Parliamentary Sovereignty and EU Renegotiations

Debate between John Baron and Philip Hollobone

Thursday 4th February 2016 Commons Chamber

[Mr Baron]

I completely agree and that is very well put. It is terribly important that there is an element of democratic accountability. If there is not, we will alienate sections of society and issues such as unemployment will not be properly addressed. How are people going to voice their opinion without moving to the extremes of the political divide, and feeding that extremism because they do not feel they can be democratically represented within the existing structures?

[Mr Philip Hollobone (Kettering) (Con)]

Does my hon. Friend agree there is a practical side to the issue of sovereignty, too? As a member of the EU, we have lost our sovereign ability to negotiate friendly or free trade agreements with major economies around the world. It would be in this country’s interests to have a friendly trading agreement with the big economies, such as America, China and Japan. We cannot do that, however, because we have lost our seat at the World Trade Organisation and our membership of the EU forbids us from making such negotiations.

[Mr Baron]

That is absolutely right. It is a question of sovereignty, at the end of the day. If we cannot take our seat at the WTO and negotiate our own trade deals, indirectly that is a loss of sovereignty. There is no doubt about that. I am conscious that time is ticking on, so I will make some progress if colleagues will forgive me.

The Prime Minister misses the importance of parliamentary sovereignty in the EU debate. That is a mistake No. 10 is in danger of making when it focuses too heavily on Project Fear issues, such as immigration and jobs. We all know it is the loss of parliamentary sovereignty that really lies at the heart of our uneasy relationship with the EU, and which has rankled since we first joined in the 1970s. Over the course of the referendum campaign, I do not believe Project Fear will bite. Ever-increasing numbers of big businesses, including the likes of JCB, Toyota, and Unilever, make it clear that they will not pull out in the event of a Brexit. Indeed, a recent Barclays report suggested a Brexit would be beneficial to the UK. Jobs are linked to our trade with Europe, not to our membership of the EU. Given that our vast trade deficit is in the EU’s favour, it would want to sign a trade agreement in the event of a Brexit.

Furthermore, even if the EU wanted to get awkward, it could not. Falling global tariffs since the 1970s mean that both the UK and EU are bound by the WTO’s “most favoured nation” tariffs—the USA’s average being under 3%. One can easily lose 3% in a currency swing in a week. Many smaller countries outside the EU easily trade with it. Does the “in” camp think the public believe we could not do likewise?

What excites voters’ imagination is the ability to restore sovereignty to our ancient Parliament. I rather suspect the Prime Minister knows this, and that consequently he is holding something in reserve—we are hearing something about a sovereignty Bill, for example—but details are scant. If it is true, however, does it not acknowledge that the “washed-out lottery ticket” and the EU “backseat driver brake” are not fit for purpose? Will the Minister supply the House with more details?

In conclusion, there has never been a better time to renegotiate our relationship with the EU, and nor are we ever likely to be in a stronger position to win meaningful concessions. I therefore urge the Prime Minister, at this critical stage, to return to the renegotiations and seek nothing less than a true restoration of parliamentary sovereignty. Let us step back for one brief moment. If the EU did not exist today, would we really invent it? I cannot understand why this and other Governments have acquiesced in this charade. I can only surmise it is because it is easier not to correct it and to do nothing, than to put it right and take action. But inaction is costing this country dear, not just by way of our £10 billion a year net contribution, but in terms of our sovereignty and responsibility to the people of this country.

Reserve Forces

Debate between John Baron and Philip Hollobone

Tuesday 17th November 2015 Westminster Hall

[Mr Hollobone]

I am grateful to the hon. Gentleman, who has identified a real issue, and hope that the Minister will respond to those figures. We want to ensure that ex-regulars join the reserves. We also need to retain the reservists who are recruited. Retention is a key issue. All too often we focus on how well recruitment is going, and do not spend enough time on retaining reservists.

I am pleased that the Government have an employer recognition scheme. It was launched by the Prime Minister in July 2014 and is intended to recognise employers through a scheme with bronze, silver and gold tiers. I understand that 10 employers received gold awards last year.

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

Does my hon. Friend agree that part of the problem is that the original plan was to hold the regular forces and not let sizeable numbers go until there was clear evidence that the plans for the reserves were working? That original plan changed because of financial considerations, which is the reason for the present large capability gaps. Perhaps it is also the reason for the problem with recruitment.

European Council

Debate between John Baron and Philip Hollobone

Thursday 8th December 2011 Westminster Hall

[Mr Baron]

As I said at the start, I do not buy the repatriation of powers. I want a fundamental renegotiation of our relationship with the EU based on free trade, competition and growth. Such a renegotiation would recognise the fact that we want good relations with our EU neighbours, and we want good trade relations in particular, but we recognise that we need to engage better with the faster-growing economies throughout the world. In many regions of the world—those of the BRIC economies—growth rates are so much faster. This is not a little Englander approach; it is a globalist approach that recognises that we need to engage better with those faster-growing areas.

[Mr Philip Hollobone (Kettering) (Con)]

I am hugely enjoying my hon. Friend’s speech; he is making some excellent points. Does he agree that in 1980 the EU’s share of world trade was some 30%, but by 2020 it is likely to have fallen to 15%? In other words, it will have halved over a period of 40 years, yet we find ourselves increasingly brought together with part of the world that will grow more slowly than the BRIC economies.

[Mr Baron]

My hon. Friend makes an excellent point. There is much talk of Germany winning market share, but one forgets that Germany has benefited from an artificially weak currency, to which the periphery nations have contributed. Germany has had a very strong manufacturing base allied to a weak currency, which has made for heady growth, but if we take Europe as a whole, it is falling behind. Many people do not recognise that.

I worry that the Government have ruled out the idea of a referendum. I think that is a mistake as we go into a summit, because it cuts off a key negotiating ability. I also worry that we seem to be saying we do not want a two-speed or two-tier Europe, but on the other hand we are trying to join in the chorus of “we must save the euro”, which can only mean closer fiscal union, which can only result, as Angela Merkel has readily acknowledged, in a two-tier, two-speed Europe. It is nonsense and a contradiction. Anybody who believes that closer fiscal and political union will not fundamentally or materially affect our relationship with the EU is living in cloud cuckoo land.

Before I finish, I will attempt to knock down one or two myths surrounding the debate. The first myth is that we must save the euro. In my 15 years in the City running hundreds of millions of pounds for charities, pension funds and private clients with some very large fund management groups, I have never heard so much economic clap-trap. The whole concept to begin with was flawed. The idea that we can bind divergent economies into a single currency without full fiscal union was and remains a mistake. Not only the concept but the solution is flawed. The problem is that we are not addressing the core issue of competitiveness. We have Governments spending too much relative to their means.

This recession, unlike all other post-war recessions, is built on debt. It is a deleveraging, not a destocking, recession. Accordingly, we have to grow our way out of that and reduce our debt. We cannot, as we all know, borrow our way out of debt. The solution does not fit, so I am not convinced that the solution put forward by the present eurozone leaders will work, anyway. However, let us give them the benefit of the doubt. Let us say it buys time. The problem is that by cutting off the option of devaluation—put that and the fact that the solution does not fit to one side for a second—even if it buys time, we are making the austerity packages much worse.

I have previously broached the fact that there have been some 80 situations in which countries have left currency unions since the second world war and have benefited from the growth that has followed. We saw it in our own case when we exited the exchange rate mechanism. By binding countries into a single currency, we have to make the austerity packages more severe, because we are ruling out the option of devaluation, which would increase competitiveness. The eurozone leaders do not seem to understand that. If there was an orderly break-up of the euro, certainly for the periphery nations, the Germans would still want to sell their cars and the French their wine. Believe me, life would go on.

Many say that the banking system could not survive the write-off of the debts. That point was made earlier. However, the markets have already discounted the debt in many of these countries by 60%. It would not come as much of a shock if there was a 50% write-down. In many cases, that would represent a 10% uplift by the banks themselves. This is an economic point that has not been widely acknowledged and accepted. The markets have already downgraded the debt, so this will be a downgrade instituted by politicians. Look at what the markets themselves are telling us.

Nobody has been able to quantify or substantiate why it would create economic mayhem if we did not save the euro. Siren voices also suggested that if we left the ERM something similar and awful would happen. Actually, almost to the day, our economic recovery kicked off.

Finally, if the eurozone wants to crack on and create closer fiscal union, that is fine. That is not, or should not, be mutually exclusive to our objective of wanting to negotiate a different and fundamentally new relationship with the EU. They are not mutually exclusive. Many commentators seem to suggest that by wanting to renegotiate the relationship, we are breaking up or being awkward about what the 17 eurozone members want to do. That is not the case. If they want to take that path, it is up to them, but their taking that path should not restrict us.