Economic Growth Debate

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Department: HM Treasury

Economic Growth

William Cash Excerpts
Wednesday 15th May 2013

(10 years, 12 months ago)

Commons Chamber
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Jim Hood Portrait Mr Jim Hood (Lanark and Hamilton East) (Lab)
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I am delighted to have caught your eye, Mr Deputy Speaker, and to speak in the debate on the Gracious Speech. I made my maiden speech in a debate on the Gracious Speech on 8 July 1987, following Mrs Thatcher’s third victory. I remember using an analogy. I said that the Government and the Gracious Speech were more of the same poison in a different bottle. I thought of that comment when I looked at the Conservative Back-Bench amendment. It is déjà vu, or Maastricht, all over again. If historians check the speeches on the Maastricht debate in Hansard against what we have heard in the past hour or so, I am sure they will understand what I am saying.

William Cash Portrait Mr William Cash (Stone) (Con)
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As one who led the Maastricht rebellion, I should say that, at the time, we made predictions. Exactly what we said would happen has happened—that is the difference.

Jim Hood Portrait Mr Hood
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The hon. Gentleman has been saying exactly what he said in the Maastricht debate ever since, at every opportunity. It will surprise no one, including me, if he continues to say those things, but I am speaking to the reality. Some say that the Conservative amendment is a UKIP amendment. In fact, the hon. Member for Harwich and North Essex (Mr Jenkin) accepted that he agrees with a lot of what UKIP says.

I remind the House of something the Prime Minister said in his Conservative party leadership campaign. He promised the country and his party that he would make the Conservatives electable again, and get rid of the “nasty Tory” image. He travelled to the Arctic to embrace huskies, and came back here and cuddled hoodies. These are changed days. Where is he now? This week, with conspiracies going on behind his back in his own party in Parliament, he is away negotiating an EU trade deal. You could not make it up! As my grandmother used to say, when the cat’s away, the mice will play. That is what is happening to him.

The debate and the run-up to it are more like Shakespeare’s assassination plot in “Julius Caesar”. The big question is who will be Brutus. Margaret Thatcher’s political assassination in 1990 had nothing, or nothing much, to do with Europe, but we have the same modus operandi. As my hon. Friend the Member for Bolsover (Mr Skinner) pointed out in a speech two weeks ago, the Conservatives kicked Mrs Thatcher out on the street like a dog.

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William Cash Portrait Mr William Cash (Stone) (Con)
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Basically, I regard the whole question of having a referendum as fundamental. I led the Maastricht referendum campaign, and the question now is about the same fundamental questions we were addressing then. This is the problem: nothing has changed, but much has got worse. The real problem is one of urgency. This is not just about an abstract theory of sovereignty; it is about the economy, who governs Britain and whether we can achieve economic growth, which is what the debate is actually about. We cannot achieve economic growth in the circumstances I shall now describe. In my judgment, it would be wrong to wait until 2017, given that the situation is so urgent, as hon. Members will hear in a moment. The British Chambers of Commerce, which represents 104,000 businesses and 5 million employees, is concerned about the delay and the uncertainty that goes with it and about over-regulation.

It is generally acknowledged by all parts of the House that our relationship with the EU has to change, but the trouble is with the institutional treaty changes, on which I have had meetings in Brussels. I saw Mr Van Rompuy only 48 hours ago and also Mr Olli Rehn, and the fact is that they are on a railway line, and are continuing along it. They talk about destiny, contracts with other countries—unenforceable as they might be—and more centralisation. The European Scrutiny Committee had an interesting meeting on that.

Bernard Jenkin Portrait Mr Jenkin
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In his travels around Europe, has my hon. Friend gained the impression that there is any appetite in the Commission or among our European partners for substantial treaty change that would allow the United Kingdom to have a different relationship with the EU while remaining signed up to the existing treaties?

William Cash Portrait Mr Cash
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It is my opinion, based on extensive discussions yesterday and over several months, that there is absolutely no prospect of any changes that would even begin to alter the circumstances we are now in and which are pivoted on the existing treaties.

The problem is one of debt and deficit. We cannot pay for the public services needed in the country, whether health, education or whatever. I hear the point from Opposition Members and I agree with some of their arguments—it is not right that people should be deprived of services—and I do not believe that the entire answer depends on cuts. It depends on the subject of this debate, which is economic growth. We can grow with the rest of the world. We are running a trade surplus of about £13 billion with the rest of the world, other than the EU, with enormous potential in south-east Asia, India and Africa, which is where the emerging markets are. This is where we have to concentrate our efforts.

On our trade relations with the other 26 member states, I ask hon. Members to take account of the following very alarming figures. Two weeks ago, during a debate on the Maastricht treaty and the convergence criteria, I gave what was then the latest figure, which was that we were running a trade deficit with the other 26 of £47 billion. Now, some might think a deficit of that scale is an awfully big loss, but the following Monday the new figure came out. In one year, the deficit had risen from £47 billion to £70 billion. Furthermore, the German surplus, which was running at £30 billion, rose to £70 billion between 2011 and 2012. It is essential that we take note and hold this referendum—and hold it urgently—because we have to deal with fundamental changes in the relationship that will enable us to disentangle ourselves from the spider’s web that we have got caught up in and which we have not asked the British people about since 1975. It is a vital question of national interest, and I beg hon. Members to listen.

Bernard Jenkin Portrait Mr Jenkin
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Is not the corollary of what my hon. Friend is saying that if we follow the programme of the Labour party and continue to pursue a policy of closer integration and more burdens on our economy, it will mean more cuts, more borrowing, slower growth and more unemployment than if we sort out this relationship?

William Cash Portrait Mr Cash
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My hon. Friend is completely right. Labour caused the debt and the deficit; now Labour Members want to engage in more borrowing without the growth that would come from expanding our trade with the rest of the world.

Jim Hood Portrait Mr Hood
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rose—

William Cash Portrait Mr Cash
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I will give way to the former Chairman of the European Scrutiny Committee.

Jim Hood Portrait Mr Hood
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I am listening with interest, as I always do, to the hon. Gentleman’ s speech, and I have heard it a few times—a lot of times, in fact. If he gets his referendum and the vote is overwhelmingly, or marginally, in favour of staying in the EU, will he then embrace the EU and work from the positive side, in the same way as everybody else?

William Cash Portrait Mr Cash
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I have come to the conclusion that we have to leave the existing treaties, but I will say one last thing. The UK Independence party argument is self-defeating, for a simple reason. If UKIP were to take a number of marginal seats on the scale that seems likely and we were to lose the next general election, UKIP will not get the referendum or make the changes it wants, because we would be faced with a Lib-Lab, pro-integrationist, anti-referendum situation, which would be a complete disaster. UKIP, with which I am quite obviously much in agreement, will not produce the answers, because it is not possible to repeal the European Communities Act 1972 or have a referendum without a majority of MPs. It does not have a majority and it will not get one.