European Council

John Redwood Excerpts

Tuesday 19th March 2013 Commons Chamber

[Mr Swire]

Will the hon. Gentleman allow me to finish? Russia is a major player in the world. We continue to have extraordinarily important discussions with it about Syria and about the Democratic People’s Republic of Korea and other issues, and we continue to review—and raise when appropriate—the situation there regarding human rights.

[Mr John Redwood (Wokingham) (Con)]

Given the importance of low-energy prices to industrial recovery and jobs, did the Prime Minister take advantage of the summit to ask the Germans how they were managing to run their coal stations for much longer, under EU rules, and to have cheaper energy, and did he give notice that Britain needed to do the same?

[Mr Swire]

I cannot answer either of those questions in the affirmative but I shall ensure that the right hon. Gentleman’s questions are given a precise and accurate answer.

European Union (Approvals) Bill

John Redwood Excerpts

Monday 11th February 2013 Commons Chamber

[Philip Davies]

Absolutely, and again I am grateful to my hon. Friend. The situation makes the Government’s position on these matters unjustifiable and completely ridiculous. If the Government do not support all this, why on earth are we in this situation? If we are in this situation because the Minister is utterly powerless to do anything about it because he has no influence whatsoever, I hope he will admit that. When our referendum comes, in 2017 or thereabouts, it will be another argument for why we should leave the European Union.

[Mr John Redwood (Wokingham) (Con)]

Does my hon. Friend agree that the whole idea of an EU quango to lecture member states on how we should behave on human rights is nonsense? This is a group of democratic states, so surely it is the job of the Parliaments of the individual member states to decide on and uphold the human rights in their countries, rather than to be instructed by EU quangos.

[Philip Davies]

My right hon. Friend, as ever, is absolutely right. We certainly need no lectures from other countries in the EU about how to protect people’s freedoms; this country has a far better track record than member states of the EU will ever have. I suspect that the Minister will be trying to defend the indefensible, but it is a sad state of affairs when it appears that we in this House are powerless to do anything about these sorts of bureaucracies. We all know what happens with these types of bureaucracies: they grow and grow, and they empire build. They will grow their influence and they will try to do things that they are not supposed to do—things they were not set up to do. They will grow the number of staff and grow their budget, and it appears from what I have heard so far that we are utterly powerless to do anything about it. If the Minister can give me some comfort that we can and will do something about it, fair enough, but it seems to me that either the Government approve of all this nonsense, which would be a terrible state of affairs, or we are powerless to do anything about it, which in my view is equally unacceptable. I look forward to the Minister explaining which it is, but whichever it is, my hon. Friend the Member for Christchurch is right to draw the matter to the attention of the Committee and to pursue his amendment, which I support with gusto.

--- Later in debate ---

[Michael Connarty]

No, I do not want to continue with the Council of Europe. I have spoken at length in the House in debates on the functions of the Parliamentary Assembly, which I think is an excellent organisation that brings people back to why we come to Parliament. It is about the application of human rights. We often get tied up in playing our parties off against each other, but if we look through the lens of human rights we can very quickly see where the breaches are. There were huge outcries under the previous Government when we were locking up people for long periods without trial, which I objected to. Many of these things come back to the fundamentals.

The EU is adding its weight. It has more power than the Council of Europe to deliver judgments and make those judgments stick, because penalties apply to things that the EU gets involved in. If we decided to break away from a European directive, we could, as a country, be fined. When, for example, Bulgaria refused to come up to scratch with its legal system, it had all its EU finances frozen until it brought itself up to a standard that was acceptable.

The EU might attract many criticisms, and at times I find it greatly irritating, but I am pleased that it is adding its weight to the need to look at things on a human rights basis and to report on that. That is what the proposal is about.

[Mr Redwood]

Does the hon. Gentleman not accept, in retrospect, that when so many powers were given away by the House under the Labour Government, it would have been much better if they had asked the British people’s permission? The British people feel cheated now.

--- Later in debate ---

[Mr Nuttall]

My hon. Friend makes an extremely good point. The question arises what would happen in a situation which has partly happened now and will certainly happen in the next multi-annual framework, where the agency straddles two financial periods. How can an agency properly budget when its framework straddles two budgetary periods? It does not make sense. That is just another example of muddled thinking in Europe, and of an organisation that has no intention of being transparent or open to the people whom it seeks to serve.

[Mr Redwood]

I am sure my hon. Friend has noticed that in the supporting documentation it is asserted that there will be no impact on public sector manpower or cost. Having to deal with yet another one of these fiddly agencies means huge legal bills, on top of the ones that we have for the European Court of Human Rights and on top of our domestic ones. Is that not an awful lot of extra money?

[Mr Nuttall]

Yes. My right hon. Friend again makes an excellent point. We will find that someone who is concerned about a particular right in this country is faced with a plethora of bodies, and those involved in this field in this country have an extra body to liaise with on the European front. Whereas in the past they would just have looked to the contents of the European convention on human rights and the findings of the European Court of Human Rights, they now have to think, “I wonder what the European Union Agency for Fundamental Rights will think about all this. I wonder what it has said about it.”

I will not go down that road, as we have other amendments to consider and there is a further debate afterwards. I doubt whether we need that body at all. That is why I will support my hon. Friend’s amendments tonight. The body is unnecessary and it adds confusion to what is already a very crowded playing field in the area of human rights. I simply ask the Minister how the agency will benefit my constituents in Bury, North. How would they notice if it were simply abolished? That is what I think should happen.

--- Later in debate ---

[The Minister for Policing and Criminal Justice (Damian Green)]

My hon. Friend the Member for Christchurch (Mr Chope) provoked a very wide-ranging debate covering a large number of issues, some of which are to do with the Bill and a few of which are even to do with the amendments. They include the question of whether the Fundamental Rights Agency represents value for money and concern about the potential for duplication with the work of the Council of Europe, about which my hon. Friend the Member for North Dorset (Mr Walter) spoke so eloquently.

The Bill is limited to seeking parliamentary approval for an EU decision to agree the agency’s new five-year work programme. The programme simply identifies the thematic areas under which the agency will undertake its tasks. The amendments—my main contribution to the debate, Mr Evans, will be to talk about the amendments—have as their common purpose a desire to remove clause 1(2)(b) from the Bill, the effect of which would be to withhold parliamentary approval of the draft decision that seeks to establish the next five-year work programme for the agency. Without that parliamentary approval, the UK cannot vote in favour of this measure at EU level. I do not believe that withholding such approval is the right course of action. I urge my hon. Friend to withdraw the amendment, or the Committee to vote against it, for the following reasons.

The work programme is agreed by the Council. Agreeing the work programme provides member states—including, of course, us—with the opportunity to define the focus for the agency’s work for the next five years, encouraging it to concentrate its resources on a limited number of areas and to undertake targeted, in-depth research within the boundaries defined by the framework. The UK has participated actively in the negotiations that have led to the new draft programme being drawn up and is satisfied with the results. It is important for the Committee to be clear that the agreement of a new work programme does not alter the core tasks of the agency, nor does it change the agency’s role. The work programme does not set out or define these elements. They are set out in a completely different instrument—the agency’s establishing regulation, which is not under review in the Bill or in the amendments. I hear the views of many of my hon. Friends about the merits of the agency’s work, but neither this Bill nor the draft decision that it approves can do anything to bring about changes in those areas.

[Mr Redwood]

I think that we have all been entirely in order and that the Minister should reconsider. We are saying that we want this thing to do a lot less and to do it much more cheaply. That is entirely in order, and it is our one opportunity to say it. We in this Government are meant to be looking for cuts. This would be an exceedingly popular one, so will the Minister cut the thing?

[Damian Green]

I was not suggesting for a moment that my right hon. Friend, my hon. Friends or anyone else who has contributed to this debate were out of order; I was merely making the point that I want to address the amendments. My right hon. Friend has expressed his views with characteristic force, but I have to disappoint him by saying that the amendments would not achieve what he hopes they would.

Let me be clear about the consequences of the UK not approving the draft decision. Failure to agree the work programme would deprive the Council of the opportunity to set the direction of the agency by defining the themes. However, the absence of a work programme would not mean that the agency would go away or down tools. My right hon. and hon. Friends should bear that important point in mind when considering whether or not to support the amendment. If there was no draft framework, the agency would still be able to carry out its role. However, its focus would shift to answering requests for work from other EU institutions. Not supporting the framework therefore means that member states, including the UK, would have less influence on the work that the agency does. I do not think that that would be a good result for the UK and I suspect that my hon. Friend the Member for Christchurch would agree with that.

The themes set out in the work programme continue those in the current one, and I welcome the European Scrutiny Committee’s analysis that the proposed work programme can indeed be considered to be equivalent to the former one. Although there are some adjustments between the two work programmes with regard to terminology, the changes will not alter the work that the agency has been doing.

During negotiations the UK Government were successful in ensuring that the themes set out in the work programme should continue to be limited to Community law. Other member states proposed the inclusion of themes on police co-operation and judicial co-operation in criminal matters. That would have been an extension of the agency’s work and it was successfully resisted by the UK Government. The draft decision records that we were successful. Agreeing to the draft decision will ensure that that is a binding decision of the EU institutions. That is why we are asking Parliament to approve it.

Moving on to some of the specific points that have been raised, the issue of duplication of the work of the Council of Europe has been a feature of this debate. The agency’s role is to provide the EU institutions and member states with independent evidence on how fundamental rights are respected. It does so through undertaking research and producing comparative data of the situation of rights across those member states, and through producing indicators that can be applied across the EU. Some of my hon. Friends were treating it as though it were an alternative to either the European Court of Justice or the European Court of Human Rights. It is, in essence, a data collection and dissemination agency that does not do any of the work of the ECJ or the ECHR. I agree that that would be unnecessary duplication. The same point applies to those in this country who, quite reasonably, would not want to lectured by the Fundamental Rights Agency about our performance on human rights. It does not do that sort of thing—that is not the work that it does.

There has been much discussion and concern expressed about money. This, of course, has to be set in the context of the statement made by my right hon. Friend the Prime Minister earlier today. As he made clear—I think this was widely welcomed by all parties—the Government will continue to push for a good deal for UK taxpayers through agreement on the next multi-annual financial framework. The agency’s budget for the period covered by the next MAFF will form part of our negotiations following the agreement of that framework.

--- Later in debate ---

[Mr Chope]

I am grateful to my right hon. Friend the Minister for responding so frankly. What he has said illustrates the farce we are in. As a result of the commendable passing of the European Union Act 2011, we are being asked to approve, among other things, the work programme of the Fundamental Rights Agency for the next five years. If we do not approve the programme, we have been told, “Don’t worry—they’re going to go ahead with it anyway and choose their own programme.” Similarly, as the Prime Minister told us earlier with regard to the multi-annual financial framework—the next seven-year budget for the European Union—if a real-terms reduction had not been agreed, it would have carried on spending more than had been agreed anyway. That shows the extent to which we have been tied up in knots by the European Union and its institutions. The evidence coming out of this debate will be prayed in aid by people such as me when we get into the hard issues of debating whether or not it would be better to stay in or leave the European Union. I see this as part of that debate.

This debate has raised a number of interesting points beyond the Minister’s insight into what our powers amount to in this case. My hon. Friend the Member for North Dorset (Mr Walter) undertakes with extreme diligence his job as leader of the UK parliamentary group in the Parliamentary Assembly of the Council of Europe. He raised a number of serious issues. Such issues are being raised not just by him as leader of the UK delegation, but by a lot of other delegations. One such issue is that, at a time when the European Court of Human Rights and the Council of Europe are being starved of resources, we can see with our own eyes that the 27 member countries of the European Union feel that they can throw money at the gravy train that is the Fundamental Rights Agency. Sadly, I did not hear an assurance from my right hon. Friend the Minister about what the Government are doing to stop that. They may be powerless to do anything about it, for the reasons given in his speech.

I do not think that that is good enough. We now have a situation in which we know that a lot of that money is being wasted. My hon. Friend the Member for Shipley referred in his excellent speech to undocumented migrants in Europe having access to health care. That was the very subject on the agenda at the Warsaw conference that I attended and on which I expounded on Second Reading. What a waste of money that was.

The hon. Member for Linlithgow and East Falkirk (Michael Connarty) was concerned about the five-year delays in getting judgments. The European Court of Human Rights needs more money if it is to increase the speed with which it deals with its casework. It is not getting extra money because the 27 members of the European Union would prefer to spend their money on the Fundamental Rights Agency.

[Mr Redwood]

Does my hon. Friend not mean to say that the work load of the European Court of Human Rights should be severely reduced to leave more matters in the power of democratic member states? Surely he does not want more money to be spent at that level.

[Mr Chope]

As a lawyer—[Laughter.] As a non-practising lawyer, I believe that if somebody starts a case before the courts under the rule of law, it should reach a conclusion within a reasonable space of time. It is incumbent upon any organisation that operates a legal system to ensure that sufficient resources are available for the judges to reach decisions reasonably quickly.

[Mr Redwood]

Does my hon. Friend not agree with the Government’s very wise argument that we do not want so many appeals to the European Court of Human Rights and that individual litigants should be able to appeal only to our Supreme Court?

[Mr Chope]

I certainly agree with that in relation to our particular case. I look forward to debating that issue when we discuss the draft Voting Eligibility (Prisoners) Bill. Two months have gone by since the draft Bill was published and the Committee still has not been set up to consider it. However, that is another story.

Europe

John Redwood Excerpts

Wednesday 30th January 2013 Commons Chamber

[Mr Alexander]

Of course change is coming to the EU and we want to see it. The tragedy is that Conservative Back Benchers prevent the Prime Minister from addressing those changes in a sensible, serious way and from advancing Britain’s national interest.

[Mr John Redwood (Wokingham) (Con)]

I heard very clearly the Opposition rule out an in/out referendum at any time, but I have also heard the right hon. Gentleman’s reluctance to say never. Will he explain in what circumstances he will go to his party leader and say, “Things have changed. We need an in/out referendum”?

[Mr Alexander]

The right hon. Gentleman missed the “Today” programme on Saturday morning, of which the Foreign Secretary spoke. The position I set out last week in the studios reflected the fact that we could not sensibly and should not make a judgment now. As I have said, Europe is changing. The timing, character and impact on Britain and our national interests of those changes is as yet unclear. That is not a party political position but simply the reality. I do not start from a prejudiced view towards the EU. The right hon. Member for Wokingham (Mr Redwood) published a book called “The Death of Britain?” in 1999. As far as I am aware, Britain still exists. In that sense, I am not sure that his concerns—[Interruption.] He seems uncertain because he is adopting the shadow Chancellor’s hand gestures. I hope he soon adopts the shadow Chancellor’s economics as well.

On economics, senior British figures, including Sir Richard Branson and Sir Martin Sorrell, warned that the Prime Minister’s approach risked creating damaging uncertainty for British business. The Foreign Secretary did his very best to use the expertly drawn-up brief from the Foreign Office to suggest that British business was rushing to endorse the Prime Minister’s approach last week, but he was careful to give a series of quotes that endorsed a process of reform—not a single quote welcomed the prospect of a referendum, which is the basis on which economic stability has been put at risk. The Foreign Secretary does not need to take my word for that. On 24 October 2011, he himself claimed that an in/out referendum

“would create additional economic uncertainty in this country at a difficult economic time.”

For the record, since the Foreign Secretary made those remarks, it has been confirmed that the UK economy has shrunk by 0.3%, so perhaps he will take this opportunity to enlighten the House on how calling for an immediate in/out referendum creates, as he suggests, “additional economic uncertainty”, but committing to an in/out referendum years from now does not. The sound of silence speaks volumes. For all his best efforts today, we know that the origins, timing and content of the Prime Minister’s speech on the EU lay in the politics of the Conservative party much more than they lay in the foreign policy of the country.

--- Later in debate ---

[Mr Alexander]

What a revealing answer.

[Mr Redwood]

Are there any powers or changes that the EU is currently seeking or likely to seek in the future that the right hon. Gentleman’s party would regard as unacceptable?

--- Later in debate ---

[Mr Redwood]

Is not the problem that we thought we were joining a football club and now there is mandatory synchronised swimming?

[Richard Ottaway]

Yes, but my point is that it is an exaggeration to say that we are trying to play a different sport. We are trying to take a fresh approach. It is the multi-tiered approach that I think is most likely to win the day.

--- Later in debate ---

[Julie Elliott (Sunderland Central) (Lab)]

Thank you for allowing me to speak in this important debate, Mr Deputy Speaker.

I want to focus on the important impact that the European Union has on growth, investment and jobs in the north-east of England and my constituency of Sunderland Central. I was extremely concerned last week to hear the Prime Minister stating his support for an in/out referendum on our membership of the European Union. His announcement weakens our negotiating position and creates uncertainty in the markets and in industry, which will impede investment and thus jobs and growth. The timing of his announcement could not be worse. Last month in my constituency there were just under 4,000 people unemployed, 34% of whom had been unemployed for over 12 months. As the threat of a triple-dip recession looms large over our country, the Government’s priority should be ensuring stability, investment and growth.

This is a crucial time for areas such as Sunderland, yet with his speech the Prime Minister is creating volatility and undermining investment in the region. His announcement will mean years of economic uncertainty, deterring potential investors and destabilising the vital economic recovery that is critical for areas such as mine. The Prime Minister’s focus should, and must, be on our economy, rather than on pandering to his Back Benchers.

Nissan is a great success story for Sunderland. The plant there employs almost 7,000 people, and for every person directly employed by the company, another four are employed throughout the UK. The Sunderland plant is the company’s most productive factory in Europe. Nissan has invested a huge amount in Sunderland: some £3.6 billion since 1984. Only in December, it committed to building another car at the Sunderland plant, involving £250 million of extra investment and creating 280 new jobs. I worry about whether a multinational company such as Nissan would have made the same decision if the future of the UK’s trade relationship with the EU looked set to change.

[Mr Redwood]

Does the hon. Lady remember all the forecasts that her constituency would lose all that investment if we did not join the euro? We did not join the euro, and Nissan has put more in.

[Julie Elliott]

That is not the same point. We are not discussing the euro. We are discussing something far more fundamental to our country: the continuation of our membership of the EU.

The business stability needed to invest in car manufacturing is about long-term business planning. How can a company such as Nissan make long-term assessments of where to base its operation when access to its major market is put at risk by the threat of withdrawal from that market? Pulling out of the EU could result in a 10% tariff on car imports into the EU market, which would severely damage the UK car manufacturing industry and might prompt it to relocate. Across the north-east, 140,000 jobs depend on EU trade, of which more than 60,000 in Tyne and Wear and more than 8,000 in the city of Sunderland are EU-dependent. It would be misleading to suggest that all those jobs would disappear overnight if Britain withdrew from the European Union, but many of them would be lost over time, because the area would be at a competitive disadvantage.

In addition to jobs supported directly by the single market, there has been a substantial amount of investment in the north-east from structural funds to support employment and job creation. Between 2007 and 2013, £196 million was invested in the north-east through the European social fund to promote skills and employment, as well as €375 million through the European regional development fund to support regional competitiveness. Our involvement in the EU has delivered proven jobs and growth. That is something that we should be proud of and that we should protect.

Let us not forget the benefits that our EU membership has brought to British workers. Our membership has introduced employment rights, through the working time directive and other measures. The directive has delivered the right to at least one day off a week, the right to four weeks’ paid holiday a year, the right not to work more than 48 hours a week if a person does not wish to do so, and the right to a 20-minute break if they work more than six hours. Before I came to the House, I worked for almost 20 years negotiating with employers on behalf of the members I represented. I learned that we get the best deals when we negotiate from a position of strength. That is a simple principle, but it is an important one.

The Prime Minister’s announcement has seriously weakened the UK’s bargaining position. I agree that the European Union requires some reforms, but the Prime Minister cannot demand reforms while he is hovering in the doorway and threatening departure. Our EU neighbours will not be blackmailed, and as their allies and friends, we should not attempt to do that to them. When Labour was in government, we were able to negotiate flexibilities in the Lisbon treaty by working with our fellow member states and assuring them that our future lay in the Union.

The Prime Minister has said that he wants to remain in the EU, but with this announcement he is leading us even closer to the exit. This uncertainty for businesses, for markets and for investment opportunities will be extremely damaging for our country and for regions such as mine that rely, to an extent, on the EU for jobs and growth. His policy of wait and see is just not good enough; it is a wait that we simply cannot afford.

--- Later in debate ---

[Mr Cash]

I will make one further point before I give way.

I have just come back from Dublin, where, in my capacity as Chairman of the European Scrutiny Committee, I met the other 27 national chairmen. There was no doubt whatever in the statement made by the chairman of the Bundestag’s European affairs committee that, as far as he and Germany were concerned, delay was unacceptable. We also know, from listening to him and to the German ambassador, that there will be no cherry-picking and no negotiations of the kind that are being contemplated. The French take a similar view; I have had meetings with them, too. The reality is, therefore, that there is a serious requirement to make the decisions earlier rather than later.

[Mr Redwood]

I quite agree with my hon. Friend’s central point. Does he agree that the reason that we have this tragedy in Britain over our relationship with Europe is that more than 100 vetoes in important policy areas were given away at Nice, Amsterdam and Lisbon, against the wishes of the loyal Opposition in this House and probably against the wishes of the overwhelming majority of the British people, who were never consulted about the way in which their democracy was taken away and trashed?

[Mr Cash]

I absolutely agree with my right hon. Friend, and I will add another point. The recent analysis by VoteWatch Europe, which has been through every decision taken by the Council of Ministers in the past three years, demonstrates that in 91.7% of votes taken in that forum, the UK Government—under the aegis of UKRep and through the Council of Ministers itself—have voted in favour of the proposals in question. That is effectively a forced consensus, because we have only 8% of the votes in the Council of Ministers. When I hear Ministers and others talking about the degree of influence that we exercise in relation to qualified majority voting, I say yes, we have to have alliances, but we know that if others are not going to be in alliance with us, we will not get the kind of result that the British people deserve.

Ultimately, this is about one fundamental question. It is not just about the word “democracy”; it is about democracy in action and its impact on the daily lives of the people of this country. The reality is that someone goes into the ballot station, votes in secret and casts his or her vote based on a manifesto in which they are told what the party in question is offering them in a general election; that is what democracy is all about. When they cast their vote, they expect the legislation to follow what they have been promised. The reality is that, under this system, the whole of Europe is becoming increasingly dysfunctional, with riots, unemployment and the rise of the far right. Let us face it: we have to get real. The fact is that it is not working. That is why our debate is so important.

--- Later in debate ---

[Mark Hendrick]

In the unlikely event of the Conservatives winning the next general election, it is not clear that they would succeed in getting any of their shopping list of demands. They will want change in much of the social legislation. The working time directive has been mentioned, as have holiday pay and health and safety at work, and they might also wish to focus on measures such as the European arrest warrant and some justice and home affairs issues. There will be a long shopping list to placate Tory Back Benchers, therefore, but if, by some chance, the Tories win the next election, there will be huge disappointment. The situation will be the same as the Labour party faced under Harold Wilson in the 1970s: there will be a huge split in the Conservative party, leading to its being out of office for a long time—after all, it took Labour 18 years to be re-elected to office following that split in our party.

[Mr Redwood]

Does the hon. Gentleman think it was more damaging to run out of money and go to the International Monetary Fund or to offer people a referendum, as that Labour 1970s Government did?

[Mark Hendrick]

The right hon. Gentleman knows that none of the money offered by the IMF was used by that Labour Government. It was there as a back-up.

The Conservatives do not want a social Europe, with working time protection, holiday rights and health and safety regulation. The single market is about the free movement of goods, capital, services and labour. The right of workers to move around freely in the European Union is as important as the rights of capital, goods and services to do so. I have always supported the free movement of people whose countries are members of the EU. With the imminent accession of Romania and Bulgaria, we should seek to extend full rights to workers and not object to their having equal freedoms to other Europeans. Some 50% of the Polish people who originally moved to the UK following their country’s accession have now returned, because of the economic condition of our country under the current Government. The rest are making a valuable contribution to the British economy.

We know that every country’s economic fortunes are cyclical. Our economy is bad at present, in part because of the irresponsible policies of the current Government, but it will get better at some time in the future. Therefore, it is important that we continue to take workers from other countries; after all, 2 million Britons work elsewhere in the EU.

--- Later in debate ---

[Mr Turner]

Of course it would be better if these things were done more quickly, but we must persuade Europe to change. If it does, okay; we must offer it that chance.

I am never very biddable when it comes to voting for further controls or regulations from Europe; neither are some of my esteemed colleagues on the Government Benches—nor, indeed, are some on the Opposition Benches. We do not vote against the Prime Minister to be awkward, but because we sincerely believe that our relationship with Europe must change and because we know that many of those whom we represent agree with us. If that change does not happen, the people must be asked whether we should be in or out.

[Mr Redwood]

Does my hon. Friend agree that the fundamentally undemocratic point is that if we legislate through Europe, we cannot reverse it on our own, whereas if we legislate in this House and get it wrong, or if the Government were to change, it could be repealed the next day?

[Mr Turner]

My right hon. Friend has made the exact point that I was about to reach. I sincerely hope that the Prime Minister can renegotiate our membership and come to an agreement where we do not have to contribute so much and get so little. We need only one fundamental change in our relationship with Europe: full sovereignty must lie with the United Kingdom. That would mean those of us elected to this House would be truly answerable to our constituents. I know that the Prime Minister will keep his promise on a referendum. If renegotiation does not mean that sovereignty will be returned to Britain’s shores—I am sorry, to the United Kingdom’s shores—a referendum is the only option left. The issue is sovereignty.

--- Later in debate ---

[Mr Denham]

None of us is against competitive success, but the Prime Minister gave no clue about how he thought that should be achieved or about which failures to achieve it in the EU would lead him to a no vote. It was all motherhood and apple pie, as my right hon. Friend the leader of the Labour party said last Wednesday. We can always sign up to those five principles, but the speech took us no further forward.

[Mr Redwood]

Will the right hon. Gentleman give way?

[Mr Denham]

I shall do so a little later.

On the one hand, we have those who believe Britain can never again be a nation of power and influence; on the other, we have those of us who have few doubts about the capacity of our country and our people to succeed, our ability to have an influence that exceeds our economic power and our capacity to create a stronger economy in the future.

Some of the pessimists are the traditional Eurosceptics —that is, the UK Independence party and its allies in the Tory party. They still wear the flapping white coats that caused so much harm to the previous Conservative Prime Minister. Those defeatists have been joined today by a new group who are perhaps a bit sensitive to the taint of the past. Those new Eurosceptics—perhaps we should call them neurosceptics—enjoy a much more nuanced and subtle lunacy. Let us stay in the EU, they say, but only if we can act as though we were not part of it, by pulling out of agreement after agreement until there is no meaningful relationship left. Of course, the end game is the same: years of uncertainty and declining influence, which make it more likely to end in a British exit.

[Mr Denham]

A year ago, I voted with the Prime Minister of the hon. Gentleman’s party to say that an in/out referendum at that point would be damaging to Britain. Nothing I heard last week made the case that an uncertain referendum in five years’ time is not equally damaging. We never say never, but on the two issues that we are considering today, I think that the Prime Minister was right a year ago and wrong on Wednesday.

[Mr Redwood]

rose—

[Mr Denham]

I will not give way, as I have done so twice already.

The Eurosceptics and the neurosceptics have made the Conservative party ungovernable. The Prime Minister, who lacks the will, ability or interest to lead his party, was forced into last week’s speech. That pessimism is in their language. Historians will surely puzzle over how the party of Winston Churchill—indeed, that of Margaret Thatcher—became the party that sees Britain’s future in Norway and Switzerland and how a country with all our history, all the capabilities of our people and, notwithstanding our current difficulties, all our strengths should consider countries a 10th our size and with little of our influence as role models.

The pessimism is there in the Eurosceptics’ policy and in the call to withdraw from most of the provisions of the social chapter. They will say that it is about sovereignty, but it reflects a deeper belief that the creation of wealth is incompatible with ensuring that wealth is fairly shared among all the people who help to create it. They want us to turn our back on a broadly shared European value that we helped to create, which is that economic growth and social justice can go hand in hand. That is what leads neurosceptics like the Mayor of London to speak against serious banking reform, despite the damage done to the global economy and our own by the excesses and distortions of the past.

The debate is often clouded by concerns, sometimes quite legitimate, about this regulation or that regulatory threat, but those concerns are the cover for a much bigger and more pessimistic view of Britain’s future. Those who express them believe that we must give up on a fair sharing of wealth, on decent protection at work from exploitation and danger and on the shared obligation to protect our environment, which the Prime Minister attacked last week. That is the pessimist vision: a Britain that can compete only by offering ourselves to the worst regulated, most unstable and least committed global economic forces. That is, indeed, a possible vision of Britain’s future, but true patriots will say that it is not the best.

The real future that is possible—the best vision for Britain—will have sustained, committed private investment that builds on the research, the innovation and the skills that we have to offer, that understands that real success is based not on the quickest profit but on the creation of lasting value and that sees the potential to build strong companies, whether British or foreign, rooted in this country whose business success depends on our country’s success. That is the way to compete and pay our way in the world.

Although their economic prescriptions are founded on pessimism, much of the rest of the Eurosceptics’ and neurosceptics’ agenda is either fanciful or dangerous. On what basis should we believe that an isolated Britain will be able to negotiate more preferential trade terms than a large trading bloc; that an isolated Britain would have more diplomatic influence with the USA or with China and the rest of the BRICs than as an influential part of the EU; or that our constituents would be safer if we tried to tear up co-operation on justice, as though the drugs smugglers, the weapons dealers, the terrorists and the paedophiles will think, “Oh, Britain’s leaving the EU. We won’t go there any more.”? Evil people do not target the strong and the confident; they target the weak and the pessimistic. That leaves our constituents—the people of Britain—more vulnerable, not less.

That is not to say that everything is perfect. It is not. Change is coming and change is needed, so had the Prime Minister come to the House last week and said, “Let’s bring regional aid policy back to member states,” he would not only have united the House but won many friends in Europe. Had he come to the House and said, “Let’s change the state aid rules so that countries that want to develop an active industrial policy can do so within the single market,” he would, I think, have united the House and won many friends in Europe. Had he said, “Let’s change the rules on the movement of people so that benefits are only for those who have contributed through work and taxation, even if they aren’t members of a formal contributory scheme,” I believe that he would have united the House and won more friends in Europe than he thinks.

We have no idea what the Prime Minister wants to achieve, though. The Europe Minister tells us that we will have to wait for the Tory manifesto in 2015 to find out, and tells us nothing about what our Prime Minister wants to achieve in the next two years. That is the truth: it is not about British interests; it is about Tories and the next election. Our hapless Prime Minister dare not say whether he is with the optimists or the pessimists, and the price that our country pays is five years of paralysis, indecision and uncertainty. Britain deserves better than that.

--- Later in debate ---

[David Rutley]

There is an opportunity for Europe to respond, but it is not responding—in fact, it has been caught completely flat-footed by the economic crisis and is not responding properly. We want that to change.

[Mr Redwood]

Is not the true pessimism the Labour pessimism that says that Britain is not big enough and strong enough to have a strong presence in the world and that we have to kowtow to Germany and France to achieve that?

[David Rutley]

As so often, I agree with my right hon. Friend. I hope to build on that thought.

The reality of the world economy is shifting patterns of trade and emerging markets. They have been tapping us on the shoulder for some time and are now tapping even harder. Some hon. Members in the Chamber today may remember John Major pointing out to Peter Mandelson that if we do not notice when reality taps us on the shoulder, one day reality will grab us by the throat. Yet it is sadly clear that the EU has become divorced from reality—from real people and from real lives. When the British people voted to stay in the European Economic Community in 1975, it was for real world reasons—for jobs, for growth and for the common market—and at that time the EEC gave every impression that that was its purpose. The EU needs to give us and our constituents similar cause for optimism today. There is an urgent need for reform and a fundamental resettlement in the UK’s relationship with Europe.

This is not about being little Englanders. It is about being big Britons who want to seize the opportunities available in the global marketplace; so do big Germans, big Swedes and big Danes—not to be confused with Great Danes—and we need to work with them, our reformist friends, against those who should be called little Europeans, who would turn our continent’s shoulder to the world. Just as we led Europe to the single market, we can lead in its completion and help our local businesses and our constituents to compete better on the global stage. The channel is little more than 20 miles across, but the gulf is huge between the global economic horizons of the big Britons we represent and the continental introversion represented by the little Europeans on the Opposition Benches.

The EU has been caught flat-footed in the economic crisis, and the euro—a political creation—has been caught in an economic straitjacket, yet there remains clear political will among many people in the eurozone for it to succeed. That has already led to calls for deeper, thicker integration and less flexibility at national level, and that is not the Europe that was voted for. We are told that we should not demand a Europe à la carte, yet the eurozone members chose to set up a new club within the club of Europe and—perhaps unsurprisingly, given the problems that the euro has caused—they are now demanding a European fixed price set menu. The Prime Minister is resisting this, quite rightly.

The bottom line for our constituents is this: are we better off in or better off out? Are we more likely to create jobs and economic growth, or are we to be suffocated by excessive regulation and told that our national Parliament cannot do anything about it? Those are important questions that we want answered. We do not want to fudge them. The Government have already taken important action, which the Foreign Secretary told us about. We wanted to ensure that, if transfers of power to the EU were proposed, they would have to be put to the British people first, and we have achieved that by creating the referendum lock. Rightly, no further powers can be transferred to the EU without the British people having their say.

The Government have already taken action to kick-start the debate on the resettlement with Europe. The review of the balance of the EU competencies will provide a national audit of what the EU currently does and what it means for our country, and it will provide us with the information that is needed to take future decisions about our relationship with the EU and in the referendum that now, thank goodness, lies ahead.

The House will not be surprised that I regard myself as a Eurosceptic. As I said at the beginning, in scepticism there is hope, contrary to what the right hon. Member for Southampton, Itchen (Mr Denham) said. On the Government Benches and across the country, Euro- scepticism is on the rise. The Prime Minister and the Foreign Secretary are surely right to press for renegotiation before an in/out referendum and to work with our partners for a more competitive EU and one that is worth considering voting for.

Some people have asked, “What are you considering repatriating?” or “What do you want to renegotiate?” I commend the fantastic work that is being led by my hon. Friends the Members for South Northamptonshire and for Daventry (Chris Heaton-Harris) on the Fresh Start project. A wealth of options is being put forward there—worked through, thought through and analysed carefully. Take a look. I think that Opposition Members will find something to learn there.

This negotiation must be aimed, laser-like, at improving our economic position, cutting through red tape, safeguarding our financial services, delivering government at the lowest possible level and trusting the people to have the final say. That is the Conservative way. But in their heads the Opposition, with a few notable exceptions, do not want the British people to have their say. The reality of the Labour Government was the Lisbon treaty, with no promised referendum at the end.

--- Later in debate ---

[Alison McGovern]

No—the end of this process is the Prime Minister telling us and the British people how he would vote. That is the confusion.

[Mr Redwood]

rose—

[Alison McGovern]

I will make some progress.

[Mr Redwood]

rose—

[Alison McGovern]

I am tempted to give way but I will make some progress before I do.

Let us not forget the real issues. As I said, what matters to my constituents at the moment is the fact that our local authority has been cut to the bone and we are losing hundreds and hundreds of jobs. We are worried about employment and having a well-functioning economy on Merseyside where people have the money in their pockets to afford the prices in the shops. That is what people are really concerned about.

Because my time is limited and I have only four minutes left, I want to focus on a particular problem in Europe that I would have hoped we could all try to work together to deal with. This is timely, I hope, because yesterday a report by the Work Foundation demonstrated not only that youth unemployment is a significant problem on the continent of Europe but that the UK’s unemployment is higher than the European average, third only to Greece and Spain, and that we have youth unemployment that is higher than the OECD average. In yesterday’s Treasury questions, I asked how the Government planned to tackle the fact that their own predictions from the Department for Work and Pensions demonstrate that they have increased by 31,000 the number of young people to whom we will be paying jobseeker’s allowance by the end of this Parliament. We have the wrong economic plans. This problem cuts across the whole continent of Europe, and we ought to work together with our European partners to try to solve it. Considering this question helps to enlighten the debate about what we should do in Europe.

We need to focus on two things in the light of this problem. First, we need to rebalance the economy of Europe.

--- Later in debate ---

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Prime Minister’s speech last week was much delayed, much anticipated and over-hyped. It is already clear that the blip in the opinion polls is much less than he had hoped for. I therefore look forward to the internal debate in the Conservative party over the coming two years, and to the Prime Minister continuing to try to appease and assuage the egos of many Conservative Back Benchers.

I want to consider the so-called five principles and aspects of the Prime Minister’s speech. He said that

“we…need to address the sclerotic, ineffective decision making that is holding us back.”

Much of that sclerotic decision making in the EU happens because of unanimity rules. Can we therefore take it that the Prime Minister has called for more qualified majority voting? Conservative Back Benchers are shaking their heads, but Ministers cannot tell us the answer, because they do not know what the negotiating position will be.

Similarly, the Prime Minister questioned whether we can justify an ever-larger Commission, but the Commission gets larger because of EU enlargement and the accession of more member states. If the Prime Minister does not wish the Commission to become larger, the long-standing policy of successive Governments for further European enlargement has presumably been ditched. Alternatively, is the Prime Minister arguing that there should be a limit on the number of commissioners and saying that there might be future circumstances in which there is no British commissioner? We do not know the answer to that question because, again, the Government are unable to tell us.

[Mr Redwood]

Does the hon. Gentleman recollect that the Labour Government sold the pass on the number of commissioners by saying that not every state should have one? Perhaps that was one of the few sensible things they did to drive home the point that the Commission is a European government, not a representative government.

--- Later in debate ---

[Jack Dromey]

I am coming to that point in a moment.

On the argument that I have just deployed, I remember the chairman of the company then known as British Aerospace saying that we needed a single market, but that as a company and as a continent we could not succeed in the world on the basis of a race to the bottom. That brings me to my first concern, which is the hidden agenda that lies behind the Prime Minister’s argument. There was a tantalising glimpse of that last week when, extraordinarily, he seemed to suggest that we should return to the days when a junior doctor could work 100 hours a week. Repatriation is the cry, but the reality behind that is rolling back a generation of progress on workers’ rights and taking us back to the 1980s, an era I remember well.

Let me give the House an example, which relates to the acquired rights directive. The directive was legislated on at European Union level in 1978, and introduced here, reluctantly, by a Conservative Government in 1982. However, that Government did not extend it to cover 6 million public servants. What we saw was the most appalling Dutch auction, involving cut-throat competition as workers were transferred and suffered cuts to their pay, their holiday entitlement, their sickness entitlement and, often, their pension arrangements as well. I remember a particular example that I dealt with early on involving the Moreton-in-Marsh fire service training college, where 130 women caterers and housekeepers had seen dramatic cuts to their terms and conditions of employment. The only humorous side to that otherwise sad story was the fact that the managing director of the company concerned—Grand Metropolitan catering—was none other than a Mr Dick Turpin.

Two things happened at that time. First, in 1991, I took the case of the Eastbourne dustmen to the European Court of Justice, and we won. It was ruled that the British Government had acted unlawfully in denying protection on transfer from the public to the private sector. Secondly, employers themselves began to speak out. I remember Martin O’Halloran of ISS, the then chair of the CBI, saying that it was madness—that employers did not want a market based on a race to the bottom, and that they wanted a market in which we competed on quality and productivity, characterised by fair treatment and fair competition.

[Mr Redwood]

I, too, found that my attitude towards the single market changed in the 1980s, when I became the chairman of a big industrial company. I discovered that I had much better access, as an investor and as an exporter, to leading non-EU countries than I had to France and Germany.

[Jack Dromey]

I say this to the right hon. Gentleman and anyone else on the Government Benches: let us have some honesty in this debate. If they want to go back to the days of the 1980s, they should say so. If they want a Beecroft Britain, they should say so. If they believe that Britain can succeed only by driving down workers’ pay and conditions of employment, and by reducing their health and safety protection at work, they should say so. We will certainly be seeking to draw out what is undoubtedly their hidden agenda.

--- Later in debate ---

[Mr John Redwood (Wokingham) (Con)]

Who governs? That is the fundamental question before us in this mighty debate today. At what point does a self-governing country have to say it is no longer self-governing because the body of European law and the wide-ranging body of European decisions are so fundamental that Ministers and this Parliament can no longer effectively govern the country?

Too many of us have watched as Governments have given away mighty powers of self-government from these islands and from this once great Parliament to the European institutions, and we have worried greatly. This has been done in the name of the British people, but it has not been done with the consent of the British people. There has always been an excuse not to trouble the British people, and so often outside this House political parties have misled the British people.

The British people were told that they were joining a common market. It was very clear from the treaty of Rome onwards that they were joining a political, economic and monetary union in the making. They were told that they just belonged to a single market, needed to guarantee jobs in certain export industries. There were two misleading things there. First, we do not need to belong to the EU to export to the EU. Many other countries outside it export much more successfully than we have done from inside it. Secondly, it was always a far bigger and more noble venture in the eyes of its architects, its fathers and mothers, than a mere single market or internal market.

I ask Members of this Parliament to look around and see what has been done in their names—to see how difficult it is now for Ministers of the coalition, future Ministers and Conservative or Labour Administrations to do many of the things they would like to do or their electors wish them to do, because so many powers have been given away. The bigger the corpus of European law becomes, the more constrained are not just our Ministers, but this once-great Parliament.

[Mark Hendrick]

Does not the right hon. Gentleman accept that the cars exported from the UK to mainland Europe today are a result of foreign direct investment to the UK because the UK is within the European Union, not outside the European Union?

[Mr Redwood]

No. That is a trivial point compared with the issues that I am raising, and it is entirely wrong, because there are many countries outside the EU that attract as much as or more inward investment than we do. I want, as does the hon. Gentleman, to keep those jobs, and we will continue to attract and support that inward investment as long as we have a satisfactory enterprise economy here and a decent market. We have a very large market of our own. That is why those investments come here.

The hon. Gentleman needs to look around and see how many powers have been taken away. We can no longer have an agricultural policy of any kind unless it is the approved one from Brussels. Our fishing grounds are completely controlled and regulated from Brussels. Our energy policy is greatly circumscribed by a large amount of European legislation, regulation and price control, and many more decisions coming along on climate change and energy, which means that it is very difficult to have an enterprise-oriented energy policy in this country.

We find that we do not control our own borders. We have no say over who comes here from the continent of Europe, and they have come in very large numbers in recent years. Many of them are welcome, but a sovereign country has the right to decide who comes and on what terms. We were always assured by Governments that we kept control of our welfare policy—that that was a matter for domestic consideration. We now find that the EU presumes to instruct us to whom we give benefits and what benefits we give them.

[Michael Connarty]

This is a grand opportunity to ask the right hon. Gentleman, as I asked the hon. Member for Stone (Mr Cash), to outline what position he would take and on what issues he would vote to leave the EU—on a matter of emotion, or can he give me some specific issues that he says should persuade his party and his Government to vote no when it comes to a referendum?

[Mr Redwood]

I wish to help restore democracy in our islands and to do that we need to regain the veto. We should not have sacrificed 100 vetoes at Nice, Amsterdam and Lisbon. This Parliament needs to be able to decide whether a new law goes forward or not; otherwise we will find that in ever more areas—I am just beginning to illustrate some of them—we are a fax or an e-mail democracy. We receive the e-mails or the faxes from Brussels and this Parliament has to put through the measure, whether we like it or not. That creates a tension within our democracy. Successive Governments bring measures to this House and recommend them to this House. They are very fundamental measures, but they often sneak them through this House, or sneak them through upstairs, because they fear they are unpalatable to us. However, they know that there is nothing that the House of Commons can do once the agreement has been made in Brussels—and very often it is made without the wholehearted consent of the British Minister. In the case of this Government, it may often be made against the wishes of the British Minister, but this House is still expected to put through these measures come what may.

That is why we need a Government who resolutely negotiate a new relationship for us with our partners in Europe. Of course, I give no ground to anybody in wanting to maximise jobs and investment in this country, and my recommendations would increase that rather than reduce them, as we find with non-EU members already. However, I also wish to see the Prime Minister’s great speech used as a platform for setting out how we recreate a democracy and secure the right in this House to say no to European laws if we do not like them. We have waited a long time for a Prime Minister who would say honestly that this country does not share the aim of the treaties and of many of the member states of the European Union because we do not wish ever-closer union.

I have heard very few Labour Members say that they want ever-closer union, because they know that that means political, monetary, fiscal, economic and every kind of union known; it means the creation of a united states of Europe. Those who wish to join that, I wish well, but it was never Britain’s view that we wanted to be part of a united states of Europe. The British people, if asked, would say no to that idea. It is up to us now, at this late hour, to say that too many powers have gone and that they need to be returned if we are to restore this once-great Chamber to what it once was.

This Parliament wrestled power from over-mighty monarchs. This Parliament took on those who wished to dominate the continent of Europe and rejected the imperial ambitions of first Spain, then France, and then Germany. Because of the work of our predecessors in the House of Commons, we as a nation said to Europe: “We want a Europe of the free. We want a Europe of independent nations. We want a Europe where people’s sense of local belonging is respected. We are against a tyranny. We are against an over-mighty Europe. We do not believe that Europe can be governed as a whole.”

How proud that vision was, and how right it is that our Prime Minister has reminded us of the foundations of our beliefs: no to ever-closer union, yes to more democracy; no to restrictions and too much centralised government from Brussels, yes to greater freedom to breathe and to decide and to choose among all the smaller countries of western Europe. I suspect that many countries out there and many politicians in them respect that vision and are rather impressed by its boldness. We should all join together now in rallying the peoples of Europe to say yes to friendship, yes to trade, yes to co-operation, but no to centralisation and no to authoritarian interference.

--- Later in debate ---

[Mr William Bain (Glasgow North East) (Lab)]

It is 62 years since the treaty of Paris was adopted, and 57 years since the adoption of the first treaty of Rome. In that time we have seen peace among the great powers in Europe, a great boost to our growth and trade, and a greater sense of social unity between Europe’s peoples. That is now under threat because the Government no longer seem willing to make the case that pooling part of our sovereignty increases our collective economic strength within Europe, and that our influence in the world increases as a result.

The success of the European Union means that other countries such as Serbia and Turkey are queuing up to join, and the model of peaceful rules-based co-operation between nation states has been followed in Asia with the Association of Southeast Asian Nations, in Africa with the African Union, and in south America with Mercosur. We know from the views of the American Administration and the Government of China that our sense of and influence in the world is bound up with our full participation in the European Union, and we risk that at our peril.

Like my hon. Friend the Member for Sheffield Central (Paul Blomfield), my grandfather served during the first world war and my parents were children during the second world war when Europe was in the process of tearing itself apart.

[Mr Redwood]

Will the hon. Gentleman give way?

[Mr Bain]

Sadly I cannot because of time. For my generation, Europe stands stronger together with common rights at work, free movement for workers and a successful single market of 480 million with whom we trade more than 48% of our exports. On many issues, the common stance that we have adopted has added to our strength in the world. That is why, as a Scottish Member of Parliament, I am clear that we must remain part of the United Kingdom and through that play a crucial part in Europe. I am hugely concerned that the Scottish Government’s proposals to take Scotland out of the United Kingdom would impact on that strong link with Europe and lead to years of negotiations and uncertainty about our currency and central bank, and our inclusion in global trade agreements.

The EU is at an important crossroads and needs reform, not least of its economic policies. Through the fiscal pact to which 25 countries have signed up, we see southern Europe at risk of a generation of austerity. The tragedy of the Prime Minister’s leadership—as the ghost of Maastricht continues to stalk the Conservative Benches two decades after the ratification of that treaty—is that Britain is well placed to lead on major issues of reform such as reducing agricultural subsidies through the CAP, increasing Europe’s investment in science and innovation, and completing the single market in energy. Instead of prioritising those areas, the Prime Minister is throwing that opportunity away and trying to diminish the rights of workers within the single market to paid holidays, maternity and paternity leave, and safe conditions at work.

As the Government’s survey shows, if Britain is not part of the single market and if the rest of Europe completes it in our absence, our national income would be 7.4% lower—[Interruption.] The analysis, which Government Members can consult, was conducted by the Department for Business, Innovation and Skills.

The Prime Minister is placing his increasingly forlorn ambition of uniting his party above our national interests at the heart of Europe. It is the Opposition’s duty to make the positive case.

--- Later in debate ---

[Andrea Leadsom (South Northamptonshire) (Con)]

I am delighted to speak last from the Back Benches in this debate. Who laughs last laughs longest, so I hope to have some influence on Britain’s EU reform. I feel hugely optimistic. The Prime Minister’s vision for Britain at the heart of a new globally competitive EU, and an EU that is both fair and democratically accountable, is music to my ears.

I find it astonishing that Opposition Front Benchers say that the Prime Minister’s speech causes rather than resolves uncertainty. They need to focus on the fact that the uncertainty over Britain’s future in the EU is the same as the uncertainty over the EU’s future. The eurozone has faced an unprecedented currency crisis and an existential crisis. While we have been worrying about jobs and growth, they have been worrying about the literal collapse of their currency and their eurozone union. Change is not just something that Britain would like to have and haggle over a bit here and there at the edges; change is essential across the whole of the EU, something already in evidence in the recent actions in the eurozone.

[Mr Redwood]

My hon. Friend has done an important study of EU powers. Did she find that the EU either now controls, or has substantial influence over, every part of Government?

[Andrea Leadsom]

My right hon. Friend makes a good point. Clearly, as part of a newly negotiated relationship with Brussels, it will be important for Britain to bring back significant powers. At the same time, the EU is set to change itself. It is already changing significantly, and changing in ways that already benefit Britain. Just one example is the eurozone’s decision to create a single regulator for eurozone financial institutions, and the recognition that in doing so there was the potential for member states to caucus against non-euro members. It has been agreed, at the request of Britain and other non-euro member states, to have a double majority, so that eurozone members cannot exclude non-euro countries from having a say in a vote. That is an important, game-changing precedent that points the way to a future for the European Union. There is a group of eurozone members that need to move towards a country called Europe where they underwrite one another’s debts and move to a federal united states of Europe. At the same time, there can be another very strong group of non-euro member countries that can find a different path. The Fresh Start project, which I was closely involved in establishing 18 months ago, has recently recommended a number of reforms. I hope that the Government will take close account of its recommendations.

--- Later in debate ---

[Emma Reynolds]

We have been clear and consistent about our position. I was in the Division Lobby with each of the right hon. Gentlemen who are sitting on the Treasury Bench, voting against a referendum on our membership in October 2011. We are not the ones who have changed our position; they are the ones who have changed theirs.

The Government’s commitment to a referendum also weakens the UK’s negotiating position with the rest of the EU. Opposition Members would like meaningful reform of the European Union, but we do not do that by blackmailing our European partners. Although my right hon. Friend the shadow Foreign Secretary has been specific about what kind of EU reform he would like, the same cannot be said of the Prime Minister’s speech last week, which gave very little detail about which powers he wanted to repatriate. Indeed, he did not even mention the word “repatriation”—much to the disgust, I am sure, of his Back Benchers—and he was also unclear about how he would campaign if he was not successful in that negotiation. When the Minister winds up, it would be useful for the rest of the House and the country if he put an end to that obscurity and told us which powers the Conservatives are attempting to bring back. What is their strategy, if they have one, and why are they so sure that the timing, in 2017, chimes with any sort of timing in the European Union? Chancellor Merkel has gone very lukewarm on the possibility of treaty change. It is not clear that we will have any treaty change between now and 2017.

[Mr Redwood]

Why did the Labour party in office give away a lot of our rebate, which a Conservative Prime Minister had negotiated, and then get no agricultural reform, which it had promised?

[Emma Reynolds]

I correct the right hon. Gentleman: he may have longer experience than I do, but I can tell him that there was significant reform of the common agricultural policy, and we put our contribution, for the first time in our history, on a par with the French contribution.

Labour’s agenda for the EU is reform, not exit. We believe it is in our vital national interest that the UK remains a full member of the EU, arguing and pushing for reform from the inside. In a global economy dominated by economic giants—the US, China, India and Brazil—it would be economic madness to shrink our domestic market from 500 million people to 60 million people. The EU is the biggest collective negotiating tool when negotiating trade deals with those emerging economies. At a time when the economy is flatlining, the Prime Minister’s attempt to unite his party might prove incredibly damaging. [Interruption.] I hope that it is not, but those are the warnings that we are getting on jobs, trade and inward investment in the years to come. That is indeed regrettable.

Commission Work Programme 2013

John Redwood Excerpts

Monday 7th January 2013 Commons Chamber

[Mr John Redwood (Wokingham) (Con)]

I should be grateful if the Minister could tell us whether there is provision in the Commission work programme to deal with the new relationship for the United Kingdom that I believe the Prime Minister will be sketching in his forthcoming speech.

[Mr Lidington]

I appreciate that my right hon. Friend finds it hard to contain his excitement at the prospect of the Prime Minister’s speech. He will, however, understand if I decline to be drawn into speculating about the contents of that speech today. I am very confident indeed that when my right hon. Friend the Prime Minister makes his promised speech on European policy, it will address the important issues facing both the United Kingdom and Europe as a whole, and will chart a way forward that is in the interests of the people of this country in particular and the peoples of Europe more broadly.

--- Later in debate ---

[Mr Lidington]

Mr Speaker, the Whips on duty hear everything.

Overall, the Government have achieved some success in trying to shift the Commission away from a culture of regulation. Our reform agenda has widespread support and 12 other member states joined us in November in backing a 10-point plan for EU smart regulation. On 12 December the Commission published a new better regulation strategy, which includes a proposal that the Commission should use EU common commencement dates, which ought to help businesses plan for changes in regulation. It has also promised to introduce summary sheets for impact assessments to make it easier for businesses to assess the cost of new legislation.

[Mr Redwood]

Has not the EU been legislating all my lifetime? It has far more regulation than anyone could conceivably want. Why does it not have a year off? How can the Minister possibly say that it is going our way when all we see is more and more needless, time-consuming and costly regulation?

--- Later in debate ---

[Mr Redwood]

The Leader of the Opposition recently made a very interesting speech, in which he said that Labour had probably been a little too lax on migrants coming into this country during its period in office and that there was going to be a new policy. What would the hon. Lady like to see in the Commission’s work programme to ensure that we can have proper controls on our borders?

[Emma Reynolds]

That would be an innovative use of the Commission’s work programme, given that that is not an element of it. The Leader of the Opposition did say in a recent speech that we got it wrong in government and that we should not have had an open-door policy in 2004. I think that we should have been more in line with our European partners. We were one of the small handful of countries that had an open-door policy right from the start. Germany and other countries had transition periods, and we are certainly committed to them in the future.

Developing modern and efficient infrastructure, both digital and physical, is central to ensuring that the single market adapts to a rapidly changing world. It would be impossible for member states of the EU to meet the challenges of tomorrow using the tools of yesterday. We therefore welcome many of the proposals in the “Connect to Compete” section of the programme, particularly those to tackle obstacles to electronic payments across borders.

In the “Growth for jobs” section of the work programme, the Commission is right to express the concern that

“high unemployment, increased poverty and social exclusion risk becoming structural”

in Europe if no action is taken. It is an absolute tragedy that one in every two young people in Greece and Spain is out of work. Here in the UK, youth unemployment is too high and long-term unemployment is a real problem. Last year, including over Christmas, more people than ever before had to use food banks for their families’ basic needs. The Government seem to have few answers or solutions to those problems. The Opposition believe it is incredibly important that effective policies are formulated and implemented both here in the UK and across the EU to reduce unemployment drastically and to reduce poverty.

Oral Answers to Questions

John Redwood Excerpts

Tuesday 19th June 2012 Commons Chamber

[Mr Hague]

I am not aware of the particular comments, but the hon. Gentleman can rest assured that the Government support a strong, democratic, free and open future for Chile, and our relations with the Government of Chile are excellent on that basis. Looking to the future, there is no doubt about where we stand.

[Mr John Redwood (Wokingham) (Con)]

Will the Government seek a new and less intrusive arrangement with the European Union as many member states press on to a political union and centralised government that we could not conceivably join?

[Mr Lidington]

We want to see the eurozone restore economic stability. That is in the interests of the United Kingdom as much as any other European country. The Prime Minister is demonstrating, through his leadership on the agenda to do with growth, deregulation and trade, that the UK continues to shape the direction of the European Union in a way that serves the prosperity and security of the people of this nation.

Oral Answers to Questions

John Redwood Excerpts

Tuesday 17th April 2012 Commons Chamber

[Mr Hague]

The points are very clear in the statement that I have issued today—not in a rushed way but after full consideration, putting all the facts together for the House. On the one hand the right hon. Gentleman says that there is a rush, but then he asks for a rush on a great many other things. What is clear is that rumours within the British expatriate community about the matter were brought to officials on 18 January; that the allegations about Mr Heywood’s death, made by former Chongqing vice-mayor and chief of police, Mr Wang Lijun, were made on 6 February; and that on 7 February, the next day, officials brought those concerns to me—the same day that I instructed them to ask China to investigate. I think that puts into perspective some of the ranting of the right hon. Gentleman.

[Mr John Redwood (Wokingham) (Con)]

Will the Government seek prudent limits on the amounts of money that the European Central Bank can lend to weak commercial banks in the European Union, given our small shareholding and big interest in that difficult situation?

[Mr Hague]

That may be more a matter for my right hon. Friend the Chancellor of the Exchequer, but of course the governance of the European Central Bank is also not primarily for the United Kingdom, given that we are mercifully not part of the euro—and are not going to become part of the euro. So we might not be in a strong position to seek those limits.

Treaty on Stability, Co-ordination and Governance

John Redwood Excerpts

Wednesday 29th February 2012 Commons Chamber

[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.

--- Later in debate ---

[Mr John Redwood (Wokingham) (Con)]

This debate is about the future of democracy itself. There can be no more important issue. We are considering a draft treaty that presumes to take substantial powers of decision over how much a country can spend, how much a country can tax and how much a country can borrow from the democratic choices of the member state to a centrally imposed system, which it is hoped will make the euro work better. This matter is of vital importance to the United Kingdom because we wish our neighbours to live in democratic prosperity for their own sakes, because we wish to trade with them successfully and because we wish to make sure that there is no danger whatever that our cherished freedoms and independence as a member state that has deliberately kept out of the euro could in any way be damaged by this treaty, which presumes to use European Union institutions to enforce a non-European institution will.

The peoples of western Europe are right to be mightily worried about the bad state of health of their respective democracies where they have adopted the euro. We see daily on our televisions or hear reported on our radios dreadful scenes from Greece, Spain and Italy, which are struggling with the common economic discipline and policy being imposed today. The German-led new treaty says that such discipline is not strong enough, that there needs to be more mutually assured deflation and that there needs to be a madness imposed on these countries to try to see whether the euro will work.

Ministers rightly say that they must not say anything in public or be seen to do anything in public that makes the difficulties of the euro area worse. I fully endorse that approach. They should never normally comment on the euro, because it is too dangerous, it is too difficult and it is up to those in the euro to say what they wish about how their currency is developing. But how it develops is of grave interest to us, so I urge my right hon. Friend the Prime Minister to ensure that, in private, when he is round the table, as he will be, with all the other leaders and with a right to a view, he speaks truth to their impotence. He should say to those assembled leaders struggling to get a grip on their recalcitrant economies and some stability into their very unstable currency, “This is not working.” He should tell them that, in truth, the treaty before us this afternoon cannot conceivably make the euro work. Other things can help to ease the pain of the euro, and in another debate we could discuss many other policies that could pull off the trick of getting many countries through and the euro out the other side, but this treaty is not the way to do it.

This treaty is deeply offensive to many democratic peoples in the countries of western Europe that will face it. It reinforces a German view of how to make the economies of western Europe work that clearly is not working. If part of the medicine for a country that has borrowed too much is to spend less and borrow less in the public sector—that can be the right approach, and I can think of countries where that could apply—at the same time a series of policies have to be adopted to promote growth in the private sector, so that there is some hope, there are some new jobs and there could be new tax revenue coming in.

Where the EU is proposing tax rises, it needs tax reductions on enterprise, business and success. Where it is proposing a bigger monetary straitjacket, it needs monetary ease. It is now creating a very big monetary easing across the eurozone as a whole by tipping trillions of printed money into the system to try to make it work, but that new money cannot possibly help Greece or Portugal, because they have frozen and damaged banks, they are under the austerity cosh, and representatives of the European Union are going in and treating them as if they are damaged economies that cannot conceivably pull through.

The euro scheme is damaging the confidence that Greece and Portugal need in order to see light at the end of the tunnel; it is putting people off investing there. Why would someone go to Greece to invest through euros, if they think that it may be driven out of the currency and forced into a big devaluation? Why would they seek to do business in Greece when the banks are frozen and they are not benefiting from the liquidity injection that is helping the corporate bond market and the Government bond market, temporarily, in Italy and in Spain?

Above all, our Prime Minister has to secure and protect the British interest. We in this House should be very proud of what our predecessors created, obtaining control over how much is raised in taxation, how much is spent and how much this country borrows and prints. We are rightly out of the euro, because those in it cannot conceivably maintain democratic control over those issues. I am grateful to my hon. Friend the Member for Stone (Mr Cash) for raising this issue today before the summit, but we are worried that—inadvertently, I am sure—the Government might get us dragged into much greater supervision of our economy by the European Union, in a way that signs us up to the very mad policies that we are rightly warning them cannot conceivably work.

Europe is at risk: jobs are being destroyed; economies are being gravely damaged; the people are on the streets; and the main political parties in these European countries are signing up to exactly same policy, so even where a general election takes place the popular will is thwarted, as people do not have a proper choice if they stick to the main parties. In one or two countries Governments are even being changed by the European elite without a single vote being cast and without the democratic view of the people and their parties being consulted. Surely everyone in this House is ashamed of that. Surely we all unite in saying that the thing that brings us together is our belief in the power of the ballot box, the voice of the elected representative and the right of people to choose and to say that a policy is failing. We are told by the European establishment that only its policy can work. There is no evidence whatsoever that the policy is working, but there is massive evidence of the damage it is doing.

[Several hon. Members]

rose—

Iran

John Redwood Excerpts

Monday 20th February 2012 Commons Chamber

[Mr Jack Straw (Blackburn) (Lab)]

First, I declare that I co-chair the all-party parliamentary group on Iran, along with the hon. Member for Wyre and Preston North (Mr Wallace). I congratulate the hon. Member for Basildon and Billericay (Mr Baron) on securing this important debate. I was one of the people who supported him in obtaining the debate, although it will be noted that I have not signed his motion. If there is a vote, as I suspect there will be, I will vote for the amendment in the names of the right hon. and learned Member for Kensington (Sir Malcolm Rifkind) and many other right hon. and hon. Members.

I will first offer the House briefly my experiences of negotiating with the Iranians as Foreign Secretary. I visited Tehran on five occasions and I am the only Foreign Secretary who has visited Tehran since the Iranian revolution in 1979. I will also offer a brief assessment of where we are today.

I want to make it clear to the House that in supporting the amendment, I do not for a moment believe that we are anywhere near reaching the bar for military action. I am sure that I speak for my right hon. and hon. Friends on the Front Bench in saying that none of us is giving the Foreign Secretary carte-blanche approval for military action, and I am sure that he would not see it that way. The other side of the coin—I say this to the hon. Member for Basildon and Billericay—is that I do not think it reasonable to ask the British Foreign Secretary, on behalf of the British Government and Parliament, to negotiate on this difficult issue, but to remove one option that may, in distant circumstances, be necessary.

Some may ask how I square that position with the statement that I made in November 2004, when I was asked on the BBC whether I thought that Israel or the United States would go in for the bombing of Iran. I said:

“Not only is that inconceivable but I think the prospect of it happening is inconceivable.”

That was my judgment at the time. The fact that it has not happened in the intervening seven and a half years may suggest that I was not far off the mark. The more important point is why I made that intervention as stridently as I did. One reason was that we were engaged in two wars, as was the United States. It was inconceivable at that time, given the difficulties in both theatres, that the United States would wish to engage in a further military action even if it had the capability, which I doubt it did. The second reason was that we were making progress in negotiations with the reformist regime in Iran.

I accept what the hon. Member for Basildon and Billericay said about there having been a number of missed opportunities in dealing with Iran. Tony Blair asked me to go to Tehran as a positive response to President Khatami’s reaching out to the west straight after 9/11. Mr Blair took a risk there. He responded in a positive way by sending me. We had the support of the US Department of State. I am sad to say that our efforts were partly undermined by the line in President Bush’s speech at the end of January 2003 and by other efforts to undermine the strategy, although not by the State Department. That said, we made progress with Khatami. After an extraordinary and tense negotiation in October 2003, when Joschka Fischer, Dominique de Villepin and I came very close to walking out altogether, we got the Iranians to agree to a series of measures, including effectively abandoning their work on a nuclear programme and signing an additional protocol under the non-proliferation treaty. The effectiveness of that agreement is shown by the US national intelligence estimate from four years later, which stated:

“We judge with high confidence that in fall 2003, Tehran halted its nuclear weapons program”.

[Mr John Redwood (Wokingham) (Con)]

On reflection, does the right hon. Gentleman think that the war in Iraq increased the stability or the instability of the middle east?

[Mr Straw]

I hope the right hon. Gentleman will allow me not to go down that particular rabbit hole. I have given endless evidence to the inquiry into Iraq, and I do not resile from my support for that military action, not least for the reasons that my hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) gave. We can have that debate on another occasion, but it is incontrovertible, as the hon. Member for Basildon and Billericay showed, that the Iraq war changed the balance of power in the region. We knew that it was going to do that, but that provides still more reason for us to use better our relations with the US.

Progress was made, but for a variety of reasons, including errors by the US, the reformists lost out and President Ahmadinejad came to office in the summer of 2005. Since then, there has been a gradual deterioration in relations with Iran, despite, in my judgment, the best efforts of successive British Governments and many others. I wish that I shared the view of the hon. Member for Basildon and Billericay about whether it will be possible to achieve a shift by the current Administration without any pressure. I have literally sat across a table from President Ahmadinejad trying to negotiate with him—an interesting situation that did not lead to any great progress. Since 2009 and the disgraceful attitude of the Iranian authorities towards the elections, and then following their reaction to the Arab spring, things have got worse, not better.

--- Later in debate ---

[Mr Hague]

The hon. Gentleman is right. I will make that clear when I come to that point.

[Mr Redwood]

Given the amount of blood and treasure that we have shed in the middle east in recent years, does my right hon. Friend agree that in this difficult and potentially dangerous situation we should look to the considerable regional powers to take the lead, in consultation with the United States of America, and not rush in ourselves?

[Mr Hague]

Of course we need to work on this with all the regional powers. My right hon. Friend can be assured that the regional powers are extremely concerned about Iran’s nuclear programme. However, we also have our responsibilities as a member of the United Nations Security Council, and we must live up to those responsibilities on this, as on all other occasions.

European Council

John Redwood Excerpts

Thursday 26th January 2012 Commons Chamber

[Mike Gapes]

If my hon. Friend looks at Hansard, he will see that I was not blaming Britain for the problems in the eurozone, but saying correctly that our influence in the European Union will be reduced because of the misguided tactics adopted by the Prime Minister.

[Mr John Redwood (Wokingham) (Con)]

Will the hon. Gentleman give way?

[Mike Gapes]

I will make some progress first.

As a result of the European Union Act 2011, the Prime Minister has boxed himself into a position in which there must be no potential for a referendum in this country. As he was trying to assuage his 81 Europhobic Back Benchers, he took the easy option of making a political decision rather than one in the national interest, which would have been to remain in the negotiations and to carry on trying to influence the outcome. As a result, when discussions conclude on the arrangements, if they are based on the fourth draft agreement—I quote the House of Commons Library Paper—

“the Heads of State or Government of contracting parties whose currency is not the euro who have ratified this Treaty and have declared their intention to be bound by some of its provisions”

would be invited

“to a meeting of the Euro Summit”.

However, those who did not agree to the intention to be bound by the provisions and were not participating would have no automatic right to attend. The Library paper states:

“This would appear to exclude the UK as a non-Euro, but crucially also a non-contracting State.”

There is a potential, therefore, for us no longer to be in the room, even as an observer, because of our misguided decision in December to walk away from the process.

--- Later in debate ---

[Mike Gapes]

I suspect that when the eurozone finally resolves the crisis, whether this week, which is doubtful, or on 1 and 2 March, which might be more likely, and when the 20 or so countries—perhaps 25 or 26, depending on how many of the existing 17 euro countries and the others eventually sign up to the package—agree to abide by the provisions, our influence will cease to be as strong as it has been. As a result, one other thing will develop: the pre-meeting discussions that take place within the European People’s party network, the conservative group that dominates the politics of the European Union—the right of centre, not the left of centre, are in control in the EU—the Sarkozy-Merkel meetings, or meetings involving Poland and the new right-wing Government in Spain, will not include the UK. When the bigger countries pre-cook the agendas, we will not be there and we will not be heard. That is potentially very dangerous.

[Mr Redwood]

Does the hon. Gentleman not understand that one has to pay to play? If we were in the room, the other countries would expect us to divvy up, as they are short of money.

[Mike Gapes]

More than half our trade is with the European Union. Our companies, and the future of the City of London and its relationship with the eurozone economy, are greatly affected by what happens in Europe. Those who want to move out to the middle of the Atlantic or who believe that somehow we can reinvigorate the Commonwealth and go back to imperial preference, are not living in the real world for the British economy. Our national interest is to have prosperity and success. As the Chancellor of the Exchequer has made clear, it is in Britain’s national interest for the eurozone to succeed and for the current crisis to be resolved. Clearly, Conservative Members do not agree with the Chancellor’s words. They wish to see the eurozone fail—[Hon. Members: “Rubbish!”] Well, the hon. Member for Gainsborough (Mr Leigh) seemed to say that. If he disagrees, he can intervene again. They want to see the eurozone fail because they believe that somehow that will be in the national interest of this country. It will not.

--- Later in debate ---

[Damian Collins]

The problem with the stability rules has been that when there should have been interventions or challenges the opportunity has been ducked. That has allowed countries to fudge the rules, has made a shambles of the stability pact and has undoubtedly led to the crisis we face now. It demonstrates something that many hon. Members have known for a very long time: this was primarily a political project and the objective was to get as many countries in as possible and to keep them in whatever the cost, even if the cost was to the member states.

The other point made by the hon. Member for Rhondda (Chris Bryant) was about the concern in member states about whether staying in the euro is good for them or not. Since the December Council we have seen a greater understanding of what staying in the euro will mean. In effect, as my hon. Friend the Member for Stone (Mr Cash) said in his speech, it will mean that the European Commission will decide on budgets for member states, on debt levels and on spending and will enforce measures through the European Court to correct those states if they do not comply. The price of continued membership of the eurozone will then look increasingly high. I believe that might lead some countries to question whether to stay in—or, perhaps, the markets will make that decision for them. No doubt the events of the next few months will give us a good idea of how that will play out.

The challenge is for Europe not to continue as a fortress Europe, but, instead, to be a market Europe that looks to open itself up to the world. That is the best thing for its competitiveness and prosperity and for the future of all its citizens.

This month, the European Council published “The European Council in 2011” , which looks back at the previous year. The President of the Council, Mr Van Rompuy, said that

“we can draw confidence from the political will we mustered in the past year”.

I am glad that one person in Europe draws confidence from the political will mustered by the European Council, because I think most people see a failure of leadership and a great deal of concern about the effectiveness of that body to lead in the future.

In the same chapter of the book, which is entitled “The road ahead”, Mr Van Rompuy goes on to say:

“The key for the future is to harness the forces of change.”

I believe that is right: Europe needs to harness the forces of change. That requires a change of direction, however, rather than acceleration down the old worn path, which is where it is heading.

The document also states that the level of economic integration—in effect, the creation of a common economic policy—will remain high on the agenda for the European Council this year. It states:

“‘Member States shall regard their economic policies as a matter of common concern’. In 2012, we will further examine a deepening of our economic union, a subject on which I will report to the March European Council.”

It goes on to say:

“We must demonstrate that the euro is more than a currency: an irreversible project, a common destiny.”

That underlines the concerns that many of us have had for some time that the leaders of the European Council and leaders in Europe have been blinded by the political objectives behind the euro to whether it is truly sustainable for those countries.

Hon. Members have already remarked that trade is an important part of our membership of the European Union and that half of our trade is with the EU. That is true, but UK trade figures for the past 10 years show that the growth comes from trade not with the member states of the European Union but with the emerging consumer markets around the world, in Brazil, Russia, China and India. That is common in countries such as Germany, too, because as the world economy grows and there are more consumers, we need to be in the market competing for their goods and services.

[Mr Redwood]

Does my hon. Friend recognise that because of the Rotterdam entrepot effect of goods going through that port to other parts of the world and because of large service exports to non-EU countries, the true figure is under a third? It is nowhere near half.

[Damian Collins]

I thank my right hon. Friend for that important contribution. It follows my point that the future of our trade and growth will increasingly lie beyond the borders of the EU and not solely within it. That should not make us any less European; we must simply recognise that the world economy is growing, that it is growing outside the EU and that those economies are increasingly competitive. They have more consumers with more money in their pockets and more demand for the products we can sell. Our challenge, and that for Europe, is to make ourselves open to those markets. Rather than having European rules and regulations, particularly on social and environmental law, that seek to add costs and make us less competitive, we should review them and consider whether they are truly fit for the modern world in which we live. That would give us the chance to compete in this more competitive and growing global economy.

That is the crisis that Europe faces as it reaches its crossroads. Its rules and regulations have created a union that is less competitive than it should be and more weighed down with debt. Currency union has not supported the weaker countries but has emboldened and added weight to the strength of those already strong economies, such as Germany. Those fundamental issues must be addressed as Europe faces its crisis. I believe that they are the issues that the Council must tackle. It will require a more flexible and open Europe in which, I believe, the UK can act as a fellow traveller, setting the course of direction. We must be very clear that if Europe will not move and will not change, we cannot afford to be held back by it.

--- Later in debate ---

[Mr MacShane]

I am very happy to hear the hon. Gentleman gloss over his speech, but that is the point I was making.

I am all for exporting to the BRICs, but their growth rates are slowing. India is talking about a return to “Hindu economic growth” and China might go as low as 8% or 7%, which is a real worry for the Chinese authorities. The same is the case in Brazil—[Interruption.] Hon. Members say that that is not bad and, of course, I would love a 7% growth rate for my own country, and I shall come to that. However, rapidly developing countries throughout history have had very high growth rates when peasants and others move from the fields and core industries are developed, but the plain fact is that we export more to Ireland than to all the BRICs combined. Belgium exports more to India than we do. The absurd notion that Brazil, India or Russia, run by kleptocrats, are an alternative to the mature, balanced, middle-class consumer economies of the European Union is not right.

[Mr Redwood]

Does not the hon. Gentleman understand that the markets that feed and clothe him are the people? The markets we are talking about today are his pension savings, his other savings and those of millions of other people who are trying to protect themselves from the euro disaster.

[Mr MacShane]

I do not really want to get into a debate about the markets as I am also pro-market, but the markets are also Mr Hester, the hedge fund billionaires and the donors to the Conservative party who make a fortune out of speculation and who have so increased inequalities in the past 30 years that we now have a generalised social crisis that might cause severe dislocation.

I do not share the cataclysmic views that some have about what the Prime Minister did on 9 December. I think he was ill-advised, that he allowed the Treasury to run the negotiations and that the key decision was taken at a time—2.30 am—when no sane person should take a decision. None the less, the plain fact is that across the rest of the European Union there is a sense that Britain does not want to engage or be fully part of the EU. Last week, at a conference with the former French Defence Minister who negotiated the French side of the French-British defence treaty of 2010, I was surprised to hear his extraordinary, virulent attack on what one could call “Albion perfide” and how Britain was no longer a defence player with France, was not prepared to co-operate and was doing all it could, he said, to sabotage the good effects that the treaty would have. That is the reputation we have and that worries me.

It also worries me to hear reports that one of the new intake on the Government Benches, whom I shall not name, said in a conference over the weekend that it would have been impossible to have been selected as a Conservative candidate in recent years—or, indeed, to be a Conservative MP—without showing the most strident Euroscepticism. [Interruption.] Well, if there is an exception that proves the rule and if the hon. Member for South Swindon (Mr Buckland) is about to make a pro-European speech I shall welcome that. None the less, that is the impression in this country.

--- Later in debate ---

[Martin Horwood (Cheltenham) (LD)]

First, I congratulate the Backbench Business Committee on selecting this topic for debate, although on this occasion I agree with the hon. Member for Stone (Mr Cash) that it might have been better to debate this issue in Government time as it is critical for this country.

While I am on the theme of congratulations, let me congratulate Sharon Bowles, MEP, on her recent re-election as chair of the economic and monetary affairs committee of the European Parliament. She was once voted one of the top 10 economic regulators in the world and she has presided over innovations such as the attempt to introduce regulation on bankers’ bonuses that would prevent someone like Fred the Shred from ever again walking away with a huge bonus from a failing bank. For that alone she deserves congratulation and I am pleased to see her retaining her place as one of the most influential Liberal Democrats in Europe.

I repeat my earlier congratulations to the Deputy Prime Minister on convening the European Liberal leaders forum on issues relating specifically to this debate in London on 9 January. The forum agreed a programme of reform and competitiveness for Europe that would probably unite Conservative and Liberal Democrat Members of this House at least. That is a good example of how to build alliances across Europe and engage with Europe in a proactive way.

It is good to see Britain at the table for the summit. Clearly, there is the main summit, which is supposed to be focusing on prosperity and growth, but there is also the rather important sideshow of the 26 making further progress towards the fiscal compact, which is critical for Britain, and I am very pleased that the Government have made sure that Britain is an active participant in the process, albeit with observer status. I know that Ministers have been active behind the scenes getting Britain involved in the process and making sure, for instance, that the fiscal compact treaty does not spill over into areas outside its proper remit, such as the construction of the single market. As Liberal Democrats have pointed out, that is one of the risks of our relatively isolated situation in Europe.

[Mr Redwood]

Does the hon. Gentleman think that at this point the power to fine Greece and then fining her would cut the Greek deficit?

[Martin Horwood]

I shall not be drawn into that. Critically, it is for the eurozone countries to address the crisis in the eurozone. The right hon. Gentleman highlights the important point that just by drawing up a treaty the eurozone countries do not solve some of the rather fundamental problems in the eurozone. In fact, the situation in Greece is becoming increasingly serious and it needs to be urgently addressed—that is even more the case now than in recent months.

The importance of the main business of the summit must not be neglected. Britain’s re-engagement in European affairs is critical and it must be pushed forward. There have already been some successes. My right hon. Friend the Secretary of State for Business, Innovation and Skills helped to create the like-minded growth group, which has pushed forward ideas such as lifting onerous accounting rules from the smallest businesses in this country. I think the group has helped to create a shift in Commission attitudes on the smallest businesses to the point where it has committed to review all existing EU legislation to look for other opportunities to lift onerous regulation from such businesses and to screen new legislation to see whether, wherever possible, the smallest businesses can be excluded. That is exactly the kind of agenda we should be pushing in Europe.

--- Later in debate ---

[Mr John Redwood (Wokingham) (Con)]

I rise to support the Prime Minister. I think he had no alternative but to say no to a very unsatisfactory deal and to a totally inappropriate proposed measure at that Council. Nor do I think he has lost Britain influence by doing it; I think he has won Britain influence by doing it. We learned subsequently that several non-euro member states could not go along with the draft any more than the United Kingdom could. We also learned subsequently that France, Germany and others are now beating a path to the United Kingdom Foreign Office door, trying to get us back on board, trying to woo us because we had the courage to say no.

We meet today because we wish to influence our Government in what they are doing at yet another important European summit. The European Central Bank has bought the Europeans a little time by printing and lending unprecedented sums of money to a very weak European banking system, but those meeting would be wise to understand that that has only bought a little time; it has not solved the underlying problem. Indeed, there are two underlying problems. There is the inability of the southern countries to compete with Germany at the fixed exchange rate within the euro, making them poor and giving them large balance of payments deficits which they have trouble financing; and there is the big problem of the southern states’ debt getting ever bigger. As their economies are malfunctioning, because so many people are out of work and because they cannot price themselves back into jobs, their debts and deficits go on soaring, and now in three cases member states of the euro area cannot finance those deficits in the normal way and have to be on life support from the EU and the IMF.

[Martin Horwood]

On the subject of the right hon. Gentleman’s support for the Prime Minister, will he join me in welcoming the Prime Minister’s remarks this morning in Davos, when he said,

“Let me be clear. To those who think that not signing the treaty means Britain is somehow walking away from Europe let me tell you, nothing could be further from the truth”?

[Mr Redwood]

Of course the Prime Minister is right that we are in the European Union and all the time we remain in it we have to use our membership as best we can to protect the interests of the British people.

The main purpose of the summit must be to try to deliver greater prosperity and some growth and some hope to the peoples of Europe, because their hope has been depressed and their prosperity is being destroyed by a system that cannot conceivably work. The euro area is now locked into a system of mutually assured deflation, a mad policy, and the more those countries’ economies decline, the more the deficits go up, the more they have to cut. They cannot get themselves out by monetary means, in the way that the United Kingdom and the United States can, by creating more money in their system, and they cannot get out by having a competitive exchange rate.

[Mike Gapes]

rose—

[Mr Redwood]

I am sure that was the point that the hon. Gentleman wanted to make.

[Mike Gapes]

If the right hon. Gentleman is so against the austerity deflation policies in the eurozone, why is he supporting the austerity policies of his own Government?

[Mr Redwood]

As I just explained, it is totally different if a country has its own currency and can use monetary mechanisms to try to grow its way out of the problems, and can establish an exchange rate that allows it to export its way out of the problems, which is exactly what these countries have to do, yet are unable to do because they are locked in.

[Mr MacShane]

rose—

[Mr Redwood]

I have no more injury time available, so I need to develop my argument rapidly.

If those countries are to have some hope of prosperity, they need to solve the two underlying problems. It is obvious to most external observers that the way to solve the problem of competitiveness quickly is to devalue. Normally, an IMF programme for a country in trouble not only asks it to cut its budget deficit and reduce its excess public spending, but suggests that it devalue its currency and move to a looser monetary policy domestically, so that there can be private sector-led growth, export-led growth—the kind of thing it needs to get out of its disastrous position. That is exactly what those countries are unable to do. That is why the IMF should not lend a country such as Greece a single euro or a single dollar. Greece is to the euro area as California is to the dollar area: it is not an independent sovereign state, and it cannot do two of the three things that a country needs to do to get back into growth and prosperity, because it cannot devalue and it cannot create enough credit and money within its own system.

We need to give honest advice to our partners and colleagues in the eurozone, around the European conference table—in private, not in public—that the only way forward, the only way to resolve the crisis for those countries that can no longer borrow in the marketplace at sensible rates of interest, is to have an orderly way of letting them out as quickly as possible, so that they can re-establish their own currency, their own looser and appropriate monetary policy and their own banking policy, and offer some hope to their subject peoples.

I am very worried that this is not only an economic crisis, a banking crisis, and a currency crisis, but also now a crisis of democracy. The challenge, in countries such as Greece and Spain, is how the Governments manage to get buy-in to the policy of deflation and cuts with everything that is the only offering from the euro scheme and the euro system. We see in some of these countries now that the electorates do not choose the Government; the European Union’s senior players choose the Government. We see in some of these countries that the electorate change the Government but they do not change the policy. The new Government have to pledge to follow exactly the same policy, which does not work, in order to get elected and to be acceptable to the European Union, in order to carry on drawing down the subsidies and loans from within the European Union that have to be on offer to try to make the system operate to some extent.

I hope that the British Government will adopt the following position. I hope that they will say in public, whenever asked about the euro, that the British Government have no intention of providing any running commentary on the euro whatever or of saying anything that makes the position of the euro worse, but will always give good, strong, independent advice in private. That should be the public position. It is too dangerous to say things. Most of the things that politicians say about bond markets and currency crises make the position worse, so the United Kingdom would be well advised to have a simple formula, which all Ministers use, that we are providing no commentary on the euro and we wish the euro members well in sorting it all out.

In private, we are important allies and partners of the euro area and the British Government need to give honest advice to try to get our continent out of this mess. I do not believe there is a single fix that can solve that problem for all the countries currently in the euro. Many of them went into the euro with inflation rates that were too high, with state deficits and debts that were too high, and with currencies that were not in line with the German currency. It was a huge error. The founders of the euro knew that there had to be very strict requirements; they broke them from day one.

It will not solve the problem to sign up to some new constitutional pact that says that a country down on its luck, unable to borrow money, running out of cash, will be fined. Who will pay the fine? The answer is that the fine would have to be lent to the country in trouble by the very people who are fining it. It is so preposterous that I find it very difficult to believe that serious people can sit round a table, negotiating such an instrument. They should cast aside the draft instrument. It is irrelevant; it cannot work. They should sit down in private and work out how to get non-competitive countries out of this mess before even more damage is done to their economies and their democracies.

--- Later in debate ---

[Emma Reynolds]

My right hon. Friend makes a valid point. If the Prime Minister had not pulled his MEPs from the mainstream centre right in the European Parliament when he was Leader of the Opposition, he would have found that he had much more influence before the summit, because he would have been in Marseille for the European People’s party meeting in preparation for the European Council summit.

It is of real concern to the Opposition that by isolating the UK the Government have lost influence with our European partners and could lose influence over the single market. Deeper fiscal integration by the eurozone countries does not necessarily lead to the development of separate trade policies or separate decisions on the single market, but that could come about if the UK continues to lose influence.

I understand that the Polish Government are now seeking to secure a seat at the frequent eurozone summits—a logical negotiating position. If they are successful, they would then have a voice, even if they did not have vote, at eurozone summits. As it stands, our Government will be barred from such meetings, leaving the UK without a vote and without a voice, unable to guard against eurozone Heads of State and Government straying into areas of decision making that are relevant to the EU of 27.

[Mr Redwood]

Will the hon. Lady bring us up to date with Labour’s thinking on any vote that we might face in this House on money for the IMF to lend on to euroland countries in trouble?

[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.]

Oral Answers to Questions

John Redwood Excerpts

Tuesday 17th January 2012 Commons Chamber

[Mr Lidington]

I really had hoped that the hon. Lady would have something a bit better to say than that. What the Government are determined to do is to support our allies and neighbours in the eurozone in their efforts to restore economic stability to their currency union, and also to press for the measures to promote job creation and economic growth which the whole of Europe desperately needs. We are not prepared to take lectures from the Labour party that signed away £7 billion of the British rebate and denied the people of this country the referendum on the Lisbon treaty, which it had promised.

[Mr John Redwood (Wokingham) (Con)]

Does the Minister agree that the gloom about the consequences of an early break-up of the euro has been greatly exaggerated, bearing in mind the very positive economic experience for eastern European countries from the break-up of the rouble zone—very similar to the euro—in the early 1990s?

[Mr Lidington]

I have to say that it is unusual to find my right hon. Friend looking to the example of the former Soviet Union for inspiration. We have looked across Government very carefully at what the consequences of a eurozone break-up might be, and one of the key differences between now and 20 years ago is that the economies and the financial systems of Europe are much more closely interlinked now than they were then. It is certainly our judgment that it would be damaging to the British national interest were a collapse of the eurozone or a prolonged recession in the eurozone to take place.