amplification of what the European Scrutiny Committee is considering and what it may yet conclude. I cannot make any assumptions about what its conclusion will be. We have certainly had the most powerful evidence from the likes of Professor Paul Craig, who is by no means unknown in European Union circles as a person of immense stature.

[Michael Connarty]

I am about to leave the Chamber, because I believe that this is not the right time to debate something that we are considering in the European Scrutiny Committee. I am used to all-party Back-Bench Committees being run as the fiefdom of the Chair. However, as a former Chair of the European Scrutiny Committee, I think that it is extremely discourteous, when we have not finished our inquiry or published our report, to have a debate on something that the Chair of the Committee sees as a matter of interest. It is wrong to do that and I think that it should be discussed in the Committee. I am now going to read my papers for the Committee sitting at 2 o’clock so that we can have some debate.

[Mr Cash]

I will reply to that point simply by saying that it is important that we, as a House, consider matters as they are going on concurrently. There should be no presumption that other Members of the House necessarily know the detail of the matters that we are discussing.

[Mr Robert Buckland (South Swindon) (Con)]

May I reinforce my hon. Friend’s point that it is important for the House as a whole, and indeed for departmental Select Committees, to have thematic debates about issues that arise from the EU? Such debates should happen at an earlier stage than they do, which so often seems to be at the last minute. I agree with him on that point.

[Mr Cash]

There is also the important question of whether action might need to be taken on the advice of the Attorney-General in relation to the ratification process, which, as I shall explain in a moment, was initiated by the German vote yesterday.

[Mr John Redwood (Wokingham) (Con)]

It is quite right to have this debate as it is urgent and on a matter of great moment. Does my hon. Friend think that there is any way in which 25 countries can construct a treaty that presumes to use the EU institutions that belong to the 27 member states as a whole, without having an adverse or substantial impact on the UK? Should we not be warning our Prime Minister of that threat before he negotiates?

[Mr Cash]

Absolutely. Given that the Prime Minister is going to the Council tomorrow, where it is inconceivable that this matter will not be raised, and that the ratification process is under way, it is important to get that point on the record. I believe the arguments to be self-evident.

[Neil Carmichael (Stroud) (Con)]

I am enjoying this interesting debate. It is an opportunity to air some key issues. Why does the European Scrutiny Committee meet in private? It would be more helpful if it was open to us all more often.

[Mr Cash]

We have periodically sat in public, but then the position has been reversed. That depends on what is decided by the House as a whole, because these matters relate to the Standing Orders. I see that the Leader of the House is here. He knows how vexed this question is. We have gone backwards and forwards on it. However, the issues that we are discussing have been discussed extensively in public. My hon. Friend is more than welcome to come along if he wants to listen to any of our sessions. [Interruption.] As my hon. Friend the Member for Rochester and Strood (Mark Reckless) has just indicated, if he does not want to come along, he can read the transcript. I have copies of it here if he wants to look at it. I do not think that anyone can dispute the fact that the information is out there.

The question of when action needs to be taken is highly relevant in determining whether the Government are seen to acquiesce in decisions that are being taken by other Parliaments, which, as my right hon. Friend the Member for Wokingham (Mr Redwood) said, will affect us vitally.

[Mr Nigel Dodds (Belfast North) (DUP)]

rose—

[Mr Dodds]

I congratulate the hon. Member for Stone (Mr Cash) on securing the debate. I think that it is right and proper that the whole House considers such matters. On the Irish referendum, will he confirm that the rules have been rigged so that if 12—never mind the rest—eurozone countries approve, the pact will be deemed to be ratified?

[Mr Cash]

Absolutely. I do not know whether the right hon. Gentleman was in the Chamber at the time, but I referred to that in reply to another colleague. We are effectively having a new qualified majority voting system for referendums.

The catalogue of breaches of the spirit and the specific legal requirements were epitomised in Madame Lagarde’s remarks on 17 December 2010 about the first bail-out fund, otherwise known as the EFSM—the European financial stabilisation mechanism. She said:

“We violated all the rules because we wanted to close ranks and really rescue the euro zone.”

That is the objective and the method. She is now head of the International Monetary Fund, and we are faced with the prospect of the United Kingdom being expected to contribute to the IMF for what everybody knows is a back-door arrangement to underpin and guarantee the bail-outs in the European Union, which the IMF was not set up to provide, as the United States and other countries have made clear.

Indeed, Germany and France broke the stability and growth pact as it was originally instituted. Now we have a new feature in the big political landscape: in the pursuit of a tax and fiscal policy and compliance with a so-called golden rule to balance their budgets by a form of coercion, 25 member states of the European Union have now come up with an agreement to increase the powers of the stability and growth pact as it applies to them, irrespective of whether a country held a referendum and voted no, as the right hon. Member for Belfast North (Mr Dodds) just suggested. The vote would simply be swept away by a majority vote of the other countries, which insisted on applying the golden rule. One is bound to ask what kind of golden rule it is and whether it is not possible for individual countries to balance their budgets out of self-interest and through their own democratic decisions, rather than having a rule imposed on them in pursuit of the ideology of economic and political union. Indeed, the imposition of such a rule will, of itself, not balance the budgets anyway, as has been found in the past. This is using rules of law to breach the rule of law.

The real solution to the European crisis, which is not confined to the eurozone and deeply affects the United Kingdom, is that the levels of public expenditure, which led to the breaches of the criteria in the treaties, can be solved only by generating growth and giving oxygen to small and medium-sized businesses, for example, through deregulating the massive over-regulation and multiplicity of laws, such as the working time directive, among many others. The list is vast.

Yet again, the whole treaty is a vain attempt to sacrifice practicality and democracy on the altar of ideology, just as the referendums in Ireland, France, Holland and so on were all simply thrown away.

[Martin Horwood (Cheltenham) (LD)]

Will the hon. Gentleman give way?

[Mr Cash]

I will not give way again. I have listened to what Mr Speaker has said and I have no intention of giving way. I have given way a great deal already, as I am sure Mr Speaker appreciates.

Even today, the European Central Bank is departing from its established rules in providing what some suggest is as much as a trillion euros of guarantees, and flooding the markets with unearned money to support countries which are failing to run their economies properly. There is a further problem, which is an increasing trend towards coercion, again in pursuit of ideology.

There is an increasing tendency by Germany to impose its will on other member states, but it should not be forgotten that although Germany pays vast sums into the European Union, it benefits enormously from that, and it could be argued that both French and German banks have played roulette with the Greek economy, and are now, through the rules and the treaty, seeking to obtain repayment and bolster their own banks and their own economies by imposing new rules to suit their requirements. Germany, of course, wants to help the euro. It has an enormous investment in it, but I would argue that the tendencies to coercion are not in the interests of Germany, the European Union or the United Kingdom. Indeed, today, we read that the constitutional court in Germany yesterday blocked the powers of a special parliamentary panel to fast-track emergency decisions affecting the rescue fund.

The new treaty is described as the “treaty on stability, co-ordination and governance” in the EU, yet it is not, contrary to what the Opposition said at an earlier stage, an EU treaty. The Lisbon treaty lays down specific requirements before changes can take place. They specify that the rules shall not be changed unless everyone agrees. The false assumption underlying the new treaty between the 25 is that, despite the failure to achieve unanimity, and even though the rules on enhanced co-operation have not been used, they claim that it remains legitimate to obtain those ends by a different route. I put that to the Minister for Europe the other day—namely that the treaty is based on the dangerous assumption that the end justifies the means, and that they would argue that, even if it is unlawful, the requirement to introduce the treaty for political reasons overrides the law. The question is whether it is lawful for the EU institutions, such as the Commission and the European Court, to be involved in such an agreement.

The new treaty is the triumph of expediency over the law. Professor Paul Craig sets out his arguments in 11 pages of carefully analysed argument. I am certain that the Government know all that and I am glad that the Attorney-General is here. If he wishes to intervene, I shall be only too happy. As a former shadow Attorney-General, I am sure that my right hon. and learned Friend knows the parameters of the unlawfulness of this treaty, which is why I suggested that he should come today.

I believe profoundly that the Government know that the treaty is unlawful and, in the words of Professor Paul Craig, it is important to consider whether it can

“confer new functions on EU institutions.”

He continues:

“I believe this would be contrary to the existing Lisbon treaty and to legal principle.”

He then examines articles 7 and 8, which I have no time to go into, as well as articles 3(2) and 273. They all raise questions that are before the European Scrutiny Committee about detailed matters, which we will tackle in due course in our report.

[Chris Kelly (Dudley South) (Con)]

Will my hon. Friend encourage people who wish to find out more to visit the European Scrutiny Committee’s website at www.parliament.uk/ESCOM?

[Mr Cash]

I certainly would, as I said earlier.

Angela Merkel is quoted in The Wall Street Journal a few days ago as saying:

“As Chancellor of Germany, I should and sometimes must take risks but I cannot embark on an adventure.”

I cannot think of any more dangerous adventure than moving away from the rule of law and inviting the tendency to coercion, which is increasingly evident in German policy making. Indeed, I believe that new rules of law are being asserted to break the rule of law. I am sorry to say that in Germany they seem to believe in government by rule. We believe in government by consent.

The process will not work. We are now in the period of a phoney war. Those who have seen the play “Three Days in May”, about 1940, may well wonder whether it is now obvious that, if we were to acquiesce in imposing the new and unacceptable rules, and in using EU institutions, that would become a new process of appeasement. Fortunately for us, in those dark days, Churchill refused to accept Halifax’s advice at the end of that fateful month.

The letter that the Prime Minister has sent, through Sir Jon Cunliffe, to the secretary-general of the European Council makes it clear that we have serious reservations. We now have two Europes, both built on sand. It is essential that we have a referendum in this country so that the people can have their say because there are such profound questions—

[Mr Buckland]

On what?

[Mr Cash]

On what kind of Europe we want. It is increasingly obvious that the position has become unacceptable and that the rule of law itself is now in jeopardy. We are involved and we must have a referendum on our relationship with the EU. However, first the Government must decide what action they will take about the challenge to the rule of law in Europe. They must put referral to the European Court of Justice firmly on the agenda, follow that through and, at the same time, reassess our policy towards the European Union and insist on a renegotiation of the treaties to ensure that the United Kingdom is not found wanting.

--- Later in debate ---

[Mr Buckland]

I do not disagree. My hon. Friend the Member for South Northamptonshire (Andrea Leadsom) made a powerful point about variable geometry; we should use Europe in our national interests, and work with it where appropriate. My hon. Friend the Member for South Dorset (Richard Drax) is absolutely right about trade and the single market, which was, let us face it, a British invention. Lord Cockfield did a huge amount of work to make sure that that aspiration became a reality, and my hon. Friend is right to emphasise the issue. As for not being told what to do, again he makes a fair point. I do not accept that, at any stage, the British Government, or the people of this country, should be put in a position in which they end up doing something against their will. That is why I supported the Bill on European referendums, now the European Union Act 2011, why I agree with the mechanism that the Government proposed, and why I was happy to speak in support of that Bill on Second Reading and at other stages.

To come back to the reality of the debate about Europe, we are talking about real jobs. We should be talking about trade, widening the single market, the digital economy and the energy market—all things that form the subject matter of a very helpful letter, signed by the Prime Minister and 11 other Heads of Government on 20 February, which set out a plan for growth. That should be at the core of negotiations at the European Council. That should be the agenda, because that is the agenda that is relevant to my constituents and the wider country. It would be wholly ridiculous for me, an elected representative of Swindon, to say to my Honda workers, “What we need is more arcane debate about the legality of Europe,” when what they want to hear is debate and discussion about how we can grow the economies of Europe and expand the growth agenda. That is what I call on Ministers to do.

[Mr Cash]

rose—

[Mr Buckland]

I shall take an intervention from my hon. Friend, as he was good enough to allow me to intervene on him.

[Mr Cash]

I entirely agree with my hon. Friend, and it has been, in a way, my political life’s work to try to draw attention to the effect that this legal framework has on our daily lives, but it is absolutely unacceptable to suggest that we can make any changes of the kind that he would prefer to make, in order to benefit his constituents or mine, without having regard to the legal constraints imposed on us as a result of treaties.

[Mr Buckland]

I yield to no one in my respect for my hon. Friend, and he and I have had many conversations on these issues, but we cannot get away from the point that the European Union is an exercise of political will first and foremost. It is the political will of its members that drives the future course of the European Union. I accept that we all work within a legal framework, but let us be clear about where we are. The 25 have agreed to sign a treaty that is not an EU treaty. If there is to be any proposed fold-in in five years, the British veto will apply. We have the right to say no, and that is an important point that we need to underline.

--- Later in debate ---

[Jacob Rees-Mogg]

I am afraid to say that I disagree with my hon. and almost learned Friend. Law is the foundation of what politicians do, and politicians use their political will through the law. Indeed, they have the ability through Parliament to change the law, but they cannot just ignore it.

That is why I want to come on to Sir Jon Cunliffe’s important letter. He makes two significant points. First, he notes that

“the EU institutions must only be used outside the EU Treaties with the consent of all Member States, and must respect the EU Treaties.”

In response to a question at a meeting of the European Scrutiny Committee last week from my hon. Friend the Member for Hertsmere (Mr Clappison), the Minister for Europe—who, if I may say so, was extremely helpful at the evidence session—said when asked whether permission had been given by the Government for the EU treaties to be used:

“No, we have not been asked so to do.”

It ought to be of grave concern to the House and to the country that the member states of the European Union, excluding us and the Czech Republic, have decided to proceed with a treaty without establishing that they are following the correct legal forms.

[Mr Cash]

My hon. Friend may be interested to know that yesterday in the European Parliament, which I attended as Chairman of the European Scrutiny Committee, in a dialogue between MEPs and MPs, one of the French representatives said from the platform to the chairman that she did not think it appropriate for me to be able to make certain comments because the United Kingdom Parliament and the United Kingdom were not part of the eurozone. My hon. Friend might find that rather extraordinary.

[Jacob Rees-Mogg]

Indeed, but one never knows what people might say in relation to the European Union.

As I was saying, it is a shocking state of affairs that our partners in Europe should want to proceed with a treaty without even bothering to go through the proper forms to ensure that that treaty is lawful under EU law. They have not even asked the question. It may be that they know what the answer will be, but if they do, they are one up on most Members of Parliament.

The other point raised in Sir Jon Cunliffe’s letter is that

“we must reserve our position on the proposed treaty and its use of the institutions”.

This, again, is very important because what we are trying to find out is whether the Government are reserving their position on the current legality of the treaty, or how the treaty will be used in practice. If it is the former—if the Government are concerned about the current legality of the treaty—it is important that they act now to establish their concern and to have a judgment from the European Court of Justice, rather than waiting. If the Government wait, as my hon. Friend the Member for Stone said earlier, he who is silent is seen to consent, and we will find that we have allowed the treaty to be implemented and we will have lost our ability to have recourse—

--- Later in debate ---

[Mr Cash]

Undue delay in reserving our position on the necessity of getting concrete guarantees and an answer to the question of whether we will go to the European Court of Justice over this matter is no substitute for action. We must take action now because the advice from the legal adviser states:

“within five years…when this happens”.

His assumption is that this will happen within five years. We must take action now. We cannot allow delay to trump the necessity of getting this right. It is essential that we move, and move now. I shall speak to the Prime Minister about this shortly. I seriously hope that the Attorney-General will take the necessary action and advise accordingly so that the Cabinet is fully apprised of the fact that this is not a lawful treaty.

European Council

William Cash Excerpts

Thursday 26th January 2012 Commons Chamber

[Mr William Cash (Stone) (Con)]

I am grateful to the Backbench Business Committee and its Chairman for arranging this debate. I am sorry that the Government did not take note of the unanimous view of the European Scrutiny Committee that such a debate should be held in Government time. However, we now have this opportunity to air our views before the Prime Minister goes to the summit. He is to be congratulated on his use of the veto, which I am bound to say I was glad about because I had suggested its use in my pamphlet “It’s the EU, Stupid”, and in other discussions.

The proposal for fiscal union vitally affects our national interests and our democracy; it is not just about the single market and the City, essential though those matters are. As I said to the Foreign Secretary the other day, once we have crossed the Rubicon we cannot cross it again, and it is imperative that there should be no backsliding at the summit on 30 January. I totally repudiate the attitude of the Deputy Prime Minister that the non-EU treaty of the 26 should eventually be folded into the EU treaties. The Liberal Democrats are an obstruction to our vital national interests. A house divided against itself will fall, and the situation will be worse still if it is built on sand. There are now two Europes, both built on sand, and the situation is not only precarious but dangerous.

What is the root cause of the European crisis? It is not merely a eurozone crisis; it is a crisis of the European Union as a whole. Europe is being destroyed on the altar of ideology. The existing treaties, which cover 70% of our legislation here in the UK, have failed and are the root cause of the crisis in Europe.

[Martin Horwood (Cheltenham) (LD)]

In the light of the hon. Gentleman’s attack on the role of the Liberal Democrats in all this, would he accept that the Deputy Prime Minister’s hosting of the recent summit of European Liberal leaders—including two Prime Ministers, six Deputy Prime Ministers and five European Commissioners —to try to bring together a bilateral plan to support jobs, growth and prosperity across Europe was a positive step?

[Mr Cash]

We are all in favour of growth, but unfortunately the European treaties themselves work against that aim because of the degree of overregulation, and many other matters that I shall come to in a moment.

The lack of growth is contaminating the UK economy. Elsewhere in Europe it is creating civil disorder, with youth unemployment of up to 45% in Greece and Spain, and 30% in Italy. The present European Union is completely undemocratic, and the existing treaties should be sent to a convention so that all the member states could have the opportunity to face one another and decide what kind of Europe they want. In the past, when referendums have been held in France, Holland, Ireland and Denmark, the no vote has been overturned by bribing and threatening the electorate. That kind of behaviour, combined with economic and political crisis, creates a fertile breeding ground for the far right, as I predicted as far back as 1990.

There is no growth in Europe, except in Germany. We cannot grow from a stagnant Europe, and the coalition cannot achieve its main objective of reducing the deficit and achieving growth so long as this paralysis continues. The remedy of the Eurocrats—and, indeed, the leaders of European Government and the Liberal Democrat leadership in this country—is a fatal obstruction to our present and future economic success.

The approach adopted by the Prime Minister today at Davos reflects the view that I expressed in my pamphlet “It’s the EU, Stupid” and the growth paper that has been circulated to all Members of Parliament and the Lords and others, as well as in my remarks to the Minister of State, Cabinet Office, which is that we need to refocus our trade towards the rest of the world and not rely on the fact that we have 40% to 50% of our trade with the EU to provide the mainspring of our economic future.

[Kelvin Hopkins (Luton North) (Lab)]

Emphasis is constantly placed on our trade with the European Union, but it is not always pointed out that we have a massive trade deficit with the EU. Given the austerity measures here and over there—but particularly over there—that is only going to get worse.

[Mr Cash]

Indeed. In 2009 there was a trade deficit of £14 billion in goods and services, but since then it has risen to £51 million. Those figures speak for themselves.

Cuts in public expenditure cannot solve the problem on their own. We need enterprise for small and medium-sized businesses and drastic cuts in overregulation. We need enterprise, not strangulation. Indeed, we must insist on our ability to enter into trade relationships on our own terms, in our own national interests, and not be confined to a single trade policy dictated by the European Commission.

I was deeply alarmed to read in today’s City A.M. that Angela Merkel at Davos is encouraging more integration. She is quoted as saying:

“We have to become used to the European Commission becoming more and more like a government.”

She urges more and more Europe, but that Europe would be both undemocratic and increasingly dominated by Germany itself, as I have repeatedly stated for 20 years, and as The Economist concedes in this week’s edition. It states, following France’s downgrading, that

“the balance of power has long been shifting from the French President to the German Chancellor”,

and a former French economic Minister has said that

“Berlin is alone in the cockpit”.

That is not healthy for Germany or the UK, and certainly not for Europe. It now seems certain that President Sarkozy is on the way out, and Italy and Greece have technocratic Prime Ministers. Democracy is dwindling and diminishing. The Franco-German partnership is now a hollow reminder of German strength and French weakness. This is all the more reason why the UK must insist on leading Europe out of this crisis with Euro-realist policies and an insistence on government by consent. Sadly, Germany believes in government by rule, and is now even proposing the European Commission as the anchor of European government.

There has been much agitated activity in seeking to resolve the Greek bankruptcy, but there has been no result. A few days ago I came across a five-page article written in 1998 setting out exactly why Greece should not be allowed into the European Union, which was of course ignored. Every member state is responsible for this failure of judgment and must bear the consequences. It is a pity that those such as George Soros who are now wringing their hands in Davos did not listen to the Euro-realist arguments instead of condemning and mocking them.

On the draft agreement, we must bear in mind that the issues now being presented to the British electorate and the European Union are more political than legal. There are still fundamental legal problems in the latest draft of the agreement between the 26. There must be no misunderstanding: this deal is flawed in seeking to incorporate the European Commission and the European Court of Justice, which are institutions of the EU, into a non-EU treaty.

Furthermore, what is the basis in the treaty on the functioning of the European Union for the proposed powers, including infringement powers, to be conferred on the European Commission under article 8 of the agreement? Prima facie, that is unlawful, given the prohibition on infringement proceedings under article 126(10) of the treaty. There are serious doubts about the use of article 273 in relation to issues of jurisdiction. There is also the issue of enhanced co-operation under article 10, which bypasses the treaty requirement that enhanced co-operation should be used only as a last resort; the agreement proposes its use “whenever appropriate and necessary”. This could cause serious damage to British national interests in relation to the internal market.

My Committee, the European Scrutiny Committee, will be investigating all these matters with the assistance of evidence from witnesses from all sides of the equation. There is a further problem of whether the treaty to establish the European stability mechanism can come into force before the amendment to the Lisbon treaty, so that member states could allow such a treaty, given that the United Kingdom has not yet ratified it. I would be grateful if the Minister would answer these questions when he responds to the debate; I hope that he is listening to what I am saying. We urgently need to know whether the Government have received the fifth, and presumably final, draft. If not, will he tell us when they will, and when it will be sent to the European Scrutiny Committee?

With regard to article 13, will the UK Parliament be involved in the proposed inter-parliamentary conference? If so, will the European Scrutiny Committee be invited to attend? At present no one knows how that arrangement will work in practice—there are serious question marks over the agreement—but we know that it will be determined by German demands and conditions. I do not blame Germany for its pride and defence of its own national interests, but I do not believe that we the UK should pay one penny to provide funds for an EU bail-out which, if it were done within the European Union itself, would be blatantly unlawful.

Mme Lagarde, who is now head of the International Monetary Fund, openly admitted in September 2010 that to save the euro,

“we violated all the rules”.

It is ironic that she should now be in charge of a further attempt to bypass the rules. That is outrageous, and I am glad that America has quite rightly said that it believes that Europe should sort out its own mess. However, that will be achieved through policies for genuine growth, and not through bail-outs with fictitious money and a refusal to face up to Euro-reality.

We now live in peaceful democratic times, and we must therefore insist on our Westminster democracy as the basis for protecting our national interest. Let us therefore get down to the business of letting the British people have their say, and of saving the United Kingdom from impending disaster and the European Union from itself. We must turn our eyes to the sunlit uplands of enterprise and international trade, earn our way in the world by our own efforts and re-create the foundations of true independence of action and prosperity for our own country.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

On a point of order, Mr Speaker. I apologise for interrupting the debate, but my attention has been drawn to media reports about the future of RAF Northolt, which is next to my constituency. Apparently, there might be Government plans to develop RAF Northolt as an alternative to the Boris island airport, or as a satellite terminal for Heathrow. That is potentially of huge concern to my constituents, and I wonder whether you have received a statement from the Government setting out their real thinking.

--- Later in debate ---

[Emma Reynolds]

As the right hon. Gentleman knows, the Opposition voted against the IMF contribution last time. I think that he might have been in the Lobby with us. We think that the European central bank should be the lender of last resort and that IMF money should concentrate on countries with severe economic problems outside the eurozone.

The Prime Minister’s walk-out also resulted in risks to foreign direct investment. Businesses investing from the US and Asia have chosen the UK for their operations because it gives them access to European markets. But if the UK’s position in the single market were in doubt, foreign direct investment would also be under threat. Moreover, as the Deputy Prime Minister rightly said on the Sunday after the December Council, if the UK stands tall in Brussels, we stand tall in Washington. It is also true that if we stand tall in Brussels, we also stand tall in Beijing and the other major emerging economies. With economic power moving south and east, to countries the size of continents, it is nostalgic longing for the empire to think that the UK can go it alone. It was the Minister for Europe, in a recent Opposition day debate, who said that

“without the size of the EU behind us, the United Kingdom on its own is unlikely to be able to secure the same deep and ambitious free trade deals with other regions or trading countries around the world.”—[Official Report, 13 December 2011; Vol. 537, c. 724.]

[Mr Cash]

Will the hon. Lady give way?

[Emma Reynolds]

I will in a minute.

The task of Monday’s European Council is both urgent and long term—urgent in that it must address the lack of confidence in European markets, but alongside that the EU must enhance the resilience and capacity of the single market to get back to a sustainable footing in the long term.

We welcome the intention to focus on jobs and growth on Monday, as well as agreeing a fiscal compact. We would prefer the Government, rather than merely commentating on the outcome of the European Council, to be setting the agenda. We hope that their failure in diplomacy will not involve a failure of policy and economics. After all, in the coalition agreement, the Tories and the Liberal Democrats stated that Britain should play a leading role in the EU. The Prime Minister clearly did not have that in mind in December.

[Mr Cash]

Will the hon. Lady give way?

[Emma Reynolds]

When the Minister replies, will he clarify one issue? The Deputy Prime Minister has been organising his own meetings, and in some cases he seems to be running his own parallel foreign policy. While it is right for the Government to be building bridges, it is disappointing that the Deputy Prime Minister has thus far chosen not to report the outcome of the meetings to Parliament. Would the Minister therefore confirm whether the Deputy Prime Minister was speaking for the Government when, at the recent European Liberal forum, he said that:

“We believe—

the treaty—

“should, over time, be folded into the existing EU treaties so you don’t get a permanent two parallel treaties working separately from each other”?

At next Monday’s European Council, the British Government at least have observer status, but that is thanks to Chancellor Merkel and Prime Minister Monti, who want the UK back in the room. They see the UK as a leading member state, advocating an extension of the internal market. It is testament to past British diplomacy and previous Governments that many other member states share the view that, with Britain isolated and excluded from these talks, the push for further liberalisation and reform becomes harder.

[Mr Cash]

Will the hon. Lady give way?

[Emma Reynolds]

The hon. Gentleman is frustrated, but he will understand that because interventions eat into my time I will continue.

Britain’s standing in the world—economically and politically—must be reinforced and strengthened, not weakened. The resolution of the eurozone crisis is manifestly in our national interest. It is also in the national interest for the UK to be at the heart of the EU, a large member state with an open economy, arguing for and securing an extension of the single market, arguing for and securing reform of the EU. The UK now needs to regain that position and start rebuilding bridges.

On Monday the Prime Minister should seek to undo the damage caused by what he did in December, diminishing our standing in Europe and the world. It might not please his Back Benchers, but it would be of benefit to businesses, jobs and employees throughout the country. The Prime Minister must start to put the national interest before his party’s interest.

--- Later in debate ---

[Alistair Burt]

I can make no stronger a case for Honda in Swindon than my hon. Friend has made. He is absolutely right to focus on competitiveness, growth and the agenda that my right hon. Friend the Foreign Secretary will take forward there. I appreciate his comments. This informal European Council will rightly focus on growth and competitiveness, and it is vital that it makes progress ahead of the March European Council, which will also focus on growth.

The UK has played, and will continue to play, a strong and positive role in the EU as we and our European partners face the most pressing task of tackling our shared economic challenges. We are leading the arguments for growth and others continue to look to us for leadership. We have spearheaded the work of 16 member states, some inside the eurozone and some outside, in pressing for reforms to support growth. Together we have over the past year secured positive conclusions from European Councils that reflect our priorities. Action is now being taken, as shown by the Commission agreeing to exempt micro-businesses from EU regulation unless a clear case can be made for their inclusion.

Our diplomatic efforts to build alliances for growth continue in the European Council. The UK has agreed growth priorities for the informal Council with the Netherlands, Sweden, Finland, Ireland and Estonia, which will cover: completing the single market; reducing the regulatory burden; what member states should do to improve labour markets; and reaffirming the importance of the external dimension of the single market.

My right hon. Friend the Prime Minister also spoke to the German Chancellor, Angela Merkel, at the weekend to discuss our shared priorities. They agreed that the steps we should take to strengthen growth and fight unemployment, particularly youth unemployment, in Europe will form the focus of the informal Council on Monday. A number of right hon. and hon. Members spoke about our engagement with Europe. The Prime Minister was very clear today when talking about engagement, as my hon. Friend the Member for Cheltenham (Martin Horwood) made clear. In response to the question the right hon. Member for Leicester East (Keith Vaz) asked on Lisbon, I can tell him that the Prime Minister today said in Davos:

“For all the talk, the Lisbon Strategy has failed to deliver the structural reforms we need.”

It has largely been replaced by Europe 2020, which includes the sorts of benchmark the right hon. Gentleman referred to. The fact remains that we need to be bolder in the structural reforms we pursue to promote growth. The Prime Minister also said:

“Britain has been arguing for a pro-business agenda in Europe… Over the last year we have spearheaded work with 15 other member states across the EU... This weekend Chancellor Merkel joined me in calling for a package of deregulation and liberalisation policies… But we need to be bolder still. Here’s the checklist: all proposed EU measures tested for their impact on growth; a target to reduce the overall burden of EU regulation; and a new proportionality test to prevent needless barriers to trade in services and slash the number of regulated professions in Europe. Together with our international partners, we also need to take decisive action to get trade moving.”

That is what the EU needs, and that is what the informal Council will concentrate on.

[Mr Cash]

Will my hon. Friend give way?

[Alistair Burt]

I have only three minutes remaining, but I will take one further intervention, because my hon. Friend deserves it; we have discussed these matters on many occasions.

[Mr Cash]

Did the Prime Minister agree with Angela Merkel when she said:

“We will have to get used to the fact that the European Commission… will become more and more like a government”?

[Alistair Burt]

Alas, I have not had the opportunity to test that quote with my right hon. Friend the Prime Minister, but I will do so as soon as I have the opportunity.

A number of Members, including the hon. Members for Ilford South (Mike Gapes), for Rhondda (Chris Bryant) and for Wolverhampton North East (Emma Reynolds) and the right hon. Member for Rotherham (Mr MacShane), spoke about engagement in Europe. We are engaged. As my hon. Friend the Member for Cheltenham said, the Deputy Prime Minister hosted a meeting of various liberal European Prime Ministers, Commissioners, Deputy Prime Ministers and Foreign Ministers on 9 January to set out the British vision of greater competitiveness and growth across the European Union, because austerity alone will not fix the eurozone or the European economies. We have to combine fiscal discipline with a plan for more jobs and more growth, and the Deputy Prime Minister was right to say it.

As for lack of engagement and isolation, I am astonished that the presumption of the hon. Member for Wolverhampton North East in bringing to the House a challenge to the Government when the Opposition’s position is distinctly unclear. We will continue to work hard with our many allies in Europe to advance our interests. It is not isolation; it is defending the national interest. We differ from others in that we are not in the euro and do not want to join. We will not proceed with plans for fiscal consolidation if we feel that we are not protected. We will continue to work hard to advance our interests. One thing that would have made Britain weaker was coming home with a treaty change and no safeguards.

If the Opposition want to criticise the Government’s policy, they need to say what they would have done in office, but last month in the space of 10 days they had three different positions: first they refused to say what they would do, then they said that they would have vetoed the treaty, and then they said they would not have done so. They would have some credibility if they had a policy, and a bit of consistency would help.

This useful debate has concentrated not only on engagement and the like, but on the prospects for next Monday. The UK has an ambitious agenda for growth in Europe, and it is one we share with many like-minded states across Europe. It is also an agenda on which we have made much progress already throughout the last year. We will continue to ensure that we put our national interests first and to have a policy from a united party in relation to the UK interests in Europe. We will continue to look for partners who will share that interest, and at the moment the EU is calling for growth, competitiveness and more jobs.

European Union

William Cash Excerpts

Tuesday 13th December 2011 Commons Chamber

[Mr Dodds]

The right hon. Gentleman is absolutely right, and I will come to that. Even today, we are hearing of issues in Denmark and that Sweden is unlikely to sign up. In Poland, it has been pointed out that two thirds of each House will have to support what has been agreed if the country is to sign up, and it is unlikely to get that. We are hearing similar things in Finland, the Czech Republic and other countries, never mind what is going on in Germany and even France. This is potentially a watershed moment in British politics.

[Mr William Cash (Stone) (Con)]

This is a good moment to place on record the fact that the Democratic Unionist party has played a stalwart role in this whole business from the beginning. That needs to be put on the record, as part of the historic tribute that needs to be paid to that party in this matter.

[Mr Dodds]

I am very grateful to the hon. Gentleman for his kind remarks. Given that he was commended even by the leader of the Labour party in the House yesterday, those words are very welcome coming from someone with such vast experience in fighting these battles over the years.

What happened at the weekend is important not so much for the substance of the matter in itself but for the rebalancing of our relationship with the European Union that it might herald. I refer to that in our motion.

Many people say that because of the action that the Prime Minister has taken, we are now marginalised and isolated. Many of those who say that are, of course, the very same people who at one time not so long ago were urging us to join the euro. They were the people who castigated the euro-realists who dared to point out the in-built defects of the euro project. They made the same dire, doom-laden predictions then. They were wrong then, and they are wrong now.

Being outside arrangements that exist for most of the other EU members is, in any case, nothing new. For instance, the UK is not in the Schengen agreement. We were told by some that that was contrary to the spirit of being good Europeans as part of the EU, but it is absolutely right in the interests of the UK and the protection of our borders.

We heard much yesterday and over the weekend about the damage that the latest developments might do to our country’s standing in the world. For instance, we heard about how the Americans might view us. However, yesterday Hillary Clinton made very clear what she thought, saying that

“our concern has not been over the position that the UK has taken, it’s whether the decisions made by other members of the eurozone countries within the EU will work.”

With respect, that is the nub of the matter. What matters is what will happen to the eurozone.

We have talked about the role of other countries. The right hon. Member for Wokingham (Mr Redwood) referred to other countries that have not signed up, and I mentioned Sweden. It will also be interesting to see what the position is in the Irish Republic when the matter has been considered in detail. It is not so much the text of the proposal as its substance that matters in the decision whether the agreement must go to a referendum. It will be interesting to see the reaction there. It is clear, is it not, that the French Government and others have a clear policy when it comes to corporation tax? Over the years, the Irish Republic has prided itself on attracting foreign direct investment through low rates of corporation tax, and it has built its economic policy around that to a large degree. It will be watching the matter very carefully.

--- Later in debate ---

[Mr Dodds]

I do not agree with the hon. Gentleman. The Prime Minister is right to say that it would have been entirely wrong, without sufficient protections, to have a treaty that, as he put it, would have hard-wired the situation into the European Union treaties. The hon. Member for Ilford South (Mike Gapes) alluded to protections, but QMV does not provide the UK with much of a protection. As has been said already in the debate, given some of the vindictive language being used in European capitals at the moment, we must be very careful indeed. It is clear, in my view, that the status quo cannot stand in the medium to long term.

[Mr Cash]

Does the right hon. Gentleman accept that what he is saying is incredibly important in terms of the future path, because the real problems are contained in the existing treaties themselves, which need to be fundamentally changed, along with our relationship with the European Union? That is the real problem. We should not just nibble at the edges.

[Mr Dodds]

The hon. Gentleman is right in that regard. We cannot have a bloc of eurozone countries acting collectively by using its voting power at EU level to force through measures to the detriment of the UK’s national interest.

Even the Deputy Prime Minister has warned against the dangers of a club within a club. The new club will have a common interest and act collectively. The Secretary of State for Northern Ireland pointed that out in a recent article in The Spectator. He said:

“a fiscally united eurozone will spend as a bloc, tax as a bloc…and…vote as a bloc”,

and he is absolutely right.

For that reason and a host of others it is clear, as the hon. Member for Stone (Mr Cash) said, that a fundamental reassessment of our relationship with the EU is required. The Prime Minister’s use of the veto is very welcome. Saying no to Europe has been and remains almost unthinkable for some in the political elite, no matter what the cost in terms of our national interests, but the question now is: where do we go from here?

As things stand we are left with all the old familiar problems with the EU that we had before the European Council. We are left with the huge issues of loss of sovereignty and EU control of vast swathes of UK laws and policies. We are still committed as a country, because of the EU treaties, to “ever closer political union”. We remain subject, for instance, to the common fisheries policy, to the plethora of regulations and directives that stifle competitiveness and growth, and to interference in criminal justice and home affairs. Not least, we are still required to contribute almost £10 billion per year net to the EU at a time when domestic budgets are being slashed, and QMV provisions under the Lisbon treaty have reduced the areas where we can say no to EU intrusion.

--- Later in debate ---

[Mr Cash]

I am profoundly and deeply grateful to my right hon. Friend for giving way at last. Would he care to comment on the report in the newspapers today that the Government have already received legal advice that they can use the institutions in relation to the agreement of the 26? The European Scrutiny Committee will be looking into this matter extremely carefully and will no doubt ask him to come to give advice on that matter.

[Mr Lidington]

I look forward with my usual sense of delight to the opportunity to give evidence to my hon. Friend’s Committee. Seriously, I would be happy, as would my officials and those from other Departments, to give evidence to his Committee, but my hon. Friend has been in the House long enough to know that no Minister of any Government comments on legal advice that Ministers may or may not have received.

--- Later in debate ---

[Mr William Cash (Stone) (Con)]

The reality is that the markets are already demonstrating that there is almost no chance of the euro being saved. In addition, it is way beyond legal devices for people to claim that they will be able to stitch together an arrangement through some method of enhanced co-operation, article 136 and all the rest of it, against the background of the implosion going on outside in the eurozone, and indeed in the European Union as a whole. I am disturbed by some of the language that I have been reading in the papers. As I indicated in an intervention on my right hon. Friend the Minister for Europe, legal advice has already been given, presumably by the Foreign Office, to the Government that they will be able to stitch together some kind of device that will enable the European Commission and the European Court of Justice to give a spurious authority—a spurious jurisdiction—to the deal between the 17 plus the others that wish to join in with them.

I would go further and say that, as has been said by a number of my hon. Friends, there are indications that some of the countries concerned are beginning to realise that when they go back to their Parliaments they will have to look also to their electors. The idea of unanimity in the confines of the euro establishment’s comfy offices is not quite the same as having to face the consequences of the austerity measures, and to face up to protests and riots in some of those countries. That is where the decisions will eventually be taken, because we are talking about people; we are not talking about machines. We are not just talking about jurisdiction. There is far too much talk of trying to stitch up arrangements for the sake of convenience.

[Mr Stewart Jackson]

Is my hon. Friend not as incredulous as I am that those on the left in this country and across Europe are willing to be complicit in support for these fiscal policies? Working people in Europe will be subject to social discord, stagflation, unemployment and depression for the sake of the continuation of the European Union’s policies.

[Mr Cash]

Yes. This fantasy of a European Union and how it has developed through the existing treaties is the reason we have the crisis in Europe as a whole. That is why we need fundamental change: the existing treaties are the cause of the crisis. It is not just a question of the single markets or, for that matter, the single market—

[Ian Paisley]

rose—

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

rose—

[Mr Cash]

I will give way one more time, to the hon. Member for Linlithgow and East Falkirk (Michael Connarty) who is a member of the European Scrutiny Committee.

[Michael Connarty]

I am very grateful to the hon. Gentleman but I think he is perhaps getting carried away by his own conclusions before using logic. Clearly, the crisis that faces all the countries in Europe, and most other developed countries, comes from the profligate madness of the casino-based banking system that all the countries joined in with. The eurozone might be under greater pressure, but it is not in as bad a condition, in reality, as the US economy at this moment. It is just that, unlike the US, it is not united enough to deal with the crisis as one country.

[Mr Cash]

I understand what the hon. Gentleman is saying, but with about 47% youth unemployment in Spain and in Greece, for example, and 30% in Italy, and so on, youth unemployment is a really serious problem, and there is not the same problem in some of the other countries to which the hon. Gentleman referred.

I am afraid that both the Opposition and the Liberal Democrats are completely out of their depth on this subject. For the Deputy Prime Minister to say that this historic vote, which will change the whole future of the European Union and our relationship with it, is bad for Britain is simply absurd. I do not want to go further than that, but I want to get on the record the fact that it is irresponsible of the Deputy Prime Minister to make such a statement. To claim that influence can be retained in a room when you know in advance not only that everyone will vote against you but that they all have the power to continue to do so involves living in a fantasy world not unlike that of “Alice in Wonderland”.

Let me turn briefly to the question of this attempt, this device, this spurious method that people are trying to stitch together to give the measure some degree of authority despite all the realities of the crisis in the eurozone and in the European Union as a whole. There is an attempt to give the European Court of Justice and the European Commission some jurisdiction over this so-called separate treaty. I am not at all sure that it will be a treaty—at best it will only be an agreement—but people are calling it a treaty. I am very worried about the looseness of the language; I want just to make that point on its own.

The main objection to reinforcing the eurozone by means of an intergovernmental agreement is that the rules agreed under the European Union treaties—by which I mean EU primary legislation—by the 27 member states for the operation of the eurozone are to be modified by a separate agreement that does not have primacy over EU treaty law, and so cannot modify or be in conflict with EU treaty law, and that has not been agreed to by all 27 member states. It is vital to stick to that principle, which is at the heart of how the European Union functions. I might be critical of how the European Union has developed under the existing treaties, but those who are against us cannot have it both ways.

As for the objective, the hope seems to be that the provisions of an international agreement can be incorporated

“into the treaties of the Union as soon as possible.”

That is in the statement on the agreement. In other words, the objective of getting the arrangement stitched up into the new treaty has already been set. I must advise the Government that it will not be in their interests to give effect to the proposal through a stitch-up or a device. The European Scrutiny Committee, of course, will be considering all those questions. In addition, the EU treaties require unanimity, so in order to make such a change unanimity would be required—unanimity that would have to include the United Kingdom. That would lead to a great deal of trouble for the Government if they were to attempt to achieve a stitch-up.

--- Later in debate ---

[Martin Horwood (Cheltenham) (LD)]

I congratulate the Democratic Unionist party on a timely choice of topic and on some smart draftsmanship in the wording of the motion.

It is reasonably common knowledge that the Liberal Democrats think that the outcome of last week’s summit in Brussels was not a good one. The less important reason for the outcome being bad was that the Prime Minister felt compelled to threaten the use of a British veto. That has generated a great deal of media interest and political over-excitement, but that was not the big issue. The big issue, as the Minister rightly emphasised, is the economic and financial crisis still facing the continent of Europe and, by extension, still facing the UK economy and the global economy.

It is already pretty clear that the hundreds of billions of euros mustered by the IMF, the European stability mechanism and potentially the European Central Bank have not been enough to reassure the markets. Italy, Spain, Portugal and Greece are all still under pressure. Some people have talked as if overnight exits from the eurozone would be desirable, even if they were possible, but they would not be; they would be catastrophic. The prospect of disorderly defaults and eurozone exits would threaten wholesale bank failures, bankruptcies and insolvencies across Europe, and that is still possible. I do not think the eurozone countries have yet put in place the firepower required to avoid it.

The capacity needed by the financial institutions will probably run to trillions of euros. It is not just a short-term crisis, as some of my Eurosceptic friends have pointed out. There are long-term structural issues concerning the compatibility of the German economy with those much weaker and less competitive economies in the same currency union, and those problems have not yet been sorted out. Perhaps the structures and the rules of a new treaty or agreement, whatever form it takes, may prove to be the beginning of a solution, but the process is still a long way from complete and there are quite a few obstacles in its path, some of them sitting in this Chamber.

[Mr Cash]

As one of the immovable objects to which the hon. Gentleman refers, may I stress that we are talking about the rule of law? I am sure he would not want a device to be used that attempted to bypass the legal processes of the very treaties that he so strongly advocates.

[Martin Horwood]

Of course not, and the law will be followed, but we may find that European Governments have to gather yet again for more crisis summits in the not-too-distant future. That offers Britain a bit of an opportunity. We now need a process of positive and active diplomacy to persuade some of our more traditional allies in Europe—Ireland, Sweden, even Germany, and many others—of the benefits of having Britain fully involved not in the eurozone, but in the overall process of European economic decision making. Why? Because one of the medium to long-term solutions to Europe’s problems is to have a real focus on jobs and sustainable prosperity—jobs and prosperity in the UK, as well as in the rest of Europe because, as has been pointed out, half our trade and foreign direct investment comes from other EU members.

The argument about repatriating powers, let alone leaving the EU, completely misses the point. It is in our interest not just to have a competitive and vibrant British economy, but for there to be a competitive and vibrant European economy as well, and Britain can help to bring that about. It is not just in Britain’s interest to be at the heart of the European economy and European economic decision making; it is in Europe’s interests too, and that in turn will help British jobs, British business and British prosperity.

--- Later in debate ---

[Sammy Wilson]

Of course, but I want to develop this point first.

There is nothing new in this. The chattering classes have all come together to condemn the Prime Minister for standing up for Britain and for our interests in Europe. There is nothing new in those who see the European project being attacked using that tactic in debates such as this. In fact, a leader of the Liberal Democrats said, as revealed by Hansard:

“There will be a second-tier Europe”—[Official Report, 24 September 1992; Vol. 212, c. 34.]

in which we will be led into “isolation”. People may wonder how on earth that can be, when the Liberal Democrat leader has not been in the House since these events happened. How can he have anything on record in Hansard? Of course, I quoted not the present Liberal Democrat leader but the Liberal Democrat leader from 1992—nearly 20 years ago—when we had exactly the same situation. They have not even learned new lines, for goodness’ sake. If they are going to criticise someone for undermining the European project, one would have thought that they would learn to find some new arguments.

People have said that we are isolated in the world. It is interesting to note that when Hillary Clinton commented, she said that she was not concerned at all about what the Prime Minister did in Europe this weekend. She was more concerned—and America is more concerned—about whether this will be an effective way of dealing with the crisis of the euro. As a number of hon. Members—including even the hon. Member for Cheltenham (Martin Horwood) —have pointed out, even the markets agree that this has not been a good deal. How on earth can we be isolated and left alone on the edges of Europe on this issue if we find that all those looking at the effectiveness of the deal have found it wanting?

The second argument is that Britain will be left alone and other nations in Europe will not support us. Hon. Members, including again the hon. Member for Cheltenham, and the hon. Member for Folkestone and Hythe (Damian Collins) and even the hon. Member for Foyle (Mark Durkan), have pointed out that this is not the end of the matter. Many of those hailed as supporting the deal are already beginning to have second thoughts. The list is endless: Denmark, Sweden, Poland, Finland and Czechoslovakia. Ironically, even one of the candidates who might well be the next Prime Minister of France has said that he would undo what has happened. I think that, far from being alone, we will find this issue being revisited by others. That requires a word of caution: if it is to be revisited, it is important for the Prime Minister to take the same stance again.

[Mr Cash]

Does the hon. Gentleman agree that, in the light of everything he has so soundly said, it would be extremely unwise for our own Government to make any attempt to endorse the arrangement, given its uncertainty and apparent instability?

[Sammy Wilson]

Absolutely. As other nations start to look at the implications of the deal and see the essentially undemocratic nature of it, they will ask themselves whether they are prepared to put their destiny in the hands of the European Commission.

I find it strange that the party that has opposed the Government’s austerity measures in the United Kingdom has taken the view that it is better to hand the ability to impose those measures to the unelected bureaucrats in Europe. At least the Prime Minister can be held to account in this place every Wednesday and the Chancellor can be held to account here, too. We will not be able to hold European bureaucrats to account if we give them this power. That is one reason why I find the attitude of Labour Members very strange.

The third argument that has been made is that we have gained nothing and lost everything. The hon. Member for Wolverhampton North East put it succinctly: it was bizarre of us to support the Prime Minister, she said, because decisions will be made that will affect us, and we will not even be in the room when they are discussed; it has failed to stop any changes in the financial system; and it is bad for Britain, and bad for jobs. Therefore, she and the Labour party oppose what the Prime Minister has done. With such an argument, she should have found it easy to say, “We want to be in the room, we want to safeguard financial institutions, and we want to create jobs, so we will support the deal.” But no matter how many times those in the Labour party have been asked the question, they have not been able to say that they would have supported the deal. Perhaps she will now tell us that the Labour party will support the deal.

European Council

William Cash Excerpts

Thursday 8th December 2011 Westminster Hall

[Mr William Cash (Stone) (Con)]

I should like to ask my hon. Friend a simple question. How much more important can things get than when we face a fundamental change in the relationship between ourselves and the EU? It is as simple as that. This is an historic question, and it demands a referendum. Why does she think otherwise?

[Andrea Leadsom]

We will just have to agree to disagree. If people are in government, they govern. At the current moment, a referendum would be extraordinarily important in the history of Britain, but it would be extraordinarily difficult to get the sort of answer that would give the Government a coherent direction. It is for the Government to make the best decision at this moment. For what it is worth, I have always thought that a referendum needs to come at the tail end of a renegotiation of Britain’s relationship with the euro and that it should be used to ratify such a renegotiation, based on the simple question of whether Britain should be in or out of the EU on the basis of a pre-negotiated set of terms with the EU.

--- Later in debate ---

[Martin Horwood (Cheltenham) (LD)]

I start the Liberal Democrat contribution to the debate. This may alarm the hon. Member for Harwich and North Essex (Mr Jenkin), but I am going to agree with him about something. This debate should have taken place on the Floor of the House. As the hon. Member for South Northamptonshire (Andrea Leadsom) has just pointed out, we need to reform how we scrutinise European affairs in this Parliament. It is not adequate. In fact, I have already made a contribution to the discussions on scrutiny by suggesting to Ministers that we involve departmental and other Select Committees in scrutinising forthcoming European legislation, as she has just suggested. I strongly welcome that suggestion.

[Mr Cash]

As Chair of the Committee in question, I assure the hon. Gentleman that we frequently have arrangements whereby we refer particular directives and regulations to departmental Select Committees. Sometimes they do not actually look at them, despite the fact that we have asked them to do so. We also asked the Government, on behalf of the European Scrutiny Committee unanimously, for a full three-hour debate on the Floor of the House, of the kind that is taking place here, and it was refused. That is the state of play. That comes largely from the fact that we are in a coalition.

[Martin Horwood]

I do not think that it comes from the fact that we are in a coalition. I do not want to risk my Liberal Democrat credentials by agreeing with the hon. Member for Stone (Mr Cash) as well, but I think that this issue is worthy of a debate on the Floor of the House. I know that his Committee refers matters for scrutiny to departmental Select Committees, and it is not good enough if those Committees are not prepared to scrutinise those matters. They have the expertise and the Committee experts who can make a serious contribution to the scrutiny process. I restrain myself from suggesting that that might remove the necessity for the European Scrutiny Committee, but the point is that we need wider and deeper discussion of European matters in this Parliament, and I entirely agree with that.

One of the healthy things about being in a coalition is that we can bring different points of view on issues such as Europe, as well as others, to the table without actually having to conceal them and pretend to be coming from exactly the same place, which the previous Government had to do. None the less, it is slightly frustrating. I thought that we had settled quite a lot of the issues that are being debated at the moment. When we discussed at inordinate length the European Union Act 2011, which has already been passed, we spent countless hours debating when to hold a referendum and when to look at renegotiation of powers. We came to a conclusion and a settled view, as a coalition and as a Parliament, which was pretty clear. It represented something of a compromise between the Liberal Democrat and the natural Conservative positions, which seemed quite acceptable: a treaty change should be subject to an Act of Parliament, but if that treaty change involves a fundamental and significant shift in powers from the British to the European level of government, then that should be automatically subject to a referendum. Yet now, only a matter of months later, this whole issue seems to have been reopened. That is a problem, because it makes it more difficult—let us put it no more strongly than that—for Ministers to negotiate with confidence, knowing what position they are representing back in this country. We are not so much sending them naked into the debating chamber, as sending them so wrapped up in unrealistic expectations that they cannot move, which is a problem.

Ministers need to focus on the issues at hand in the Council, which are threefold. The eurozone is not the only issue, because there are two other important topics for discussion. On energy, if I can put it in the language of this debate, I speak from a nuclear-sceptic point of view. There is the welcome process of independent scrutiny, at European level, of the safety of European nuclear programmes. In the wake of the Fukushima disaster, which will potentially cost the Japanese economy hundreds of billions of pounds, it is incredibly important that the process is ongoing and rigorous. If I have a concern that I would like to be raised at the European Council, it is that the Commission report makes the case for tighter safety rules but does so in a limited way, even though it concedes that many of the regulations that were already in force before the Fukushima disaster in March are still not being applied throughout the European Union. Some states, including the UK, Poland, Slovakia and Belgium, have not updated national legislation in line with a European directive from 2009. At present, there are no common safety standards or criteria for nuclear power plants across the European Union. [Interruption.] The hon. Member for North Wiltshire (Mr Gray) says, from a sedentary position, “Good.” He may have a lot of confidence in British nuclear safety regimes. I hope he has exactly the same confidence in Polish safety regimes and in the safety regimes of other European nations. The bad news for him, I am afraid, is that radioactivity, as we found out after Chernobyl, is no respecter of national boundaries.

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[Martin Horwood]

The economy is still growing, actually, but that is a debate for another day. The voters made up their mind about who was responsible for the economic mess that we found ourselves in.

We are still in a vulnerable position, and all colleagues need to be able to go back to their constituencies, to look pensioners, small business people and others in the face and to say that we are doing everything that we can to speed a resolution of the crisis and that we are not throwing spanners in the works.

[Mr Cash]

Does the hon. Gentleman not agree that it is extremely unwise to make assumptions about the existing arrangements? They include so much over-regulation, centralisation and deprivation of oxygen for small and medium-sized businesses not only in this country but in the European Union that, precisely because there is no growth there—for all those reasons and some others—it is impossible for us to grow, what with the 40% of trade that we have with those other countries. Solving the causes of the failure of the European Union is so necessary.

[Martin Horwood]

The hon. Gentleman makes a rather interesting point about regulation of the smallest businesses, because we have a rather good case study. The Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), has been active in going to other European Ministers, in particular those with a similar outlook on economic policy, and taking a collaborative, positive and co-operative approach to reach agreement that we should lift onerous accounting rules from the smallest businesses, not only in this country but throughout Europe. [Interruption.] It might be a small concession, but it was progress through a collaborative process that has lifted some of the burden of European regulation from businesses in the UK. There will be other examples of what Members may call repatriation, if they want. In fisheries policy, we are likely to see the movement of powers over fisheries from the European level to national and regional levels in future. So it is possible to achieve change without a confrontational attitude and, as in both those cases, without treaty change.

As I have said, to defend Britain’s interests during the whole process is important. One of the ways to do so is to prevent marginalisation, which is a real danger. To an extent, I share some of the anxieties expressed by Conservative Members—it could happen that we might be excluded from the core of decision making in Europe—and I would not be happy with the Labour party’s approach that we should be observers to the process. I want us to be participants. We must ensure that Britain plays a central role in whatever new structures emerge from the crisis, and we need to be able to discuss and debate with the members of the eurozone how their economies move forward. As EU members, we will always have more say in the process than we would do if we committed the ultimate act of economic suicide and left the European Union, as some hon. Members might want. The risk, however, is that some marginalisation is possible, although we increase the risk of that if we roll up at European Councils with a list of unrealistic demands and throw a spanner in the work of resolving possibly the biggest crisis to have faced continental Europe for decades. That does not do us much good.

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[Mr William Cash (Stone) (Con)]

I congratulate my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) on securing this extremely important debate. It is a substitute for the debate that the European Scrutiny Committee has insisted should be held on the Floor of the House, but which has been declined by the Government so far.

[Mr Hollobone]

I am looking forward to my hon. Friend’s speech very much indeed. Would it not have been marvellous if the Leader of the House had timetabled an opportunity this week, perhaps on Wednesday afternoon, for the Prime Minister to hear hon. Members’ views on what he should say at the European Council? Then he would have been able to jet off today to that summit with all the suggestions fresh in his mind. Instead, it was up to the Backbench Business Committee to timetable the debate for this afternoon.

[Mr Cash]

I agree. People were not listening back in the days of Maastricht and they are not listening now. That is the problem. I give special thanks to my hon. Friend the Member for Harwich and North Essex not only for this debate but for the consistency that he has shown since the days of the Maastricht rebellion, which I had the honour to lead all those years ago and of which he was a very important member. He was a new Member of the House and he understood the position immediately, as did my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) and a number of others who have remained in the House.

This is not only an historic question but a national question. The now absent hon. Member for Luton North (Kelvin Hopkins) mentioned Peter Shore and Bryan Gould. When I set up the Maastricht referendum campaign, it was hon. Members on the other side of the House, such as Peter Shore and Bryan Gould, who joined me in that campaign. We presented a petition, which many people may recall, of well over 500,000 signatures; in fact, we reckon that we got 700,000 signatures all told. The petition was deposited, calling for a referendum on the Maastricht treaty. I was delighted that my right hon. Friend the Prime Minister said only a couple of weeks ago that there should have been a referendum on that treaty. As one who was very deeply engaged in the whole of that process, from beginning to end—much to the dismay of those who have now, in my opinion, lost the argument—I believe that the necessity of knowing the views of the British people remains implicitly entrenched in the arrangements that are now coming forward and that therefore a referendum is essential.

I should now like to move on to the present time. I want to address the question facing us today in terms of the broad landscape. I wrote a pamphlet that was published in effect in this very room when we had a conference between the leading Eurosceptics and the leading Europhiles. It involved Charles Grant of the Centre for European Reform, Roland Rudd of Business for New Europe and a galaxy of others. Both sides regarded it as essential that we should get together and properly debate the questions on both sides of the argument with many of the best people from the two sides of the debate. In that pamphlet, I set out details that I will not go into today, but I say to those who are interested and who read the transcript of these proceedings that it is available. Indeed, the Prime Minister has written to me, saying that it is a substantial document and effectively, therefore, it has to be answered. He has said as much to me, and it does have to be answered. I assume that my right hon. Friend the Minister for Europe will do so in due course.

This is an historic turning point for both the country and the Conservative party. The dream of ever-closer union and, indeed, political and economic union has failed, and the root of that trouble is the fantasy world, which has persisted for so many decades, of trying to create economic and political union among so many diverse countries with diverse cultures, diverse economies and diverse democratic traditions.

Only today I witnessed Mr Barroso on the television screens berating everyone in the most dictatorial language. He was saying that everyone had to come together for the sake of saving this project. They themselves are responsible for having created it and they are now attempting to save it, despite the fact that the causes of the present discontent come from the creation of this project in the first place by the very people who are now berating everyone else.

I will go further and refer to two documents that I have just obtained. One is dated 6 December. It is Mr Van Rompuy’s document, entitled “Towards a stronger economic Union”. There is not one word about democracy anywhere in that document—the word “democracy” does not appear. Similarly, in the letter written to the President of the European Council—Mr Van Rompuy, no less—by Mr Sarkozy and Angela Merkel, there is not a single reference to the democratic question. There is not one iota, not one jot of a reference to democracy in either of those documents, yet they are demanding that this failed project be continued with greater—deeper—integration. All the mistakes that have been made in the past are being reinforced in the new arrangement, which clearly will not work. It did not work before and it will not work now. It is a tragedy— I say that—that we are in the current position. I trust that the Prime Minister will address that during the next 48 hours.

This is not some theoretical experiment. It is about the daily lives of the British people and about our democratic traditions and economic performance. The idea that a fiscal union of 17 would be stable is simply and emphatically wrong. It will concentrate and increase the dangers of centralisation and will be fundamentally unstable. Germany will not be able to bail out the other countries, and it is a complete strategic failure for people, including the coalition Government, to think that it can.

Germany of course wants to preserve the euro, because it is doing so well out of it. One has only to consider the foreign direct investment by the Germans in other countries, the extent to which those countries are in effect economic satellites of Germany and the fact that the structural funds—I have the figures from the Library—are so incredibly important in generating investment backed by German contracts in those other countries, from which they then repatriate the profits. This is actually a German economic hegemony. Equally, I do not think that the Germans are inherently hostile about this. I say what I say without any hostile spirit, but I do say that we have to be realistic. We are desperately at risk. The British nation is in peril under these arrangements.

Furthermore, the impact of this economic conglomeration in the hands of one country in particular has led not only, in effect, to the dismissal of two Prime Ministers, whatever their merits or demerits, but to the voting arrangements, which follow from the qualified majority voting system. I am talking about the number of votes that are available to Germany when it wants to pursue a policy, because of its influence and, in effect, its control over the countries in question, which are dependent on it. That is the case not only in the eurozone of 17, but in so many of the other countries, including— I say this without any disrespect for them, because I love these countries—Poland and Denmark. Then of course there are Bulgaria, Romania, the Baltic states, Hungary and so on. The truth is that that is inherently in German national interests. Indeed, we have to look only at what Chancellor Kohl had to say in the 1990s, which I have included in a pamphlet that I wrote, called “It’s the EU, stupid”, to see the political determination behind Germany’s desire to ensure that the euro survives. Angela Merkel is now using that very language in the same context.

I do not blame the Germans. I have said in this Chamber that I recognise the fact that to a great extent they have shown their commercial nous—they have taken advantage of the system to ensure that they get the best out of it. The organisation is not a European union, but effectively a greater Germany.

We, above all other countries in Europe, ought to recognise that we should defend our own interests—not, as I said, in a hostile manner, but in a realistic and down-to-earth manner. We ought to get across the message that there should be, inherent in the proposed arrangements, a fundamental change in our relationship with the European Union. We and, if I may say so, the Prime Minister, have an absolute duty to protect the national interest that he says he wants to protect; to ensure that there is fundamental reform in the European Union, which he called for at the Mansion house the other day, to generate the growth that we need, with our 40% of trade with the Union and to guarantee that we are not drawn into an arrangement by which, through a majority block vote, we are consistently outvoted and become completely and utterly controlled by the system. It just does not make sense, and I believe that the system will not work.

It needs to be pointed out that not only is voting power naturally going to Germany, with its economic investments—it is doing extremely well out of the system—but Germany believes that it can require countries to obey rules. That is a much deeper question, a matter of attitude. We cannot require countries to obey rules just because we prescribe them. That is where I think the whole philosophy and the attitudes in the Eurocracy and in Germany go wrong. As we have heard, the Germans themselves have not obeyed the rules on the stability and growth pact when it suited them not to. An inherent dishonesty lies at the heart of the arrangements: someone disobeys the rules when it suits them, but insists that the rules be obeyed when they can benefit out of those rules. That cannot be right.

Countries are made up of individuals and individual companies, which have their own ideas as to how they should be democratically governed. Those ideas do not by any means fit within the rules prescribed from above or the conditions that are imposed. The Eurocrats, Germany and those who go with it on the matter simply do not understand that the lack of democracy is a fundamental flaw in the entire European project.

[Emma Reynolds]

Is the hon. Gentleman not a little unfair in singling out Germany? Germany is obviously the largest country to have done quite well out of the euro, but other eurozone countries in the group of healthy economies are doing pretty well economically. It is slightly unfair of him to single out Germany.

[Mr Cash]

I do not think it is. If the hon. Lady investigates, as I have, German FDI into the other countries, and then looks at the countries that are growing, she will see that there is a correlation with the amount of money that the Germans have provided. I give them credit for doing so on good investment projects, but some of them have been bad, as in Greece. The growth in some of the countries is buttressed and underpinned by German investment. That is the problem.

[Martin Horwood]

The hon. Gentleman is making an interesting speech. If he was Nicolas Sarkozy—if he can imagine that—exposed as his economy is to Greek debt in particular, what would he do, if he is so critical of the proposed arrangements?

[Mr Cash]

First, there is a strong case for getting out of the euro, because that would enable countries to—[Interruption.] It is described as irrevocable, but I have news for the hon. Member for Cheltenham (Martin Horwood): treaties and laws have been passed for not generations but centuries, and there are more treaties and international relationships that have been reviewed and changed than he might have had hot breakfasts. When those things do not work, there is a good starting point for reviewing them. That is what we are doing now.

[Mr Hollobone]

My hon. Friend thinks that there may well be a move to establish a fiscal union of the 17 eurozone countries. If that is not possible, and if an agreement of the full 17 cannot be achieved, does he think that there could be a move to establish a fiscal union with a smaller number of eurozone countries to let some of the peripheral economies have some kind of orderly default?

[Mr Cash]

I think that the crisis is so great that that suggestion has to be taken on board seriously. I agree with the sentiment that lies behind that suggestion.

[Mr Jenkin]

I follow on the point about foreign direct investment that my hon. Friend made to the hon. Member for Wolverhampton North East (Emma Reynolds). It is interesting that Poland, which one might describe as a pre-in—it is not in the euro, but a pre-in nation state in the European Union—supports the German line. That is precisely because it is such a huge beneficiary of public subsidies arriving through the European Union, largely paid for by the German taxpayer, and because it is massively dependent on FDI. As a result it is effectively already a satellite state of the eurozone.

[Mr Cash]

We must understand that countries need investment. Therefore, in a sense, I am not critical about it. However, I know that the consequences of that are the reasons behind the problems presented to the Prime Minister tonight. There are dilemmas in the matter. I am not just being generous-minded; I understand that there is a triangulation, which is a problem.

I regard the Prime Minister to be, as it were, standing alone at the moment in a quadrangle that is surrounded by four 40 foot-high walls. On one side, he has the Euro-elite—Angela Merkel and Nicolas Sarkozy—and the Eurocracy. Another wall is the fact that he has to reduce the deficit, which he cannot do without growth, and he cannot increase growth without a viable European Union. Another wall is the Conservative party, not only in Parliament but in the constituencies, and the country at large. The final wall—I pay my respects to the hon. Member for Cheltenham—is the coalition and its ideas on the matter, which preclude repatriation and renegotiation—[Interruption.] The hon. Gentleman may say that, but we had it quite clearly stated.

[Martin Horwood]

Will the hon. Gentleman give way?

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[Mr Cash]

I am not going to take an intervention, because otherwise we will be here all afternoon—we are going to be anyway. I simply make the point that the leader of the Liberal Democrats has been quite specific in saying that there should not be any repatriation.

Within the electorates of individual countries, decisions can be taken to improve economic performance, develop small and medium-sized businesses and remove burdens on business, but that is not the European method. We may be driven into the formula of the notwithstanding arrangements, which was endorsed by the European Scrutiny Committee report on sovereignty and Parliament, because if the situation is so critical, we may have to override European regulation. However, the European method has locked people, by unanimous decisions, into a European system that cannot be changed, other than by renegotiation, which is almost impossible, or by a notwithstanding arrangement of the kind I have mentioned. Such oppressive regulations and rules are based on theoretical assumptions, as with the Lisbon agenda and the 2020 agenda, which have failed. The result is no growth.

We need to move away from centralisation and integration and back to decision making by Parliaments in the United Kingdom and elsewhere on behalf of the electorates of every country, and also into an association of nation states by co-operating. The other alternative is not to remain a member of the European Union at all. We are reaching that kind of critical point. We may not have got there yet, but we are getting to it.

Effectively, there would have to be a European Free Trade Association-type arrangement, with countries co-operating for free trade, competitiveness and growth, as my hon. Friend the Member for Basildon and Billericay (Mr Baron) so rightly said. However, that arrangement would also have to be based on democratic consent and not exclusively on majority block voting arrangements. That would provide free choice in the marketplace and at the ballot box.

That is the route to solving the problem, not imposing economic prescriptions and rules that have already been broken in the past—invariably—and that will not be observed in the future, because we are dealing with people and not economic or theoretical machines. That is fundamentally the difference between the British approach, which favours freedom of choice, and the eurocratic and—I say this with respect—the Germanic approach, which is rule-based and completely different.

This week’s meeting presents the Prime Minister with a historic moment, given the scale of the crisis, and it is essential that he takes the right path. We cannot have a fiscal union and be within the same treaty; that is a contradiction within itself. It is not a neat Russian doll; it is angular and impossible. Actually, it will not fit. A treaty within a treaty is a house divided against itself and because both are built on sand the result of going down this route will be even greater chaos, whether there are 17 or 27 countries involved. That is the problem and the European Court of Justice simply will not be able to deal with the overarching contradiction that those two competing arrangements provide.

Whether it is the eurozone 17 or the eurozone 27 that we are dealing with, the Prime Minister must recognise that the intentions expressed by the Germans and the French are to pursue a model that is entirely unsuited to the UK and that will create a fundamental change in the relationship between the EU and the UK. As I have said already, countries in the non-eurozone will vote for fiscal union, and that will be disastrous, not only with respect to the single market and how it affects the City of London but with respect to EU directives. I have looked at those directives, but I do not have time to go through all of them now. I simply say that there are literally hundreds, if not thousands, of directives in other areas of the treaty. For example, I have mentioned transport, but other areas include communications and energy—the list is endless. I have the list; in fact, the Library has provided it for me. It shows all those areas that are decided by qualified majority voting and the few areas that are decided by unanimity. The fiscal solidarity within the 17—or within the 27, if that is the way it goes—will use that QMV in all the areas, because that will be the new deal. So we are really in grave peril for those reasons.

I believe that the creation of another treaty within the framework of the existing treaties will deliberately target, for example, the City of London, and that is not just accidental. I remember saying before Mr Nicolas Sarkozy was elected—I say this with some respect to him—that he might prove to be a very dangerous president of France, and from our point of view that has been proved to be the case, much as I think he is looking after French interests. I cannot complain about that; we cannot try to defend our own interests and then say that the French should not look after themselves. The problem is the unreality—the Alice in Wonderland world—in which we are now living, where the French are allowed to renegotiate and throw down the gauntlet to us about what they want, but we are supposed to acquiesce and do nothing much about that. That is why this debate is so important and should be taking place on the Floor of the House.

The critical voting block against the UK will be extremely important. In fact, at the moment it is 213 votes to 130 between the eurozone 17 and ourselves. If it turns out that there is a eurozone 27, there will still be all the economic critical mass and consequently there will still be a voting arrangement against us. For that reason, we are in serious difficulties. Therefore I say that it is an illusion to imagine that that critical mass will not exist.

We also have to repatriate, although I have said repeatedly for months now—if not years—that the fundamental change in the relationship between the UK and the EU is the key question, because when we have got that right we can also address the question of repatriation. As my right hon. Friend the Prime Minister said in 2005 in the Centre for Policy Studies lecture, it is imperative that we repatriate social and employment laws.

Then there is the question of our current account deficit with the EU, which is minus £51 billion. That is up by something of the order of £35 billion or £40 billion in one year alone, and yet our trading surplus with the rest of the world is £15 billion. In other words, there is nothing wrong with our competitiveness; it is just that we cannot be competitive inside the European framework. Therefore we must deal with that issue too.

Effectively, that means that we must re-gear our relationships as a matter of fundamental foreign policy and economic policy. The Foreign Office and the Treasury, through No. 10, must re-gear our relationships with the rest of the world: with the Commonwealth countries, including India; with the United States, of course, which is not part of the Commonwealth and which must be addressed in its own right; and with all the other countries, including Malaysia, South Africa and other African countries, and south-east Asian countries. All those countries offer huge opportunities and many of them operate on the basis of British commercial law and British contracts, adapted indigenously to provide the basis of their legal system and constitutional arrangements. We can be enormously optimistic about the future if we go down that route, not abandoning our trade with the EU, but ensuring that we get a proper balance in our relationship with the EU and putting the emphasis in the right place.

We are told that 3 million jobs are at stake in our trading relationships with the EU. Nobody is suggesting that we would not continue to trade with the EU, but the problem is that the other EU countries have no growth and our trading generates a deficit.

This issue is not just a technical question about Schengen, or otherwise; we must concentrate on the bigger landscape, which is the failure of the European project. It is also about our democracy and the individual electors who voted us into Parliament on the clear understanding that we would protect their interests. That is why a veto is necessary unless a renegotiation of our fundamental relationship with the EU, along the lines that I have described, is achieved, as well as the protection of our democratic interests and the rights of our constituents.

That is also why a referendum is required. The idea being peddled that a referendum is not required—leaving aside the issue of timing—because of the coalition agreement is wholly misleading. The coalition agreement is not law, and even section 4 of the European Union Act 2011, which I sought to remove from the original Bill by an amendment that was rejected by the Government, is not definitive in excluding a referendum where a new treaty or series of legal devices that have been put together has the effect of merely appearing to make provision for member states other than the UK. That is a matter of legal interpretation and we are by no means finished with it; indeed, I have a Bill coming forward in January that has been signed up to by six Chairmen of Select Committees and that will make that clear. But the important thing is that we engage in this debate.

The assumption that is being made at the moment—that we are unable to have a referendum because of section 4 of the 2011 Act—is wholly misleading. The constitutional position for a referendum, let alone the political and economic situation, is not clear-cut by any means, and it cannot override the fundamental principle, as set out in 1975 when a referendum was conducted, because the renegotiations in this instance involve a fundamental change in the overall relationship between the UK and the EU. A referendum is required, quite simply because the current proposals vitally affect the people of the UK. We must have a referendum—it is a matter of principle, honour and trust.

[Mrs Anne Main (in the Chair)]

Order. Before I call Mr David Nuttall to speak, I will point out that there are three other Members who have attended the debate and who would also like to speak. I will be calling for winding-up speeches from about 5.10 pm. I call Mr David Nuttall to speak, and there are three other colleagues who may wish to catch my eye after him.

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[Mr Lidington]

My hon. Friend makes a perfectly sensible point about the fact that other countries have departed currency unions since the second world war. It is fair to say that we have not had such a break-up of a currency union on this kind of scale, with economies that are so closely integrated, and in an age when information and capital can be moved rapidly, not just in national jurisdictions but globally, at the click of a computer mouse. Studies that I have seen say that it would be much, much more damaging and risky for the eurozone to break up, particularly if it broke up chaotically, than it was for some of those other currency separations, such as those of the Czech Republic and Slovakia. Incidentally, Slovakia, having broken with the Czech Republic, then decided to enter the eurozone and has engaged in some challenging austerity and competitiveness measures in order to try to make a success of that commitment.

Where I would agree with my hon. Friend is that this has been seen, by those who took part, as a political project as well as an economic project. However, to an extent that we sometimes do not appreciate in this country, those political ambitions have a much greater resonance among the wider electorates in many countries on the continent of Europe than they do here. That is due to all kinds of historical reasons with which we are fairly familiar. I want to emphasise that the prime objective of the summit ought to be to sort out the issues that remain unresolved from the eurozone meetings of 21 July and 26 October. Whether we talk about the European financial stability facility, bank recapitalisation or the detail of the Greek write-down, there is detail that has yet to be finalised, and that needs to be addressed rapidly. So, too, does the need for competitiveness, not only in the peripheral eurozone economies but in the global context of the European Union as a whole. It needs to be embraced as a priority by every single one of the member states and the European institutions. If I have time, I will come on to that. There is some evidence that that challenge is starting to be recognised and addressed.

I accept too—I will make this point very briefly—that if eurozone countries choose to push forward with greater economic integration, there will be a democratic challenge as well. How are economic policies to be made democratically accountable? I accept that that is a challenge for those countries. It is clearly for them, as independent sovereign countries, to decide how they individually address that.

Many hon. Members raised the issue of possible treaty change, and the safeguards that the United Kingdom would require should the eurozone follow that path. Let me set out the options in broad terms. One way to introduce stronger rules for the eurozone, which of course would not apply to the UK, would be a change in the treaty governing all 27 members of the European Union. That would be the most comprehensive way to provide tough sanctions to ensure that eurozone countries stick to their own rules on debt. A second option would be to allow the 17 countries of the eurozone to create a separate intergovernmental treaty of their own. That has happened before, with the Schengen agreement on open borders and with the European stability mechanism. The 17 are free to do that again. The likelihood, however, is that the signatories to such a treaty would want to draw on the EU institutions that belong to all 27 member states to monitor and enforce compliance with any new rules on tighter budget discipline. In both instances, we would have the power of veto. Treaty change at 27 requires unanimity and, while the content of an intergovernmental treaty at 17 is a matter for the 17 signatories, it cannot cut across the provisions of the existing EU treaties, nor can it seek to use the EU institutions without the specific agreement of all the EU 27.

[Mr Cash]

My right hon. Friend, I am sure, recognises the extreme danger of creating a treaty within a treaty. I am sure he realises that that would be a house divided against itself, and catastrophic for our democratic system.

[Mr Lidington]

As I said earlier, this is not without precedent. I am not saying that this will happen, but it is an option that has been floated quite openly by a number of European leaders as a possible way forward. Just as there is a negotiation within the eurozone about the measures and mechanisms to enforce discipline, so there is a negotiation with us and fellow non-euro countries. In the course of these negotiations, whichever option is followed we will make sure that our interests are protected. Of course, there is another option, which is to use the existing frameworks and treaties. That option is still on the table.

In the debate, there has been extensive discussion of the repatriation of powers and a referendum. We need to remind ourselves that this is the first Government in British history to have introduced a legislative guarantee of a referendum. The European Union Act 2011 ensures that there is now a legal requirement on any Government to hold a referendum before any agreement on treaty change that transfers competence or powers from the UK to the EU. I have never pretended that the Act is a panacea. It does not address the issue of repatriation of powers and that was not its purpose. It is a guarantee.

There has been some suggestion from hon. Members that the UK should hold a referendum on any changes the eurozone countries may choose to make. I want to reiterate the point the Prime Minister has made on this issue. What the eurozone countries may or may not do is have arrangements between themselves that pool some of their sovereignty. To say that we have to have a referendum in Britain about something that other countries are going ahead with anyway would not only be a rather odd approach for us to take, but it would probably mean that those countries would choose to go ahead in any case but using purely intergovernmental means, however messy and unsatisfactory from their point of view such an alternative might be. That may well yet happen, but holding a referendum on such a treaty would not bring back a single power.

Personally, I could draw up a list of powers—we had the list in the Conservative manifesto at the previous election—that I think are better decided nationally than by the EU. However, we have to be ruthlessly focused on what is most important to our national interest and, at this time, in particular to our national economy. That is why our priority in the negotiations is safeguards to keep the single market fair and open for our most crucial industries, including financial services, to which my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) made reference.

National Referendum on the European Union

William Cash Excerpts

Monday 24th October 2011 Commons Chamber

[Mr William Cash (Stone) (Con)]

In light of what my right hon. Friend said in advocacy of the single market as it now operates, will he explain why, between 2009 and 2010, our trade deficit with the 26 member states jumped from minus £14 billion to minus £53 billion, and with the eurozone from minus £4 billion to minus £38 billion in one year—last year alone? Why did that happen, and what is his remedy?

[Mr Hague]

The remedy is to restore the health of the British economy, to have a tax system, such as the Chancellor is creating, that attracts businesses to this country, and to create export growth from this country to the whole world, not just to the European Union. We cannot do that if we are not taking part in the free trade agreements that Europe is making with the rest of the world.

The second and third reasons—

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[Mr Alexander]

Talking of absurd scares, it is now 12 years since the right hon. Gentleman pronounced the death of Britain in his book, so I am a little cautious of taking his advice on the matter.

All of us are aware that growth is stalling in Europe. Indeed, growth forecasts were downgraded in Germany just last week. We need to consider the economic effects at home and in our largest export markets abroad if the motion were to be passed. Businesses deciding whether to invest in Britain at this crucial time would have to make that decision not knowing whether it would still be in the European Union by the time that investment came to fruition.

[Mr Cash]

I would be most grateful if the shadow Foreign Secretary would answer the question that I put to the Foreign Secretary about the tremendous advantages that they claim for this economic miracle of Europe. How do you explain that under your watch, when you were in government—[Interruption.] Not yours, Mr Speaker. Can he explain why, under Labour’s watch, the trade deficit with the other 26 member states went up from minus £14 billion to minus £53 billion in one year between 2009 and 2010?

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[Mr Holloway]

I will not, actually.

The Deputy Prime Minister was even louder in his protestations. He said:

“The Liberal Democrats believe we should have a real vote on Europe—whether we should be in Europe or out… the public back our position by a margin of 2:1”.

I should say that the margin is about the same today. Those statements, and many more from the Front Benches, render irrelevant the arguments that we have heard today about whether this is the right moment for a referendum.

I am sure that if the Government had not liked today’s motion, they could have come up with something. What would it say about the relationship between Parliament and the people if we were to deny not only what we have recently promised, but what people out there, at our invitation, have asked us to do through the petition?

I should have much preferred a Conservative Government, but I support this Government sincerely and spiritedly. I was one of only about 50 Back Benchers who supported my right hon. Friend the Member for Witney (Mr Cameron) in the leadership election, and now I really do think—I am not just sucking up—that he is a brilliant Prime Minister. I have never voted against the party line, even when I have known enough about what we were discussing to be aware that I should vote against it. I have loved doing my minuscule job as a Parliamentary Private Secretary in the foreign affairs team, whose Ministers I respect—and believe me, they are doing a very good job. Trust me, and again I am not sucking up, they do not come better than the Minister for Europe—“Hear, hear” at this point. [Laughter.]

I am mostly enthusiastic about the coalition in private. If you are part of a team, you support it. But if you cannot support a particular policy, the honest course of action is of course to stand down. I want decisions to be closer to the people whom they affect—to be made by local communities, not sent upwards towards Brussels. I am not prepared to go back on my word to my constituents, and I am really staggered that loyal people like me have been put in this position. If Britain’s future as an independent country is not a proper matter for a referendum, I have absolutely no idea what is.

[Mr Cash]

Many people in the country, knowing of the integrity and the honesty that is reflected in my hon. Friend’s speech and knowing that this honourable gentleman—this honourable friend—has decided that he will resign his position as a Parliamentary Private Secretary in the Foreign Office on a matter of such importance, will commend him for it.

[Mr Holloway]

Obviously, I completely agree with my hon. Friend.

We do not have the right to give away powers entrusted to us by our constituents. To anyone who is still wondering which way to vote, I say: “Do not try to guess what the result of a referendum would be, and do not worry about wording or timing. You need only ask yourself two questions. First, is this the right thing to do in principle? Secondly, what do your constituents want you to do?” Here is our opportunity to show people that the system can work, that representative government continues to function in the land where it was nurtured and developed, and that patriotism—putting one’s country rather than one’s own interests first—is not foreign to the House.

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[Mr Walter]

The hon. Gentleman is absolutely right—it was a political argument. What I am sad about is that there are those who want to destroy that legacy and the legacy of those who fought and voted for that lasting peace—a Europe in harmony, comfortable with itself and respecting differences of culture, language, history and nationality, but confident in its ability to work together.

[Mr Cash]

I just want to mention to my hon. Friend that my father was killed in the war in Normandy and I am sure that he, together with all the others, also appreciated that what they were doing was fighting for freedom and for the democracy that is being put at risk by opposition to this motion.

[Mr Walter]

I hope that that is not correct and I remind my hon. Friend that he and I first met when we were both on a committee of the European Movement, which, of course, had just campaigned for a yes vote in that very referendum.

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[Mr William Cash (Stone) (Con)]

A few months ago the Prime Minister asked me after a debate to write to him about my views on the European Union, so I wrote him a pamphlet called “It’s the EU, stupid.” That was a reference not to him, but to Bill Clinton’s recognition that the economy is at the heart of the issue. In just the same way, I believe fundamentally, as I have set out in the pamphlet—I will quickly encapsulate some of the thoughts it contains—that this is first of all a matter of principle. The referendum issue has been going around since before the Maastricht referendum campaign. I voted yes, as it happens, in 1975, but since then we have seen the accumulation of powers and the broken promises, betrayals and prevarication. The argument is that it is never the right time to deal with these issues, but that is the problem, and the British people feel that they have been betrayed by a failure to deliver on those promises.

[Steve Baker]

I would have voted yes in 1975, but does my hon. Friend agree that the EU has gone far beyond that which is necessary to guarantee peace and prosperity?

[Mr Cash]

Yes, indeed, and I will go further: the EU has created a situation in which it actually damages our economy. That is the problem, and that is the reversal of the situation, with massive over-regulation—£8 billion a year, according to the British Chambers of Commerce—over the past 20 years in this country alone.

As I said earlier in my interventions on the Foreign Secretary and the shadow Foreign Secretary, we are running the single market on a deficit that has gone up in the last year alone by as much as £40 billion, so it would be inconceivable for us not to take a rain-check and say, “We cannot just continue with this and pretend that nothing is going on.”

If ever there was a time to tackle the issue in principle, it is now, and that is what the motion is about: whether there is a case for renegotiation or for leaving the European Union. On renegotiation, we must establish the fact in line with the wishes of the people of this country—not because the Whips have said, “You’ve got to do this, that and the other” or, with great respect, because the Prime Minister or the Foreign Secretary have said so, but because we have a sacred trust, as elected Members of this House, to do what is right, in the interests of the British people as we see it for our constituents, and in the national interest. This is exactly that issue tonight.

The Prime Minister has given two speeches over the past year or so—one was about rebuilding trust in politics, and the other was about a European policy that we can believe in. I strongly recommend that people tonight, tomorrow or at some point read those speeches again and ask themselves, “What is going on in this debate today?” We know that the Whips have been strongly at work, but I had all that over Maastricht, we have had it over the years and it becomes something that we have to get used to. The reality is that we are doing the right thing for the right reason. That is the point.

[Zac Goldsmith (Richmond Park) (Con)]

My hon. Friend is making an excellent speech. Does he not think that, because the debate has been generated by an e-petition, because it has been made possible by the Backbench Business Committee and because it is an issue that does not divide Members along party lines, it is totally wrong for both party leaders to apply the three-line Whip?

[Mr Cash]

I absolutely agree. In fact, I think that three parties are involved, and the point applies to all of them.

I should like to return to the Prime Minister’s statement today and to test it against what has been going on. He said to us: “Members of my party fought the last election committed to three things,” including, “stopping the passage of further powers to the EU.” The Foreign Secretary, in his article in The Daily Telegraph the day before yesterday, said that he objected to the Lisbon treaty, and he will remember that he, I and many Conservative Members fought, united together, against it line by line—every aspect of it—and fought for a referendum. Yet, we have been watching the implementation of further powers—I do not want to get into the semantics or legal niceties of the word “powers”, because I know them as well as anybody else in the House—and every aspect of that Lisbon treaty day in, day out, and many of the problems that we are now experiencing are a result of its implementation.

The Prime Minister went on to say that we have instituted “a referendum lock to require a referendum, by law, for…such transfer of powers”, and I have a ten-minute rule Bill on that tomorrow. It would reverse section 4 of the European Union Act 2011, which I opposed on the Floor of the House. I see the Foreign Secretary smiling, because he knows what I am going to say. The real test, as I said to the Prime Minister during his statement, is about fundamental change—constitutional, political and economic. That is the test that needs to be applied, and it was endorsed—by the way—by the Lords Constitution Committee only last year.

Fiscal union, of which I shall explain more tomorrow, is such a fundamental change, but the Government quite deliberately ensured through section 4(4)(b) of the 2011 Act that there would be no referendum when the provision in question applied, in their terms, only to the eurozone and not to us directly. At the very time when we were being told that, however, I and others objected because we felt that such a provision would affect us enormously. We were told that it would not, but now we are told day in, day out how much it does affect us, and that therefore we must not do what we are doing tonight, for the very simple reason that, somehow or other, it will undermine our economic activity with the European Union. That is absolute rubbish. The reason why we are in such difficulties with deficit reduction is that there is no growth, and there is no growth because 50% of all our economic laws come from Europe. It also accounts for 40% of our trade, a point that the Foreign Secretary made, but the fact is that we have a massive trade deficit, as I have already described.

The EU is a failed project. It is an undemocratic project. This vote—this motion—is in the national interest, because it is for democracy, for trust in politics and for the integrity of this House.